Enforceable Termination Clause: Bertsch v. Datastealth Inc., 2025 ONCA 379
In the recent case of Bertsch v. Datastealth Inc., 2025 ONCA 379 [“Bertsch”], the Ontario Court of Appeal (the “ONCA”) upheld the lower court's decision that held a termination clause in an employee's employment agreement was enforceable, and effectively ousted the employee's entitlement to reasonable notice at common law.
Facts
Mr. Bertsch was employed by Datastealth for approximately eight and a half months as vice-president until he was dismissed without cause. Mr. Bertsch had signed an employment agreement that purported to limit his entitlements upon his dismissal to his minimum entitlements under the Employment Standards Act, 2000 (the “ESA”). Upon his dismissal, Mr. Bertsch was offered four (4) weeks' pay, which was much higher than the one (1) week's pay he would have been entitled to under the ESA and per his employment agreement.
Mr. Bertsch brought a wrongful dismissal action, arguing that the termination clause was void because it was ambiguous and allowed Datastealth to dismiss him for the lower common law standard of “just cause” and provide him with no notice or no pay in lieu. Such a clause would violate the ESA, because the ESA only allows an employer to withhold an employee's minimum entitlements under such legislation if the employee is dismissed for “wilful misconduct, disobedience, or wilful neglect of duty” per the ESA's Regulation O. Reg 2888/01, which is a higher standard than that of “just cause” at common law.
The motion judge disagreed with Mr. Bertsch's arguments. The motion judge held the termination clause was enforceable because there was “no reasonable alternative interpretation…which would be contrary to the minimum requirements of the ESA and regulations.” The motion judge also held that the termination clause was not ambiguous and clearly excluded Mr. Bertsch's entitlement to reasonable notice at common law. Therefore, Mr. Bertsch was not entitled to anything further.
ONCA Upholds Enforceable Termination Clause
On appeal, Mr. Bertsch argued the motion judge erred in refusing to find that the termination clause was ambiguous. The ONCA disagreed with Mr. Bertsch. The ONCA found that this was not a case where the employment agreement used legal terms or language that might be confusing to a lay-person. The ONCA held the termination clause clearly stated an employee who was terminated “with or without cause” would receive their minimum payments and entitlements under the ESA and its regulation and would be entitled to nothing further.
As a result, Mr. Bertsch's claim was struck without leave to amend, ending his lawsuit against Datastealth.
Key Takeaways
The Bertsch case is a significant win for employers and demonstrates the court will uphold a properly drafted termination clause in an employment agreement. In this example, the termination clause contained clear and unambiguous language that complied with the ESA, and effectively defeated the employee's broad allegations that it was ambiguous.
The Bertsch case is a helpful reminder for employers to regularly review their contract templates and ensure such language is clear and is up to date on new case law developments. We encourage you to regularly seek legal advice to review and reconsider the language used in your existing employment agreement templates.
Errors Made at Termination did not Constitute Bad Faith: Boyle v. Salesforce.com, 2025 ONSC 2580
In the recent case of Boyle v. Salesforce.com,2025 ONSC 2580 [“Boyle”], the Ontario Superior Court of Justice found that mistakes made by the employer in the manner of dismissal, as well as in the written termination letter, did not rise to the level that would award the employee moral or punitive damages.
Facts
Mr. Boyle was employed by Salesforce for approximately eight years and worked as a Senior Success Signature Engineer prior to his dismissal. He was 49 years old at the time of termination. While on vacation, Mr. Boyle discovered he was part of Salesforce's significant workplace reduction, in which 10% of its workforce (i.e., over 3000 employees) had been dismissed. Mr. Boyle learned he had been terminated when a colleague sent him a text message to advise his account on Slack had been deactivated, prompting Mr. Boyle to check his email and discover he had received a termination letter.
Mr. Boyle brought a wrongful dismissal action against Salesforce and was awarded a reasonable notice period of 11 months at the summary judgment motion. However, the motion judge drew an adverse inference from Mr. Boyle's failure to produce his notice of assessment prior to the summary judgment motion and deducted three months' notice from the awarded notice period on account of failure to mitigate damages.
No Entitlement to Damages
A significant issue at the summary judgment motion was whether Mr. Boyle was entitled to moral and punitive damages on account of the manner in which he learned of his dismissal. The motion judge held that while the circumstances surrounding Mr. Boyle's termination were “not ideal,” they did not demonstrate bad faith on Salesforce's part. The motion judge held that the evidence did not support Mr. Boyle experienced distress beyond that which can be expected to accompany learning that one has lost their job.
Mr. Boyle also argued Salesforce made significant errors in the termination letter that breached the ESA and constituted bad faith conduct. Specifically, Mr. Boyle argued:
- Salesforce provided him with a “non-working notice period” and kept him on the payroll to avoid having to provide him with statutory severance pay as a lump sum;
- the termination letter did not indicate Mr. Boyle would receive his statutory entitlements during the notice period if he found new employment;
- the termination letter did not say Mr. Boyle would receive his statutory entitlements regardless of whether he accepted Salesforce's enhanced offer at termination;
- Salesforce would not provide Mr. Boyle with his bonus unless he signed a release; and
- Salesforce erred in calculating the proper amount of statutory severance pay owing to Mr. Boyle and did not pay him the proper amount to him until a year later.
The motion judge held that none of the above complaints rose to the level that would entitle Mr. Boyle to an award of moral or punitive damages.
The motion judge found that the termination letter did in fact state Mr. Boyle would receive his statutory severance pay as a lump sum amount on the next regularly scheduled payroll date.
Further, the motion judge held that it was open for Salesforce to take the position that it was not required to pay Mr. Boyle his bonus unless he signed a release, based on the wording of its bonus policy. There was no indication Salesforce took this position in bad faith.
Finally, the motion judge found Salesforce corrected the error in the amount of severance pay owing to Mr. Boyle when it realized it had made a mistake and held that an error does not amount to bad faith or reprehensible behaviour.
In sum, the motion judge held Salesforce was not untruthful, misleading, or unduly insensitive, and it did not fail to be reasonable and forthright with Mr. Boyle. Salesforce's actions in how it dismissed Mr. Boyle did not constitute a marked departure from ordinary standards of decent behaviour. The motion judge found that Mr. Boyle's distress and feelings at the time of termination were understandable but did not go beyond what would normally be expected. The motion judge noted that Salesforce was managing a large layoff, and while it may have done so imperfectly, it did not do so in a way that attracted moral, aggravated, or punitive damages.
Key Takeaways
At all times, employers should strive to ensure the manner in which an employee is dismissed is appropriate, and the termination letter issued to the employee does not contain errors. We encourage you to seek legal advice prior to dismissing a large number of employees and to regularly review your termination letter templates.
However, the Boyle decision makes clear that not every error made in the course of dismissing an employee will attract moral, aggravated, or punitive damages at a trial. The Boyle decision suggests the courts may extend some leeway to employers who inadvertently make errors in the course of carrying out a large layoff and reminds us that such errors do not in and of themselves amount to bad faith or reprehensible behaviour.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
