Court File and Parties

COURT FILE NO.: CV-18-600084 DATE: 20181221 SUPERIOR COURT OF JUSTICE - ONTARIO

RE: BASEL KHASHABA, Applicant AND: PROCOM CONSULTANTS GROUP LTD., Respondent

BEFORE: Carole J. Brown J.

COUNSEL: Ben Hahn, for the Applicant D. Jared Brown, for the Respondent

HEARD: September 24, 2018

Endorsement

Overview

[1] The applicant brings this application pursuant to Rules 14.05(3)(d) and/or (h) of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194 for the determination of rights that depend on the interpretation of a contract or statute, with regard to an Employment Agreement that he alleges was concluded between himself and Procom Consultants Group Ltd. (“Procom”). Procom is a recruiting, staffing and placement agency in the IT sector.

[2] Mr. Khashaba was contacted by Procom on behalf of one of Procom’s clients, and went through the process of applying for and accepting a position with Procom, with the understanding that although the contract was with Procom, he would be working for the client. Mr. Khashaba, believing that Procom had hired him, gave notice to his employer at the time. In Procom’s view, the employment agreement was not concluded. Ultimately, Procom told Mr. Khashaba that the client did not want to move forward with hiring him.

[3] Mr. Khashaba did not commence employment.

[4] Mr. Khashaba brought this application, claiming that the Employment Agreement’s early termination provision is unenforceable because it violates the Employment Standards Act, 2000, S.O. 2000, c. 41 (the “ESA”) by allowing termination without notice or termination pay for behaviour that meets the standard of “cause” as defined at common law, while the ESA requires the higher standard of “wilful misconduct.” Mr. Khashaba submits that, as a result of this violation, the entire “Early Termination” provision in the Employment Agreement, consisting of five clauses, is void. In the absence of an enforceable early termination provision, he submits that he is entitled to termination pay for the common law notice period, being the remaining term of the contract. He also submits that he is not subject to a duty to mitigate.

[5] Procom submits that it did not conclude an employment contract with Mr. Khashaba, and that its Employment Agreement does not violate the ESA. Further, Procom submits that if there is an issue with a clause in the “Early Termination” provision, it is severable pursuant to the severability clause in the Agreement. Finally, with regard to mitigation, it submits that Mr. Khashaba has failed to mitigate his losses by refusing Procom’s offer to assist him in finding another job or that, in the alternative, he has completely mitigated his losses because he found another job within two weeks.

[6] For the reasons that follow, I find that Procom did conclude a contract with Mr. Khashaba. I also find that the “Termination for Cause” provision of the Employment Agreement does not comply with the ESA. However, I do not find that this non-compliance voids the entire “Early Termination” provision, or that in the circumstances of this case, Mr. Khashaba is entitled to wages for the entire term of the contract.

Facts

Communication between the parties

[7] On March 27, 2018, Mr. Khashaba received an email from Charles Liikson, a Senior Technical Recruiter with Procom, asking if he would be interested in applying to become a “Purchasing Assistant” for a company called Alectra Utilities. The position was for a six month term, with 35 hours per week and a pay rate of $36.77 per hour, more than Mr. Khashaba was making at the time. Mr. Liikson had found Mr. Khashaba’s résumé because Mr. Khashaba had made it available on Monster.com, a job-finding site.

[8] Mr. Khashaba replied that night to say that he was interested, and to ask for more information.

[9] The next morning, March 28, 2018, Mr. Liikson requested an updated version of Mr. Khashaba’s résumé and the two made arrangements to set up a phone call.

[10] The phone call took place that afternoon, and resulted in Mr. Liikson scheduling Mr. Khashaba for an interview with Alectra on April 3, 2018.

[11] Mr. Khashaba attended the interview and felt that it went well.

[12] Mr. Khashaba emailed Mr. Liikson two days after the interview, on Thursday April 5, to ask if he had heard any feedback from Alectra. Mr. Liikson told Mr. Khashaba that he would know Alectra’s decision by the next day or the Monday following.

