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Ontario Court Finds Termination Clause Unenforceable
On March 28, 2025, the Ontario Superior Court of Justice released its decision in Boyle v. Salesforce.com, 2025 ONSC 2580. The ruling offers a critical reminder to Ontario employers: a termination clause that is not compliant with the Employment Standards Act, 2000 (“ESA”), or at least ambiguous as to whether it is compliant, is unenforceable even in contracts used by sophisticated multinational companies.
The decision also sheds light on employee entitlements to bonuses and benefits during the notice period, as well as how courts assess mitigation efforts.
This article breaks down what Ontario employers need to know, key takeaways from the decision, and how to proactively reduce the risk of wrongful dismissal claims.
What Happened in Boyle v. Salesforce.com?
The plaintiff, a senior success signature engineer, was terminated without cause after roughly eight years of service. He first learned of his termination by text from a colleague who advised him that he had been deactivated on Slack, and was on holiday when he later received written notice of his termination by email.
His employment agreement included a termination clause purporting to limit his entitlements. It also referenced “at-will” employment and incorporated documents intended for global use, despite “at-will” employment not being recognized in Ontario.
The employee brought a wrongful dismissal claim, challenging the validity of the termination clause and claiming he was entitled to 14 months’ notice, bonus payments, and additional damages.
As Christopher Achkar, employment lawyer and founder of Achkar Law, explains:
“Employment contracts aren’t one-size-fits-all. As this case shows, failing to align with Ontario’s laws can be costly. Employers must be proactive, clear, and compliant to reduce legal risk.”
Why the Termination Clause Was Unenforceable
Justice Brownstone held that the termination clause in the employment agreement was not compliant with the ESA, or at least ambiguous as to whether it was compliant, and was therefore unenforceable. The Court criticized the employer’s use of a global contract, stating:
“There is no practical way that an employee in Ontario could be aware, when signing the contract, of the terms that would govern his termination. The ambiguity… is explained by [the employer]’s choice to use one contract for employees in many jurisdictions.”
As such, Ontario employers should be mindful that ambiguity in a termination clause regarding compliance with the ESA will likely render the clause unenforceable and entitle the employee to common law reasonable notice.
Reasonable Notice and Mitigation: How the Court Assessed Damages
Although the employee claimed his reasonable notice was 14 months, the Court ultimately awarded 8 months, reduced from an initial assessment of 11 months due to concerns related to mitigation.
The Court considered several key factors in assessing his notice period, including:
- He’s nearly 50 years of age
- He’s had 8 years of service
- His position and responsibilities; and
- Availability of comparable employment
Regarding mitigation, the worker applied to 18 jobs before focusing on further training. The Court noted that while his efforts were imperfect, they were not unreasonable. However, the Court reduced the notice period by 3 months after he refused to produce his tax documents during litigation, drawing an adverse inference that the documents would not support his claims.
Bonus and Benefits: Still Owed During Notice Period
The employee received a $12,808 bonus in 2022 and sought a bonus payment for the 2023 fiscal year and a pro-rated bonus entitlement over the notice period. The employer argued that their plan excluded terminated employees but failed to provide evidence to support this claim.
The Court awarded the bonuses, noting that the employee ought to have been employed when the bonuses were paid out and is entitled to a pro-rated bonus during the notice period.
The Court also awarded:
- Pro-rated group benefits
- RRSP contrib utions
- Pro-rated vacation pay
- Credit for amounts already paid
This decision confirms that if bonuses or benefits are integral components of compensation, they may be owed during the notice period unless explicitly and lawfully excluded.
No Bad Faith, But Method of Termination Still Matters
The employee claimed aggravated and punitive damages, citing the impersonal manner of termination. However, the Court found that while the method was “not ideal,” it did not demonstrate bad faith by the employer.
The employer was undergoing a large-scale layoff affecting over 3,000 employees. The Court distinguished this from cases involving deliberate employer misconduct and denied additional damages.
Still, employers should note that failing to handle dismissals with empathy or professionalism, especially for long-term employees, can expose them to reputational damage and bad faith claims.
Key Takeaways for Ontario Employers
The Boyle decision offers several important lessons for employers operating in Ontario:
1. Use Ontario-Specific Employment Contracts
Do not rely on global or U.S.-style contracts containing “at-will” language. Contracts must be tailored to Ontario’s legal landscape and clearly comply with the ESA.
2. Review and Update Termination Clauses
Outdated or ambiguous termination language can invalidate the entire clause. Regular legal review is critical to ensure enforceability.
3. Factor in Bonuses and Benefits
Unless properly excluded in a clear and legal manner, bonuses and benefits are typically owed throughout the notice period. Employers must document bonus plan terms carefully.
4. Handle Dismissals Respectfully
Even in large workforce reductions, employers should aim for transparency and professionalism. Poor communication, even if legally permissible, can lead to claims of bad faith.
5. Don’t Overlook Mitigation
Employers should document mitigation arguments and request financial records early. Production delays can affect damage calculations.
How Achkar Law Can Help
At Achkar Law, we help employers across Ontario avoid costly termination disputes through tailored contracts, compliance audits, and proactive HR strategies.
Whether you’re restructuring, updating your employment contracts, or defending against a wrongful dismissal claim, our experienced employment lawyers can assist with:
- Drafting and reviewing enforceable termination clauses
- Legal advice on bonuses and entitlements during notice periods
- Litigation strategies for wrongful dismissal and mitigation claims
- Workforce planning and employee termination protocols
Contact Achkar Law
If you’re an employer in Ontario and want to ensure your employment agreements and termination practices comply with legal standards, contact Achkar Law today.
Call toll-free: 1-800-771-7882 | Email: [email protected]
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. ©
Workplace Law Topics
Employees: Wrongful Dismissal, Termination and Severance, Employee Contracts, Workplace Disputes and Litigation
Employers: Employment Agreements, Employee Terminations and Layoffs, Employment Litigation, Employment Policies and Procedures