Wednesday, December 07, 2016

LawFact of the Day: Family Law

Here is your daily LawFact from Wise Law for Wednesday December 7, 2016. Today we are talking about Family Law.

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The property rights of common law spouses upon separation are not governed by any Ontario statute.

Common law spouses may still advance family property claims, especially where property has been acquired in a “joint family venture,” or they have contributed to the acquisition, maintenance or improvement of property owned by a common law spouse.
- Garry J. Wise, Toronto
Visit our Toronto Law Office website: www.wiselaw.net

Tuesday, December 06, 2016

Social Media in Family Law Matters

BY SIMRAN BAKSHI and RACHEL SPENCE



How much is it worth to bash your spouse on social media? 

These days, the cost could be more than you might think.

Canadian Courts have seen the use of social media as evidence in family law proceedings increase dramatically in the past few years.
  • Westhaver v. Howard, 2007 NSSC 357, the Nova Scotia Supreme Court (Family Division) considered crude and homophobic comments posted by a father on social media and found those comments to be evidence of the father's poor judgment, ultimately denying the father access to the child;
  • M(MJ) v. D(A), 2008 ABPC 379, the Alberta Provincial Court dismissed a father's application for guardianship of his child and ordered modest access, relying in part on the fact that the father had "demonstrated and displayed publicly (at least to his some 95 'friends' on his Facebook page) his disregard and callous lack of consideration of the mother" and that the father had simultaneously posted photos of the child online, thereby linking "the child to his rancour... and, despite her young age, also exposed her to adult-appropriate matters";
  • W(JWA) v. B(A), 2008 NBQB 157, the New Brunswick Court of Queen's Bench (Family Division) admitted into evidence photographs found online that showed the mother dancing at a bar, drinking alcohol and smoking marijuana. This formed part of the basis for finding that it was in the child's best interest to reside primarily with the father; and
  • Byram v. Byram, 2011 NBQB 80, the New Brunswick Court of Queen's Bench (Family Division) considered the vilifying comments made online by the father about the mother in granting the mother sole custody. 
How to Protect Yourself

While most of this may be common sense, this may nonetheless be a beneficial reminder:
  • Never post/tweet anything about or in relation to your ex online that is negative or alludes to negative feelings about him or her;
  • Do not post anything in relation to any extracurricular/adult activities you may be involved in, or anything that could be misconstrued ie.: partying, alcohol, drugs;
  • Use your privacy settings and make your social media private;
  • Do a thorough sweep of your “friends” on social media and delete/block anyone who may have the potential to create drama in relation to your family law matter.
  • Do not post/tweet anything that you would  not want a judge to read and,
  • For those who have a very hard time controlling themselves in moments of volatility, we suggest deleting your social media completely or limiting it.
Collecting Evidence

You cannot deceitfully or illegally collect evidence from a spouse’s social media page. Put simply, you cannot hack his or her Pinterest or Facebook pages or make a fake account, get accepted as a friend and collect evidence. 

However, if one of your former partner's legitimate online friends shares posts with you that relate to your ex, you likely may use them if they pass the legal test of relevance.

In many cases your ex’s online presence may confirm things are not as you have been told. For example, a former partner who: 
  • Posts about a job while claiming in Court documents to be unemployed 
  • Posted photos of luxurious vacations while claiming to have no assets
  • Posts pictures or video disclosing inappropriate behaviour around the children, 
  • Posts rants about you, or rudely alludes to you or your character or your parenting skills.
If you suspect that your ex or someone close to him or her may be posting something like this online, it is in your best interest to do a thorough but lawful inspection of his or her online presence and maintain diligent records and screenshots to provide to your lawyer.

Now that you’ve taken the time to read this, consider the following for a moment.

What you have to gain by posting anything negative in relation to your ex online?  

The answer is:  Nothing.  

It will not assist you legally in any way and could instead, potentially harm your case.

So don't do it.

If you are involved or could become involved in any family law dispute, have fun online but...

Always practice safe social (media).

- Simran Bakshi, Lawyer & Rachel Spence, Law Clerk

Visit our Toronto Law Office website: www.wiselaw.net

LawFact of the Day: Employment Law

Here is your daily LawFact from Wise Law for Tuesday December 6, 2016. Today we are talking about Employment Law.

