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On June 17, 2020, the Ontario Court of Appeal (“ONCA”) released a major new decision on the enforceability of termination clauses, Waksdale v Swegon North America Inc [Waksdale], potentially making the majority of termination clauses in Ontario, chiefly those that have not been drafted or reviewed since 2018, unenforceable. For more information about the decision and its implications for termination clause enforceability, please read our recent blog.

This change in the law is particularly significant as many employers must make difficult termination decisions in the near future due to the economic impacts of COVID-19 on their businesses. In many cases, employers may no longer be able to rely on the termination clauses in those employees’ contracts, and many of those employees may, as a result, be entitled to the much greater common law reasonable notice termination entitlements. Given the tough economic times, having enforceable termination clauses in employment agreements that limit an employee’s termination entitlements and allow the employer to have predictability when considering the costs of ending the relationship is of utmost importance.

For more information or assistance in reviewing your existing employment agreements and/or in strategically implementing new employment agreements in your workplace, contact any of our lawyers.

This blog is provided as an information service and summary of workplace legal issues. This information is not intended as legal advice.