July 19, 2018
Osler partner Jennifer Dolman tells Benefits Canada that the Ontario Court of Appeal’s recent decision in Amberber v. IBM Canada Ltd., 2018 ONCA 571 “encourages a pragmatic approach to the interpretation of employment agreements…” In his article, author Julius Melnitzer examines the case, in which the Court allowed IBM’s appeal and enforced a termination clause against an employee seeking reasonable notice at common law. In upholding the clause, the Court reaffirmed that general principles of contractual interpretation apply to employment contracts, and also provided guidance on contractual ambiguities. Jennifer, who represented IBM in this matter both before the motion judge and the Court of Appeal, explains the significance of this decision.
“This decision is a heartening result for employers seeking to enforce termination clauses in their employment contracts,” Jennifer says.
She tells Benefits Canada that the termination clause must be “read as a whole,” based on the Court’s decision.
“Amberber tried to slice and dice the termination clause, but the Court of Appeal ruled that the clause must be read as a whole and that, read in this way, it did not violate the ESA,” Jennifer tells Benefits Canada. “The decision encourages a pragmatic approach to the interpretation of employment agreements that leans on general principles of contract interpretation requiring that the meaning of an agreement must be taken from its entirety.”
She adds that the decision separates “true ambiguities” from “mere difference of opinions” among lawyers.
“It is no longer acceptable for an employee to latch on to the least favourable interpretation in order to manufacture an ambiguity in an effort to invalidate an agreement,” she says. “For a true ambiguity to arise, there must be two or more interpretations that are reasonable.”
For more information, read Julius Melnitzer’s article “Court decision in IBM case clarifies minefield in enforcing termination clauses” in Benefits Canada.