[13] By Monday, April 9, 2018, Mr. Khashaba had not heard from Alectra or Mr. Liikson. He emailed Mr. Liikson, who replied “They are interested. You are their preferred candidate.” He asked Mr. Khashaba to forward him references, saying “I think if we could send them a good completed reference that would seal the deal.” Mr. Khashaba sent his references.

[14] Later that day, Mr. Liikson emailed Mr. Khashaba, saying “Please call me ASAP”. When they spoke, Mr. Liikson told Mr. Khashaba that Procom was offering him the position with Alectra. Procom’s evidence is that Mr. Liikson explicitly instructed Mr. Khashaba during this call that he should not give notice to his employer until the details of the job were finalized. Mr. Khashaba’s evidence is that they did not discuss giving notice to his employer.

[15] Mr. Khashaba next received an email from Jamie Faulkner, of Procom. It stated:

Charles [Liikson] sent us a note that you will be accepting the offer from Alectra. I just wanted to extend my congratulations to you and let you and let you know [sic] that I will be your Procom point of contact for this contract. I will send you an official onboarding email tomorrow.

[16] The next day, April 10, 2018, Mr. Khashaba received the onboarding email from Ms. Faulkner. She wrote:

I have received the below information regarding your upcoming assignment at Alectra Utilities.

Approximate start date: April 30, 2018 (Please note: once your criminal checks are clear I will inform you and you can provide your notice to your current employer.)

End date: October 31, 2018

Hourly pay rate: $36.77

[17] The email also outlined the steps Mr. Khashaba needed to take next, including providing copies of documents and personal information. Later that day, Mr. Khashaba received another email from Procom about completing Ministry of Labour training online. He provided the information and completed the other steps requested soon after.

[18] On the following day, April 11, 2018, Mr. Khashaba and Ms. Faulkner continued to communicate about completing his criminal background check and tax forms.

[19] At 2:07 pm on April 11, 2018, Ms. Faulkner sent Mr. Khashaba an email with the Procom Employment Agreement and two related schedules attached. It read:

Congratulations again on your contract with Alectra.

Please find attached your contract documentation:

• Contract
• Schedule A
• Schedule B

Please print the above, initial every page as well as sign/date as needed on the relevant pages.

Kindly return ALL the pages of the completed contract and ALL the pages of the schedules at your earliest convenience to [Ms. Faulkner’s contact information].

We will advise once the security checks have been completed and provide the start details once received from the client.

[20] That evening, Mr. Khashaba forwarded to Ms. Faulkner a few outstanding documents. He indicated to her that he would send the remaining documents and the signed contract back the next day.

[21] The next morning, April 12, 2018, at 8:45 am, Ms. Faulkner emailed Mr. Khashaba confirming receipt of the documents.

[22] Nine minutes later, at 8:54 am, she sent a second email stating “I just wanted to let you know that your criminal check is now complete/clear.”

[23] When Mr. Khashaba saw her email, he signed the contract documents and gave notice to his current employer that he would be leaving.

[24] A minute after Ms. Faulkner’s email, Eric Descoteaux, Ms. Faulkner’s manager sent Mr. Khashaba an email stating “Please hold off on giving notice until I confirm start date with Alectra.”

[25] At 4:35 pm that afternoon, Mr. Khashaba sent Ms. Faulkner the signed contract, and told her that he had given notice to his employer. At 4:46 pm, Mr. Descoteaux replied stating, “I asked you not to give notice as I was waiting for confirmation from them. I hope you can go back and take that back as it hasn’t been confirmed yet.” Mr. Khashaba states that at this point he looked again and saw for the first time Mr. Descoteaux’s earlier email telling him to hold off on giving notice.

[26] Mr. Khashaba replied advising Mr. Descoteaux that he had been relying on Ms. Faulkner’s email of April 10, 2018 which stated “once your criminal checks are clear I will inform you and you can provide your notice to your current employer.” At 5:34 pm, Mr. Descoteaux replied, “Always an outside chance it doesn’t get approved. That’s why I don’t want you to give notice until 100% a go.”

