Another Court Win for Employees – And Another Wake-Up Call for Employers
By now, we should all know: when it comes to employment contracts, intent doesn’t matter—language does. But in case anyone needed a refresher, the Ontario Court of Appeal has delivered yet another painful reminder.
⚖️ What Happened?
In the case of De Castro v. Arista Homes, the employer relied on a termination clause that they thought was ESA-compliant. Spoiler alert: it wasn’t. The Ontario Court of Appeal upheld a lower court decision that found the clause was offside—and as a result, the employee was owed common law notice instead of the minimum ESA payout.
Translation? What could’ve cost 4 weeks’ pay turned into 8 months’ pay. Because of the wording.
🧨 The Mistake? Two Little Words.
Here’s where it all fell apart:
- The contract said termination for “Cause or [list of ESA reasons]”
- It also said “Cause shall include…” – creating an open-ended, non-ESA compliant definition
Why does that matter? Because the ESA only allows termination without notice for wilful misconduct, disobedience, or wilful neglect of duty—not for just anything an employer wants to label “cause.”
So even though the employer intended to follow the law, the wording left the door wide open for an interpretation that violated the ESA. And the courts weren’t having it.
🧠 The Lesson (Again): Words Matter More Than Intent
This case is just the latest in a long list that prove:
“Good intentions don’t hold up in court. Clean, compliant language does.”
You can’t hide behind your “understanding” of the law if the contract language says otherwise. The ESA sets minimum standards. Contracts have to meet (or exceed) those. Period.
🔍 What Should Employers Do?
- Stop DIY-ing contracts from templates or old documents or worse – using the template found on Google.
- Review every contract, especially the termination clause, to ensure it’s ESA-compliant.
- Be hyper-literal. The courts are. Don’t assume your wording is “close enough.”
- Work with professionals who understand both the legal requirements and how to draft language that stands up to scrutiny.
✍️ CatalystHR Partners Can Help
At CatalystHR Partners, we don’t mess around with templates. We draft contracts that actually protect your business—and your people—by staying fully compliant while aligned to your culture, policies, and goals.
We’ve seen too many employers lose in court over things they thought were covered.
Let’s fix that before it becomes a $60,000 mistake.
📩 Ready for a contract audit? Let’s talk.
