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Ontario Court Invalidates CIBC Termination Clause: A Warning for Employers Using “Standard” Contracts
If a bank with one of Canada's largest legal departments could not draft an enforceable termination clause, the probability that your organization's standard employment contract is fully compliant with current Ontario case law is worth examining carefully. In Ghazvini et al v. Canadian Imperial Bank of Commerce (2025 ONSC 5218), the Ontario Superior Court found CIBC's termination provisions entirely unenforceable, awarded one employee seven months and another twelve months of common law reasonable notice, and rejected a general savings clause as ineffective to cure the defect. The reasoning tracks directly onto how Ontario courts assess termination clauses under the Employment Standards Act, 2000. Any employer relying on agreements drafted before this line of cases developed should treat this decision as a prompt to review.
Are your employment contracts using standard or template termination language that has not been reviewed against the current Ontario standard?
Template for-cause definitions and general savings clauses are the two most common failure points. Both failed in Ghazvini. If your agreements have not been reviewed post-Waksdale and post-Dufault, they may not protect you. Get them reviewed before your next termination.
Call: 1-800-771-7882 Get Your Contracts ReviewedWhat happened
Two CIBC employees working as Mobile Investment Consultants were terminated without cause as part of a broader corporate restructuring. Both were federally regulated under the Canada Labour Code. CIBC paid each employee their minimum statutory entitlements under the CLC and relied on the termination clauses in their employment contracts to argue that nothing further was owed. The employees challenged the validity of those clauses.
The Court agreed with the employees on all three grounds the clauses were challenged on. The entire termination framework was declared unenforceable and the employees were awarded seven months and twelve months of common law reasonable notice respectively amounts substantially higher than what the contracts contemplated.
The three reasons the clause failed
The for-cause language permitted termination below the statutory threshold
CIBC's contract included an expansive list of conduct that would permit termination for "cause" without notice. Some items on that list did not meet the legal threshold for just cause under the Canada Labour Code they described conduct that would require notice or pay in lieu under statute. A clause that permits termination without notice in circumstances where the law requires notice violates minimum employment standards regardless of how it is framed.
One defective clause voided the entire termination framework
The Court applied the principle that termination provisions must be read as a whole the same principle established in Waksdale v. Swegon North America Inc. (2020 ONCA) for Ontario ESA purposes. Where one component of the termination framework contravenes minimum standards, the invalidity infects the entire framework. CIBC could not sever the defective for-cause clause and rely on the otherwise valid without-cause clause. The entire structure fell.
A savings clause cannot cure a clause that was defective at signing
CIBC included a general promise in the contract to comply with applicable employment standards legislation. The Court rejected this as ineffective to save the invalid for-cause clause, consistent with Rossman v. Canadian Solar Inc. (2019 ONCA 992). A savings clause cannot transform a clause that was unlawful when signed into a valid one. The compliance obligation must be built into the clause itself through precise, unambiguous language not grafted on through a general promise elsewhere in the agreement.
Four employer lessons from this decision
Template for-cause definitions are the highest-risk provision in most employment contracts
Many standard employment contract templates include broad lists of conduct that will permit termination for cause without notice. Where any item on that list describes conduct that would not meet the legal threshold under the ESA or the CLC the narrow standard of wilful misconduct, disobedience, or wilful neglect of duty that is not trivial and has not been condoned the for-cause clause is defective. Under Waksdale, Dufault, and now Ghazvini, that defect voids the entire termination framework. The for-cause clause is the most common single point of failure in Ontario employment contracts.
Paying statutory minimums at termination does not cure a defective clause
CIBC paid the employees their statutory minimums under the Canada Labour Code. This made no difference to the enforceability analysis. Ontario courts assess whether the termination clause complies with employment standards as written at the time of signing not whether the employer happened to comply with the statute when it acted. An employer who pays statutory minimums in good faith but whose contract was defective at signing is still exposed to common law reasonable notice. Compliance at the time of termination is not a substitute for compliance at the time of drafting.
Savings clauses provide no protection against a void termination framework
A general promise to comply with employment standards legislation cannot save a termination clause that violated those standards when it was drafted. This has been the law since Rossman v. Canadian Solar Inc. in 2019 and Ghazvini reconfirms it. The only effective approach is to draft the clause in compliance with the applicable statute from the outset using precise language that tracks the statutory threshold, does not create ambiguity, and does not purport to permit anything the statute prohibits. A savings clause does not do this work. It simply acknowledges that the clause might be defective without fixing the defect.
Agreements drafted before the current line of cases need to be reviewed now
The standards against which termination clauses are assessed have shifted significantly over the past five years through Waksdale (2020), Dufault (2024), Boyle v. Salesforce (2025), and now Ghazvini (2025). Employment agreements drafted before this body of case law developed may contain for-cause language, savings clauses, or ambiguous provisions that would not survive scrutiny under the current standard. The cost of a contract review is a fraction of the cost of a common law notice award. If your agreements have not been reviewed in the past two to three years, that review is overdue.
When did you last have your employment contracts reviewed against the current Ontario standard?
Ghazvini joins Waksdale, Dufault, and Boyle v. Salesforce in a clear pattern: standard termination clauses fail, savings clauses do not save them, and the result is common law reasonable notice. Our team advises employers on employment agreements and termination clause compliance. Get your contracts reviewed now.
Get Your Contracts Reviewed Or call us: 1-800-771-7882Practical takeaways for Ontario and federally regulated employers
Questions about termination clause compliance or employment contract review in Ontario?
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