The purpose of termination clauses in an employment contract is to set out when an employer can fire an employee and what the employee’s entitlements will be upon termination. Employers often seek to limit the employee’s entitlement upon termination to the statutory minimums as set out under the Employment Standards Act, 2000 (“ESA”). If the termination clause is unenforceable, the employee’s entitlements at termination would be reasonable notice at common law. Reasonable notice at common law is generally more generous than what notice the employee would be entitled to under the ESA.

Whether or not certain terminology contained in the termination clause will result in the termination clause being successfully found to be enforceable is an ongoing issue within employment law. As it sits now, there has been a series of cases heard in Ontario courts which sets out that a termination clause containing the wording “at any time” is not determinative of whether the clause will be enforceable per se.

Let’s review the case law

The first two cases set out that the words “at any time” may cause the clause to be held to be unenforceable. These cases are Dufault v. The Corporation of the Township of Ignace, 2024 ONSC 1029 and Baker v. Van Dolder’s Home Team Inc., 2025 ONSC 952. In Dufault, the court held that if a termination clause set out that the employer was entitled to terminate at the employee “at any time” and at the employer’s “sole discretion” then the employer would run afoul of the ESA, and as such, that clause was held to be unenforceable. However, in Baker, the termination clause did not also include the wording that referenced the employer’s “sole discretion.” However, the court in Baker still went on the hold that the termination was unenforceable.

The second set of cases is Li v. Wayfair Canada Inc., 2025 ONSC 2959 and Jones v. Strides Toronto, 2025 ONSC 2482.  Li and Jones are not congruent with the first two cases. The Ontario court in Li and Jones held that even though the termination clauses contained the phrase “at any time,” those clauses remained enforceable. The courts did not provide much guidance as to why Li and Jones were distinguishable from Baker and Dufault.

So now what?

Ontario courts need to provide additional clarity as to whether the phrase “at any time” (with or without the additional phrase at the employer’s “sole discretion”) will render a termination clause unenforceable. Providing additional clarity will limit the risks to both employers and employes of undergoing needless legal action(s) such as bringing a claim for wrongful dismissal at the time of termination. Currently, we cannot determine whether a termination clause is enforceable or not if the wording of the clause includes “at any time.” If the termination clause includes the phrase “at any time” along with the phrase at the employer’s “sole discretion” it may lead to the clause being more likely to be unenforceable, but not necessarily so. The likely scenario is that Ontario’s court of appeal will provide additional guidance when one of the cases above is appealed successfully.

Finally, it is very important to contact an employment lawyer if you are an employer trying to draft a termination clause in an employment agreement or whether you are an employee trying to see if the termination clause in your employment agreement is enforceable. Employment lawyers are in the best position to guide a person to the best possible outcome for either side. Employment lawyers can provide insights to these issues given the complexity at hand as case law relating to the enforceability of termination clauses in employment contracts is always changing.