dismissal without cause
When an employee is terminated without cause and offered a package that is very modest, but otherwise compliant with the employment contract, a common first step for his or her lawyer will be to see if the contract can be set aside. If the contract can be declared void, the employee can try to pursue the typically much greater common law damages. There are several grounds upon which courts have set aside either the full contract or at the least, the termination provision. This blog post will focus on the issue of signing the contract prior to the start date.
It appears that the saga of judicial interpretation and consideration of termination clauses will continue, with predictably unpredictable results. Courts will enforce termination clauses that limit an individual’s entitlement to notice of dismissal, but the onus will be on the employer to show that the clause should be enforced.
Canadian employees are presumptively entitled to “reasonable notice” of termination. Although this entitlement can be limited to some extent by contract, an employee will generally be entitled to some advance notice of the end of their employment. If advance notice is not given, then the employer can satisfy this obligation by making a payment equivalent to the earnings the employee would have received over the notice period.
The CBS reality show Big Brother recently made headlines when two of its female contestants were fired from their jobs back home due to racist and homophobic comments made towards fellow contestants. Because the contestants have no contact with the outside world while on the show, neither person is aware that they have been fired or that their workplaces have spoken to the media about their terminations.
Termination clauses can be void even if only a possibility they could violate Employment Standards Act
As those who read my comments regularly will know, I recommend that every employee be asked to sign an employment agreement that sets out, among other things, the amount of notice or pay in lieu thereof that will be required in the event of a dismissal without cause. Such a provision will eliminate all of the uncertainty that typically arises at the time of dismissal when the parties must assess, negotiate and possibly litigate what “reasonable notice” would be in light of all the circumstances.