{"id":7471,"date":"2025-03-03T15:41:15","date_gmt":"2025-03-03T20:41:15","guid":{"rendered":"https:\/\/perlaw.ca\/?p=7471"},"modified":"2025-03-03T15:43:12","modified_gmt":"2025-03-03T20:43:12","slug":"ontario-court-of-appeal-reinforces-waksdale-and-alludes-to-a-new-standard-for-employment-contracts-in-ontario","status":"publish","type":"post","link":"https:\/\/perlaw.ca\/fr\/2025\/03\/03\/ontario-court-of-appeal-reinforces-waksdale-and-alludes-to-a-new-standard-for-employment-contracts-in-ontario\/","title":{"rendered":"Ontario Court of Appeal Reinforces Waksdale and Alludes to a new Standard for Employment Contracts in Ontario"},"content":{"rendered":"

The recent Court of Appeal decision in Dufault v The Corporation of the Township of Ignace<\/em> 2024 ONCA 915 (\u201cDufault<\/em>\u201d) follows a series of rulings that affirm the unenforceability of employment contracts where a termination provision is found to be non-compliant with the Employment Standards Act, 2020<\/em> (\u201cESA\u201d).<\/p>\n

Ms. Dufault was employed as a Youth Engagement Coordinator pursuant to a two-year fixed-term employment agreement. Prior to the expiry of her term, the Township terminated Ms. Dufault\u2019s employment on a without cause basis. Ms. Dufault argued, among other issues, that the \u201cfor cause\u201d termination provision was invalid in accordance with the principles set out in Waksdale v. Swegon North America Inc.,\u00a0<\/em>2020 ONCA 391<\/a> (\u201cWaksdale<\/u><\/em>\u201d), and further that the \u201cwithout cause\u201d termination provision similarly violated the ESA and must therefore be unenforceable.<\/p>\n

The Ontario Superior Court agreed, and among other findings made, determined that the language allowing the Township to terminate Ms. Dufault\u2019s employment \u201cat its sole discretion\u2026at any time\u201d violated the job protections outlined in the ESA, particularly regarding an employee\u2019s statutory leave of absence or retaliation for attempting to exercise a right under the ESA.<\/p>\n

On appeal, the Township argued that both the \u201cfor cause\u201d and \u201cwithout cause\u201d provisions were compliant with the ESA. Alternatively, the Township submitted that if the \u201cfor cause\u201d provision was contrary to the ESA, it ought to be severed and the \u201cwithout cause\u201d provision preserved, providing the Court of Appeal an opportunity to revisit its decision in Waksdale<\/em>.<\/p>\n

The Court of Appeal agreed with the lower court\u2019s ruling that the \u201cfor cause\u201d provision allowing the termination without notice contravened the ESA. Specifically, the Court took issue with the inclusion of \u201cfailure to perform services\u201d in the definition of \u201ccause\u201d and the inclusive language used, determining that it set a threshold for \u201ccause\u201d that did not align with the \u201cwilful misconduct\u201d standard outlined in the ESA. Keeping with the Waksdale<\/em> decision, the Court found that the \u201cfor cause\u201d termination provision rendered all termination provisions in the agreement unenforceable.<\/p>\n

The Court expressly declined to revisit the lower court\u2019s finding on the \u201csole discretion\u2026at any time\u201d language in the employment agreement. As such, employment agreements that permit employers to terminate \u201cin their sole discretion\u2026at any time\u201d are likely unenforceable because of the lower court ruling.<\/p>\n

The Township has filed an application for leave to appeal to the Supreme Court of Canada. A similar leave application from British Columbia has also been filed. If either or both are granted, the Supreme Court could offer much-needed clarity on the interpretation of employment contracts across Canada.<\/p>\n

In the meantime, employment contracts in Ontario must be drafted in compliance with the principles in both Waksdale<\/em> and now Dufault<\/em>. It is prudent for employers to review their existing employment agreements to ensure they reflect ongoing developments in the law.<\/p>\n","protected":false},"excerpt":{"rendered":"

The recent Court of Appeal decision in Dufault v The Corporation of the Township of Ignace 2024 ONCA 915 (\u201cDufault\u201d) follows a series of rulings that affirm the unenforceability of employment contracts where a termination provision is found to be non-compliant with the Employment Standards Act, 2020 (\u201cESA\u201d). Ms. Dufault was employed as a Youth […]<\/p>\n","protected":false},"author":3,"featured_media":7473,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"wds_primary_category":0,"wds_primary_expertise_area":0,"footnotes":""},"categories":[161],"tags":[],"class_list":["post-7471","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-publications","expertise_area-litige"],"acf":[],"_links":{"self":[{"href":"https:\/\/perlaw.ca\/fr\/wp-json\/wp\/v2\/posts\/7471","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/perlaw.ca\/fr\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/perlaw.ca\/fr\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/perlaw.ca\/fr\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/perlaw.ca\/fr\/wp-json\/wp\/v2\/comments?post=7471"}],"version-history":[{"count":1,"href":"https:\/\/perlaw.ca\/fr\/wp-json\/wp\/v2\/posts\/7471\/revisions"}],"predecessor-version":[{"id":7472,"href":"https:\/\/perlaw.ca\/fr\/wp-json\/wp\/v2\/posts\/7471\/revisions\/7472"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/perlaw.ca\/fr\/wp-json\/wp\/v2\/media\/7473"}],"wp:attachment":[{"href":"https:\/\/perlaw.ca\/fr\/wp-json\/wp\/v2\/media?parent=7471"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/perlaw.ca\/fr\/wp-json\/wp\/v2\/categories?post=7471"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/perlaw.ca\/fr\/wp-json\/wp\/v2\/tags?post=7471"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}