In Ghazvini et al v. Canadian Imperial Bank Of Commerce, 2025 ONSC 5218 Justice Merritt was asked to determine the enforceability of this termination clause:

By CIBC for Cause – CIBC may terminate your employment at any time without advance notice, or pay in lieu of notice, for Cause. Cause includes, but is not limited to, dishonesty, fraud, breach of trust, failure to perform your duties in a satisfactory manner, a breach of [CIBC’s Code of Conduct], failure to obtain or maintain any required [Training Licenses and Accreditations], failure to complete the pre-employment screening process to the satisfaction of CIBC, providing false, misleading or inaccurate information during the hiring process, a breach of any other term or condition of your employment, and any act or omission recognized as Cause under applicable law. If your employment is terminated for Cause, you will have no entitlement to any notice of termination, payment in lieu of notice of termination, severance or any other damages whatsoever.

The Court held that this clause was illegal because it in essence tried to contract out of the Just Cause provision in the Canada Labour Code ( Section 229.1)

At paragraph 56 and 58 the Judge said : ‘

[56] The For Cause Provision here does not comply with the minimum statutory requirements. It violates the CLC because it is not clear that it only includes events that would be just cause under the CLC. Rather, it contains items that may not be just cause and is therefore broader than the concept of just cause under the CLC. The For Cause Provision does not specify that the acts which constitute Cause must be serious.

58] Where an employment contract defines cause more broadly than the statute, and therefore permits termination without notice in circumstances where the statute prohibits it, the contract breaches the statute: De Castro, at para. 7.

Because the Cause termination provision was illegal, the entire termination clause is void and thus Plaintiffs received reasonable notice instead of the the contractual amount under the By CIBC Without Cause ( which was 2 weeks per year of service).

In addition the Judge seemed to favour the argument the the inclusion of the words ” CIBC may terminate your employment at any time without Cause” also made the clause illegal ( citing Dufault and the cases that followed it ) however the Judge did not feel it was necessary to determine this issue as the clause was illegal in any event for the reasons set out above .

My Comments :

It was generally thought that the Waksdale may have only applied to Ontario because only Ontario uses the different statutory standard of “wilful misconduct” whereas all the other Canadian jurisdictions use the” just cause” standard.

However this case reinforces the principal that when a statute uses a term such as “just cause ” that it is up to the Courts, and not the contracting parties, to determine what is and what is not just cause.

It follows that any clause that seeks to define just cause by listing examples of what it includes runs a real risk that the entire clause will be found to violate the applicable employment standards legislation and thus be unenforceable.

This case could potentially invalidate as many termination provisions across Canada as Waksdale did in Ontario.

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In Adrain v Agricom International Inc., 2025 BCSC 1842 Justice Bongers had a situation where an employee was given 13 months working notice. Feeling that that notice period was inadequate ( which out was as she had 30 years service ) she engaged a lawyer to first write two letters demanding $200,000. This was refused by the employer so the employee started a lawsuit.

The Court held the following :

1. Suing your employer while still working is not just cause .

2. However it does constitute a repudiation of the contract if the employer accepts the repudiation.

3. In calculating damages you first determine the proper notice period ( 24 months in this case) then you deduct the period of working notice that the Plaintiff did work PLUS the amount of working notice that she did not work

Thus in this case 24 months was the reasonable notice period.

She actually worked 1.5 months before the repudiation.

She failed to work the remaining 11.5 months of working notice .

Thus her entitlement was : 24 – ( 1.5 +11.5) = 11 months

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In Panchbhaya v. Vulsay Industries Ltd., 2025 ONSC 5370 Justice Koehnen awarded a notice period of 26 months to a 65 year old Lab Manager with 40 years service.

The Judge made a number of interesting comments on the following issues :

1. Notice Period Being Exceptional and Therefore Deserving of More than 24 Months :

This was the only job that the Plaintiff ever had in Canada.

He had no practical experience outside this job.

He worked in a specialized industry and position.

A 65 year old is ” nearing the end of their career”.

His age and seniority alone can act as exceptional circumstances, thereby justifying exceeding  the 24 month cap.

2. Attacks on Mitigation Efforts :

Notwithstanding that the Plaintiff looked for over a hundred jobs, the Defendant chose to attack his mitigation efforts. In ignoring these concerns, the Judge made the following observations:

They provided no letter of reference or outplacement counselling.

