An employer cannot necessarily enforce a termination provision by examining it separately from the rest of the agreement.

In Waksdale, an employee was dismissed without cause after approximately eight months. The employer relied on the agreement’s without-cause termination clause to limit his payment.

The agreement also contained a for-cause provision that the parties accepted was unenforceable because it did not comply with employment standards legislation.

The Court of Appeal held that the termination provisions had to be read together. The unlawful for-cause provision affected the enforceability of the without-cause provision, even though the employer had not relied on the unlawful clause when dismissing the employee.

The court also rejected using the severability clause to preserve the termination provision in those circumstances. The matter was returned for determination of damages.

The ruling does not mean that every problem anywhere in an employment agreement invalidates the entire contract. Its analysis concerned the termination provisions and statutory minimum protections.

What this could look like in practice

Imagine receiving a termination letter stating that your contract limits you to a small payment. Reading only the paragraph mentioned in the letter may leave out wording elsewhere that affects the assessment.

A complete review would include the signed agreement, schedules, amendments, and the termination letter. For an employer, the same exercise can identify problems before a dispute arises.

The takeaway

Review termination provisions as a whole. A clause that appears straightforward in isolation may operate differently when considered with the rest of the agreement and applicable employment standards.

Contact JY Law to discuss your circumstances and how we may assist you.

This information is provided for general educational purposes only and does not constitute legal advice. The example is hypothetical. Your rights depend on the facts and current law. Reading this page or contacting our firm does not, by itself, create a lawyer-client relationship. If you have further questions or require advice about your situation, please contact us.