Superior Court Finds Employers Cannot Terminate "At Any Time"

Over the years, we have reported on the enforceability of termination clauses (or lack thereof in most cases). Just when we thought all possible arguments had been exhausted and considered by the courts, the superior court surprised us with yet another new ground to render termination clauses unenforceable.

In the matter of Dufault v The Corporation of the Township of Ignace 2024 ONSC 1029 ("Dufault"), the Court considered several arguments (most of which are debated and considered regularly) with respect to the enforceability of a termination clause within a fixed-term employment agreement but a novel argument presented itself amidst the usual ones.

The plaintiff argued (among other things) that the termination clause in her agreement was unenforceable because it gave the employer "sole discretion" to terminate her employment "at any time", which is very common wording in employment agreements. The plaintiff argued that the termination clause misstated the ESA