They  only paid the Plaintiff his ESA minimums.

Although they gave advance notice that the plant would be shutting down, at the same time they offered retention bonuses for those who stayed on and said that they might be offered other jobs.

The Defendant could not point to a single job that the Plaintiff could have applied for and did not.

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In Carroll v Oracle Canada ( 2025 ONSC 4889) Justice Koehnen had a situation where the defendant initially only paid the ESA termination on the Plaintiff’s base pay and failed to pay him the commission he had earned over the 8 weeks statutory period. They finally paid the Plaintiff 8 months later.

The judge was not happy with this conduct and found that it was a breach of the duty of good faith and that the real purpose was to ” try to force a financially vulnerable employee into a less favourable settlement position ”

To punish the defendant and to encourage others to not play these games the Judge awarded punitive damages in the same amount as the delayed payment, namely $57,740.

Comments:

In the olden days, the SCC said in Wallace v United Grain Growers that the Court could award damages for bad faith actions in relation to the termination of employment. They gave, as an example, the use of hard ball tactics by an employer over severance issues. This case is a prime example of the how the Courts use the principle of bad faith to seek to regulate bad behaviour by employers.

The other risk that employers could encounter is that a failure to abide by the requirements of the ESA ( or the employment contract) could give rise to an argument that by doing so they have repudiated their own contract. That would mean that the employer could no longer rely on an otherwise valid termination clause and thus be required to pay reasonable notice.

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In  Carroll v Oracle Canada ULC , 2025 ONSC 4889 Justice Koehnnen had a 61 year old Global Strategic Client Executive making in excess of $750K per annum with 3 years and 7 months service . He was awarded 12 months notice .

The Judge also made some interesting findings and comments :

1. People who make more money should get a longer notice period because there are less of these jobs available .
2. The absence of a letter of recommendation therefore tends to a longer notice period.
3. The Plaintiff’s income was based largely on commissions, which fluctuated from year to year. The judge used a 3 year average.
4. The judge denied the Plaintiff of the RSU that would have vested within the notice period because of the following language in the RSU Plan:

   Section 11 of the Amended and Restated 2000 Long-Term Equity Incentive Plan Stock Unit Award Agreement For Employees Outside the U.S. provides, among other things:

   (vii) this Award and the Shares subject to this Award, and the income and value of same, are not part of normal or expected compensation or salary for any purpose including, but not limited to, calculating any severance, resignation, termination, redundancy, dismissal, end of service payments, bonuses, long-service awards, pension or welfare or retirement benefits (including the 401(k) Savings and Investment Plan and the Deferred Compensation Plan) or similar payments and in no event should be considered as compensation for, or relating in any way to, past services for the Company, the Employer or any Parent, Subsidiary or Affiliate;

   (xiii) no claim or entitlement to compensation or damages shall arise from forfeiture of this Award resulting from the termination of Participant’s employment (for any reason whatsoever, whether or not later found to be invalid or in breach of employment laws in the jurisdiction where Participant is employed or the terms of Participant’s employment agreement, if any), and in consideration of the grant of this Award to which Participant is otherwise not entitled, Participant irrevocably agrees never to institute any such claim against the Company, any Parent, Subsidiary or Affiliate or the Employer, waives the ability, if any, to bring any such claim, and releases the Company, any Parent, Subsidiary or Affiliate and the Employer from any such claim; if, notwithstanding the foregoing, any such claim is allowed by a court of competent jurisdiction, then, by participating in the Plan, Participant shall be deemed irrevocably to have agreed not to pursue such claim and agrees to execute any and all documents necessary to request dismissal or withdrawal of such claim;

5. He awarded the value of benefits at 10% as ” Courts have consistently approved awards for benefits equal to 10% of salary.”

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In Chan v NYX Capital Corp ( 2025 ONSC 4561) Justice Parghi had to determine the enforceability off this termination clause:

10.      Termination

Your employment with the Company may be terminated as follows:

(a)       The first three months of your employment are probationary, during which time the Company may terminate your employment at any time and for any reason at its discretion, without notice or pay in lieu of notice, or other obligation.

(b)       You may resign from your employment at any time and for any reason upon providing the Company with two weeks of notice in writing of your resignation, which notice may be waived by the Company in whole or in part at its sole discretion save as may be required under the ESA.