[27] Mr. Khashaba tried to extend his notice of resignation the next day, April 13, 2018, but his employer would not allow it. Mr. Khashaba emailed Mr. Descoteaux to ask about the status of the Procom position. Mr. Descoteaux replied that Alectra did not want to go ahead with hiring Mr. Khashaba.

[28] In cross-examination on his affidavit, Mr. Descoteaux agreed that Alectra had never expressed to Procom that it had chosen Mr. Khashaba for the job. He also agreed that on April 12, 2018, when he wrote to Mr. Khashaba “Always an outside chance it doesn’t get approved”, he knew that Alectra had chosen a different candidate. However, Mr. Descoteaux stated that there are times when a client chooses a different candidate and that candidate does not pass certain checks and does not get the approval to go ahead, such that there was a possibility that the job could still be available for Mr. Khashaba.

[29] Procom offered to assist Mr. Khashaba to find a different job, but Mr. Khashaba did not respond.

[30] Mr. Khashaba subsequently started a new job on May 22, 2018, about five weeks after he left his previous employer, and about three weeks after the Procom position’s scheduled start date. Mr. Khashaba’s new job pays $24.00 an hour at 44 hours per week, and is for an indefinite term.

Terms of the Employment Agreement

[31] The Employment Agreement contains an Early Termination provision:

5. Early Termination (a) Resignation You must give 2 weeks’ prior written notice to Procom if you wish to terminate this Agreement before the Scheduled End Date, which notice may be waived in whole or in part by Procom at its sole discretion, without any further obligation or liability to you, other than accrued wages, vacation pay, and benefits continuation (if applicable) to your last day of active employment. (b) Termination for Cause Procom may, at its option, terminate your employment immediately for cause, without prior written notice or compensation of any nature. For these purposes, “cause” means any grounds at common law for which an employer is entitled to dismiss an employee summarily without notice or compensation in lieu of notice. (c) Termination without Cause Notwithstanding the fixed Term of this Agreement, Procom may terminate your employment without cause at any time by providing you with only the minimum amount of notice of termination or pay in lieu thereof (at the Company’s sole discretion, in any combination), minimum benefits continuation (if applicable), and minimum severance pay (if applicable), as required by the Employment Standards Act, 2000, as well as accrued wages and vacation pay up to and including the date of termination. In no event will you receive less than your minimum entitlements under the Employment Standards Act, 2000. If a greater entitlement is required under the Employment Standards Act, 2000 than this provision grants to you, your entitlements shall automatically be increased to satisfy only the minimum entitlements required by the Employment Standards Act, 2000 on the termination of your employment. You understand and agree that the entitlements set out in this paragraph will constitute your full, exclusive and final entitlements to notice or pay in lieu of notice, severance pay (if applicable), and benefits continuation (if applicable), including in the event of a constructive dismissal and including any entitlements to common law notice and by your acceptance of this Agreement waive any further other claim at common law relating to such termination. (d) You agree that these provisions respecting resignation and termination shall remain in effect throughout this Agreement and any renewal or extension of this Agreement, notwithstanding any other changes to the terms and conditions of this Agreement or to any renewal or extension of this Agreement, unless a specific written agreement is made to change these provisions. (e) Return of Property Upon termination of your employment for any reason whatsoever, you shall immediately return all property of the Client…

[32] The cover page also sets out some conditions and the manner of acceptance:

This offer is contingent on you being legally entitled to work for Procom in Canada. Prior to commencing any work you shall disclose to Procom if you are working subject to a temporary work permit. You will provide the Company a copy of your work permit and you understand that you will not be permitted to begin work before the Company is provided with a copy of the Work Permit.

This offer… once signed by you, will constitute a temporary employment agreement (“Agreement”) between Procom and you that shall be binding on you and your legal representatives and on Procom and its successors and assigns.

