In 2022, Canada saw significant statutory and case law developments in labour and employment law, some of which related to COVID-19. This Insight provides an overview of key 2022 developments, with links to more detailed articles and commentary.

1. Ontario and British Columbia Produced Arbitration Awards Supporting Imposition of Vaccine Policies in Workplace to Reduce Spread of COVID-19

In 2022, we continued to see a steady flow of arbitration awards in Ontario and British Columbia that considered issues relating to mandatory COVID-19 vaccination policies in the unionized workplace. The “weight of authority” supported the imposition of vaccine policies in the workplace to reduce the spread of COVID-19, provided that employers complied with their obligation to accommodate employees under human rights legislation. The arbitrators concluded that the authority to impose such policies arose from management’s right to implement reasonable rules and regulations under the collective agreement, and from the employer’s duty to take necessary measures to protect the health and safety of workers under occupational health and safety legislation, which outweighed the minimal intrusion on the employee’s privacy rights. Arbitrators noted that context is an important factor to consider because reasonableness of a vaccination policy in a pandemic is contextual and highly dynamic. As well, the view was quite consistent that a mandatory vaccination policy that contemplated the possibility of discipline or termination upon an employee’s non-compliance with a mandatory vaccination policy was reasonable provided that the alternative was included in a manner consistent with the terms of the collective agreement; employees were warned that termination of employment was possible; and the employer inquired about individual circumstances and, when feasible, accommodated them. More detailed articles are available here.  

2. Ontario’s Superior Court of Justice Holds Employment Standards Act, 2000’s New Prohibition Against Non-Compete Agreements Does Not Apply to Those Entered Into Prior to October 25, 2021

Ontario’s Bill 27, Working for Workers Act, 2021 (Act), became law on December 2, 2021. Among other things, the Act amended the Employment Standards Act, 2000 to prohibit employers from entering into an employment contract or other agreement with an employee or an applicant for employment that is, or that includes, a non-compete agreement. (This prohibition does not apply upon the sale of a business or if the employee is an “executive.”) The Act provides that the prohibition against non-compete agreements is deemed to be in force effective October 25, 2021; however, it does not indicate whether the prohibition applies to non-compete clauses entered into prior to October 25, 2021. This question was answered by Ontario’s Superior Court of Justice in Parekh et al v. Schecter et al, 2022 ONSC 302, when it held that the prohibition does not apply to non-compete agreements entered into prior to the prohibition’s effective date of October 25, 2021. Such non-compete agreements may be enforceable in accordance with the common law, but on an exceptional basis and only if the employer can establish that the non-competition restriction is reasonable in all respects. A more detailed article is available here.

3. Ontario Court of Appeal Renders Uncertain State of Law re Whether Exceptional Factors Justify Exceeding 24-Month “High End” Amount of Reasonable Notice

In Currie v. Nylene Canada Inc., 2022 ONCA 209, the Ontario Court of Appeal (OCA) dismissed the employer’s appeal of a lower court decision in which the trial judge held “exceptional circumstances” existed to justify making an award that exceeded the 24-month “high end” amount of reasonable notice for long-term employees and awarded 26 months’ salary in lieu of notice. The OCA rendered this decision despite its own 2019 decision in Dawe v. The Equitable Life Insurance Company of Canada, 2019 ONCA 512, in which it reduced a 30-month reasonable notice award to 24 months following judicial precedent that held that although factors such as senior position, long-term/career-long years of service of a dedicated and loyal employee at the same company, advanced age at the time of termination, and difficulty finding new employment warranted a substantial notice period, such factors are already “recognized” and “rewarded” by the 24-month notice period, and they do not establish “exceptional circumstances.” In light of these competing decisions, the law has been rendered uncertain. A more detailed article is available here.

