Attention Employers: It’s Time to Audit Your Employment Contracts

Employment contracts shouldn’t be considered “set it and forget it” documents. With what feels like almost constantly evolving case law, employers need to keep contracts up to date or risk having key provisions thrown out by a court. 

If a termination clause is found to be invalid, the promises in your contract (most typically limiting notice to minimum standards) can be replaced by much more generous common law entitlements. Depending on the circumstances, that could mean months of additional pay you didn’t budget for. 

In this blog, we’ll take a brief look at two recent decisions in Ontario, which are now heading to Ontario’s top court, and explain what it could mean for your contracts going forward. 

Ontario’s Duelling Decisions 

Recently, two Judges of Ontario’s Superior Court of Justice seemed to come to two different conclusions about similar phrasing found in the termination provisions of two employment contracts. 

In the first case, the Court found, in part, that the phrase “we may terminate your employment at any time” was unenforceable. The Court concluded that the termination provision was unenforceable because Ontario’s Employment Standards Act prohibits the employer from terminating at particular times, including at the conclusion of an employees leave or in reprisal for attempting to exercise a right under the Act. Given the ESA prohibits termination at these times, a provision allowing for termination “at any time” was unenforceable according to the Court. 

In the second case, the Court found, in part, that the phrase “…the Company may terminate your employment at any time for any reason…by providing you with only the minimum statutory amount of written notice required by the ESA…” was in fact enforceable. While the Court acknowledged the result in the first case, it determined that the termination provisions in each case were distinguishable. Unfortunately, the Court did not explain exactly how the two provisions differed. 

Now What? Appeals and Takeaways

As it turns out, Ontario’s top court has just announced that it will hear the appeal of the two cases together early next year.  This should hopefully bring some much needed clarity on the enforceability of termination provisions which include the term “at any time”. 

If you’ve made it to this point of the blog, despite the caselaw discussion, congratulations and thank you for letting us nerd out. Now’s let’s talk in practicalities:

  • As you may have noticed, Ontario Courts have a lot to say about whether or not a termination provision will really hold up;
  • If the termination provision in your employment agreement doesn’t hold up, the promises in your contract when it comes to termination entitlements could be replaced by far more generous entitlements; 
  • From our perspective, it’s always the right time to get in touch, to have your employment contracts audited for compliance. 
Picture of Tiffany Thomas

Tiffany Thomas

Tiffany is a labour and employment lawyer and SpringLaw’s Legal Skills Development Portfolio Lead. She’s passionate about practical problem-solving, accessible legal advice, and building healthy workplaces. Tiffany supports clients across Ontario and mentors SpringLaw’s legal team through ongoing training, development, and collaboration initiatives.

Share the Post:

Related Posts

Canadian flag displayed in front of a government building, representing proposed federal labour law reforms under Bill C-39 and changes to the Canada Labour Code.

Federal Bill C-39: Major Changes Proposed for Federal Labour Relations 

Federal Bill C-39 proposes major changes to the Canada Labour Code that could reshape labour relations for federally regulated employers and unions. From expanded government intervention during strikes and lockouts to new collective bargaining rules and mediation processes, these reforms may significantly impact workplace disputes, collective agreements, and the balance between protecting workers’ rights and the national economy.

Read More »
Person working remotely on a laptop beside a swimming pool, illustrating remote worker management, employee accountability, and flexible work arrangements.

Remote Worker Management: Accountability without Constant Check-Ins 

Managing a remote team doesn’t require constant check-ins. Effective remote worker management comes from clear expectations, transparent systems, and trust. Learn how to create accountability, improve collaboration, and measure results without micromanaging employees. Discover practical strategies to build a productive remote workforce that stays aligned, engaged, and focused on outcomes rather than online presence.

Read More »
Mountain village with wooden buildings overlooking a valley, representing workplace accommodations that can evolve while supporting long-term stability and growth.

Can An Employer Change An Accommodation? 

Can an employer change a workplace accommodation once it has been in place for years? A recent Ontario court decision confirms that accommodations are not necessarily permanent. Employers have flexibility to modify accommodations when employees remain reasonably accommodated and free from discrimination. Learn what this ruling means for disability accommodation, workplace management, employee benefits, and legal compliance.

Read More »

Contact Us

Thank You For Your Interest. Kindly Complete The Form Below. Our Client Services team will be in touch with further information about our fees and intake process.
[grow-contact-form]