Business Law

Chapter 4 RQ#4.
Simardeep’s negotiated severance letter contained the following terms:
a. The Employer will provide you with two weeks’ pay in lieu of notice plus two days per year of service severance as required by the Canada Labour Code. [statutory entitlements]
b. In addition to the amount provided in (a) above, on the condition that you provide a signed copy of this letter and a signed release, the employer will continue to pay you your regular salary until the earlier of the date on which you obtain new employment or May 28, 2010, the date on which your salary continuance period ends. If you obtain new employment during the salary continuation period, the employer will stop the salary continuance and pay you 50 percent of the remaining amount in a single lump sum. [common law entitlements]
When the employer discontinued salary continuation payments earlier than Simardeep expected it to, the parties realized that they disagreed on the proper interpretation of these two clauses. Simardeep sued her former employer for the additional amount, arguing that the common law severance compensation set out in paragraph (b) was to be in addition to the statutory severance described in paragraph (a). The employer countered that the benefits and salary negotiated in paragraph (b) were clearly to include the statutory entitlements set out in paragraph (a) because any other interpretation would be unfair and provide the employee with severance pay well in excess of the 24-month “cap” that typically applies to common law awards.
Which interpretation do you think the court will choose?

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