By Howard Levitt and Hani Shamsi
Last year we wrote about an Ontario Court of Justice decision which offered employers some comfort. In the case, a company called Cannon Design was not penalized for a poorly drafted termination clause. Arguably, it was rewarded.
In 2016, Farah Rahman signed a written employment contract providing her an annual salary of $185,000, plus benefits and a bonus. Cannon ultimately fired her without cause four years later, at age 61 years.
Cannon tried to rely on an arguably defective termination contract and only pay Farah the equivalent of four weeks of her regular wages. She claimed that she was owed additional payments beyond what was required by the Employment Standards Act, which was all that her contract afforded her.
Justice Sean Dunphy decided that Rahman was not entitled to any further payments beyond that contractual amount. He found that Rahman and Cannon Design had equal bargaining power at the time that Farah had signed her employment agreement because she had received legal advice before signing.
It is not unusual for employees to speak to a lawyer before entering into an employment contract. We encourage this. Employees should understand the terms of their agreements before entering into them. But prudent practice is not intended to serve to the employees’ disadvantage, especially if their contract is invalid because of the employer’s poor drafting.
Justice Dunphy’s decision was significant. He...
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