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An employee who has been temporarily “laid off” may be entitled to treat the layoff as a permanent termination and claim notice and severance payments and other compensation.

Temporary layoffs may not be permitted unless there is employment contract that specifically allows for such layoffs. Seek legal advice to determine your rights and entitlements if you have been “laid off.”
- Garry J. Wise, Toronto
Visit our Toronto Law Office website: www.wiselaw.net

Monday, December 05, 2016

Top Ten Legal Headlines

Here are our top 10 legal headlines from last week.

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- Garry J. Wise, Toronto
Visit our Toronto Law Office website: www.wiselaw.net

140Law: Legal Headlines for the week of December 5, 2016

Here are this week's leading legal news stories from Wise Law on Twitter
- Garry J. Wise, Toronto
Visit our Toronto Law Office website: www.wiselaw.net

Friday, December 02, 2016

Starting a professional practice? Why you may want to consult with a Lawyer

BY SIMRAN BAKSHI, ASSOCIATE LAWYER 

Anyone who has ever taken the leap to start their own professional practice will tell you of the many restless nights they have had contemplating the various, potential legal disasters their future professional practices could run into.

Having personally advised my family and clients through the trials and tribulations of starting and operating their own chiropractic clinics, dental clinics, architectural firms, brokerage firms and other professional practices, I know just how important it is to feel informed about the legal requirements of your professional sector, and the applicable law generally, before opening shop. 

Here is the good news - if you are feeling a bit overwhelmed and anxious, you are probably on the right track

It is actually very important to go through the checklist of "what could go wrong", in order to make sure you have it right. This is a time when your lawyer can become your best friend, and the key to having a good night's rest.

Here are some ways in which a lawyer can help.

Legally structuring your practice to meet your objectives

Make sure your practice is structured in a way that makes the most sense for you, both from the perspective of minimizing liability and realizing maximum profitability.

There are various ways in which your business can be structured, ranging from a sole proprietorship or partnership to a limited liability corporation. Sometimes, it can also be advantageous to consider incorporating a management company to operate certain aspects of your practice.

It is important to keep in mind that each ownership structure has its own advantages and disadvantages. Consulting with a lawyer (and an accountant) early on can ensure that your practice is legally structured in a way that actually reflects your underlying concerns and objectives. 

Creating proper and enforceable employment documentation

The key to any successful professional practice is having the right people in place. It is of course a long and often trying process to put together a team of staff, associates and other practitioners or professionals who are just the right fit for your professional practice.

As you put together your dream team, and build towards your professional empire, hiring employees and sometimes, making changes, will quickly become a reality of life.

It is accordingly so important that you ensure that your practice has the right building blocks with respect to is employment documentation, including employment contracts and contracts with any independent contractors and subcontractors, as well as confidentiality, non-disclosure and non-solicitation agreements. In some circumstances, particularly where a practice is being purchased from another practitioner, clear non-competition agreements may be necessary to protect your financial and professional interests.

A lawyer can help by ensuring that you are equipped with these necessary agreements, contracts, employment agreements, handbooks and a suite of employment-related templates that will be valid and enforceable, to protect your business in the long run.

Interpreting the laws and regulations applicable to your professional practice

Professionals are guided and overseen by their professional bodies, and are subject to various rules and regulations that change over time.

A lawyer can provide you with a regulatory map to help you navigate your professional practice.

For example:
  • Are you permitted to accept or to provide referral fees in your profession? 
  • Can you accept family members as clients or patients? 
  • What confidentiality provisions, if any, are you subject to? 
If you find yourself asking such questions, you can take proactive measures by seeking a legal assistance as to the laws and regulations applicable to your professional sector, and how best to avoid common pitfalls.

Troubleshooting and Dealing with Issues Proactively

Once you are up and running, legal advice is sometimes needed urgently:
  • You have a continuing issue with an employee or former employee 
  • A workplace-related complaint has been made by one of your employees against another
  • A supplier has not come through and you now have suffered losses
  • A problem has emerged with one of your investments 
  • Your building has been damaged and your landlord won't fix it
  • A legal claim or dispute arisies
  • You have serious accounts receivables and certain clients or patients who promise, but never pay
  • You are considering a new opportunity and want to discuss your options.
Any number of day-to-day concerns can arise in any business or professional practice. At many such junctures, picking up the phone and speaking to your lawyers can make a world of difference and help you to ensure you are on an optimal and protected legal path.

