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.