4. Ontario’s Employment Standards Act, 2000 Amended to Require Certain Employers to Have Written Policy re Electronic Monitoring of Employees

On April 11, 2022, Ontario’s Bill 88, Working for Workers Act, 2022 (Bill 88) received Royal Assent and became law. Among other things, Bill 88 amended the province’s Employment Standards Act, 2000 to require certain employers to ensure that they have a written policy in place for all employees with respect to electronic monitoring of employees (Policy) by October 11, 2022, and to provide a copy to existing employees by November 10, 2022. On July 13, 2022, in its Your guide to the Employment Standards Act, Ontario published employer guidance for complying with the Policy. More detailed articles are available here and here.  

5. Ontario’s Occupational Health and Safety Act Amended to Require Certain Employers to Provide and Maintain in Good Condition a Naloxone Kit in Their Workplaces (In Force on June 1, 2023)

Bill 88, Working for Workers Act, 2022 also amended Ontario’s Occupational Health and Safety Act (OHSA). Among the OSHA amendments is a requirement that certain employers provide and maintain in good condition a naloxone kit in workplaces where they are aware, or ought to be aware, that there may be a risk of a worker having an opioid overdose. On December 8, 2022, Ontario proclaimed Bill 88’s amendments to OSHA in force and announced that the naloxone kit requirement will come into force on June 1, 2023. On December 12, 2022, Ontario published Regulation 559/22: Naloxone Kits, which provides additional information about the naloxone kit requirement.  On December 13, 2022, Ontario published this webpage, which provides important guidance regarding the naloxone kit requirement. More detailed articles are is available here, here, and here.

6. British Columbia Court of Appeal Rejects Use of Precise Legal Test to Determine “Employee” Status for Purposes of Employment Standards Act

In Beach Place Ventures Ltd. v. Employment Standards Tribunal, 2022 BCCA 147, the British Columbia Court of Appeal (BCCA) upheld a determination by the Employment Standards Tribunal, which was upheld by the Supreme Court of British Columbia, that three taxi drivers were employees, not independent contractors. The BCCA rejected the notion that a precise legal test should be applied universally to determine “employee” status for purposes of the Employment Standards Act. The court decided instead that the central question is whether the person is performing services as a “person in business on his own account” and, to make the determination, a non-exhaustive list of factors should be considered in a contextualized manner, including but not limited to whether the worker provides their own equipment, whether the worker hires their own helpers, the degree of financial risk taken by the worker, the degree of responsibility for investment and management held by the worker, and the worker’s opportunity for profit in the performance of their tasks. A more detailed article is available here.

7. Ontario Court of Appeal Finds Non-competition Clause Governed by Common Law Unenforceable Because It Was Ambiguous and Overbroad

In M & P Drug Mart Inc. v. Norton, 2022 ONCA 398, the OCA dismissed an employer’s appeal of an application judge’s decision that a non-competition clause in an employment agreement governed by the common law was unenforceable because it was ambiguous and overbroad. The decision provides insight into the type of analysis an Ontario court will undertake to determine enforceability where common law principles apply. It suggests that even when an agreement is entered into freely, Ontario courts will determine that a non-competition clause is unenforceable if it is unreasonable between the parties because it is ambiguous or because the scope of the prohibited activities is overly broad. Such a clause will be more likely to be considered reasonable and enforceable if it clearly and only restricts the employee from engaging in a particular type of work at a specific type of location. Finally, in deciding whether a non-competition clause is enforceable, a court will focus exclusively on the clause’s wording and reject an employer’s efforts to persuade it that certain facts prove the parties’ intention was different from what the contract reveals. A more detailed article is available here.  

8. Ontario Court of Appeal Finds if Union Member Makes Claim Against Third Party and Claims “Essential Character” Concerns Matter Outside Scope of Collective Agreement, Claim Will be Within Court’s Jurisdiction Rather Than Arbitrator’s 

In McCoy v. Choi, 2022 ONCA 403, the OCA dismissed an appeal of a motion judge’s order, which allowed a Canadian Football League (CFL) player’s action for damages against a physician for misdiagnosing his football injury to proceed in the Superior Court. The OCA agreed with the motion judge that the medical negligence dispute did not fall within the ambit of the collective agreement (CA), which dealt with claims arising from employment with the CFL team and not the negligence of an outside party. McCoy v. Choi puts unionized employers on notice that if a union member makes a claim against a third party and it is determined that the “essential character” of the claim concerns a matter outside the scope of the collective agreement, and/or the third party is not a party to the collective agreement and claims against third parties are not provided for in the collective agreement, then the claim will be within the jurisdiction of a court to decide rather than an arbitrator. A more detailed article is available here.

