In Waksdale v. Swegon North America Inc., 2020 ONCA 391, the Court of Appeal for Ontario ruled that an otherwise enforceable “without cause” termination provision in an employment agreement is rendered unenforceable where the employment agreement also contains a “just cause” provision that contracts out of minimum standards legislation. This troubling decision has the potential to render otherwise valid termination provisions in Ontario employment agreements unenforceable, effectively permitting employees to claim “common law” reasonable notice and potentially increasing severance obligations.

The Employer in this case has now sought leave to appeal to the Supreme Court of Canada. The Supreme Court of Canada will have to decide whether to grant leave, which we hope it will.

We are continuing to monitor this development and if you have any questions regarding the impact of this decision on your business, please do not hesitate to contact McCarthy Tétrault’s labour and employment group.