In the recent decision Forbes v. Glenmore Printing Ltd., 2023 BCSC 25 (“Glenmore”), a former employee argued that the termination clause of his employment contract was unenforceable as it failed to meet the minimum “group termination” notice threshold pursuant to the Employment Standards Act, R.S.B.C. 1996, c. 113 (the “ESA”). It is settled law that a contractual notice provision which is inconsistent with minimum statutory requirements is null and void, and the common law presumption of reasonable notice, not the statutory minimum, will apply. In Glenmore, the Court ruled in favour of the employer and held that the termination clause was enforceable despite the employment agreement being silent on the statutory group termination notice requirement.
In Glenmore, former employee Ross Forbes was constructively dismissed after six years and four months of employment with the company. While the parties did not dispute Mr. Forbes’ entitlement to severance, they disagreed with the amount of severance payable.
Mr. Forbes’ termination clause (the “Termination Clause”) contained in his written employment agreement (the “Employment Agreement”), provided, in part that:
Glenmore Printing may terminate this Agreement by giving the Employee,
(a) After the first three months of continuous employment, one week’s notice or wages,
(b) After the first year of continuous employment, two weeks’ notice or wages, and
(c) After three consecutive years of employment three weeks’ notice or wages, plus one additional week’s notice or wages for each additional year of employment to a maximum of eight weeks’ notice or wages.
The company argued that given Mr. Forbes’ six years and four-months period of employment, it had discharged its liability to Mr. Forbes by paying him six weeks’ pay in accordance with the Termination Clause. Mr. Forbes argued that the Termination Clause was not enforceable because it provided for less entitlement than that which was prescribed in the group termination provisions of the ESA. Specifically, he submitted that section 64 of the ESA provides that if an employer terminates 50 or more employees at a single location within any two-month period, each employee is entitled to between 8 and 16 weeks of notice of such termination or pay in lieu, depending on the number of employees affected in addition to any notice an employee is entitled to pursuant to section 63 (the individual notice provision).
Of note, Mr. Forbes was not part of a “group dismissal” contemplated in section 64 of the ESA. Notwithstanding, his argument was that the eight-week maximum individual notice entitlement was a possible contravention to the minimum statutory notice requirements in the event that there was group dismissal. In other words, if there was a group dismissal, the Termination Clause, as drafted, would provide less than what is contemplated in section 64, and in accordance with well-settled law, the Termination Clause was null and void, meaning common law notice should prevail.
The Court assessed Mr. Forbes’ argument in two pieces:
- Does section 63 or section 64 of the ESA establish the “minimum statutory requirements” required to oust the common law entitlement to reasonable notice?
- Does the Termination Clause waive or circumvent section 64 of the ESA such that it is unenforceable?
The British Columbia Supreme Court dismissed Mr. Forbes’ claim and confirmed that payments to individuals made under section 63 of the ESA are intended to, and do, replace the wages that the common law notice requirements are intended to protect. The group termination notice requirements, being additional statutory rights not found in the common law, do not establish the minimum standard that is required to oust an employee’s common law entitlement to reasonable notice.
The Court further disagreed with Mr. Forbes’ argument that the Termination Clause waived or circumvented section 64 of the ESA and found where an agreement is silent to a statutory requirement, the employer is nonetheless still bound by the ESA. For a termination clause to be unenforceable in these circumstances, there must be express language for the parties to contract out of the ESA. Accordingly, the Termination Clause was upheld and the Court concluded that the company had satisfied its obligations to Mr. Forbes.
This decision is notable as it confirms to employers that a termination clause drafted in compliance with section 63 of the ESA will not be invalidated for failure to expressly address the section 64 group termination requirements, so long as they do not explicitly waive their obligations to do so.
- In British Columbia, section 63 of the ESA sets the minimum statutory requirement for notice (up to eight weeks’ notice for individual terminations), not section 64 of the ESA (which provides up to 24 weeks for group terminations).
- For a termination clause to be held unenforceable, it requires express language of intention to contract out of the ESA. Employers should consult with legal counsel prior to drafting employment agreements and review their employment agreements routinely to ensure limited exposure to common law reasonable notice.