Ontario Court of Appeal Confirms Enforceability of “At Any Time” and “For Any Reason” Termination Clauses

Termination clauses are often the focal point in wrongful dismissal litigation, with former employees frequently challenging their enforceability in an effort to obtain common law notice beyond the entitlements contemplated by their employment agreements.

In Alberta, the most common challenge to termination provisions is whether they unambiguously limit entitlements to those provided for in the Employment Standards Code (Alberta). In contrast, Ontario courts have been increasingly invalidating termination provisions when they potentially violate the Employment Standards Act, 2000 (Ontario). The key similarity between the analyses in these two jurisdictions are the general principles to interpreting an employment agreement.

McLennan Ross previously reported on decisions from lower Ontario courts on the interpretation of “at any time” and “for any reason” in termination clauses, which can be viewed here: Ontario Superior Court upholds termination clause utilizing “at any time” language – limiting employee to statutory minimum notice.

Background

On August 6, 2026, the Ontario Court of Appeal released its anticipated decision reviewing the lower courts’ interpretation of “at any time” and “for any reason” in two employment agreements. In Baker v Van Dolder’s Home Team Inc; Li v Wayfair Canada ULC, 2026 ONCA 568 (“Baker and Li”), the Ontario Court of Appeal found that an employment agreement stating the employer could terminate the employee’s employment, on a without cause basis “at any time” and “for any reason” did not invalidate the without cause termination clauses of the employment agreements at issue.

The appellants argued that these six words violated the ESA, and rendered the termination provisions unenforceable, because the words indicated the employer could terminate an employee’s employment in circumstances that were unlawful.

The Court reaffirmed the long held principle that employment agreements must be interpreted as a whole giving words their ordinary and grammatical meaning, consistent with the surrounding circumstances known to the parties at the time of formation of the contract. In addition, the Court indicated:

  • Courts should not interpret words in isolation, and should avoid a “magic words” approach, whereby isolated words determine the legal effect of a contractual provision; and
  • Courts should not strive to find an ambiguity where none reasonably exists. A contractual provision is not ambiguous merely because it is possible to identify multiple potential or hypothetical interpretations. Ambiguity should only be found where there are genuinely competing reasonable interpretations considered in the context of the entire contract.

Ultimately, the Court of Appeal found that “at any time” reflected a mutual intention that a without cause termination will be valid and legally effective regardless of when it occurs. Similarly, the Court found that the words “for any reason” meant that the employer is not required to give the employee a reason for terminating the employment contract, but must provide the employee their contractual entitlements upon a termination of employment which must be at least equal to their ESA entitlements. Importantly, the Court found that when reading the employment agreements as a whole, the agreements contained many provisions indicating the parties’ intention to abide by the ESA.

Key Take Aways

The Ontario Court of Appeal’s decision provides the following key take aways for employers:

  • Employment agreement provisions that expressly commit the employer to complying with employment standards legislation, or that consistently tie employee entitlements to statutory minimum standards, strengthen the enforceability of the contract provisions even where it contains “at any time” or “for any reason”.
  • Employers should continue to periodically review and update their employment agreements to ensure ongoing compliance with current legal requirements. The Court reconfirmed that:
    • Due to the power imbalance between an employee and an employer, Courts favour interpretations of termination provisions that comply with employment standards legislation;
    • A termination clause must be clear in order to oust reasonable notice at common law, while complying with employment standards legislation; and
    • If a termination clause could reasonably be interpreted in more than one way, courts should prefer the interpretation that gives the greater benefit to the employee.

Overall, Baker and Li indicate that Courts will interpret employment agreements contextually and as a whole, rather than invalidating termination provisions based on isolated wording. The Ontario Court of Appeal's willingness to uphold words such as "for any reason" and "at any time" may encourage a more practical and commonsense approach to interpreting termination provisions.

Our Labour and Employment team regularly advises employers on termination provisions and assists with the review and drafting of employment agreements to help ensure they are clear, enforceable, and legally compliant. Contact us to discuss whether your employment contracts reflect current legal requirements and best practices.