Take a moment to think about the most successful practitioners and professionals you have come across.  What they often have in common is a willingness to access other professionals who understand their business needs and can provide practical guidance regarding their profession's regulatory requirements.

Your lawyers, among other professionals, can work with you as a partner to plan for and achieve the goals of your business, while limiting risk and ensuring you are compliant with the requirements of your regulators.

- Simran Bakshi, Associate Law, Toronto

Visit our Toronto Law Office website: www.wiselaw.net

Thursday, December 01, 2016

Last Wills that Offend Public Decency

BY GARRY J. WISE AND PAUL B. ADAM

Competing February 2016 rulings by Ontario courts have left us with real questions as to when a discriminatory Last Will and Testament will be upheld in this province.

Background

These cases are the latest in a very interesting history of court cases dealing with Last Wills that have tried to create racially discriminatory gifts, meddle in the marital affairs of others, support unsavoury political causes, and troll public institutions.

For over a century, Canadian and British courts have responded by striking out portions of last wills that violate an established code of law like the Charter of Rights and Freedoms, or a well established legal principle. 

A relatively small number of cases have emerged in that time, and that's probably just as well. Wills that are struck down in this manner usually involve testators with ugly views about humanity, their own family, or both.

There have been a number of rulings over the years concentrated in two areas in particular: 
  1. Wills containing gifts and bequests that violate the freedom of race, religion, gender, sexual orientation, etc.
  2. Wills that try to meddle with a person's freedom to marry whom they desire.
Over time, the courts have taken a progressively broader view of the sorts of scenarios in which they will strike down part of a Will that violates these two Charter values.

Today, the right to marry whom one chooses is recognized as a protected Charter right that Last Wills cannot try to restrain. 


But even before the Charter era, it was considered a civil offence to interfere with the married relations of another person (for instance, by offering a financial incentive to leave a spouse- see Re McBride, 1980, Ontario Superior Court) and the courts were prepared to strike out last wills that meddled in such a manner.

The Priebe Estate

In February 2016, Justice A.K. Mitchel of the Ontario Superior Court made a ruling in the Estate of Victor Hugh Priebe (Royal Trust v University of Western Ontario et al). 

Victor Priebe's Last Will is a pretty typical example of a violation of the first charter principle above. Priebe, a physician, provided for the creation of a scholarship for students at Western, but available only to young men who were:
"Caucasian (white) male, singleheterosexual students in scientific studies" with special consideration for students who took on "hard manual work in their selection of summer employment";  
Or, a young woman who was
 "hard-working, single, Caucasian white girl [...] not a feminist or lesbian"
Justice A.K. Mitchell of the Superior Court of Ontario, ruled that these portions of the Will were invalid, and wrote that she had "no hesitation" in declaring the discriminatory and politically charged qualifications void, as being contrary to public policy. 

The court's intervention in this case is perhaps easy to understand, because the Last Will was ordering the Trustees of the Priebe Estate to create a scholarship fund for the broader Canadian public that was set up on unabashedly prejudicial terms - to deliberately violate the Charter. Instead, the estate was directed to make the charitable donation to the university, but without any of unseemly restrictions on the scholarships.

The Priebe ruling is consistent with previous rulings in which the Court has intervened when a Will appeared to violate the Charter:

In Ontario Human Rights Commission v Canada Trust Co. (1990, Ontario Court of Appeal) Ontario the Court struck out provisions from a Trust created by Estate of Reuben Leonard, that since 1923 or thereabouts had provided scholarships to nobody but White, Protestant, loyal subjects of the British Empire. The Court acknowledged that the public interest had evolved over the last 65 years, and however the scholarships had been administered in the past, they clearly offended the Charter of Rights and Freedoms in the year 1990. The Court ordered that the Trustees continue to award the "Leonard Scholarships", but without any regard to race, religion or national identity.

This evolution though, was still a process. The Leonard decision, for instance, noted that the court could not interfere with gifts and bequests to private individuals that were discriminatory, so long as they weren't set up as charitable trusts.

