What Baker v. Van Dolder's Means for Charity and Non-Profit Employers in Ontario

TL;DR: In Baker v. Van Dolder's Home Team Inc., 2026 ONCA 568, the Ontario Court of Appeal held that "at any time" and "at any time and for any reason" termination clauses do not, by that wording alone, violate the Employment Standards Act, 2000 (ESA). They remain enforceable as long as the contract's savings language guarantees the employee's ESA minimum notice (s. 57) and severance pay (s. 64) regardless of how the termination happens. If your charity or non-profit uses this common template wording, this ruling is what determines whether it still holds up.

If your organization has ever hired staff in Ontario using a standard employment contract template, there's a good chance it already contains the exact wording this case decided. Here's what the Court of Appeal ruled, why it took years to settle, and what it changes for your organization's contracts.

What Happened in Baker v. Van Dolder's Home Team Inc.?

The Court of Appeal reviewed two combined cases with nearly identical facts. Frederick Baker worked as controller and head of finance for Van Dolder's Home Team Inc. starting November 2020, earning $95,000 a year. In March 2023, at age 71, Van Dolder's terminated him without cause. Under ESA s. 57(b), his length of service entitled him to two weeks' notice or pay in lieu. Van Dolder's offered four weeks' pay for a signed release; he declined and sued instead.

The Court also reviewed Song Li's case against Wayfair Canada ULC. Li started as a senior product manager in January 2023 at $221,546 a year and was terminated without cause later that year. His contract used nearly the same "at any time and for any reason" wording. Both employees argued the broad termination language voided their contracts outright, even though neither employer had actually used it to violate the ESA.

Why Did Ontario Courts Disagree Before This Ruling?

Waksdale v. Swegon North America Inc., 2020 ONCA 391, established the rule driving this dispute: if any part of a termination clause is unenforceable, the entire clause fails — even parts the employer never relied on. Dufault v. The Corporation of the Township of Ignace, 2024 ONSC 1029 (aff'd 2024 ONCA 915), applied that rule to strike down a clause giving the employer sole discretion over notice. Together, these cases made courts scrutinize termination wording for any theoretical ESA conflict, not just real ones.

That scrutiny produced a split. In Baker, the Superior Court found "at any time" unenforceable because it could technically be read to permit termination during an ESA-protected leave. In Li, a different Superior Court judge upheld nearly identical wording, reading the contract as a whole. Two similar clauses, two opposite results — which is why the Court of Appeal heard both cases together.

What Did the Court of Appeal Decide?

The Court of Appeal sided with both employers. "At any time" and "at any time and for any reason" reflect the ordinary right of either party to end employment on notice; they don't, by themselves, signal an intent to dodge the ESA. The Court also confirmed that "with cause" clauses using a bar lower than the O. Reg. 288/01 wilful-misconduct standard — intentional, deliberate wrongdoing, not just poor performance — remain enforceable, provided the contract's savings language clearly guarantees ESA minimums apply regardless.

Importantly, the Court did not revisit or soften Waksdale's severability rule — the principle that if any part of a termination clause is unenforceable, the whole clause fails, even parts never actually used. It simply found both contracts ESA-compliant in the first place, so severability was never triggered. A clause that genuinely conflicts with the ESA is still void entirely — this ruling narrows when a clause is found to conflict, not what happens once one does.

How Does This Apply to Your Organization?

Scenario one — funding-driven layoff. A charity's template lets it end employment "at any time, without cause," with a separate clause guaranteeing ESA minimum notice or pay in lieu. When a grant isn't renewed and a position is eliminated, that "at any time" wording now holds up on its own, as long as the ESA savings language is clear. Exposure stays capped at the ESA minimum instead of months of common law notice.

Scenario two — performance-based dismissal. A non-profit's "with cause" clause allows dismissal for repeated missed deadlines — a lower bar than wilful misconduct. After Baker, that clause remains enforceable if it includes savings language confirming the employee still gets full ESA entitlements when the "with cause" standard isn't met.

Scenario three — the gap this ruling doesn't close. A federated charity with an Ontario payroll over $2.5 million terminates an employee with seven years of service. Its notice clause is airtight under Baker. It still owes statutory severance pay under ESA s. 64 — a separate entitlement Baker doesn't address and an enforceable notice clause doesn't eliminate.

What's Now Confirmed as Valid

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What Should Your Organization Check Right Now?

Pull your current templates and locate every termination clause, with-cause and without-cause. Confirm each includes explicit language guaranteeing ESA minimum notice, pay in lieu, and severance pay under s. 64 — not just a vague promise to "comply with applicable law." Older templates aren't automatically safe just because this ruling favours employers; the savings language still has to actually be there. Have new hires, renewals, and updated agreements reviewed against this ruling before rolling them out, and log when each template was last reviewed.

Frequently Asked Questions

Does "at any time" language make a termination clause illegal in Ontario? 

No. Under Baker v. Van Dolder's Home Team Inc., 2026 ONCA 568, this wording alone does not violate the ESA, provided the contract guarantees the employee's statutory minimum entitlements.

Do we need to rewrite our employment contracts because of this ruling? 

Not automatically. Review your templates to confirm they contain proper ESA savings language under s. 57 and s. 64. Baker validates existing wording; it doesn't excuse a contract that's missing those protections.

What happens if our termination clause has no ESA savings language? 

That clause stays vulnerable to being struck down, which can expose your organization to common law reasonable notice instead of the ESA minimum — sometimes 24 months' pay or more for longer-tenured staff.

Does this ruling apply to registered charities and non-profits equally?

Yes. It applies to any employer bound by the ESA, including registered charities and unincorporated non-profits, regardless of size or structure.

Could this decision still be appealed to the Supreme Court of Canada? 

A party could seek leave to appeal. Unless and until the SCC grants leave and rules otherwise, Baker binds Ontario courts.

Does passing the Baker test mean we don't owe severance pay too? 

No. ESA severance pay under s. 64 is a separate entitlement from termination notice. It applies where the employer's Ontario payroll is $2.5 million or more (or it terminates 50+ employees within six months) and the employee has 5+ years of service — regardless of how well the notice clause is drafted.

Key Terms

• ESA minimum notice (s. 57): The shortest notice period, or pay in lieu, the ESA guarantees based on length of service.
• Severance pay (s. 64): A separate, additional payment owed to longer-tenured employees at larger employers, on top of notice.
• Savings language: Contract wording guaranteeing ESA minimums apply even if another clause is later found invalid.
• Wilful misconduct (O. Reg. 288/01, s. 2(1)): The regulatory standard — intentional, deliberate wrongdoing, not just poor performance — that lets an employer deny statutory notice for cause.
• Severability (Waksdale rule): If any part of a termination clause is unenforceable, the whole clause fails, even parts never actually used.

The Bottom Line

Baker v. Van Dolder's Home Team Inc. confirms that "at any time" termination wording is valid on its own, and that Waksdale's severability rule stays intact for clauses that actually conflict with the ESA. Charities and non-profits using this common language can rely on it, provided their savings clause clearly guarantees ESA notice and severance minimums. Review your templates now — the protection has to actually be written in.

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