Two recent Ontario decisions have cast doubt on earlier rulings that suggested the words “at any time” could invalidate an employment agreement’s termination clause.
Background: The “At Any Time” Controversy
In our February 2025 update, we highlighted a growing concern in Ontario employment law — that including the words “at any time” in a termination clause could make it unenforceable.
This concern arose from two decisions:
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Dufault v. The Corporation of the Township of Ignace, 2024 ONSC 1029:
The court found a termination clause invalid because it allowed the employer to terminate “at any time” and at its “sole discretion.” The judge reasoned that such wording could permit termination during job-protected ESA leaves or after an employee filed an ESA complaint — both violations of the Employment Standards Act, 2000 (ESA).
The clause was also unenforceable for two additional reasons: a problematic definition of “cause” and failure to provide all ESA-required compensation.
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Baker v. Van Dolder’s Home Team Inc., 2025 ONSC 952:
Following Dufault, the court ruled that merely including the words “at any time” — even without “sole discretion” — was enough to void the termination clause.
At that time, we noted that predicting widespread invalidation of termination clauses based on Baker was “premature at best.” We expected further clarification — and this summer, that clarification has started to emerge.
New Cases Point in a Different Direction
Two 2025 cases have since challenged the reasoning in Dufault and Baker:
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Li v. Wayfair Canada Inc., 2025 ONSC 2959:
The court upheld a termination clause that allowed the employer to terminate “at any time” and “for any reason.” It distinguished Dufault on the basis that the clause contained no other ESA-related flaws — such as issues with “cause” or termination pay. However, the court did not directly address why the “at any time” wording itself was acceptable.
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Jones v. Strides Toronto, 2025 ONSC 2482:
The court explicitly found that including “at any time” — without the words “sole discretion” — does not violate the ESA. Nonetheless, the clause in Jones was found unenforceable on other grounds.
What This Means for Employers and Employees
The Li and Jones decisions directly conflict with Dufault and Baker. The courts are now split on key questions:
- Are the words “at any time” inherently problematic?
- Does the inclusion (or omission) of “sole discretion” make a difference?
Until the Court of Appeal for Ontario provides guidance, uncertainty remains. Unfortunately, the Court of Appeal declined to clarify the issue when it dismissed the appeal in Dufault, finding the clause unenforceable on other grounds without addressing the “at any time” or “sole discretion” language.
For now, we await further appellate clarification — perhaps through an appeal in Li or Jones — to bring consistency to this evolving area of employment law.
Written by Adriana Totera
* Please note that the information in this article is not intended as legal advice, but rather as a general overview on the subject. If you are seeking legal advice, please consult with a lawyer.
