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.
In Bryant v Parkland School Division, 2022 ABCA 220, the Justices considered the meaning of the following termination clause:
The Employment Standards Act in Ontario is legislation designed to protect the rights of all workers in the province. Under section 3, the Act specifies that it applied to any employee in the Province of Ontario, or any employee who is performing work outside of Ontario that is “…continuance of work performed in Ontario.” The Act contains numerous protections for Ontario employees, such as limiting the maximum hours of work in a week, providing an entitlement to overtime pay, and creating entitlements such as parental leave, vacation and personal leave. The Act also provides for the employee’s rights in the event of a termination of employment. Many employers have perceived these entitlements as onerous in some circumstances. In order to attempt to avoid such payments, or other obligations under the Act, employers have sought to have employees sign contracts containing provisions which purport to surrender the employee’s rights under the Act. This is generally referred to as “contracting out”.