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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In Brocklehurst v Micro Companies Limited( 2025 NSSC 192) Judge Chipman had to deal with this termination clause:

Termination Without Cause:

Your employment may be terminated by Micco without cause, upon provision to you of the following payments:

(i) any portion of the annual salary and accrued vacation pay, if any, that has been earned by your [sic you] prior to the date of termination by [sic, but] not yet paid;

(ii) continued participation in Micco group health plan for such time as may be required under Nova Scotia Labour Standards legislation; and

(iii) only such minimum notice of termination, or pay in lieu thereof, and severance pay (if applicable) to which you are entitled under the Nova Scotia Labour Standards legislation.

The Judge found that this close was unenforceable due to ambiguity for the following reasons :

1. “the qualifier, “to which you are entitled under the Nova Scotia Labour Standards legislation”, may be read such that it does not apply to the notice of termination. This qualifier may be read to only apply to the severance pay.  Accordingly, the termination provision does not clearly limit the Applicant’s entitlement to common law notice.”
2. There is no “severance pay ”  under the Nova Scotia Labour Standards Code, therefore the reference to that could be referring to common law notice  as the term “severance pay” is a colloquial way of referring to common law notice.

My Comments :

The first reason given by the Judge I understand on an intellectual basis but even to me it seems a bit of a stretch.

However the second reason is fascinating because that is common language used in Ontario where the ESA refers to both termination pay and severance pay as they are two distinct statutory entitlements.

This case again reminds us that it always risky to try to adopt termination clauses that are not specific to one jurisdiction.

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In McFarlane v. King Ursa Inc., 2025 ONSC 3553 , Justice Akazaki had a situation where an Exec VP with 4 years service making $317,000 before her maternity leave was offered upon her return a demotion to her previous position of Associate Partner & VP with a reduced salary of $210,000.

The Judge found this constituted a constructive dismissal . This aspect is not surprising given that the wage reduction was almost 30% and the failure to reinstate her to her former position was a violation of the ESA.

What is surprising is that she was awarded 12 months notice . This is what the Judge said

What struck me as the determining factor, aside from her age, length of tenure, and executive position, was the availability of comparable positions. King Ursa promoted the plaintiff rapidly into the senior position. Evidently, Ms. McFarlane acquitted herself both in terms of hard work and entrepreneurial energy. The fact that she could only secure contract work despite being an expert in marketing analytics meant she knew how to look for a comparable job but was unable to secure one. I appreciate there is a strong ex post logic to this reasoning, but I cannot ignore her inability to find comparable employment as a factor tipping the scales in favour of a longer term. I would therefore award damages based on a twelve-month notice period. 

The second surprising aspect of this case was that the Judge awarded punitive damages of $40,000. This is what  the Judge said :

The circumstances of her isolation from the company during the extended maternity leave contributed to a need for heightened sensitivity and professionalism in the negotiation or renegotiation of her compensation or severance, based on the company’s undeniably poor financial performance. These facts lead the analysis away from a discrimination claim and into the handling of the employee, for the purposes of the punitive and moral damages inquiry.

I appreciate the attempt to impose a salary cut was not to push her out but to implement a cost reduction scheme. However, there was no justification of imposing a demotion. The fact that the demotion may have arisen from a word processing error does not excuse the employer from the impact on the employee. Any employee, especially one whose executive status is closely tied to her identity and self-esteem, would react negatively to a document containing a demotion.

As to the quantum of moral damages, Doyle provides some guidance in that the range in employment law has been quite wide. In the circumstances where the demotion appears to have resulted more from carelessness than malice, I would assess the quantum in the middle of the range, in the amount of $40,000.00. 

My Comments:

It seems what upset the Judge in this case was the demotion from Executive Vice President Media & Analytics to Associate Partner and Vice President .

In the opening paragraphs of the decision the Judge said:

Nevertheless, the attempt to demote her, separate from a reduction of her salary, had no economic basis and therefore could be construed as callous and unduly insensitive. The attempt to demote her struck the employee’s vulnerability as a person who had built her professional identity and status through thought and industry. I will therefore award Ms. McFarlane moral damages. 

This employer would have been better off cutting her salary ( which is what the other working executives lived with) but not touching her title.

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In Richard Turcotte v. Grenville Management Inc., 2025 ONSC 3087,  Justice Akazaki had a situation where a 14 year Service Tech was given a temporary layoff notice as a result of the CVOID pandemic.

Here is the relevant chronology ;

March 5, 2021: Temporary Layoff Notice up to 35 weeks

November 5, 2021 : As a result of a medical condition, the Plaintiff is no longer able to work

January 14, 2022: Employer advises Plaintiff that he is now on Infectious  Disease Emergency Leave (IDEL)

July 30, 2022 : IDEL Expires, Plaintiff not recalled

February 22, 2023 : Plaintiff issues lawsuit claiming termination as of March 5, 2021

March 9, 2023: Discoveries held where Employer learns that the Plaintiff cannot work due to illness.