[33] Under “Special Considerations”, the Employment Agreement states, “This offer may be subject to acceptable background criminal records and credit checks. You acknowledge that Procom reserves the right to retract this offer should your records return unacceptable.”

Issues

[34] The applicant characterizes this case as being solely about the validity of the “Early Termination” provision in the Employment Agreement. He submits that if the “Early Termination” provision complies with the ESA, the applicant gets nothing, and if the “Early Termination” provision does not comply, the applicant gets the value of the unexpired term of the contract, $33,460.70.

[35] I cannot agree with such a narrow characterization of the issues in this case. I am of the opinion that, even if there were a contract between Procom and Mr. Khashaba and that contract is not consistent with the ESA, Mr. Khashaba is not inevitably entitled by that non-compliant clause to the value of the unexpired term of the contract. If the contract does not comply with the ESA, I must still analyze the impact of that violation in the context of the facts of this case and the applicable law.

[36] The issues therefore are:

1. Was there a valid contract?
2. Does the contract violate the ESA?
3. What are the consequences of a violation of the ESA?

Analysis

Was there a contract?

Legal Framework

[37] An effective agreement requires a meeting of the minds of the parties. An enforceable contract requires a consensus between the parties on all of the essential terms of their agreement. It is the responsibility of the parties, not the court, to clearly express those essential terms so "that their meaning can be determined with a reasonable degree of certainty": Scammell and Nephew Ltd. v. Outston, [1941] A.C. 251 (H.L.).

[38] In G.H.L. Fridman, The Law of Contracts in Canada, 6th ed. (Toronto: Thomson Carswell, 2011) at p.15, the judicial test for determination of when an enforceable contract is created was set forth as follows:

Constantly reiterated in the judgments is the idea that the test of agreement for legal purposes is whether the parties have indicated to the outside world, in the form of the objective reasonable bystander, their intention to contract and the terms of such contract. The law is not concerned with the parties' intentions but with their manifested intentions. It is not whether or not what an individual party believed or understood was the meaning of what the other party said or did that is the criterion of the agreement; it is whether a reasonable [person] in the situation of that party would have believed and understood that the other party was consenting to the identical terms.

[39] Fridman continues at p.15:

Sometimes it is a simple matter to decide what the parties have manifested to each other, and consequently, whether they have agreed, and if so, upon what. This is especially true where a document containing their agreement has been prepared and signed by the parties. If the plain wording of the document reveals a clear and unambiguous intent, it is not necessary to go further. Indeed, once that has been done, it may not be possible to have recourse outside such document, either to other written material or to parol evidence from the parties or anyone else, in order to explain, or otherwise clarify what is contained in the document.

Application

Was there intent to contract?

[40] Procom prepared a document containing the terms of its offer and sent it to Mr. Khashaba in an email stating “Congratulations again on your contract with Alectra” and instructing him to “Please print the above, initial every page as well as sign/date as needed on the relevant pages”, to return all the pages to Procom, and that “we will advise once the security checks have been completed and provide the start details once received from the client.”

[41] That document states that, once signed by Mr. Khashaba, it is binding on him and on Procom.

[42] The plain wording of this document, and the context in which the offer was made, reveal a clear and unambiguous intention to make a binding contract.

Were the terms of contract settled?

[43] Procom’s position is that the start date for the contract was not settled. It submits that Procom repeatedly advised the applicant that the start date was “approximate” and that he should not give notice until the start date was finalized.

[44] The first place to look to ascertain what the parties agreed to is the plain wording of the contract. The contract states “Scheduled Start Date: Monday, April 30, 2018.” Under the “Term” provision it states that “Your term of employment with Procom (the “Term”) will commence on the Scheduled Start Date…” This does not appear to reveal any ambiguity or lack of clarity that needs to be interpreted by reference to communications between the parties.

