Baker v Van Dolder’s Home Team Inc, 2025 ONSC 952 – A case comment
Factual Background
Frederick Baker was employed by Van Dolder’s Home Team Inc. and was terminated “without cause” on May 24, 2023. Upon his dismissal, Mr. Baker sued for wrongful dismissal, challenging the enforceability of the termination provisions in his written employment contract. The contract included a “without cause” termination clause (limiting the employee’s entitlements to Ontario Employment Standards Act minimums. The parties agreed to have the case determined by summary judgment, focusing on whether the termination clause was legally enforceable or void. The Ontario Superior Court heard the motion, with the core question being whether the contract’s termination provision complied with the Ontario Employment Standards Act (the “ESA”) or ran afoul of its requirements.
Legal Analysis & Decision
The contract stated the employer could terminate the employee “at any time” without cause, with only the ESA minimum entitlements.
• The Court held that language permitting termination “at any time” is inconsistent with the ESA because the Act prohibits termination in certain circumstances (e.g., during protected leaves or in reprisal for exercising statutory rights). As a result, this clause was unenforceable.
• The Court reaffirmed and applied the reasoning from Dufault v The Corporation of the Township of Ignace (2024), which had similarly struck down “at any time” language as contrary to the ESA.
Outcome
• The termination provision was struck down in its entirety.
Baker was entitled to reasonable notice at common law rather than the limited ESA minimums specified in his contract.
Key Legal Takeaways
• Termination clauses that state an employer may terminate “at any time” without cause may be held unenforceable as contrary to the ESA.
Even language purporting to comply with the ESA cannot always salvage an otherwise non-compliant termination provision.
Note: The decision has been cited in subsequent commentary as part of ongoing judicial scrutiny of “at any time” drafting, and the enforceability question is under review on appeal, reflecting evolving Ontario case law on termination clause drafting.
Interpretation of the ESA in the Decision
The ESA sets out minimum mandatory termination entitlements and protections, which formed the benchmark for the court’s analysis. Section 5 of the ESA prohibits employers from contracting out of or waiving any ESA standard except to provide a greater benefit. In Baker, the Court interpreted the disputed clause in light of a key ESA requirement:
Statutory Termination Restrictions: The ESA prohibits terminations in certain circumstances or for certain reasons – for example, an employer may not terminate (or threaten to terminate) an employee for exercising ESA rights or while the employee is on a protected statutory leave (pregnancy/parental leave, emergency leave, etc.). In Dufault, and by extension in Baker, the words “at any time” and “sole discretion” were viewed as potentially allowing termination at times or for reasons that the ESA forbids. The Court reasoned that a clause saying the employer can end employment “at any time” could include terminating when an employee is, say, on maternity leave or has just filed an ESA complaint – thus implying a power to violate the ESA’s protective provisions. Although the employer argued it would still obey the law, the clause’s literal breadth was enough for the Court to find an ESA contravention on its face. This strict approach treats broad termination language as null if it hypothetically encompasses illegal scenarios, even if no illegal act actually occurred in Mr. Baker’s case.
In summary, the Baker decision applied the ESA by scrutinizing the contract language against the statute’s protective floor. Where the clause’s wording could authorize termination in ESA-protected situations, the Court held the clause illegal. This reflects a continued employee-centric interpretation of the ESA: if a termination provision isn’t crystal clear and entirely compliant with the ESA’s letter and purpose, it will be struck down.
Court’s Reasoning and Conclusion
The Court’s reasoning methodically invalidated the termination clause and, by extension, the entire contractual termination limitation. The Court explicitly followed the Dufault precedent as a matter of horizontal stare decisis. Citing the principle that courts of coordinate jurisdiction should generally follow one another’s decisions for consistency, the Court found no justification to depart from Dufault’s holding that “at any time” termination language breaches the ESA. The judge acknowledged that Dufault had voided a similar clause, and stated: “I must apply Dufault, as none of the reasons to depart from a prior decision referenced in Hansard Spruce Mills are applicable. As such, the ‘without cause’ termination provision is unenforceable.”.
Having found the without-cause clause void, the Court noted that under Waksdale the invalidity of any part of a termination provision nullifies all of it. In other words, an unenforceable term in the termination section means the employee cannot be held to any contractual limit on their dismissal entitlements. Therefore, even without more, Mr. Baker would be entitled to common law reasonable notice.
Conclusion: The Court held that the termination clause was void and unenforceable, and thus the employer could not rely on it to limit Mr. Baker’s termination pay. The net result was that Mr. Baker was entitled to reasonable notice of termination at common law (which is typically substantially more generous than statutory minimums. The decision dismissed the employer’s attempt to enforce the contract as written. In practical terms, the employer would have to provide Mr. Baker with common law damages for wrongful dismissal, since the contractual cap on his entitlements was invalid.
Building on Waksdale: Continuity and Development
Baker is a key decision in a series of Ontario cases reinforcing a strict approach to employment contract termination clauses, an approach largely galvanized by the Court of Appeal’s landmark ruling in Waksdale v Swegon North America Inc, 2020 ONCA 391. In Waksdale, the Court of Appeal held that if any portion of a termination clause contravenes the ESA, the entire clause is void, and courts will not sever the offending part to save the rest. This meant that even a well-drafted “without cause” provision will be unenforceable if the same contract contains a for-cause provision that breaches the ESA. Baker directly applied this principle: the Court cited Waksdale and acknowledged that once a flaw was found in one part of the termination agreement, “it renders the entire termination provision unenforceable.” Thus, Baker is a clear affirmation of the Waksdale rule.
