An Ontario employment lawyer discusses common missteps employers make and the legal exposure that can result
Termination is the “capital punishment” of the employment relationship. For the modern employer, it is also a moment of significant legal exposure.
While hiring is often treated as an art, firing has become a rigid science governed by a complex intersection of employment standards legislation, the common law, and recent judicial decisions that leave employers facing a challenging legal landscape when ending employment relationships.
In Ontario, courts have signalled a zero-tolerance approach to ambiguous contracts and aggressive termination tactics. The standard practices of a decade ago are now fraught with liability, and a single procedural misstep can exponentially increase severance obligations. Employers operating under the mistaken belief that a generous severance offer cures all legal ills often face damages awards that far exceed the employee’s salary.
The most volatile trend in recent Ontario jurisprudence is the invalidation of termination clauses based on ‘for cause’ language. Recent decisions, including Dufault v. The Corporation of the Township of Ignace and Baker v. Van Dolder’s Home Team Inc., have fundamentally altered how these clauses are scrutinized.
A common drafting error involves reserving the right to terminate an employee “at any time” or “at the employer’s sole discretion.” The courts have ruled...
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