The employment law landscape is always evolving, and it can be challenging for HR to keep up.
That’s why many HR professionals took advantage of the opportunity ask about the legal issues most concerning their organizations, directly to a panel of employment lawyers, at HR FutureFest on June 3 at the Toronto Event Centre.
The panel, called “Ask the lawyers,” featured Erin Kuzz, a partner at Sherrard Kuzz LLP; David Whitten, a partner at Whitten and Lublin; and Alycia Riley, an associate at Gowling WLG.
Perhaps reflecting the barrage of court decisions that have been issued over the past few years, one of the top issues discussed by the panel was termination clauses in employment agreements and how to stay current on what makes them enforceable.
Termination clauses
Kuzz acknowledged that it’s difficult for employers to keep on top of the standards of enforceability when it seems they keep changing with every court decision.
“It’s hard to constantly have to stay to clients, ‘This was really great, it was the gold standard two years ago, but now we have [Waksdale v. Swegon North America Inc., 2020 ONCA 391] and we have [Dufault v. Ignace (Township), 2024 ONCA 915],” she said. “So keep it simple – my observation is, the more complex and the more you try to add to the language, the more likely that someone finds a reason it’s wrong.”
“I’ve seen lawyers do all these gyrations trying to draft clauses addressing cause and wilful misconduct, but it’s as simple as saying that we reserve the right to terminate you on provision of your minimum entitlement under the ESA,” said Whitten. “You don’t need much – you don’t have to have a termination for cause section or a wilful misconduct section – it can just be one termination section.”
All three lawyers suggested that a termination clause offering more than the statutory minimums is more likely to be enforceable and less likely to be challenged. Riley suggested that employee buy-in would be more likely in such circumstances, while Kuzz said a termination clause providing only the legal minimum entitlements would be “the quickest way to invite a court to get very creative to try to find a way around your provision.”
However, they note that a recent Ontario Court of Appeal decision, Bertsch v. Datastealth Inc., 2025 ONCA 379, has offered some hope for employers who stick to clear language in their termination clauses.
“We have a light at the end of the tunnel in Datastealth, where the court found that an employment standards-only termination provision was in fact binding and the language was the language, it was clear,” said Kuzz.
“The Datastealth decision was so vindicating for employer counsel because we just feel like we’re constantly pushing this boulder up the hill and courts are knocking us down a little bit – but [an enforceable termination clause] is definitely possible,” said Riley.
Non-disparagement clauses
Staying the theme of employment agreements, the panel supported the idea of including mutual non-disparagement clauses, particularly for after the employment relationship ends. However, employees don’t have to agree to them to get their statutory or common-law severance payments, so it’s likely additional consideration would have to be provided – and such clauses shouldn’t be too broad.
“Larger organizations shouldn’t agree to a mutual non-disparagement clause that applies to the entire company – how do you police your employees from talking trash about that person other than sending a blast email to everybody, which often has the opposite of the desired effect,” said Whitten. “So if you’re going to ask for a non-disparagement provision, expect that there will be some reciprocity and make sure that it’s limited to a certain subset of your staff – you can’t have it apply to the whole organization unless you’re a small shop and very confident that you can enforce it.”
“I will not recommend agreeing to anything beyond ‘The organization will direct the following three people not to disparage the former employee,’ said Kuzz. “That way, the organization’s obligation is to provide that direction, not take responsibility for whether they obey it or not – you provide that direction and you’ve satisfied your obligation.”
Riley noted that it’s a good idea to cover potentially disparaging conduct at the beginning of the relationship, particularly for a public organization for which the ramifications could be significant.
“I find it helpful to have these types of clauses in there to remind employees that even if they don’t think something is necessarily disparaging, it could have far-reaching effects,” she said.
Temporary layoffs
The topic of temporary layoffs came up in the session, with Whitten pointing out that it’s a common misconception that because employment standards legislation typically contemplates temporary layoffs, it’s implied as part of the employment agreement.
“We all learned this in the pandemic, that unless it’s an express term in the employment agreement or in an employment manual the employee has acknowledged they’re bound by, layoffs aren’t something an employer can automatically do, and it can trigger a constructive dismissal claim,” said Whitten, noting that a non-profit organization relying on funding to determine whether it can keep certain employees could use a well-drafted severance provision that could terminate the relationship if project work or funding dries up, with the expectation that the employee is free to come back if funding resumes.
“All is not lost if you don’t have a temporary layoff provision in your contract, you just need to get a little more creative,” he said.
If the temporary layoffs are related to seasonal work, the employer should have a plan so employees aren’t left hanging during the off-season, said Riley.
“It’s easy to say, ‘We’ll think about it for the next season, I don’t need to put my mind to this now,’ she said. “And then next season you decide not to recall the employee – why did you leave the employee sitting on the bench for the last six months if that could have been time used to pursue other opportunities.”
“I’d encourage seasonal employers to intentionally plan for the upcoming season and be proactive about addressing those issues sooner rather than later,” Riley added.
“And if you’ve got the discipline, used fixed-term agreements – a big asterisk on the discipline, because we all know if you let them stay one day later, you suddenly have a non-fixed-term employment agreement, which leaves you worse off than you were before,” said Kuzz. “But we know that if it’s for a certain period of time, you can just have a fixed-term agreement in place and at the end of it, they’re not owed anything else.”