This distinction appeared to have dissolved over time. The decision in Murley Estate (1995 Nfld Supreme Court), for example, struck out a provision in a Will that left a bequest to a beneficiary on the condition that he remain a member of the Catholic, Anglican or United Church.

A February 2016 ruling of Ontario's Court of Appeal appears to have changed this, at least with respect to private testamentary gifts that do not involve testamentary public trusts for scholarship, community or similar purposes. 

The Spence Estate

Having seen examples of when Courts have struck out a portion of a Last Will on discriminatory grounds, it's equally informative to note when they have not.

A dramatic example of an apparently discriminatory Will being upheld is found in the Ontario Court of Appeal's surprising February 2016 ruling in Spence v BMO Trust.

The Last Will of Rector Emanuel Spence contained this provision:
I specifically bequeath nothing to my daughter, Verolin Spence, as she has had no communication with me for several years and has shown no interest in me as a father.
Verolin Spence brought a Court application urging the Court to look deeper into the Spence family affairs. A lifelong friend of Rector Spence testified that his true reason for excluding Verolin from his Estate was that the father of her son was white. Rector had raged that he had no further use for Verolin and her “bastard white son” and that he intended to exclude her from his will because of her personal choice. 

To the extent the Will excluded Verolin, it was invalidated at the Application's hearing. On appeal, however, the Application Judge's ruling was overturned and the will was upheld.

The issues before the Court of Appeal were framed as follows:
[1]         Is it open to the courts to scrutinize an unambiguous and unequivocal residual bequest in a will, with no discriminatory conditions or stipulations, if a disappointed beneficiary or other third party claims that the bequest offends public policy?  Is third-party extrinsic evidence of the testator’s alleged discriminatory motive for making the bequest admissible on an application to set aside the will on public policy grounds?
The Court of Appeal upheld the will, ruling it a private matter for which no extrinsic evidence was admissible regarding the testator's motives or reasons for disinheriting his daughter, and upholding the overriding principle of testamentary freedom:
73]      This question lies at the very heart of Eric’s exercise of his testamentary freedom.  It must be remembered that the bequest at issue is of a private, rather than a public or quasi-public, nature.  Recall Tarnopolsky J.A.’s caution in Canada Trust, at p. 515, that it was the “public nature of charitable trusts which attracts the requirement that they conform to the public policy against discrimination”.  Here, assuming that Eric’s testamentary bequest had been facially repugnant in the sense that it disinherited Verolin for expressly stated discriminatory reasons, the bequest would nonetheless be valid as reflecting a testator’s intentional, private disposition of his property – the core aspect of testamentary freedom.

[74]      In these hypothetical circumstances, neither Ontario’s Human Rights Code, R.S.O. 1990, c. H.19 nor the Charter of Rightsand Freedoms would apply to justify court interference with the testator’s intentions.  The Human Rights Code, of course, ensures that every person has a right to equal treatment with respect to services, goods and facilities without discrimination based on race and other enumerated grounds.  The Charter pertains to state action.  Neither reaches testamentary dispositions of a private nature.

[75]      Absent valid legislative provision to the contrary, the common law principle of testamentary freedom thus protects a testator’s right to unconditionally dispose of her property and to choose her beneficiaries as she wishes, even on discriminatory grounds.  To conclude otherwise would undermine the vitality of testamentary freedom and run contrary to established judicial restraint in setting aside private testamentary gifts on public policy grounds...
[97]      It need hardly be said that public policy in Canada precludes discrimination on the basis of race and other discriminatory characteristics.  The public policy against discrimination is reflected in the Charter and the human rights legislation of every province in Canada, including Ontario’s Human Rights Code 
[98]      But the desirability of affirming the public policy against discrimination does not lead to the conclusion that third-party extrinsic evidence of a testator’s alleged discriminatory motive is admissible to challenge the validity of a will where, as here, the testator’s residual bequest to a private beneficiary is absolute, unequivocal and unambiguous.  Quite the opposite.  If, as Rondelholds, extrinsic evidence is not admissible to establish what a testator intended, still less should it be admissible to question whythe testator made a particular bequest...
[111]   As I have indicated in these reasons, the scope for judicial interference with a testator’s private testamentary dispositions is limited.  So, too, is the reach of the public policy doctrine in estates cases.  And for good reason.  The court’s power to interfere with a testator’s testamentary freedom on public policy grounds does not justify intervention simply because the court may regard the testator’s testamentary choices as distasteful, offensive, vengeful or small-minded.  As the court observed in Thorsnes v. Ortigoza2003 MBQB 127 (CanLII)174 Man. R. (2d) 274, at para. 14, “a person has the right, subject to fulfilling specific legal obligations to dependants, to dispose of his or her estate in an absurd or capricious manner, whatever others may think of the fairness or reasonableness of the dispositions”. 
One of the most (in)famous estates cases in Canadian history is Millar Estate (1937, Supreme Court of Canada). Charles Millar was a wealthy lawyer who died with no family or heirs. He wrote a Last Will full of intentionally bizarre and obnoxious bequests designed to irk the recipients, or the public at large. 

