Fast-Tracking Wrongful Dismissal Claims: How Employers Can Benefit from Rule 21 Motions

How long will it take and how much will it cost before a judge can dismiss this wrongful dismissal case against me? That is a frequent question of employers who find themselves on the receiving end of a wrongful dismissal action in which the primary legal question is whether the employer’s employment contract legally establishes the employee’s severance entitlement.

In Bertsch v. DatastealthInc., 2024 ONSC 5593, the Ontario Superior Court of Justice demonstrated that when the parties make use of the tools the system affords them, the system can work.

As a summary of the chronology of events, the plaintiff’s employment was terminated on June 7, 2024. He filed his statement of claim on July 18, 2024. The employer’s motion to dismiss was heard on October 7, 2024, and the court released its decision on October 8, 2024.

That is how employment law cases should run.

Employers Do Not Have the Right to Terminate Employees "At Any Time"

Do Ontario employers have the right to terminate an employee’s employment “at any time” and in their “sole discretion”?

In Dufault v. The Corporation of the Township of Ignace, 2024 ONSC 1029, the Honourable Madam Justice H. M Pierce of the Ontario Superior Court of Justice sitting at Thunder Bay held that they do not.

Illegal Termination Provision Buried in Confidentiality Clause Voids Otherwise Valid Termination Clause

If an employment contract contains language that purports to allow the employer to terminate an employee for cause- and such language contravenes Ontario’s Employment Standards Act- does it matter where such language appears within the contract?

In Henderson v. Slavkin et al., 2022 ONSC 2964, Justice Carole J. Brown of the Ontario Superior Court of Justice rightly found that it does not matter where within the employment contract the offending language is found- if the language is illegal, then it voids the whole of the termination provision.

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.

Employer’s Conduct Repudiated Contractual Termination Provision: ONSC

As a matter of law, can the manner in which an employer dismisses an employee impact the enforceability of a contractual termination provision?

In Humphrey v. Mene, 2021 ONSC 2539 (CanLII), Justice Gina Papageorgiou, after an extensive and thorough review of applicable jurisprudence, held that, in some cases, it can.

The Judicial Consideration of Porky Pig

I appreciate that I have not blogged very much in 2021. To say this year has been “busy” in the employment bar might be a touch of an understatement. However, it would appear that notwithstanding the paucity of new posts, some of you are still using this blog as a resource.

In Lamontagne v. J.L. Richards & Associates Limited, 2021 ONSC 2133 (CanLII), the Honourable Justice Pierre E. Roger of the Ontario Superior Court sitting at Ottawa referenced me and one of my oft-used phrases to resolve a perennial favourite question of the employment-law bar – “is this termination provision legal?”

So with reference to the meme above this is a post about a decision which referenced this blog.

Dismissed Construction Employee Entitled to Reasonable Notice Despite Employment Contract and ESA

Should courts void contractual termination provisions if such provisions have even the remote potential to, at some later point in time, violate the strictures of the Employment Standards Act, 2000 even if, at the time of actual termination, there is no actual violation?

In Rutledge v. Canaan Construction Inc., 2020 ONSC 4246 (CanLII), Justice Judy A. Fowler Byrne of the Ontario Superior Court held that they should.

Employment Law Isn't Real

“Employment law isn’t real.”

Mention to my father that to which I have dedicated my intellectual focus and professional pursuits and he will be quick to inform you that employment law is not a real thing. He will ask you, rhetorically, who has ever heard of such a thing.

My father’s perspective on the subject of employment law reminds me of something I remember being told in law school: “There is no point taking environmental law.” Perhaps somewhat unexpectedly, it was my environmental law professor who told me and my classmates such a thing. The reason, my professor teased, that there was no point in taking environmental law was because “environmental law” was not a distinct subject. It was, others would argue, simply applied criminal law, or applied tort law. So long as one had an understanding of criminal law and private rights of remedy, why would one need an entire law course dedicated to the subject of the environment? “Because,” came the obvious answer, “it’s different.”

I did not take employment law in law school. Didn’t take labour either. In fact, the closest I came to learning about the subject in law school was one lunch hour talk about mandatory retirement, which I only attended because a friend had asked me to, and there was pizza.

Had I taken such a course however, and had the professor chosen to introduce the subject in the same provocative way that my environmental law professor had, I suspect that she would have said something similar to what I heard down the hallway in my environmental law class: ‘There is no point in taking employment law.’ Employment law is, by and large, applied contract law, with occasional criminal law and tort law, but mostly applied contract law.

