Background
Kourosh Ghazvini, Anna Rosa Roberts and Sandra Rose were terminated without cause by the Canadian Imperial Bank of Commerce. They had signed employment agreements containing identical termination provisions. Following their dismissal, they obtained damages in lieu of common law reasonable notice. Justice Loretta P. Merritt of the Superior Court of Justice made that award by order dated September 25, 2025, with reasons reported at 2025 ONSC 5218.
CIBC appealed, arguing that the trial judge erred in finding the termination provisions unenforceable. It maintained that the employees were entitled only to the minimum amounts required under the Canada Labour Code, R.S.C. 1985, c. L-2. In the alternative, CIBC challenged the trial judge’s conclusions on mitigation and her calculation of damages. The Court of Appeal heard the appeal on October 13, 2026, and dismissed it in reasons delivered by Huscroft, Dawe and Brownstone JJ.A.
The Court’s Holding
The court applied Waksdale v. Swegon North America Inc., 2020 ONCA 391, under which termination provisions are unenforceable if, in whole or in part, they fail to meet minimum employment standards. It rejected CIBC’s argument that Waksdale applies only to provincially regulated employment agreements, seeing no principled reason why the same analytic approach should not apply to agreements governed by the CLC. The trial judge had therefore properly considered the agreements’ termination provisions as a whole.
The CLC requires notice of termination unless there is “just cause” for dismissal. The court agreed that the agreements’ “For Cause Provision” defined cause more broadly than that statutory standard. Its inclusive list covered matters that might, but would not necessarily, constitute just cause; “dishonesty,” for example, could encompass conduct insufficient to justify dismissal under McKinley v. BC Tel, 2001 SCC 38. The provision also expressly contemplated other acts or omissions recognized as cause under applicable law, extending beyond the statutory standard.
Unlike the clause in Baker v. Van Dolder’s Home Team Inc., 2026 ONCA 568, this provision preserved no statutory minimum entitlements. Instead, an employee terminated for cause would have “no entitlement to any notice of termination, payment in lieu of notice of termination, severance or any other damages whatsoever.” The For Cause Provision consequently permitted dismissal inconsistent with the CLC’s minimum protection. The trial judge was not bound by Horwitz v. Canadian Imperial Bank of Commerce, 2019 ONSC 7583, which had not addressed that provision’s enforceability.
Because the For Cause Provision’s defect rendered the Termination Provision unenforceable as a whole, the court did not decide whether the “without cause” provision was independently enforceable. Citing Rossman v. Canadian Solar Inc., 2019 ONCA 992, it also upheld the trial judge’s conclusion that the agreements’ “Compliance with Legislation” provision did not make the termination language consistent with the statute. The employees were therefore entitled to common law reasonable notice.
The court also rejected CIBC’s alternative grounds. CIBC bore the burden of proving failure to mitigate, and the trial judge found that burden unmet. Her findings that the employees did not act unreasonably in declining alternative positions because those positions were not comparable were open on the record. CIBC had not clearly and unambiguously contracted out of the common law rule governing compensation during the notice period, as required by Matthews v. Ocean Nutrition Canada Ltd., 2020 SCC 26. Nothing in the Mobile Investment Consultant plan clearly excluded Variable Incentive pay and Annual Bonus from damages. The damages calculation disclosed no palpable and overriding error.
Key Takeaways
- The Waksdale whole-agreement analysis applies to employment agreements governed by the CLC, not only provincially regulated agreements.
- A for-cause clause that permits dismissal beyond the CLC’s just-cause standard and removes all entitlements can invalidate the termination provision as a whole.
- The court left undecided whether the separate without-cause provision was independently enforceable.
- The employer’s mitigation burden was not met, and the damages findings warranted no appellate intervention.
Why It Matters
The decision confirms that federally regulated employers cannot avoid scrutiny of an overly broad for-cause clause merely because their employment agreements are governed by the CLC. It also illustrates the importance of preserving statutory entitlements expressly: general language requiring compliance with legislation did not cure the defect here.
For damages disputes, the decision reinforces that an employer must prove unreasonable mitigation and must use clear, unambiguous language to exclude compensation otherwise payable for the notice period. Appellate courts will not disturb supported factual findings or damages calculations absent a proper basis for intervention.
The appeal was dismissed. The respondents were awarded costs in the agreed amount of $25,000, all inclusive.