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Finally, a practical and common-sense approach to termination clause interpretation
In a significant win for employers, the Ontario Court of Appeal has upheld the enforceability of termination clauses in Baker v. Van Dolder's Home Team Inc.; Li v. Wayfair Canada ULC. 2026 ONCA 568, rejecting the increasingly technical approach that has dominated termination clause litigation in recent years. Both of these cases came before the Court of Appeal to seek judicial determination, in part, on whether the phrases “at any time” or “for any reason” invalidated a termination clause.
Good News for Employers: Wayfair Upholds “At Any Time” Termination Language
Employers in Ontario have faced challenges with termination clauses in employment agreements, particularly when using phrases like “at any time,” which courts have sometimes found to violate the Employment Standards Act (ESA). However, in Li v. Wayfair Canada ULC. (2025 ONSC 2959), the Ontario Superior Court upheld a termination clause using that exact phrase, offering positive news for employers. This decision provides clarity on enforceability and signals a shift that could impact how employment contracts are drafted moving forward.
Ontario Court Confirms Enforceability of ESA-Only Termination Provision
Employers and employees in Ontario have long been permitted to contract out of common law notice entitlements, provided their agreements meet or exceed statutory minimums under the Employment Standards Act, 2000 (ESA). However, in recent years, courts have closely scrutinized termination provisions, leading to increased uncertainty for employers.
The recent Ontario Superior Court of Justice decision in Bertsch v. Datastealth Inc., 2024 ONSC 5593, provides welcome clarity, reaffirming that properly drafted termination provisions will be enforced—even when they limit an employee’s entitlements to ESA minimums. The decision also demonstrates how employers can use procedural tools like Rule 21 motions to resolve contractual interpretation disputes efficiently.
Termination Provisions Scrutinized in Dufault Case
A recent decision of our Superior Court out of Thunder Bay has caught our attention (and the attention of most employment lawyers) as another example of the court broadening the application of the Ontario Court of Appeal’s 2020 Waksdale case.
Employers, Review Those Employment Agreements!
Since the 2020 decision in Waksdale v Swegon North America Inc., 2020 ONCA 391 (“Waksdale”), it has been more difficult for employers to argue the termination provisions in their employment agreements are enforceable.
Accepting Reality: Adjusting to the changed contractual reality for employers in Ontario
The Court of Appeal’s decision in Waksdale v. Swegon North America Inc., 2020 ONCA 391 will not be heard by the Supreme Court of Canada. The case remains the leading authority for interpreting termination provisions in employment agreements in Ontario.
Update on Employment Contracts
We have seen quite a few legal developments in 2020 from our highest courts with respect to the employment relationship and employment contracts in particular.