In Wilds v. 1959612 Ontario Inc., 2024 ONSC 3452 (CanLII) Justice Vermette found multiple ESA violations in the employment contract.
In determining whether the savings clause was sufficient to offset these illegal provisions, this is what the judge said :
[64] The last paragraph of section 15.1 of the Employment Agreement is a “saving provision”. For convenience, I reproduce this paragraph again:
It is intended that this termination provision includes any entitlements you have pursuant to the Act. In the event that your entitlements pursuant to the Actexceed these contractual provisions, those statutory provisions shall replace these contractual provisions and no further payments are required. You agree that the provision of notice, pay in lieu, or a combination of both as set out above will fully satisfy all obligations of the Organization to you, whether arising pursuant to statute, common law or otherwise, and that you will have no further entitlement to notice, pay in lieu, or severance arising out of your employment or the termination thereof. To be clear, these provisions replace any common law entitlement that you would otherwise have.
[65] Gibson’s attempts to contract out of the ESA in the termination provisions cannot be saved by this paragraph: see Perretta at para. 58. This paragraph cannot reconcile the parts of the termination provisions that are and have been in direct conflict with the ESA from the outset. See Rossman at paras. 35, 40-41. The statement at the beginning of the paragraph that the intention of the termination provisions is to include any entitlement that the employee has pursuant to the ESA is contradicted by clear violations of the ESA in the termination provisions. Such language creates ambiguity and confusion for an employee and does not constitute clear wording that allows an employee to know at the beginning of their employment what their entitlement will be at the end of their employment. In my view, the termination provisions in the Employment Agreement were not drafted with strict compliance with the ESA as their main objective. See Waksdale at para. 7.
[53] A severability clause in an employment agreement does not have any effect on clauses of the agreement that have been made void by statute, and cannot be used to rewrite, read down or interpret the terms of the agreement so as to provide for the minimum standard imposed by the ESA. See Waksdale at para. 14 and North v. Metaswitch Networks Corporation, 2017 ONCA 790 at para. 44.
[54] Further, “saving provisions” in termination clauses cannot save employers who attempt to contract out of the ESA’s minimum standards, and cannot reconcile a provision that is in direct conflict with the ESA from the outset. Holding otherwise creates the risk that employers will slip sentences into employment contracts in the hope that employees will accept the terms. This outcome exploits vulnerable employees who hold unequal bargaining power in contract negotiations. Moreover, it flouts the purpose of the ESA – to protect employees and to ensure that employers treat them fairly upon termination. Employers cannot be permitted to draft provisions that capitalize on the fact that many employees are unaware of their legal rights and will often refrain from challenging notice provisions in court. Attempting to reconcile the provisions of a termination clause with the benefit of hindsight runs counter to the remedial purpose of the ESA. See Rossman at paras. 35, 40-41.
My Comments :
This case definitively determines that neither savings clauses or severability clauses can fix an otherwise illegal termination provision.
Therefore a termination clause will only be enforceable if on its face, there is no violation of the ESA.
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