A recent decision, Ghazvini et al. v. Canadian Imperial Bank of Commerce (2025 ONSC 5218), is a clear warning to federally regulated employers: if your termination clause defines “cause” more broadly than the Canada Labour Code’s just-cause standard, the clause is offside—and your entire termination scheme may be unenforceable.
Who’s covered
This case concerns federally regulated employees (banks, telecom, interprovincial transport, airlines, and certain Crown corporations) governed by the Canada Labour Code (CLC), not provincial legislation.
The clause the Court reviewed (in plain language)
CIBC’s contract said the bank could fire an employee for Cause “at any time without advance notice or pay in lieu.” It then listed examples of “Cause,” including (summarized):
dishonesty, fraud, breach of trust
failing to perform duties “in a satisfactory manner”
breaching the Code of Conduct
failing to obtain/maintain required licences or accreditations
issues in pre-employment screening or providing inaccurate hiring information
breaching any other term or condition of employment
and a broad catch-all: “any act or omission recognized as Cause under applicable law”
If terminated “for Cause,” the employee received no notice, severance, or damages.
What the Court decided and why
1) The clause breached the CLC’s just-cause standard.
Justice Merritt held the provision did not meet the CLC’s minimum requirements because it wasn’t limited to “just cause” as that term is understood in the CLC. It swept in conduct that might not amount to just cause, and it didn’t specify that the conduct must be serious enough to meet that standard. In short, the contractual “Cause” was broader than just cause under the CLC.
2) You can’t contract out of statutory just cause.
Where an employment contract defines cause more broadly than the statute—and therefore allows no-notice termination in situations where the statute prohibits it—the clause breaches the statute and is invalid. The Court relied on the same principle applied in other cases addressing statutory minimums.
3) Result: the entire termination section failed.
Because the “for cause” subsection was illegal, the whole termination clause fell. The employees were therefore entitled to reasonable notice at common law rather than the contract’s “without cause” formula (which had been set at two weeks per year of service).
4) An additional problem the Court flagged (but didn’t need to decide).
The agreement also said CIBC could terminate employment “at any time without cause.” The judge noted case law suggesting that phrasing can itself be problematic under the CLC, but it wasn’t necessary to rule on that point given the broader illegality already found.
Why this matters (beyond banks)
Many assumed Ontario’s Waksdale-style invalidation risk was unique to the ESA’s “wilful misconduct” carve-out. Ghazvini shows a parallel risk under the CLC: when Parliament uses a term like “just cause,” it’s for courts—not drafters—to define. If a contract tries to pre-define cause with a laundry list (especially using “includes, but not limited to”), it invites invalidation if any listed ground falls short of statutory just cause.
This reasoning has national reach for federally regulated workplaces. It also offers a drafting cautionary tale for provincial contracts that hinge on statutory concepts.
Practical takeaways
For employees (federally regulated)
Don’t assume “cause” in your contract equals lawful just cause. If you’re denied notice/severance based on broad, catch-all “cause” wording, that clause may be unenforceable.
If the “for cause” piece is illegal, the whole termination clause can fall, opening the door to common-law reasonable notice (often much more than a formula in the contract).
Get the documents. Keep your offer, any policy manuals it incorporates, and the termination letter. Have the wording reviewed before you sign anything.
Bottom line
Ghazvini v. CIBC confirms that under the Canada Labour Code, just cause is a statutory concept that contracts cannot dilute. Overbroad “cause” definitions risk voiding termination provisions altogether—and replacing a tidy contractual formula with common-law reasonable notice. If your employment agreement uses expansive or catch-all cause language, it’s time for a rewrite—or a legal review.
General information only, not legal advice.