Don’t Let Your Termination Clause Sink: Lessons from Nova Scotia’s Latest Employment Law Decision
Nova Scotia isn’t Ontario, but its courts can still sink your termination clause faster than you can say ‘Bluenose’
In Brocklehurst v. Micco Companies Limited, 2025 NSSC 192, the Nova Scotia Supreme Court delivered a fresh reminder that drafting enforceable termination clauses requires surgical precision, not just good intentions. For Maritime employers who thought they might escape the strict scrutiny applied to termination clauses in other provinces, this decision makes it clear: think again.
The Case: When “Clear” Language Isn’t Clear Enough
The employee worked as a sales representative for the defendant company for over eight years before being terminated without cause in June 2024. His employment agreement included what seemed like a straightforward termination clause, limiting him to: “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.”
At first glance, this appears unambiguous—the employee gets statutory minimums, nothing more. The employer paid the plaintiff four weeks’ notice (the statutory minimum for his length of service) and considered the matter closed. They even offered an additional two weeks’ pay in exchange for a release, which the employee declined before filing his wrongful dismissal claim.
Where It All Went Wrong: The Devil in the Details
Justice Chipman found the clause fatally ambiguous, and his reasoning reveals a crucial trap that many employers fall into. The provision listed both “minimum notice of termination” AND “severance pay (if applicable)” as separate entitlements under the Labour Standards Code. Here’s the problem: “severance pay” doesn’t actually exist in Nova Scotia’s employment standards legislation, unlike in Ontario’s Employment Standards Act.
This created what the court called “reasonable doubt” about whether common law notice was truly being excluded. As Justice Chipman explained, since both entitlements were connected by “and,” it necessarily contemplated a situation where the employee could receive minimum notice of termination in addition to severance pay. But if severance pay isn’t a thing under provincial law, what could this second entitlement refer to? The court found it could reasonably be interpreted as referring to common law notice.
The Broader Legal Landscape: Nova Scotia Follows National Trends
This decision reinforces that Nova Scotia courts apply the same rigorous standards to termination clauses as their counterparts across Canada. Justice Chipman extensively cited the leading case Bellini v. Ausenco Engineering Alberta Inc., 2016 NSSC 237, which established that termination provisions must contain “express language that creates a high level of clarity” to displace common law notice entitlements.
The decision also referenced recent guidance from the Ontario Court of Appeal in Waksdale v. Swegon North America Inc. and Bertsch v. Datastealth Inc., emphasizing that employment agreements must be interpreted as a whole, not on a piecemeal basis. Courts will focus on whether the employer has violated the employee’s statutory rights while restricting common law entitlements.
Notably, Justice Chipman acknowledged that while some Ontario decisions have been more lenient in enforcing termination clauses, Nova Scotia jurisprudence demands that termination provisions expressly state that statutory minimums are “the ceiling,” not just the floor.
The Price of Ambiguity: An $80,000 Lesson
The financial consequences were severe. Instead of the four weeks’ statutory notice the employer had paid, the court awarded the plaintiff eight months’ notice at his full compensation package of $80,000 annually (including base salary, commissions, and benefits). This meant damages of approximately $53,333, plus prejudgment interest and costs—a significant multiple of the original four-week payout.
The court applied the traditional Bardal factors in determining the notice period, considering the employee’s age (52), length of service (8.5 years), character of employment (sales representative), and availability of similar work. Importantly, the court also found that the plaintiff was entitled to his full compensation package during the notice period, including commissions, rejecting the defendant’s argument that only base salary should apply.
Additional Lessons: Commission Entitlements and Mitigation
The decision offers valuable guidance beyond termination clause drafting. The court found that the employee was entitled to commission payments during his notice period, applying the Supreme Court of Canada’s decision in Matthews v. Ocean Nutrition Canada Ltd. The written Sales Incentive Plan that attempted to exclude post-termination commissions was found ineffective because it explicitly applied only to the “2016 fiscal year period” and wasn’t in effect at the time of the plaintiff’s 2024 termination.
On mitigation, the employer argued that the employee’s job search efforts were inadequate, but the court disagreed. Justice Chipman noted that using the internet as a primary job search method—which might have been viewed skeptically twenty years ago—is now standard practice and cannot be considered a failure to mitigate. The court emphasized that the burden is on the employer to prove both that the employee failed to make reasonable efforts and that better efforts would likely have secured replacement employment.
Practical Takeaways for Maritime Employers
1. Don’t Rely on Generic Templates: Just because a termination clause works in Ontario doesn’t mean it will work in Nova Scotia. Provincial differences in employment standards legislation can create unexpected ambiguities.
2. Precision is Paramount: Avoid using terms that don’t exist in your provincial legislation. If you’re referencing “severance pay” in Nova Scotia, you’re creating confusion that courts will resolve against you.
3. Regular Reviews are Essential: Employment law evolves rapidly. That clause you drafted five years ago may no longer provide the protection you think it does, especially as courts continue to raise the bar for enforceability.
4. Consider the Whole Agreement: Don’t just focus on the termination clause in isolation. Courts will look at how all provisions work together, including commission plans, benefit entitlements, and other terms that could affect notice obligations.
5. Budget for the Worst Case: Even if you think your termination clause is solid, consider the potential downside. Is the cost of proper legal review really more expensive than several months or more of wrongful dismissal damages?
The Bottom Line
This case serves as a potent reminder that when it comes to employment law, “close enough” isn’t good enough—whether you’re on Bay Street or Barrington Street. Nova Scotia employers cannot assume their province’s courts will be more relaxed on employment contract precision than in other provinces.
The message is clear: invest in proper legal drafting upfront, or risk paying exponentially more on the back end. In employment law, precision is essential for protecting your business from potentially devastating financial exposure.
Case Citation: Brocklehurst v. Micco Companies Limited, 2025 NSSC 192
Full Decision: https://canlii.ca/t/kclr6
Need help reviewing your employment agreements? Our team specializes in drafting bulletproof termination clauses that protect your business while complying with evolving legal standards. Contact us for a consultation.