Canada: New Ruling Reinforces Employer Responsibility in Terminations

In early October, Canada’s Ontario Court of Appeal issued a ruling that invalidated an employer’s termination agreement because the “for-cause” parameters did not meet legal requirements for clarity and compliance. The employee was terminated “without-cause” but claimed that, while the agreement in that section was compliant, the discrepancies in the for-cause section rendered the whole agreement invalid.

Earlier, lower courts agreed with the employer in the case Waksdale v. Swegon North America Inc., but the superior court later agreed with the plaintiff. Moving forward, the ruling implies that a released employee is potentially eligible for greater entitlements related to severance and notice of termination than outlined in a severance agreement. In short, an agreement is not valid if any part of it is not compliant with regulations – even if the non-compliant part does not apply to the employee’s immediate situation.

Takeaway: The ruling highlights the sensitivity of contracts with employees as companies determine the costs of releasing workers, regardless of cause. A review of contracts, and diligence in staying abreast of changes in this area of law, can help ensure companies, and their workers, are clear in their expectations.

Canada: New Ruling Reinforces Employer Responsibility in Terminations

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