Finally, a breath of fresh air for employers

A new Ontario Court of Appeal case is providing a breath of fresh air for employers, who have been under siege in a barrage of court decisions that have declared numerous employment agreements unenforceable.  Especially since the 2017 decision in Wood v. Fred Deeley Imports Ltd., 2017 ONCA 158 (CanLII), courts across Canada have been parsing employment contracts to find sometimes razor-thin reasons to invalidate them – often due to non-compliance with technical requirements of employment standards legislation.  Employers’ frustrations were reflecting in the 2023 Financial Post article titled “Why many new employment contracts are just as unenforceable as the old ones.”

 However, this month in the case of Bertsch v Datastealth Inc., 2025 ONCA 379, employers were handed a big win.  The Court ruled that an employment contract stipulating notice of dismissal equal to Employment Standards Act minimums was enforceable, especially as a result of the presence of this “catch-all” clause:

 “If any of your entitlements under this Agreement are, or could be, less than your minimum entitlements owing under the Ontario Employment Standards Act, 2000, as amended from time to time, you shall instead receive your minimum entitlements owing under the Ontario Employment Standards Act, 2000, as amended from time to time.”

 Here are some takeaways from the Bertsch case:

 1. Clear and Unambiguous Language Works

Here, the termination clause succeeded because it explicitly stated it applied "with or without cause" and clearly limited Bertsch’s entitlements to ESA minimums. Employers should use precise contract language that leaves no room for misinterpretation.

2. ESA Compliance is Essential

The clause in question was enforceable because it complied with ESA minimum standards. Employers must ensure termination provisions always provide statutory minimums. Otherwise, the entire clause is at risk of being void.

3. Include Failsafe Provisions

The agreement included a "failsafe"/”catchall” clause [Section 11(a)] that ensured ESA minimums would be provided if any other provision fell short. This approach provides additional protection against challenges.

4. Ambiguity Standards are Strict

Courts won't find ambiguity simply because an untrained person (in this case, Bertsch) might misunderstand the content of their contract. The test is whether the clause can be "reasonably interpreted" in multiple ways, not whether someone might incorrectly interpret it.

5. Proper Drafting Can Limit Common Law Notice

Well-drafted termination clauses can successfully extinguish expensive common law notice periods and can even limit employer liability to statutory minimums. This approach can result in significant cost savings and time efficiency in respect of terminations without cause.