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By Malcolm MacKillop and Hendrik Nieuwland Termination clauses and strategic terminations Restrictive tactics could result in savings around large bonuses and commissions. M any employers have introduced termination clauses into employment contracts. A termination clause is useful because it limits the amount of severance an employee is entitled to when his or her employment is terminated without cause. The most aggressively worded termination clauses limit a dismissed employee's entitlements to the minimum amounts under the Employment Standards Act. Many in-house counsel wonder whether such restrictive termination clauses would be enforced by the courts, particularly for senior level employees. Another common question is whether an employee's bonus should be included in the sums awarded under a termination clause. A recent decision of the Ontario Superior Court answers both of these questions. In Dimson v. KTI Kanatek Technolo- gies Inc., the plaintiff was employed by the defendant for six years and occupied the senior position of vice president, strategic accounts. He signed a contract that included a termination clause that limited his severance entitlements to the minimum amounts owing under the ESA. He was dismissed on a without cause basis and paid in accordance with the termination clause. He then sued the employer for wrongful dismissal, claiming the termination clause was unenforceable and he was therefore entitled to common law reasonable notice damages. The contentious part of the termination clause dealt with the calculation of bonuses upon termination. It said: "If at any time Kanatek provides you with a bonus, it will not be included in the calculation of payment for the purposes of this Article or as otherwise agreed to or required by the Employment Standards Act." The plaintiff claimed that as a result of this language being in the termination clause his bonus would be excluded in the calculation of UNDERSTANDING lIAbIlITy foR INTENTIoNAl INTERfERENcE IN EmploymENT mATTERS New publicatioN The Law of InducemenT In canadIan empLoymenT Law Nikolay y. ChsherbiNiN, b.Comm., ll.b., ll.m. Find the information that helps you determine when interference is actionable – and how to assess liability – with the only work of its kind dedicated to the topic. the law of inducement in canadian employment law is an important new publication that covers: • The difference between the law of torts and the law of contract • The roots and history of the tort of inducing breach of contract and other economic torts • recent english and Canadian jurisprudence • The development of the economic torts • avoiding/attracting liability for intentional interference • knowing assistance with a breach of trust versus inducing breach of contract • Geographical limits and mitigation of damages • The application of duty of good faith and fair dealing to inducement scenarios • how employers can prevent and remedy economic loss caused by departing ex-employees CARSWELL 36331 1/2 horz oRDeR # 985243-65203 $150 hardcover approx. 320 pages December 2012 978-0-7798-5243-7 Shipping and handling are extra. Price subject to change without notice and subject to applicable taxes. 14 • a pr il 2013 included are sample pleadings for Tort of inducing breach of Contract, Tort of Causing loss by Unlawful means, and Tort of intentional interference with Contractual relations. available Risk-FRee FoR 30 Days order online: www.carswell.com call toll-Free: 1-800-387-5164  in toronto: 416-609-3800 INHOUSE

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