Despite working in Manitoba, director’s wrongful dismissal claim to proceed in Ontario
A Manitoba woman who was fired on her first day returning from mental health leave has won the right to pursue her wrongful dismissal claim in Ontario, despite working in Manitoba.
In a decision released Nov. 17, 2025, the Ontario Superior Court of Justice dismissed Canadian Nuclear Laboratories’ (CNL) motion to stay the proceedings, ruling that a clause in the original employment contract remained valid and enforceable even after her employment transferred to CNL.
In her job, Georgina Barnett claimed there was an unsupportive, toxic, discriminatory culture and that she was underpaid. At one point, she suffered a complete mental health breakdown leading to a PTSD diagnosis. But on her first day back from approved medical leave, CNL terminated her employment during a virtual meeting, and simultaneously cut off her disability benefits.
Restructuring doesn't erase contract terms
Barnett was initially hired by Atomic Energy Canada (AECL), a Crown corporation, in 2014 at an annual salary of $105,000. Her employment contract included a clause stating, "the courts of Ontario have exclusive jurisdiction to determine any dispute between you regarding or in any way relating to this agreement, your employment with AECL or the termination thereof."
Just months after starting, her employment transferred to CNL as part of a government-owned, contractor-operated (GoCo) restructuring model. The AECL contract anticipated this transition, stating the agreement "may be assigned by AECL to a wholly owned subsidiary of AECL as part of an internal re-organization."
In response to the wrongful dismissal claim, CNL argued the forum selection clause didn't apply to them, but Justice Brian Holowka disagreed.
Termination after medical leave
Over her decade with CNL, Barnett's responsibilities grew significantly — from managing procurement to directing business operations with 32 employees — and her salary increased to $220,400 by 2023.
The claim outlines a pattern of workplace misconduct beginning in 2019 when new leadership took over at Whiteshell Laboratories. Barnett alleges her manager became "unsupportive, dismissive, and even 'cruel' towards her, including laughing at her in his office after she found out he planned to have her terminated."
After raising concerns with investigators examining the toxic workplace culture, Barnett experienced various physical and mental health issues culminating in a complete breakdown and PTSD diagnosis. She took two approved short-term medical leaves and indicated her ability to resume work progressively.
However, CNL dismissed her employment on Jan. 8, 2024 without prior notice.
Contract clause survives corporate shuffle
CNL contended that Barnett's employment represented a novation requiring a new contract, not an assignment of the original AECL agreement. The company also argued that even if the forum selection clause applied, strong cause existed to decline jurisdiction because most events occurred in Manitoba, the contract was formed there, and Manitoba's Workers' Compensation Act might bar certain claims.
Justice Holowka rejected these arguments, finding the AECL contract was "drafted with the flexibility to anticipate" the transfer to CNL. The contract included language stating it would "continue to govern your employment, notwithstanding your length of service or any change in your position, place of employment, salary, benefits or other terms of employment."
The court concluded CNL "became subject to the terms of the AECL contract" when it assumed Barnett's employment in November 2014.
