Below is a sampling of important legislative updates (primarily to the Ontario Employment Standards Act) and recent ON cases pertaining to terminations and termination clauses.
Legislative updates
In 2024, three Ontario “Working for Workers” laws (Bills 149, 190 and 229) were enacted and will come into force at various dates in the coming year. These bills amended the Employment Standards Act (ESA), the Occupational Health and Safety Act (OHSA), and the Workplace Safety and Insurance Act, 1997 (“WSIA”), as well as other work-related statutes. So it’s a good time for employers to review their practices and policies to ensure compliance with new legislation coming into place.
June 19, 2025 – New Long-Term Job-Protected Leave (ESA)
Bill 229 amends the ESA to include two new long-term job-protected leaves. One of these – the new 27-week Long-Term Illness Leave – will come into effect June 19, 2025. This leave allows an employee who has been employed for 13 consecutive weeks to have up to 27 unpaid weeks of leave if they will not be working due to a serious medical condition. The employee must advise the employer in writing and provide a note from a doctor, RN, psychologist or other practitioner specified in regulation. That note must include the period of time that the employee will be off work, and the employee is only entitled to take leave for that period, unless extended under certain conditions.
July 1, 2025 – Required Information for New Employees (ESA)
As of July 1, 2025, employers with 25 or more employees will have to give new employees certain information before or when the employee commences their employment, preferably in their employment contract. This information includes the legal name of the employer and its operating or business name, complete contact information for at least one contact, and logistical information like where the employee will commence work, their expected hours of work, their starting compensation, and their pay period and pay day.
July 1, 2025 and January 1, 2026 – Constructors and Employers to Keep Clean Washrooms (OHSA)
As of July 1, 2025, constructors and employers must keep washrooms for workers in clean and sanitary condition, and keep records of washroom cleaning which are maintained and made available. As of January 1, 2026, the dates and times of the last two cleanings for each facility must be posted physically near the washroom or be available electronically (assuming workers get instructions on accessing the records).
January 1, 2026 – Changes to Job Postings, Including Salary Transparency (ON)
On January 1, 2026, employers with 25 or more employees will have to comply with new obligations relating to publicly advertised job postings and related application forms:
- Pay transparency. Job postings must include information about the expected compensation for the position or the range of expected compensation (within $50,000) for the position, where the expected compensation (defined as “wages” under the ESA) is less than $200,000 annually.
- AI disclosure. Job postings must disclose whether the employer uses artificial intelligence (AI) to screen, assess or select applications for the position.
- Canadian experience. Job postings and application forms must not include any job requirements related to Canadian experience.
- Vacancy. Job postings must include a statement disclosing whether the posting is for an existing vacancy or not.
- Follow up with interviewees. An employer who interviews an applicant for a publicly advertised job posting must, within 45 days of their last interview, inform the interviewee as to whether they have made a hiring decision for the posting.
- Information retention. Employers will have to retain every publicly available job posting and related application form, plus records of what information they provided to candidates, for 3 years after the posting is removed or the information is provided.
Note that a job posting is not “publicly advertised” for the purposes of these requirements if it is:
- A general recruitment campaign or general help wanted sign, not advertising a specific position
- An internal posting for existing employees only, or
- A posting for a position for which work is to be performed outside Ontario
While these new recruitment rules are currently unique to Ontario, a variety of pay transparency rules for recruitment have recently been introduced in BC and eastern provinces.
Caselaw updates
Invalidity of “At Any Time” Language in Termination Clauses
In the 2024 case of Dufault v. The Corporation of the Township of Ignace, the Ontario court held that an employment agreement’s termination provisions contracting out of the ESA by reserving the employer’s right to terminate without notice “at any time” and at the employer’s “sole discretion” were unenforceable. The court’s reasoning was that such language might allow an employer to terminate employees while they are subject to statutory protections, such as a statutory leave or after making a protected complaint about working conditions.
This decision has many employers and counsel scratching their heads again, given how common such language is in many employment agreements. The Ontario Court of Appeal declined to comment on the matter, deciding an appeal of the case on other grounds.
An Enforceable Termination Clause in Ontario. In the recent decision of Bertsch v. Datastealth Inc., the Ontario court upheld the enforceability of a termination clause in an employment agreement that limited the plaintiff’s entitlement to only the minimum standards under the ESA. The Court held that the clause, while wordy, was lawful and unambiguous, and dismissed the plaintiff’s claim for wrongful dismissal common law damages. The clause guaranteed all minimum statutory entitlements and excluded common law reasonable notice.
Employer Bad Faith in Termination
In Krmpotic v. Thunder Bay Electronics Limited, the Ontario Court of Appeal upheld a $50,000 aggravated damages award against the employer. The court found that the employer acted in bad faith by dismissing an employee just two hours after he returned to work after a lengthy medical leave, causing the employee mental distress. When assessing the award for aggravated damages, the trial judge concluded that the Company had breached the duty of good faith and fair dealing. Notably, this award was granted and upheld without supporting medical evidence, highlighting the courts’ willingness to penalize employers for bad faith conduct during terminations.
Takeaways
Employers will want to review their standard employments, policies, job postings and application forms to ensure that they comply with current and upcoming legislation.
The cited cases underscore the importance for employers to draft clear, ESA-compliant termination clauses, and to handle terminations with fairness and in good faith to avoid significant legal repercussions.
Note: My blog contains a general overview of legal cases, updates and perspectives from a variety of sources, and is not intended to be relied upon as legal advice or opinion. Laws may change and should be interpreted in their context at the time. It is strongly encouraged to consult with an employment law professional for situation-specific advice.