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.
For a copy of this case, email me at barry@barryfisher.ca
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