Labour & Employment Law Insights

“At Any Time” Clause Found Unenforceable…Again

August 29, 2025 | By Rebecca Rosenberg

Employment Standards

Summary

In the recent decision Chan v NYX Capital Corp., 2025 ONSC 4561 (“NYX”), the Ontario Superior Court of Justice once again found that a termination clause using the phrase “at any time” violated the Employment Standards Act, 2000 (the “Act”), rendering it unenforceable. This decision follows the Court’s reasoning in Dufault v The Corporation of the Township of Ignace, 2024 ONSC 1029 (“Dufault”) and Baker v Van Dolder’s Home Team Inc., 2025 ONSC 952 (“Baker”), which similarly rejected an employer’s ability to terminate someone’s employment “at any time” and “for any reason”.

Facts

In NYX, the plaintiff had been working for the defendant for just under three months when his employment was terminated. The defendant asserted that the plaintiff was a probationary employee and, as such, was not entitled to notice under the Act or at common law. The plaintiff evidently rejected the defendant’s assertion, arguing:

1. The plaintiff was not a probationary employees because the probationary clause under the termination clause in the employment agreement was unenforceable; and
    
2. Even if the plaintiff was a probationary employee, the defendant terminated the plaintiff’s employment in bad faith because the defendant did not satisfy the test for terminating a probationary employee, which required a good faith finding that the plaintiff was unsuitable for permanent employment.

The language at issue in the termination clause read in part:

10.    Termination

Your employment with the Company may be terminated as follows:

(a)    The first three months of your employment are probationary, during which time the Company may terminate your employment at any time and for any reason at its discretion, without notice or pay in lieu of notice, or other obligation.

The “at any time” language also appeared in subsection (c) of the termination clause, which related to termination with and without cause:

(c)     After you successfully complete the first three months of your employment, the Company may terminate your employment at any time without cause, upon providing you with notice, or pay in lieu of notice, benefits continuation and severance pay (if applicable) and any other benefits or entitlements strictly required in accordance with the minimum requirements set out in the ESA. It is agreed and understood that the provision of such notice or pay in lieu of notice, severance pay (if applicable), benefits continuation and any other benefits or entitlements required under the ESA shall constitute full and final satisfaction of any claim which you might have arising from or relating to the termination of your employment, whether such claim arises under statute, contract, common law or otherwise, save any claim that cannot be released by operation of a statute of Ontario.

(d)     The Company may terminate your employment at any time for cause, without any obligation to you on account of notice or pay in lieu of notice, severance pay, or other obligation, other than accrued amounts owed to the date of termination.

(Emphasis in original)

The Decision

The Court agreed with the plaintiff that the termination clause was void and unenforceable. Specifically, the Court found that the language used in the termination provision was invalid for the following reasons:

1. 10(a) used “at any time and for any reason,” and 10(c) used “at any time without cause” language, which has been found to violate the Act, per Dufault and Baker.
    
2. 10(c) further states that the defendant is released from claims the plaintiff may have upon termination, which violates certain claims arising from termination of employment that cannot be contracted out if (i.e. a claim for damages if termination of employment was done for reprisal).
    
3. 10(d) provides the defendant with the right to terminate the plaintiff’s employment “at any time for cause,” and “cause” is not defined in accordance with the Act and its regulations (i.e. wilful misconduct, disobedience or wilful neglect of duty that is not trivial and has not been condoned by the employer.

Given its reasoning above, the Court found that the probationary clause was unenforceable, and the plaintiff could not be characterized as a probationary employee at the time of termination. 

Notably, the Court found that if the plaintiff was properly characterized as a probationary employee, his employment was appropriately terminated without notice. In other words, had the Court found that the termination clause had been enforceable, the defendant would have met the test for terminating a probationary period because the defendant (a) provided the plaintiff with a fair and reasonable opportunity to demonstrate his suitability for permanent employment, and (b) made a good faith determination that the plaintiff was not suitable for the same. The issue was not with the defendant’s conduct, but with the terms used in the employment agreement. 

Having found the termination clause unenforceable, the Court awarded the plaintiff with three months’ reasonable notice. However, the Court refused to order any amounts in punitive or aggravated damages, finding that the defendant’s conduct was “somewhat insensitive” but not at the level that required additional damages. 

Takeaways

Employers are understandably frustrated with the shifting jurisprudence on the issue of termination clause enforceability. The Court’s reasoning in Li v Wayfair Canada Inc., 2025 ONSC 2959 (“Li”) marked a step forward for the enforceability of termination provisions that used the phrase “at any time” and “for any reason”. We discussed the Li decision in our previous insight (available here). NYX takes a different approach, however, landing on the opposite side. 

So, what does this mean for employers? Looking at the case law as a whole, we know that referencing language from the Act is crucial to demonstrating the employer’s intention to act within the minimum standards set out by the Act. 

In Li, for instance, the termination clause included the specific definition of “cause” as stated in the ESA and its regulations. The Court found that that definition represented a distinction between the clause in that case, and the unenforceable clause in Dufault. Accordingly, it is important to include explicit language in an employment agreement pointing to the employer’s obligation to provide minimum standards, including those relating to termination and severance pay, in the termination provision and elsewhere.  

Given the uncertainty around these termination clause decisions, we continue to encourage employers to have their employment agreements reviewed on a regular basis. 

Need More Information?

For more information or assistance with drafting or reviewing employment contract language, contact Rebecca Rosenberg at rrosenberg@filion.on.ca or your regular lawyer at the firm.

Download PDF