As 2025 draws to a close, Ontario and federal employment law continue to evolve. This year has introduced a combination of new statutory entitlements, compliance responsibilities, and judicial rulings.

Staying informed is essential for employers and HR professionals. The following highlights the most significant developments of 2025, as well as some changes expected in 2026. Review the updates and assess their impact on your organization. If necessary, consult a legal expert. Being proactive now can prevent issues later.

#1: Contradicting Court Decisions: Does “At Any Time” violate the ESA?

Ontario courts issued conflicting rulings in 2025 regarding whether the phrase “at any time” in termination clauses violates the Employment Standards Act, 2000 (“ESA”).

In Baker v. Van Dolder’s Home Team Inc. (“Baker”), Justice Sproat held that “at any time” invalidates the termination without cause clause, quoting Dufault v. The Corporation of the Township of Ignace (“Dufault”). Similarly, in Chan v. NYX Capital Corp., Justice Parghi found the phrase “at any time and for any reason” illegal.

Conversely, in Li v. Wayfair Canada ULC (“Wayfair”), Justice Dow upheld a similar clause containing “at any time for any reason”, stating it was “distinguishable” from previous rulings but without a clear explanation. Additionally, in Jones v. Strides Toronto, Justice Moore ruled that “at any time” alone does not breach the ESA, as it differed from Dufault due to its association with “sole discretion.”

Taken together, some judges view “at any time” as inherently offending the ESA’s protective purpose; others treat it as harmless when paired with clear ESA-anchored language. The Court of Appeal will hear the Baker and Wayfair cases together in early 2026. The “at any time” debate is expected to be resolved next year.

Takeaway: Until the Court of Appeal rules on this issue, employers should avoid “at any time,” “for any reason,” and “in its sole discretion” phrasing altogether and use precise ESA-compliant language to reduce risk.

#2: Ontario Court Of Appeal Upheld an ESA Minimum Termination Clause

Not surprisingly, in Bertsch v. Datastealth Inc., the Ontario Court of Appeal upheld a 2024 lower court decision, holding that a termination clause limiting the termination entitlement to the ESA minimum was enforceable.

Takeaway: Properly drafted termination clauses that clearly exclude common law entitlements and limit termination entitlements to the ESA can withstand court scrutiny. To mitigate the risk of significant common law payouts, employers should seek legal counsel to draft and review these clauses effectively.

#3: Ontario Court Held a Global Contract Unenforceable

On the contrary, in Boyle v. Salesforce.com, the court held that Salesforce’s global “for cause” clause was unenforceable under Ontario law because it created ambiguity and failed to comply with the ESA. The contract combined U.S.-style “at-will” language with local carve-outs, stating that employment could be terminated “at any time, with or without cause,” except in “certain non-U.S. jurisdictions.” The court found it impossible for an Ontario employee to know which provisions governed termination, especially when the agreement directed employees to consult the company’s legal department if uncertain.

The court concluded that the clause was ambiguous and non-compliant with the ESA, rendering the entire termination provision void and entitling the employee to common law notice.

Takeaway: The decision underscores that one global contract is unlikely to fit all jurisdictions. Employers operating in multiple jurisdictions must ensure Ontario contracts have termination language that specifically complies with the ESA.

#4: Arbitrary Definition of “Cause” Invalidates a Termination Clause

Another lesson for employers. In Ghazvini et al v. Canadian Imperial Bank of Commerce, the Ontario Superior Court held that CIBC’s termination clause was illegal and unenforceable because it defined “cause” more broadly than the Canada Labour Code (“CLC”) permits. The clause listed examples such as unsatisfactory performance, breach of policy, and failure to complete training—none of which necessarily meet the statutory threshold of serious misconduct under section 229.1 of CLC. Since the “for cause” wording breached the statute, the entire termination provision was void, and the employees were entitled to common law reasonable notice instead of the contractual two-weeks-per-year formula.

Takeaway: The case reinforces that federally regulated employers should keep their termination clauses simple and avoid any “for cause” definitions that extend beyond statutory limits.

 #5: Termination Clause Unenforceable Because of a Missing Comma

In Brocklehurst v. Micco Companies Limited, the Nova Scotia Supreme Court ruled that the employer’s termination clause did not effectively limit common law notice due to grammatical ambiguity and improper statutory reference. The clause stated that upon termination without cause, the employee would receive “only such minimum notice of termination, or pay in lieu thereof, and severance pay (if applicable) to which you are entitled under the Nova Scotia Labour Standards legislation.”

The court found that the phrase “to which you are entitled” could only attach to “severance pay,” not “notice of termination,” due to a missing comma, leading to ambiguity. Additionally, the reference to “severance pay,” a term not recognized in Nova Scotia’s Labour Standards Code, further complicated the clause’s intent and reinforced its ambiguity. As a result, the employer was ordered to pay 8 months’ reasonable notice under common law, instead of the 4-week statutory minimum.

