Home Employment Contracts Termination clause in former VP’s contract at Harbour Air Seaplanes ruled enforceable by B.C. court

Termination clause in former VP’s contract at Harbour Air Seaplanes ruled enforceable by B.C. court

by HR Law Canada

The Supreme Court of British Columbia has upheld a termination clause for a former executive at Harbour Air Seaplanes, a Richmond, B.C.-based floatplane service.

The worker, GE, held the position of vice-president, maintenance operations. The case centered around the enforceability of a termination clause in GE’s employment contract, which the court found to be valid and legally binding.

The termination clause read: “The Harbour Air group may terminate your employment at any time without cause so long as it provides appropriate notice and severance in accordance with the requirements of the Canada Labour Code.”

GE was terminated from Harbour Air on March 30, 2020. The termination, as stated in the letter from the employer, was due to a significant downturn in business caused by the pandemic. Harbour Air, in its termination letter, adhered to the conditions stated in GE’s employment contract, which was in line with the Canada Labour Code.

This included providing two weeks of wages and five days of severance pay, amounting to a total of $10,203.93.

The legal debate was focused on whether the termination clause in the contract limited his termination entitlements solely to the minimum requirements set by the Canada Labour Code. GE’s contract explicitly stated that Harbour Air could terminate his employment without cause, provided it adhered to the stipulations of the Canada Labour Code.

In its judgment, the court found that the termination provision was not ambiguous and was sufficient to counter the common principles regarding reasonable notice. The court also determined that Section 231 of the Canada Labour Code, which outlines conditions of employment, did not apply to GE’s case since he was given wages in lieu of notice and was not employed during a notice period.

As a result of the ruling, GE’s claim for additional damages was dismissed, and Harbour Air’s application for dismissal of the action was allowed. The parties have been directed to make submissions on costs, with a schedule for all submissions to be determined and provided by Dec. 31, 2023.

For more information, see Egan v Harbour Air Seaplanes LLP, 2023 BCSC 1916 (CanLII)

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