On January 12, 2021, the Government of Ontario declared a second state of emergency under the Emergency Management and Civil Protection Act in response to the COVID-19 pandemic. At the same time, the government issued a province-wide Stay-at-Home Order and amended O. Reg. 82/20: Rules for Areas in Stage 1 (“Stage 1 Rules”) to introduce stricter lockdown measures starting January 14, 2021.

“Essential” Businesses

As of January 12, the entire province has been moved back to the grey zone and must operate under the Stage 1 Rules. While the list of businesses permitted to operate under the Stage 1 Rules is mostly unchanged, the Stage 1 Rules have been amended to include stricter health and safety measures:

  • Restricted Hours: Non-essential businesses, including those offering curbside pickup or delivery, may only operate between the hours of 7 am to 8 pm. These restricted hours do not apply to essential retailers such as grocery stores, pharmacies, gas stations, convenience stores, and restaurants for takeout or delivery and do not apply to discount and big-box retailers permitted to open.
  • Capacity Limits: Discount and big-box retailers that sell groceries and retailers that sell alcohol must limit occupancy capacity to 25%.
  • Work from Home: Employers must now ensure that their employees work remotely, except where necessary. Employees will be permitted to leave their homes to attend work if their workplace is permitted to be open and if the nature of their work requires them to be onsite. This requirement replaces previous guidance that “strongly encouraged” such workers to work from home.
  • Schools: School closures (online learning only) in Toronto, Peel, York, Hamilton, and Windsor-Essex will remain in effect until at least February 10, 2021, while schools in other regions will remain closed until at least January 25, 2021.
  • Masks: It is now mandatory for all individuals to wear a mask or face covering that covers their mouth, nose and chin when they are in indoor areas of a business, with limited exemptions. Now, enforcement personnel have the authority to issue tickets to individuals, employees, and businesses for not complying with masking requirements.
  • Physical Distancing: It is now mandatory for all individuals to maintain a physical distance of at least two meters from others while in an open business or facility. Now, enforcement personnel have the authority to issue tickets to any individual that does comply with physical distancing rules when inside an open business or facility.
  • Construction: Non-essential constructionhas been restricted to prescribed construction activities or projects, including projects and services associated with the healthcare sector and long-term care, projects necessary for or support the provincial infrastructure and internet and telecommunication services, projects that are due to be completed before July 2021, certain residential projects and projects that aid the production, processing, manufacturing or distribution of food, beverages or agricultural products, among others.

The new rules do not change for businesses Toronto, Peel Region, York Region, Hamilton, and Windsor-Essex, which were placed in the grey lockdown zone and were required to operate within the Stage 1 Rules towards the end of 2019. Accordingly, most businesses that were “essential” prior to yesterday continue to be “essential” and may continue to operate, subject to the new restrictions.

Stay-at-Home Order

The Stay-at-Home Order, which is expected to last at least 28 days starting January 14, requires Ontarians to stay at home, leaving only for essential purposes. According to the Order, Ontarians are only permitted to leave for the following reasons:

  • Essential Work: To attend work if their work is considered essential under the Stage 1 Rules and their employer has determined that the nature of their work requires attendance at the workplace.
  • Schools: While elementary schools, secondary schools, and post-secondary institutions are largely closed for in-person learning, individuals may leave their residence to provide training or receive educational services at such institutions.
  • Child Care Facilities: To attend, obtain, or provide child care services at child care facilities for children not old enough to be enrolled in school.
  • Goods and Services: To get goods and services for health and safety of oneself, family or animals (i.e., food, beverages, personal care items, healthcare items or services, curb side pickup, and financial institutions).
  • Assisting Others: Delivering goods or providing assistance to individuals who require assistance or support (i.e., children, individuals in congregate living settings, or members of the same household).
  • Self-Protection or Legal Purposes: To remove oneself from harmful or unsafe living conditions or for the administration of justice (i.e., domestic violence, seeking emergency assistance, or to attend court or similar place).
  • Exercise: To exercise outdoors.
  • Travelling or Moving: To travel outside of Ontario by means of airport, bus or train or to move to a new residence or between select secondary residences.
  • Gathering(s): Individuals who live alone leave their residence to gather with members of a single household.

Key Takeaways

Employers should review the Stay-at-Home order and amendments to the Stage 1 Rules to assess whether their business has been impacted.  Because the government did not amend the list of “essential” businesses and most parts of Ontario were already operating under the Stage 1 Rules, including the Greater Toronto Area, most employers that have been operating before the emergency declaration may continue to operate, subject to the new rules.

Employers that continue to operate, and require employees to attend onsite, should consider issuing travel letters to employees confirming that the nature of their work requires them to attend onsite. While the government has stated that law enforcement cannot stop individuals to verify compliance with the Stay-at-Home Order, employers should consider issuing such letters as a precaution.

Lastly, the government has announced that it will be increasing its workplace inspection efforts, particularly in high transmission workplaces. As such, all employers should review existing health and safety protocols and make updates as needed to ensure compliance. Employers should make an effort to provide necessary personal protective equipment to employees’ onsite. Employers with employees exempt from the masking requirement should take steps to ensure physical distancing is practiced at all times.

Many thanks to Dorna Zaboli for her assistance in drafting this article.

To ring in the New Year, we highlight the ten most significant developments in Canadian labour and employment law in 2020.

