Through mergers and expansion many Canadian companies now have substantial foreign operations. As a result, employees often find themselves, whether by choice or compulsion, transferred to a foreign country. When a dispute arises with the employer while the employee is working in that foreign country, the question arises as to which justice system will take jurisdiction over that dispute. Clearly, the obligation on the employee to sue in the foreign jurisdiction will increase both the cost and the inconvenience of enforcing her rights under her contract of employment, whether written or oral.
In Trites v. Renin Corp, the court considered “the novel and perplexing legal issue” of whether an employer that is experiencing significant financial difficulties can unilaterally impose a temporary layoff on an employee in the absence of an express or implied term in the contract of employment to support the employer's action.
Those of us that practice employment law understand that our Courts will not hesitate to deem a termination clause in an employment agreement unenforceable if they are provided with a reasonable basis upon which to do so. In recent times, we have seen two noteworthy cases that have dealt with termination clauses and been decided in favour of the employee. Employers and their counsel should be mindful of these cases as they implement employment agreements, if they hope to be able to rely upon them.
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