Ontario Employee Wins Termination Pay Dispute - Clean Water Works Case
19Jan

Ontario Employee Wins Termination Pay Dispute: Clean Water Works Case

On September 19, 2025, the Ontario Labour Relations Board (OLRB) upheld an Employment Standards Officer’s (ESO) order requiring Clean Water Works Inc. to pay a former employee, Paul McCarney, $350,000 in termination pay.

In Clean Water Works Inc. v. Paul McCarney, 2025 CanLII 103364 (ON LRB), the employer attempted to overturn the order, arguing that McCarney had resigned and that the employment agreement was unenforceable. The Board rejected those arguments, confirming that written employment contracts that provide greater benefits than Ontario’s Employment Standards Act, 2000 (“ESA”) are valid and enforceable.

This decision underscores how written agreements can protect employees’ financial security and how the ESA ensures employers cannot escape their obligations through technical or implied arguments.

The Case at a Glance: What Happened?

Paul McCarney worked for Clean Water Works Inc. under a 2019 employment agreement that guaranteed $350,000 in termination pay if his employment ended without cause, a clear benefit above the ESA minimum.

When the employment ended, the employer claimed McCarney had resigned and was therefore not entitled to the payment.

The company also argued the contract was invalid because it supposedly contained an implied termination for cause clause and an implied duty to mitigate, both allegedly inconsistent with the ESA.

An Employment Standards Officer disagreed, ruling that the contract gave McCarney greater protection than the ESA and ordering the company to pay him $350,000.

Clean Water Works appealed the order to the OLRB, relying on Waksdale v. Swegon North America Inc., a leading case on invalid termination clauses.

What the OLRB Decided and Why It Matters

The OLRB dismissed Clean Water Works’ request and confirmed that McCarney’s written employment contract was valid and enforceable.

Key Findings:

  1. No “Implied” Termination for Cause Clause
    The Board rejected the employer’s claim that a termination for cause term could be implied. The written agreement contained no such clause, and Waksdale does not authorise implying one.
  2. No Implied Duty to Mitigate
    Relying on Bowes v. Goss Power Products Ltd. and Barlow v. 6HARMONICS Inc., the Board confirmed that employees have no duty to mitigate unless their contract expressly says so.
  3. Written Agreements That Provide Greater Benefits Stand
    Under section 5(2) of the ESA, written employment contracts giving employees greater benefits than the ESA are enforceable. The ESA is remedial legislation; it exists to protect employees, not to reduce their rights.
Christopher Achkar - Employment Lawyer

As Christopher Achkar, employment lawyer and founder of Achkar Law, explains:

“This case shows how written agreements can protect employees and how Ontario law prevents employers from avoiding their own promises. Employees should never assume that an employer’s interpretation is final; the law is often on their side.”  

Why This Decision Matters for Ontario Employees

This case reaffirms several important principles for Ontario employees:

  1. Employment Contracts Can Offer More Than the ESA Minimum
    If your written agreement promises more than the ESA minimums, those terms can be enforced even through the Employment Standards Branch or OLRB.
  2. Employers Cannot Use the ESA to Avoid Their Obligations
    The ESA sets the floor, not the ceiling. An employer cannot rely on it to walk away from a contract they voluntarily signed.
  3. Ambiguities Are Resolved in Favour of Employees
    Consistent with Rizzo & Rizzo Shoes Ltd. and Nemeth v. Hatch Ltd., any unclear clause is interpreted in favour of the employee, especially where the employer drafted the contract.
  4. No Hidden or “Implied” Clauses Against Employees
    The OLRB made clear that it will not read in implied terms that reduce employee entitlements.

What Ontario Employees Can Learn

If you’ve been terminated or pressured to resign, always review your employment agreement before signing a release or accepting payment. Many employees are entitled to more than the ESA minimum, especially if the contract promises enhanced termination pay. Employers cannot rewrite or reinterpret your contract to deny you what you are owed.

How Achkar Law Can Help

At Achkar Law, we represent employees across Ontario in employment standards and contract disputes. Whether your employer is refusing to pay termination pay, misclassifying your resignation, or challenging your contractual rights, our team can help.

We assist employees with:

  • Reviewing and enforcing employment agreements
  • Challenging wrongful termination or unpaid severance decisions
  • Representing employees before the OLRB and Employment Standards Branch
  • Negotiating settlements and protecting employee entitlements 

Contact Achkar Law

If your employer has refused to honour your employment agreement or termination pay, contact our experienced employment lawyers today.  

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. ©