9. British Columbia’s Labour Relations Code Amended to Make Automatic Card-check Union Certification Process Available in Certain Circumstances

On June 2, 2022, British Columbia’s Bill 10 – 2022: Labour Relations Code Amendment Act, 2022 received Royal Assent and became law. As a result, British Columbia joined a small group of Canadian jurisdictions where an automatic card-check union certification process is available where 55% or more of the employees in the proposed bargaining unit sign union membership cards. A more detailed article is available here.

10. Ontario Court of Appeal Provides Clarification re Termination of Employment in Context of Companies’ Creditors Arrangement Act Proceedings 

Antchipalovskaia v. Guestlogix Inc., 2022 ONCA 454 confirms that if (i) in the context of proceedings in which an employer is seeking Companies’ Creditors Arrangement Act (CCAA) creditor protection, an employer terminates an employee’s employment; (ii) pursuant to a Plan of Compromise and Arrangement (i.e., a proposal the company presents to its creditors on how it will deal with the debts it owes as of the date of filing), a court orders the release of claims by the employer’s creditors (including an employee whose employment has been terminated in the context of the proceedings because, at that point, they have become a former employee); (iii) the employer immediately re-hires the employee; and (iv) the employer subsequently terminates without cause, the years of employment will not be viewed as continuous in determining common law reasonable notice. This approach gives effect to the court order that any claims by creditors would be released (CCAA Release). Employers should be aware, however, that the termination of employment in the context of CCAA proceedings and a CCAA Release will be considered when a court weighs the non-exhaustive list of factors in Bardal for the calculation of common law notice. Indeed, a court may conclude that the employee is entitled to a longer notice period than they would have been entitled to had they first commenced their employment at the time of their rehiring due to the benefit the employer would receive from the employee’s previous employment. A more detailed article is available here.

11. Alberta Court of Appeal Finds Termination Clause in Employer’s Standard Employment Contracts Ambiguous

In Bryant v Parkland School Division, 2022 ABCA 220, the Court of Appeal for Alberta (ABCA) allowed an appeal from a summary dismissal by the Court of Queen’s Bench of Alberta (ABQB) in Bryant v Parkland School Division, 2021 ABQB 391. The ABQB dismissed a claim by three employees for common law reasonable notice because it found that the termination clause in the standard form employment contracts, which entitled them to “sixty (60) days or more written notice,” was not ambiguous. The ABCA disagreed and referred the matter back to the ABQB for determination of common law reasonable notice if the parties could not agree. The decision of the ABCA in Parkland is yet another example of why employers that intend to include termination clauses in their employment contracts should consider using language that unambiguously limits or removes the right to common law reasonable notice, and also preserves all statutory minimum entitlements. A more detailed article is available here.

12. Ontario Court of Appeal Upholds Human Rights Tribunal of Ontario’s Finding that Midwives Were Underpaid Due to Gender Discrimination

In Ontario (Health) v. Association of Ontario Midwives, the OCA was satisfied with the reasonableness of the Human Rights Tribunal of Ontario’s (HRTO) finding that the Ministry of Health (MOH) unlawfully underpaid midwives due to gender discrimination, and of its order that the MOH (i) implement a 20% wage adjustment for eligible midwives retroactively to April 1, 2011; and (ii) provide damages of $7,500 to each eligible midwife for injury to dignity, feelings, and self-respect. This substantial retroactive wage increase and damage award reminds employers and compensation-setters of their duty to ensure that their compensation systems and workplace policies and practices comply with Ontario’s Human Rights Code and pay equity principles. This is especially important for employers of sex segregated or predominantly female workers who are particularly vulnerable to discrimination in their compensation. A more detailed article is available here.