Most notoriously, Millar set aside a generous gift to be given to the mother or mothers who gave birth to the most children in a ten year period after his death. The disposition of his Estate was challenged all the way to the Supreme Court. The Chief Justice ruled that the intention behind this bequest might be unseemly, but it didn't violate any specific law or established line of legal reasoning, and therefore Courts were not free to strike it out.

Until the recent Spence appeal ruling, it might have been difficult to succeed in an argument that a dispute with a child, reflected in a disinheritance over the gender, race or religion of a child's partner or children would be addressed by Ontario's courts as simply a private matter between family. 

Spence, however, has apparently elevated the principle of testamentary freedom beyond any objections over discrimination, so long as a testamentary bequest is solely private in character and no public or community trust is implicated.  

It is now increasingly unlikely that Ontario's court will be willing to look more deeply into family disputes and strike out or amend a Last Wills that purported to exclude a beneficiaries on grounds that the public at large would consider discriminatory, based on the Canada's Charter values.

This anomaly can only be resolved by legislative change.

- Garry J. Wise and Paul B. Adam, Toronto

LawFact of the Day: Wills and Estates

Here is your daily LawFact form Wise Law for Thursday December 1, 2016. Today we are talking about Wills and Estates.

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Where a person dies without a will, an intestacy arises. Ontario’s Succession Law Reform Act establishes rules for the distribution of an intestate deceased person’s property. An intestate person’s spouse inherits the first $200,000 of an Estate.

Estate property over $200,000 is divided between the deceased’s spouse and children, in proportions that depend on the number of surviving children. Where there are no surviving spouse or children, parents inherit. If there are no surviving parents, siblings will inherit.

- Garry J. Wise, Toronto
Visit our Toronto Law Office website: www.wiselaw.net

Wednesday, November 30, 2016

Recognizing Foreign Divorces in Canada

BY PAUL B. ADAM, ASSOCIATE LAWYER

If you were divorced in a foreign country, and now plan to marry in Canada, beware.

Not all divorces are created equal.

For a foreign divorce to be validated in Canada, it needs to have been granted according to the law of that country, by a court of that country with the power to grant a divorce. There is such a wide range of divorce laws and courts around the globe. Some are consistent with this country's legal principles and others are not.

According to Canadian law, if a couple has been divorced in a foreign country, they must provide proof that the foreign divorce they obtained was valid in order to remarry in this province.

The only proof that the Canadian government will accept is an opinion letter from a lawyer.


THE OPINION LETTER


Why is a lawyer's opinion necessary? Due to the wide range of family law systems throughout the world, the government relies on the legal profession to scrutinize foreign divorce orders and ensure they were obtained properly, by Canadian standards.

This opinion letter is not a rubber stamp exercise, either. Lawyers should be carefully reviewing the foreign law, original documents from the clients, with translations if necessary, and facts about the separation and divorce. They are required to give a well-considered opinion that is supported by facts.

WHEN WILL A DIVORCE BE RECOGNIZED?

A divorce will be valid by Canadian standards if when the foreign court granted the divorce,
  1. at least one spouse resided in the country or territory that granted the divorce; and
  2. they lived there for at least one year.
  3. the divorce was not obtained through unfair means such as fraud or coercion. 
When a couple obtains a divorce, without having met the tests outlined in items 1 and 2 above, the government may still accept the divorce if it was legal by local standards, and it takes into considerations the other rights that spouses may have after a separation in this country, including spousal support, child support, and fair custody and access arrangements. 

