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Employment - Federal - Canada Labour Code (CLC). Ghazvini v. Canadian Imperial Bank of Commerce
In Ghazvini v. Canadian Imperial Bank of Commerce (Ont CA, 2026) the Ontario Court of Appeal dismissed a federal (CLC) employer's appeal, this brought against "the decision of the trial judge awarding the respondent employees damages in lieu of common law reasonable notice, following their termination without cause by the appellant employer".
This is an interesting case, extending to the federal CLC context the Ontario principle that if an employment contract's termination provisions breach ESA 'minimum standards' - even in part - then the common law wrongful dismissal doctrine (which is invariably more generous to employees) re-asserts itself:The Termination Provision violates the CLC
[4] The respondent employees executed employment agreements with the appellant that contained identical termination provisions (the “Termination Provision”).
[5] Termination provisions are unenforceable if, in whole or in part, they fail to meet minimum employment standards: Waksdale v. Swegon North America Inc., 2020 ONCA 391, 446 D.L.R. (4th) 725, at para. 10, leave to appeal refused, [2020] S.C.C.A. No. 292. Although the respondents were terminated without cause, the trial judge applied Waksdale, considered the termination provisions in their employment agreements as a whole, and found them unenforceable in their entirety because the termination with cause provisions did not comply with the minimum requirements of the CLC. We do not accept the appellant’s argument that Waksdale only applies to provincially regulated employment agreements. We see no principled reason why the same analytic approach should not apply to employment agreements governed by the CLC.
[6] The CLC provides that employers must give their employees notice of termination of employment unless there is “just cause” for their dismissal: CLC, ss. 229.1, 230(1). The “just cause” standard is not defined in the CLC but has been described in the jurisprudence as entailing misconduct that goes to the root of the employment relationship: David Harris, Wrongful Dismissal (Toronto: Thomson Reuters Canada Limited., 2025) (loose-leaf updated 2026, release 9), at § 5:1.
[7] The Termination Provision contains the following provision governing dismissal for cause (the “For Cause Provision”):By CIBC for Cause – CIBC may terminate your employment at any time without advance notice, or pay in lieu of notice, for Cause. Cause includes, but is not limited to, dishonesty, fraud, breach of trust, failure to perform your duties in a satisfactory manner, a breach of the Code, failure to obtain or maintain any required TLAs, failure to complete the preemployment screening process to the satisfaction of CIBC, providing false, misleading or inaccurate information during the hiring process, a breach of any other term or condition of your employment, and any act or omission recognized as Cause under applicable law. If your employment is terminated for Cause, you will have no entitlement to any notice of termination, payment in lieu of notice of termination, severance or any other damages whatsoever. [8] The trial judge did not err in reading this provision as defining cause more broadly than just cause under the CLC.
[9] First, the inclusive list of examples includes matters that may amount to just cause under the CLC, but do not necessarily do so. For example, “dishonesty” is a term broad enough to include conduct that would not constitute just cause for dismissal: see McKinley v. BC Tel, 2001 SCC 38, [2001] 2 S.C.R. 161.
[10] Second, the provision states that cause “includes, but is not limited to… any act or omission recognized as Cause under applicable law.” This expressly contemplates reasons for termination beyond the statutory standard of just cause for which an employee could be dismissed without any entitlements.
[11] Finally, the For Cause Provision provides that, if the employee is terminated for Cause, there is “no entitlement to any notice of termination, payment in lieu of notice of termination, severance or any other damages whatsoever.” This distinguishes the provision from the one considered in Baker v. Van Dolder’s Home Team Inc., 2026 ONCA 568, at para. 73, in which this court held that a similarly overly inclusive termination provision was nevertheless statutorily compliant because it provided that an employee terminated for cause would still be entitled to any “minimum compensation or entitlements prescribed by the Employment Standards Act.” There is no such language in the For Cause Provision at issue in this case.
[12] The trial judge made no error in concluding that the For Cause Provision permitted dismissal inconsistent with the minimum protection afforded by the CLC. The trial judge was not bound by the Divisional Court’s decision in Horwitz v. Canadian Imperial Bank of Commerce, 2019 ONSC 7583, which did not engage with the enforceability of the For Cause Provision. As a result, the Termination Provision is unenforceable, and the respondents were entitled to common law reasonable notice.
[13] In the circumstances, there is no need to determine whether the “without cause” provision is independently enforceable. The unenforceability of the For Cause Provision renders the Termination Provision unenforceable as a whole. The provision breaches the CLC and the trial judge did not err in concluding that the “Compliance with Legislation” provision did not render it consistent with the statute: Rossman v. Canadian Solar Inc., 2019 ONCA 992, 444 D.L.R. (4th) 131, at para. 35.
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