Article No. 9
WRONGFUL DISMISSAL AND THE EMPLOYMENT CONTRACT
An employer’s obligation to provide reasonable notice upon termination or wrongful dismissal damages is by no means absolute. There will certainly be no such obligation where the employee is terminated for cause. The concept of “just cause” and employee’s conduct which can give rise to just cause for termination will be treated in future articles. Today, however, we will take a look at the increasingly common situation where an employer requires that an employee sign an employment agreement setting out the terms and conditions of the employment relationship. Such agreements will typically include termination provisions which attempt to restrict the employee’s right to notice (wrongful dismissal damages) in the event of termination without cause. In monetary terms, the contracted entitlement to notice will likely be significantly less than “reasonable notice” as prescribed at common law. Put differently, it is rare that an employment contract will provide more generous terms than the common law right to reasonable notice/wrongful dismissal damages.
If the termination provision of the agreement is drafted carefully by the employer, it may be difficult for a terminated employee to obtain reasonable notice/wrongful dismissal damages. The Courts, however, have shown a reluctance to enforce such agreements unless the following conditions are met:
Where the employment agreement is silent on the issue of notice, the Courts have found an implied term providing for an employee’s right to reasonable notice/wrongful dismissal damages in the event of termination.
Employees are best advised to seek the advice of an employment lawyer before executing an employment contract. It is appropriate to know what one is getting into before signing on the dotted line. An employee who has signed a contract which includes a term which seeks to limit their right to notice or wrongful dismissal damages will need to consult an employment lawyer to determine if there are any grounds upon which such term can be set aside and preserve the right to wrongful dismissal damages. Finding a basis for contesting the agreement can make the difference between Employment Standards minimum entitlements and potentially greater damages for wrongful dismissal. To be clear, the law on the enforceability of termination provisions is not precise or clear. It is best to seek the advice of an employment lawyer before you sign any agreement regardless of whether it is before or after you start employment. Furthermore, one should always seek the advice of an employment lawyer once terminated and before a Release is signed.