A rundown of notable employment and labour law changes from the past year
As we entered a new decade in 2020, Canada saw significant developments in labour and employment law, some of which related to COVID-19. Employment lawyers from Littler LLP in Toronto discuss 14 key 2020 developments that significantly affected employers over the course of the year and may continue to do so in the near future.
The year 2020 was one like no other in recent memory. Many employment law standards and principles went out the window as part of the rapid and radical change the pandemic brought to the way businesses operate. Here are some of the most prominent developments that affected employers and employees, both at the provincial and federal levels — some directly related to COVID-19 and some not.
The Ontario Superior Court recognized a new invasion of privacy tort: “publicity which places the plaintiff in a false light in the public eye.” The recognition by Ontario’s Superior Court of the new “false light” privacy tort in a family law case, Yenovkian v. Gulian, was significant to employers. The decision is a caution for employers that before they disseminate information about people to the public, including on the internet, they must ensure that it will not portray the person in a false light (i.e., as other than they are). Employers should be attentive to the language used in in their statements both to their own employees and to the general public, including when an employee or company officer is under investigation or has left the company, whether voluntarily or otherwise. In all cases, these statements should be reviewed carefully to ensure that they do not make claims that are false or misleading. Employers that do not conduct such a review may find themselves liable for significant damages for this new invasion of privacy tort, especially if the harm from the publicity is significant and their conduct is outrageous and egregious.
The Federal Court of Appeal affirmed federally regulated employees can make unjust dismissal complaints after signing releases. In Bank of Montreal v. Li, the Federal Court of Appeal (FCA) dismissed the employer’s appeal of the Federal Court’s decision and the Supreme Court of Canada subsequently dismissed an application for leave to appeal of the FCA judgment. Accordingly, employees of federally regulated employers may make claims for unjust dismissal during the permissible 90-day period, even after signing releases and settlement agreements.
The Canadian federal government provides 75-per-cent Canada Emergency Wage Subsidy (CEWS) to motivate business owners to keep employees employed during COVID-19 pandemic. The federal government created the 75-per-cent CEWS and made it available to all eligible companies — large, medium, small and non-profits — that experienced a specified reduction in revenue. The objective of the CEWS is to prevent further job losses, encourage employers to re-hire workers laid off due to COVID-19 and make it easier for employers to resume normal operations when the pandemic ends.
New leaves of absence created in some Canadian jurisdictions in response to COVID-19. In response to the COVID-19 crisis, the governments of a number of jurisdictions in Canada amended their employment standards legislation to entitle employees to emergency unpaid job-protected leave when unable to work due to the declaration of a state of emergency or for reasons related to the designation of COVID-19 as an infectious disease.
The federal government announced Canada Emergency Response Benefit (CERB) to support workers and businesses during COVID-19 pandemic. On March 25, 2020, the Government of Canada announced the CERB to support workers and businesses during the COVID-19 pandemic. The CERB was a taxable benefit open to workers regardless of their eligibility to receive Employment Insurance benefits. It provided workers who qualified with $2,000 per month for a specified number of months.
The Ontario government filed regulation under Employment Standards Act, 2000 eliminating (in most cases) temporary layoffs and risk of constructive dismissal claims for defined “COVID-19 period.” On May 29, 2020, the government of Ontario filed Regulation 228/20 under the province’s Employment Standards Act, 2000 (ESA). The regulation amended layoff and constructive dismissal rules under the ESA and, in most cases, eliminates temporary layoffs and constructive dismissal claims for a defined “COVID-19 period” (March 1, 2020 to July 3, 2021) during which many employers in Ontario have had to close or reduce operations. There is no case law yet on whether this regulation impacts the common law or is limited to the statute.
The Ontario Court of Appeal held proper method for determining enforceability of termination clause is to analyze employment agreement as a whole. In its June 17, 2020 decision of Waksdale v. Swegon North America Inc., the Ontario Court of Appeal held that the proper method for determining whether a termination clause in an employment agreement is enforceable is to analyze the agreement as a whole, rather than on a piecemeal basis. If any termination provision in the agreement is contrary to the requirements of the province’s Employment Standards Act, 2000 (ESA), all termination provisions in the contract will be considered unenforceable — regardless of the existence of a severability clause, which cannot be utilized to sever the offending portion of the termination provisions. Employers that wish to rely on an ESA-compliant “without cause” provision may be prevented from doing so and required to pay damages in lieu of common law reasonable notice if any other termination provision in the agreement violates the ESA. Accordingly, in light of Waksdale, employers must take extreme care to ensure that every termination provision in their employment contracts complies with the minimum requirements of the ESA. The Supreme Court of Canada dismissed the employer’s application for leave to appeal.
The Court of Appeal of Newfoundland and Labrador held that employer must individually assess if employee can safely perform job despite use of medical cannabis, without undue hardship to employer. On June 4, 2020, in International Brotherhood of Electrical Workers, Local 1620 v. Lower Churchill Transmission Construction Employers’ Association Inc., the Court of Appeal of Newfoundland and Labrador overturned the decision of the province’s Supreme Court, which addressed an employer’s obligation to accommodate medical cannabis use for workers in safety-sensitive positions. The Court of Appeal decided that rather than considering the class of individuals who use medical cannabis, the better approach is to individually assess whether, regardless of the absence of a scientific or medical standard, the employee could safely perform the job despite his use of medical cannabis, without undue hardship to the employer.
