SCC denies leave to appeal in Waksdale - Employers' hopes dashed

The evanescent hopes of employers to see the decision of the Ontario Court of Appeal in Waksdale reversed by the Supreme Court of Canada have faded. Now that the leave to appeal has been denied, employers must come to grips with the reality that many of their employment agreements entered into before 2020 may be invalid. Despite the best legal craftsmanship, their employees may very well be entitled to common law reasonable notice. That is a heavy financial consequence for employers to bear, particularly in this economic climate.

So what can be done to limit exposure in the event of a dismissal? The fatal flaw in the Waksdale agreement was the exclusion of notice in the event of cause - it made no reference to the Employment Standards Act 2000: an employer might have cause under common law, but would still be required to pay statutory notice and severance pay. That omission was viewed as an unlawful attempt to contract out of the statute, rendering not only the clause but the entire notice provision which might be valid.

There are two solutions:

1. The cause provision refers to the ESA and might read: “In the event of cause, you will receive no notice or pay in lieu of notice, except for the minimum provisions under the Employment Standards Act 2000";

  2. Get rid of discrete provision for cause and simply say: “In the event of our terminating your employment, you will receive the minimum       

       provisions of the Employment Standards Act 2000 and that shall be your full and final entitlement.” In this way, there are no exclusions.

Lang may yer lum reek!