Baker v. Van Dolder’s Home Team Inc., 2025 ONSC 952
The Ontario Superior Court recently reaffirmed the decision reached last year in Dufault v. The Corporation of the Township of Ignace. In that case, it was decided that the employment contract’s termination provisions violated the Employment Standards Act. In particular, the employment contract’s “With Cause” provision purported to allow the employer to terminate the employee for cause without any payments, contrary to the Employment Standards Act. Additionally, the “Without Cause” provision purportedly provided the employer “sole discretion” to terminate the employee. The Court took issue with this language in Dufault and noted that it is a violation of the Employment Standards Act to terminate an employee while they are on any of the protected leaves outlined in the act.
The Importance of Precedent
The Court acknowledged that it could depart from previous decisions issued from the same level of Court on occasion. In doing so, the Court referred to the Supreme Court’s decision in R v. Sullivan outlining the value of precedent in the Canadian legal system. Departure from precedent is only to occur in very narrow circumstances; namely if:
- The validity of the judgement has been affected by subsequent decisions;
- The judge overlooked some binding case law or a relevant statute; or
- The decision was otherwise made without full consideration.
The Court then turned to consider whether the decision in Dufault fell under any of the outlined circumstances. It held that none of these circumstances operated in the case of Dufault. Consequently, the Court reasoned that the decision in that case must be adhered to on the basis of precedent.
In the present case, the employee faced a very similar set of termination provisions to those found in Dufault. The Court turned its attention towards the “Without Cause” provision first. In this case, the contract purportedly allowed the employer to terminate the employee at any time. The employer attempted to argue that this language is distinct from that found in Dufault. However, the Court did not countenance such arguments. Instead, the Court determined that the purported ability to terminate an employee at any time violated the ESA just as it did it Dufault. The Court likewise indicated that it was bound to adhere to the reasoning in Dufault due to its precedential status. Consequently, the Court ruled that the “Without Cause” provision of the employment contract was unenforceable.
The Court then turned to consider the “With Cause” provision of the employment contract. In the “With Cause” provision, the employer purported to be allowed to terminate the employee on the basis of just cause without providing any termination or severance pay. Like with Dufault, the Court found that this language violated the Employment Standards Act, as it set too low of a standard than that set by the Employment Standards Act regarding when termination without payment could be made. The Court also indicated that, even if the “Without Cause” provision was individually enforceable, the “With Cause” provision’s violation of the Employment Standards Act renders all termination clauses unenforceable.