As an employer in a competitive market, there may be a strong business case to actively recruit top-performing employees from other companies. While there can be clear advantages to attracting talented and qualified employees, an aggressive recruitment strategy targeting workers in otherwise stable employment can also lead to unintended liability.

One of the issues we commonly encounter, when speaking with both individuals and employers, is whether the language in their employment contract addressing termination is enforceable.

For employees, where a termination provision is unenforceable, it can mean they have an entitlement to increased severance. Whereas for employers, if the clause does not hold, it can create uncertainty and result in unintended liability.

Restrictive covenants (such as non-competition and non-solicitation clauses) are a common feature of many employment agreements. It is relatively rare, however, that companies resort to litigation to enforce these requirements by way of an injunction. This may be down to the costs associated with doing so, or that the required legal threshold to obtain an injunction is high.

Hiring a new worker can be exciting. Presumably, by the time you make the job offer, something about the candidate has impressed you and suggested this person is the one for the job. Similarly, most hires are eager for the opportunity to work with you – that’s why they applied for and accepted the job!

The legal doctrine of frustration of contract is well known to employment lawyers but its application is not all that intuitive to the average employer or employee. In the recent case of Hoekstra v. Rehability Occupational Therapy Inc., 2019 ONSC 562, the Ontario Superior Court of Justice was asked to revisit this doctrine and opine as to whether an employee, as compared to an employer, can ever assert frustration to end an employment relationship.

We are not long into 2019 and yet one thing already seems clear – the law concerning employment contract termination clauses will continue to be the focus of a great deal of litigation in Ontario. In just the past few months alone, new decisions from the Superior Court have helped to advance the law and provide further guidance to employers on proper drafting of termination clauses.

On January 2, the Court of Appeal for Ontario released its first decision of 2019: Heller v. Uber Technologies Inc. et al. While the new year is just getting started, this decision is likely to be one of the most significant from an employment law perspective. Its implications are far-reaching and raise novel compliance challenges for Ontario employers that contract to resolve workplace disputes by way of private arbitration.

Vey Willetts lawyer Paul Willetts was quoted in the February 26, 2018 edition of The Lawyer's Daily. The article, "Automated legal services cost efficient, but can leave clients vulnerable, lawyers say", considers the advantages and disadvantages of artificial intelligence, and the automation of legal documents, for individuals in need of legal assistance. 

Vey Willetts LLP was recently successful in defeating a summary judgment brought by IBM Canada Limited. This decision, Amberber v. IBM Canada Limited, serves as an important reminder to employers of the need to draft contractual termination clauses with a high degree of clarity, or risk unanticipated liability in the event of a without cause dismissal.

A recent decision from the Ontario Court of Appeal, Roberts v. Zoomermedia Limited, dealt with the unusual situation of a defendant employer arguing that its own contractual termination provision was unenforceable and thus the plaintiff employee was entitled to common law reasonable notice. Employees frequently challenge the enforceability of a termination provision to seek common law notice, however, it is rare that an employer would do the same.

There are few areas of employment law more in flux (and vexing to lawyers) than that surrounding the enforcement of termination clauses. Part of the frustration is when the Courts provide seemingly contradictory messages on whether termination clauses will be upheld. In January 2017 alone, the Ontario Superior Court of Justice released two decisions that appear, on their face, to be somewhat at odds. 

Vey Willetts LLP was recently successful on a motion for summary judgment, seeking increased severance for an employee who had been wrongfully dismissed. In its decision, Vinette v. Delta Printing Limited (2017 ONSC 182), the Superior Court significantly increased Mr. Vinette's severance entitlement from 8 weeks to 15 months.

Fixed term employment contracts can serve a useful purpose within an organization. They permit employers to limit the engagement of an employee to a set project or a fixed period of time. In circumstances where there is a significant fluctuation in annual work volume or where temporary staff are required to offset absences (such as due to illness or a parental leave) fixed term contracts may be ideal.