[45] Furthermore, even if the communication between the parties were relevant, I am not convinced that Procom effectively communicated to Mr. Khashaba that his start date was not finalized, or that he should not give notice because his start date was not finalized – at least not before he accepted its offer. Other than the contested phone call, Procom communicated this fact in writing on only two occasions before Mr. Khashaba accepted the offer. The first was Ms. Faulkner’s email of April 10, 2018, which stated the “Approximate start date”, but which also stated “once your criminal checks are clear I will inform you and you can provide your notice to your current employer.” The second statement accompanied the written offer, and stated that “We will advise once the security checks have been completed and provide the start details once received from the client.” Although these statements imply some uncertainty about Mr. Khashaba’s start date, I am not of the view that they would lead a reasonable person to believe that a key term of the contract remained unsettled such that there would be no concluded contract.

[46] Mr. Descoteaux’s email stating “Please hold off on giving notice until I confirm start date with Alectra” was quite clear, but because it came after Procom sent the offer, it could not be used as an aid to interpret what was in the minds of the parties at the time the contract was made.

Was the contract contingent such that there were no obligations formed until a condition is satisfied?

[47] Procom also submits that the contract was not concluded because the offer was contingent and/or conditional. It states that “Although the Applicant’s criminal record checks were completed, at no time did Procom receive notice from Alectra, or communicate to the Applicant, that Alectra was satisfied with the results.”

[48] The contract states “This offer may be subject to acceptable background criminal records and credit checks. You acknowledge that Procom reserves the right to retract this offer should your records return unacceptable.”

[49] The Supreme Court in Turney v. Zhilka, [1959] S.C.R. 578 held that a true condition precedent is an external condition upon which the existence of the obligation depends – in that case, the obligations under the contract did not exist if the Village Council did not approve a land subdivision plan. Until the event occurs, there is no right to performance on either side. In The Law of Contract in Canada at p. 426, Fridman writes that “The chief point about the distinction made by the Supreme Court of Canada in Turney v. Zhilka was that “true” conditions precedent could never be waived unilaterally, whereas other conditions precedent could be waived by the party for whose benefit such condition had been introduced into the contract.”

[50] Based on the above, I am not of the view that the background criminal records and credit checks condition was a true condition precedent that could prevent the formation of a contract between Procom and Mr. Khashaba.

[51] On the plain wording of the contract, Mr. Khashaba’s successful background checks were not an external condition, and did not depend on any “event” or act taken by a third party. The contract does not say that Alectra needed to approve the results of the background checks. The language of the contract conveys that Procom retained discretion to waive this condition unilaterally, by not exercising its right to retract the offer: it stipulates that the offer “may” be subject to acceptable checks and that Procom “reserves the right to retract” it.

Does the Employment Agreement violate the ESA?

[52] The “Termination for Cause” provision of the Employment Agreement does not comply with the ESA as it allows for termination without notice or termination pay for conduct meeting the standard of just cause at common law, while the ESA requires the higher standard of “wilful misconduct”.

[53] Plester v. Polyone Canada Inc., 2011 ONSC 6068, aff’d 2013 ONCA 47, considered the difference between wilful misconduct and just cause at common law, concluding that wilful misconduct is a higher standard. Wilful misconduct involves an assessment of subjective intent, whereas just cause is a more objective standard. Wilful misconduct is colloquially described as “being bad on purpose.” Careless, thoughtless, heedless, or inadvertent conduct, no matter how serious, does not meet the ESA wilful misconduct standard. By contrast, common law just cause for dismissal may be found on the basis of prolonged incompetence, without any intentional misconduct. See also Cummings v. Quantum Automotive Group Inc., 2017 ONSC 1785 at para. 37.

[54] The saving language in the “Termination without Cause” provision, which states that no employee will get less than they are entitled to under the ESA, cannot apply to save the “Termination for Cause” provision. Procom relies on Burton v. Aronovitch McCauley Rolley LLP, 2018 ONSC 3018, in which the court found that interpreting the employment agreement in accordance with the intention shown in a “saving provision” meant that there was no violation of the ESA. However in Burton, the saving language was obviously applicable to the part of the termination clause that allegedly violated the ESA. The saving language came after the part of the termination clause that allegedly violated the ESA and stated that “notwithstanding the foregoing, and for greater certainty” an employee will be entitled to everything the ESA requires. Here, the provisions are separate, and it is not at all clear that the saving language within the “Termination without Cause” provision applies to terminations under the “Termination for Cause” provision.

