A recent Nova Scotia Supreme Court decision is a cautionary reminder that “one-size-fits-all” employment contracts can backfire when applied across Canada. In Brocklehurst v. Micco Companies Limited, the court ruled that a termination provision in a sales representative’s contract was too ambiguous to limit his common law notice entitlement and ultimately awarded him eight months’ pay in lieu of notice.
Why employers should not use the same employment contract across Canada
It is tempting for multi-jurisdictional companies to use a single contract template with references to “applicable employment standards legislation.” But that approach risks overlooking small yet important differences between provinces. For example:
- Ontario provides both statutory notice and, for certain long-service employees, statutory severance pay, plus mandatory benefits continuation during the notice period.
- Nova Scotia, by contrast, only requires notice or pay in lieu. There’s no statutory severance requirement.
When contracts are drafted without these distinctions in mind, courts may find them unclear, and potentially unenforceable.
The facts in Brocklehurst v. Micco
Mr. Brocklehurst worked for Micco Companies for about 8.5 years as a sales representative. His compensation included a base salary and significant commissions. When the company terminated him without cause, it relied on the termination clause in his contract, which promised:
- Payment of earned salary and accrued vacation;
- Continued participation in the company’s health plan “for such time as may be required under Nova Scotia Labour Standards legislation”; and
- “Only such minimum notice of termination, or pay in lieu thereof, and severance pay (if applicable) to which you are entitled under the Nova Scotia Labour Standards legislation.”
Micco argued this clause limited his entitlements to the bare statutory minimum under Nova Scotia law. Mr. Brocklehurst disagreed, saying the wording was unclear and did not clearly oust his right to common law reasonable notice.
The Court’s analysis
Justice Chipman found several problems with the termination clause’s wording, finding it ambiguous:
- The reference to “severance pay” – as Nova Scotia’s legislation doesn’t provide severance pay, only notice or pay in lieu.
- The way subsection (iii) was structured left it unclear whether “to which you are entitled under the Nova Scotia Labour Standards legislation” applied to both notice and severance, or just severance.
Because the termination clause was not clear and unambiguous, it was deemed to be unenforceable. The court instead awarded Mr. Brocklehurst eight months’ pay in lieu of notice, significantly more than the statutory minimums provided upon termination.
Key takeaways for employers when it comes drafting employment contracts across Canada
- Clarity is critical. Termination clauses must be explicit and leave no room for alternate interpretations.
- Avoid generic cross-Canada language. Provincial differences especially around severance, benefits, and calculation of notice—mean that cut-and-paste contracts can easily cause trouble.
- Tailor for the jurisdiction. The safest route is to prepare province-specific clauses, or at least ensure your language is accurate for each location where employees work.
- Review templates regularly. Employment standards legislation changes over time. A clause that worked last year might be out of date today.
Conclusion
The Brocklehurst decision is a straightforward example of how a small drafting issue can lead to significant liability. For national employers, it’s a reminder that efficiency in contract drafting should never come at the expense of legal precision. The safest approach is to review and customize employment agreements for each province where you operate, ideally with advice from local counsel. Cut-and-paste may be quick, but as Micco Companies learned, it can also be costly.
If your organization currently uses the same employment agreement Canada-wide and would like more information on revising them to be province-specific, please contact a member of the Whitten and Lublin team to discuss further. Contact us online or call 416 640 2667
Author – Jordan Cantor
