On February 23, 2017, the Ontario Court of Appeal (the “Court”) released its decision in Wood v Fred Deeley Imports Ltd., which held that a termination clause that contravened the minimum standards prescribed by the Employment Standards Act, 2000 (“ESA”) was unenforceable. Deeley Imports Ltd. employed Julia Wood as a Sales & Event Planner for eight years, from April 2007 to April 2015. As the termination clause was interpreted by the Court as excluding Deeley’s statutory obligations to make benefit contributions during the notice period and to pay severance pay, it was held to be unenforceable. In the result, Ms. Wood was entitled to termination compensation based on common law principles, as opposed to the contractual amount. For charities and not-for-profits, the Deeley decision demonstrates the importance of carefully drafted employment contracts, which include termination clauses that meet at least the minimum requirements of the ESA.
For the balance of this Bulletin, please see Charity & NFP Law Bulletin No. 400.