statutory severance pay
A recent decision from the Ontario Superior Court of Justice touches upon a little discussed area of employment law. Specifically, when does the limitation period clock start running for a claim of wrongful dismissal?
The Ontario Court of Appeal weighed in, to some extent, on the hot issue of enforceability of termination clauses in a recent decision. In this case, the clause at issue was written in French. The Applicant argued that the Motion Judge’s interpretation of the clause only referred to “notice” and not “severance” and therefore the termination clause was an unlawful attempt to contract out of the Employment Standards Act because it did not expressly provide for the payment of severance and there are a number of cases suggesting such clauses are void.
This decision is another reminder to employers to ensure that termination clauses provide for all entitlements prescribed by the Employment Standards Act in order for them to be considered valid and enforceable. The company in this case should never have carved out its obligation to provide statutory Severance Pay.
Three popular articles this week on HRinfodesk deal with statutory severance pay; unjust dismissal; and, napping while on duty.
Most of the time when employers look to terminate an employee they opt for pay in lieu of notice. Yet pay in lieu of notice can be costly, it can discourage mitigation and it may hurt productivity (if a suitable replacement has yet to be found). An often overlooked approach is providing working notice that satisfies both statutory and common law obligations.