In C. v. NYX Capital Corp., 2025 ONSC 4561, the Ontario Superior Court of Justice reaffirmed that employers cannot rely on a “probationary period” to avoid paying common law notice if their termination clause breaches the Employment Standards Act, 2000 (ESA).
The case involved a Vice President who was terminated just one day before completing a three-month probationary period. His contract stated that the employer could terminate “at any time and for any reason” without notice or pay in lieu of notice.
The Court found this language illegal — and that single defect voided the entire termination section of the employment agreement. As a result, the employee was entitled to common law reasonable notice despite his short tenure, amounting to three months’ pay (over $44,000).
Why the Clause Was Illegal
The Court ruled that the probationary clause violated the ESA because it purported to allow termination “for any reason.” The Act prohibits employers from dismissing employees for reasons that include reprisal for exercising ESA rights.
Relying on the Waksdale principle — that an illegal part of a termination provision voids the entire section — the Court held that:
- The entire termination clause was unenforceable;
- The probationary period could not stand on its own; and
- The employee was therefore entitled to common law notice.
Key Takeaways for Employees
Probationary Clauses Must Comply with the ESA
Even if you have been employed for less than three months, you may still be entitled to notice or pay in lieu if your contract breaches the ESA. Clauses stating you can be dismissed “for any reason” are likely illegal.
One Bad Clause Can Void the Whole Contract
Under Waksdale, if any part of a termination clause violates the ESA, the entire termination section — and any limits on severance — are void. This all-or-nothing approach generally benefits employees.
Always Get a Contract Review
High-earning or senior employees often sign contracts with restrictive clauses without realizing their implications. Having an employment lawyer review your agreement can protect your rights and prevent costly mistakes.
Intent Doesn’t Matter
The employer argued that both parties intended for the employee to be probationary. The Court rejected this, emphasizing that illegal language is void regardless of intention.
What This Means for Employees
This decision reinforces that even brief employment is protected under Ontario law. A probationary label does not remove your rights — particularly when the employer’s contract language is flawed.
If your employment agreement includes a probationary period or limits your termination entitlements, contact Monkhouse Law Employment Lawyers for a review to ensure your rights are protected.