CIBC’s Termination Clause Was Illegal: What Ontario Employees Should Know
Short version: An Ontario court just struck down CIBC’s termination clause. Why? Because the “for cause” wording was broader than the law allows under the Canada Labour Code (CLC). That single flaw tainted the entire termination provision, meaning the employees could pursue common law reasonable notice instead of the clause’s limits.
What happened?
In Ghazvini et al. v. Canadian Imperial Bank of Commerce, 2025 ONSC 5218, the Court reviewed CIBC’s contract language that let the bank fire an employee “for Cause” and listed examples like dishonesty, breach of policy, and unsatisfactory performance—without tying those examples to the strict “just cause” standard under the CLC. The judge found that this defined “cause” more broadly than the statute, which violates the CLC.
Crucially, the Court applied the Waksdale logic (well known in Ontario ESA cases): if any part of a termination provision is illegal, the whole termination scheme fails—even if the employer never relied on the illegal part.
Why the clause was illegal
Too broad “for cause” list: The contract didn’t say “just cause” or limit examples to serious misconduct. Some listed items (e.g., generic “dishonesty” or any policy breach) may or may not be just cause depending on context. That overbreadth breaches the CLC.
Result: Because the “for cause” piece was illegal, the entire termination provision was unenforceable, so the common-law presumption of reasonable notice wasn’t rebutted.
CLC vs. ESA: Ontario’s ESA uses “wilful misconduct” for cause-related forfeiture of minimums; the CLC uses “just cause”—a strict standard requiring serious misconduct or continued misconduct after warnings. The Court emphasized that difference and anchored its analysis in the CLC.
What about the “at any time” wording?
CIBC’s contract also said it could terminate “at any time.” Recent Ontario cases debate whether that phrase conflicts with employment standards. The judge canvassed those decisions but ultimately didn’t need to decide the “at any time” issue because the clause was already void due to the illegal “for cause” wording.
Why this matters (even in Ontario)
Although CIBC is federally regulated (so the CLC applies), the case reinforces a familiar Ontario lesson from Waksdale: if a termination provision overreaches anywhere, the whole thing can collapse. For employers, granular “cause” lists are risky. For employees, an invalid clause may open the door to significantly higher notice than the contract promised.
Practical takeaways
For employees (including bank and other federally regulated workers):
Don’t assume a “for cause” list is lawful just because it’s detailed. If it’s broader than CLC just cause, you may still be owed notice, severance, and benefits.
If your letter cites “dishonesty,” “policy breach,” or “poor performance,” get advice—context matters.
For employers:
Drop the laundry lists. If you include examples, link them expressly to CLC just cause and seriousness.
Avoid misleading phrases like “at any time”; they’re under increased scrutiny.
A saving clause won’t rescue a termination provision that already violates the statute. Draft for compliance at the outset.
How we can help
We act for employees and employers across Ontario (and federally regulated sectors). If you’ve been let go—or you’re revising agreements—we can assess your clause, exposure, and strategy quickly.
This post is information only and not legal advice.