Many employment agreements include a clause allowing the employer to terminate the relationship “at any time.” It sounds reasonable. After all, flexibility is essential in managing a team, and as long as the minimum notice is provided, the clause should hold up. Right?
Not necessarily.
Employment law is very nuanced. And the way contracts are drafted can have significant legal consequences.
Two recent Ontario cases involving nearly identical “at any time” clauses had opposite outcomes in court. One left the employer exposed to significant common law liability; the other upheld the contract in its entirety.
For dentists who rely on older or boilerplate employment agreements, these decisions serve as a wake-up call. The language in your employee contracts could be working against you, even if you’ve done everything in good faith.
The Hidden Risk in ‘At Any Time’ Termination Clauses
At first glance, a clause that allows an employer to terminate employment “at any time” might seem harmless. It suggests flexibility and appears to provide both parties with clarity about when the employment relationship can end. But in the world of employment law, even a single vague or overly broad phrase can unravel a contract. Courts aren’t just reading one clause in isolation—they’re reading the entire agreement and scrutinizing it for compliance with the Employment Standards Act, 2000 (ESA).
The ESA sets minimum requirements for things like termination notice, vacation pay, and employee protections. If a contract—even unintentionally—creates the possibility of violating those standards, the courts will likely find that clause unenforceable. And if one termination clause fails, the entire termination section of the agreement often falls with it.
Two Ontario cases from 2025 show how this plays out in real life. Each case involved an “at any time” termination clause, but the outcomes could not have been more different. One clause was struck down as invalid, leaving the employer responsible for substantial common law damages. The other was upheld because it clearly aligned with the ESA.
Let’s look at the two contrasting decisions.
Case 1: Baker v. Van Dolder’s Home Team Inc.
In this case, the employment agreement allowed the employer to terminate the employee “at any time” without cause, provided they paid the minimum amounts required under the ESA.
On the surface, that sounds harmless—but the Ontario Superior Court disagreed. Why? The court found that the phrase “at any time” could include times when an employee is protected under the ESA, such as during statutory leaves or in situations where a termination could be perceived as a reprisal.
Even though the contract included a general statement that the employer would comply with the ESA, that wasn’t enough to save it. Because the contract didn’t explicitly exclude illegal terminations, the whole clause was void. Worse, thanks to the Waksdale decision, that meant all termination language went down with it.
The result? The employee was entitled to full common law notice, which can be significantly more costly than ESA minimums.
Case 2: Li v. Wayfair Canada Inc.
This case also involved an employment agreement with a clause allowing termination “at any time” without cause, with compensation limited to ESA minimums. On its face, the language was strikingly similar to the one in the Baker case.
However, in this agreement, both the “with cause” and “without cause” termination clauses were worded more precisely. The contract, when read as a whole, clearly preserved the employee’s minimum entitlements under the ESA and did not create the same risk of violating protected rights.
The broader context of the agreement helped. The court found that the employer had not attempted to contract out of the ESA or include language that could result in an illegal termination.
The result? The termination provision was upheld as enforceable, and the employer was only required to pay ESA minimum notice.
These cases serve as an important reminder that it’s not just what a single provision says—it’s how the entire agreement is written, and how it fits within the broader legal framework.
Why This Matters to Dentists
Employment agreements aren’t about magic words; they’re about context. And judges are increasingly skeptical. Just adding a clause that says “we’ll comply with the ESA” isn’t always enough.
If your termination clause is worded too broadly—or if it creates even the possibility of breaching the ESA—it can be struck down. And once one termination clause is void, all termination provisions usually fail under the Waksdale principle. That exposes you to common law notice obligations, which can mean paying one month’s salary per year of service, and up to a soft ceiling of 24 months for long-term employees.
This is especially relevant for dentists because many practices use employment agreements that haven’t been updated in years. In some cases, the documents were created before key court decisions, or they’ve been copied from templates that don’t reflect the unique needs of a dental office.
Your practice may be small, but your legal responsibilities as an employer are just as real – and enforceable – as those of a larger organization. Without properly worded contracts, you risk:
- Owing significant severance to long-term employees.
- Losing buyers or reducing your practice value in a sale due to employment liabilities.
- Facing liability from clauses that aren’t illegal on purpose, but poorly drafted.
This isn’t just about avoiding worst-case scenarios. It’s about creating clean, enforceable documents that reflect how you want to manage your team—with clarity and fairness.
How to Protect Your Practice
If you haven’t reviewed your employment agreements in a few years, or you’re relying on contracts pulled from templates or other clinics, now is the time to take a closer look. Here are three practical steps you can take to reduce your risk.
1. Review All Existing Employment Agreements
Start with your longest-serving team members. If their contracts were signed before 2020, there’s a good chance they haven’t been updated to reflect recent case law. Look specifically for clauses that allow termination “at any time” or that fail to spell out ESA protections and priority. Some additional terms that can be red flags include “for cause”, “for any reason” and “sole discretion”.
2. Avoid Template or Generic Contracts
Dental practices operate differently, and your employment agreements should reflect that. Using a contract designed for a different industry or copied from another clinic is a recipe for trouble. You need agreements that account for:
- ESA compliance
- Statutory leaves
- Practice sales
- Transition clauses for hygiene and associate roles
Contracts need to be enforceable but also reflect how your practice actually operates.
3. Consult a Dental-Focused Legal Team
It’s not just about fixing what’s broken. A well-drafted contract can help protect your practice in the long term, especially if you’re thinking about bringing on new team members, transitioning your business, or preparing for a future sale.
We’ve seen dentists pay tens of thousands of dollars in unexpected termination costs, all stemming from one clause that didn’t hold up when challenged. A legal review now is far cheaper than a settlement later.
Bottom Line
This isn’t about panic—it’s about prevention. The good news is that these contract issues are fixable. But the longer outdated agreements sit on the shelf, the more likely they are to cause problems down the road.
If you’re unsure whether your current employment agreements are enforceable, or if you’re preparing to hire, terminate, or sell your practice, this is a good time for a legal check-in. A contract that worked yesterday might not hold up today.
At DMC, we’ve helped hundreds of dentists across Ontario update their employment documents to reflect current law and real-world dental practice operations. We’re here to make sure your agreements don’t just sound fair—they stand up when it counts.
Let’s take a look at your contracts together. Send us an email or call our Employment Law team directly at 416-443-9280 extension 206 for a quick review to ensure your practice is protected.
