Are Your Termination Clauses Enforceable in 2025? How Waksdale Still Shapes Ontario Severance Rights
If you were just handed a new contract, or you’re considering a severance offer, the fine print in your termination provisions can decide whether you get only ESA minimums or substantial common-law notice. Since the Ontario Court of Appeal’s landmark decision in Waksdale v. Swegon, courts have continued to strike down clauses that stray from the Employment Standards Act (ESA). If you want an immediate read on your contract, an employment lawyer can spot red flags in minutes and map next steps before you sign anything.
What Waksdale changed—and why it still matters in 2025
Before Waksdale, many employees assumed a well-worded “without cause” section would hold up. The Court of Appeal held that all termination language must comply with the ESA, and if any part (including “for cause” provisions) violates the statute, the entire termination scheme can be void, even if your contract has a severability clause. That shift means a single drafting error can unlock common-law severance, which we routinely pursue through our employment law firm for employees across Ontario.
Courts also continue to stress that ESA minimum standards are a floor, not a ceiling; clauses that try to contract out of those minimums are unenforceable. If your employer is pressuring you to sign an “updated” agreement after a promotion or restructure, get independent advice from an Ontario employment lawyer so you don’t surrender rights you already have.
ESA basics: the non-negotiable floor your clause must respect
The ESA sets mandatory rules for notice, pay in lieu, benefits continuation and, for some employees, severance pay. Any clause that gives less than those minimums—directly or by implication—fails. When we review agreements, we test the wording against Ontario’s official termination of employment guidance to ensure it truly meets statutory minimums before considering common-law exposure.
Because small wording choices can have big consequences, even “neutral-sounding” phrases like “no pay if dismissed for cause” can be fatal if they don’t track the ESA’s narrower wilful misconduct standard. If your clause uses broad “just cause” language, speak with a Toronto wrongful dismissal lawyer before you assume you’re limited to bare minimums.
After Waksdale: strict scrutiny—plus a 2022 reminder in Rahman
Post-Waksdale, the Ontario Court of Appeal reinforced a zero-tolerance approach: if any termination wording breaches the ESA, the limitation on notice fails. In 2022, the Court in Rahman v. Cannon Design confirmed sophistication or legal advice prior to signing the agreement can’t save a defective clause—ESA compliance is binary. We rely on that principle when negotiating with employers, and we explain it plainly during consults so you understand your leverage.
The takeaway: even if you negotiated your deal, courts won’t enforce language that undercuts statutory protections. If HR says “these are standard,” have our employment law firm vet the draft before you sign.
The common drafting traps that still void clauses
When we audit contracts for employees in Toronto and the GTA, we often find the same issues:
- Overbroad “for cause” language. Clauses that deny ESA amounts for anything labelled “cause” usually conflict with the ESA’s wilful misconduct threshold. A quick review with an employment lawyer can confirm if the wording is too broad.
- Silence on benefits continuation. If the clause doesn’t preserve benefits during the ESA notice period, courts may treat it as non-compliant. Our employment law firm flags this routinely.
- Ambiguous severance pay references. Employees at larger employers may qualify for ESA severance in addition to termination pay; clauses that muddle this are vulnerable. Ask a Toronto wrongful dismissal lawyer to check whether you meet the severance criteria.
- Severability “fixes” that don’t fix. A severability clause won’t rescue illegal termination language. If HR relies on that line, get advice from an Ontario employment lawyer before accepting a package.
How “just cause” and “wilful misconduct” diverge—and why you should care
Employers often argue “cause” to avoid paying any termination amounts. But the ESA standard of wilful misconduct is stricter than common-law “just cause.” You can be fired for cause yet still be owed ESA minimums if your conduct wasn’t intentional and wilful. We explain this distinction in plain language during consults with a Toronto employment lawyer, because it directly affects how much you should be paid.
That difference also shapes strategy when we negotiate with employers. If the termination provision is illegal—or relies on broad “cause” wording—you may be entitled to common-law notice, which our employment law firm uses as leverage to improve severance outcomes.
