Employers and employees in Ontario have long been permitted to contract out of common law notice entitlements, provided their agreements meet or exceed statutory minimums under the Employment Standards Act, 2000 (ESA). However, in recent years, courts have closely scrutinized termination provisions, leading to increased uncertainty for employers.

The recent Ontario Superior Court of Justice decision in Bertsch v. Datastealth Inc., 2024 ONSC 5593, provides welcome clarity, reaffirming that properly drafted termination provisions will be enforced—even when they limit an employee’s entitlements to ESA minimums. The decision also demonstrates how employers can use procedural tools like Rule 21 motions to resolve contractual interpretation disputes efficiently.

In 2023, the federal government broadened the scope of reportable transactions under mandatory disclosure rules, sparking considerable concern among employment lawyers about how these changes might affect settlement agreements involving general damages and the associated reporting requirements to the Canada Revenue Agency (CRA). This article provides an update on these concerns in light of the federal government's recent clarifications.