The Court of Appeal heard two appeals concerning the enforceability of termination clauses in employment contracts.
In both cases, the employees argued that provisions allowing termination without cause 'at any time' or 'for any reason' violated the Employment Standards Act (ESA) by theoretically permitting termination in circumstances prohibited by statute, such as after a leave or as a reprisal.
The Court rejected this literal interpretation, holding that employment contracts must be read in context to determine the parties' objective intentions.
Given the contracts' express commitments to comply with ESA minimums, the 'at any time' language simply meant the termination would be legally effective regardless of when it occurred, not that the employer could violate statutory prohibitions.
The Court also upheld a 'with cause' provision that defined cause more broadly than the ESA's 'wilful misconduct' standard, because it expressly preserved the employee's right to ESA minimums if terminated for cause.
The appeal in Baker was allowed, and the appeal in Li was dismissed.
