In Ojo v Crystal Claire Cosmetics ( 20121 ONSC 1428) Diamond J. had a situation of a 52 year old Warehouse Manager with only 10 months service.
The Plaintiff had a termination clause in his employment contract which read as follows:
Crystal Claire maintains the right to terminate your employment at any time and without notice or payment in lieu of thereof, if you engage in conduct which constitutes just cause for summary dismissal.
In the absence of just cause, Crystal Claire may terminate your employment at any other time and for any reason upon providing you with either advance notice and/or applicable payments equivalent to the minimum applicable entitlements contained within the ESA, as amended. For greater certainty, Crystal Claire’s maximum liability to you for common law notice, termination pay, severance pay, or payment in lieu of notice shall be limited to the payment of the amounts specified in the ESA.”
The termination clause was held to be invalid for two reasons:
- The words ” conduct which constitutes just cause for summary dismissal ” was contrary to the ESA which has a higher standard of “guilty of wilful misconduct, disobedience or wilful neglectful duty that is not trivial and has not been condoned by the employer.” This is entirely consistent with the Ontario Court of Appeal’s decision in Waksdale v. Swegon North America Inc. 2020 ONCA 391 (CanLII), “
- The second argument is that because the clause did not refer to benefit continuation during the ESA termination pay period, it was illegal. Here is the defence argument was a little more nuanced.
 The defendant relies on the decision of Justice Monahan in Burton v. Aronovitch McCauley Rollo LLP 2018 ONSC 3018 (CanLII) in which the court was faced with the following termination clause:
“AMR may, at its sole discretion, terminate your employment without cause (a ‘Non-Cause Termination”’. In the event of a Non-Cause Termination, AMR shall provide you with severance pay in accordance with the Employment Standards Act, as amended, and any successor legislation, if so required as at the time of a Non-Cause Termination; and
Notwithstanding the foregoing, and for greater certainty, if the amounts which you would receive upon a Non-Cause Termination, as set out above, are less than the amounts to which you would be entitled under the Employment Standards Act, as amended or any successor legislation, then you shall be entitled to notice, severance pay, and any other payment required by the relevant legislation in force as at the time of the termination.”
 Justice Monahan held that the chosen wording (“any other payment required by the relevant legislation”) contemplated the continuation of benefits, and thus the termination clause before him complied with the Act.
However, this Judge did not see it the same way . In my view, the Burton decision is distinguishable. I agree with the plaintiff that the termination clause in this proceeding requires the defendant to pay the plaintiff his minimum termination pay, but not the obligation to continue paying the plaintiff the value of his benefits during the minimum notice period required by the Act. The termination clause, at best, allows the defendant to provide the plaintiff with payments equivalent to the minimum applicable entitlements under the Act.
My Comments :
In Ojo, the clause entitled the Plaintiff to receive “applicable payments equivalent to the minimum applicable entitlements contained within the ESA,”.
This was held not to include benefits :
In the Burton case, the Plaintiff was to receive “and any other payment required by the relevant legislation”.
This was held to include benefits .
Both cases used the same term ” payments or payment ” but apparently they mean different things to different judges.
Ain’t the law wonderful?
The Judge awarded 3 months notice. Not bad for a guy with only 10 months service.
As this case is not yet on the CanLII website, if you want a copy just send me an email at firstname.lastname@example.org and I will send you a copy .