employment agreement
Stock rights are distinct from employment contract rights
It is the terms of an Equity Agreement, Shareholders’ Agreement or Stock Plan that determine employees’ rights with respect to shares. The common law relating to compensation for breaches of a contract of employment (i.e. reasonable notice) does not apply to shares where there is a distinct and separate agreement.
Is the termination clause in my employment agreement enforceable?
In this article, we consider some of the circumstances that can result in a termination clause being found unenforceable.
Will saving provisions no longer save us?
Saving provisions are widely used in employment agreements to ensure that even if a decision-maker finds that some aspect of some clause is not enforceable due to the fact that it could possibly, maybe, one day, maybe, sorta violate the Employment Standards Act (ESA), the saving provision will communicate to that judge that this was not the employer’s intention to do so.
Ontario Court of Appeal: Upon termination, employee’s shareholder rights distinct from common law entitlements
In Mikelsteins v Morrison Hershfield Limited, the Ontario Court of Appeal held that an employee was not entitled to compensation over his common law notice period in connection with shares he had purchased under a shareholders agreement.
Fixed-term contract costs employer $1.2 million in severance
Beware the fixed-term employment contract. That should be every employer’s mantra following the recent decision of the Ontario Superior Court in McGuinty v. 1845035 Ontario Inc. (McGuinty Funeral Home), 2019 ONSC 4108 (“McGuinty”).
Do all arbitration clauses in employment agreements violate the ESA?
In Rhinehart v Legend 3D Canada (2019 ONSC 3296) Justice Sanfilippo was faced with a motion by the defendants to stay the action as the employment contract had an arbitration clause that said as follows:
Slate not wiped clean by release in context of share sale
Can an employee extinguish his statutory right to severance pay by way of a full and final release signed in the context of a share sale?
Choice of law provisions: Application of the Ontario Employment Standards Act to international employees
Can an employer and employee agree by contract that the laws of Ontario, Canada will apply to terms of their employment relationship, even if: (a) the employee works and is physically situated in in Los Angeles, California; and (b) the company is a New Jersey company with its head office in the State of Connecticut?
Alberta Court of Appeal rules on termination clause
The case of Holm in this article is a good reminder of the importance of drafting clear and unambiguous termination clauses and the consequences of failing to do so.
What happens to employment contracts when an employer sells the assets of its business?
The Court of Appeal for Ontario has confirmed that in an asset sale, a purchaser’s offer of employment to a seller’s employee can constitute consideration for changes in an employment contract — including a new termination clause.
British Columbia Supreme Court rules on reasonable notice when an employee is terminated before their first day of work
In Buchanan v. Introjunction Ltd., 2017 BCSC 1002, the Court considered a case where the employer terminated the plaintiff’s employment before he commenced work. The Court rejected employer’s argument that the probation period clause applied to limit its liability to provide notice of termination of employment.
Update on probationary clauses from Ontario Court of Appeal
Recently, the Ontario Court of Appeal affirmed that the probationary clause, which provided, simply, “Probation…six months”, was enforceable, and that the employee was not entitled to anything more than the one week of pay in lieu of notice of dismissal pursuant to the Ontario Employment Standards Act, 2000 (“ESA”).
Don’t take a chance on it: The uncertainty of ESA-only termination clauses
In January 2017, the Ontario Superior Court of Justice released its decision in Cook v. Hatch upholding a less than perfect termination clause that failed to reference statutory severance pay or provide for continued health benefits during the statutory notice period. A month later, the Court of Appeal responded with its decision in Wood v. Fred Deeley Imports Ltd. where it overturned a motion judge’s ruling upholding a similar termination provision. And so, the age old debate about the enforceability of ESA-only termination provisions rages on.
Can an employment agreement executed after the employee starts work be enforced? The Ontario Court of Appeal says yes.
In Wood v. Fred Deeley Imports Ltd., the Ontario Court of Appeal confirmed that a “written employment agreement is not unenforceable merely because the employee signs it after starting to work”. The Court found the trial judge’s inference to be reasonable, noting that Deeley did not claim she reviewed the terms of her employment for the first time on April 24, 2007, or that the contract contained any new material terms. The Court acknowledged that the contract was likely signed the day after Deeley started work as “a matter of administrative convenience.” In these circumstances, fresh consideration was not necessary.
Departing employees gone rogue
The business consequences of departing employees gone rogue were recently highlighted in Prim8 Group Inc. v Tisi. In that case, an officer and director of Prim8 Group Inc. (Tisi) resigned from his employment to set up a competing business. Two days before his resignation, Tisi removed electronic equipment from Prim8’s premises, some of which contained proprietary information, and refused to return it. Shortly thereafter, another employee resigned from Prim8 without notice to join Tisi’s competing business.
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