A Nova Scotia sales representative has been awarded eight months’ notice after a court found his employment contract’s termination clause was too ambiguous to limit his common law entitlements.
C.B. worked as a sales representative for Micco Companies Limited for eight years and four months before being terminated without cause in June 2024. The company provided him with four weeks’ pay in lieu of notice, the minimum required under provincial labour standards legislation, plus $6,379 in earned commissions and vacation pay.
The dispute centred on whether C.B.’s employment agreement successfully limited his notice entitlement to statutory minimums or whether he was entitled to common law reasonable notice.
Termination clause under scrutiny
The employment agreement’s termination provision stated that upon termination without cause, C.B. would receive “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.”
The Nova Scotia Supreme Court found this language ambiguous and insufficient to override C.B.’s common law notice entitlement.
The court noted that the qualifier “to which you are entitled under the Nova Scotia Labour Standards legislation” could reasonably be interpreted as applying only to severance pay, not to the notice of termination portion of the clause.
Additionally, the court found it significant that “severance pay” does not appear anywhere in the Nova Scotia Labour Standards Code. The only payment required by the code upon without-cause termination is pay in lieu of notice.
Two reasonable interpretations identified
The judge identified two possible interpretations of the termination clause, both of which would preserve C.B.’s common law notice rights:
The “minimum notice of termination” could refer to common law notice requirements, while “severance pay” refers to statutory pay in lieu of notice, or the “minimum notice of termination” could refer to statutory notice, while “severance pay” is a colloquial reference to common law notice.
The court emphasized that employment contracts must contain “express language that creates a high level of clarity” to limit an employee’s common law notice entitlement. The agreement failed to meet this standard.
Eight-month notice period awarded
Applying the traditional factors for determining reasonable notice — the employee’s age, length of service, character of employment, and availability of similar work — the court awarded C.B. eight months’ notice.
At the time of termination, C.B. was 52 years old and had worked in sales for the company for eight years and four months. The court noted he secured new employment in liquor sales approximately nine months after his termination.
Commission entitlement preserved
The court also ruled that C.B. was entitled to his full compensation package during the notice period, including base salary, commissions, and benefits.
Micco argued that C.B.’s commission entitlement should be limited based on a Sales Incentive Plan that contained language stating terminated employees “shall immediately cease to participate in the plan” and “shall not be eligible to receive any payment under the plan.”
However, the court found this plan only applied to the 2016 fiscal year and was not in effect when C.B. was terminated in 2024. Various verbal commission plans had been implemented over the years, and the written plan did not “unambiguously alter or remove” C.B.’s common law rights for the period in question.
The court calculated C.B.’s total annual compensation at $80,000, factoring in his base salary of $37,000, average commission earnings, and benefits including a car allowance.
Mitigation defence rejected
Micco argued that any notice period should be reduced due to C.B.’s alleged failure to mitigate his damages. The company suggested his job search efforts were inadequate because they relied primarily on internet-based applications.
The court rejected this argument, noting that using the internet as a primary job search method cannot be viewed as a failure to mitigate in today’s society. The judge distinguished a 2004 case where internet job searching was considered insufficient, noting that decision was made “when the internet was fairly new, before it was fully integrated into all aspects of life.”
The court found C.B. had made extensive efforts to find new employment, including internet searches and reaching out to industry contacts via email. The company failed to provide evidence that C.B. could have made additional reasonable efforts or that such efforts would likely have resulted in earlier employment.
The court awarded C.B. $53,333 representing eight months of his annual compensation, minus amounts already paid by the company, plus prejudgment interest and costs.
For more information, see Brocklehurst v. Micco Companies Limited, 2025 NSSC 192 (CanLII).
