The Township, the Baker and the Furniture Maker

Why It Matters

The outcome will determine whether employers can rely on “at any time” clauses to limit liability, potentially saving millions in severance or exposing them to extensive common‑law damages.

Key Takeaways

• Baker and Li cases examine “at any time” termination language
• Waksdale previously struck entire clauses with ESA breaches
• Ontario caps statutory notice at eight weeks, severance at 26 weeks
• Invalid “at any time” clause could cost employers up to 24 months pay
• Ruling will set definitive standard for termination provisions

Pulse Analysis

The legal landscape for employee termination in Ontario has evolved dramatically over the past six decades. Starting with the 1960 Bardal decision, courts established a reasonable‑notice framework based on age, tenure, and role. Machtinger (1992) reinforced that contracts cannot contract out of statutory minimums, and the 2020 Waksdale ruling took a bold step by invalidating any clause that mixed statutory‑compliant and non‑compliant language, effectively striking entire termination provisions that contained an unlawful “with cause” element. This backdrop set the stage for the current high‑profile disputes.

In February 2025, the Superior Court’s Baker decision applied the Waksdale logic to a clause that allowed termination “at any time,” deeming it unenforceable. Just months later, the Li case reached a contrary conclusion, holding a similar clause enforceable because the agreement, read as a whole, met statutory requirements. Both cases were heard together on March 25, 2026, and the Court of Appeal’s pending judgment will clarify whether the “at any time” phrasing is a fatal flaw or a permissible flexibility. Legal scholars anticipate that the court will either cement Waksdale’s sweeping effect or carve out a nuanced exception, providing much‑needed predictability for HR practitioners.

For employers, the stakes are substantial. Ontario’s Employment Standards Act caps statutory notice at eight weeks and severance at 26 weeks—totaling 34 weeks of pay—while common‑law judgments can extend liability to as much as 24 months. A definitive ruling could either protect companies that rely on “at any time” language to limit payouts or force a massive contract overhaul to avoid costly litigation. In the interim, risk‑averse firms are already reviewing termination clauses, consulting counsel, and updating policies to align with the most conservative interpretation, ensuring they remain compliant regardless of the appellate outcome.