Takeaway: Employers should realize the necessity for clear and unambiguous language in termination clauses. Even a grammatical error can lead to a huge payout.

#6: “Buyer’s Remorse” Doesn’t Change the Settlement Deal in Emails

In Johnstone v. Loblaw Companies Limited, the Ontario Superior Court upheld that a settlement agreed upon via email is binding, even without signed formal minutes. Mr. Johnstone, an employee of Loblaws, accepted a settlement offer that was contingent on mutual agreement on documentation. After receiving a draft, he attempted to include new conditions regarding a house purchase, but Loblaws declined to renegotiate and sought summary judgment to enforce the settlement.

The court ruled that all essential terms—such as notice, legal fees, and reference letters—were agreed upon and that the “subject to mutual agreement on the supporting documentation” phrase did not provide an escape. The court noted that unsigned documentation does not prevent a binding agreement when key terms are mutual. Johnstone’s attempt to modify terms was deemed “buyer’s remorse,” which cannot undo an otherwise enforceable contract. The court granted summary judgment to Loblaws and dismissed the employee’s wrongful dismissal claim.

Takeaway: Once the parties confirm agreement on essential terms, even in an informal way, a party cannot later withdraw simply because formal minutes remain unsigned. Maintain clear, contemporaneous records of settlement negotiations and terms agreed upon, as these will determine enforceability if disputes arise.

#7: Ontario: Long-term Illness Leave in Effect

On June 19, 2025, a maximum 27-week long-term illness leave for employees who have worked at least 13 consecutive weeks came into effect, under the ESA. This leave is unpaid. An employee must obtain a medical certificate indicating a serious medical condition and the duration of time the employee will be unable to work due to this condition. Employers must retain records related to the leave for 3 years after it ends.

Takeaway: The new long-term illness leave policy will require Ontario employers to be prepared to manage workforce coverage during extended absences, revise leave policies and properly retain HR records.

#8: Ontario: Certain Information Must Be Provided to Employees

Beginning on July 1, 2025, under the ESA, certain employers must provide new employees with the following written information before their first day of work or as soon as possible after:

• Legal and any operating business name
• Contact information (address, phone number, contact names)
• General description of the initial work location
• Starting hourly wage or commission
• Pay period and payday
• Description of initial anticipated work hours

Takeaway: Although exemptions apply to employers with fewer than 25 employees and to assignment employees from temporary help agencies, it is still recommended for all employers to include the information above in their written employment contracts/offers.

#9: Federal: Leave Related to Pregnancy Loss

Under expected changes to the CLC, employees in federally regulated workplaces will be entitled to a leave of absence after a pregnancy loss , if:

• their pregnancy does not result in a live birth;
• their spouse or partner’s pregnancy does not result in a live birth; or
• they intended to be the legal parent of a child from another person, like a surrogate.

The leave’s length will be up to eight weeks for stillbirths (after the 20th week or 500g) and up to three days for other pregnancy losses. The first three days are paid. These changes are expected to take place by the end of 2025.

Takeaway: Federally regulated employers should prepare to implement policies and support structures that accommodate the new leave provisions for pregnancy loss under the CLC, and consider these provisions when making workforce management plans.

#10 Ontario: New Job Posting and Pay Transparency Requirements in 2026

In 2026, Ontario employers with 25 or more employees must disclose the expected compensation or a salary range when publicly posting job openings. The salary range must not exceed $50,000. This requirement does not apply to positions offering salaries over $200,000.

Additionally, employers must indicate whether artificial intelligence (AI) is involved in the hiring process. Employers are prohibited from requiring Canadian experience. Job postings must clearly specify whether they pertain to an existing vacancy. Lastly, candidates must be informed of hiring decisions within 45 days following their interviews.

#11: Federal New Leaves in 2026

• Certain Bereavement Leaves May Become Longer in 2026

CLC currently permits 10 days of leave of absence in the event of the death of a member of their immediate family, or the death of a family member for whom the employee was taking compassionate care leave or critical illness leave. Amendments to CLC will permit up to eight weeks of bereavement leave for the death of an employee’s child or the child of their spouse or partner. These amendments may come into effect in 2026.

• Leave for Placement of Child May Come into Effect in 2026

A new unpaid leave of up to 16 weeks has been introduced to CLC to assist federally regulated employees who need to manage responsibilities related to placing a child(ren) in their care, whether it be through adoption or surrogacy. Employees can receive EI benefits during this leave. This new leave may take effect in 2026.

 Conclusion

As we look ahead, it is crucial for employers in Ontario and across federally regulated workplaces to stay informed and proactive regarding these evolving employment laws. The developments of 2025 highlight the importance of careful compliance and the nuances involved in drafting employment documents, including contracts, policies, and job postings. Employers should consult with legal experts to ensure their documents align with the latest legal requirements while effectively addressing the needs of their workforce.