A recent Ontario Court of Appeal decision is good news for employers: termination clauses that limit entitlements to Employment Standards Act (ESA) minimums will be upheld—if they’re properly drafted. 

In Bertsch v. Datastealth Inc., the Court reinforced a more practical and business-focused approach to interpreting termination provisions, providing clarity for companies seeking to manage employment risk through enforceable agreements. 

Why This Case Matters to Employers 

This decision is a win for organizations that rely on well-drafted employment agreements to control termination costs. It confirms that: 

• Employers can lawfully restrict termination entitlements to ESA minimums 

• Termination clauses don’t need to eliminate all potential confusion—just be clear to a reasonable reader 

For in-house counsel, this provides renewed confidence that a straightforward, compliant termination clause can offer meaningful protection from wrongful dismissal claims. 

Case Summary: Bertsch v. Datastealth Inc. 

• The context: A VP-level employee was terminated after eight months and given four weeks’ notice in line with the ESA. 

• The agreement: His employment contract clearly limited termination entitlements to ESA minimums and excluded common law notice. 

• The challenge: The employee argued the clause was ambiguous and unenforceable. 

• The outcome: Both the trial judge and the Court of Appeal disagreed—the clause was enforceable. 

Key Takeaways for General Counsel and HR Leaders 

1. Clarity Wins

If a termination clause clearly states the employee is entitled only to ESA minimums—without contradicting ESA rights—it can be enforced. Ambiguity must be material to be fatal. 

2. Courts Are Focusing on Reasonableness

The Court held that enforceability is judged from the perspective of a reasonable person reading the contract—not based on hypothetical confusion. 

3. Common Law Notice Can Be Excluded

This decision confirms that employers can validly contract out of common law notice if done properly. Courts will uphold that intention when clearly expressed. 

4. Review Older Agreements

Contracts signed years ago may not meet current standards for ESA compliance. Even small drafting issues can create risk. Now is a good time for employers to revisit template language. 

Now more than ever, HR and legal teams should ensure every new employment agreement includes a clearly worded, ESA-compliant termination clause. 

If your company needs to implement these clauses across an existing employee pool, a strategic rollout is essential. Caravel Law can help—from drafting to deployment strategy—to protect your business and reduce legal exposure. 

What This Means for Employers 

If your organization relies on employment agreements with ESA-based termination clauses, this ruling provides greater legal certainty—but only if your contracts are up to date and compliant. 

At Caravel Law, we regularly advise general counsel and HR teams on: 

• Drafting ESA-compliant termination provisions 

• Reviewing existing employment agreements for enforceability 

• Creating scalable contract templates for growth-stage and established businesses 

• Minimizing exposure to wrongful dismissal claims 

Next Steps 

• Audit your employment contracts 

• Update any outdated or ambiguous clauses 

• Plan your rollout strategy for legacy employees 

• Work with legal counsel who understands both ESA law and business risk 

Our employment law team is here to help. Contact us today.