The Ontario Court of Appeal confirms past experience with vendor in asset purchase transaction a factor in calculating reasonable notice. The Ontario Court of Appeal in Manthadi v. ASCO Manufacturing analyzed the common law approach to the calculation of reasonable notice when a vendor terminates employment in an asset purchase transaction, the employee signs a release and is hired by the successor employer and the successor then terminates the employee’s employment. The decision indicates that the past service with the vendor may be a factor in the reasonable notice calculation, which involves weighing the experience the employee brings to the successor employer and does not involve “stitching together the employee’s two terms of service.”
The Saskatchewan Court of Appeal affirms moral damages award due to untruthful employee termination. In Porcupine Opportunities Program Inc. v. Cooper, the Saskatchewan Court of Appeal affirmed that a trial court appropriately decided to award $20,000 in moral damages to an employee upon finding that the employer had breached its duty of good faith and fair dealing when it was untruthful and misleading during the termination process. Porcupine provides employers with invaluable guidance regarding how they should manage a dismissal as well as the pre- and post-termination events.
The Supreme Court of Canada overturns Nova Scotia Court of Appeal in a landmark bonus case. On Oct. 9, 2020, in Matthews v. Ocean Nutrition Canada Ltd., the Supreme Court of Canada (SCC) released a highly anticipated decision in an employee’s appeal of the Nova Scotia Court of Appeal’s (NSCA) setting aside the damages awarded under a long-term incentive plan following a constructive dismissal. The SCC’s decision has clarified the analysis for determining the entitlement to damages for a lost bonus in a wrongful dismissal case. Furthermore, the top court put employers on notice that: (i) certain bonus language will not be viewed as unambiguously removing or limiting the employee’s common law entitlement; and (ii) if an employee sues for damages for mental distress and/or punitive damages for a breach of the duty to exercise good faith in the manner of dismissal, and the circumstances are appropriate, a court may declare that the employer breached the duty and award damages.
The Ontario Human Rights Tribunal awards significant damages to employee who acquiesced to sexual relationship with supervisor. In NK v. Botuik, the Human Rights Tribunal of Ontario (HRTO) awarded $170,000 in damages to a vulnerable employee. After being sexually harassed by her direct supervisor, the employee engaged in unwelcome sexual activity, fearing that if she refused she would lose her job and be unable to care for herself and her young son. In its lengthy decision, the HRTO emphasized that an employee’s participation in sexual activity with a direct supervisor in “a state of fearful compliance” is not “true consent.”
Ontario arbitrator upholds for-cause dismissal of employee with COVID-19 who put colleagues and others at risk. In Garda Security Screening Inc. v. IAM, District 140 (Shoker Grievance), a labour arbitrator dismissed a grievance pertaining to the for-cause dismissal of a unionized employee who worked at an airport. The arbitrator determined that the employee was aware of and violated her employer’s guidelines and the Public Health Agency of Canada’s COVID-19 guidelines when she went to work after she was tested for COVID-19 and was waiting for her results, rather than self-isolating as she was required to do. The arbitrator concluded that because the employee had done this, her for-cause dismissal was justified.
Ontario arbitrator upholds mandatory employee COVID testing. In Christian Labour Association of Canada v. Caressant Care Nursing & Retirement Homes, a union filed a group grievance on behalf of a number of its members working at an Ontario retirement home. The grievance challenged the reasonableness of a policy imposing a bi-weekly COVID testing requirement on all staff. In a Dec. 9, 2020, decision, the arbitrator dismissed the grievance on the basis that the policy was reasonable when the privacy intrusion was weighed against the objective of preventing the spread of COVID in the retirement home.
For more information see:
- Yenovkian v. Gulian, 2019 ONSC 7279 (Ont. S.C.J.).
- Bank of Montreal v. Li, 2020 FCA 22 (F.C.A.).
- Waksdale v. Swegon North America Inc., 2020 ONCA 391 (Ont. S.C.J.).
- International Brotherhood of Electrical Workers, Local 1620 v. Lower Churchill Transmission Construction Employers’ Association Inc., 2020 NLCA 20
- Manthadi v. ASCO Manufacturing, 2020 ONCA 485
- Opportunities Program Inc. v. Cooper, 2020 SKCA 33 (Sask. C.A.).
- Matthews v. Ocean Nutrition Canada Ltd., 2020 SCC 26 (S.C.C.).
- NK v. Botuik, 2020 HRTO 345
- Garda Security Screening Inc. v. IAM, District 140 (Shoker Grievance)  O.L.A.A. No. 162
- Christian Labour Association of Canada v. Caressant Care Nursing & Retirement Homes, 2020 CanLII 100531 (Ont. Arb.).
Rhonda B. Levy is a knowledge management counsel for Littler LLP in Toronto. She can be reached at (647) 256-4545 or [email protected] Sari L. Springer is office managing partner for Littler LLP in Toronto. She can be reached at (647) 256-4509 or [email protected] Barry Kuretzky is a partner with Littler LLP in Toronto. He can be reached at (647) 256-4503 or [email protected] George Vassos is a partner with Littler LLP in Toronto, practising on a wide variety of labour and employment law issues. He can be reached at (647) 256-4504 or [email protected] Monty Verlint is a partner with Littler LLP in Toronto, practising in all areas of labour and employment law. He can be reached at (647) 256-4506 or [email protected]