Termination Clause Upheld

The Ontario Court of Appeal in May of 2025 upheld the motion’s judge decision affirming the validity of the employment contract termination paragraph. The wording was as follows:

Termination of Employment by the Company: If your employment is terminated with or without cause, you will be provided with only the minimum payments and entitlements, if any, owed to you under the Ontario Employment Standards Act, 2000 and its Regulations, as may be amended from time to time (the “ESA”), including but not limited to outstanding wages, vacation pay, and any minimum entitlement to notice of termination (or termination pay), severance pay (if applicable) and benefit continuation. You understand and agree that, in accordance with the ESA, there are circumstances in which you would have no entitlement to notice of termination, termination pay, severance pay or benefit continuation. You understand and agree that compliance with the minimum requirements of the ESA satisfies any common law or contractual entitlement you may have to notice of termination of your employment, or pay in lieu thereof.

The employee argued unsuccessfully that this provision did not properly set out the more onerous provisions of termination for just cause as defined in the statute, referring to ““wilful misconduct, disobedience or wilful neglect of duty”. It was also submitted that this clause was ambiguous to a lay reader. The Court of Appeal noted:

A finding of ambiguity, however, means “something more than the mere existence of competing interpretations”.

The issue is, rather, that how might the agreement be reasonably interpreted:

In any event, the issue is not whether an ordinary person might arrive at an incorrect interpretation of the termination provisions of the employment agreement, but how the agreement can be reasonably interpreted. The termination provision specifically states that an employee who is terminated “with or without cause” will receive the minimum payments and entitlements under the ESA and its regulations. We see no error in the motion judge’s conclusion that the termination provision in the employment agreement is unambiguous, and that, when reasonably interpreted, it does not depart from the minimum standards guaranteed by the ESA. As such, the termination provision is enforceable and precludes the appellant’s claim for common law damages for wrongful dismissal.

The clause was upheld.

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