In Oudin v. Centre Francophone de Toronto, 2016 ONCA 514 (CanLII), the Ontario Court of Appeal upheld the summary judgment of the Superior Court of Justice (see Oudin v Le Centre Francophone de Toronto, 2015 ONSC 6494 (CanLII)). The motions judge dismissed the Plaintiff’s claim for reasonable notice based on the written employment contract, which provided that the employer could terminate employment with Employment Standards Act (“ESA”) minimum notice and made no mention of severance. The Court of appeal dismissed the appeal, deferring to the motion judge’s interpretation.
The Plaintiff was hired by the Defendant in December 2000 as a project manager, initially on one-year contracts. In 2007, the parties entered into an indefinite contract. The contract was in French. In September 2013, he was dismissed as a result of a reorganization.
Before the motion judge, the Plaintiff advanced the position that the termination provision was void as it contravened the ESA.
The relevant contractual provisions (translated fro French) provided:
“s. 4 TERMINATION OF AGREEMENT
During the period of employment, CFT may terminate the employment of the employee without notice or payment of indemnity for all serious incidents (see Policy on disciplinary measures RH-8020), gross negligence or continuing incapacity considered permanent, incompetence in the exercise of his functions or breach of article 10 of this agreement (confidentiality and exclusivity).
- 9 Termination of Employment
- 9.2 Termination and contractual rescission: This agreement may be terminated without notice or compensation by CFT for the reasons mentioned in article 4 of this agreement. The CFT may also terminate this agreement for any other reason by giving the employee 15 days notice or the minimum prescribed by the Employment Standards Act or by paying an amount of salary equal to the salary the employee would have had the right to receive during the notice period (after deduction and/or withholding at source), in the entire discretion of CFT.
- Waiver and Severability
12.2 If any of the provisions of the present agreement is invalid or unable to be performed by virtue of any law, regulation, order or any other requirement or other principle of law, this modality shall in such case be considered to be modified or nullified, but only to the extent necessary to comply with the statute, regulation, order, legal requirement or principle and the other dispositions of the present agreement shall remain in force.” [Emphasis added]
It was common ground that the termination for “continuing incapacity considered permanent” violated the ESA. However, the motion judge concluded:
“[40] …. The parties have explicitly spelled out what they intend to do in the event any part of the contract is found to be unenforceable. In s. 12(2) the parties have provided that “[i]f any of the provisions of the present agreement is invalid or unable to be performed by virtue of any law, regulation…this modality shall in such case be considered to be modified or nullified, but only to the extent necessary to comply with the statute, regulation, order, legal requirement or principle and the other dispositions of the present agreement shall remain in force” [translation].”
The motion judge concluded that s. 9.2 was enforceable. He also dismissed the Plaintiff’s submission that it was ambiguous. He stated:
“[52] I cannot find that a fair construction of the employment agreement permitted the employer any discretion to provide less than the minimum notice prescribed by the ESA. The only reasonable interpretation of the language employed in s. 9(2) was that the parties – both parties – fully intended the greater of the two notice periods to apply and the very law they incorporated by specific reference so required.”
The decision in Oudin is inconsistent with other decisions, for example, the decision in Stevens v. Sifton Properties Ltd., 2012 ONSC 5508 (CanLII), where the contract read:
“13. With respect to termination of employment, the following terms and conditions will apply:
(a) The Corporation may terminate your employment for what it considers to be just cause without notice or payment in lieu of notice;
(b) The Corporation may terminate your employment without cause at any time by providing you with notice or payment in lieu of notice, and/or severance pay, in accordance with the Employment Standards Act of Ontario.
(c) You agree to accept the notice or payment in lieu of notice and/or severance pay referenced in paragraph 13(b) herein, in satisfaction of all claims and demands against the Corporation which may arise out of statute or common law with respect to the termination of your employment with the Corporation.”
In Stevens, the Court rejected the Plaintiff’s submission that “reject the plaintiff’s argument that contract termination provisions regarding notice will not suffice to displace the common law presumption if they ensure only minimum notice in accordance with legislative requirements” [Para. 49]. Nevertheless, the Court concluded that the contract violated the ESA because the contract’s termination provisions made no allowance for the continuation of benefits.