S. Margot Blight

A motion raised a question of law concerning the enforceability of a termination clause in an employment contract under the Employment Standards Act, 2000.

The clause limited termination compensation to base salary and excluded commissions and the continuation of benefits.

The court held the clause violated statutory minimum standards because it attempted to exclude the employer’s obligation to maintain benefit contributions during the statutory notice period under ss. 60 and 61 of the Act.

The court further interpreted s. 64 of the Act and held that an employer’s payroll for severance eligibility includes the wages of all employees, not only those in Ontario.

The termination clause was declared void and the employer remained liable to pay statutory severance.

The plaintiff employee brought a motion to determine two questions of law following his dismissal without cause.

First, he argued that the termination clause in his employment contract was void because it excluded the continuation of group insurance benefits during the statutory notice period, contrary to the Employment Standards Act, 2000.

Second, he argued he was entitled to statutory severance pay because the employer's global payroll exceeded $2.5 million, even though its Ontario payroll did not.

The court agreed on both issues, finding the termination clause null and void for violating the Act's minimum standards, and ruling that the calculation of an employer's payroll under section 64 is not restricted to wages paid in Ontario.