Narrative Review is above
| Issue | Decision | Authority |
| General Principles of Interpretation of Termination Clause | ||
| Consider parties are not in equal bargaining power;
Employees are unfamiliar with ESA; ESA is remedial legislation; interpretations which protect employee rights are favoured; Clear wording is required to rebut presumption of fair notice obligation; Court should prefer an interpretation which gives the greater benefit to the employee. |
Wood v Fred Deeley Imports
OCA 2017 |
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| Need for remedial interpretation of employee’s rights under ESA | Waksdale v Swegon
OCA June 2020 |
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| Timing of case law | Appellate courts have demanded stricter standards to show compliance with ESA since Oudin in 2015 | par 22 Dufault v Ignace not yet on Canlii |
| Language used | Clear wording required to avoid common law claim | Boule v Ericatel
BCSC June 1998; NSSC April 2005; BCSC Jan 2006; NBKB July 2011 |
| Degree of sophistication of employee | This was determined to be an irrelevant factor, in addition to fact that plff took ILA. OCA setting aside motions decision on this issue and just cause question | Rahman v Cannon
OCA June 2022 |
| Impact of defective clause | Once it is shown that one aspect of the termination clause is offside the ESA, the clause in its entirety will fail. In this case, the just cause violations led to the entire termination clause as unenforceable | Waksdale v Swegon
OCA 2020; Summers v Oz Optics OSC Nov 2022 OSC Aug 2022; Ramcharan v. Wesdome Gold Mines Ltd OSC Aug 2023 |
| Voluntary compliance | Subsequent compliance cannot cure the defect | Wood v Fred Deeley Imports
OCA 2017; OSC 2011 |
| Ambiguity | Read against the drafting party | Wright v Young and Rubicam
OSC 2011 |
| ESA Interpretation Generally | ||
| ESA is “benefits-concurring” legislation and should be interpreted in a broad and generous manner. Any doubt arising from language issues should be read in favour of the employee. | SCC Re Rizzo Shoes
Jan 1998 |
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| Benefits | ||
| Benefits must be continued as status quo for the stat notice period, o/w clause is unenforceable. This cannot be cured by later compliance. | Wood v Fred Deeley Imports
OCA 2017 |
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| Salary continued for notice period | The use of the word “salary” does not incorporate benefits. Contract failed. | Carpenter v Brains II
Div Ct May 2016 |
| Benefits not referenced; agreement failed | Stevens v Sifton Properties | |
| Potential Violation | ||
| Clause was offside ESA as benefits were extended for only 4 weeks. On termination, entitlement was 3 weeks; potential violation after 5 years; clause unenforceable | Rossman v Canadian Solar
OCA 2019 |
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| Shore v Ladner Downs
BC CA 1998 |
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| Clause offside as it did not contemplate severance pay after 5 years of employment | Wright v Young and Rubicam
OSC 2011 |
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| Agreement allowed for termination with no notice; after 3 months the contract would have been in violation of the ESA; clause unenforceable | Covenoho v. Pendylum
OCA 2017 |
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| Potential seen as “too remote” at trial and not considered specifically on appeal as trial decision was reversed for other reasons. | The facts, at trial, showed that the termination clause would be in violation of the Act once the combined notice and severance obligations exceeded 27 months, which would require that the plaintiff be employed until 2035, at which time the plaintiff would have been 78 years old.
Given the employment relationship from 2008 to 2015, this was considered too remote to allow for the potential of being offside. The foundation of this successful argument at trial was reversed on appeal as the Court of Appeal found that the agreement contracting out of the total employment history was in violation of the Act. For this reason, the “potential” reasons are trial were not needed to be reviewed on appeal.