March 22, 2023: Employee issues a Notice of Recall . Plaintiff does not return.

These are the issues the Judge decided:

1. Frustration: As the evidence did not reveal that the Plaintiff was totally disabled on March 5, 2021 when the layoff took place,  there was no frustration. The fact that the Plaintiff became disabled after the layoff is not relevant.
2. Constructive Dismissal at Common Law: The Judge recognized that a temporary layoff is a termination unless it is part of the employment agreement that  a temporary layoff would not constitute a termination. In this case the Plaintiff’s employment contract contained an unusual cause, as follows 

   It is agreed that the Company reserves the right to ask you … to accept a temporary layoff, during which time you may be eligible for Employment Insurance in accordance with the relevant statutes.

   However, when the layoff occurred, they did not ask him to accept a temporary layoff, rather they told him that he was being laid off. He did however sign a document which stated ” I have read this notice and agree that my period of temporary layoff may continue for up to 35 weeks of layoff in 52 weeks .

   The Judge went on about how this was not really consent as for a number of reasons, however the facts reveal that the Company did not recall him for almost 25 months, so it hard to see how this issue was even relevant.

3. Impact of IDEL Regulation on the Common Law : Simply put the IDEL regulation provided that putting someone on an IDEL layoff was not a constructive dismissal but Section 8(1) of the ESA also provides that no civil remedy of an employee is affected by the ESA. There was a series of cases back in the day that consistently held that the IDEL Reg did not overrule the common law and therefore a common law claim for contructive dismissal based on a temporary layoff is still valid. Th Judge in a lengthy and extremely erudite rendition of the law ( including a reference to BNA Act and a 1931 case involving fish)  agreed with the established line of cases that upheld the fact that the IDEL Reg has no effect on the common law .
4. Length of Notice : It seems that the Judge thought that the normal notice period would be 10 months but because of the pandemic and the resultant difficulty in getting a job in his field, the Judge awarded anther 6 months notice for total of 16 months. This bump of 50% on the notice period because of the pandemic is much larger than previous cases have awarded.
5. Mitigation: The Plaintiff did nothing to look for a job. However the Judge accepted the Plaintiff’s evidence that until he saw his lawyer about 12 months later, he actually believed that he would be recalled so why should he look for another job? After his illness in November, he was medically unable to work. The found that there would be no reduction in the notice period because of a failure to mitigate.

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In William Williamson v Brandt Tractor Inc,  2025 ONSC  2571 Justice Akazaki had a situation where the employer was trying to prove just cause on the  basis of the cumulative misconduct principle. In order win such an argument, the employer must not only prove a history of disciplinary conduct but the the final incident ( the culminating incident ) was itself worthy of some discipline .

In this case the Plaintiff was a salesperson of tractors. The Plaintiff was dealing with a Customer who later complained to the Mr Clark, the Sales Manager that the Plaintiff had acted in an unethical and unprofessional manner. The Sales Manager made extensive notes of that conversation and testified about at the trial.

The Plaintiff admitted at trial that he and the Customer had a disagreement but denied any of his conduct was unethical or unprofessional.

The Defendant chose not to call the Customer as a witness.

This is what the Judge said :

My Comment;

In the olden days when I went to law school ( 1977 Grad of Osgoode) taking Evidence was mandatory. My understanding is that is no longer the case. I find that in my career as an arbitrator, there is an insufficient understanding both of the rules and the reasoning behind the rules of evidence. Lawyers are not the only ones who suffer from this lack of understanding. I have seen both judges and adjudicators let in evidence that should never be admitted under the guise that they will “give it the appropriate weight “.

Admissibility of evidence is fundamentally different from weighing the evidence. If the evidence is inadmissible, then it cannot be considered for any purpose whatsoever. It does not even make it to the scale to see if it has some weight.

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In Paul v. Sensient Colors, 2025 ONSC 3127  Justice De Sa had a situation of a 10 year Sales Rep who, contrary to the Employer Policy, refused to provide proof of her COVID status. She did not claim any human rights exemption. The Policy clearly stated that refusal to follow the policy would result in dismissal for just cause, which is what the Employer did.

Having concluded that the Employer’s mandatory vaccination policy was reasonable, the Court went on to say this :

[68] When an employer terminates with cause for non-compliance with a vaccination policy, there must be a sufficient connection between the employee’s job responsibilities and the requirement to be vaccinated so as to justify imposing the ultimate penalty of ending the employment relationship.

[69] Clearly, in certain cases, a refusal to vaccinate may sufficiently undermine an employee’s ability to carry out their duties so as to justify dismissal with cause. However, this will not be true in every case.

