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Toronto employment labour lawyer Stephen Moreau says his client, Jean-Francois Oudin, is considering an appeal to the Supreme Court of Canada after the Ontario Court of Appeal upheld a termination clause that prevents him from claiming full compensation in lieu of common law reasonable notice of termination.
In Oudin v. Centre Francophone de Toronto 2016 ONCA 514, the panel of judges ruled the employee’s contract implied that the terms of the Employment Standards Act would be respected, meaning the worker’s claim for pay in lieu of reasonable notice was denied.
Moreau, partner with Cavalluzzo LLP, says his client is “disappointed” in the appeal court’s decision, which could have a serious impact on how an employee is compensated for a wrongful dismissal.
‘Considering options’
“We are considering our options, and may seek leave to appeal,” he says.
In this highly anticipated and debated appeal, the court upheld a lower court decision that had been heavily criticized and vetted by industry experts, because it was seen as an outlier that went against the weight of decided opinion.
The immediate effect of any decision upholding a potentially faulty termination clause is that a terminated employee is denied a significant severance package and can only receive very minimal amounts set by provincial minimum standards legislation, Moreau says.
The more profound potential effect is that, in blessing poorly drafted clauses, courts signal that such clauses will in future be more likely upheld, to the detriment of employees.
The decision came after Moreau’s client had commenced an action for wrongful dismissal against his former employer. The motion for partial summary judgment was not successful because the motion’s court judge held that a termination clause in a contract, which on its face permitted the employer to terminate the long-standing employee on the payment of eight weeks’ salary, was not void.
Eight weeks salary
The payment of only eight weeks’ salary on termination is illegal in Ontario under provincial employment standards law. The motion’s judge gave effect to some implicit expectation on the parties that their contract was designed to minimally respect that law, and so was not void, Moreau says.
According to the appeal court decision, the motion judge held that the employment contract “limited the appellant’s entitlement on termination to the minimum provided in the Employment Standards Act.
The respondent employer had agreed (and the Court of Appeal agreed) that the motion judge erred in his translation of the French contract language, but the court held that whatever the wording, this had no impact on what the parties actually intended.
“The respondent acknowledges that the judge’s translation was not accurate but submits that the error was of no moment. It is submitted that the reasons for judgment make it clear that he understood that the section referred to notice, not all of the requirements of the ESA. We agree,” the panel of judges wrote.
The Court of Appeal nonetheless rejected the employee’s overall argument that the properly translated clause, which only called for salary during the statutory notice period, was void.
The court concluded that it should defer to the motion judge’s interpretation of what the parties allegedly intended over the faulty words.
