In Livshin v. The Clinic Network Canada Inc., 2021 ONSC 6796 (CanLII) Justice Black had a situation where the termination clause referred to ” just cause” and as such was illegal under the Waksdale case. The Defendant argued that this should not matter as the parties were highly sophisticated, were both represented by lawyers and that the employment agreement was part of a larger sale of business transaction .
The Court held that there was no ” commercial imperative ” that prevented the contract from complying with the ESA.
This is the part of the decision that I love.
The Defendant argued that because the Plaintiff had a lawyer in his negotiations, he should be held to the contract, even if it was technically illegal . The Court’s response was as follows:
“TCN’s argument that Livshin’s representation by counsel should result in him being taken to understand the potential pitfalls of the Employment Agreement at issue here might be turned back on TCN to suggest that an employer, represented by counsel, particularly in the period after the Court of Appeal’s decision in Fred Deeley, ought to know better than to draft a termination provision that fails to comply with the ESA.”
The result of this illegality was immense as the employment contract was a for three year fixed term and thus the breech meant that the Plaintiff was entitled to the balance of the contract, not just reasonable notice . Thus the Plaintiff received compensation for 20 months , with no duty to mitigate.
I have always said that the most important part of any employment contract is the termination clause.
If you would like a copy of this case, email me at barry@barryfisher.ca