Executive Summary: Key Legal and Evidentiary Issues

• Enforceability of the “without cause” and “with cause” termination provisions in the employment contract against the minimum standards and remedial purpose of the Employment Standards Act, 2000 (ESA).
• Impact of “we may terminate your employment at any time” wording on ESA compliance and whether it improperly broadens the employer’s termination rights.
• Legality of the with-cause clause allowing termination “at any time for just cause, without prior notice or compensation of any kind” in light of the ESA’s narrower “wilful misconduct” threshold.
• Effect of any ESA-offending language on the entire contractual termination regime under the Waksdale approach, leading to common law reasonable notice if any part is invalid.
• Application of prior trial-level reasoning (especially Dufault v. Ignace) and stare decisis principles in compelling the trial judge to follow earlier findings on similar “at any time” language.
• Appellate management of intervenors to ensure balanced assistance from employer-side (OCC) and worker-side (ISAC/PCLS) participants without skewing the appeal.

Facts of the case

Frederick Baker was employed by Van Dolder’s Home Team Inc. in Ontario under a written employment agreement that contained detailed termination provisions. His employment was terminated without cause, and the employer relied on the contract to limit his entitlements on termination to the minimum standards set out in the Employment Standards Act, 2000 (ESA), rather than common law reasonable notice. Mr. Baker commenced an action in the Ontario Superior Court of Justice, arguing that the termination provisions were unenforceable because they contravened the ESA, a statute intended to set mandatory minimum protections for employees.

The key contractual provisions were a without-cause termination clause and a with-cause termination clause. The without-cause clause provided that the company could terminate the employee’s employment “at any time” without cause. The with-cause clause stated, in substance, that the employer could terminate “at any time for just cause, without prior notice or compensation of any kind, except any minimum compensation or entitlements prescribed by the Employment Standards Act,” and then listed examples of misconduct that would constitute cause. Mr. Baker contended that this language unlawfully attempted to contract out of ESA minimums and could mislead an employee into believing that he or she had no statutory rights in circumstances where the ESA would in fact provide entitlements.

Termination clauses and policy considerations

The central legal question at trial was whether the impugned termination provisions complied with the ESA. The ESA only permits an employer to withhold termination and severance entitlements in narrow circumstances, typically where the employee has engaged in wilful misconduct, disobedience, or wilful neglect of duty that is not trivial and has not been condoned. A contractual “just cause” standard that is broader than this statutory threshold is treated as an attempt to contract out of the ESA and is void.

The “at any time” phrasing in the without-cause provision suggested that the employer could terminate in a very wide range of circumstances, potentially in ways inconsistent with the ESA’s remedial purpose and protection of employees. Even though the clause also referenced statutory entitlements, the court was concerned that, read as a whole, it implied a power to dismiss beyond what the ESA permits. The with-cause clause similarly suggested that the employer could deny notice and compensation in a broader range of situations than those permitted under the ESA.

The trial judge approached these issues against the backdrop of recent case law, including decisions that struck down termination clauses containing language such as “at any time” or “at its sole discretion” as conflicting with the ESA. He also relied on the principle that decisions of judges of the same court, while not strictly binding, should generally be followed unless there are compelling reasons to depart, and he found no such reasons here. The broader policy concern throughout was the inequality of bargaining power in employment relationships and the risk that employees, who are often unfamiliar with the ESA, might be misled by broad or imprecise contractual wording.

The trial decision in the Ontario Superior Court of Justice

In Baker v. Van Dolder’s Home Team Inc., 2025 ONSC 952, the Superior Court held that both the with-cause and without-cause termination provisions were unenforceable. The judge concluded that the with-cause clause unlawfully undercut the ESA because it purported to allow termination for “just cause” without any notice or compensation in a range of circumstances that could be broader than the ESA’s narrow wilful misconduct standard. As a result, the clause was void.

The judge also held that the without-cause clause was invalid. The “we may terminate your employment at any time” wording was found to be inconsistent with the ESA’s protective scheme, especially in light of earlier trial-level precedent dealing with similar phrasing. This was so even though the Baker contract did not include some of the additional “sole discretion” language seen in other cases; the “at any time” phrase alone was considered problematic.

Applying the approach endorsed in Waksdale v. Swegon North America Inc., the court treated the termination provisions as a unified scheme. Once any part of that scheme was found to contravene the ESA, the entire contractual termination regime fell. The practical consequence was that Van Dolder’s Home Team Inc. could not rely on its ESA-limited provisions and Mr. Baker was instead entitled to common law reasonable notice.

The reported discussion of the case focuses on the legality of the termination provisions and the doctrinal implications for ESA compliance. The specific length of reasonable notice awarded to Mr. Baker and the precise quantum of damages and costs are not clearly set out in the materials that summarize the decision.

Appellate intervention decisions

The employer appealed to the Court of Appeal for Ontario. The Court described the appeal as involving an employment matter and the enforceability of termination provisions, and it recognized that the case raised broader questions about the ESA’s remedial objectives and the need for greater clarity and certainty in the law of termination clauses.

On the appeal, several organizations sought leave to intervene. In an earlier motion (not reproduced here but referenced in later reasons), the Court granted leave to the Ontario Chamber of Commerce (OCC) to intervene, while denying leave to the Canadian Association of Counsel to Employers (CACE). One concern was avoiding duplication and preventing the appeal from being overwhelmed by multiple intervenors aligned with employers.

In Baker v. Van Dolder’s Home Team Inc., 2025 ONCA 829, the Income Security Advocacy Centre (ISAC) and Parkdale Community Legal Services (PCLS) jointly applied to intervene as a coalition. The Court of Appeal held that the coalition could offer a broader perspective on the effects of termination clauses on vulnerable and low-wage workers and could speak to disparities in bargaining power and legal sophistication that underlie many employment disputes. It found that their submissions would assist the court and that, because they were aligned more closely with the employee, their participation would help balance the employer-side perspective already represented by the OCC.

The Court of Appeal granted ISAC and PCLS leave to intervene as a coalition on specified terms. They were required to take the record as they found it, limited to a single joint factum of up to 15 pages and 10 minutes of oral submissions in total. The appellant was allowed to respond with a supplementary factum of up to 15 pages and an extra 10 minutes of oral submission time. The coalition intervenor was neither entitled to, nor liable for, costs of the motion or of the appeal.

Outcome and monetary relief

On the merits of the termination-clause dispute, Mr. Baker is the successful party at first instance. The Ontario Superior Court struck down both the with-cause and without-cause termination provisions as contrary to the ESA, with the result that Van Dolder’s Home Team Inc. lost the protection of its ESA-limiting language and Mr. Baker became entitled to common law reasonable notice. The appellate decisions to date, including 2025 ONCA 829, address only who may intervene and on what terms; they do not overturn the trial court’s conclusions on the enforceability of the clauses. However, the available summaries and excerpts do not disclose the specific length of reasonable notice awarded or the exact dollar amounts of damages and costs ordered in Mr. Baker’s favour. Accordingly, while Mr. Baker is clearly the successful party on the legal issues addressed, the total monetary award and costs in his favour cannot be determined from the information currently available.