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New Year HR and Employment Law Updates

On September 14, 2023, the Federal government further extended deadlines for Canada Emergency Business Account (CEBA) loan repayments, issued during 2020 and 2021 to small businesses and not-for-profit organizations to help cover their operating costs during the pandemic, with partial loan forgiveness offered in exchange for timely repayment.

Repayment by the new deadline of January 18, 2024 (or March 28 if a refinancing application is submitted prior to January 18 at the financial institution that provided their CEBA loan), will result in loan forgiveness of $10,000 for a $40,000 loan and $20,000 for a $60,000 loan. As of January 19th, outstanding loans will convert to 3-year term loans, subject to interest of 5% per year, with the term loan repayment date extended an additional year to December 31, 2026.

The following are some interesting trends and updates in Ontario employment legislation and caselaw:

Temporary Help Agencies (THA’s) and Recruiters must be Licensed

  • A temporary help agency (“THA”) or recruiter operating in Ontario is required to have a licence to operate. The original January 1, 2024 deadline was extended to July 1, 2024 for a THA or recruiter in Ontario to have a valid licence, or have submitted a licence application, in order to operate. Penalties may apply for non-compliance, and an organization may also risk penalty if it knowingly hires an unlicensed recruiter or THA. 
  • Note that licenses are not required for employees of organizations who recruit for other organizations. In that case, the organization requires a license, not its individual employees. Nor are licenses required for employees who recruit solely for their employers (e.g., recruiters in a bank).

Working for Workers Act, 2023 (“Bill 149”). If enacted, Bill 149 will amend various work-related statutes, specifically, the Employment Standards Act, 2000, Digital Platform Workers’ Rights Act, 2022, Fair Access to Regulated Professions and Compulsory Trades Act, 2006 and Workplace Safety and Insurance Act, 1997. Highlights to be prepared for, if enacted:

  • Employers will be required to disclose salary range information on job postings.
  • Employers in regulated professions will be prohibited from requiring “Canadian experience” (only) as a qualification for registration unless an exemption from the prohibition is granted in accordance with the regulations. 
  • If a prospective employer uses AI to screen, assess, or select applicants for a position, they must include a statement disclosing such use of AI in any job posting. This requirement may be subject to exemptions in the regulations.
  • Employers will be required to keep all postings and applications for 3 years in order to prove the above if needed.
  • Employers will not be able to use digital payment for tips on a platform which charges fees to the employee to access. Nor will establishment owners be allowed to participate in pooled tips unless they work alongside their staff in a similar capacity.  Employers will also be prohibited from deducting employee wages for losses incurred by customer behaviour such as theft, dine and dash, not paying for gas etc.
  • The vacation pay schedule must be set out in the employment contract for agreement by the employee if not paid out in advance of their vacation time via lump sum.

Potential Exposure Expanded in Wrongful Dismissal Cases

  • Caselaw continues to be upheld that a termination clause that provides in any way for less than the statutory minimum notice will be struck down in its entirety.  In that event, common law applies, and factors such as age, job level, length of service etc. are considered in determining the notice period a wrongfully dismissed employee is entitled to, with 24 months being the historic cap for C-suite or niche employees in exceptional circumstances.  In recent cases, the ON Court of Appeals has upheld longer notice periods for reasons such as age, longer service and specialized skills, considering the decreased likelihood of re-employment for these mid-level employees near retirement age. See Mildwid v IBM,  Lynch v Avaya.

Independent Contractor Agreements

  • Beware of engaging with an independent contractor for a fixed term. In a recent case, the company terminated the contract early and was required to pay for the balance of the term because there was no termination clause.  Because of their exclusive relationship, it was found to be more subject to employment law, and the contractor had no duty to mitigate as per typical contract law.  Monterosso v Metro Freightliner. 
  • Takeaway:  It is important to have an early termination clause in any fixed term agreement. Consider using an indefinite term contract with a termination clause.

COVID Decisions

  • Vaccine policies are dwindling but still being upheld when deemed necessary to keep employees and public safe, such as in a large hospital providing essential services. In a 2023 case, 47 grievances were dismissed in arbitration because vaccination was a condition of employment, therefore known up front, and considered necessary to protect the hospital’s reputation and ability to provide care to the public.
  • Human right exemptions to vaccine policies remain a necessary accommodation if for medical reasons or due to a sincerely held religious belief. It cannot be made up to support a personal preference.  It is expected that employers faced with such an objection will have an exploratory discussion with the employee and try in good faith to come to mutually agreeable resolution prior to any decision to terminate employment. 