[55] The principle that “where the language of a termination clause is unclear or can be interpreted in more than one way, the court should adopt the interpretation most favourable to the employee” must also be considered: Wood v. Fred Deeley Imports Ltd., 2017 ONCA 158 at para. 40, citing Ceccol v. Ontario Gymnastics Federation (2001), 149 O.A.C. 315.

What are the consequences of the violation of the ESA?

[56] I find that the “Termination for Cause” provision (clause 5(c)) is void. However, the remainder (the other four clauses) of the “Early Termination” provisions are still valid and enforceable.

Legal Framework

[57] Since Machtinger v. HOJ Industries Ltd., [1992] 1 S.C.R. 986, Ontario courts have answered questions about illegal termination provisions in a way that incentivizes employers to draft ESA-compliant termination provisions. Section 5 of the ESA, which states that an employer and employee cannot contract for less than the ESA provides for, has been given a broad and remedial interpretation. Justice Iacobucci at pps. 1003-1005 of Machtinger is frequently cited. In summary, he stated that:

• The objective of the ESA is to protect the interests of employees by requiring employers to comply with certain minimum standards, including minimum periods of termination.
• The ESA seeks to protect employees because they are often in an unequal bargaining position in relation to their employers, and may be unaware of their statutory and common law rights.
• Accordingly, an interpretation of the ESA which encourages employers to comply with the minimum requirements of the ESA, and so extends its protections to as many employees as possible, is to be favoured over one that does not.
• If the only sanction which employers potentially face for failure to comply with the minimum notice periods prescribed by the ESA is an order that they minimally comply with the ESA, employers will have little incentive to make contracts with their employees that comply with the ESA. Employers can rely on the fact that many employees will not challenge contractual notice provisions which are in fact contrary to employment standards legislation, and they will only have to comply with the ESA for those individual employees who take legal action after they are dismissed.
• An approach more consistent with the objects of the ESA is that, if an employment contract fails to comply with the minimum statutory notice provisions of the ESA, then the presumption of reasonable notice will not have been rebutted. Employers will be incentivized to comply with the ESA to avoid paying for longer common law reasonable notice periods.
• This approach does not disproportionately burden employers. An employer can readily make contracts with his or her employees which referentially incorporate the minimum notice periods set out in the ESA or to the employees’ notice entitlement under the ESA.
• If an employer has attempted, whether deliberately or not, to frustrate the intention of the legislature by violating the ESA, it would indeed be perverse to allow the employer to avail itself of legislative provisions intended to protect employees, so as to deny the employees their common law right to reasonable notice.

[58] The Ontario Court of Appeal also recently confirmed in Wood v. Fred Deeley Imports Ltd., 2017 ONCA 158 at para. 28 that “Termination clauses should be interpreted in a way that encourages employers to draft agreements that comply with the ESA.”

[59] These principles of interpretation and approach to termination provisions that fail to comply with the ESA have led to the cases that the applicant relies on, which provide:

