In Riskie v Sony ( 2015 ONSC 5859 ) a long service employee signed a fixed term contract after 25 years of employment which expired in 8 months but also had a early escape clause allowing either party to terminate upon 30 days notice. Dunphy J. found the 30 day escape clause to be contrary to the ESA as the employee was entitled to 8 weeks termination pay but held that the defect did not invalidate the balance on the clause, and since there was nothing wrong with a 8 month fixed term contract , the doctrine of reasonable notice did not apply.
The Employer also paid the employee his ESA severance pay after the contract had expired. The employment agreement was silent on the issue of severance pay, which the plaintiff tried to use as further ground to invalidate the fixed expiry date in the contract. However the Court held since the contract did not seek to actively exclude severance pay, a mere absence of reference to it did not invalidate the whole clause.
At para 68 the Judge said ” A provision which seeks to contract out of the law is unenforceable ; a provision which merely promises to obey is superfluous.”
It is important to note however that what was at stake was not a normal ESA only termination clause, rather this was a fixed term contract which expired on its own volition. The statutory consequence of terminating a fixed term contract of an employee with more than 5 years service is that the person is entitled to payment of his severance pay, as severance pay cannot be paid by way of working notice.
If this had been a termination clause which only referenced having to give the employee termination pay and was silent on the issue of severance pay and/or benefits, I do not think that this case would apply as many cases have held that a failure to mention all of the statutory payments on termination can be fatal to the clause.