A recent court ruling could have big implications for federally regulated trucking companies, especially when it comes to termination clauses in employment agreements.
The Ontario Superior Court’s decision in Ghazvini v. CIBC suggests courts are now taking a stricter approach to how those contracts are written, even under the Canada Labour Code (CLC).
For years, there’s been some uncertainty about whether a key Ontario case — Waksdale v. Swegon — applied to federally regulated employers like trucking companies.
That case set a tough standard: if any part of a termination clause violates minimum employment standards, the entire clause can be thrown out — even if the problem section wasn’t used.
Until now, it wasn’t clear if courts would apply that same logic under federal rules. This latest decision suggests they will.
What happened in the case
Two CIBC employees challenged their termination, arguing the company’s employment agreement didn’t meet minimum standards under the CLC.
The court zeroed in on the “for cause” language, which allowed termination without notice for a broad list of reasons, including things like poor performance or policy violations.
The problem? Not all of those situations meet the legal bar for “just cause” under the CLC.
Because the wording was too broad and not clearly tied to the legal definition of “just cause,” the court found the clause didn’t comply with the law. That was enough to invalidate the entire termination section, including the “without cause” part.
The result: the employees were entitled to common law notice, which can be far more costly for employers.
What’s changed
The big takeaway is this: courts are now applying the same strict interpretation to federally regulated employers as they do to provincially regulated ones.
In other words, trucking companies can no longer assume their contracts will be given more flexibility just because they fall under federal rules.
If there’s ambiguity or wording that could allow termination below minimum standards, the whole clause may be unenforceable.
What hasn’t changed
The underlying requirement hasn’t changed: employers still need to meet minimum standards under the Canada Labour Code. What’s changed is how closely courts are scrutinizing the wording.
Even technical issues — like using “cause” instead of clearly defining “just cause” — can create problems.
What fleets should do
For trucking companies, the message is straightforward:
- Review employment agreements, especially termination clauses
- Tighten language around “for cause” and “without cause” provisions
- Make sure everything clearly aligns with CLC standards
- Consider updating agreements for existing employees, not just new hires
The risk otherwise? You could think you’ve limited liability in a contract only to find out in court that the clause doesn’t hold up.
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