[70] In this case, I am not satisfied that the termination of Ms. Paul was a necessary or proportionate response to her refusal to disclose her vaccination status.

The Judge then went on to consider the following factors in determining that discharge for just cause was a disproportionate  response to the Plaintiff’s refusal to comply with the Policy.

1. 90% of her work time since the pandemic started was from home.
2. During the pandemic her performance exceeded the job requirements.
3. None of her 10 top clients required her to be vaccinated to do an on site visit.
4. Prior to her termination and during the pandemic she continued to do on site visits with clients in Ontario with no problems.
5. None of  her clients outside Ontario asked her to do an on site visit.
6. She had no US based clients.
7. She complied with all other safety requirements like masking.
8. She was an overall satisfactory employee.
9. Even though her job required that she attend certain meetings in the USA, the Employer could have arranged  much of the training in other ways.

If discharge for just cause was too extreme, what should the Employer have done ?

[78] A more proportionate response here may have been to review and revise Ms. Paul’s customer portfolio to the extent required, temporarily suspend her from customer-facing sales or even possibly put her on a leave of absence

She was awarded 12 months notice.

The Judge also noted that she was the only employee who refused to comply with the Policy.

Comments :

It seems that the farther we get away from the COVID era, the more lenient the Courts are getting in response to these types of cases.

Even though this Employee did not rely any human rights exemption, the Judge seemed to require the Employer to accommodate the Employee by requiring them to change  her job requirements so as to meet her desire not to be vaccinated.

However, the Judge also left open the option that they could have simply suspended her for the duration of the pandemic. This is consistent with a number of other COVID cases. I am not aware of any case where a suspension or a leave of absence in a COVID refusal case was held to be improper.

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In Brown v General Electric Canada ( 2025 MBCA 37 ) the Court had a situation where, as a result of a merger , the employee was offered a comparable  job with the new company. The Plaintiff refused the offer. The Plaintiff was then terminated. The new company did not renew the offer which was previously rejected.

The Court found that this refusal constituted a failure to mitigate .

This is what they said :

(c)           The judge discounted the significance of the timing of the Wabtec offer occurring before the termination because he drew an inference on the evidence that Wabtec would have re‑extended its offer to the plaintiff after the termination if there was any suggestion the plaintiff changed his mind, as Wabtec wanted the plaintiff to continue in his employment and took no steps to fill the position (see Brown at paras 55-56).

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In Boyle v. Salesforce.com, 2025 ONSC 2580 Justice Brownstone was faced with the following Termination Clause:

6 (b) Cause

The Company has the right, at any time and without notice (or pay in lieu), to terminate your employment under this Agreement for Cause. In the event that you are terminated for Cause, the Company’s obligation shall be limited solely to the payment of any portion of the Base Salary, and vacation pay, if any, that shall have been accrued by you prior to the date of termination.

Cause is defined in schedule A of the agreement as “any act or omission by you that would in law permit the Company to, without notice or payment in lieu of notice, terminate your employment.”

The company is regulated by different local laws where it operates globally. If there is a conflict in these laws, you should consult the Company’s legal department to resolve the conflict appropriately. In general, local laws will apply.

Except for certain non-U.S. jurisdictions, the Company’s employment relationship with all of its employees is one of employment “at will,” which means that employment may be terminated by either the employee or the Company at anytime, with or without cause. If you are located outside of the U.S. and have an employment agreement, the terms of those agreements will prevail if there is any conflict with the policies in this handbook. However, all other policies will apply.

The policies in the Global Employee Handbook are not a contract and that my employment is “at will.” This means that the Company or I can end my employment at any time with or without cause or advance notice.

The Judge found that this provision was illegal :

25]        In my view, applying the governing principles to this contract clearly results in the unenforceability of the termination provisions. There is no practical way that an employee in Ontario could be aware, when signing the contract, of the terms that would govern his termination. The ambiguity contained in the documentation, all of which Mr. Boyle was required to sign prior to commencing employment, is explained by Salesforce’s choice to use one contract for employees in many jurisdictions. Salesforce repeatedly claims to be able to terminate employment at will. It then says that this provision will not apply in certain jurisdictions outside of the U.S. If the employee is uncertain, he should consult the Company’s legal department. It is impractical to expect a potential employee, who has not yet started employment, to consult the future employer’s lawyer before signing an employment agreement to understand what kind of misconduct, if any, is cause for termination.

26]        I therefore find the provision is not compliant with the ESA, or at least ambiguous as to whether it is complaint, and is therefore unenforceable. Mr. Boyle is entitled to payment in lieu of reasonable notice.

My Comments :

This case illustrates the importance of designing specific termination clauses for each jurisdiction in which an employee resides and works. One size does not fit all. Especially Ontario.

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