13. Ontario’s Superior Court of Justice Finds Sexual Harassment Not an Independent Tort Capable of Supporting Independent Cause of Action and That Employer Cannot be Found Vicariously Liable for Sexual Harassment of One Employees by Another

The court in Incognito v. Skyservice Business Aviation Inc., 2022 ONSC 1795 held that sexual harassment is not an independent tort in Ontario capable of supporting an independent cause of action, and an employer cannot be found vicariously liable for the sexual harassment of one of its employees by another. As we learned from A.B. v. C.D., 2022 HRTO 890, however, if management employees fail to take appropriate action to prevent discriminatory harassment in the workplace once they know of the offending conduct, they are creating a poisoned work environment and they may be found personally liable for infringing an employee’s right to a workplace free from sex discrimination under s. 5(1) of Ontario’s Human Rights Code. The employer may be found vicariously liable for this violation. If the individual responsible for the harassment is a directing mind of the employer, the employer can also be held liable for the individual act of harassment. More detailed articles are available here and here.

14. Alberta Court of Appeal Indicates Employee’s Refusal to Accept Employer’s Unilateral Reduction in Compensation Should Be Expressed Quickly to Avoid Failure of Constructive Dismissal Claim

Kosteckyj v Paramount Resources Ltd, 2022 ABCA 230, a decision of the ABCA, indicates that an employee who does not accept a unilateral reduction in compensation should say so quickly as their failure to do so may cause a constructive dismissal claim to fail. The decision suggests that, at a minimum, an employee who continues to perform their duties for three to four weeks without expressing their lack of consent to reduced compensation may be viewed as having accepted it. In another decision pertaining in part to constructive dismissal, LaFleche v. NLFD Auto, 2022 BCHRT 88, the British Columbia Human Rights Tribunal found that the employer constructively dismissed an employee when it significantly altered the employee’s job duties by unilaterally removing her from the managerial position she held prior to her leave, gave it to her replacement, and did not communicate with the employee regarding her return to work. More detailed articles are available here and here.

15. Ontario’s Superior Court of Justice Finds all Termination Provisions in Employment Agreement Invalid When Actual Termination Clause Complied with Employment Standards Act, 2000 But Confidentiality and Conflict-of-Interest Clauses Did Not 

In Henderson v. Slavkin, 2022 ONSC 2964, the court demonstrated the wide application of the principle in Waksdale v. Swegon North America Inc., 2020 ONCA 391 for determining whether a termination clause in an employment agreement is enforceable. The Waksdale principle requires the factfinder to analyze the agreement as a whole rather than on a piecemeal basis, and if any termination provision in the agreement is contrary to the requirements of the 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. The court found that the actual termination clause complied with the ESA, but that the confidentiality and conflict-of-interest clauses were unenforceable because they did not comply. Accordingly, all termination provisions in the employment agreement were invalid, and that the employee had been wrongfully dismissed. Henderson v. Slavkin indicates that courts will not restrict their focus to whether an actual termination clause is unenforceable; they will examine all provisions in any agreement or policy that provide that an employee’s failure to comply with any of the provisions would be cause for termination without compensation. Should a court determine that any such provision offends the ESA, it can invalidate a termination clause that would otherwise be enforceable. A more detailed article is available is available here.

16. Ontario Court of Appeal Finds Discretionary Nature of Bonus Provision in Employment Agreement Does Not Mean Employer Entirely Unconstrained in Exercise of Discretion

In Bowen v. JC Clark Ltd., 2022 ONCA 614, the OCA put employers on notice that the discretionary nature of a bonus provision in an employment agreement does not mean the employer is entirely unconstrained as to how that discretion is exercised. Employers are encouraged to avoid taking an approach that is “purely subjective” and “unconstrained” as to do so may be inconsistent with their obligation to exercise their discretion in a fair and reasonable manner. To determine entitlement to a discretionary bonus in a particular year and its quantum, the OCA encourages employers to consider individual employee performance as well as whether discretionary bonuses will be awarded to similarly situated employees. A more detailed article is available here.

