When an employer dismisses an employee without cause, the employee’s work performance prior to termination is generally considered to be irrelevant. Ontario’s legal framework is concerned only with determining whether the employee was dismissed without receipt of either reasonable notice (in accordance with the common law or a written contract, as the case may be) and if not, calculating the value of damages that should be paid.
Over close to 9 weeks of social-distancing, my 2-year old daughter and I have watched Disney’s Sleeping Beauty (at her request, I promise) at least 167 times (and often before the sun rises). As we both became word-perfect, I realized this movie, in addition to great animation, holds some important lessons for Ontario employers and employees.
One of the issues we commonly encounter, when speaking with both individuals and employers, is whether the language in their employment contract addressing termination is enforceable.
For employees, where a termination provision is unenforceable, it can mean they have an entitlement to increased severance. Whereas for employers, if the clause does not hold, it can create uncertainty and result in unintended liability.
The majority of employment disputes are resolved long before they ever reach a court room. Usually, the former employee will agree to accept a sum of money from their previous employer in exchange for executing a release agreement. While the substance of release agreements can vary, they generally share two similarities:
No further liability: The individual agrees that upon receipt of an agreed payment, he/she shall have no further right to seek additional compensation as a result of their employment, or the termination thereof; and
Confidentiality: The individual agrees to keep the terms of settlement confidential.
Generally speaking, employers have the right to dismiss employees that fail to report to work sober, and perform their duties in a safe manner, particularly where these requirements have been clearly communicated through written policy.
We are not long into 2019 and yet one thing already seems clear – the law concerning employment contract termination clauses will continue to be the focus of a great deal of litigation in Ontario. In just the past few months alone, new decisions from the Superior Court have helped to advance the law and provide further guidance to employers on proper drafting of termination clauses.
