In December 2024, the Court of Appeal for Ontario released its highly anticipated decision in Dufault v. Ignace (Township). The three-judge panel determined that the “for cause” termination clause contained in the employee’s employment agreement was unenforceable because it did not comply with the minimum standards set out in the Employment Standards Act, 2000 (ESA). The panel dismissed the employer’s appeal and ordered the employer to pay damages to the employee for wrongful dismissal.

Quick Hits

• The Court of Appeal for Ontario highlighted three key points in Dufault v. Ignance (Township): the ESA is intended to protect employee interests; courts should interpret termination of employment clauses such that employers comply with the ESA; and the wording of termination clauses will determine that interpretation.
• The court also held that if the termination clause in an employment agreement does not comply with the ESA when it is entered into by the parties, this error will not be remedied by the employer’s subsequent compliance, at the time of termination.
• The court’s ruling may serve as a reminder for employers to consider reviewing their employment agreements to ensure that the language in the termination provision is clear and complies with the ESA.

Dufault v. Ignace (Township)

This case pertains to the “without cause” dismissal of an employee whose employment was subject to the terms of a fixed-term employment agreement. When her employment was terminated, the...

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