A "termination clause" is a type of contractual term which specifies entitlements owed to a worker at the end of their employment. They come in many different shapes and sizes. Whatever the construction, the usual motivation for employers in drafting termination clauses is to control costs and provide for certainty at the end of the employment relationship.
It is important for employers to keep in mind that the words in employment contracts have meaning. Moreover, where it is the employer that has drafted the contract and sought the requested terms, in the event of a later dispute over said terms, it is likely the courts will give effect to the logical, common sense meaning of the contractual language and interpret any ambiguity in the employee’s favour.
In Ontario, employers are required to provide employees with reasonable advance notice of their dismissal (or payment in lieu thereof). This requirement applies unless the parties have agreed in writing for the employer to provide an alternate lawful entitlement. To qualify as an alternate lawful entitlement, the language must comply in all circumstances with the minimum requirements of the Employment Standards Act, 2000.