Saving Clause Does Not Save an Illegal Contract:

In Campbell-Givons v. Humber River Hospital, 2021 ONSC 6317, Justice Black had an illegal “just cause” provision in a contract which also contained the following clause just below the “without cause ” portion:

“At all times the Employee will receive all employment standards entitlements owing to her in accordance with the Ontario Employment Standards Act, 2000. ”

Citing Wood v. Fred Deeley Imports Ltd., 2017 ONCA 158 , the Court found that this clause could not validate a provision which was itself void because it violated the ESA. This is waht the Judge said:

[34] Implicit in that guidance, and brought to bear in the numerous cases that have refused to enforce termination clauses that contain any provision that violates the ESA, is the notion that, given the power and knowledge imbalance between employers and employees, there is a risk that an employer might “slip in” to an employment agreement a provision or provisions known to be beyond the narrow parameters of O. Reg. 288/01 of the ESA. That employer might hope or even expect that the employee will not be aware of the contents of that regulation. As others have noted, the mischief of a “saving” clause is that in the face of such a clause an employee might conclude that the offending provisions must be in keeping with the ESA requirements.

The Judge went on to distinguish those cases where such clauses were upheld (Amberber v. IBM Canada Ltd., 2018 ONCA 571, and Nemeth v. Hatch Ltd., 2018 ONCA 7) , because in those cases the issue was whether there was an ambiguity as to whether  common law damages were available or not, as opposed to whether the language of the clause offended the ESA.

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