Ontario Superior Court upholds termination clause utilizing “at any time” language – limiting employee to statutory minimum notice

Over the past few years, courts in Ontario have made several consequential decisions concerning the validity of termination clauses in employment agreements. Two phrases in particular have sparked controversy with respect to the enforceability of a contractual termination provision. Jones v Strides Toronto, 2025 ONSC 2482 (“Jones”) and Li v Wayfair Canada Inc, 2025 ONSC 2959 (“Wayfair”), have recently confirmed that the use of the phrases “at any time” (Wayfair) or “sole discretion” (Jones) do not inherently invalidate a termination clause.

Jones and Wayfair come on the heels of other recent decisions from Ontario where these phrases in termination clauses caused concerns about enforceability. In Dufault v Ignace (Township), 2024 ONCA 915 (”Dufault”), the Court of Appeal declined to opine on the lower court’s ruling that “at any time” in the employment agreement’s termination clause made the whole clause unenforceable. Relying on Dufault, in Baker v Van Dolder’s Home Team Inc, 2025 ONSC 952 (“Baker”), the Court also found that “at any time” rendered the termination clause unenforceable. The Courts in Jones and Wayfair have departed from this approach and appear to have corrected course.

The Court in Wayfair made particular reference to Dufault and Baker when discussing the following provision in the applicable employment agreement:

The Company may terminate your employment at any time for Cause without notice, pay in lieu of notice, severance, benefits continuance or other compensation or damages of any kind, unless expressly required by the ESA in which case only the minimum statutory entitlements will be provided.

After your probationary period concludes, in the absence of Cause, the Company may terminate your employment at any time and for any reasons by providing you with only the minimum statutory amount of written notice required by the ESA or by paying you the minimal amount of statutory termination pay in lieu of notice required by the ESA, or a combination of both, as well as paying statutory severance pay required by the ESA, providing benefits continuance for the requisite minimum statutory period under the ESA and all other outstanding entitlements, if any, owing under the ESA.

Failure to account for job-protected leaves is one of the key arguments that is typically used by parties seeking to invalidate a termination clause based on the use of “at any time” or “sole discretion” language. While there is a presumption when interpreting employment agreements that employers draft such agreements in accordance with the law, Ontario courts generally ignored this argument until Wayfair and Jones. Wayfair in particular noted that the provision clearly contemplated the Ontario Employment Standards Act (“ESA”) and thus it was clear that the termination provision was to be read in light of the obligations owing to an employee under the ESA.

Given the differing assessments of “at any time”, and “sole discretion”, the Ontario Court of Appeal may need to weigh in on the effect of these phrases in termination clauses.

For employers operating in multiple jurisdictions, it is important to note that Ontario is not the only province considering these issues. It must be emphasized that “at any time” or “sole discretion” language in termination clauses has not received the same level of scrutiny in Alberta, and neither Dufault nor Baker have been applied yet.

The use of “at any time” language was considered in Nutting v Franklin Templeton Investments Corp, 2016 ABQB 669. However, unlike the decisions in Dufault and Baker, the Court did not closely scrutinize the use of the words “at any time”. Instead, the Court emphasized that the language in the termination provision expressly provided that the employer would provide the employee with “at least” the statutory minimum notice required and as such was enforceable. Therefore, while the jurisprudence in Alberta has not followed the same trajectory as Ontario, we anticipate that these types of challenges may become more frequent in Alberta.

Takeaways

Following Jones and Wayfair, there are some key takeaways for employers when drafting and interpreting termination clauses:

• The use of the phrases “at any time” or “sole discretion” may not invalidate an employment agreement’s termination clause;
• Drafting clear termination clauses in employment agreements is essential should you later seek to rely on these clauses; and
• Employers should conduct regular reviews of their employment agreements to ensure they comply with the current law.

Our Labour and Employment team advises employers about termination provisions and can review and draft employment agreements that are clear and enforceable. Contact us to ensure your contracts are clear, enforceable, and compliant with current law.