(c)       After you successfully complete the first three months of your employment, the Company may terminate your employment at any time without cause, upon providing you with notice, or pay in lieu of notice, benefits continuation and severance pay (if applicable) and any other benefits or entitlements strictly required in accordance with the minimum requirements set out in the ESA. It is agreed and understood that the provision of such notice or pay in lieu of notice, severance pay (if applicable), benefits continuation and any other benefits or entitlements required under the ESA shall constitute full and final satisfaction of any claim which you might have arising from or relating to the termination of your employment, whether such claim arises under statute, contract, common law or otherwise, save any claim that cannot be released by operation of a statute of Ontario.

(d)       The Company may terminate your employment at any time for cause, without any obligation to you on account of notice or pay in lieu of notice, severance pay, or other obligation, other than accrued amounts owed to the date of termination.

The Judge found this clause to be illegal for the following reasons:

1. “At any time” and “for any reason ” were illegal . quoting Dufault v. The Corporation of the Township of Ignace, 2024 ONSC 1029, andBaker v. Van Dolder’s Home Team Inc., 2025 ONSC 952,.
2. ” At any time for cause ” is illegal quoting Waksdale v. Swegon North America Inc., 2020 ONCA 391,

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In Li v Wayfair Canada Inc, ( 2025 ONSC 2959) Justice Dow had a no just cause termination clause which provided  the following:

“After your probationary period concludes, in the absence of Cause, the Company may terminate your employment at any time and for any reason” which goes on to state “by providing you with only the minimum statutory amount of written notice required by the ESA or by paying you the minimal amount of statutory termination pay in lieu of notice required by the ESA, or a combination of both, as well as paying statutory severance pay required by the ESA, providing benefits continuance for the requisite minimum statutory period under the ESA and all other outstanding entitlements, if any, owing under the ESA”.

There are two decisions of Ontario Courts which have held that words of that nature violate the ESA because they would  allow for a termination for reasons that are prohibited by the sections of the ESA relating to statutory leaves and anti reprisal. These decisions (Dufault v. The Corporation of the Township of Ignace, 2024 ONSC 1029  and Baker v. Van Dolder ‘s Home Team Inc., 2025 ONSC 952.) refer to the policy reasons for this finding.

However Mr Justice Dow found that ” the wording in this employment contract to be distinguishable to that contained in that case and thus requires a different conclusion.”

The Judge however gave no reason for why this apparently different wording should lead to a different conclusion.

He went on to find that the termination clause was enforceable.

I have just been advised that the Plaintiff is filing an appeal with the Ontario Court of Appeal

My Comment:

In Dufault the wording was as follows:

The Township may at its sole discretion and without cause, terminate this Agreement and the Employee’s employment thereunder at any time upon giving to the Employee written notice as follows:

In Baker the wording was as follows:

Termination without cause: we may terminate your employment at any time, without just cause,

Both Dufault and Baker say that the use of ” at any time” breaches the ESA. This is same wording as the present case.

Dufault says that the  use of ” at its sole discretion ”  breaches the ESA . In the present case they use the words ” for any reason”.

Please someone explain to me the difference between ” at its sole discretion” v  “for any reason”.

It strikes me as a difference without a distinction.

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In Jones v. Strides Toronto, 2025 ONSC 2482,  Justice Moore was faced with this termination clause :

Termination of Employment: 

The Organization may terminate your employment without cause at any time upon providing you with the following: 

• Advance notice, or payment in lieu, in accordance with the Employment Standards Act, 2000 (“ESA”) and any other payments required by such legislation including severance pay, and as well as continuing to provide benefits (which includes participation in the group RRSP) during the applicable statutory notice period; plus 

• An additional 1-week advance notice of termination or pay in lieu thereof for each completed year of each completed month of employment with the Organization in an incomplete year. 

Notwithstanding the above, the Organization may terminate your employment at any time, without notice or pay in lieu thereof or severance pay, for willful misconduct, disobedience or willful neglect of duty that is not trivial and has not be condoned by the Organization. If your employment is terminated for conduct that amounts to just cause at common law but not willful misconduct, disobedience or willful neglect of duty that is not trivial and has not been condoned by the Organization, you will receive those amounts set out in (a) above but you will not receive the amounts in (b) above. (emphasis added) 

There were two attacks on this clause:

At Any Time

In the case of Dufault v. The Corporation of the Township of Ignace, 2024 ONSC 1029(“Dufault”). the relevant clause had two components; ” at any time ” and “in the employer’s sole discretion” . The Court found as follows;

I find that the Dufault decision does not stand for the proposition that the words “at any time” divorced from “sole discretion” are improper in an employment contract. I do not find that these words in the termination clause in this case bring it into conflict with the ESA and make it unenforceable. 

