Ontario Court Of Appeal Once Again Confirms That Employment Agreements Must Read As A Whole

In Waksdale v. Swegon North America Inc., 2020 ONCA 391, an employee was terminated on a “without cause” basis after less than one (1) year of employment. His employer sought to enforce the termination clause in his Employment Agreement and provided him with two (2) weeks’ notice pursuant to the clause and the Ontario Employment Standards Act, 2000. Both parties agreed that the “without cause” termination clause in his Employment Agreement was enforceable, while the “with cause” termination clause was not. Given that this was not a “with cause” termination, the employer argued that the unenforceability of this particular clause was irrelevant in the circumstances. At the trial level, Justice Edward M. Morgan agreed, allowing the “without cause” provision to stand alone and dismissed the employee’s case.

The Ontario Court of Appeal however, did not agree with the employer. Writing for the court, Justice Lois B. Roberts indicated the illegality of the “with cause” provision affected the enforceability of the “without cause” provision, confirming that, “[the court] will not enforce termination provisions that are in whole or in part illegal.” In delivering a final blow to the employer, the court also refused to allow the employer to rely on the Severability Clause found in the Employment Agreement, which would have given the employer the right to sever the offending portion (i.e. the “with cause” provision) from the Agreement.

This case only further underlines the importance of having your organization’s Employment Agreements reviewed by a legal or HR professional on a regular basis. As Waksdale has reiterated, even one outdated or improperly worded provision may result in the entire Agreement being rendered null and void.

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