The farm worker had given 40 years of his life to the same employer. Four decades of early mornings, seasonal rhythms, and the kind of loyalty that seems quaint in our gig economy. When his employer finally pushed him out the door, a court handed down a $440,000 judgment that included a quarter-million-dollar retirement allowance, plus aggravated and punitive damages for good measure.
If that doesn’t make you reach for your company’s employment contracts, nothing will.
The great termination clause collapse
There’s a trend we’ve noticed recently in the coverage we do at HR Law Canada: Courts, arbitrators, and other decision-makers are sending an unmistakable message to employers: the era of sloppy termination practices is over.
The wrongful dismissal landscape has shifted so dramatically that some employment lawyers are quietly telling clients that fewer than 10 per cent of termination clauses would survive judicial scrutiny. That’s not a typo — nine out of 10 are legally worthless the way things have shifted. (To be clear, that’s also not a scientific number, but it drives the point home.)
The culprit? Language that seems innocuous enough. Courts are striking down clauses that give employers the right to terminate “at any time” because, as one Ontario judge noted, an employer’s right to dismiss isn’t absolute. The Employment Standards Act prohibits termination in specific circumstances — during leaves, for whistleblowing, for exercising statutory rights. When your contract suggests otherwise, even in passing, the entire termination provision collapses.
Consider the case of Van Dolder’s Home Team Inc., which thought it had protected itself with standard termination language. The company’s contract allowed them to fire an employee “at any time” while promising to follow employment standards. The court? Unimpressed.
Despite the employer’s good intentions, the judge ruled that general promises to comply with the law don’t cure specific violations within the contract. The entire termination clause was tossed, leaving the company liable for common law notice — potentially months of additional severance.
This isn’t legal hairsplitting. It’s a judicial awakening to the power imbalance in employment relationships. Courts are reading contracts through the lens of the reasonable employee, not the sophisticated lawyer who drafted them. If a clause could mislead someone into signing away their rights, it fails the test.
The cost of playing hardball
The ripple effects extend beyond contract language. Employers who take hardball approaches to wrongful dismissal cases are also getting walloped with cost awards that make settlement look like the bargain of the century.
One Ontario court recently ordered an employer to pay $62,699 in legal costs after criticizing their “hard-line approach” and “unreasonable settlement position.” Another case involving PearTree Securities saw an employer hit with an extraordinary $830,761 cost award for what the court called “unforgiving, scorched earth, and bare-knuckle” litigation tactics.
The message is clear: courts won’t tolerate employers using deep pockets to bully terminated employees into accepting inadequate settlements.
Modern workplace, ancient rules
Meanwhile, the scope of what constitutes wrongful dismissal continues to expand. A Starbucks manager fired for an inappropriate comment to a non-binary employee still won her wrongful dismissal case, receiving eight months’ notice despite the employer’s disciplinary concerns.
A WestJet accountant who refused COVID-19 vaccination on religious grounds successfully claimed wrongful dismissal when her accommodation request was denied.
These cases reflect something deeper than legal technicalities. They reveal courts grappling with modern workplace realities — from pandemic policies to evolving understanding of discrimination — while maintaining that termination procedures must follow established legal frameworks regardless of the underlying circumstances.
Any traditional assumptions that employment relationships tend to favour employers is cracking. Workers are increasingly willing to challenge their dismissals, and they’re finding courts receptive to claims that termination letters contained errors, that proper procedures weren’t followed, or that the manner of dismissal itself caused psychological harm.
How you fire matters as much as why
Perhaps most telling is the continued rise of “manner of dismissal” claims. Employees are successfully arguing that how they were fired — not just that they were fired — entitles them to additional compensation. Courts are awarding damages for everything from deficient termination letters to employers’ failure to clearly explain statutory entitlements.
This isn’t about making terminations impossible. Employers retain broad latitude to end employment relationships for business reasons. But they’re being held to higher standards in how they execute those decisions. The farm worker’s $440,000 award wasn’t just about losing his job — it was about an employer who failed to follow through on promises and handle the termination with basic competence and dignity.
Solid organizations are already adapting. They’re investing in proper legal reviews of their employment contracts, training managers on termination procedures, and recognizing that cutting corners on severance often costs more in litigation than doing things right from the start.
The courts have spoken with remarkable consistency: employment relationships require good faith, clear communication, and respect for legal obligations. Employers who treat terminations as administrative afterthoughts are discovering that what seemed like cost-saving measures have become expensive lessons in judicial priorities.
The old playbook of minimal severance and intimidating legal language is being rewritten by judges who understand that how we treat people when we part ways says everything about who we are as employers — and as a society that values fairness in an inherently unequal relationship.
