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ARTICLE · 01 MARCH 2024

Contract Permitting Termination In An Employer's "Sole Discretion… At Any Time" Unenforceable

Filion Wakely Thorup Angeletti LLP
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In a decision dated February 16, 2024, the Ontario Superior Court of Justice struck down a termination provision that stated the employer could terminate an employee's...

CanadaEmployment and HR
Clifton Yiu
Clifton Yiu
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Bottom Line

In a decision dated February 16, 2024, the Ontario Superior Court of Justice struck down a termination provision that stated the employer could terminate an employee's employment in its "sole discretion... at any time". The judge held that this, among other components of the provision, violated the Employment Standards Act, 2000 ("ESA"), and that the employer could not rely on it to limit the employee's entitlement to termination notice.

The Court's decision will have significant impact on existing employment agreements. Employers ought to review their existing employment agreements with this decision in mind.

The Plaintiff's Contract of Employment

In Dufault v. The Corporation of the Township of Ignace, 2024 ONSC 1029 ("Dufault"), the Plaintiff employee was employed as a Youth Engagement Coordinator pursuant to a fixed-term employment agreement for just over two years (the "Agreement"). However, approximately two months into the Agreement, the

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