More Human Rights – Accommodating Family Status

  • Family status accommodation tests vary by jurisdiction. In relation to requests to alter work arrangements in relation to childcare, typically the employee must demonstrate that the accommodation is genuinely needed and they have been trying without success to find a suitable alternative, including various forms of childcare, family members etc.  
  • As with other requests for accommodation under human rights grounds, the employer is obliged to give accommodation that is needed, not just what is wanted by the employee.  These discussions are not easy, but the employer can ask and explore what has been tried, and can decline a request that is simply a preference.  Ideally, mutual agreement can be reached for what is appropriate accommodation, the intended duration and what happens if it doesn’t work, and those considerations are then documented in an agreement.   
  • It is recommended to have a policy on family status accommodations, particularly with the increase in employees working from home. For example, it may be appropriate to specify that remote workers are expected to have a quiet, distraction-free workspace where they are able to focus on their work during their working hours. Remote workers may be expected to arrange for childcare if needed during working hours, with unplanned, temporary circumstances (like a school closure or sick child) accommodated on an exception basis.  Note that any changes to policy should be communicated with advance notice to allow impacted employees the opportunity to discuss with the employer if needed, and/or make any necessary arrangements.   

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.

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Employment Agreements, Terminations and Important Updates to COVID Legislation

Further to my last blog, the Waxdale case remains valid precedent, indicating that an entire termination clause in an employment contract may be struck in a wrongful dismissal case if the “for cause” termination clause is too broad and overreaching.

The significance of just cause terminations is that the employer is not necessarily required to pay notice or severance to the employee. Therefore, it is a high threshold to reach and be upheld. Further, there must be willful misconduct, an even higher threshold, to deny an employee’s ESA entitlements.  

As in most situations, case decisions on wrongful dismissal are fact and context specific, considering factors including the culture of the workplace, power imbalance among the parties, relevant policies and training, the severity of the action or actions, employee accountability, investigation process and outcomes, and reasonable alternatives to termination as applicable.

Just cause for dismissal is supportable where the employee’s behaviour violates an essential condition of the employment contract, breaches the faith inherent to the work relationship, or is fundamentally or directly inconsistent with the employee’s obligations to his or her employer. 

A single act of harassment can justify cause. In Render v ThyssenKrupp Elevator, the respondent had no intent to engage in sexual misconduct, but also did not appear to understand or acknowledge the impact of his behaviour.  The court agreed with the employer’s position that the employee had no appreciation of his actions and could not be confident it wouldn’t be repeated. Termination for cause was upheld. Factors including workplace culture, imbalance of power and circumstances of the incident also played a role in the decision.     

In Hucsko v. A.O. Smith Enterprises Ltd., the Ontario Court of Appeals upheld that a series of acts of verbal harassment, along with other factors including imbalance of power and lack of acknowledgement, constituted grounds for just cause termination. 

However, in McKinley v BC Tel, where an employee withheld information from his employer about his medical condition and related treatments, the Supreme Court held that the punishment or sanction must be proportional to the severity of misconduct, and in that case, while the misconduct was intentional and harmful to the employer, for cause termination was too severe of a response.  The court found that the employee’s dishonesty was not in a manner that undermined, or was incompatible with, his employment relationship.

COVID-related cases

Johnson Controls v Teamsters illustrates that context matters, where a just cause termination of a long service hospital employee for violating COVID screening protocols was supported.  The employee came to work with upper respiratory symptoms over several days but denied it in screening, and had COVID.  The intentional dishonesty, particularly in the health care setting, was sufficient to uphold the cause termination. The employee’s prior record was also a factor.

However, in Tenneco Canada Inc. v United Steelworkers, an employee had a pre-existing respiratory condition, denied symptoms in workplace screening, and was terminated for violating the screening protocol. The arbitrator concluded that although the employee’s conduct was very serious, it did not warrant the penalty of discharge. Mitigating factors included the employee’s acknowledgement and likelihood not to repeat the behaviour. The employee was reinstated with no backpay.

Takeaways:

– Employment agreements should be reviewed by an employment law professional and updated if needed to ensure the termination clause is enforceable.

– Note that employment agreements limiting the rights of existing employees cannot be amended without proper consideration (something of value such as a raise, promotion or extra vacation etc.) and acceptance (signature), so timing and approach to updating existing employment contracts is critical to the receptivity of staff to the request.

