In Alarashi v Big Brother Big Sisters of Toronto ( 2019 ONSC 4510) Sossin J. had to determine the validity of the following termination clause:
Following the probationary period, in the event that it becomes necessary to terminate your employment without cause BBBST will provide you with such notice (or payment in lieu of notice) or severance pay that may be required to meet the requirements of the Employment Standards Act, 2000. Notice is based on the length of service as follows:
4 years or more but fewer than 5 years – 4 weeks
You understand and agree that BBBST has no obligation to make any additional payments to you or to provide you with additional notice upon termination. You also understand and agree that BBBST would not have entered into this agreement if it were required to provide notice in excess of the Employment Standards Act, 2000.
If your employment is terminated without cause, BBBST will continue your group insurance benefit coverage for such period as the Employment Standards Act, 2000 shall require, provided such coverage is available from the insurer.
Your employment may be terminated for cause and without pay in lieu of notice at any time for serious breaches of the terms of this Agreement and/or BBBST’s policies set out in the Human Resources Manual, and/or for any cause recognized at law
The judge found that the use of the word “or” instead of ” and ” made the clause unenforceable. Here is what he said :
Excluding Termination Pay or Severance Pay
 The third and final area Alarashi raises to invalidate the termination clause in the employment agreement is the reference to a terminated employee’s entitlement to “such notice (or payment in lieu of notice) or severance pay that may be required to meet the requirements of the Employment Standards Act, 2000.” (Emphasis added.)
 The parties agree that under the ESA, BBST would have an obligation to pay a terminated employee both payment in lieu of notice (“termination pay”) and severance pay, if the employee were entitled to it.
 Once again, the challenge to this provision in the termination clause does not relate to Alarashi’s own circumstances, as he received payment in lieu of notice of five weeks which meets or exceeds any interpretation of the minimum requirements for termination pay under the ESA, and he was not eligible for severance pay.
 BBBST argues that this clause is clearly intended to convey that BBBST will be bound by the requirements of the ESA and therefore while the drafting could more clearly convey these benefits are additive rather than alternatives, the provision remains clearly enforceable.
 Alarashi relies on Andros v. Colliers Macaulay Nicolls Inc., 2018 ONSC 1256 (CanLII) (“Andros”) for the proposition that even if the termination provision could be read in a manner which complies with the ESA, it remains invalid where it is unclear or ambiguous with respect to whether the termination benefits included severance pay.
 Writing in Andros, Dietrich J. highlighted the significance of whether the termination clause specifically adverts to compliance with employment standards legislation. Distinguishing the termination clause at issue in Andros from the Court of Appeal’s decision in Roden v. Toronto Humane Society, (2005), 2005 CanLII 33578 (ON CA), 259 D.L.R. (4th) 89 (Ont C.A.) (“Roden”), Dietrich J. stated (at para. 32), “A key distinction between Roden and the case at bar is that the clause in question in the Roden case made specific reference to the applicable employment standards legislation. No such reference in made in clauses 4a and 4b. In this case, as in Roden, the termination clause makes specific reference to the ESA.
 In Wood, also relied upon by Alarashi, Laskin J.A., writing for the Court, distinguishes that case from Roden as well, stating (at para. 55-56), “The difference between Roden and this case lies in the wording of each termination clause. In Roden, the clause dealt only with the Toronto Human Society’s obligation to give the notice of termination, as required by the ESA, or to pay a lump sum for the notice period. It did not exclude the Toronto Humane Society’s additional obligation to continue to contribute to Roden’s benefit plans during the notice period. It said nothing about that obligation. In this case, by contrast, the termination clause is not merely silent about Deeley’s obligation to contribute to Wood’s benefit plans during the notice period. It uses language that excludes that obligation…”
 Therefore, in light of the Court of Appeal’s analysis in Wood, the question I must address is whether the language of the termination clause excludes severance pay if termination pay is provided.
 In Alarashi’s case, the severance pay clause would not arise as only employees with five years or more experience can be eligible for severance pay under the ESA.
 I do not think BBBST intended to exclude severance pay by this provision. The intent of the parties appears to be to abide by the requirements of the ESA, not contract out of them or waive them.
 Under the ESA, it is possible to be entitled to termination pay and not severance pay (as in the case of Alarashi, who had worked less than five years), but it is not possible to be entitled to severance pay and not termination pay (or notice). In my view, this provision could be read simply as setting out the distinction between two different pathways to entitlement under the ESA.
 In other words, in this clause, BBBST could be conveying to Alarashi at the time he commenced employment that in the event of his termination without cause, he will receive what he is entitled to receive under the ESA, whether termination pay or severance pay. Where his entitlement is to both termination pay and severance pay under the ESA, nothing in the wording of this provision is inconsistent with his being paid both.
 While the clause can be read in a way that is compatible with the ESA, that is not the test for a valid termination clause, as affirmed in Andros. Because the clause could also be conveying to Alarashi that he may not be entitled both to termination pay and severance pay, the clause is at best ambiguous.
 In the face of ambiguous wording, the terminated employee is entitled to an interpretation which would lead to the highest level of benefit. In this case, such an interpretation would be that the reference to “or” in the clause excludes either termination or severance pay, and thus constitutes an invalid termination clause.
This case again reinforces one of the key elements of Wood v Deeley, which is if a termination clause can reasonably be read two ways with respect to whether or not it complies with the ESA, it is therefore ambiguous. Ambiguity alone will invalidate the entire termination clause and thus the common law of reasonable notice applies.