When a Termination Clause may not be Enforceable

The legal doctrine of “the changed substratum” provides that “…if an employee enters into an employment contract that specifies the notice period for a dismissal, the contractual notice period is not enforceable if over the course of employment, the important terms of the agreement concerning the employee’s responsibilities and status has significantly changed.” This was set out in the decision of MacGregor v National Home Services 2012 ONSC 2042 (S.C.J.).

It is therefore important for employers to ensure that employment contracts contemplate and specify that termination provisions will continue to apply regardless of advancement or promotion or alternatively to seek ratification or an earlier termination provision from the employee upon any such promotion or advancement.