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Kerzner v American Iron & Metal Company
OSC July 2017
Kerzner v American Iron & Metal OCA Dec 2018
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| Unusual Potential Violation Submission | Agreement when signed would have produced a violation of ESA after 5 years. By the date of termination, this defect had been cured by the passing of time. This submission was not considered directly in the reasons. Contract was upheld due to saving provision, a result which would not have followed today. The case went to OCA but this specific argument was not before the OCA. | Amberber v. IBM
OCA June 2018 |
| Sole Discretion to Terminate
At Any Time |
||
| The agreement allowed the employer the right to terminate at any time in its sole discretion. This was found to be offside the ESA as it contradicted the protected rights of returning form a leave or the prohibition against reprisal. This issue was not specifically addressed as a potential violation in the decision, but this is the substance. There were other reasons to find the clause unenforceable, such as the failure to include vacation pay, leave pay allowed by contract and the absence of the differing just cause gradations. The case is unlikely to be appealed specifically on the “sole discretion to terminate at any time” words. | Dufault v Ignace not yet on Canlii
January 2024 |
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| Obiter on this issue. Decision upheld employer’s submission on right to terminate any time. Agreement failed due to just cause issue. | Henderson v Slavkin
OSC 2020 |
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| Statutory Notice Period | ||
| Extension of the Notice Period | Statutory period also extends employment term by the notice period. This may be important for severance pay and other issues re length of employment;
This makes 2 weeks a year offside, when there is severance eligibility, as at 5 years. Service record at 5 years becomes 5 years plus 8 weeks, given 8 years of employment. . |
s. 62(1) ESA |
| All monetary compensation must be included, such as contracted car allowance;
“wages” includes monetary remuneration payable under contract; |
ss. 60(1) ESA
Div Ct March 2015
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| Contract which stated “base salary” for notice period failed as this did not reflect obligation to continue all forms of compensation;
Termination clause must also allow for sick days and leave days. (Dufault) |
Carpenter v Brains II
Div Ct May 2016 ; OSC Jan 2024 |
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| Vacation Pay | ||
| As in above case, failure to address vacation pay as included within statutory notice period was a violation of ESA | Dufault v Ignace
OSC Jan 2024 |
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| Vacation pay is mandatory on all bonus sums. There is an exemption for a bonus which is dependent on discretion of employer, and is not related to hours, production or efficiency | ||
| Vacation pay due on bonus sum set by private contract when higher than ESA minimum | Kenpo Greenhouses v Director of Employment Standards | |
| “Use It or lose it” policy found to be offside ESA. 1 | Geluch v Rosedale Golf and Country Club
OSC June 2004
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| Employer asserted vacation pay could not be carried forward. Such a term requires clear evidence which was lacking. | Boyer v Callidus
OSC Jan 2024 |
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| Length of Employment | ||
| Service history is cumulative and not consecutive for the purposes of severance pay. | subsection 65(2) ESA | |
| Unlike severance determination, termination pay is based on a service history which is consecutive only. | There is not an equivalent statutory definition for termination pay. | |
| Contracting out of employment history not allowed for ESA determination | An agreement by which the period of employment has been abbreviated cannot revise the calculation of the employment history. The immediate case involved the sale of a business, accompanied by a new employment contract given to the principal of the acquired company by which his prior employment was stated to be ignored for the determination of employment history. | Kerzner v. American Iron & Metal Company
OCA Dec 2018
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| Severance Pay | ||
| Service history must be Ontario based. | Singer v Tullett Tokyo (not reported)
Div Ct 1998; OLRB 2005; OSC Aug 2019; OSC Jan 2024 |
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| Payroll is not limited to Ontario. | Hawkes v. Max Aicher
Div Ct 2011; OLRB Feb 2024 |
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| Severance pay is defined as “regular wages for a regular work week” | S. 65 (1) ESA | |
| Other ESA issues | The ESA also requires pay for statutory holidays, over-time for non-managers, equal pay for equal work, pregnancy leave, parental leave, statutory leaves, reprisal and reinstatement remedies. | |
| Just Cause – Differing Standards | ||
| Agreement failed to address the graded distinctions between ESA and common law. Contract unenforceable | Rahman v Cannon
OCA June 2022; OSC Nov 2022; OSC Aug 2022; Ramcharan v Wesdome Gold Mines OSC Aug 2023 |
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| Timing of the Payment | ||
| The ESA requires, presuming no working notice provided, that the sums due be paid in a lump sum and hence an agreement which states such will be paid over time is offside. | Dufault v Ignace
OSC Jan 2024 |
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| Fixed Term Contract | ||
| The ESA applies where: (1) employment ends before the fixed term has concluded; or
(2) employment ends before the specific task has been completed: or (3) the term exceeds 12 months; or (4) the specific task is not completed within 12 months; or (5) whatever the specific term may be (presuming 12 months or less as greater than 12 months requires ESA compliance) and employment continues for 3 months or more after this time period. |
Regulation 288/01 | |
| Plff hired under fixed term contract for a period of 12 months. Prior to the expiry of this fixed term contract, the plaintiff was terminated. There then arose the need for the statutory period of notice, given three months of employment. Plff recovered balance of contractual period. | Kopyl v Losani Homes (not reported)
OSC 2023 |
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| Mass Termination | ||
| At least 8 weeks prior notice where number of terminated employees is 50 or more and less than 200;
12 weeks, greater than 200 and less than 500; 16 weeks, greater than 500 |
O. Reg. 288/01, s. 3(1)
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| Saving Clause | ||
| Policy issue in the interpretation of such clauses; saving clause ineffective | Rossman v Canadian Solar
OCA 2019 |
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| Obiter dicta upholding saving clause | Amberber v. IBM
OCA June 2018; OSC 2020 |
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| Severability | ||
| An offending clause is not severable | Wood v Fred Deeley Imports
OCA 2017; OCA 2017 OCA June 2020 |
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