For a few years, Ontario employment lawyers have been trained to know that when a without-cause termination provision included the words “at any time,” the clause could render itself unenforceable and vulnerable to challenge. In Baker v. Van Dolder’s Home Team Inc., 2025 ONSC 952 (“Baker”) the motion judge found that these words could permit termination in circumstances prohibited by the Employment Standards Act (“ESA”), effectively giving the employer power, as well as the ability to contract out of statutory entitlements and protections, rendering a termination clause void.
By contrast, in Li v. Wayfair Canada ULC, 2025 ONSC 2959 (“Wayfair”) the motion judge upheld language permitting termination “at any time and for any reason,” emphasizing that the termination agreement repeatedly confirmed the employee’s entitlement to ESA minimums.
Two cases. Similar language. Opposite results.
Now, in 2026, the Court heard the Baker and Wayfair appeals together, giving the Court a chance to clarify whether phrases such as “at any time” and “for any reason” automatically render a without-cause termination provision unenforceable.
A Shift to Contextual Interpretation
In both appeals, the employees argued that the without-cause termination provisions in their employment contracts were inconsistent with the ESA because the words “at any time” could allow their employer to terminate employment at times expressly prohibited by the ESA or other Ontario statutes, for example, during a statutory protected leave.
The Court rejected that approach.
Rather than isolating individual words from the rest of the employment agreement, the Court emphasized the importance of modern contractual interpretation. The words of a contract must be read in their full context, including the surrounding language and the purpose of the provision. In the employment context, this means considering whether the agreement, read as a whole, preserves the employee’s statutory minimum entitlements.
“At Any Time” does not mean “In Breach of the ESA”
When you look at the language at first glance, the phrase “at any time” appears to be broad enough to conflict with statutory protections. However, the Court held that the phrase should not be read in isolation.
When used in a without-cause termination provision, “at any time” simply reflects the mutual intention of the parties that the employer may terminate the employment relationship without cause, provided the employee receives the entitlements required by law.
The Court found it highly unlikely that reasonable parties to an employment contract would have intended for language to allow termination in circumstances expressly prohibited by legislation, such as during protected leave.
“For Any Reason” Does Not Mean “For an Illegal Reason”
The Court applied similar reasoning to the phrase “for any reason.”
The phrase does not give employers the right to terminate an employee for reasons that are protected under statute. Instead, in the context of a without-cause termination clause, it means the employer does not need to prove just cause or provide a reason for ending the employment relationship, so long as the termination complies with the ESA and any other applicable statutory protection.
The Court therefore rejected the assumption that broad language must be interpreted as authorizing unlawful conduct.
The proper question is whether the provision, read in the context of the surrounding circumstances, preserves statutory minimum standards.
The Importance of ESA Saving Language
The Court of Appeal’s decision is also significant for its treatment of language intended to preserve minimum entitlements under the ESA, including phrases such as “except as required by the ESA.”
The Court held that the for-cause provision did not contract out of the ESA because it expressly preserved the employee’s statutory minimum entitlements, even though it referred to “Just Cause.” Read as a whole, the provision ensured that ESA entitlements would be provided whenever required.
This reinforces the Court’s broader approach that termination provisions must be interpreted in their entirety, including language that preserves minimum ESA rights.
Key Takeaways for Employers
The appeal decision not only clarified the competing decisions from Baker and Wayfair, but it also acts as an important reminder to employers that what’s written in their employment contracts matters. The enforceability of a termination depends on the wording of the agreement as a whole.
The main takeaways are:
- Context matters. Words such as “at any time” and “for any reason” are not automatically void when they appear in a without-cause termination provision. They must be interpreted in the context of the full agreement, not as isolated terms.
- Make everything compliant. Employers cannot contract out of ESA minimum standards. Termination provisions, as well as the entire contract, should clearly preserve all statutory entitlements, including notice, termination pay, severance pay where applicable, and benefit continuation.
- Keep the entire agreement consistent. A compliant without-cause provision can still be unenforceable or undermined by other language in the contract if the agreement, read as a whole, suggests that the employee may receive less than their statutory minimum entitlements. Everything needs to work together.
- Do not isolate broad language: While “at any time” and “for any reason” may no longer make a termination clause automatically unenforceable, employers should avoid wording that could reasonably be interpreted as limiting or excluding statutory rights.
- Saving language matters, but it’s not a substitute for careful drafting. The Court considered the for-cause provision’s reference to entitlements required by the ESA as part of the broader contractual context. Language such as “except as required by the ESA” may help show that the parties intended to preserve statutory minimums, but employers should not rely on a saving clause to fix termination language that otherwise contracts out of the ESA.
The appellate decisions in Baker and Wayfair clarify that termination clauses must be read as a whole, not dissected word by word in isolation.
For employers, the message is clear and comes down to common sense. Specifically, broad language in a without-cause termination clause is not necessarily fatal, but ESA compliance must be clear and consistent.
This blog post was written by Travis Ujjainwalla, Practice Lead of our Employment Law team, and Carly Baldachin, Articling Student. Travis can be reached at 613-566-2060 or at [email protected].