What can happen if a person was divorced and the divorce was granted legally according to the laws of the foreign country, but not legally by Canadian standards?

For example, several US states, including Florida, Texas and California, will grant a divorce if one spouse has lived in that state for six months. In Illinois, the time period is 90 days, in Nevada, it is just six weeks. As well, several foreign countries have legal systems with a mix of religious and state-run courts, which have their own rules and procedures.

When a Canadian lawyer is writing an opinion letter about the validity of such a divorce, he or she must provide facts and evidence to support the opinion that the divorce is valid, and demonstrate how the divorce addresses the various requirements of the Divorce Act regarding access, custody and support.


This process is meant to weed out divorces that would be considered unfair by Canadian standards and prevent them from being recognized, when this would cause harm to an ex-spouse, or the children of a foreign marriage.

CANADIAN LAWS vs. FOREIGN LAWS

The question of validity can involve a complex comparison of divorce law in two jurisdictions

In Zhang v Lin, the Alberta Court of Queen's Bench refused to recognize a Texas divorce granted to one spouse. The spouse had obtained a divorce that was apparently valid by Texas law. However, those laws did not deal with child and spousal support properly, by Canadian standards.

On the other hand, consider Martinez v Basail: a couple were married in Cuba in 2004, and emigrated to Ontario. In 2007, while living in Ontario, they decided to separate, and mistakenly believed that needed to get a divorce back in Cuba. They travelled there and obtained an uncontested divorce with terms of custody, access and spousal support that were fairly reasonable by Canadian standards. And yet, they had only been in Cuba at the time for around one month. 

The Ontario Court accepted that even though the couple did not meet any sort of normal residency requirement that is usually a requirement for a foreign divorce, this divorce valid, because the parties obtained it together, with good intentions.

- Paul B. Adam, Toronto
Visit our Toronto Law Office website: www.wiselaw.net

LawFact of the Day: Family Law

Here is your daily LawFact from Wise Law for Wednesday November 30, 2016. Today we are talking about Family Law.

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Many couples live separate and apart “under one roof,” following marital separation, and do not immediately physically separate by changing residency.

Legal advice should be obtained as to whether a separation has occurred that would be recognized under Ontario law
- Garry J. Wise, Toronto
Visit our Toronto Law Office website: www.wiselaw.net

Tuesday, November 29, 2016

Enforceability of Employment Agreements: Termination Clauses in Ontario

BY SIMRAN BAKSHI, ASSOCIATE LAWYER 

In the excitement of finding a new job, it can be tempting to overlook the importance of the termination provisions that might be included in the employment contract you have been asked to sign.

Employment agreements in non-union environments typically govern the terms of the working relationship itself, but they may also set out exactly how the employment relationship may be brought to an end.

Generally, termination provisions in employment agreements are crafted to reduce employers' severance obligations upon termination. In fact, that employment agreement you barely remember signing might be at the center of your wrongful dismissal claim of the future.
 


ENTITLEMENTS WHERE THERE IS NO EMPLOYMENT AGREEMENT CONTAINING A TERMINATION PROVISION

At common law, an Ontario employer may usually dismiss any employee without cause by simply providing reasonable notice of termination or pay in lieu of that notice to the departing employee.

(Like virtually everything in the law, there are definite exceptions to this general statement. For example, if the termination is inherently discriminatory or a retaliatory reprisal after a legitimate workplace safety complaint by the terminated employee, termination may be legally prohibited, and reinstatement of employment could be ordered by a court or tribunal.)

Where there is no employment contract that provides for entitlements upon termination, "reasonable notice" is determined at common law by Ontario's courts upon considering a number of factual issues about the employment, including:

  • the length of the employment
  • the employee's age and seniority
  • the level of the position held (e.g. managerial or entry level)
  • the expected difficulty in finding comparable employment, and 
  • An extensive and still-developing list of other considerations. Collectively, these considerations are known in case law as the "Bardal factors," after being outlined by the court in a landmark 1960 case called Bardal v. Globe and Mail.

DOES YOUR EMPLOYMENT AGREEMENT OPT YOU OUT OF THE COMMON LAW?


By signing an employment contract that includes a termination clause, an employee essentially agrees to opt out of his or her common law entitlement to reasonable notice of termination, and instead agrees to instead accept the specified, usually reduced compensation upon termination that is set out in the employment agreement. 

