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On January 15, 2021, the Supreme Court of Canada denied an application for leave to appeal from the Ontario Court of Appeal's June 2020 decision in
Waksdale v Swegon North America Inc., 2020 ONCA 391. As a result, many provincially-regulated employers in Ontario are now saddled with unenforceable termination provisions in their employment agreements with non-union employees, unless steps are taken to rectify them. Failing to take these steps may materially increase an employer's severance costs.
In
Waksdale, a company terminated an employee without cause and paid him severance as per the termination without cause provision in the employee's employment agreement. In response, the employee sued the company, claiming the otherwise enforceable termination without cause provision in his agreement was now unenforceable because a separate with cause provision in his agreement was unenforceable. Although not reproduced in the case, a with cause provision that stipulates something along the lines of "if you are terminated for cause, you will not be entitled to payments of any kind" is likely unenforceable for being offside of Ontario's employment standards legislation.