A recent judgment of the New Brunswick Court of Appeal has once again affirmed the importance of carefully drafting termination clauses in employment contracts. In this case, the Court upheld a trial judgment that a termination clause which purported to limit the employee’s notice entitlement to 20 days was not enforceable.

The Court of Appeal’s decision begins with the following useful overview of the legal principles applicable to a termination without cause:

 Every person employed for an indefinite period is entitled to reasonable notice of dismissal, unless the dismissal is for just cause or the parties previously settled upon a notice period, which is authorized by the Employment Standards Act, S.N.B. 1982, c. E-7.2. Where the dismissal is without cause and the employment contract is mute on the length of notice required, or if the employment contract provides for a notice period that is short of the minimum prescribed