The courts continue to shape employment law, and six decisions of the Ontario Court of Appeal from January to June of 2025 clarify the law on enforcing contracts, mitigating losses, fiduciary duties and termination clauses.
In the first half of 2025, the Ontario Court of Appeal issued a series of impactful employment law rulings. These decisions clarified the law on enforcing contracts, mitigating losses, an employee’s fiduciary duties, and termination clauses. They offer important guidance to lawyers, employers and employees. Let’s look at six of the most significant appellate decisions so far this year.
Enforcing employment-related agreements
In Brant Securities Limited v Goss, 2025 ONCA 8, former executive Mr. Goss received a $1.6 million loan under his employment agreement, repayable by annual bonuses. After his termination, Brant sought repayment of the loan based on an amended promissory note. Goss argued the amendment was unenforceable due to a lack of fresh consideration.
The Court of Appeal upheld enforcing the amended note. The Court found there was consideration in the form of deferred tax consequences, extended interest-free terms, and clarified loan terms—non-monetary benefits that still had value to the employee.
The takeaway? Valid consideration for amending employment-related agreements can include non-cash benefits that provide clarity, flexibility, or other practical advantages to the employee.
Barring an employer’s claims
In Boyer v Callidus Capital Corporation, 2025 ONCA 79, Mr. Boyer had retired but later claimed constructive dismissal, citing a toxic workplace. Callidus counterclaimed for breach of fiduciary duty. At summary judgment, the judge dismissed the constructive dismissal claim but awarded Boyer unpaid vacation, stock options, and deferred bonuses. The court barred Callidus’ counterclaim by issue estoppel, meaning the issues Callidus raised had already been dealt with by other decision-makers. The employer appealed the decision.
The Court of Appeal dismissed the employer’s appeal. The counterclaim relied on facts already litigated and rejected in prior proceedings. The Court also emphasized that just cause is irrelevant to an employer’s statutory obligation to pay accrued vacation pay.
The takeaway? Employers cannot revive misconduct allegations as part of a “just cause” defence if a decision-maker has already decided on those facts. Employment standards entitlements like vacation pay are due regardless of just cause.
Informing patients of a move
In Coscarella Dentistry Professional Corporation v Harvey, 2025 ONCA 118, Dr. Harvey left his practice at a dental clinic. He informed his patients of the move using contact information accessed from clinic records. The clinic sued for misuse of confidential information and improper solicitation.
The Court of Appeal found no breach. Patients are not proprietary assets of the clinic, and a professional may contact their own patients when departing, especially to comply with ethical obligations.
The takeaway? For independent professionals, patient relationships are personal. Informing patients of a change in practice is not wrongful solicitation if done appropriately and in line with professional standards.
Suing civilly for regulatory and human rights violations
In Brown v Weirfoulds LLP, 2025 ONCA 152, Mr. Brown sued his former law firm and individual lawyers for constructive dismissal, discrimination, breach of Law Society rules, and defamation. The motion judge struck the claims against individuals and limited the scope of amendments. Mr. Brown appealed the decision.
The Court of Appeal affirmed the dismissal. The Court confirmed that breaches of professional rules or human rights legislation don’t give rise to private civil claims unless tied to a recognized tort or contractual breach supported by sufficient factual allegations.
The takeaway? An employee must ground their civil claims in established legal causes of action. Regulatory breaches, without more, do not create actionable civil claims.
Mitigating losses on termination
In Pateman v Koolatron Corporation, 2025 ONCA 224, 29-year employee Mr. Pateman sued for wrongful dismissal. The trial judge accepted the claim and awarded 24 months of pay in lieu of termination notice. However, the judge deducted 3 months for Mr. Pateman’s alleged failure to mitigate his losses and 2.5 months for actual notice worked. The employer appealed the decision.
The Court of Appeal dismissed the employer’s appeal and allowed the employee’s cross-appeal. Koolatron failed to prove that better mitigation efforts by Mr. Pateman would have led to him finding similar employment. A vague offer of part-time work from the employer was insufficient.
The takeaway? Employers carry the burden to prove both inadequate mitigation efforts and that such efforts would have reduced losses. Half-hearted employer offers don’t satisfy this burden.
Voiding unenforceable termination clauses
In De Castro v Arista Homes Limited, 2025 ONCA 260, Arista Homes dismissed Ms. De Castro without cause. The employer gave her the statutory minimum amount of termination notice per the termination clause in her employment contract. She challenged the termination clause as invalid because it allowed termination for cause in circumstances less severe than Ontario’s Employment Standards Act (ESA).
The Court of Appeal agreed with the motion judge that the “for cause” language violated the ESA. Even if never invoked, a clause that permits termination without notice that doesn’t meet minimum requirements under the ESA renders the entire termination clause unenforceable.
The takeaway? Termination clauses must strictly align with ESA standards. Overbroad “for cause” language—especially if it considers dismissal for lesser misconduct—will void the entire clause, entitling the employee to common law notice.
Final Thoughts
These cases illustrate the Court of Appeal’s continuing focus on contract clarity, compliance with minimum standards legislation, and procedural discipline. Whether drafting employment agreements or litigating post-termination claims, employers and legal counsel must use precise language, anticipate regulatory scrutiny, and stay alert to strategic pitfalls like issue estoppel and limitation periods.
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DISCLAIMER The information in this article was correct at time of publishing. The law may have changed since then. The views expressed in this article are those of the author and do not necessarily reflect the views of LawNow or the Centre for Public Legal Education Alberta.
About Elka Dadmand
