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his termination and severance pay, that this result was contrary to the ESA, and therefore the termination clause was void. The defendant argued the termination clause complied with the ESA because it preserved the plaintiff's right to the inclusion of a bonus if the parties agreed or if including the bonus was required by the ESA. The ESA stipulates where an employee receives wages that are not paid on the basis of time (like a bonus), the bonus should only be included in the minimum termination and severance pay if the employee received the bonus in the 12 weeks prior to the date of termination. The court held that the termination clause was "perfectly acceptable" as it provided expressly for entitlements to be paid in accordance with the standards set out in the ESA. Since the plaintiff did not receive a bonus in the 12 weeks prior to the day he was terminated, he was not owed any bonus in calculating his minimum termination and severance pay. The action was dismissed on the basis the termination clause was enforceable and the plaintiff was paid the entire amount owing under his contract. The Dimson case is important for two reasons. First, the court upheld a contractual provision that severely restricted the entitlements of a dismissed senior level employee. In this respect, the court's decision runs contrary to the philosophy apparently underlying other recent cases where the Court of Appeal appeared to be far more merciful to senior level employees and their entitlements on termination. For example see Wronko v. Western Inventory Service Ltd., where a dismissed vice president received 24 months' severance pursuant to a termination clause after being given 24 months' notice that the termination clause was being changed, and Bowes v. Goss Power Product Ltd., where a dismissed vice president received 12 months' severance pursuant to a termination clause even though he found a comparable job within two weeks of his dismissal. Second, the Dimson case appears to create an incentive for the strategic termination of employees who receive large bonuses or commissions. As already mentioned, these earnings may be excluded from the minimum termination and severance pay if they are paid more than 12 weeks prior to the termination. In light of Dimson, employers who use restrictive termination clauses could lower their severance costs if they strategically terminate employees at least 12 weeks after paying any large bonuses or commissions. Such a tactic could be used to great effect in industries where large bonuses or commissions are earned at particular times of the year, such as the insurance or financial services industries. Dimson is currently under appeal, so we will have to wait and see if the Court of Appeal ultimately agrees with the practical implications of this decision. IH Malcolm MacKillop and Hendrik Nieuwland practise employment law with the firm Shields O'Donnell MacKillop LLP of Toronto. You told us you'd like to work more efficiently. How's 19% LEXIS NEXIS faster sound? 1/2 island Quicklaw for Microsoft Office. ® ® Focus on delivering work for your clients, not switching between programs. Now, when you're creating a Word document or working in Outlook®, you can pull content directly from Quicklaw, the open web and your computer with intuitive simplicity and reduce the time required to conduct background research by up to 19%*. We've teamed with Microsoft to bring this innovation to our customers' existing workflow processes. It's just one example of intuitive tools created for legal minds, by legal minds. Another LexisNexis® innovation that enables better outcomes. For more information go to www.lexisnexis.ca/quicklaw-office *A study conducted in the United States in July 2011 by KS&R and CDI Market Research, in conjunction with National Legal Research Group (NLRG), involved 600 time-test observations with multiple legal scenarios and documents. LexisNexis and the Knowledge Burst logo are registered trademarks of Reed Elsevier Properties Inc., used under licence. Quicklaw is a registered trademark of LexisNexis Canada Inc. Microsoft and Outlook are registered trademarks of Microsoft Corporation in the United States and/or other countries. Other products or services may be trademarks, registered trademarks or service marks of their respective companies. © 2013 LexisNexis Canada Inc. All rights reserved. QLMO-Ad-04/13 w w w. c a n a d i a n law y er m a g . c o m / i n h o u s E ntitled-2 1 april 2013 • 15 13-02-26 10:10 AM

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