Executive Summary: Key Legal and Evidentiary Issues

• The plaintiff challenged the enforceability of a termination clause in his employment contract after being dismissed without cause.

• The clause limited entitlements strictly to the minimum standards under Ontario’s Employment Standards Act, 2000 (ESA).

• The plaintiff argued the clause was void for violating the ESA or for being ambiguous and unclear to an average employee.

• The Court of Appeal found the termination clause unambiguous and in full compliance with ESA minimum standards.

• The use of “with or without cause” in the clause was held to clearly avoid infringing ESA protections against unjustified cause-based termination.

• The court reaffirmed that speculative misreadings by non-lawyers do not render clear contract terms ambiguous or unenforceable.

Facts and procedural history

In Bertsch v. Datastealth Inc., 2025 ONCA 379, the Ontario Court of Appeal reviewed a wrongful dismissal appeal brought by Gavin Bertsch against his former employer, Datastealth Inc. Bertsch had been hired as a vice-president earning $300,000 annually and was terminated without cause after only 8.5 months of service. Upon termination, he received four weeks’ pay in lieu of notice, in line with the minimum statutory entitlements under the Employment Standards Act, 2000 (ESA).

Bertsch sued for wrongful dismissal, seeking common law notice damages, arguing that the termination clause in his employment agreement was unenforceable. The employer brought a motion under Rule 21.01 of the Rules of Civil Procedure to interpret the contract and dismiss the action as disclosing no viable cause of action. The motion judge sided with the employer, holding that the clause was enforceable and not in breach of the ESA.

Bertsch appealed that decision.

Legal analysis by the Court of Appeal

The Court of Appeal upheld the motion judge’s findings and dismissed the appeal. The central legal question was whether the termination clause unlawfully allowed termination without ESA entitlements, particularly for conduct that fell short of “wilful misconduct,” which under the ESA disqualifies an employee from termination pay and severance.

The termination clause in question expressly stated that Bertsch would receive only the minimum entitlements under the ESA, whether his employment was terminated “with or without cause.” It also included a “failsafe” clause stating that if any contractual entitlement was less than ESA minimums, the employee would receive the ESA minimums instead.

The court rejected Bertsch’s argument that an average employee might mistakenly believe the clause allowed for termination without any pay for minor misconduct. It held that the wording of the contract was clear, unambiguous, and compliant with the ESA. The clause did not allow termination without notice for reasons that failed to meet the ESA’s definition of “wilful misconduct,” and it did not attempt to contract out of statutory minimums.

The court referenced Amberber v. IBM Canada Ltd., affirming that a termination clause is ambiguous only if it reasonably supports multiple interpretations. The mere suggestion that a non-lawyer could misunderstand the provision was insufficient. Legal ambiguity must be grounded in the text and structure of the agreement, not hypothetical confusion.

Outcome

The Court of Appeal unanimously dismissed the appeal and awarded $10,000 in costs to Datastealth Inc. The ruling affirms that termination clauses excluding common law notice can be enforceable if they clearly and lawfully limit compensation to ESA minimums, without breaching or contracting out of those statutory protections.

This case reinforces the importance of precision in drafting employment contracts and provides further guidance on how Ontario courts interpret and uphold termination provisions consistent with the ESA.