• It does not matter whether the employer actually complied with the ESA, or whether the illegal provision in the agreement actually applied to the employee. If the wording of the employment contract allowed for the employer to potentially violate the ESA then the termination clause is void and the employee is entitled to the common law notice period: Andros v. Colliers Macaulay Nicolls Inc., 2018 ONSC 1256 at paras. 25-26, Covenoho v. Pendylum Ltd., 2017 ONCA 284 at para. 7, Garreton v. Complete Innovations Inc., 2016 ONSC 1178 at para. 27.
• Termination provisions must be clear that they are specifying a period of notice other than common law reasonable notice: Machtinger at p. 998, Ceccol v. Ontario Gymnastic Federation (2001), 55 O.R. (3d) 614 (C.A.) at para. 45.
• If a termination provision violates the ESA in one aspect, like not stating that benefits will be paid during the notice period, then the entire termination provision is void for all purposes so that the employee will be entitled to common law reasonable notice: North v. Metaswitch Networks Corporations, 2017 ONCA 790 at para. 24, Miller v. A.B.M. Canada Inc., 2014 ONSC 4062 at paras. 43-44, Wood v. Fred Deeley Imports Ltd., 2017 ONCA 168, at para. 21, Andros v. Colliers Macaulay Nicolls Inc., 2018 ONSC 1256 at para. 34.
• A violation of the ESA renders a termination clause void, so that a severability clause cannot remove it because there is nothing on which the severability clause can operate: North v. Metaswitch Networks Corporation, 2017 ONCA 790 at paras. 41-45.

[60] Furthermore, the Court of Appeal’s recent decision in Howard v. Benson Group Inc., 2016 ONCA 256 settled that for a fixed term employment contract that does not provide for early termination without cause, an employee is entitled on early termination to the wages the employee would have received to the end of the term: para. 22. The Court of Appeal concluded that the employee has no duty to mitigate: para. 44. See also: Mohamed v. Information Systems Architects Inc., 2018 ONCA 428 at paras. 26-27, and Covenoho v. Pendylum Ltd., 2017 ONCA 284 at para. 9.

Application

[61] The “Early Termination” provision of the fixed term contract is made up of five separate clauses. Clause (b) is “Termination for Cause”, Clause (c) is “Termination without Cause.” The remaining clauses are not about the manner in which the employer can terminate the employee. Clause (a) governs resignation by the employee, Clause (d) provides that “these provisions” shall remain in effect throughout the agreement and any renewal or extension of the agreement, and Clause (e) governs the employee’s responsibility to return the client’s property if the employment terminates for any reason.

[62] The non-compliance with the ESA is within only one of the five clauses: the “Termination for Cause” clause. This distinguishes it from the cases the applicant cites which state that one violation of the ESA renders an entire termination provision void. In North v. Metaswitch Networks Corporations, 2017 ONCA 790, Wood v. Fred Deeley Imports Ltd., 2017 ONCA 168 and Miller v. A.B.M. Canada Inc., 2014 ONSC 4062, relied on by the applicant, all terms of the agreement governing an employee’s termination were contained within one clause. The illegal aspects were sentences or missing words that resulted in an illegal attempt to contract out of an ESA minimum. The courts in those cases held that the entire clause should be void because of the illegality. In Andros v. Colliers Macaulay Nicolls Inc., 2018 ONSC 1256, the termination provision contained two sub-clauses. The trial judge analyzed each separately and found that each were separately illegal and void.

[63] I interpret the references in the case law to a single violation of the ESA rendering an “entire termination clause” void to mean that the entire clause which contains the illegality should be void. No words or sentences in the clause containing the illegality should be valid or enforceable for any purpose. In this context, the entirety of the “Termination for Cause” clause should be void.

[64] The other clauses of the “Early Termination” provision remain valid and enforceable. This result accords with the objectives of the ESA. The “Termination without Cause” provision does not violate the ESA. It also contains explicit language showing the parties’ intent that it should comply with the ESA. The other clauses in the “Early Termination” provision do not relate to the manner in which an employer can terminate an employee’s employment. There is no reason why they should not remain valid and enforceable.

[65] Although I do not rely on this clause, I also note that the agreement contains a severability clause which indicated the parties’ intention that illegal portions of the agreement should be severed.

[66] I am aware of Iacobucci J.’s statement in Machtinger, confirmed by the Ontario Court of Appeal in Wood, that termination clauses should be interpreted in a way that incentivizes employers to draft ESA-compliant termination clauses at the outset. However, in finding only the “Termination for Cause” clause void, I am not interpreting, rewriting or reading down any part of the Employment Agreement to make it comply with the ESA. I am interpreting the illegal clause, the “Termination for Cause” clause as void.

