The Trumping of Hope. The Court of Appeal for Ontario’s Merciless Approach to Contract Interpretation in Employment Law

On September 16, 2021, I published a post titled “Hope for Ontario's Employer Bar: The ONSC's Decision in Rahman v. Cannon Design Architecture Inc.” The artwork I selected for that post was the iconic “HOPE” poster used in 2008 by the Obama campaign when the then-US Senator was running for President.

“Hope” was an appropriate word to describe the employer bar’s reaction to the Superior Court’s decision in Rahman. In that case, Justice Sean F. Dunphy of the Ontario Superior Court of Justice had held that an employee’s sophistication and the fact that she had retained independent legal advice were factors in the determination of whether a contractual termination provision ought to be enforced as written.

Justice Dunphy further held, following the approach more commonly employed in British Columbia (see my commentary in my post Employment Law Isn't Real) that, “Every contract – including this one – must be interpreted with a view to giving expression to the mutual intention of the parties as expressed in the words used by them.”

The employee in the Rahman case appealed Justice Dunphy’s decision to the Court of Appeal for Ontario.

And, just as “Hope” left Washington on January 20, 2017, hope for the employer’s bar was “trumped” when the Court of Appeal released its decision in Rahman v. Cannon Design Architecture Inc., 2022 ONCA 451 (CanLII).

Court Declines to Issue Injunction Preventing Terminations for Failure to Adhere to Covid Vaccination Policy – But Employers Beware

What is the court’s power to prevent an employer from terminating an employee’s employment if that worker refuses to adhere to the employer’s mandatory COVID-19 vaccination policy?

In Blake v. University Health Network, 2021 ONSC 7139 (CanLII), Justice Sean F. Dunphy said, essentially, “none.”

Employee’s Sophistication, Representation by Legal Counsel, Not Reason to Uphold Illegal Employment Contract: ONSC

If an employment contract is negotiated as part of a larger commercial transaction, can the sophistication of the employee and the fact that he was represented by counsel during contract negotiations, be pointed to by the employer if the employee later alleges that the terms of the agreement are illegal?

In a rebuke (although not express) of Justice Dunphy’s decision in Rahman v. Cannon Design Architecture Inc., 2021 ONSC 5961, (released September 15, 2021,) Justice William Black in Steve Livshin, 2021 ONSC 6796 (CanLII), (released October 14, 2021,) held that if an employment agreement is illegal, then its unenforceable and the sophistication of the parties doesn’t matter.

Hope for Ontario's Employer Bar: The ONSC's Decision in Rahman v. Cannon Design Architecture Inc.

Are these words automatically fatal to a contractual termination provision post the Court of Appeal’s decision in Waksdale v. Swegon North America Inc.: “[The Employer] maintains the right to terminate your employment at any time and without notice or payment in lieu thereof, if you engage in conduct that constitutes just cause for summary dismissal.”

While many in Ontario’s employment law bar (especially those predominantly acting for plaintiffs) would respond with an emphatic “of course!” In Rahman v. Cannon Design Architecture Inc., 2021 ONSC 5961, Justice Sean F. Dunphy of the Ontario Superior Court held otherwise.

The ONCA’s Decision in Oudin v. CFT Leaves One 'Wundering' – Is Wunderman Dead?

Must the termination provision in an employment contract expressly employ the words “benefits” in order to be legally binding? Before the Court of Appeal for Ontario’s decision in Oudin v. Centre Francophone de Toronto, 2016 ONCA 514 (released June 28, 2016), I would have said “yes.” In fact, I said so rather emphatically in my earlier blog post “Benefits”: The Most Important Word in Ontario Employment Law. I mean, I declared the word “benefits” as “the most important word in Ontario employment law.” Perhaps I was mistaken.

Employee Owed More Severance Because He was Fired in June

Does it matter in which month an employee is fired? According to decision from the Ontario Superior Court of Justice, Fraser v Canerector Inc., 2015 ONSC 2138 (CanLII), the answer is “yes.”

In his reasons for decision granting the plaintiff 50% more reasonable notice than he otherwise would have awarded, the Honourable Justice Sean F. Dunphy wrote:

I must also account for the time of year when his employment was terminated in assessing reasonable notice. Mr. Fraser’s employment was terminated in June and it was quite foreseeable that hiring decisions at his level might have needed to be delayed somewhat due to the summer months in order to account for vacation schedules of key decision-makers.