‘I'm hopeful this will be a useful tool to convince employers to use province- or territory-specific termination provisions’
HR professionals will want to take note of a recent Nova Scotia Supreme Court decision that’s a cautionary tale for employers relying on template contracts across multiple regions of Canada.
The crux of the case was an ambiguous termination clause referencing both “termination pay” and “severance pay”— the latter being a statutory concept unique to Ontario and the federal jurisdiction, not Nova Scotia.
“The judge just seized on that and said, ‘Well, there's an ambiguity: You said severance pay, we don't have statutory severance pay here, so you must mean common law,’” says Barry Fisher.
Many companies try to have a single contract for all of Canada — or even the world, he says, but “that's a complete mess.”
“Because they have offices across Canada and they want to have one contract, they try to come up with a clause that works everywhere — and it often works nowhere.”
The Nova Scotia case clearly shows this is not the ideal way to go about drafting employment agreements and termination provisions in particular, says Maria Constantine,
“I'm hopeful that this will be a useful tool to convince employers to use province- or territory-specific termination provisions so that they don't run into issues of this nature.”
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