Ontario court clarifies 'at any time' termination clauses don't override employment standards
A Court of Appeal ruling resolves conflicting lower-court decisions on what makes employment contracts unenforceable.
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The Ontario Court of Appeal has resolved a legal dispute that has cost employers hundreds of thousands of dollars in unexpected payouts: whether the phrase "at any time" in a termination clause makes an employment contract unenforceable.
The question arose after a 2020 Court of Appeal decision in Waksdale found that language allowing termination "for cause" without notice breaches minimum employment standards. That ruling established a crucial principle: if any part of a termination clause violates employment standards legislation, the entire clause is void, and the employee becomes entitled to common-law reasonable notice instead of the limited severance the contract promised.
Common-law notice can run several months or even exceed 24 months in exceptional cases — far higher than the maximum 34 weeks the Employment Standards Act provides after 26 years of service. Most employers responded by removing "for cause" language from contracts. But confusion persisted over another phrase: "at any time."
Lower courts split on the issue. Some ruled that "at any time" — especially paired with language giving the employer sole discretion — oversteps what employment law allows, making the entire termination clause unenforceable. Others said the phrase itself is not automatically fatal and depends on the rest of the contract's language.
The Township of Ignace in northern Ontario faced this directly when it terminated an employee 15 months into a 38-month contract. Its termination clause was thought to limit the payout to two weeks' pay and benefits. Instead, a court ruled it unenforceable and ordered the township to pay the remaining 23 months — over $150,000 more than expected, plus interest and legal costs.
Following a March 2026 hearing, the Ontario Court of Appeal released its decision on Aug. 6, 2026, settling the conflict and providing employers with clarity on what termination provisions will hold up in court.
How many Ontario employment contracts currently contain the phrase 'at any time' in termination clauses?
What is the specific reasoning the Court of Appeal applied to resolve the conflicting lower-court rulings?
We'll update this story as answers emerge.
The facts
What did the Ontario Court of Appeal decide about 'at any time' termination clauses?
On August 6, 2026, the Ontario Court of Appeal resolved conflicting lower-court rulings and clarified whether the phrase 'at any time' in termination clauses makes employment contracts unenforceable, providing employers with clarity on what termination provisions will hold up in court.
What was the Township of Ignace ordered to pay after terminating an employee?
The Township of Ignace was ordered to pay the remaining 23 months of an employee's contract after terminating them 15 months into a 38-month term, totalling over $150,000 more than the two weeks' pay and benefits the termination clause was thought to limit, plus interest and legal costs.
How much severance does Ontario's Employment Standards Act allow after 26 years of service?
The Employment Standards Act provides a maximum of 34 weeks of severance after 26 years of service, though common-law reasonable notice can be much higher, running several months or even exceeding 24 months in exceptional cases.
