Termination “At Any Time” Revised September 2026 Post author:dqh Post published:July 21, 2025 Post category:Contracts ContentsTermination Clause: At Any TimeCourt of Appeal Resolves the IssueThe Effect on DufaultThe For-Cause ClauseThe Present Law📚 Explore Other Subjects in This Chapter Home › Contracts ›Termination Clause: At Any Time Termination Clause: At Any Time The first decision to consider this issue was the February 2024 decision in Dufault v. The Corporation of the Township of Ignace, 2024 ONSC 1029. The agreement stated that the employer had the right, in its “sole discretion”, to terminate the plaintiff “at any time”. This was the third argument advanced by the plaintiff to set aside the employment contract. The agreement also failed to distinguish between the statutory standard of wilful misconduct and the common law concept of just cause. The termination provision further referred to the termination sum due by a formula based upon base salary and did not include vacation pay. The significant aspect of the decision for present purposes was its conclusion that the employer could not reserve to itself the right, in its “sole discretion”, to terminate the employee “at any time”. The Employment Standards Act, 2000 (“ESA”), for example, may prohibit termination following a protected leave or termination by way of reprisal for attempting to exercise a statutory right. The termination provisions were consequently held unenforceable on several grounds. The case went to the Court of Appeal. Dufault v. Ignace (Township), 2024 ONCA 915. The appellate court upheld the result but did not decide the “at any time” issue. It disposed of the appeal solely on the basis that the “for cause” provision purported to deny statutory termination entitlements in circumstances falling short of the ESA standard of wilful misconduct. The employer’s application for leave to appeal to the Supreme Court of Canada was subsequently dismissed. The February 2025 decision in Baker v. Van Dolder’s Home Team Inc., 2025 ONSC 952 then followed Dufault. The contract again permitted the employer to terminate employment “at any time”. Sproat J. considered himself bound by the reasoning in Dufault and concluded that a separate provision requiring compliance with the ESA did not salvage the offending language. At that point, it appeared that the words “at any time” would render an Ontario termination provision unenforceable. That conclusion was soon placed in doubt by Li v. Wayfair Canada ULC, 2025 ONSC 2959. The agreement in Li permitted the employer to terminate employment “at any time and for any reason”. Dow J. nevertheless upheld the provision. The Court emphasized that the termination clauses were required to be read as a whole. The agreement repeatedly preserved the employee’s minimum ESA entitlements and correctly distinguished between contractual just cause and the statutory requirements governing the loss of minimum termination entitlements. The Court stated: Plaintiff’s counsel submitted the termination clauses in this contract were similar to that reviewed in Dufault v. The Corporation of the Township of Ignace, supra. I disagree. While the termination clause in Dufault v. The Corporation of the Township of Ignace, supra contained the phrase “anytime”, its definition of cause did not refer to the ESA or the definitions cited above. With regard to “without cause” dismissal, the wording failed to provide for all types of wages such as vacation pay or sick days. The Court concluded that an employment contract, when read as a whole, may be enforceable provided that it complies with employment standards legislation. A further decision applying Dufault followed in August 2025. The reasons in Li were not cited. The conflicting decisions in Baker and Li produced precisely the uncertainty which required appellate intervention. Court of Appeal Resolves the Issue The uncertainty has now been resolved. The Ontario Court of Appeal heard the appeals in Baker and Li together and released its decision on August 6, 2026. Baker v. Van Dolder’s Home Team Inc., 2026 ONCA 568. The Court allowed the employer’s appeal in Baker and dismissed the employee’s appeal in Li. It held that the words “at any time” and “at any time and for any reason” do not, by themselves, violate the ESA or invalidate a termination provision. The Court rejected an interpretation which considered these words literally and in isolation. The exercise remains one of contractual interpretation. The objective intention of the parties is to be determined from the words used in the agreement as a whole, considered in light of the relevant surrounding circumstances. Employment agreements remain subject to the special interpretive principles intended to protect vulnerable employees, but those principles do not justify straining contractual language in an effort to identify a hypothetical statutory violation. In Baker, the agreement expressly provided: [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. The Court regarded this provision as reinforcing the conclusion that the parties could not reasonably have intended the words “at any time” to authorize termination in circumstances prohibited by statute. The Court explained that, when read in context, the words “at any time” simply recognize that a without-cause termination may be contractually effective regardless of when it occurs. They do not purport to render lawful a termination which is expressly prohibited by the ESA or some other statute. The same reasoning applied to the additional words “for any reason” in Li. Those words did not confer a right to dismiss an employee for a discriminatory reason, as an ESA reprisal, or for some other reason prohibited by law. Read in context, they reflected the conventional principle that an employer terminating employment without cause need not establish a particular business reason for doing so. The Effect on Dufault The significance of Baker is particularly apparent when considered alongside Dufault. The Court of Appeal in Dufault had not endorsed the trial judge’s conclusion concerning the words “at any time”. It expressly decided the appeal on the defective for-cause provision and left the “at any time” issue undecided. The Court of Appeal has now directly considered that issue in Baker and rejected the proposition that the words “at any time”, standing alone, invalidate a termination provision. Thus, the reasoning in the trial decisions in Dufault and Baker concerning these particular words can no longer be regarded as good law. The result in Li, on the other hand, has now been affirmed. The For-Cause Clause The Court of Appeal also considered an important second issue in Baker. The employment agreement defined “just cause” more broadly than the ESA standard of wilful misconduct. It included forms of conduct that might justify dismissal without common law notice but would not necessarily deprive the employee of statutory termination entitlements. Unlike the clause considered in Dufault, however, the Baker provision stated that termination for just cause would be without notice or compensation “except any minimum compensation or entitlements prescribed by the Employment Standards Act.” That qualification was critical. The Court held that an employment agreement may define contractual just cause more broadly than the statutory wilful-misconduct standard, provided that the employee’s minimum ESA entitlements remain available where the employee’s conduct does not satisfy the higher statutory standard. This also explains the different result from Dufault. The Dufault clause purported to eliminate further payments upon a finding of contractual cause, whereas the Baker clause expressly preserved whatever minimum compensation or entitlements the ESA required. The Present Law The law in Ontario can now be stated with considerably greater certainty. The use of the words “at any time”, “for any reason”, or “at any time and for any reason” does not, by itself, render a termination provision unenforceable. The employment agreement must instead be interpreted as a whole to determine the objective intention of the parties. Where the agreement demonstrates an intention to comply with statutory minimum standards, such wording will not reasonably be construed as granting the employer a contractual licence to violate the ESA or another statute. The Court of Appeal has therefore rejected an excessively literal approach under which an otherwise compliant termination provision may be invalidated because isolated words could hypothetically be given an unlawful meaning divorced from the agreement as a whole. There is a broader significance to Baker. The decision reflects a move away from an increasingly technical search for a defect in the wording of a termination clause and returns the focus to the conventional exercise of contractual interpretation: determining the objective intention conveyed by the agreement when read as a whole. One important doctrine remains untouched. Van Dolder sought reconsideration of Waksdale v. Swegon North America Inc., 2020 ONCA 391. The request for a five-judge panel was denied, and the Court ultimately found it unnecessary to reconsider Waksdale because both termination provisions in Baker were compliant with the ESA. Waksdale therefore remains binding Ontario law. 👤 About the Author: David Harris — Canadian Employment Law 📚 Explore Other Subjects in This Chapter 🔙 Back to Contracts Index Page 🏠 Return to Canadian Employment Law You Might Also Like Nova Scotia: Contract Ambiguous October 31, 2025 Summary of Suspension Issues April 4, 2024 Stock Options & Termination Clause August 29, 2023