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CONTRACT OF EMPLOYMENT - Express terms - Remuneration - Severance pay - Interpretation

Thursday, February 01, 2018 @ 8:43 AM  


Lexis Advance® Quicklaw®
Appeal by the defendant, AGAT Laboratories Ltd., from a chambers judgment interpreting the severance provisions of an employment contract in favour of the plaintiff, Holm. In October 2013, the parties entered an employment agreement that provided for payment of severance in lieu of notice limited to amounts owed in accordance with provincial employment standards legislation. The agreement further provided that where the defendant relied on just cause to terminate the plaintiff, damages were limited to the statutory minimum even if a court subsequently found no cause for termination. At issue was whether the agreement's notice provisions limited the plaintiff's notice, or pay in lieu thereof, to the statutory minimum. The chambers judge found that the agreement's language was not sufficiently restrictive to limit the plaintiff's constructive dismissal claim to the statutory one-week minimum, as the legislation itself did not preclude notice or damages beyond the statutory minimum. The defendant appealed.

HELD: Appeal dismissed. The chambers judge did not err in finding that the wording of the parties' employment agreement did not meet the high level of clarity required to extinguish the plaintiff's common law rights. There was no palpable and overriding error in interpreting the contract to find it did not clearly restrict the applicable notice period to the statutory minimum. Under s. 3 of the Employment Standards Act, the minimum entitlement was not the only outcome that would be in accordance with the Act. The contract did not create a ceiling that limited the plaintiff's notice entitlement to the statutory minimum or precluded pursuit of a court action above the statutory minimum. At best, any ambiguity was resolvable in favour of the plaintiff. No basis for appellate interference was established.

Holm v. AGAT Laboratories Ltd., [2018] A.J. No. 59, Alberta Court of Appeal, J. Watson, B.K. O'Ferrall and F.L. Schutz JJ.A., January 19, 2018. Digest No. TLD-January292018007