Two years ago in Waksdale v. Swegon North America Inc., 2020 ONCA 391, the Ontario Court of Appeal established the proper method for determining whether a termination clause in an employment agreement is enforceable. Applying the standard established in this case, the factfinder must analyze the agreement as a whole rather than on a piecemeal basis, and if any termination provision in the agreement is contrary to the requirements of the Employment Standards Act, 2000 (ESA), all termination provisions in the contract will be considered unenforceable, regardless of the existence of a severability clause, which cannot be utilized to sever the offending portion of the termination provisions.
Since Waksdale was decided, its reasoning has generally been applied to invalidate actual termination clauses that do not comply with the ESA. In Henderson v. Slavkin, 2022 ONSC 2964, however, the court found that the actual termination clause complied with the ESA, but that the confidentiality and conflict-of-interest clauses were unenforceable because they did not comply. Accordingly, the court found all termination provisions in the employment agreement invalid, and that the employee had been wrongfully dismissed. Henderson v. Slavkin underscores how widely the principle in Waksdale will be applied.
Background
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