The Ontario Court of Appeal has confirmed that when a termination clause clearly limits severance to the minimums under the Employment Standards Act (ESA), employees cannot claim additional common law notice — even if the wording feels harsh or confusing.
Case Overview
In B. v. Datastealth Inc. (2025 ONCA 379), the Court dismissed an employee’s wrongful dismissal claim, upholding a termination clause that limited him to ESA minimums.
The employee, a Vice-President earning $300,000 per year, worked for just over eight months before being terminated without cause. He received four weeks’ pay — the statutory minimum — and sued for additional severance under common law.
The Clause That Ended the Claim
The employment contract stated:
“If your employment is terminated with or without cause, you will be provided with only the minimum payments and entitlements, if any, owed to you under the Ontario Employment Standards Act, 2000…”
It also said that those payments would satisfy any other entitlement to notice or pay in lieu.
The employee argued that this wording was ambiguous — suggesting that a non-lawyer might misunderstand it to mean no payment would be provided in certain “for cause” terminations, contrary to the ESA.
The Court disagreed. It ruled that ambiguity requires more than just competing interpretations and that the clause could only be reasonably read one way: the employer must at least pay the ESA minimums in all cases. Because the clause was clear, it was enforceable and barred any claim for additional severance.
Key Takeaways for Employees
This case highlights how a few words in your employment contract can dramatically limit your rights on termination.
Don’t Assume Common Law Rights Apply
Unless your contract explicitly provides for additional severance, a clear ESA-only clause can eliminate your right to months of common law notice.
Read the “For Cause” and “Without Cause” Provisions Carefully
If both sections only reference ESA minimums, you’ve likely waived your right to a larger payout — no matter your position or income.
Get a Legal Review Before Signing
For senior employees or those with high salaries, a contract review by an employment lawyer is essential. Spending a few hundred dollars at the start could save you tens of thousands later.
Negotiate Before You Start
Once you’ve signed, courts will rarely rescue you from a clear clause. The best time to negotiate better severance terms is before accepting the job.
The decision in B. v. Datastealth Inc. is a reminder that employees must protect themselves before signing. If your offer letter limits your rights to ESA minimums, you may be signing away months of potential severance. Before you agree to any terms, it’s important to understand your rights and what you may be giving up.
At Monkhouse Law Employment Lawyers, our team helps employees review employment contracts and negotiate fair severance packages. Contact us to book your free 30-minute phone consultation to learn how we can help protect your entitlements under Ontario law.