“At Any Time” Survives: The Ontario Court of Appeal Restores Order to Termination Clauses

 VanBuskirk Law, 2026-08-07

 For the past two years, employers have been told that a few ordinary words could cost them a year or more of an employee’s pay.

 That fear has now been calmed. On August 6, 2026, the Ontario Court of Appeal released Baker v. Van Dolder’s Home Team Inc., 2026 ONCA 568, deciding two appeals together and holding that a without cause termination provision permitting dismissal “at any time,” or “at any time and for any reason,” is not inconsistent with employment standards legislation. For employers that have been attempting to thread smaller and smaller contract “needle holes” over the past 10 years, this decision affirms (as one would expect in a relational contract context) that form does not always win over substance.

 Two nearly identical clauses, two opposite results

 The appeal hearing decided a pair of similar cases, with different outcomes on summary judgment. In the first case, a 71-year-old controller earning $95,000 was dismissed without cause after roughly 2.5 years and was paid two weeks’ notice pay. In the second, a senior product manager earning $221,546 was dismissed after 9 months and paid one week. Both argued that the employer’s reservation of a right to terminate “at any time” was offside the ESA, which actually prohibits dismissal in defined circumstances, such as at the conclusion of a protected leave and as a reprisal for exercising a statutory right.

 One motions judge accepted that argument and struck the clause down, following the Superior Court’s reasoning in another case called Dufault. The other judge rejected it and upheld a clause that had even added the words “and for any reason.” The impugned language was, for practical purposes, the same. The Court of Appeal took these appeals as an opportunity to resolve the split, noting that employment counsel has been left to guess at when a termination clause would be upheld.

 Both clauses were held to be valid and enforceable.

 The reasoning employers should be aware of

 The court identified an error in principle in the approach that has driven this line of cases: reading the impugned words literally and in isolation. An employment contract must still be interpreted as a contract, which means reading it as a whole, in light of the surrounding circumstances, to identify what the parties objectively intended when they signed it. Courts should not go looking for ambiguity with a microscope where none reasonably exists, and a provision is not ambiguous simply because a hypothetical alternative reading can be constructed.

 Applied here, the argument that the clauses were unenforceable collapsed. No employee signing the contract intended to waive their statutory protection against reprisals or to take a protected leave. No employer intended language that would expose it to a reinstatement order, a make-whole remedy, prosecution and a fine of up to $100,000. Read in context, “at any time” means only that a without cause dismissal is legally effective whenever it occurs, and “for any reason” means only that the employer need not give a reason for the dismissal. Both readings sit comfortably with what the Supreme Court said in Wallace nearly 30 years ago.

 The contractual language promising compliance with the ESA also carried significant weight. One contract contained a clause committing the employer to comply with the statute “at all times” and to provide all statutory entitlements. It said:

 [W]e will, at all times, comply with the Employment Standards Act. If any term of this Agreement is inconsistent with the minimum requirements of the Employment Standards Act, the Employment Standards Act shall prevail, and you will receive all entitlements prescribed by the Employment Standards Act. [Emphasis added.]

 The court treated this language as confirmation of the parties’ intention to comply with the ESA, which is a marked shift from earlier decisions suggesting that a general savings promise like this one cannot rescue offending wording (e.g., Rossman v. Canadian Solar Inc., 2019 ONCA 992).

 Another point that will matter in practice

 The second issue in these cases received less attention before the appeal, and it may prove even more consequential.

 The first contract defined “just cause” broadly, capturing things like poor performance after a written warning, making misleading statements, and improper use of company property. That standard sits well below the statutory threshold of “wilful misconduct” that disentitles an employee to any notice and severance under legislation like Ontario’s (which is similar to Nova Scotia and other provinces). Clauses drafted that way have been struck down repeatedly, including in Dufault, De Castro and Rahman.

 But this one survived, because it also expressly provided that the employee would receive any minimum compensation or entitlements prescribed by the ESA. The court held that this proviso brought the clause into alignment with the statute, and confirmed that employers may incorporate ESA entitlements by reference rather than by attempting to explain the difference between common law just cause and statutory wilful misconduct in the contract itself.

 What has not changed

 The employer asked the court to reconsider its 2020 decision in Waksdale, under which a single non-compliant termination provision anywhere in the contract invalidates the entire termination scheme. A 5-judge panel was refused, and the court has now declined to take the question up because both provisions complied. Waksdale stands.

 That is significant, because this decision is not a licence for loose drafting of employment contracts: a truly faulty ‘with cause’ provision can still invalidate the whole termination scheme in an employment agreement. The Court emphasized a contextual approach, and here the context cut in the employers’ favour largely because both contracts said (plainly and more than once) that statutory minimums would be honoured no matter what happened. A contract without that language may not fare as well.

 What employers should do now

 Review your contract templates and your existing agreements, and confirm three things: (1) that the ‘without cause’ provision limits entitlements to statutory minimums in very clear terms; (2) that the ‘with cause’ provision expressly preserves those minimums however cause is defined; and (3) that a minimum standards clause appears somewhere in the agreement and says something very close to what these two contracts said.

The decision is binding in Ontario, but the interpretive principles are drawn from Sattva and Earthco and will be argued across the country, including in New Brunswick and Nova Scotia. Employers with agreements that were quietly rewritten to strip out the phrase “at any time” over the past two years can now stop worrying about that phrase. The rest of the termination clause is where the risk has always really been, and where it remains.

If you would like your employment agreements reviewed in light of this decision, please feel free to get in touch with us!