Beyond Waksdale’s general severability rule, Baker also builds on the substantive legacy of Waksdale and subsequent cases in key ways:
Stricter Scrutiny of Clause Wording: Waksdale opened the door for employees to challenge termination clauses, and Baker pushes that door further. It confirms that courts will closely scrutinize even seemingly minor wording choices in a contract. For instance, Waksdale itself dealt primarily with an illegal “for cause” clause, but did not pronounce on phrases like “at any time.” Baker, following Dufault, extends the employee-friendly approach by finding that even wording such as “at any time” (which does not overtly reduce notice below ESA minimums) can be read as contracting out of ESA protections.
This shows that courts are willing to infer an ESA breach from broad language. In that sense, Baker builds upon Waksdale’s spirit – that termination clauses must be unambiguous and fully compliant – by highlighting new pitfalls in drafting (e.g. temporal language like “at any time”). It also resonates with the Dufault trial decision (2024 ONSC 1029, aff’d 2024 ONCA 915) which first flagged the “at any time / sole discretion” issue. Together, these cases illustrate an evolving doctrine: courts scrutinize not just whether notice duration meets ESA minimums, but whether any implication of the clause could circumvent employee protections.
It should be noted that Baker’s treatment of the “at any time” wording reflects a relatively new development in the case law, and not all courts have agreed. In fact, shortly after Baker, other Superior Court judges in Li v Wayfair Canada ULC, 2025 ONSC 2959 and Jones v Strides Toronto, 2025 ONSC 2482 declined to void termination clauses just for using “at any time,” especially where the offending “sole discretion” language was absent. Those decisions distinguished or implicitly questioned Baker and Dufault, suggesting that “at any time” alone may not always amount to contracting out of the ESA. This divergence means the exact impact of Baker is still being worked out in the lower courts. Nonetheless, until an appellate court clarifies the issue, Baker (along with Waksdale and Dufault) stands as a cautionary high-water mark in favour of employees. It signals that employers proceed at their peril when using broad language in termination clauses.
Implications for Employment Law and Drafting Practices
The Baker decision has significant implications for employment law throughout Canada, particularly in how termination clauses should be drafted and reviewed:
Continued Strict Judicial Scrutiny: Baker confirms that courts remain focused on policing termination provisions, striking down language that not long ago might have been considered benign. Small drafting choices – using phrases like “at any time,” “for any reason,” or “in its sole discretion” – can render a clause void even if the employer’s intention was to comply with employment legislation. The decision reinforces the message from Waksdale that courts will resolve ambiguity or overbreadth against the drafter (the employer) when statutory minimums are at stake. As a result, many standard termination clauses that limit an employee to statutory minimum notice may no longer survive unless carefully worded. This trend tilts the balance toward employees, who will more readily secure full common law notice unless the contract is ironclad lawful.
Cautionary Drafting Guidance: Employers should review and revise their employment contracts in light of Baker. In particular, avoiding certain terminology is advisable: terms like “at any time” and “[in the employer’s] sole discretion” in termination provisions are red flags that, in the absence of appellate clarification, lower courts are finding contrary to employment legislation. Drafters should consider removing or narrowing such language to clearly exclude any implication of terminating during protected leaves or for unlawful reasons.
Regular Updates and Legal Advice: The law on termination clauses continues to evolve rapidly post-Waksdale. What worked a year or two ago may be invalid today. Baker exemplifies this fluidity – even phrases that were commonplace are now suspect. Employers should stay abreast of the latest case law and regularly review termination provisions for continued compliance, ideally on an annual basis. Seeking advice from employment counsel when drafting or revising contracts is crucial. On the flip side, employees (and their lawyers) will undoubtedly scrutinize termination clauses even more closely in light of Baker, knowing that courts are prepared to strike down clauses and award greater notice. We can expect that many disputes will reference Baker as authority to invalidate employment standards-only notice provisions that contain any questionable language.
In conclusion, Baker is a significant addition to Canadian employment law jurisprudence on termination clauses. It underscores the Courts’ unwavering stance that words matter when it comes to contracting out of employee rights. Unless and until the Court of Appeal provides further guidance (for example, on the “at any time” issue), prudent employers should draft termination provisions with the most conservative, employee-friendly interpretation in mind. The practical takeaway is clear: assume the strictest possible scrutiny and draft accordingly. By doing so – and by keeping contracts up to date with the latest case law – employers can better protect themselves from unwelcome surprises, while employees can enjoy the reassurance that courts will hold employers to the exacting standards of employment legislation.
*Always seek legal advice. The above is for information purposes only.
Stephen Dugandzic received his Juris Doctor degree from the University of Alberta in 2013 and is Calgary-based. He previously practised with Bennett Jones LLP and Taylor Janis LLP before founding YYC Employment Law Group in 2018 and Evolution Legal in 2026.