Employee compensation is a fundamental aspect of employment law, both during and after employment. Employers must properly pay out any wages, salaries, commissions, or benefits validly owed to the employee.
It is critical for employers to carefully consider the terms of the employment agreement when terminating an employee. Otherwise, by failing to pay out all entitlements owed to the employee, the employer may face liability for wrongful dismissal grounded on a breach of the employment contract. Depending on the employer’s conduct, they may also be ordered to pay punitive damages, as in the 2023 Ontario case of Giacomodonato v. PearTree Securities Inc.
The termination clause is one of the most essential parts of an employment agreement. It is important to note that employers cannot contract outside of the minimum employment law standards set by legislation. Upon termination, the employee must at least receive the minimum compensation set out in the Employment Standards Act. In some cases, if a termination clause is too broad or ambiguous, the termination clause may be invalid and, therefore, unenforceable. Due to this, it is crucial to consider the termination clause carefully.
