Marc W. Kitay

Two employees of Canadian Imperial Bank of Commerce (CIBC) employed as Mobile Investment Consultants were terminated without cause due to a restructuring.

They sued for wrongful dismissal, claiming entitlement to damages in lieu of reasonable notice under common law.

The central issue was whether the termination provision in their employment contracts was enforceable or violated the Canada Labour Code.

The court found the termination provision unenforceable because the "For Cause" provision defined cause more broadly than the statutory definition of "just cause" under the Canada Labour Code, and the "Without Cause" provision's language permitting termination "at any time" was contrary to the statutory framework.

The court determined reasonable notice periods of seven months for one plaintiff and twelve months for the other, and awarded damages for salary, commissions, bonuses, and benefits during those periods.

The plaintiff, Patrick Ojo, brought a motion for summary judgment against his former employer, Crystal Claire Cosmetics Inc., regarding his termination without cause.

The key issues were the enforceability of the employment agreement's termination clause, the reasonable notice period if unenforceable, mitigation of damages, and entitlement to a pro-rated bonus.

The court found the termination clause unenforceable due to non-compliance with the Employment Standards Act, 2000, specifically regarding "just cause for summary dismissal" and continuation of benefits.

The court awarded the plaintiff three months' common law reasonable notice and found he had adequately mitigated his damages.

However, the claim for a pro-rated bonus was dismissed due to lack of contractual entitlement and insufficient evidence.

An employee was terminated after eight years and four months of employment when her employer sold its assets.

The employment agreement contained a termination clause providing two weeks' notice per year of employment or pay in lieu thereof, stated to be inclusive of all statutory entitlements under the Employment Standards Act, 2000.

The employer paid the employee thirteen weeks' working notice plus a lump sum equivalent to eight weeks' pay, and made benefit contributions during the notice period.

The employee sought damages equivalent to twelve months' notice, arguing the termination clause was unenforceable.

The motion judge dismissed the motion, finding the clause enforceable but determining that if wrong, reasonable notice would be nine months.

The Court of Appeal allowed the appeal, finding the termination clause unenforceable because it excluded the employer's statutory obligation to contribute to the employee's benefit plans during the notice period and did not clearly satisfy the employer's statutory obligation to pay severance pay.