In Baker v Van Dolder’s Home Team Inc., 2025 ONSC 952, the Ontario court analyzed the following “without cause” provision in an employment contact:
Termination without cause: we may terminate your employment at any time, without just cause, upon providing you with only the minimum notice, or payment in lieu of notice and, if applicable, severance pay, required by the Employment Standards Act.
The Court applied the reasoning in Dufault v The Corporation of the Township of Ignace, 2024 ONSC 1029. In this decision, a without cause provision was held to be unenforceable. Pursuant to the Ontario Employment Standards Act (the “ESA”), employers cannot simply terminate employees “at any time.” In this, the Court held that employees cannot be terminated after protected leave, or where they are exercising their right under the ESA.
Following this reason, the Court in Baker held that the without cause provision was unenforceable. The language “at any time” contradicted ESA provisions which do not permit an employer to terminate under any circumstances, and at any time. A one-hour virtual hearing was ordered to determine damages.
This decision reminds us of the importance of ensuring contracts are drafted in alignment with statute. In this, employers cannot contract outside of the law and must ensure that employees’ rights remain protected in an employment contract. Otherwise, they may end up paying significant sums in litigation and in damages. For the court’s complete reasoning in Baker, read the complete decision here.