Typically, a termination clause will limit your notice entitlements to only the statutory minimum that must be provided at law pursuant to the Employment Standards Act (ESA) or Canada Labour Code (CLC). 

The legal validity and enforceability of a termination clause in an employment agreement might therefore become critical in determining the amount notice an employee is entitled to when the employment ends.

IS A TERMINATION CLAUSE IN AN EMPLOYMENT AGREEMENT ENFORCEABLE?

The law will not enforce an employment agreement that provides (or may in the future provide) for less compensation and benefit than the applicable employment standards legislation requires. If a termination provision provides less than any statutory minimum, it will likely be held to be void and unenforceable by a court.

Does a specific agreement provide for less than employment standards law requires?  While the answer to this question is often obvious, in certain circumstances it can become highly complex and technical. 

Ontario's courts are currently somewhat divided on how to interpret employment agreements that do provide for adequate minimum notice and severance, but are silent as to whether employment benefits will continue throughout the contractual notice period, as required under Ontario's ESA.

DOES AN EMPLOYMENT CONTRACT ADEQUATELY PROVIDE FOR BENEFIT CONTINUATION DURING THE STATUTORY NOTICE PERIOD?

Ontario Courts have regularly interpreted termination clauses that fail to make express reference to benefit continuation over the notice period to be null and void.

[65] “…[E]mployers should be provided with incentive to ensure that their employment contracts comply with all aspects of the employment standards legislation, including provision of adequate notice (or pay in lieu thereof) and mandated benefit continuation…” (emphasis added)
Furthermore, in circumstances where a termination clause is ambiguous on its face, it may be interpreted in favour of the employee on the basis of the doctrine of contra proferentum, which literally translates to “interpretation against the draftsman.” The rationale behind this principle is that it is the responsibility of the drafting party to be as clear and explicit as possible, particularly in an employment dynamic, where the employer has unequal bargaining power.

Where a termination clause is broadly drafted, however, to make reference in general to the minimum entitlements set out in the legislation, it may be held to be enforceable, even if it does not expressly refer to specific entitlements such as benefits. As the Court in Stevens further articulated:

It is only where a clause “attempt[s] to ‘draw the circle’ of employee rights and entitlements on termination with an all-encompassing specificity that results in the effective and impermissible exclusion and denial of [entitlements such as] the benefit continuation rights mandated by the legislation” that it may be considered null and void.

In the recent case of Oudin v Centre Francophone de Toronto, 2016 ONCA 514 (CanLII), Ontario's Court of Appeal appears to affirm that a contextual approach focusing on what the parties' reasonably understood the termination clause to mean must be taken when considering whether it actually attempts to contract out of providing the minimum entitlements required at law:
[8] The motion judge’s reasons make it clear that he understood and considered the appellant’s submission that - by referring only to “notice” - the clause ought to be interpreted as an attempt to contract out of all obligations under the ESA. The motion judge rejected this submission and found that there was no attempt to contract out of the ESA and that the parties had agreed that the ESA would be respected.

[9] The motion judge’s decision was based on his interpretation of a contract. He considered the circumstances of parties, the words of the agreement as a whole and the legal obligations between the parties. He concluded at paragraph 54:


Contracts are to be interpreted in their context and I can find no basis to interpret this employment agreement in a way that neither party reasonably expected it would be interpreted when they entered into it. There was no intent to contract out of the ESA in fact; to the contrary, the intent to apply the ESA is manifest.
It remains to be seen whether the Oudin decision, will change the course of the rather strict interpretation that the Court has often applied in favour of the employee, when reviewing termination clauses.

Overall, the validity of a termination clause must be ascertained based on a careful and nuanced review of the language used in drafting the provision; the context in which the employment contract was negotiated and agreed to; and the parties' intent and understanding of the employer's obligations and the employee's entitlements. 

Given these complexities, it is always a good idea to have a lawyer review your employment contract with you before you sign it. 

You should certainly review your employment agreement with your lawyers if your employment come to an end.  It is essential that you do so before signing any release or related settlement documentation relating to the termination.

- Simran Bakshi, Associate Lawyer, Toronto


Visit our Toronto Law Office website: www.wiselaw.net