Client Win: How withholding termination benefits backfired and voided a termination clause

What if the piece of paper you signed years ago could strip you of your rights when you need them most? That was the reality Ms. Carpenter faced—until she fought back. At Samfiru Tumarkin LLP, we don’t just win cases; we set new standards for fairness in the workplace.

Toronto employment lawyer and firm partner David Vaughan stood up for justice and delivered a game-changing victory for his client, and employees across Canada.

The Case: Carpenter v. Brains II, Canada Inc.

Client’s Journey: Carpenter dedicated 11 years to NexInnovations as a Project Coordinator in its sales division, only for the company to shut down due to financial troubles and sell its assets to Brains II. When the new owners took over, she signed an employment contract that included a termination clause limiting her entitlements. Fast forward 7 years, and she was dismissed without cause, receiving just 8 weeks of working notice and 18 weeks of severance pay—the bare minimum required under the Employment Standards Act (ESA).

The Legal Issue: Vaughan argued that the termination clause in our client’s employment contract failed to account for benefit continuance after termination, a violation of the ESA’s minimum standards. This made the clause unenforceable, leaving her eligible for a full severance package under common law.

The Court’s Decision

Ontario Superior Court Justice Stinson agreed with our argument, ruling that:

• The termination clause in Carpenter’s contract was invalid because it did not ensure benefit continuance after her termination.
• Employers can’t contract out of ESA obligations; any such attempt renders the clause void and unenforceable.

The Outcome

Here’s how the case turned out for Carpenter:

• The court determined she was entitled to 8 months of severance pay, well above the ESA minimums she initially received.
• Justice Stinson also recognized her tireless efforts to find new work and retrain, which added even more weight to her case.
• Brains II was also ordered to pay $9,000 in legal costs—a clear signal to employers about the importance of addressing disputes fairly and upholding employee rights.

Key Takeaways

This decision highlights several key lessons:

For Employees

• Understand Your Contract: Before signing any employment agreement, ensure it does not limit your rights to severance or violate employment laws.
• Seek Legal Advice: If you’re let go, consult an employment lawyer at Samfiru Tumarkin LLP to review your contract and assess whether termination clauses are enforceable.

For Employers

• Draft Carefully: Termination clauses must meet or exceed ESA standards to avoid being invalidated.
• Respect Employee Rights: Failing to uphold an employee’s minimum rights can lead to costly legal challenges.

We’re here to help

Facing an unexpected dismissal can leave you feeling overwhelmed and uncertain about your next steps. Whether it’s a dispute over contract terms, severance pay, or wrongful dismissal, you deserve clarity, support, and a fair resolution.

At Samfiru Tumarkin LLP, we specialize in securing strong outcomes for employees, resolving most cases quickly and effectively without the need for trial. When disputes escalate, as in Carpenter v. Brains II, we don’t hesitate to take the fight to court to ensure our clients receive the compensation they’re entitled to.

Since 2007, we’ve helped thousands of non-unionized employees across Ontario, Alberta, and B.C. stand up for their workplace rights. Our proven approach combines expert advocacy, strategic negotiation, and an unwavering commitment to justice.

Don’t let uncertainty hold you back. Take the first step toward securing the justice you deserve—contact us today.