Court of Appeal for Ontario Upholds “At Any Time” Termination Language in Employment Contracts

Adam Lawson
14 hours ago
3 min read

In Baker v. Van Dolder’s Home Team Inc., 2026 ONCA 568, the Court of Appeal for Ontario provided important guidance on the interpretation of termination provisions in employment contracts, including clauses permitting an employer to terminate employment “at any time” or “at any time and for any reason.” The Court rejected a technical interpretation of those words that would have rendered the clauses unenforceable under the Employment Standards Act, 2000 (the “ESA”). Instead, termination provisions must be interpreted in the context of the agreement as a whole, with a view to determining the parties’ objective intentions.

Background

The Court heard two appeals together: Baker v. Van Dolder’s Home Team Inc. and Li v. Wayfair Canada ULC. The employment agreements contained similar without-cause termination provisions, but the Superior Court had reached opposite conclusions about their enforceability.

In Baker, the agreement permitted the employer to terminate employment “at any time” without cause upon providing the minimum entitlements required by the ESA. The motion judge found the provision unenforceable because the ESA prohibits termination in certain circumstances, such as reprisals or certain terminations connected to protected leaves.

In Li, by contrast, a clause allowing termination “at any time and for any reason,” was upheld relying in part on repeated language confirming that the employee would receive no less than his ESA minimum entitlements.

The Court of Appeal held that the termination provisions in both agreements were enforceable.

“At Any Time” Does Not Mean Contrary to the ESA

The employees argued that phrases such as “at any time” and “for any reason,” read literally, could permit employers to terminate employment at a time or for a reason prohibited by the ESA or other legislation, such as in connection with a protected leave or as reprisal.

The Court rejected that approach. Courts must read employment contracts as a whole, rather than by isolating particular words or identifying hypothetical interpretations the parties could not reasonably have intended.

In Baker, the agreement expressly preserved the employee’s minimum ESA entitlements and stated that the employer would comply with the ESA “at all times.” Against that backdrop, “at any time” could not reasonably be understood as authorizing an unlawful termination.

The same reasoning applied in Li. The addition of “for any reason” did not authorize termination for an unlawful reason. Rather, it meant that the employer did not need to establish a reason for ending the employment relationship, provided the termination was otherwise lawful.

The “For Cause” Provision Was Also Enforceable

The Court also upheld the “for cause” provision in Mr. Baker’s agreement. Although the clause defined “just cause” more broadly than the ESA’s higher standard of “wilful misconduct,” it expressly preserved any minimum compensation or entitlements required by the ESA.

As a result, an employee terminated for conduct amounting to common law just cause that falls short of ESA wilful misconduct would still receive any statutory entitlements owing. The employer was not required to explain the distinction between those two legal standards within the contract itself.

Waksdale Remains Good Law

The employer in Baker also asked the Court to reconsider Waksdale v. Swegon North America Inc., 2020 ONCA 391, which held that an unlawful termination provision can render the contractual termination scheme unenforceable as a whole. The Court declined to do so, noting that both the without-cause and for-cause provisions in the employment contracts at issue complied with the ESA.

Practical Takeaways

Words such as “at any time” or “for any reason” do not, standing alone, make a termination provision unenforceable just because employment legislation prohibits dismissal in certain circumstances. The agreement must be read as a whole.

Courts should avoid a “magic words” approach and should not find an ESA violation through an overly technical reading of isolated contractual language.

Employers must still ensure that termination provisions clearly preserve all minimum ESA entitlements, including where a contractual definition of cause is broader than the ESA’s wilful misconduct standard.

Waksdale remains unchanged. An actual ESA violation in one termination provision may still affect the enforceability of the broader termination scheme.