Ontario Court Of Appeal Pulls Back From Technical Attacks On Termination Clauses

At a Glance

• The Ontario Court of Appeal has upheld termination clauses using the phrases “at any time” and “for any reason,” confirming that such language does not violate the Ontario Employment Standards Act, 2000 when read in the context of an agreement that preserves statutory minimum entitlements.
• In its reasons, the Court signaled a shift away from highly technical attacks on termination provisions, emphasizing contextual interpretation, the parties’ objective intention, and clear contractual commitments to ESA compliance.

The Ontario Court of Appeal's decision in Baker v. Van Dolder's Home Team Inc., released together with Li v. Wayfair Canada ULC, marks a notable development in the evolving law governing termination provisions in employment contracts. The Court upheld termination clauses that had been challenged based on the inclusion of the phrases "at any time" and "for any reason," language that has recently generated considerable claims from former employees.