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“At Any Time” and “For Any Reason” Termination Clauses Survive: OCA Clarifies Rules for Interpreting Employment Contracts
Date: August 6, 2026
In Baker v. Van Dolder’s Home Team Inc.; Li v. Wayfair Canada ULC, 2026 ONCA 568, the Court of Appeal for Ontario resolved conflicting lower court decisions on whether “at any time” language in without cause termination clauses is inconsistent with the Employment Standards Act, 2000 (ESA).
In the two decisions that were appealed from the lower courts, one judge found that the use of “at any time” made a termination clause unenforceable, while another upheld a clause permitting termination “at any time and for any reason.” The Court upheld both clauses as enforceable.
Background
The Court heard the two appeals together because they both turned on the same question: does “at any time” language in a without cause termination clause breach the ESA?
Baker v. Van Dolder
The employment contract at issue in Baker permitted the employer to terminate the employment contract “at any time, without just cause,” upon providing the ESA minimum notice or pay in lieu, and separately permitted termination “at any time for just cause,” with the employee’s entitlements limited to any minimum compensation prescribed by the ESA. On a motion for summary judgment, the motion judge found both provisions unenforceable, holding that the words “at any time” were inconsistent with ESA provisions that restrict termination in specific circumstances (such as at the end of a statutory leave, or as reprisal for exercising an ESA right), and that the with cause provision was unfair because it did not explain to a regular employee how the contractual “just cause” standard differed from the ESA’s “wilful misconduct” standard.
Li v. Wayfair
The employment contract at issue in Wayfair permitted termination “at any time and for any reason” upon providing the ESA minimum statutory notice or pay in lieu, together with repeated assurances that the employee’s entitlements would be consistent with the ESA and that the employee would never receive less than his statutory minimums. On a motion for summary judgment, a different motion judge reached the opposite conclusion from the one in Baker, finding that the without cause provision was enforceable because, when read as a whole, the contract clearly and repeatedly tied the employee’s entitlements to the ESA.
Today’s Decision
Interpretive Framework
The decision today restated the key existing principles that apply when courts interpret employment contracts. Writing for a unanimous panel, Justice Monahan confirmed that employment contracts must be read as a whole, applying the modern, objective approach to contractual interpretation, while remaining alive to the remedial purpose of the ESA and the vulnerability of employees at the point of termination. A termination clause will only be found ambiguous, and interpreted in the employee’s favour, where there are genuinely two or more reasonable interpretations once the contract is read in its full context. Courts should not adopt a literal, “magic words” reading of isolated phrases, and should not strain to manufacture an ambiguity where the parties’ objective intentions are otherwise clear.
“At Any Time” Language Does Not Breach Statute
Applying that framework, the Court held that the words “at any time” in both contracts simply confirm the mutual intention that a without cause termination will be valid and legally effective regardless of when that without cause termination occurs; they do not reflect an intention to permit termination in circumstances the ESA and other employment statutes expressly prohibit (such as during a protected leave, or as reprisal for exercising a statutory right). The Court found it implausible that either employer intended to expose itself to the ESA’s own enforcement consequences for unlawful terminations, including reinstatement, make-whole orders, and prosecution, merely by using standard “at any time” wording.
“For Any Reason” Language Does Not Breach Statute
The Court separately considered whether a provision permitting termination “for any reason” changes the analysis, since some ESA protections turn on the employer’s reason for terminating rather than its timing. The Court held that “for any reason” simply means the employer need not provide a reason for a without cause termination, provided the employee still receives their contractual and statutory entitlements; it does not signal an intention to terminate for a reason the ESA prohibits, particularly where, as in the contract at issue in Wayfair, the clause repeatedly tied the employee’s entitlements to the ESA.
With Cause Provision Preserving Statutory Minimum Entitlements Also Enforceable
The Court distinguished this case from its recent decisions striking down with cause clauses that denied any compensation for conduct falling short of the ESA’s “wilful misconduct” standard. Because the employment contract in Baker expressly preserved the employee’s entitlement to minimum ESA compensation even in the case of termination for contractually-defined “cause,” or common law “just cause”, the clause aligned with, rather than contracted out of, the ESA. The Court rejected the motion judge’s view that the clause was unenforceable simply because it did not explain the legal distinction between contractual cause, common law just cause, and ESA wilful misconduct, confirming that employers can incorporate ESA entitlements by referencing them without needing to educate employees on the underlying legal principles, or copying specific sections of legislation into an agreement.
Key Takeaways for Employers
This decision provides welcome clarity and a measure of relief for employers. It confirms that standard “at any time” and “at any time and for any reason” language in without cause termination clauses is not, in and of itself, inconsistent with the ESA. It also provides much-needed guidance to lower courts on the correct interpretive approach for employment contract cases: the court’s focus should be to identify and give effect to the parties’ objective intentions, and should not read words in isolation or strain to find ambiguities in order to invalidate an employment agreement and award employees common law reasonable notice.
The decision also reinforces two practical points for drafting and defending termination provisions:
- Read the contract as a whole: clauses committing the employer to comply with the ESA, or repeatedly tying entitlements to ESA minimums, strengthen the enforceability of the contract even where it contains “at any time” or “for any reason” language.
- Referencing ESA entitlements remains valid: a “with cause” termination clause that defines cause more broadly than the ESA’s wilful misconduct standard can still be enforceable, provided it clearly preserves the employee’s entitlement to minimum ESA compensation if their conduct falls short of the ESA standard. Employers are not required to explain the legal distinction between contractual cause, common law just cause, and statutory wilful misconduct.
We will continue to monitor whether leave to appeal to the Supreme Court of Canada is sought given the significance of this decision to anyone who drafts employment agreements in Ontario workplaces.
Wayfair was successfully represented by Hicks Morley’s Edward O’Dwyer and Kelly Brennan.
The Ontario Chamber of Commerce was represented by Andrew McCreary, Mari Maimets, and Stevie (Stephanie) Gellatly.
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