CHAPTER 13 Employment Law
sum or instalment payment). The amount of notice is, at a minimum, the statutory requirement as set out in the relevant employment standards legislation, or the requirement of the applicable collective agreement for unionized employees. Because minimum statutory employment standards for notice of termination cannot be contracted out of or waived, terms in an employment agreement that provide for “termination at will” or for notice of less than the statutory minimum will not be enforceable. In Ontario, these statutory minimum entitlements include applicable notice of termination (or pay in lieu of notice), statutory severance pay (if applicable) and continuation of benefit coverage, if any, for the statutory notice period. A carefully drafted termination provision that provides for all statutory minimum entitlements in an employment agreement will, in most cases, be enforceable. However, Canadian courts are often reluctant to enforce employment agreements that appear to have been imposed on employees by an employer, with little opportunity for employees to negotiate the terms. If a non-unionized employee is employed for an indefinite term, and no specific period of notice of termination has been stipulated in an employment agreement, such employee is owed “reasonable notice” at common law and may commence a claim against an employer for damages, an award of which will account for and include the employee’s right to the statutory minimum notice or payment in lieu of notice. Reasonable notice, or damages in lieu, will also include benefit continuation, bonus entitlement, equity option vesting and exercise rights (if applicable), and all other forms of compensation unless properly limited to the statutory notice period. A court’s determination of what is “reasonable” will depend on the individual circumstances of the employee, primarily length of service, age, character of employment (e.g., specialized and executive level employees are generally entitled to greater notice, while sales employees are entitled to less), remuneration, availability
of similar alternative employment in the geographic locale and whether the employee has been enticed away from previous secure employment. The conduct of the employer at the time of the termination may also be a factor in determining compensation. Reasonable notice of termination, as construed by a court, will usually exceed the minimum statutory requirements. Although statutory notice of termination generally will not exceed eight weeks, a court may award a long-service employee reasonable notice of up to 24 months. In recent years, termination provisions in employment agreements have been subject to increasing court scrutiny and sometimes such a provision has been found to be unenforceable if it could breach minimum standards legislation, even if only theoretically. Where such a provision is not enforceable, the employee will be entitled to reasonable notice at law. In Québec, employees may not validly renounce in an employment agreement their right to receive reasonable notice in the event of termination without serious reason. Therefore, the Québec courts will always retain jurisdiction, in spite of contractual language, to evaluate the reasonableness of a notice period. Workforce Training Québec’s Act to promote workforce skills development and recognition requires most employers with payrolls in excess of $2 million to spend at least 1% of their total payrolls on eligible training expenditures. Employers that do not spend the minimum amount fixed by law are required to pay to the Minister of Revenue the difference between the statutory amount and the amount actually spent. Employers subject to the Act to promote workforce skills development and recognition must file and submit a form annually to the Commission des partenaires du marché du travail in respect of the total payroll on which their minimum participation in workforce skills development must be calculated and in respect of their eligible training expenditures.
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