What Is A Cause Agreement

Many “for reasons” sections in the contracts I see define “cause” to include employer discretion. For example, “behaviour that harms the company as determined by the employer alone.” This language, which may grant discretion to the employer, can be very problematic because the employer, regardless of what the evidence proves, can argue that “at its sole discretion” there are grounds “for substantive reasons”. I`ll spare you the stories about the legal battles that fight over “discretion” in “for reasons” employment contracts. The fact is that taking the discretion of any “cause” provision, or at least limit discretion as much as possible (i.e. “appropriate discretion”). None of these provisions would allow the employer to dismiss the executive on grounds of negligence or even negligence of its duties. A stronger definition of the case would cover any termination based on non-compliance with defined performance objectives or objectives that were communicated to management, whether or not the error was made. Whenever a definition of “for the cause” contains something you could correct, there should be a “Notice and Cure” provision. For example, if a contract provides that you can be terminated “temporarily” for non-performance, there should be a provision that states “according to a written notification indicating the (s) loss (s) of performance (s) and the possibility of 60 days (or more) to remedy the performance error.” Or if a contract provides that you can be terminated “from time to time” because you refuse to follow the instructions of the CEO or board of directors, there should be a provision stating that “according to a written notification indicating the refusal and the possibility of 10 days (or more) to cure the refusal.” In principle, the point of the “Notice and Cure” provision is to allow you to correct something that would otherwise terminate you “for a fundamental reason.” When a board of directors decides that it must terminate the employment of a CEO, the terms of the management`s employment contract determine whether the association should pay severance pay.