– Employers have a statutory duty to ensure a safe workplace, free from bullying, harassment, violence and discrimination. Make sure relevant policies are up to date and clear, including procedures for raising concerns and investigations, consistently reinforced, and include training.

– Employers also have a duty to investigate – whether internally or by a third party – claims of harassment or discrimination . If there is a finding of that or other misconduct, several factors should come into play to determine appropriate consequences.  Termination may be appropriate, noting that just cause is a high but not insurmountable threshold. There may be alternatives to termination in some circumstances.

– In determining whether there is a reasonable response to misconduct besides termination, first there must be confidence the employment relationship can continue. Consider all possible disciplinary actions and their proportionality in the context of the severity of the behaviour(s), policy language, employee’s service and record, outcome of investigation, impact of the behaviour and the employee’s response (i.e., is there is a sincere apology from the employee, recognition that the conduct was wrong, and assurance it won’t repeat). 

– Reasonable alternatives to termination may include leave, suspension, training, or different roles or reporting structures.    

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 or taken as legal advice or opinion.  Laws may change and should be interpreted in the context of their circumstances at the time. It is strongly encouraged to consult with an employment law professional for specific advice in any particular situation.

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Current status of ON Employment Standards related to COVID

The following are some important updates to COVID-related ESA rules, as the virus and related policies continue to evolve this year.

Paid Infectious Disease Emergency Leave extended to March 31, 2023

Paid infectious disease emergency leave (“IDEL”) previously set to end July 31, 2022, was extended again to March 31, 2023.  The Employment Standards Act, 2000 (ESA) was initially amended in April 2021 to require employers to provide eligible employees with up to 3 days of paid infectious disease emergency leave for certain reasons related to COVID-19, such as when an employee is under medical investigation, supervision or treatment, or is required to provide care for a specified family member. Additional paid leave is not required if the employee’s absence was already covered by the company’s paid leave policy.

Eligible employers can apply to the Workplace Safety and Insurance Board to be reimbursed for these payments of up to $200 per day for 3 days for each employee who takes paid IDEL. Individual or grouped claims must be made within 120 days of the date the employer paid the employee, or by July 29, 2023, whichever is earlier. 

Unpaid IDEL continues

Unpaid IDEL will continue to be available as an ESA leave for as long as COVID-19 is designated as an “infectious disease”. Employees will continue to be able to access Unpaid IDEL where the employee will not be performing work for one or more of the following reasons in relation to COVID-19:

  1. The employee is under individual medical investigation, supervision or treatment.
  2. The employee is subject to an order of a medical officer of health or a court under the Health Protection and Promotion Act.
  3. The employee is in quarantine or isolation or subject to a control measure, including self-isolation, that is undertaken because of information or directions issued by a public health official, qualified health practitioner, Telehealth Ontario, the government of Ontario or Canada, a municipal council or a board of health.
  4. The employer directs the employee to stay at home because of concerns that the employee might expose other individuals in the workplace to the designated infectious disease.
  5. The employee is providing care to any of the specified individuals listed above, including because of closures of schools and daycares.
  6. The employee is directly affected by travel restrictions preventing the employee from returning to Ontario.
  7. Any prescribed reason.

Employers should continue to assess all requests for unpaid IDEL on a case-by-case basis, and can ask for “evidence reasonable in the circumstances,” “at a time reasonable in the circumstances,” to verify the unpaid IDEL, but are prohibited from requiring employees to obtain medical certificates to justify the leave. 

Temporary ESA rules no longer in effect

“Deemed IDEL”, the temporary relief measures from the termination and severance provisions of the ESA, ended effective July 30th. Implications are as follows:

  • The termination and severance rules under the ESA related to layoffs will again apply where an employee’s hours of work have been reduced or eliminated, or an employee’s wages have been reduced, for reasons related to COVID-19.
  • Certain actions of an employer made in response to COVID-19—a temporary reduction or elimination of an employee’s hours of work, or a temporary reduction in an employee’s wages—will no longer be deemed not to be a constructive dismissal.

Employers should carefully consider possible impacts of these changes for any COVID-related staffing decisions going forward, and keep aware of any other legislative amendments resulting from changes in public health.

https://www.ontario.ca/document/your-guide-employment-standards-act-0/infectious-disease-emergency-leave