A recent decision from the Ontario Superior Court of Justice (“ONSC”), Boyle v Salesforce.com Canada Corporation [Boyle], highlights a critical risk for employers: termination clauses can be rendered unenforceable if combined with conflicting language in corporate handbooks or policies.

Background

The employee in Boyle was terminated without cause after eight years with Salesforce, a multinational software company with operations in various countries. He claimed damages for wrongful dismissal, arguing that the termination clause in his employment contract did not comply with Ontario’s Employment Standards Act, 2000 [ESA].

The termination clause was structured into subclauses, with one subclause addressing termination for cause. This subclause reserved the right of the employer to terminate the employee’s employment “at any time and without notice (or pay in lieu) for Cause”.

As a condition for accepting the employment offer, the employee was required to sign a “global employees handbook” that was annexed to the employment agreement. The handbook contained the following clauses and acknowledgment:

The company is regulated by different local laws where it operates globally. If there is a conflict in these laws, you should consult the Company’s legal department to resolve the conflict appropriately. In general, local laws will apply.

Except for certain non-U.S. jurisdictions, the Company’s employment relationship with all of its employees is one of employment “at will,” which means that employment may be terminated by either the employee or the Company at anytime, with or without cause. If you are located outside of the U.S. and have an employment agreement, the terms of those agreements will prevail if there is any conflict with the policies in this handbook. However, all other policies will apply. […]

I understand that: […] The policies in the Global Employee Handbook are not a contract and that my employment is “at will.” This means that the Company or I can end my employment at any time with or without cause or advance notice. […]

The employer argued that the clause was enforceable and limited the employee’s entitlements to ESA minimums. In the alternative, the employer argued that the employee’s damages should be reduced for his failure to appropriately mitigate and for his refusal to produce his Notice of Assessment (“NOA”) during the mitigation period. In particular, the employer argued that given the employee’s failure to produce the NOA, the ONSC should presume that the employee earned income during the common law notice period that should be set off against any damages he is entitled to.

Decision

Handbook Rendered Termination Clause Unenforceable and Ambiguous

The ONSC held that the termination provisions in the employment agreement, read in conjunction with the global employees handbook, were unenforceable due to ambiguity. It found that an Ontario employee could not reasonably understand the terms governing termination at the time of signing, particularly given the employer’s use of a one-size-fits-all contract across jurisdictions.

This issue was compounded by the handbook, which repeatedly described the employment relationship as “at will” and instructed employees to consult the company’s legal department for clarification before starting work. The ONSC found this expectation impractical, emphasizing that employers—not prospective employees—must provide clarity up front.

Notice Period Reduced for Late Disclosure of NOA

The ONSC determined that the employee was entitled to 11 months of notice based on age, tenure, and position. However, the award was reduced to 8 months because the employee failed to provide his NOA until just before the hearing. The ONSC drew an adverse inference that he may have earned income during the notice period and reduced the damages accordingly.

Key Takeaways for Employers

Tailor Contracts AND Handbooks/Policies for the Local Legal Landscape

Very notably, the ONSC in Boyle found that the global employees handbook’s language directly undermined the clarity of the employment contract and rendered the termination clause unenforceable. This decision suggests that courts will not distinguish between problematic language in a contract versus that found in an ancillary document if the result is ambiguity.

This underscores a critical point for all employers: compliance reviews cannot stop at employment contracts. Policies, handbooks, and other related documents must also be carefully reviewed to ensure they do not introduce ambiguity, rely on impractical guidance, or include language inconsistent with minimum standards legislation. Otherwise, employers risk having an enforceable contract rendered void by conflicting or non-compliant policy language. Boyle illustrates that risk vividly: although the termination clause itself was far from perfect (e.g., use of “at any time” language, as discussed further below), it was the conflicting terms in the handbook that helped tip the balance toward unenforceability.

Employers operating in multiple jurisdictions must be especially cautious, and should not assume that a clause deferring to local law (as was included in Salesforce’s handbook) will cure contradictory or ambiguous language elsewhere.

Additionally, although the employee in Boyle seemingly did not raise this argument, it is worth noting that Ontario courts have recently found that termination clauses containing “at any time” language are likely unenforceable. In two decisions released within the last year (see our blogs here and here), the ONSC held that such language could be interpreted as permitting termination during protected leaves (e.g., pregnancy or parental leave)—a clear violation of the ESA. These cases underscore the importance of ensuring that both employment agreements and supporting documents appropriately consider Ontario’s ever-evolving jurisprudence on termination clause enforceability.

Hold Employees Accountable for Mitigation, But Come Prepared

While the court in Boyle did reduce the notice period due to the employee’s delayed disclosure of his Notice of Assessment, this outcome was based on the employer making a clear argument and producing a record showing that mitigation was at issue. Employers should preserve and pursue mitigation evidence proactively to support similar arguments in future disputes.

This blog is provided as an information service and summary of workplace legal issues.

This information is not intended as legal advice.