“Any Time” and “For Any Reason” Termination Clauses Are Valid and Enforceable

By Sebastian Chern

The Executive Summary:

• In a win for employers, the Ontario Court of Appeal reversed a recent trend and confirmed in a new decision that termination clauses allowing without cause termination “at any time” and “for any reason” can be valid and enforceable.

The Issue with Termination Clauses in Ontario

A well-drafted termination clause can limit an employee’s notice entitlement on termination without cause down to the minimums set out in provincial employment standards legislation, such as the Employment Standards Act, 2000 in Ontario. In recent years, however, Ontario courts have applied an increasingly strict test to these clauses, holding that entirely hypothetical interpretations would contravene the ESA or other legislation rendering them unenforceable.

Recently, courts found that clauses allowing an employer to terminate an employee without cause “at any time” and “for any reason” were void. They reasoned that this wording could, in theory, let an employer terminate someone illegally, at a time or for a reason that was prohibited under legislation such as the Employment Standards Act, 2000 and the Human Rights Code. This argument became a favourite of plaintiffs’ lawyers across the country, and we saw it raised often in demand letters sent to our clients.

The Court of Appeal Decision

In Baker v. Van Dolder’s Home Team Inc., 2026 ONCA 568, which was a joint appeal of two separate decisions in Baker v. Van Dolder’s Home Team Inc., 2025 ONSC 952 and Li v. Wayfair Canada ULC., 2025 ONSC 2959, the Ontario Court of Appeal disagreed with this reasoning and upheld two termination clauses that used this exact language.

The Court held that when parties use wording like “at any time” and “for any reason,” they do not intend to permit termination at illegal times or for illegal reasons. Instead, the Court found that this language reflects an intention to comply with the minimum standards in the ESA. It would not make sense, the Court reasoned, for the parties to also intend to contravene that legislation with the same clause. The Court also cautioned against straining to find ambiguity in a contract where none exists.

The Court also upheld a “for cause” termination clause that referenced the possibility that in a few cases where just cause was proven ESA minimums could still be payable i.e. where the just cause does not meet the stricter ESA requirement of “willful misconduct, disobedience or willful neglect of duty” that is not trivial nor condoned. The Court found this was not confusing or unclear.

Key Takeaways for Employers

• Termination clauses containing “any time” and “for any reason” language, which are common in employment agreements across the country, should now upheld in Ontario.
• If your agreements contain this language, you do not need to revise them right away, and can continue to rely on them for now. There is a chance this decision will be appealed to the Supreme Court of Canada. Until then, it is good law in Ontario.
• If your agreement addresses termination “for cause “ and “without cause”, make sure the “for cause” clause mentions that, in cases that do not reach the level of willful misconduct or willful neglect of duty, ESA entitlements will be provided.

We still recommend that employers have their employment agreement templates reviewed periodically. An enforceable termination clause can significantly reduce your risk and liability, and can be the difference between owing weeks of notice or pay in lieu, versus months.

Questions?

If you would like more information on this topic, please contact us:

Sebastian Chern:            schern@howardchernlaw.ca

604 424-9688

Geoffrey Howard:           ghoward@howardchernlaw.ca

604 424-9686