A Rare Common Sense Win For Employers In Ontario: Li v. Wayfair

The use of the seemingly anodyne phrase "at any time" in employment contracts has recently become the subject of both judicial scrutiny and much industry commentary. In Li v. Wayfair Canada ULC, 2025 ONSC 2959 (Wayfair), the Ontario Superior Court of Justice (the Court) restored some much needed common sense by holding that "at any time" language does not on its own automatically render a termination provision unenforceable.¹

The employment contract

Prior to commencing employment as a senior product manager, the plaintiff in Wayfair signed an employment contract containing the following termination provision

After your probationary period concludes, in the absence of Cause, the Company may terminate your employment at any time and for any reason by providing you with only the minimum statutory amount of written notice required by the ESA or by paying you the minimal amount of statutory termination pay in lieu of notice required by the ESA, or a combination of both, as well as paying statutory severance pay required by the ESA, providing benefits continuance for the requisite minimum statutory period under the ESA and all other outstanding entitlements, if any, owing under the ESA. [emphasis added]

Unhappy with the plaintiff's performance, the employer terminated the plaintiff nine months after he commenced employment on a without cause basis, and paid the plaintiff one week of termination pay pursuant to the terms of his employment agreement and the minimum requirements of the Ontario Employment Standards Act, 2000 (the ESA).

The plaintiff filed a Statement of Claim seeking significant wrongful dismissal damages and argued that he was not bound by the employment contract that he signed less than a year earlier, amongst other things, on the basis that the "at any time" language contained therein rendered the provision unenforceable.

Background and decision

The use of the phrase "at any time" has been a regular feature of the employment law lexicon for decades, commonly used by employers, legislatures and the courts alike. To take but one example: almost 40 years ago, in Jacmain v. A.-G. Can. et al. 1977 CanLII 200, the Supreme Court of Canada was called upon to interpret Section 28(3) of the Public Service Employment Act R.S.C. 1970 c. P-32, which provided that "[t]he deputy head may, at any time during the probationary period give notice to the employee and to the Commission that he intends to reject the employee...". The Supreme Court held that the provision in question meant exactly what it said:

In my view, the whole intent of section 28 is to give the employer an opportunity to assess an employee's suitability for a position. If, at any time during that period, the employer concludes that the employee is not suitable, then the employer can reject him without the employee having the adjudication avenue of redress. [emphasis added]

Indeed, for years plaintiff counsel used to take the position that the failure to include "at any time" language in an employment contract termination provision militated in favour of greater wrongful dismissal damages, as a contract without such language was alleged to create an expectation (or "implied promise") of continued employment for an extended duration.

More recently, however, Ontario courts' hostility towards contractual termination provisions has turned such arguments on their head. The starting point of this departure from longstanding practice and jurisprudence was the Superior Court's decision in Dufault v. The Township of Ignace, 2024 ONSC 1029 (Dufault), which — in a single paragraph of analysis — held that the contractual provision in question "misstates" the ESA by giving the employer the ability to terminate the employee in the employer's "sole discretion" at any time.

While the Superior Court decision in Dufault was upheld on appeal, the Ontario Court of Appeal went out of its way to note that it was deciding the appeal on a narrow basis, which did not include the "at any time" language. Notwithstanding the Court of Appeal's caution, the single paragraph in Dufault was broadened significantly in Van Dolder's Home Team Inc., 2025 ONSC 952 (Baker), which struck down a contractual termination provision solely on the basis of the "at any time" language — even though, unlike Dufault, the contract did not purport to grant the employer "sole discretion" (see our May 2025 post: Another termination provision bites the dust: Baker v. Van Dolder's Home Team Inc. for more on Baker).

The Court in Wayfair declined to follow the reasoning in Baker and found that the termination provision in Mr. Li's employment agreement to be enforceable. In particular — and in accordance with well-established appellate guidance — Justice Dow read the termination provision as a whole and noted that the provision repeatedly stated that payments would be made as "required by" or "under the ESA." As a whole, the contractual termination provision made express and consistent reference to complying with the minimum requirements under the ESA, and thus could not fairly be read as an attempt to contract out of the ESA. Accordingly, Justice Dow in Wayfair concluded that the termination provision was enforceable and dismissed the plaintiff's claim for common law reasonable notice.

Conclusion

Wayfair is a welcome development as it refuses to follow the novel (and, in our view, flawed) reasoning in Dufault and Baker. The ESA, like many employment statutes (e.g., human rights, occupational health and safety, workers' compensation) has long prohibited employers from terminating or otherwise reprising against employees for certain reasons — but nothing in the ESA or other statutes prohibits an employer from terminating an employee "at any time" for legitimate reasons. The Court in Wayfair did not accept the plaintiff's attempt to conflate these two distinct concepts, and properly read the termination provision as a whole to conclude that the use of the phrase "at any time" in and of itself did not render an otherwise valid termination provision unenforceable.

Key takeaways

• Phrase "at any time" does not automatically invalidate a termination provision: Wayfair supports the position that the inclusion of the phrase "at any time" will not automatically render a termination clause unenforceable; however, given the rapidly evolving nature of case law in this area and the conflicting jurisprudence, employers should still exercise caution in using such language.
• Employment contracts to be read as a whole: Courts continue to confirm that employment contracts will be read and interpreted as a whole. The termination provisions in Wayfair were upheld in part because the agreement made clear and consistent reference to complying with employee's minimum entitlements under the ESA. Employers should continue to keep this in mind and emphasize ESA compliance language when drafting termination provisions.
• Rapidly evolving case law: Employment contract termination provision case law, particularly in Ontario, is rapidly evolving and is the continuing subject of judicial scrutiny. Employers should regularly update their employment agreements to ensure the language reflects the latest case law developments.

Footnote

1. A Notice of Appeal for this decision has been filed by the plaintiff, but as of now the appeal has not yet been heard and Wayfair remains good law.

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