In a Flash: Ontario Court of Appeal Changes the Landscape on Termination Clause Enforceability

June 19, 2020

June 19, 2020

 

Employers, it’s time to revisit your employment agreements. The rules of the game have changed.

There is a presumption at common law that an employee is entitled to reasonable notice of termination, where the employee is terminated “without cause”. This presumption is rebuttable, but only where there is an enforceable employment contract in effect between the parties that provides otherwise, and provided that the termination clause does not offend – or have the potential to offend – any applicable minimum statutory requirements.

This article provides a review of the recent Ontario Court of Appeal decision in Waksdale v. Swegon North America Inc. which dramatically altered the landscape when it comes to the enforceability of termination clauses in employment agreements by reinforcing the attack on “just cause” termination clauses and by seriously undermining the historical application of severability clauses. 

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