Another approach will be for the Plaintiff to claim that the Employer repudiated the contract by not strictly adhering to the termination provisions of the ESA. There are many technical issues in both the calculation and the timing of ESA termination payments which many Employers do not follow.
A third attack will be to dispute whether the clause is a “saving clause” ( and therefore unenforceable) or an “except clause” ( which is enforceable).
To obtain a copy of this case, email me at barry@barryfisher.ca
The inclusion of the words allowing a termination without cause ” at any time ” or ” at any time and for any reason” does not violate the ESA and thus are permissible.
Even if the “with just cause ” clause contains a list of offences which do not constitute wilful misconduct under the ESA as long as it contains the magic words ” except any minimum compensation or entitlements prescribed by the Employment Standards Act”, the clause is legal. The reasoning on this issue is set out below.
As in Dufault (Ont. C.A.), the definition of “cause” in Mr. Baker’s contract is broader than the ESA standard of Wilful Misconduct. However, unlike the provision in Dufault (Ont. C.A.) and the termination provisions considered in other recent decisions of this court, the With Cause Provision in Mr. Baker’s contract provides that if Mr. Baker’s employment is terminated for “cause”, he will still be entitled to any “minimum compensation or entitlements prescribed by the Employment Standards Act”. The legal effect of this proviso is to bring the With Cause Provision into alignment with the ESA, since even if Mr. Baker’s employment is terminated for cause pursuant to his employment contract, he will still be entitled to notice, benefits continuation, and severance pay unless his conduct falls within the narrower category of Wilful Misconduct. In other words, the inconsistency between the employment contracts and the ESA in Dufault (Ont. C.A.), De Castro, and Rahman does not arise in the case of Mr. Baker’s contract.
Here, there is no ambiguity in the wording of the With Cause Provision, which expressly provides that if Mr. Baker is terminated for cause, he will in any event receive his minimum entitlements under the ESA. It is well established that employers may referentially incorporate ESA entitlements in an employment contract and that such provisions are valid: Machtinger, at pp. 1004-05; Roden, at paras. 61-62; and Nemeth v. Hatch Ltd., 2018 ONCA 7, 418 D.L.R. (4th) 542, at para. 11.
My Comments :
This is a lengthy decision that you should read in its entirety . I have sought to only set out the conclusions.
To me the more surprising part of this case is the second issue reading the ” except ” language .
Many lawyers would have thought that the ” except ” language was simply a “savings clause” which has been held in numerous cases to be illegal .
I guess they were wrong .