Employment Contracts - Articles & Videos

An employee earns a substantial amount of money each year in variable bonuses. Are they entitled to that bonus as part of their severance? If so, how do you assess what they should get when the amounts varied greatly from year to year?

As readers of our blog will be aware, employment lawyers have been anticipating the Court of Appeal for Ontario’s hearing of two notable 2025 cases, Baker v Van Dolder’s Home Team Inc. and Li v Wayfair Canada ULC, which address the enforceability of termination clauses. The appeals, originally set to be heard on January 16, 2026, have been adjourned to March 25, 2026, where they will be heard simultaneously with an undisclosed third matter.

If you are a therapist planning to launch your own practice, or you operate a group practice worried about client loss, the key question is the same: Are these non-solicitation clauses actually enforceable?

As we wrap up 2025, employment lawyers have circled January 16, 2026 on their calendars. This is the date when the Ontario Court of Appeal (the “ONCA”) will hear the appeals in the Baker v Van Dolder’s Home Team Inc. (“Baker”), and in Li v Wayfair Canada ULC (“Li”) decisions, two of 2025’s notable termination clause decisions.

If you thought the Driver Inc. controversy was just background noise in the trucking industry, think again. The government is stepping up enforcement in a big way, and businesses that have turned a blind eye to worker misclassification could soon find themselves in the hot seat — facing hefty fines, back payments, and legal exposure. Let’s be clear: this isn’t just a “trucking problem.” It’s a worker misclassification problem, and it’s about to land squarely on the desks of employers and workers alike.

As employment lawyers, we frequently caution our clients that determining the appropriate common law notice period for a dismissed employee is “more of an art than a science”. Indeed, while we are familiar with the core relevant factors that courts will consider – such as an employee’s age, length of service, type of position, etc. – there is no formula that can be used to predict this outcome with certainty.

Many employers struggle to ensure that their employment contracts contain legally enforceable termination clauses. What may seem valid and enforceable at the time of signing can later be struck down when it’s tested, often years later, at the time of dismissal. Courts have increasingly invalidated termination clauses for even minor drafting flaws, and the list of reasons for doing so continues to grow. 

If you’ve spent any time on dating apps, you’ll know that a common feature on people’s profiles is often an argument about Oxford commas (which is why I’m partial to the offline world). Jokes aside, comma placement is important, as the Employer in Brocklehurst v. Micco Companies Limited, 2025 NSSC 192 (“Micco”) discovered.

The recent Court of Appeal decision in De Castro v. Arista Homes Limited follows the current trend of courts frequently striking down termination clauses in employment contracts. In that decision, the Court of Appeal sided with the employee and upheld an award of damages that was far greater than the compensation set by the employment contract. This should serve as another reminder to employers of the significant liabilities they may face in a wrongful dismissal lawsuit and the need to have carefully drafted and up-to-date employment contracts.

In the niche world of employment law, by insisting on shorter documents, employers risk leaving a lot of rights on the table.