Recent judgments have muddied the waters on the importance of considering the relative sophistication of employees in determining the enforceability of termination provisions in employment contracts. Employee sophistication had previously been considered in interpreting whether termination provisions were valid, on the premise that inherent in the employer-employee relationship is an imbalance of power. This consideration may not be as significant in light of recent developments in case law.
Earlier this year, the Ontario Court of Appeal in Waksdale v Swegon North America Inc. struck down a termination clause. This was not groundbreaking as this court has struck down a number of termination clauses in recent years.
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.