BY SIMRAN BAKSHI, ASSOCIATE LAWYER
In the excitement of finding a new job, it can be tempting to overlook the importance of the termination provisions that might be included in the employment contract you have been asked to sign.
Employment agreements in non-union environments typically govern the terms of the working relationship itself, but they may also set out exactly how the employment relationship may be brought to an end.
Generally, termination provisions in employment agreements are crafted to reduce employers' severance obligations upon termination. In fact, that employment agreement you barely remember signing might be at the center of your wrongful dismissal claim of the future.
ENTITLEMENTS WHERE THERE IS NO EMPLOYMENT AGREEMENT CONTAINING A TERMINATION PROVISION
At common law, an Ontario employer may usually dismiss any employee without cause by simply providing reasonable notice of termination or pay in lieu of that notice to the departing employee.
(Like virtually everything in the law, there are definite exceptions to this general statement. For example, if the termination is inherently discriminatory or a retaliatory reprisal after a legitimate workplace safety complaint by the terminated employee, termination may be legally prohibited, and reinstatement of employment could be ordered by a court or tribunal.)
Where there is no employment contract that provides for entitlements upon termination, "reasonable notice" is determined at common law by Ontario's courts upon considering a number of factual issues about the employment, including:
- the length of the employment
- the employee's age and seniority
- the level of the position held (e.g. managerial or entry level)
- the expected difficulty in finding comparable employment, and
- An extensive and still-developing list of other considerations. Collectively, these considerations are known in case law as the "Bardal factors," after being outlined by the court in a landmark 1960 case called Bardal v. Globe and Mail.
 “…[E]mployers should be provided with incentive to ensure that their employment contracts comply with all aspects of the employment standards legislation, including provision of adequate notice (or pay in lieu thereof) and mandated benefit continuation…” (emphasis added)
 The motion judge’s reasons make it clear that he understood and considered the appellant’s submission that - by referring only to “notice” - the clause ought to be interpreted as an attempt to contract out of all obligations under the ESA. The motion judge rejected this submission and found that there was no attempt to contract out of the ESA and that the parties had agreed that the ESA would be respected.
 The motion judge’s decision was based on his interpretation of a contract. He considered the circumstances of parties, the words of the agreement as a whole and the legal obligations between the parties. He concluded at paragraph 54:
Contracts are to be interpreted in their context and I can find no basis to interpret this employment agreement in a way that neither party reasonably expected it would be interpreted when they entered into it. There was no intent to contract out of the ESA in fact; to the contrary, the intent to apply the ESA is manifest.