By Barry W. Kwasniewski and Martin U. Wissmath

In Li v. Wayfair Canada ULC, decided on July 9, 2025, the Ontario Superior Court upheld a “for cause” termination clause in the employment agreement that allowed the employer to terminate employment “at any time”. The court dismissed the plaintiff’s claim for common law notice damages, finding that the employment agreement complied with the Employment Standards Act, 2000 (ESA) and was therefore enforceable. For charities and not-for-profits, this decision provides reassurance that properly drafted clauses limiting entitlements to ESA minimums may withstand judicial scrutiny.

The Plaintiff, Song Li (the “Employee”), sought summary judgment arising from his dismissal without cause from his position as Senior Product Manager with the Defendant, Wayfair Canada ULC (the “Employer”). The Employee worked for the Employer from January 23, 2023, to October 17, 2023, totalling just under nine months of employment. At the time of his dismissal, the Employee was 45 years old and earned an annual salary of $221,564 CDN. Upon termination, he was given one week of salary with benefits, the minimum required by the ESA, in accordance with the employment contract. He sued for common law notice damages.

The main issue before the court was whether the termination clause was enforceable. The termination clause in the employment contract stated:

The Company may terminate your employment at any time for Cause without notice, pay in lieu of notice, severance, benefits continuance or other compensation or damages of any kind … unless expressly required by the ESA in which case only the minimum statutory entitlements will be provided.

Notably, the definition of “cause” included reference to the requirements under the ESA:

It should be noted the second page of the Employment Agreement, under the heading “Joining Bonus” contains the sentence “For all purposes in this letter, “Cause” means any willful misconduct, disobedience, or willful neglect of duty that is not trivial and has not been condoned by the company and that constitutes “cause” under the ESA”.

The court further noted that the without-cause termination clause also included reference to the ESA requirements:

“After your probationary period concludes, in the absence of Cause, the Company may terminate your employment at any time and for any reason” which goes on to state “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”.

The Employee relied on the 2024 decision in Dufault v. The Corporation of the Township of Ignace where the court held that an employer’s right to terminate was not absolute and held that the inclusion of the words “at any time” in the termination clause rendered it unenforceable. The Court of Appeal upheld the trial decision, and the employer’s application for leave to appeal was dismissed. However, the court distinguished this case from Dufault as the termination clause in Dufault allowed for termination in some cases in violation of the ESA requirements. By contrast, the termination clause in this case simply limited the Employer’s obligations to those required under the ESA, so the use of the words “at any time” was found to not invalidate the termination clauses.

The decision in this case provides some clarification for employers following the decision in Dufault. Specifically, in finding that the termination clause in this case was enforceable, the court highlighted that termination clauses, both with and without cause, should be read as a whole and as long as they comply with the required employment legislation, they can be enforceable. In other words, it confirms that the inclusion of the words “at any time” may not automatically render a termination clause unenforceable, although the case law remains not entirely clear on that point considering the precedent established in Dufault. This case demonstrates how closely courts will review contractual termination clauses to determine enforceability.

​Read the September 2025 Charity & NFP Law Update