The issue of whether termination clauses contained within employment agreements will be enforceable is one that routinely arises. As I have discussed on many occasions, many employers weaken their legal position by entering into a verbal agreement, or presenting an “offer letter”, and then subsequently asking their new employee to sign a far more detailed employment agreement that is designed solely for the benefit of the employer.
Often constructive dismissal cases involving a change in duties arise from an employer’s unilateral reduction in an employee’s duties. However, Damaso v PSI Peripheral Solutions Inc, is just the opposite. An employee alleged that an employer’s unilateral increase in his duties resulted in his constructive dismissal.
Just like pre-nuptial agreements, employers should contemplate termination when their employment contracts are drafted. A recent case illustrates why it is important to include a legally enforceable termination clause in an employment contract for all employees.