“Employment law” therefore is not real. It is not unique or distinct. If one knows contract law, one can wing it at employment law.

If that thesis is true, then the Court of Appeal’s decision in, Waksdale v. Swegon North America Inc., 2020 ONCA 391 (CanLII) is wrong.

Quit While You're Ahead and Leave the Numbers Out of It

Quit while you’re ahead and leave the numbers out of it. Those are the fundamental lessons from the decision of the Court of Appeal for Ontario in Rossman v. Canadian Solar Inc., 2019 ONCA 992 (CanLII).

In yet another case concerning a contractual termination clause, the Court of Appeal for Ontario held that adding the words “Benefits shall cease 4 weeks from the written notice” after language guaranteeing that the employer would comply with the ESA not only violated the terms of the ESA on its face but created ambiguity as to the employer’s true intentions.

Commentary

The case is a useful primer on the fundamental principles governing contractual termination clauses. In his reasons for decision, MacPherson J.A. sets out what he calls the “leading ‘umbrella’ cases in employment law” (see paragraphs 16-24 of the court’s reasons for decision), which is worth a read for anyone new to this issue.

As I read the Court of Appeal’s decision, the reason the termination clause failed is because of the placement of the ‘ESA guarantee.’ I get the sense that, had the employer’s guarantee to provide minimum statutory entitlements followed the ‘four-week’ clause, then perhaps the court would have upheld the provision. It’s tough to say though.

The lesson that I think one can glean from this decision is that if an employer wants to put a limit on something, then they would be prudent to refrain from using actual numbers.

Keeping Babies in Bathtubs – ONSC Maintains Termination Clause Notwithstanding Contractual Issues

If an employment agreement contains one provision concerning the way by which one’s employer could terminate the agreement/employment with cause and a separate provision addressing the way by which the employer could terminate without cause, and the “for cause” provision is deemed to be illegal, then does that mean that the provision concerning “without cause” terminations is also illegal? Put another way, if the bathwater is polluted should we jettison the baby sitting in it? In Waksdale v. Swegon North America Inc., 2019 ONSC 5705, Justice Edward M. Morgan of the Ontario Superior Court of Justice (Toronto Region) held that just because one contractual provision is bad, doesn’t mean that one must overlook those provisions that are good.

Commentary

This case is helpful to employers, especially where certain, irrelevant aspects of their employment agreements are susceptible to attack. There has been a campaign, as of late, by plaintiff’s counsel to seek to find any technical non-compliance with the ESA and then argue that such non-compliance should void the entire employment agreement, even if other, relevant aspects of the contract are perfectly legal. The Waksdale case affirms the common sense principle that simply because one can find fault with one aspect of an agreement does not mean that an employee will necessarily be able to void the entire contract. Or, to go back to what I said before – just because the bathwater is dirty doesn’t mean we should lose the baby.

"Failsafe" Language Fails to Save Termination Provision

If a contractual termination clause provides for “the greater of” ESA entitlements and a set amount, will the guarantee of “the greater of” act as a failsafe if the rest of the provision is contrary to the provisions of the ESA?

In Andros v. Colliers Macaulay Nicolls Inc., 2019 ONCA 679 (CanLII) , the Court of Appeal for Ontario said “no.”

When Too Many Principles Converge: The Decision in Ariss v. NORR Limited Architects

What happens when ambiguous facts get resolved via summary judgment and then appealed? One gets decisions like Ariss v. NORR Limited Architects & Engineers, 2019 ONCA 449, which unfortunately add more confusion to the law of termination than clarity.

Simply Complying with the ESA not Enough to Rebut Common Law Presumption of Entitlement to Reasonable Notice – ON Divisional Court

Is the sole requirement to rebut the common law presumption of termination only upon reasonable notice that the contractual termination clause comply with the ESA, or is something else required?

In a decision released December 6, 2018, Movati Athletic (Group) Inc. v. Bergeron, 2018 ONSC 7258 (CanLII), the Ontario Divisional Court (Swinton, Thorburn, and Copeland JJ.) upheld an earlier decision of the Honourable Justice O’Bonsawin, 2018 ONSC 885, about which I blogged in my post Lack of Clear Warning Voids Termination Provision, which held something more is required.

In addition to upholding Justice O’Bonsawin’s decision, the Divisional Court provided some very clear, point-by-point analysis on what it takes for a contractual termination clause to sufficiently, and legally, rebut that common law presumption.

