A recent decision from the Ontario Superior Court, Chan v. NYX Capital Corp., 2025 ONSC 4561, has affirmed that a termination clause which allows termination “at any time and for any reason” is unenforceable. The ruling aligns with the Court’s prior decisions in Waksdale v. Swegon North America Inc., 2020 ONCA 391, Dufault v. The Corporation of the Township of Ignace, 2024 ONSC 1029; and Baker v. Van Dolder’s Home Team Inc., 2025 ONSC 952, which similarly struck down termination provisions that attempted to contract out of the Ontario Employment Standards Act, 2000 (“ESA”) minimum standards by contemplating dismissal “at any time”.
The Plaintiff, Mr. Chan, was terminated from his position one day before the end of his three-month probationary period. His contract stated that the employer, NYX Capital Corp., “may terminate [his] employment at any time and for any reason at its discretion” during his probation. It further stated the following:
After you successfully complete the first three months of your employment, the Company may terminate your employment at any time without cause…
…It is agreed and understood that the provision of such notice or pay in lieu of notice, severance pay (if applicable), benefits continuation and any other benefits or entitlements required under the ESA shall constitute full and final satisfaction of any claim which you might have arising from or relating to the termination of your employment, whether such claim arises under statute, contract, common law or otherwise, save any claim that cannot be released by operation of a statute of Ontario.
In her ruling, the trial judge noted four main reasons for her finding that the termination clause was void and unenforceable:
1. “At Any Time and For Any Reason”
The section of the employment agreement which provides for termination “at any time and for any reason” during the probationary period is contrary to the ESA (Dufault v. The Corporation of the Township of Ignace, 2024 ONCA 915). An employer does not have an absolute right to dismiss an employee, even a probationary employee. For example, an employer may not dismiss an employee as retaliation for asserting an ESA right. Any language that purports to give an employer this power of termination “for any reason” is therefore unenforceable (Baker v. Van Dolder’s Home Team Inc., 2025 ONSC 952).
2. “At Any Time Without Cause”
Another section of the employment agreement similarly purported to allow for the termination of Mr. Chan “at any time without cause.” For the same reasons found above, this is a violation of the ESA.
3. “At Any Time For Cause”
A further provision of the employment agreement allowed for termination “at any time for cause” without any notice or pay in lieu. The judge held that this language improperly attempted to expand the employer’s ability to dismiss for cause beyond what the ESA permits. Under the ESA, termination without notice or severance is only allowed in the narrow circumstances set out in O. Reg. 288/01 of the ESA, such as where the employee has engaged in “wilful misconduct, disobedience or wilful neglect of duty that is not trivial and has not been condoned.” This is a significantly more onerous standard than the common law just cause test. Because the clause allowed termination without notice in situations broader than this ESA threshold, the judge found that it unlawfully contracted out of the ESA and was therefore unenforceable.
4. No Contractual Release from Certain Claims
Finally, the employment agreement stated that a severance package would “constitute full and final satisfaction of any claim which you might have arising from or relating to the termination of your employment…” no matter what type of claim it is. The judge found this problematic, as certain termination-related rights cannot be waived or contracted out of. For example, if an employee is dismissed in reprisal for attempting to exercise a right under the ESA, they may be entitled to damages. This amounted to an unlawful attempt to contract out of ESA-protected rights, contrary to the statute’s general prohibition on waiving minimum employment standards.
Having found the termination clause unenforceable, the judge awarded the plaintiff with three months’ reasonable notice.
Takeaways
Despite what an employer may say in an employment agreement, employees cannot be terminated “at any time” and “for any reason”. Common examples we see are illegal reprisal terminations or discriminatory terminations. The protection applies to probationary employees as well.
Employers should be diligent in reviewing their employment agreements often to ensure compliance with the ESA in light of how the courts interpret termination provisions. Whether or not an employer is attempting to give themself overly broad power, any inconsistent, confusing, or broad language will be construed against the employer.
Contact Us
If you are an employee facing termination, contact us to review your employment agreement and the circumstances of your termination.
If you are an employer, contact us to update your employment agreements and termination provisions to protect both yourself and your employees.
Authors: Ava Clarke and Jasmine El Hamidi
Date: Dec 5, 2025
