Canada: Contract of Employment

Employment agreements are often treated as risk management tools. Employers rely on them to set workplace expectations and limit liability on termination. But an agreement only serves that purpose if it actually survives judicial scrutiny, and for the past few years, termination clause litigation in Ontario has increasingly turned on whether a court can find some theoretical reading of a clause that would violate the Employment Standards Act, 2000 ("ESA"), even where that plainly is not what the parties meant.

The Administrative Labour Tribunal examined whether an employee's resignation during a nine-month working notice period constituted constructive dismissal or a voluntary departure. The case explores the legal distinction between an initial termination announced by the employer and a subsequent resignation, and whether management actions during the notice period can transform a resignation into a dismissal without cause.

The Ontario Court of Appeal released multiple significant decisions during the week of August 3-7, 2026, addressing critical issues in employment law, medical malpractice, defamation, and property law. Notable rulings clarified the enforceability of termination provisions in employment contracts, particularly regarding "at any time" clauses and their consistency with Employment Standards Act minimum requirements, while also examining RSU entitlements and the application of statutory notice provisions.