What happens if my employer ends a fixed-term employment contract early in Ontario?

Ending a fixed-term employment contract before its stated end date can expose an employer to paying out the entire remaining balance of the term, unless the contract contains a clear, enforceable early-termination clause that limits the employee's entitlement to something less. This is a significant risk for employers, because unlike indefinite-term employment, courts have generally not required a dismissed fixed-term employee to mitigate their damages by looking for other work, unless the contract specifically addresses mitigation, which can make an early termination considerably more expensive than a comparable dismissal from an indefinite position would be.

Whether a specific termination clause in a fixed-term contract is enforceable depends on how clearly and properly it was drafted, similar to how termination clauses in indefinite-term contracts are assessed generally. Anyone on a fixed-term contract facing early termination, or any employer considering ending one early, should have the specific wording of the contract reviewed before assuming either the full remaining balance or a limited entitlement automatically applies.