Termination Clauses: Nova Scotia Supreme Court Weighs In

In recent years, there have been many decisions on the enforceability and interpretation of termination clauses in employment contracts - which employers and their legal counsel read with both interest and apprehension.

The Nova Scotia Supreme Court has now weighed in on the debate. Like many cases on this topic, the Court's analysis in Bellini v Ausenco Engineering Alberta Inc., 2016 NSSC 237, centred on the interpretation of the applicable employment standards legislation - the Nova Scotia Labour Standards Code. The termination clause at issue stated, in part:

If it becomes necessary for us to terminate your employment for any reason other than cause, your entitlement to advance working notice or pay in lieu of such notice, will be in accordance with the provincial employment standards legislation.

The dismissed employee, a professional engineer with approximately 3 years of service, argued that the clause was not sufficient to remove his entitlement to reasonable notice. His argument centred on Section 72 of the Code, which states:

72(1) Subject to subsection (3) and Section 71, an employer shall not discharge, suspend or lay off an employee, unless the employee has been guilty of wilful misconduct or disobedience or neglect of duty that has not been condoned by the employer, without having given at least

(b) two weeks' notice in writing to the person if his period of employment is two years or more but less than five years; [emphasis added]

He argued that the words "at least" in Section 72 established the "floor" for the requisite notice (beneath which the employer cannot go), and not the "ceiling" (or the maximum notice to which an employee is entitled).

As a starting point, the Court noted that clear and express language was required to deprive employees of the right to reasonable notice of termination, and...