Why proactive review is essential in shifting legal landscape
With the end of the year around the corner, many Canadian employers are beginning to prepare for staffing changes and onboarding new team members. In non-unionized workplaces, a carefully drafted employment agreement can assist in safeguarding employers by limiting potential liability in the event of dismissal. It also provides clarity and certainty for both the employer and the employee by outlining each party’s rights and obligations in the circumstances under which the employment relationship comes to an end. As employers take to reviewing and revising their employment agreements, it is important to include a well-crafted termination clause.
Recent developments in Canadian employment law have made it increasingly difficult to draft valid and enforceable termination clauses that can withstand court scrutiny.
Courts across Canada have made it clear that, in order to be valid and enforceable, a termination clause must be compliant with the applicable employment standards legislation.
For instance, in MacDonald v. Saskatoon Minor Basketball Association, 2024 SKKB 85, the employer argued that its executive director was an independent contractor who had been retained pursuant to a series of fixed-term contracts - the most recent of which included a without-cause termination provision that set out an entitlement to six weeks’ notice of termination. The Saskatchewan Court of King’s Bench rejected the employer’s...
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