The Ontario Court of Appeal just handed down a decision that should make every HR consultant and employer sit up a little straighter in their chair. In Bertsch v. Datastealth Inc., the Court confirmed that termination clauses that are clearly drafted and ESA-compliant can indeed limit an employee’s entitlement to the bare minimum outlined in the Employment Standards Act, 2000 (ESA)—even when the employee is a highly paid executive.
Let’s break it down.
🔍 The Backstory:
- The plaintiff was a VP earning $300K annually.
- He was terminated without cause after 8.5 months and received 4 weeks’ pay.
- He sued, claiming he was entitled to 12 months of common law notice.
- The employer said: Nope—our contract says ESA minimums only.
💼 The Contract Clauses in Question:
- The primary termination clause spelled out that only ESA entitlements (notice, severance, vacation, etc.) would apply.
- A “failsafe” clause reiterated that, if anything fell below ESA minimums, the ESA would prevail.
⚖️ The Outcome:
- The lower court agreed with the employer. The clause was clear and enforceable.
- The plaintiff appealed.
- The Court of Appeal said: Still clear. Still enforceable. No ambiguity. No wiggle room.
In doing so, the Court emphasized:
- Clear language matters. “With or without cause” is not up for debate.
- A clause is not ambiguous just because someone might misunderstand it. The legal test is about reasonable interpretation, not worst-case confusion.
💡 Why This Matters:
This case is now one of the strongest affirmations we’ve seen that well-drafted ESA-based termination clauses can hold up, even against high earners and in complex cases. It also validates the use of Rule 21 motions to cut through lengthy litigation when the legal footing is solid.
🚨 Take Action:
- Employers: Now is the time to dust off your employment agreements. If your contracts were drafted before the Waksdale era or haven’t been legally reviewed lately, they could be a liability.
- HR teams & consultants: This is your reminder that “close enough” won’t cut it when it comes to termination language. Precision = protection.
📩 Need help reviewing or updating your employment agreements? At CatalystHR Partners, we help Ontario businesses build proactive HR infrastructure that actually works. Let’s connect.
