There are many reasons why a termination clause may not be upheld by a court. Many termination clauses can be struck down by the court.
A termination clause may be struck down if it fails to meet the minimum guidelines set out in the Employment Standards Act (“ESA”). The ESA sets standards for employees, including termination and severance pay, as well as notice periods. Notably, the ESA only allows for the termination of an employee without notice and severance where there is “wilful misconduct, disobedience or wilful neglect of duty that is not trivial and has not been condoned by the employer”. If any part of the termination clause conflicts with the ESA, the clause will likely be struck down. Supporting this principle is the case Waksdale v. Swegon North America (2020),where the Ontario Court of Appeal ruled that if any part of a termination clause violates the ESA, the entire clause is voided.
A court may also strike down an entire clause if its wording is ambiguous or contradictory. Notably, in cases of unclear or vague termination clauses, the section of the contract will be interpreted in favor of the employee.
Additionally, a termination clause can be struck down if an employer acted in bad faith during the termination. Bad faith instances may include acting dishonestly, misleading the employee, behaving insensitively, or causing the employee undue mental distress. Similarly, a Further, a termination clause may not be upheld if is so unfair that it excessively favours the employer. However, this unjustness must be severe enough to where it shocks the conscience of the court.
This is by no means a conclusive list of ways to challenge a termination clause in your employment agreement. If you have been terminated, our legal team can help you receive the compensation you may be entitled to. Call us today, at no cost, to discuss potential next steps. There is no fee unless