ESA Savings Clause Does Not Save the Illegal Termination Clause:

In Tan v. Stostac Inc., 2023 ONSC 2121 Justic Dineen was faced with a termination clause that said the following in part :

The Employer may end the employment relationship at any time without advanced notice and without pay in lieu of such notice for any just cause recognized at law. 

The provisions of the Ontario Employment Standards Act, 2000, as they may from time to time be amended, are deemed to be incorporated herein and shall prevail if greater. 

This is why the judge found the clause illegal :

[11] In my view, the termination clause in this case suffers from the same flaw identified in the line of cases cited above by giving the defendant the right to terminate the plaintiff’s employment without notice or payment for just cause that might fall short of non-trivial willful misconduct. I do not accept that the attempt to incorporate the ESA’s provisions in the final sentence of the clause’s “without cause” portion detracts from the clear assertion of a right to terminate without notice for any just cause. 

My Comment:

This case again declares that any illegality in a termination clause anywhere in the employment documents is not made suddenly legal because they have one of these savings clauses.

The clause itself must be in compliance with the ESA. It is not sufficient to have an illegal clause and then say ” In any event you shall always receive no less than required by the ESA “.

The policy reason behind this case seems to be that a person should be able to read their employment contract and know what he or she will and will not receive upon termination, without the requirement of also having intimate knowledge of the numerous provisions in the ESA that deal with termination and that might conflict with the plain reading of the termination provision.

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