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More employers are changing the terms of termination notices in contracts that limit more generous payouts

January 7, 2016

Toronto, ON. January 7, 2016. More employers today are revising termination clauses
in contracts, to limit employees from receiving more generous payouts when leaving a company.

Although employers are required to provide statutory notice of termination, an employer can eliminate common law notice, which is usually more generous than statutory notice.

For instance, statutory notice in almost all jurisdictions provides one week per completed year of service to a maximum of eight weeks. This means no matter how long you work with a company, your maximum notice will still be eight weeks or eight weeks’ pay in lieu of notice. While for Common Law notice, the starting point benchmark is generally much more generous; one month per year of service.” (Which is then adjusted upwards or downwards depending on factors such as age, salary level, nature of the industry, and importance/uniqueness of the position)

“More employers are including limitations in their contracts and they are getting better at using appropriate wording, “warns Employment Lawyer, Shelly Brown. “Even where clauses were set-aside in the past, judges are refusing to set aside these limitations in many more instances.”

The difference can be significant –one week per year of service vs. one month per year of service.

“The best way forward is to seek legal advice says Brown, “both before you sign a contract and accept any offer of employment. There may not be much you can do but you should understand your legal situation. When terminated, see a lawyer before you sign anything, which you are offered. There may be changes, which have occurred to your status or the law, which may allow you to contest a limitation clause. Signing something, which releases your employer from liability, will almost certainly be fatal to your rights.

For More Information please contact:
Marjorie Wallens, MJW Communications
Office 416-961-5924 Cell-416-708-3783

The materials provided on this site are for information purposes only. These materials constitute general information relating to areas of employment law familiar to employment lawyer, Shelley Brian Brown. They do NOT constitute legal advice or other professional advice and you may not rely on the contents of this website or blog as such.

For more information contact:
Marjorie Wallens
MJW Communications
Phone: 416-961-5924
Cell: 416-708-3783

Click here to view our Sources Listing:

Shelley Brian Brown, LL.B., LL.M, Employment & Human Rights Lawyer


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