Trial Judge Must Follow Trial Ruling in Dufault v Township of Ignace:
In Baker v. Van Dolder’s Home Team Inc., 2025 ONSC 952 (CanLII) Justice Sproat made two important rulings on the enforceability of a termination clause :
1) The “without cause” clause had a fatal error of saying ” we may terminate your employment at any time,”. applying the law of stare decisis , Justice Sproat applied the trial decision in Dufault v. The Corporation of the Township of Ignace and said :12] ” I must apply Dufault, as none of the reasons to depart from a prior decision referenced in Spruce Mills are applicable. As such, the “without cause” termination provision is unenforceable.”This should put to rest the argument that because the Court of Appeal in Dufault did not address the issue of “at any time ” it somehow is not the law of the land. This case confirms that the law is made by trial judges , unless overturned by a higher court .
2) The “with cause” clause was as follows:
3. Termination with cause: we may terminate your employment at any time for just cause, without prior notice or compensation of any kind, except any minimum compensation or entitlements prescribed by the Employment Standards Act. Just cause includes the following conduct:
a. Poor performance, after having been notified in writing of the required standard;
b. Dishonesty relevant to your employment (such as misleading statements, falsifying documents and misrepresenting your qualifications for the position you were hired for);
c. Theft, misappropriation or improper use of the company’s property;
d. Violent or harassing conduct towards other employees or customers;
e. Intentional or grossly negligent disclosure of privileged or confidential information about the company;
f. Any conduct which would constitute just cause under the common law or statute.
Justice Sproat found that the clause was not saved by the addition of the language ” except any minimum compensation or entitlements prescribed by the Employment Standards Act. ”
Instead he said :
[19] ” The potential unfairness of a termination provision of the sort at issue is that the employer has described in detail the contractual standard of just cause but given no detail or explanation of the ESA wilful misconduct standard, and that it differs from the contractual standard. Given that many employees will not be familiar with the ESA provisions, many employees would assume that they had no entitlement if they breached the contractual standards.”
The lesson here is for a clause to be enforceable, it must be compliant with the ESA on its face. You cannot say something illegal and try to cover it up with a provision that says except or unless the ESA says otherwise.
1) The “without cause” clause had a fatal error of saying ” we may terminate your employment at any time,”. applying the law of stare decisis , Justice Sproat applied the trial decision in Dufault v. The Corporation of the Township of Ignace and said :12] ” I must apply Dufault, as none of the reasons to depart from a prior decision referenced in Spruce Mills are applicable. As such, the “without cause” termination provision is unenforceable.”This should put to rest the argument that because the Court of Appeal in Dufault did not address the issue of “at any time ” it somehow is not the law of the land. This case confirms that the law is made by trial judges , unless overturned by a higher court .
2) The “with cause” clause was as follows:
3. Termination with cause: we may terminate your employment at any time for just cause, without prior notice or compensation of any kind, except any minimum compensation or entitlements prescribed by the Employment Standards Act. Just cause includes the following conduct:
a. Poor performance, after having been notified in writing of the required standard;
b. Dishonesty relevant to your employment (such as misleading statements, falsifying documents and misrepresenting your qualifications for the position you were hired for);
c. Theft, misappropriation or improper use of the company’s property;
d. Violent or harassing conduct towards other employees or customers;
e. Intentional or grossly negligent disclosure of privileged or confidential information about the company;
f. Any conduct which would constitute just cause under the common law or statute.
Justice Sproat found that the clause was not saved by the addition of the language ” except any minimum compensation or entitlements prescribed by the Employment Standards Act. ”
Instead he said :
[19] ” The potential unfairness of a termination provision of the sort at issue is that the employer has described in detail the contractual standard of just cause but given no detail or explanation of the ESA wilful misconduct standard, and that it differs from the contractual standard. Given that many employees will not be familiar with the ESA provisions, many employees would assume that they had no entitlement if they breached the contractual standards.”
The lesson here is for a clause to be enforceable, it must be compliant with the ESA on its face. You cannot say something illegal and try to cover it up with a provision that says except or unless the ESA says otherwise.
For a copy of this case, email me at barry@barryfisher.ca
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