Check List to Enforce an Employment Contract

Timing

Ideally the proposed employment contract should be sent to the potential employee with the first offer of employment. Include any significant manuals as appendices to the employment agreement. Suggest independent legal advice.

ESA

Ensure that the termination clause is compliant with the ESA. Do not suggest that the termination payment is for all ESA issues or a human rights claim. Suggested wording is below.
If there is a termination for just cause term, insure that the wording of the ESA just cause for “wilful misconduct” is set out for the ESA termination obligations.
Insert a fail-safe clause that the agreement is at all times to ensure ESA compliance and no term in the agreement may violate the ESA. This is likely unenforceable to cure an ESA violation, but better than not having one.
All benefits and vacation pay and the status quo of all components of remuneration will be continued for the ESA period.

Substratum

Upon a promotion, either insure that the hiring agreement contemplates a promotion or have a new written agreement given to the employee containing an offer of the promotion.

Disclaimer & Entire Agreement Terms

Insert clauses re no other oral material representations and disclaim any damage claim.
Insure legal advice is given.
Draw opposing party’s attention in vivid terms to disclaimer or entire agreement clause.

Human Rights

On termination consider an offer which is higher than ESA or termination provision for a release in which there is a covenant of no intention to commence human rights complaint or no knowledge of any basis for one, apart from release of all statutory remedies. Do not decline to pay contracted sum dependent on this.

01 Termination Clause

The company may terminate your employment by payment to you of three weeks’ salary for each year of completed employment, in addition to (1) all vacation pay owing to you as of the date of termination and for the statutory period and (2) the continuity of all benefits, and (3) all monetary compensation for 8 weeks following the delivery to you of written notice of termination and (3) all other rights and remedies to which you may be entitled under the Employment Standards Act.

This payment will be made to you in full satisfaction of all termination and severance claims and other claims arising from the termination of your employment and your employment with ABC Industries to the date of termination pursuant to the Employment Standards Act, save as retained above, and common law.

Commentary on 01

The 3 weeks per year clause always will satisfy the ESA formula where the payroll exceeds 2.5 million annually. There are quirks with respect to the ESA severance of one week per year. The service record will always be extended to account for the 8 weeks’ notice obligation, presuming an employee with 8 years’ service.

An employee with eight years of service to the exact day of termination, for example, will have 8 years for the notice (8 weeks) but will have 8 years and 8 weeks for the severance, which is prorated to weeks of service. Hence, two weeks a year will be offside the ESA.

The ESA residual rights clause is intended to avoid an argument of contracting out, illegally, of an ESA standard, which would hence otherwise jeopardize the sanctity of the clause.

The agreement many be amended for a company which will never be over an annual payroll of 2.5 million or will never be acquired by an asset or share purchase to the same effect, but the possibility should be included as the law looks to a potential violation as opposed to an actual one.

If so, it could read:

02 Termination Clause 02 No Severance

The company may terminate your employment by payment to you of one week’s salary for each year of completed employment, in addition to (1) all vacation pay owing to you as of the date of termination and (2) the continuity of vacation pay credits, all benefits, monetary or otherwise, for 8 weeks following the delivery to you of written notice of termination and (3) all other rights and remedies to which you may be entitled under the Employment Standards Act.

Commentary on Contracting Out of Statutes Term

The only statutes which cannot be contracted out are the ESA and the Human Rights Code and Employment Protection for Foreign Nationals Act (Live-in Caregivers and Others), 2009. The agreement could also hence waive all other statutory claims, which would be a judgement call.

03 Termination Clause – No Statutory Rights Save Human Rights and ESA

The company may terminate your employment by payment to you of three weeks’ salary for each year of completed employment, in addition to (1) all vacation pay owing to you as of the date of termination and (2) the continuity of all benefits, monetary or otherwise, for 8 weeks following the delivery to you of written notice of termination and (3) all other rights and remedies to which you may be entitled under the Employment Standards Act.

This payment will be made to you in full satisfaction of all claims arising from the termination of your employment and your employment with ABC Industries to the date of termination pursuant to the Employment Standards Act save as outlined above, all other statutes save the Ontario Human Rights Code, and common law.

04 ESA Residual Clause

The agreement should always have a fail-safe ESA qualifier:

Nothing in this agreement takes away from any right or standard provided by the Employment Standards Act, as may exist today and/or as may be provided for in the future by revisions to the Act or its regulations.

Environmental Protection Act Unjust Dismissal & OHSA

If the employer’s business involves any of the statutes below, consider a specific waiver of the unjust dismissal remedy under the Environmental Protection Act, section 174. It will be, however, highly unlikely that an employment agreement may effectively waive a claim for a remedy when the underlying facts have yet to occur.

(e) The Environmental Assessment Act;

(f) The Environmental Protection Act;

(g) The Fisheries Act (Canada);

(g.1) the Nutrient Management Act, 2002;

(h) The Ontario Water Resources Act;

(i) The Pesticides Act;

(j) The Safe Drinking Water Act, 2002; or

(k) The Toxics Reduction Act, 2009,

The same issue will arise with respect to Section 50 remedy under the Occupational Health and Safety Act.

05 Termination Clause Capped Payment

Also consider in the example of the 3 weeks’ per year of completed service, a cap of an amount which exceeds the present ESA maximum of 34 weeks.