17. Amendment to Canada’s Competition Act (In Force on June 23, 2023) Will Prohibit Employers from Conspiring, Agreeing or Arranging to Enter Into “Wage-fixing Agreements” and “No-poach Agreements” With Another Unaffiliated Employer 

On June 23, 2022, Canada’s Bill C-19, Budget Implementation Act, 2022, No. 1 received Royal Assent and amended Canada’s Competition Act, which applies to all provincially and federally regulated businesses operating in Canada. These amendments include a new section 45(1.1), which, when it comes into force on June 23, 2023, will prohibit employers from conspiring, agreeing or arranging to enter into “wage-fixing agreements” and “no-poach agreements” with another employer that is not affiliated with them. A more detailed article is available here.

18. Ontario Introduced and Then Repealed Unprecedented Bill 28, Keeping Students in Class Act, 2022 

In an unprecedented bid to prevent school board employees represented by the Canadian Union of Public Employees from proceeding with a strike planned for early November 2022, Ontario introduced Bill 28, Keeping Students in Class Act, 2022 (Bill 28). Bill 28 was of interest to all employers that have unionized workplaces because its features were unprecedented. Among other things, Bill 28 imposed collective agreements without allowing the parties to negotiate them, pre-emptively prohibited a union’s right to strike or lock-out, imposed hefty fines on those who engage in strikes or lock-outs despite the prohibition, insulated itself from legal challenge by using of the Canadian Charter of Rights and Freedom’s “notwithstanding clause,” declared that it applied despite Ontario’s Human Rights Code, and provided strong protection to the Crown and its agents for their roles in imposing the CAs and implementing the Act. On November 3, 2022, Bill 28 received Royal Assent but on November 14, 2022, Ontario introduced and passed Bill 35, Keeping Students in Class Repeal Act, 2022, which was deemed to have come into force on November 3, 2022. Bill 35 repealed Bill 28, deemed it to have never been in force, and also deemed the CAs that were deemed to be in operation under Bill 28 never to have come into operation. A more detailed article is available here.

19. Human Rights Tribunal of Ontario Determined Human Rights Code Endows it With Concurrent Jurisdiction Over Human Rights Issues in Unionized Workplace

In Weilgosh v. London District Catholic School Board, 2022 HRTO 1194, the Human Rights Tribunal of Ontario (Tribunal) determined that the province’s Human Rights Code endows it with concurrent jurisdiction over human rights issues that arise in a unionized workplace, i.e., unionized employees may choose to pursue human rights claims through arbitration or through the Tribunal. Accordingly, despite the decision of the SCC in Northern Regional Health Authority v. Horrocks, 2021 SCC 42 (in which the Supreme Court of Canada decided that in Manitoba, human rights disputes arising from the interpretation, application, or alleged violation of a collective agreement fall within the exclusive jurisdiction of a labour arbitrator and the Manitoba Human Rights Commission lacks concurrent jurisdiction to consider such disputes), little has changed in Ontario. More detailed articles are available here and here.

20. Ontario Court of Appeal Clarified Principles re Wrongfully Dismissed Employee’s Obligation to Take Reasonable Steps to Mitigate Their Damages

The Ontario Court of Appeal’s decision in Lake v. La Presse, 2022 ONCA 742, clarifies principles relating to a wrongfully dismissed employee’s obligation to take reasonable steps to mitigate their damages, including that the employee must not unreasonably delay the start of their job search; the employee is obliged to seek only “comparable employment” (i.e., status, hours and remuneration); and if the employee applies for a position with a title more senior than their previous title, it should not be assumed that they are not taking reasonable steps to mitigate. A more detailed article is available here.

21. Canada Labour Code’s New Paid Medical Leave Provisions and Supporting Regulations Came Into Force 

The Canada Labour Code’s new paid medical leave provisions and the Regulations that support their implementation came into force on December 1, 2022. The new provisions entitle employees in federally regulated workplaces to a maximum of 10 days of paid medical leave per calendar year. The actual number of days that an employee earns will depend on the length of their continuous employment. To provide guidance on this new entitlement, the Labour Program published two Interpretations, Policies and Guidelines. More detailed articles are available here, here and here.

