In Waksdale v. Swegon North America Inc., 2020 ONCA 391, the Ontario Court of Appeal held that a seemingly enforceable “Termination Without Cause” provision in an employment agreement was unenforceable because the employer conceded that a separate “Termination for Cause” provision in the same employment agreement breached the Ontario Employment Standards Act, 2000.
The Ontario Court of Appeal held that the “Termination Without Cause” provision and the “Termination for Cause” provision had to be interpreted together and holistically, notwithstanding that:
- the termination provisions were separate and applied to different situations;
- the termination was “without cause” on terms otherwise compliant with the Ontario Employment Standards Act, 2000; and
- the employer never relied on the “Termination for Cause” provision which the employer conceded breached the Ontario Employment Standards Act, 2000.
The facts of the decision were unique given that the Ontario Court of Appeal was not asked to consider the enforceability of the “Termination for Cause” provision. Employers are nevertheless encouraged to review the termination provisions in their employment agreements to ensure that such termination provisions do not breach the Ontario Employment Standards Act, 2000 either individually or holistically.
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