Ontario Court of Appeal Extends Waksdale to Federally Regulated Employers: Lessons from Ghazvini v. CIBC

A single non-compliant clause can bring down an entire termination provision, and that rule now clearly applies to federally regulated employers. That is the central lesson of the Ontario Court of Appeal’s decision in Ghazvini v. Canadian Imperial Bank of Commerce, 2026 ONCA 766. The Court held that CIBC’s just cause provision was unenforceable and confirmed that the principles established in Waksdale v. Swegon North America Inc., 2020 ONCA 391 apply to employment agreements governed by the Canada Labour Code (the “CLC”). Federally regulated employers, and any employer that relies on template employment agreements, should review those agreements carefully in light of this decision.

The Trial Decision

Two CIBC Mobile Investment Consultants were terminated without cause in 2022. As bank employees, they were federally regulated under the CLC. CIBC paid them their minimum entitlements under the CLC and relied on the termination provisions in their employment agreements to argue that nothing more was owed.

The employees challenged those provisions. The trial judge found the termination provisions unenforceable and held that the employees were therefore entitled to common law notice. Central to that analysis was the “for cause” provision, which allowed CIBC to terminate employment at any time, without advance notice or pay in lieu, for “Cause,” which included, but was 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 pre-employment 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.

The trial judge found that this definition was broader than “just cause” under the CLC, meaning the for-cause provision fell below the statute’s minimum standards. Applying Waksdale, the trial judge held that because the just cause provision was unenforceable, the entire termination provision was invalid.

The Court of Appeal: Waksdale Goes Federal

CIBC appealed, arguing that the trial judge erred in finding the termination provisions unenforceable. CIBC also argued that Waksdale, which held that an entire termination provision is unenforceable if any part of it violates employment standards legislation, is confined to provincially regulated employment.

The Court of Appeal dismissed the appeal and upheld the trial decision. It agreed that CIBC’s just cause provision was unenforceable for three reasons:

1. The provision went beyond the statutory standard. Under the CLC, an employer may dismiss an employee without notice only for just cause, meaning misconduct that goes to the root of the employment relationship. Some of the listed conduct, such as dishonesty, would not necessarily meet that threshold.
2. The clause was open-ended. Its catch-all language, which stated that cause “includes but is not limited to… any act or omission recognized as Cause under applicable law,” expressly contemplated grounds for termination beyond the statutory just cause standard, for which an employee could be dismissed without any entitlements.
3. Nothing preserved the statutory minimums. The clause denied an employee terminated for cause any notice or pay in lieu, which distinguished it from the clause upheld in Baker v. Van Dolder’s Home Team Inc., 2026 ONCA 568, where the clause preserved the employee’s minimum statutory entitlements on a for-cause termination.

The Court of Appeal also expressly rejected CIBC’s argument that Waksdale applies only to provincially regulated employment agreements, finding “no principled reason why the same analytic approach should not apply to employment agreements governed by the CLC.”

Key Takeaways for Employers

• Waksdale applies to federally regulated employers. CLC-governed employers can no longer assume that the Waksdale line of cases does not apply to their employment agreements. A single non-compliant clause, including an overly broad definition of cause, can invalidate the entire termination provision.
• Review older templates and update employment contracts. As the courts continue to interpret employment agreements, the law in this area is evolving quickly. Employers should review their templates regularly and speak with counsel to ensure their employment agreements remain enforceable.

Please contact your Turnpenney Milne lawyer if you would like your employment contracts reviewed for compliance with these recent developments in the law.