Constructive dismissal risk: when “new” duties or pay cuts gut your rights
We regularly see employers use restructuring or “cost-saving measures” to roll out new contracts with tighter termination provisions. Significant unilateral changes can trigger constructive dismissal, which is where our Toronto constructive dismissal lawyer steps in to preserve your entitlements.
If your employer is citing organization-wide changes, our blog on restructuring and layoffs in Ontario explains why business reasons don’t excuse ESA non-compliance, and how timing your response can influence both severance and references. We connect those dots early in a strategy call with a Toronto employment lawyer so you don’t sign away leverage.
Culture and harassment: pressure to accept “standard” terms
Toxic cultures often produce hasty, one-sided contracts. If you’re being rushed to agree, review power dynamics and workplace safety alongside the paperwork. Our guide to workplace harassment rights in Ontario details your protection against reprisals for raising concerns, which we frequently pair with contract strategy through our employment law firm when clients need both legal and practical solutions.
If you’re unsure whom to speak with, start with our team to match your situation to the right lawyer, then coordinate a plan with a Toronto employment lawyer who knows your industry.
Signing a new agreement? Protect yourself before you pick up the pen
If HR presents a “promotion letter” or mid-employment contract, insist on consideration (something of value in exchange for your new promises) and time for independent legal advice. We routinely revise termination language with employers so it meets ESA minimums and doesn’t strip common-law rights you already earned. To avoid missteps, contact a Toronto employment lawyer before accepting the new terms, or use our contact page to book a fast review.
If you’re outside the core, you can still access our services through Mississauga employment lawyers or a Kitchener employment lawyer who can meet virtually and coordinate strategy with our Toronto office.
Already dismissed? Why a quick contract audit can unlock more
Even if you’ve been terminated, the language you signed can make or save your case. If we find a Waksdale-type defect, we press for common-law notice far beyond ESA minimums. We also look at benefits continuation, bonus/commission plans, and restrictive covenants, which our Toronto wrongful dismissal lawyers regularly negotiate into stronger settlements.
How we argue these cases (and why employers listen)
In negotiations and litigation, we compare your clause to ESA requirements and the strict line courts adopted after Waksdale and Rahman—then we present a common-law assessment grounded in tenure, age, position and market conditions. Employers respond to concrete risk: a clause that fails means exposure to months (or years) of notice. If you want that leverage on your side, start with our employment law firm and we’ll assemble the facts quickly.
When needed, we reference the government’s ESA guide to termination to anchor minimum standards and cite Rahman’s reaffirmation that non-compliant wording cannot be rescued by sophistication or legal advice, a point we surface early through a Toronto employment lawyer in severance talks.
FAQs
Is a severability clause enough to save a bad termination provision?
Usually no. Ontario courts routinely ignore severability when the termination scheme breaches the ESA. Have a Toronto employment lawyer review the text before relying on it.
My contract says “no pay if dismissed for cause.” Is that legal?
Not if “cause” is broader than wilful misconduct under the ESA. We often convert that wording into a win for common-law notice; start with a quick review by our employment law firm.
HR gave me a new contract after a promotion—should I sign?
Not without consideration and legal review. We frequently negotiate ESA-compliant language and preserve your existing rights; book with a Toronto employment lawyer.
I’m worried about retaliation if I push back. What are my options?
You remain protected from reprisals and harassment. Pair our workplace harassment guide with advice from a Toronto constructive dismissal lawyer to plan a safe response.
The bottom line
In 2025, termination clauses live or die on ESA compliance. Thanks to Waksdale—and the Court of Appeal’s Rahman follow-up—courts are unforgiving of drafting that undercuts minimum entitlements for employees. That’s good news for employees: a defective clause can open the door to meaningful common-law severance. If you want a fast, practical assessment, connect with the Unified LLP team and contact us to protect your rights before you sign.
