Does a Termination Clause Remain Enforceable in Cases of Constructive Dismissal in Canada?

Question from Tony, Does a Termination Clause Remain Enforceable in Cases of Constructive Dismissal in Canada?

Answer from AI:

In Canadian employment law, the enforceability of a termination clause in the event of constructive dismissal can be complex and depends on the specific circumstances of the case.

Understanding Constructive Dismissal

Constructive dismissal occurs when an employer unilaterally changes fundamental terms of the employment agreement without the employee’s consent, forcing the employee to resign. This could include significant changes to pay, work hours, or job responsibilities.

Termination Clauses and Constructive Dismissal

A termination clause in an employment contract typically outlines the notice period or payment in lieu of notice an employee will receive if they are terminated without cause. However, if an employee is constructively dismissed, the enforceability of this clause can be challenged.

According to Canadian law, if the termination clause is found to be in violation of employment standards legislation, it may be deemed unenforceable. This could occur if the clause provides for less than the minimum notice or severance pay required by law.

Legal Precedents

In the case of Waksdale v. Swegon North America Inc., the Ontario Court of Appeal ruled that if any part of a termination clause contravenes employment standards, the entire clause is unenforceable, even if the employee was not terminated for cause. This could potentially apply to cases of constructive dismissal.

Seeking Legal Advice

Given the complexity of these issues, it’s recommended that individuals consult with a legal professional for personalized advice. A lawyer can help interpret the terms of the employment contract, assess the validity of the termination clause, and guide the employee through the process of claiming constructive dismissal.

• Legal advice: Consult with a legal professional to understand your rights and obligations.
• Review your contract: Understand the terms of your employment contract and the specifics of the termination clause.
• Document changes: Keep a record of any unilateral changes made by your employer to your employment terms.

For more information on constructive dismissal and termination clauses, you can refer to the Government of Canada’s guide on dismissal of employment and the Ontario Court of Appeal’s decision in Waksdale v. Swegon North America Inc..