Court Confirms: Precise Wording Can Limit Severance to ESA Minimums

When it comes to termination clauses, a single word can make the difference between a modest payout and a significant severance award. The Ontario Court of Appeal’s recent decision in Bertsch v. Datastealth Inc. (2025 ONCA 379) is a reminder that airtight drafting can protect employers, while unclear wording can expose them to major liability.

The Facts

Mr. Bertsch, a vice-president at Datastealth earning $300,000 a year, was terminated after just 8.5 months of service. His contract provided four weeks’ notice in line with the Employment Standards Act, 2000 (ESA). Arguing that the termination provision was unclear and therefore invalid, Mr. Bertsch claimed he was entitled to common law notice — which could have resulted in a far larger payout.

The Court’s Decision

The Court of Appeal disagreed. It upheld the contract, finding that:

• The termination clause was clear and enforceable.

• It explicitly limited entitlements “with or without cause” to ESA minimums.

• A built-in “failsafe” provision ensured compliance with the ESA.

• The law requires more than the mere possibility of confusion to make a contract ambiguous.

In short, the Court confirmed that properly drafted ESA-only clauses will be enforced — even for senior executives.

Why This Matters

This decision underscores the importance of precision in drafting:

• For Employers: Well-crafted termination clauses can significantly reduce liability exposure. But if a clause is vague, conflicts with the ESA, or leaves room for multiple interpretations, courts will strike it down — often awarding employees common law notice instead.

• For Employees: Just because your employer points to a contract doesn’t mean it’s the final word. If a termination clause is poorly drafted or unenforceable, you may be entitled to substantially more compensation.

Key Takeaway

The Bertsch decision reinforces that in employment law, clarity is king. Employers should have contracts reviewed and updated regularly, and employees should seek advice before signing or accepting a severance package.

At Hosseini & Hosseini LLP, we help both employers and employees navigate employment contracts, wrongful dismissal claims, and severance negotiations. If you’re dealing with a termination issue, we can make sure you understand your rights and options.