“60 days or more”: Is it an enforceable termination clause?

Bryant v. Parkland School Division

The Alberta Court of Appeal reviewed the enforceability of a termination clause that appeared to impose limits on employee termination entitlements. In the case Bryant v. Parkland School Division, the Court held that a provision that entitled an employee to “60 days of termination notice or more” did not unambiguously limit the employee’s termination entitlements. Three former employees that were subject to the provision were able to claim reasonable notice well above the 60-day period, in accordance with the common law.

Facts

• The three employees in this matter were all long-term employees of the Parkland School Division. Two were hired in 1999 and the third in 2004.
• All three employees signed a standard form employment agreement, drafted by Parkland School Division.
• The three employees were terminated without cause by the employer on June 2, 2014 and each received 60 days’ notice.
• The employment contracts contained the following termination clause: “This contract may be terminated by the Employee by giving to the Board thirty (30) days or more prior written notice, and by the Board upon giving the Employee sixty (60) days or more written notice.”
• The lower court judge found the words “60 days or more” to be sufficiently clear, and gave Parkland School Division the power to determine how much notice is appropriate, so long as the notice is greater than 60 days, although the lower court judge did comment that the clause would have been more clear if the employer had simply fixed notice at 60 days.

Court’s decision

• Interpretation of the termination clause: The core issue at appeal was whether the words “60 days or more” creates any uncertainty in the notice that an employee is entitled to upon termination. The Court of Appeal started its analysis with the principle that in every employment contract, written or not, there is an implied right that the employer is required to give reasonable common law notice upon termination. While the employer can limit or remove that implied right by including a termination clause in the employment contract, the Court of Appeal emphasized that the language in the termination clause must be clear and unambiguous.
• Employee entitled to a longer notice period: The Court of Appeal went on to say that in this case, the words “60 days or more” only created a “floor” – a minimum notice period of 60 days and does not clearly suggest a “ceiling” – a maximum notice. The inclusion of the words “or more” entitles the employees to a longer notice period. Since the termination clause does not set a clear maximum notice, the Court of Appeal found the language in termination clause is not sufficiently clear, unequivocal and unambiguous to limit the employees’ right to common law reasonable notice. Further, the employer drafted the termination clause and had every opportunity to draft clear and unambiguous wordings in the employment contract. The matter was then referred back to the lower court to determine the appropriate common law notice period for the employees.

Lessons for Employees

• Termination clause must be clear and unambiguous: Not all termination clauses are drafted clearly or unambiguously limit your right to common law notice. We often see unenforceable termination clause that are drafted carelessly or simply does not comply with the law, so don’t let the termination clause in your contract stop you from pursuing your severance.
• Get your employment contract reviewed: If your contract has a termination clause, contact an employment lawyer at Samfiru Tumarkin LLP for help as the termination clause may not be enforceable.

Lessons for Employers

• Avoid using ambiguous language:  Canadian courts have consistently found that in situations where a termination clause invites more than one interpretation, the reading that is more favourable to the employee must prevail.
• Get your employment contract reviewed: Employers should have a lawyer carefully review the employment contracts they are providing to their employees. 

How Can We Assist?

If you are an employee who has questions about your employment contract or an employer who needs assistance with navigating the drafting of contracts for employment it is important to speak with an employment lawyer.  The lawyers at Samfiru Tumarkin LLP have helped employees and employers resolve these issues with little difficulty, and in a quick manner.