Where an employee has breached his employment contract, and the employer offers that employee the chance to enter into a termination agreement as opposed to being dismissed without a notice for cause, the employer is under no obligation to be honest with the employee about the strength of its case against him.

In this case the employee was caught stealing a quantity of paper towels from the employer. The employer advised the employee that he was going to be dismissed without notice for cause, but was willing to allow the employee to enter into a termination agreement in the alternative. The employee entered into the termination agreement but subsequently raised a claim at the labour court alleging that he was unduly pressured into entering into the termination agreement and that the employer was under a duty to explain to him that a summary dismissal for stealing paper towels may not have been justified in the circumstances.

The employee's claim was successful in the first instance but the District Labour Court ruled in favour of the employer on appeal. The District Court noted that employers are prohibited from unduly pressuring employees into entering termination agreements. However, in this case, as the employee had in fact stolen from the employer (and as such it was at least arguable that the employer may have been justified in dismissing the employee without notice for cause) it did not amount to undue pressure for the employer to indicate to the employee that it was going to summarily terminate him if he did not enter into the termination agreement.

The court noted that in such circumstances the employer's obligation to inform the employee extended only to the consequences (especially in terms of the potential negative impact on the employee's ability to claim unemployment benefits) of entering into the termination agreement.