In February 2025 we published an update (More termination clause drama in Ontario) that highlighted a troubling trend in Ontario termination clause case law – that the words “at any time” might render a clause unenforceable:
- In Dufault v. The Corporation of the Township of Ignace, 2024 ONSC 1029 the court held that a termination clause which reserved the employer’s right to terminate “at any time” and at its “sole discretion” was unlawful for breach of the Employment Standards Act, 2000 (“ESA”). The court reasoned that these words might allow an employer to terminate an employee when they are on a job-protected ESA leave or after they have made an ESA complaint about their working conditions. The court in Dufault also found the termination clause was unenforceable on two other grounds relating to the definition of “cause” and a failure to provide for all types of compensation in paying ESA termination entitlements.
- In Baker v. Van Dolder’s Home Team Inc., 2025 ONSC 952 the court held it was bound to follow Dufault and found that the inclusion of the words “at any time” in a termination clause were enough to void the clause. In Baker, the impugned clause did not refer to the employer’s “sole discretion”.
In our February update we stated that any prediction of widespread unenforceability of termination clauses following Baker was “premature at best”. We had reason to doubt that Dufault and Baker would be followed in the long run.
Now we have two new, unreported decisions supporting that doubt: