In Vienneau v Joy Global (Canada) (2020 NBBR 76) Justice Dysart upheld the validity of the following termination clause.
“Termination. The Company shall be entitled to terminate your employment without just cause for any reason upon the provision of reasonable notice or payment in lieu that meets the requirements of the applicable employment or labour standards legislation. By signing this Employment Agreement, you agree that upon the receipt of your entitlements and benefits in accordance with such legislation, no further amounts will be due and payable to you whether under statute or common law. Specifically, you understand and agree that your acceptance of this Employment Agreement limits your ability to claim any further damages for termination pay, termination notice, severance pay, payment in lieu of reasonable notice, or any other damages, other than as provided for in this Employment Agreement and that you are giving up any right to claim reasonable notice under common law. In the event the Company elects to pay you compensation in lieu of notice, the Company reserves the right to require you, prior to receipt of the payment, to sign the Company’s form of Release for the amount of the payment that exceeds the minimum termination pay required by the applicable employment or labour standards legislation.”
“I, Stephane Vienneau, have had a reasonable opportunity to obtain independent legal advice and to consider this Employment Agreement and the matters set out therein. I acknowledge that I have not signed this document under any type of duress and hereby accept the above terms and conditions as outlined in this Employment Agreement, pages one (1) through three (3) and certify that I am legally entitled to work in Canada.”
The Plaintiff’s main attack on this clause was as follows:
The reference to “reasonable notice” in the first sentence means that the clause was not intending to exclude the common law or at least is ambiguous. The judge disagreed and pointed out the following :
[64] In my view, it would be nonsensical to conclude that that Mr. Vienneau had a legitimate expectation that upon termination without cause, he was entitled to reasonable notice under the common law, and that he was entitled to sue Joy Global for reasonable notice at common law. The termination clause clearly provides “you are giving up any right to claim reasonable notice under common law.” That sentence simply cannot be reconciled with the Plaintiff’s argument, nor does that wording bring this within the Cybulski, Gillespie and Bellini line of cases.
My Comments:
This was a New Brunswick case, not an Ontario case.
Under the current law in Ontario, because the clause refers to “just cause,” it would be in violation of the ESA and thus void. As The New Brunswick ESA refers to “cause” and not the “wilful misconduct” language in the Ontario ESA, this argument would not work in this case.
Furthermore, in Ontario the ESA termination language ( section 57) requires the the dismissed employee receive “at least” so many weeks. There is a line of cases that stand for the proposition that simply referring to “meeting the requirements” of the ESA is not enough because the requirements themselves only set the floor. The better language is to refer to “the minimum requirements of the ESA.” Again, the New Brunswick ESA does not use the “at least” language.
Third, the language says “upon the provision of reasonable notice or payment in lieu that meets the requirements of the applicable employment or labour standards legislation.”
The use of the word “or” could be read two ways:
- Both “reasonable notice” and “payment in lieu” are subject to the condition that this payment “meets the requirements of the applicable employment or labour standards legislation.”
OR
2. “Reasonable notice” stands alone and only the “payment in lieu” is required to “meets the requirements of the applicable employment or labour standards legislation.”
The caselaw says that where there is a ambiguity, the interpretation that favours the employee wins. So unless the second interpretation is simply ridiculous, this alone should create a sufficient ambiguity that requires the clause to be read in a way most favourable to the employee, which in this case means reasonable notice.
The fact that the clause also refers to the employee giving up “any right to claim reasonable notice under common law” simply adds more fuel to the ambiguity argument rather than clarifying the parties intentions.
The net result is that a 40 year old Technical Service Rep making over $100,000 who had 11 years of service got only 4 weeks termination pay, all in accordance with the New Brunswick Employment Standards Act, set out below:
Notice of termination
30(1) Except where cause for dismissal exists, and subject to subsection (3) and to sections 31 and 32, an employer shall not terminate or lay off an employee without having given at least
(a) two weeks notice in writing, where the employee has been employed by the employer for a continuous period of employment of six months or more but less than five years; and
(b) four weeks notice in writing, where the employee has been employed by the employer for a continuous period of employment of five years or more.
The judge found that had the contract not been enforceable, he would have awarded 12 months’ notice.
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