Safety & HCM Post

No Masterpiece, But Termination Clause Is Clear Enough to Enforce

Termination of Employment: If you are terminated by IBM other than for cause, IBM will provide you with a separation allowance in lieu of notice equal to the greater of IBM’s current separation practice (i.e. one week’s notice/salary for every fully completed six months of service) or three months of your annual salary.  This includes any and all statutory obligations.  This amount will not be less than the minimum statutory termination pay and severance pay requirements.

Is the above clause ambiguous? The veteran software sales manager fired without cause claimed it was and that his separation payment of $101K+ based on 29 weeks’ pay at $3,492.70 per week, his average salary and historical earnings over 36 months of his employment, was unenforceable. While “not a masterpiece of drafting,” the BC court found that the termination clause wasn’t ambiguous. Overall, the IBM Canada calculation formula was both legal and well within the legally required ESA minimums [Johnson v IBM Canada Ltd., 2019 BCSC 592 (CanLII), April 17, 2019].

Bongarde Editorial

Bongarde Editorial

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