Illegal Termination Clause is a Fixed Term Contract Leads to $479,000 Award:

In Tarras v. The Municipal Infrastructure Group Ltd., 2022 ONSC 4522 (CanLII) Justice Smith had the following situation:

1) The Plaintiff had a fixed term 3 year contract at $250K /year as part of the sale of his company to the Defendant.
2) He was terminated after only 11 months without cause.
3) The ESA termination clause was illegal because it relied upon the common law concept of just cause rather than the ESA standard of wilful misconduct. .
4) He was a highly sophisticated party who had legal advise throughout the transaction.
4) The Plaintiff did nothing to mitigate his damages but didn’t have to as it was a fixed term contract

As a result of certain quirks in Ontario employment law, he received the balance of his contract ( 23 months) and had no duty to mitigate his damages.

If anyone tells you that employment law is straightforward and simple, run for the hills and seek the advice of an employment law specialist.

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