Court of Appeal Upholds ESA‑Compliant Termination Clause

In Bertsch v. Datastealth Inc., 2025 ONCA 379, the Ontario Court of Appeal confirmed that a well‑crafted termination clause limiting an employee’s entitlements to the minimum standards under the Employment Standards Act, 2000 (ESA) is enforceable.

For Ontario employers, this decision is more than just legal theory, it offers a roadmap for drafting and maintaining agreements that hold up when challenged.

Background to the Case

Gavin Bertsch, a vice president earning $300,000 annually, was terminated without cause after eight and a half months. Datastealth Inc., a Mississauga, Ontario-based company, relied on a clause in his employment contract that limited termination entitlements to ESA minimums.

The clause clearly stated that, on termination “with or without cause,” the employee would receive only ESA minimums and no common law notice. A failsafe provision further guaranteed that if any part of the clause conflicted with the ESA, the employee would still receive at least the statutory minimums.

Bertsch challenged the clause as ambiguous and sought common law damages. The courts, first the Ontario Superior Court of Justice, then the Ontario Court of Appeal, sided with the employer and confirmed the clause was enforceable.

Why the Decision Matters

This decision reinforces that clear, ESA‑compliant termination clauses can lawfully exclude common law notice. The Court of Appeal emphasized that ambiguity means genuine uncertainty in meaning, not just the possibility that someone might misunderstand the language.

As Christopher Achkar, employment lawyer and founder of Achkar Law, explains:

“This case shows that Ontario courts will enforce a termination clause if it’s drafted carefully. Employers should take this as a prompt to double‑check their contracts now, rather than waiting for a dispute. A review today can save significant costs and uncertainty down the road.”

Practical Steps Ontario Employers Can Take

The Bertsch decision offers a reminder and an opportunity to strengthen your contracts. Here are key actions to consider:

1. Review your existing employment agreements

Many older contracts contain language that may not reflect current case law. Conduct a thorough review with a workplace lawyer to ensure your termination clauses are unambiguous and include a failsafe provision.

2. Ensure all clauses reference ESA minimums clearly

Your termination language should clearly state that, if the employment ends “with or without cause,” the employee is entitled only to ESA minimums. Avoid vague terms or outdated references.

3. Include a failsafe clause

A simple statement that the employee will always receive at least ESA minimum entitlements can be the difference between a clause being upheld or struck down.

4. Train your team on using the correct agreements

Make sure hiring managers and HR staff are consistently using updated agreements. Old templates can easily slip through and create unexpected liabilities.

5. Plan regular contract reviews

Employment standards and case law evolve. Set a schedule, such as every 12 to 18 months, to review and refresh your agreements.

Moving Forward with Confidence

The Bertsch decision confirms that with precise drafting and proactive maintenance, termination clauses can effectively limit liability to ESA minimums.

If you would like guidance on reviewing or updating your employment agreements, speak with one of our workplace lawyers at Achkar Law.

The article in this client update provides general information and should not be relied on as legal advice or opinion. This publication is copyrighted by Achkar Law Professional Corporation and may not be photocopied or reproduced in any form, in whole or in part, without the express permission of Achkar Law Professional Corporation. ©

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