Baker v. Van Dolder’s Home Team Inc.: Court Strikes Down Termination Clauses
On February 11, 2025, the Ontario Superior Court of Justice in Owen Sound released its decision in Baker v. Van Dolder’s Home Team Inc., 2025 ONSC 952, finding that the termination provisions in an employment contract were unenforceable.
As a result, the employee, represented by counsel from Achkar Law, is entitled to damages based on common law reasonable notice, rather than the minimum entitlements under the Employment Standards Act, 2000 (ESA).
Update (December 2025)
This decision is currently under appeal to the Ontario Court of Appeal. In a procedural ruling, the Court confirmed that the appeal raises issues that extend beyond the interests of the parties, including the interpretation of termination clauses and the remedial purpose of the ESA.
The Court granted leave to multiple public-interest and business organizations to intervene in the appeal. The Superior Court’s decision remains binding unless and until it is overturned.
As Christopher Achkar, employment lawyer and founder of Achkar Law, explains:
“The Court of Appeal’s decision to allow multiple interveners confirms that termination clause drafting remains a live and important issue across Ontario workplaces,” says Christopher Achkar. “The appeal reflects the broader need for clarity in how employment standards protections are applied in written contracts.”
Case Background
Frederick Baker was employed by Van Dolder’s Home Team Inc. under a written employment contract that included:
- a “without cause” clause allowing termination “at any time” with only ESA minimums; and
- a “with cause” clause permitting dismissal without notice for reasons such as poor performance, dishonesty, or absenteeism.
Mr. Baker was terminated without cause in May 2023. Achkar Law advanced a wrongful dismissal claim on his behalf.
The Employer’s Motion
The employer brought a motion for summary judgment, arguing that the contract validly limited Mr. Baker’s entitlements to the ESA minimum standards.
The Court’s Decision
Justice Sproat rejected the employer’s position and held that the termination provisions were unenforceable.
The “without cause” clause
The Court found this clause invalid because it permitted termination “at any time,” language that could allow termination in circumstances prohibited by the ESA, such as during protected leaves.
The “with cause” clause
The Court also found this clause unenforceable because it allowed dismissal without notice for conduct falling below the ESA’s higher standard of wilful misconduct.
Relying on Waksdale v. Swegon North America Inc. (2020 ONCA 391), the Court confirmed that where one part of a termination provision is invalid, the entire termination scheme fails.
As a result, Mr. Baker is entitled to common law reasonable notice. The employer’s motion was dismissed, and the matter will proceed to a hearing on damages.
Why This Case Matters
Ontario courts continue to apply strict scrutiny to termination clauses in employment contracts.
- For employees: Even where a contract purports to limit entitlements to ESA minimums, termination provisions may be unenforceable if they misstate or dilute statutory rights.
- For employers: Seemingly standard or well-intentioned wording can still invalidate termination clauses, exposing employers to significantly greater liability than anticipated.
The ongoing appeal underscores the importance of these issues for workplaces across Ontario.
Key Takeaways
For employers
- Employment contracts should be reviewed regularly.
- Small wording choices, including phrases like “at any time”, can have significant legal consequences.
For employees
- If your employment is terminated, it is worth having your contract reviewed.
- Clauses limiting termination entitlements are not always enforceable.
How Achkar Law Help
Achkar Law represents both employers and employees in employment law matters, including wrongful dismissal disputes.
Our team:
- drafts and reviews employment contracts to align with the ESA and evolving case law;
- advises employers on compliance and risk management; and
- represents employees and employers in negotiations, litigation, and tribunal proceedings.
This case highlights the importance of careful contract drafting and informed legal advice when workplace relationships come to an end.
The article in this client update provides general information and should not be relied on as legal advice or opinion. This publication is copyrighted by Achkar Law Professional Corporation and may not be photocopied or reproduced in any form, in whole or in part, without the express permission of Achkar Law Professional Corporation. ©