My Comment:

Nowhere in the decision does the Court reference the recent case of Justice Sproat in Baker v. Van Dolder’s Home Team Inc., 2025 ONSC 952 in which it was held that the use of the phrase ” at any time ” alone is fatal to the enforceability of the termination provision. 

Failure to Repeat the Provision of Benefits :

This three tier clause seems to have become popular in which the termination clause provides for three distinct outcomes :

1. If there is wilful misconduct you get nothing .
2. If there is not wilful misconduct but there is just cause you only get the ESA minimums
3. If there is neither ( without cause ) then you get ESA plus something extra.

The attack on the clause in this case was quite ingenious. The clause provided that in a just cause but not wilful misconduct situation ( #2) that you would receive the ” amounts ” set out in the first clause but not the secound clause with the extra payment.

The Judge noted that the contract only referred to receiving ” amounts ” and did not refer to the other obligation to ” continuing to provide benefits” .  There was a further clause which stated:

“By signing below, you agree that the forgoing is your full entitlement upon termination of employment pursuant to the common law and employment standards legislation, and that there is no further amount or obligation owing upon termination,” 

The Judge therefore found there was a potential violation of section 60(1)(a) of the ESA which prohibits reducing or altering any term of employment during the statutory notice period.

The Court therefore found that the termination clause was illegal and awarded common law notice of four months.

My Comment:

The ESA does not require the employer to actually provide the benefits during the statutory notice period, it only requires that they pay the insurance premiums to the insurance company to provide those benefits:

Paragraph 60.(1)( c) of the ESA:

60 (1) During a notice period under section 57 or 58, the employer,

(c) shall continue to make whatever benefit plan contributions would be required to be made in order to maintain the employee’s benefits under the plan until the end of the notice period.  2000, c. 41, s. 60 (1).

And see also :

61 (1) An employer may terminate the employment of an employee without notice or with less notice than is required under section 57 or 58 if the employer,

(b) continues to make whatever benefit plan contributions would be required to be made in order to maintain the benefits to which the employee would have been entitled had he or she continued to be employed during the period of notice that he or she would otherwise have been entitled to receive.  2000, c. 41, s. 61 (1); 2001, c. 9, Sched. I, s. 1 (14).

So one could argue that since the only obligation of the employer under the ESA is to pay the insurance  premiums or contribution ( which of course is actual money) that it would be covered by the term in the termination clause that requires the employer to pay the ” amounts” .

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In Gent v. Askanda Business Services Ltd., 2025 BCSC 1278 Justice Marzari found that whereas he normally would have assigned a very long notice period because the Plaintiff had formed an intention to retire at 65 ( which was 6 months from his termination) his damages would only be for 6 months. This is even though the Judge found the Plaintiff had not expressed that desire to his employer. This is what he said :

[76]      However, I must also consider Mr. Gent’s evidence that he had firm plans to retire when he turned 65, even though he had not expressed those plans specifically to Mr. Hollands. Mr. Gent testified to his reasons for having those plans, including that he was the primary caregiver for three young children, that he had moved to Langley, and that he needed to wait until he was 65 before he could qualify for CPP and OAS. He gave this testimony, in part, to support his evidence that he was not subjectively intending to retire during his conversation with Mr. Hollands in May 2020.

[77]      Had Mr. Gent been less firm about his intended retirement date in his evidence, I would likely have awarded him a significant notice period. However, I do not consider that Askanda should be required to pay damages in lieu of notice after March 1, 2022, when Mr. Gent no longer intended to work or to be looking for work.

[78]      Mr. Gent is entitled to be put in the same position he would have been if Askanda had not wrongfully dismissed him, and he had been given appropriate notice before the termination of his employment. However, he is not entitled to be put in a better position. This is the rare case where Mr. Gent, who had a firm intention to retire when he turned 65, and relied upon the firmness of that intention to establish that it was not his intention to retire at 63 when he discussed retirement with his employer. I find on Mr. Gent’s own evidence that he would not have worked beyond March 1, 2022, even had he been given the opportunity.

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