Contra Proferentem in Employment Contracts

Contra Proferentem in Ontario and BC: Why Ambiguous Employment Contract Language Almost Always Costs the Employer

Ambiguous contract language is not a neutral drafting failure it is a liability that courts in both Ontario and BC consistently resolve against the employer. The doctrine of contra proferentem means that where a clause in an employment agreement is unclear, it will be interpreted in the way most favourable to the employee. Since employers draft most employment contracts, most ambiguity costs the employer. Understanding where this risk concentrates, and what precise drafting looks like in each province, is essential for any organization that relies on written employment agreements to manage termination exposure and post-employment obligations.

What contra proferentem means in practice

When a court cannot determine with confidence what an employment contract clause means, it resolves the uncertainty against the party who wrote it almost always the employer.

This is not a technicality that courts apply reluctantly. It reflects a deliberate policy choice: employers have greater resources, more sophisticated legal advice at the drafting stage, and a structural advantage in the employment relationship. Courts use contra proferentem to rebalance that advantage when clarity was available but not achieved. The practical implication is that vague termination clauses, ambiguous bonus provisions, and overbroad restrictive covenants regularly result in outcomes significantly more expensive than a precisely drafted clause would have produced.

Are your employment contracts drafted with the level of precision required to withstand scrutiny in Ontario and BC?

Template and boilerplate agreements frequently contain the exact ambiguities that trigger contra proferentem and void termination clauses. Get your contracts reviewed before you next terminate an employee.

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Where contra proferentem creates the most risk for employers

Termination clauses

The highest-risk area. A termination clause that could be read as limiting entitlement to ESA minimums but is not clearly expressed will typically be interpreted as void defaulting the employee's entitlement to common law reasonable notice, which is frequently significantly higher. Ontario courts have been particularly consistent on this point across cases including the Waksdale and Dufault line. BC courts apply the same principle. Clarity in termination clause drafting is not optional.

Bonus and variable pay provisions

Where a bonus clause is ambiguous about what happens on termination without cause, courts interpret the ambiguity in the employee's favour. An "active employment" requirement that does not clearly address the specific situation of termination without cause may not exclude a terminated employee from bonus entitlement during the reasonable notice period. The clause must be clear and unambiguous vague language does not protect the employer.

Non-compete and non-solicitation clauses

Restrictive covenants are already heavily scrutinized in both provinces. In Ontario, most non-competes are banned since 2021. In BC, they are rarely enforced. Where a restrictive covenant is also ambiguous in scope, geography, or duration, the combination of narrow judicial interpretation and contra proferentem means the clause will almost certainly fail. Precision in drafting is the minimum requirement and even precise drafting may not be sufficient in Ontario for a non-compete.

Benefit continuation provisions

Where a benefits clause is unclear about whether coverage continues through the notice period or ends on the last day of active work, the ambiguity will be resolved in the employee's favour. Benefits continuation obligations during the statutory notice period are a minimum entitlement in both provinces an ambiguous clause that appears to cut off benefits earlier is vulnerable.

Ontario vs. BC: how the doctrine applies differently

Issue	Ontario	British Columbia
Statutory floor	Ambiguous clauses that may undercut the Employment Standards Act, 2000 are struck down; default to common law notice	Same approach ambiguous or inconsistent clauses under the BC Employment Standards Act are unenforceable; common law notice applies
Non-compete clauses	Banned in most cases since 2021 under the Working for Workers Act, 2021; ambiguity in a non-compete that might survive the ban is construed against the employer	Not banned by statute but rarely enforced; ambiguity in scope, geography, or duration makes enforcement even less likely
Termination clause ambiguity	Courts frequently void clauses for ambiguity alone the clause does not need to explicitly violate the ESA; ambiguity as to ESA compliance is sufficient	Courts take a similar approach unclear or inconsistent termination language results in the clause being set aside
Multi-province employers	Ontario-specific ESA obligations apply a global or US-drafted contract creates the same contra proferentem risk as a locally drafted ambiguous one	BC-specific ESA obligations apply importing a contract drafted for another jurisdiction creates immediate ambiguity and compliance risk
Judicial approach	Strong emphasis on statutory compliance; courts have applied contra proferentem consistently across Waksdale, Dufault, Wigdor, and Boyle	Similar emphasis; courts examine fairness and clarity especially for standard-form agreements where bargaining power was unequal

The lesson from both provinces is the same: a termination clause that is defensible on its face but ambiguous in application is treated as void not as one that provides the minimum. The result is common law reasonable notice, which is calculated on age, length of service, seniority, and the job market. For long-service or senior employees, this can represent a year or more of compensation. The cost of that exposure vastly exceeds the cost of drafting the clause correctly in the first place.

Best practices for employers in Ontario and BC

Use precise, unambiguous language throughout every employment contract if a clause can be read two ways, it will be read against you

Ensure every termination clause clearly and expressly meets ESA minimums in the specific province where the employee works do not rely on saving clauses to cure defective language

Avoid importing US-style or global contracts for Canadian employees at-will employment language and multi-jurisdiction provisions create immediate ambiguity under Ontario and BC law

In Ontario, remove non-compete clauses for most employees they are banned and their inclusion creates additional legal risk including contra proferentem exposure on other provisions in the same agreement

In BC, ensure any restrictive covenant is narrowly tailored in scope, geography, and duration ambiguity on any of these dimensions significantly reduces the likelihood of enforcement

Review bonus and benefit plan documentation to ensure termination treatment is explicitly and unambiguously addressed vague "active employment" requirements do not reliably exclude terminated employees from entitlement during the notice period

Do your employment contracts contain any clause that could be read two ways?

Ambiguity in employment contracts is not a neutral drafting outcome it consistently resolves against employers in both Ontario and BC. Our team advises employers on employment agreements and termination clause compliance. Get your contracts reviewed before a dispute forces the issue.

Get Your Contracts Reviewed Or call us: 1-800-771-7882

Practical takeaways for Ontario and BC employers

Ambiguous contract language is interpreted against the employer in both Ontario and BC this is not an edge case, it is the consistent and deliberate approach of Canadian courts

A termination clause that is ambiguous as to ESA compliance is treated as void in both provinces the clause does not need to explicitly violate the Act to be struck down

Bonus and benefit clauses that do not clearly address termination without cause may be interpreted as continuing entitlement through the notice period explicit and unambiguous language is required to exclude terminated employees

Non-compete clauses are banned for most Ontario employees and rarely enforced in BC ambiguity in a restrictive covenant compounds an already unfavourable enforcement environment

Employers operating in both Ontario and BC should not use a single template agreement for both provinces ESA obligations differ between jurisdictions and a single agreement creates compliance and ambiguity risk in both

Have all employment contracts reviewed by a lawyer familiar with the current case law in the specific province the standard for enforceable termination clauses has shifted significantly in recent years in both Ontario and BC

Questions about employment contract drafting or termination clause compliance in Ontario or BC?

Our team advises employers across Ontario and BC on employment agreements, termination clauses, and restrictive covenants. Contact us for a confidential consultation before your next hire or termination.

Call us at 1-800-771-7882 or fill out the form below and we will be in touch.

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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