Another Termination Clause Bites The Dust

Following the case of Waksdale v Swegon North America Inc., 2020 ONCA 391, Ontario courts have placed increased scrutiny on termination clauses with very few surviving.

Recently, the Ontario court found a new reason to void a termination clause in Dufault v The Corporation of the Township of Ignace, 2024 ONSC 1029 ("Dufault").

In Dufault, the Court voided the termination clause for three reasons (and of course, only one reason is enough):

1. Expanding "With Cause" Definition:The provision referred to termination without notice "for cause", which is a different and lower standard than "wilful misconduct, disobedience or wilful neglect of duty that is not trivial and has not been condoned by the employer", which is the standard required to terminate employment without providing the notice (and potentially severance) required by the Ontario Employment Standards Act, 2000 ("ESA");