The Honourable Andrea Khanjin
Minister of Red Tape Reduction
56 Wellesley Street W, 7th Floor Toronto, ON M5S 2S3
The Honourable David Piccini
Minister of Labour, Immigration, Training and Skills Development 14th Floor, 400 University Ave Toronto, ON M7A 1T7
May 28, 2026
Dear Ministers Khanjin and Piccini,
Re: Protecting Ontario’s businesses and workers – enforcing termination provisions in employment agreements
Thank you for meeting with Ontario employers on April 2, 2026, through the Ontario Chamber of Commerce’s Business Advisory Committee and sitting down with our organizations at the ACSESS World Employment Conference on May 13, 2026.
In follow up to those discussions, and on behalf of our members, we are requesting targeted action to restore certainty around the enforceability of termination provisions in employment agreements.
The OCC’s 2026 Ontario Economic Report underscores that Ontario’s competitiveness is constrained by weak productivity and uneven business investment. In this environment, regulatory and legal predictability is essential to unlock investment, support job creation, and keep Ontario competitive.
Employers continue to cite the cost of doing business as a primary constraint on confidence, and the Employment Standards Act, 2000 (ESA) is frequently identified as a source of operational risk and complexity. Recent court decisions have increasingly invalidated termination provisions on technical grounds, sometimes based on hypothetical non-compliance rather than the facts in dispute. The result is growing uncertainty about whether negotiated agreements will be upheld.
This uncertainty increases disputes and costs, undermines confidence in hiring, and puts Ontario at a competitive disadvantage. In practice:
• Agreements drafted with legal advice and shared understanding are being set aside.
• There is no reliable path for employers to draft termination language that will be enforced with confidence.
• Unclear rules are driving more litigation, higher costs for employers and workers, and added pressure on the court system.
Taken together, these developments raise costs, increase risk, and weaken Ontario’s investment climate. To restore legal certainty while maintaining ESA protections for workers, we recommend the following targeted amendments to Section 5 of the Act:
1. Set predictable outcomes when a termination clause is unenforceable. Where a clause is invalid, default entitlements to ESA minimums (or the contractual amount, if higher) to reduce uncertainty and discourage unnecessary litigation. This can achieved by amending the ESA to override the legal presumption that common law principles apply if the termination provision is unenforceable. At present, if any portion of a termination provision has been voided under subsection 5(1), the entire termination provision is voided and the common law principles related to termination apply instead.
2. Require courts to preserve compliant portions of agreements. Permit severance of only the noncompliant language so the balance of an ESA-compliant clause can be enforced. As noted above, if a termination provision has been found to be contrary to the ESA’s requirements, in any way, the entire provision is voided. The Act could be amended to require courts to sever non-compliant provisions in a termination provision to the extent that they do not comply with the ESA and give effect to the remainder of the provision.
3. Affirm a good-faith compliance presumption. Create a legal presumption that an employer intends to exercise its discretion under an employment agreement in good faith in accordance with the law, absent evidence to the contrary. This amendment is unfortunately necessary to address recent developments where courts have implicitly applied a presumption that employers may exercise their discretion under an employment agreement in bad faith and not in accordance with the law, even where there is no evidence of such an intention. The vast majority of employers in Ontario have every intention of meeting their legal obligations and the law should reflect this.
To ensure predictability, these amendments should apply to all employment agreements, including those executed before the amendments take effect. Clear, enforceable employment agreements are foundational to job creation and a well-functioning labour market. In addition, we urge the government to ensure future ‘Working for Workers’ employment standards measures are specifically outlined in legislation, so the rules are clear and binding on both employers and workers, rather than leaving these matters ambiguous and subject to interpretation by courts.
Building on our recent conversation, we welcome continued dialogue on practical ESA amendments to reduce disputes, lower costs, and strengthen Ontario’s competitiveness in a more risk-sensitive investment environment.
Sincerely,
Daniel Tisch, APR, FCPRS, ICD.D Mary McIninch President and CEO Executive Director, Government Relations
Ontario Chamber of Commerce Association of Canadian Search, Employment & Staffing Services