22. Ontario Court of Appeal Clarifies That Courts Must Follow Vavilov Principles When Conducting Reasonableness Reviews of Administrative Decisions (Including Decisions of Ontario Labour Relations Board) 

In the companion decisions, Turkiewicz (Tomasz Turkiewicz Custom Masonry Homes) v. Bricklayers, Masons Independent Union of Canada, Local 1, 2022 ONCA 780 and Enercare Home & Commercial Services Limited Partnership v. UNIFOR Local 975, 2022 ONCA 779, the OCA considered whether the Divisional Court applied the correct standard of review required by Canada (Minister of Citizenship and Immigration) v. Vavilov, 2019 SCC 65 in assessing whether companies should be declared “related employers” within the meaning of s. 1(4) of the Labour Relations Act, 1995. In both decisions, the OCA made it abundantly clear that when conducting reasonableness reviews of administrative decisions, including decisions of the Ontario Labour Relations Board, courts must follow the Vavilov principles, which require judicial restraint and respect for the distinct role and specialized expertise of the administrative decision maker and permit courts to intervene only if it is truly necessary to safeguard the legality, rationality, and fairness of the administrative process. A reviewing court should refrain from deciding the issues itself, i.e., it should not ask what decision it would have made in place of the administrative decision maker, attempt to ascertain the range of possible conclusions, conduct a de novo analysis, or seek to determine the correct solution. A reviewing court should consider only whether the actual decision made by the administrative decision maker, including its rationale and outcome, was unreasonable. A more detailed article is available here.

23. Employment Insurance Sickness Benefits Extended to 26 Weeks and Maximum Length of Unpaid Medical Leave for Federally Regulated Private-sector Employees Increased to 27 weeks  

Canada announced that, commencing on December 18, 2022, Employment Insurance (EI) sickness benefits were extended permanently from 15 weeks to 26 weeks. Furthermore, to align with this change, on the same date, the maximum length of unpaid medical leave available to federally regulated private-sector employees was also increased from 17 to 27 weeks under the Canada Labour Code. A more detailed article is available here.

24. British Columbia Court of Appeal Decided Canada Emergency Response Benefit (CERB) Payments Should Not be Deducted from Damage Awards for Wrongful Dismissal 

In Yates v. Langley Motor Sport Centre Ltd., 2022 BCCA 398, the Court of Appeal for British Columbia provided a measure of relief from the ambiguity created by inconsistent lower court decisions when it decided that Canada Emergency Response Benefit (CERB) payments should not be deducted from damage awards for wrongful dismissal. Yates is the first appellate court decision to consider this issue. A more detailed article is available here.

25. Ontario’s Superior Court of Justice Declared Bill 124, Protecting a Sustainable Public Sector for Future Generations Act Void and of No Effect But Ontario Filed Notice of Appeal

In Ontario English Catholic Teachers Assoc. v. His Majesty, 2022, ONSC 6658, Ontario’s Superior Court of Justice declared Bill 124, Protecting a Sustainable Public Sector for Future Generations Act (Bill 124), to be void and of no effect. Bill 124 limited wage increases for approximately 780,000 workers in the broader public sector to 1% per year for a three-year moderation period. Labour organizations challenged the constitutionality of the Act in 10 separate applications. The Court found that the Act (i) infringed on the applicants’ right to freedom of association under s 2(d) of the Canadian Charter of Rights and Freedoms (Charter); (ii) did not violate the applicants’ freedom of speech or equality rights under the Charter; and (iii) was not saved by s. 1 of the Charter. After declaring the Act to be void and of no effect, the court deferred consideration of any remedy to a further hearing, as requested by the parties. The Act does not apply at this time to the many workers in the broader public sector within its scope; however, following the release of the court’s decision, Ontario’s government expressed its intention to file an appeal. The government’s notice of appeal was filed on December 29, 2022. A more detailed article is available here.  

Littler LLP looks forward to following the evolution of labour and employment law in Canada in 2023. We will continue to report on important developments.