Opinions and Legal Insights

Quit While You’re Ahead and Leave the Numbers Out of It

Quit while you’re ahead and leave the numbers out of it. Those are the fundamental lessons from the decision of the Court of Appeal for Ontario in Rossman v. Canadian Solar Inc., 2019 ONCA 992 (CanLII).

In yet another case concerning a contractual termination clause, the Court of Appeal for Ontario held that adding the words “Benefits shall cease 4 weeks from the written notice” after language guaranteeing that the employer would comply with the ESA not only violated the terms of the ESA on its face but created ambiguity as to the employer’s true intentions.

Commentary

The case is a useful primer on the fundamental principles governing contractual termination clauses. In his reasons for decision, MacPherson J.A. sets out what he calls the “leading ‘umbrella’ cases in employment law” (see paragraphs 16-24 of the court’s reasons for decision), which is worth a read for anyone new to this issue.

As I read the Court of Appeal’s decision, the reason the termination clause failed is because of the placement of the ‘ESA guarantee.’ I get the sense that, had the employer’s guarantee to provide minimum statutory entitlements followed the ‘four-week’ clause, then perhaps the court would have upheld the provision. It’s tough to say though.

The lesson that I think one can glean from this decision is that if an employer wants to put a limit on something, then they would be prudent to refrain from using actual numbers.