[67] I am not of the view that Machtinger, and the jurisprudence that follows it, require that upon finding a violation of the ESA in a termination clause, a court must ignore ordinary contract principles, the intentions of the parties, and common sense. I agree with the statement of the B.C. Court of Appeal in Miller v. Convergys, 2014 BCCA 311, leave to appeal denied, at paras. 14-15 that “the construction of an employment contract remains an exercise in contractual interpretation, and the intentions of the parties will generally prevail, even if this detracts from employment law goals that are otherwise presumed to apply.” In this case, the contract evinced a clear intention to comply with the ESA, the violation of the ESA was in a separate provision from the rest of the contract, and the contract contained a severability clause.

[68] Furthermore, the way that Procom breached its contract with Mr. Khashaba bears no resemblance to a typical termination. It is difficult to understand the termination of the agreement between Procom and Mr. Khashaba as a termination for cause or without cause. What happened was that the position he was promised was not available. The wrong done to Mr. Khashaba is more sensibly understood as a negligent misrepresentation. Queen v. Cognos Inc., [1993] 1 S.C.R. 87 at paras. 43-46 held that representations made by an employer to a prospective employee in pre-contractual negotiations are subject to a duty of care. At para. 62, the Supreme Court defined the standard of care:

A duty of care with respect to representations made during pre-contractual negotiations is over and above a duty to be honest in making those representations. It requires not just that the representor be truthful and honest in his or her representations. It also requires that the representor exercise such reasonable care as the circumstances require to ensure that the representations made are accurate and not misleading.

[69] In Queen v. Cognos Inc., Cognos represented to Mr. Queen that the job he was applying for existed, when in fact it was subject to budgetary approval. Similarly, Procom represented to Mr. Khashaba that the job with Alectra existed, when in fact it knew that Alectra had decided to give the job to another candidate. Procom was not truthful and honest in its representations. There is no doubt that it should have taken more care to ensure that Mr. Khashaba was aware of the truth of the situation. However, the relationship between the wrong done to Mr. Khashaba and the violation of the ESA in the Employment Agreement is no more than a coincidence.

[70] For all of these reasons, I find that while the “Termination for Cause” provision is void, the other clauses of the “Early Termination” provision remain valid and enforceable.

Damages

[71] I find that Procom terminated its Employment Agreement with Mr. Khashaba without cause. This termination is governed by the “Termination without Cause” provision of the Employment Agreement. Under that provision, Mr. Khashaba is entitled to the minimum amount of pay in lieu of notice of termination, minimum benefits continuation, and minimum severance pay as required by the Employment Standards Act, 2000. As Mr. Khashaba did not work for Procom for more than three months, pursuant to s.54 of ESA he is not entitled to any notice of termination, pay in lieu of notice, benefits or severance pay.

Conclusion

[72] In conclusion, Procom and Mr. Khashaba did conclude an employment contract. Procom terminated the contract early. That termination is governed by the Employment Agreement’s “Early Termination” provisions, specifically the “Termination Without Cause” provision, which remains enforceable despite the fact that the separate “Termination for Cause” provision is null and void as it does not comply with the ESA. Under the “Termination Without Cause” provision, Mr. Khashaba is entitled to the notice he is entitled to under the ESA. As Mr. Khashaba did not work for Procom for more than three months, pursuant to s.54 of ESA, he is not entitled to any notice of termination, pay in lieu of notice, benefits or severance pay. Indeed, in the circumstances of this case, Mr. Khashaba never reported for work. He never performed any work. His relationship with Procom was never that of a typical employer and employee.

[73] The applicant applied to this Court under Rules 14.05(3)(d) and/or (h) of the Rules of Civil Procedure for the determination of rights that depend on the interpretation of a contract or statute. I have determined that the applicant is not entitled to anything under the contract.

Carole J. Brown J. Date: December 21, 2018