Top Five Cases of Importance to Ontario Employment Law - 2018 Edition

2018 has been, compared to some other years, relatively quiet with respect to employment law jurisprudence. Sometimes that can be a good thing.

The point of this blog post, however, is to consider what I consider to be the “Top Five Cases of Importance to Ontario Employment Law”. I have produced such a list since 2012:

• 2012
• 2013
• 2014
• 2015
• 2016
• 2017

And so, with another year coming to a close, it is once again time for this Ontario employment lawyer to provide his picks for the Top Five Cases of Importance to Ontario Employment Law!

Court Says New Zealand Lamb Company’s Termination Clause Just Plain Baaa-d

Given all the other noise about what it takes to make a contractual termination clause legally binding, one can be forgiven for overlooking the most basic rule: The language used must be clear.

The contractual termination clause considered in the case of McMichael v The New Zealand & Australian Lamb Company, 2018 ONSC 5422 (CanLII), about which I recently blogged for other reasons in my post, Choice of Law Provisions: Application of the Ontario Employment Standards Act to International Employees, clearly demonstrates this most basic of rules.

Today’s Tip for Making a Termination Clause Legally Binding: KISS

Stop me if you’ve heard this one before: An employer attempts to limit, by employing a contractual termination clause, its obligation to provide notice of termination to no more than the statutory minimum amount prescribed by the provisions of the Employment Standards Act, 2000 and the employee alleges that such clause is void ab initio because it violates the strictures of such statute. In Burton v. Aronovitch McCauley Rollo LLP, 2018 ONSC 3018 (CanLII) the Ontario Superior Court of Justice once again had reason to examine such arguments.

In this case, however, the court considered all of the earlier decisions in Roden, Wood, and Nemeth.

Agreement to Provide Greater of Set Amount and ESA Minimums Legally Binding: ONCA

You know what’s fun? Trying to make sense of whether the court is going to give effect to a contractual termination clause. And, in the case of Amberber v. IBM Canada Ltd., 2018 ONCA 571, the Court of Appeal for Ontario was once again asked to do just that.

As set out by Justice Douglas K. Gray, sitting ad hoc, put it in the court’s introductory words to its reasons for decision:

The issue in this case is the enforceability of a termination clause in a written contract of employment. On a motion for summary judgment brought by the employer, Justice Hebner [Justice Pamela L. Hebner of the Superior Court of Justice] held that the termination clause was ambiguous, and did not clearly set out an intention to deprive the respondent of his entitlement to damages at common law. She held the clause to be unenforceable and dismissed the motion.

The employer, IBM, was successful on appeal.

Lack of Clear Warning Voids Termination Provision

Must an employer provide its employees with a clear warning that it intends to provide no more than the minimum amount of notice prescribed by the Employment Standards Act, 2000 in order to create a legally binding employment contract?

Does the failure to provide a clear warning to an employee that her employment may be terminated upon the provision of no more than the minimum amount of notice prescribed by the Employment Standards Act, 2000 create an ambiguity voiding the contractual termination provision?

In a decision of the Ontario Superior Court of Justice sitting at Ottawa, released February 6, 2018, Bergeron v. Movati Athletic (Group) Inc., 2018 ONSC 885, the Honourable Justice Michelle O’Bonsawin said that the answer to those questions is “yes.”

Court of Appeal Confirms that Silence is Golden

Silence is golden. According to that proverbial saying it is sometimes better to say nothing than to speak.

So what does this ancient saying, and 1964 The Four Seasons’ B-side, have to do with employment law? In short, in Nemeth v. Hatch Ltd., 2018 ONCA 7 (CanLII), the the Court of Appeal for Ontario essentially said as much when it comes to termination clauses.

Undertaking to Comply with the ESA does Not Displace Common Law Presumption of Reasonable Notice

Does an employer’s undertaking to “comply with its obligations under the employment standards legislation” displace the common law presumption of termination only upon the provision of reasonable notice?

In a decision released October 20, 2017, Nogueira v Second Cup, 2017 ONSC 6315 (CanLII), the Honourable Justice Edward M. Morgan of the Ontario Superior Court of Justice ruled that it did not.

Such decision is yet another in the long series of decisions to consider what it takes to contract out of such entitlement and, for the reasons that follow, it leaves this employment lawyer saying: ¯\_(ツ)_/¯