(c) After you successfully complete the first three months of your employment, [NYX] may terminate your employment at any time without cause, upon providing you with notice, or pay in lieu of notice, benefits continuation and severance pay (if applicable) and any other benefits or entitlements strictly required in accordance with the minimum requirements set out in the ESA. It is agreed and understood that the provision of such notice or pay in lieu of notice, severance pay (if applicable), benefits continuation and any other benefits or entitlements required under the ESA shall constitute full and final satisfaction of any claim which you might have arising from or relating to the termination of your employment whether such claim arises under statute, contract, common law or otherwise, save any claim that cannot be released by operation of a statute of Ontario.
(d) The Company may terminate your employment at any time for cause, without any obligation to you on account of notice or pay in lieu of notice, severance pay, or other obligation, other than accrued amounts owed to the date of termination. [Emphasis added].”
The court noted that NYX’s use of the phrases “at any time” and “at any time and for any reason”, violated the ESA. The court found that these termination clauses violated the ESA’s general prohibition against an employer attempting to contract out of or waive any employment standard in the ESA.
The court followed the recent decisions in Dufault and Van Dolder’s, which have similarly found that terms allowing employers to terminate “at any time” violate the ESA, noting that employers do not have an “absolute right” to dismiss employees. The court in this case gave the example that an employer cannot dismiss an employee as reprisal for exercising a right under the ESA, and therefore contractual language that would give an employer the ability to terminate “at any time and for any reason” is contrary to the ESA.
The court then applied the Ontario Court of Appeal’s finding in Waksdale v. Swegon North America Inc., 2020 ONCA 391, which established that a clause that violates the ESA will render an entire termination provision as void and unenforceable. Accordingly, the violations found in paragraphs (a), (c), and (d) resulted in the entire termination provision being set aside in its entirety. This resulted in Chan receiving approximately $45,000 for pay in lieu of notice.