The language in a “just cause” termination provision in an employment agreement can undermine all termination provisions—even where the employee is dismissed without cause.

In Ghazvini v. Canadian Imperial Bank of Commerce, 2026 ONCA 766, the Ontario Court of Appeal confirmed that termination provisions in employment agreements must be assessed as a whole. A section of the termination provision relating to “just cause” fell below the minimum standards of the Canada Labour Code.

CIBC was unable to rely on the termination provisions, as a whole, to limit the employees’ entitlement to common law reasonable notice.

While this case was decided in Ontario under the Canada Labour Code, the principles and reasoning may have application in Alberta.

Background

Three employees were dismissed without cause by the Canadian Imperial Bank of Commerce (CIBC). Their employment agreements contained identical termination provisions.

CIBC argued that the agreements limited the employees’ entitlements to the statutory minimums under the Canada Labour Code. The trial judge disagreed, relying on the Waksdale decision finding the termination provisions unenforceable due to the “just cause” section of the termination clause rendering the entire clause, including the without cause section, unenforceable. The Court awarded damages in lieu of common law reasonable notice rather than the statutory minimums.

CIBC appealed, challenging both the enforceability ruling and aspects of the employees’ mitigation efforts and damages awards. On appeal, the Court of Appeal upheld the trial decision in favour of the employees.

Why the Termination Provisions Failed

The “for cause” definition was too broad

The agreements defined “just cause” permitting CIBC to dismiss employees for “just cause” without notice or compensation for a range of conduct, including dishonesty, unsatisfactory performance, and breaches of employment terms.  “Just cause” under the Canada Labour Code is not defined and is interpreted based on the common law. The Court emphasized that dishonesty, for example, does not automatically justify dismissal without notice. The contractual language expressly listed grounds for summary dismissal inconsistent with conduct recognized by the courts as constituting just cause under the Canada Labour Code.

The defect mattered even though the employees were dismissed without cause

CIBC argued that the approach established in Waksdale should apply only to provincially regulated employment agreements.

The Court rejected that distinction. It saw no principled reason why the same approach should not apply to agreements governed by the Canada Labour Code. Termination provisions must be considered together, and a defective “for cause” provision can render the termination provisions unenforceable as a whole.

As a result, the Court did not need to decide whether the agreements’ “without cause” language was independently enforceable. Further, the Court distinguished Baker v. Van Dolder’s Home Team, 2026 ONCA 568 (Baker), finding that there was no similar saving clause in the CIBC agreements.

Practical Takeaways

For employers, the decision highlights the importance of reviewing termination provisions as an integrated whole. A carefully drafted “without cause” provision may not protect an employer if the accompanying “for cause” language permits termination below statutory minimum standards. Also, the presence of a saving clause may rectify a potential breach, as seen in Baker.

For employees, a contractual statement limiting termination entitlements is not necessarily the end of the analysis. The enforceability of the entire termination framework matters, including provisions that the employer did not invoke. Employees should look for “just cause” language that is overly broad including listed conduct that does not go to the root of the employment relationship. 

For Alberta – Although Ghazvini is an Ontario decision, and is in the Federal Canada Labour Code context, most provincial employment standards legislation, including the Alberta Employment Standards Code, relies on a common law interpretation of “just cause”. An employment agreement in Alberta that defines just cause too broadly may violate the Alberta Employment Standards Code resulting in an unenforceable termination clause for the purpose of both just cause and without cause terminations.

This post provides general information and is not legal advice. The enforceability of an employment agreement and an employee’s termination entitlements depend on the wording of the agreement and the circumstances of the employment relationship.