  1. The Supreme Court of Canada (SCC) finds arbitration clause in standard form contract unenforceable. The SCC found that an arbitration clause included in Uber’s standard form driver contracts was unconscionable because the cost to drivers to access arbitration was too high. The arbitration required all disputes to be mediated and arbitrated in Amsterdam. In an earlier decision, the Ontario Court of Appeal also ruled that the provision was also unenforceable because it prevented an employee from using the ESA’s local enforcement mechanisms.
  2. The Ontario Court of Appeal struck down a valid “without cause” termination provision because the “for cause” termination provision was unenforceable. In Waksdale v. Swegon North America Inc, the Court concluded that a common “for cause” termination provision that did not reference ESA entitlements was unenforceable, rendering the “without cause” termination provision unenforceable despite a severability clause. Waksdale is yet another reminder to employers that our courts expect near-perfection when it comes to termination clauses. Employers should review their existing termination provisions to ensure they are enforceable, both individually and collectively.
  3. SCC renders landmark decision addressing adverse discrimination and gender equality in the context of pension plans. In Fraser v. Canada, the majority of the SCC held that the RCMP pension plan provisions that did not allow employees who participated in a job-sharing program to “buy back” pension credits disproportionately affected women, particularly those with children, violating the Charter of Rights and Freedoms. Employers should carefully review distinctions drawn under workplace policies, practices, and benefits plans—particularly distinctions between full-time employees, part-time employees, and employees on a leave of absence—to ensure those distinctions do not disproportionally impact women with children.
  4. Food delivery couriers are dependent contractors, with ramifications for other individuals in the gig economy. The Ontario Labour Relations Board held that couriers delivering food on behalf of Foodora Inc., an app based food delivery company, were “dependent contractors” under the Labour Relations Act, 1995and thus have the right to unionize.
  5. COVID-19 continues to create restrictions on travel and forces employers to shift to large scale remote work. The Canadian border continues to be closed for all non-essential travel. Public health authorities are encouraging employers to allow employees to work remotely to the extent possible. Remote working has created many new challenges for employers, including productivity and performance management in a virtual setting, employee integration, and revised reimbursement policies.
  6. SCC weighs in on whether incentive compensation is payable during the reasonable notice period. In Matthews v. Ocean Nutrition Canada Limited, the SCC confirmed that, absent very clear and unambiguous language in the employment agreement or the incentive plan restricting such entitlements, incentive compensation is considered part of the damages owed in lieu of common law reasonable notice. Courts will generally refuse to enforce language limiting such entitlements if there is almost any For example, language requiring “full-time” employment is not in itself enough.
  7. The Ontario Superior Court refused to enforce clear termination provisions in an incentive plan because the employer failed to take steps to specifically highlight “harsh and oppressive” terms. In Battiston v. Microsoft Canada Inc., a key issue was whether Mr. Battiston was entitled to continued equity vesting after his termination date. Annually, Mr. Battiston was required to confirm that he read, understood, and accepted a stock award agreement, but Mr. Battiston testified that he simply confirmed his agreement without reading it. The express wording of Microsoft’s stock award agreement unambiguously ousted Mr. Battiston’s entitlement to the vesting of stock awards during the termination notice period, but the trial judge refused to enforce the termination provisions because they were not specifically brought to Mr. Battiston’s attention. Mr. Battiston was awarded damages in lieu of the shares that would have vested during the termination notice period.
  8. Many new occupational health and safety requirements have been implemented in response to the pandemic. Governments across Canada released sector-specific safety guidelines and requirements to help employers protect workers, customers, and the general public from COVID-19. For example, British Columbia created a mask mandate order, requiring masks or face coverings for everyone in many public indoor settings including many workplaces. Ontario required most Ontario businesses and organizations to implement a workplace screening tool that requires staff members and essential visitors to complete a COVID-19 screening questionnaire before entering the workplace each day.
  9. New employment standards measures introduced in response to the pandemic. Governments across Canada have amended existing employment standards legislation and/or introduced new legislation changing job-protected leave entitlements and temporary layoff rules in response to COVID-19. While the parameters for the changes vary from province to province, notable changes include access to unpaid job-protected leave for reasons related to COVID-19, extension of temporary layoff periods, and deferral of deemed termination rules.
  10. Canada enhances COVID-19 emergency income support programs to impacted employers:
    • Canada Emergency Wage Subsidy (CEWS): CEWS is a wage subsidy to encourage employers to continue to employ and/or remunerate their employees during the pandemic. Under the program, the federal government covers up to 75% of an employee’s wages for qualifying eligible employers, with this subsidy rate in effect until March 13, 2021. Eligible employers can apply for the CEWS assistance until June 2021, at which time applications will no longer be accepted. For further information, see our blog post here.
    • Work-Sharing Program: Work-sharing is a federal program designed to help employers and employees avoid layoffs when there is a temporary reduction in the normal level of business activity beyond the employer’s control. Work-sharing is a three-party agreement between an employer, employees, and Service Canada. If all three parties agree, the program provides income support to employees who would be eligible for EI benefits and who work a temporarily reduced work schedule during a specified period of reduced business. The maximum length of a work-sharing program is normally 38 weeks. However, the federal government has extended the maximum duration to 76 weeks for those employers significantly impacted by the pandemic.

Last week, the Ontario Government amended O.Reg. 228/20 to extend deemed infectious disease emergency leave (“IDEL”) under the Employment Standards Act, 2000 (the “ESA“) from January 2, 2021 to July 3, 2021.

This is a second update to our previous blog post on O.Reg. 228/20, Ontario Files New ESA Regulation Affecting COVID-19-Related Leaves, Temporary Layoffs & Constructive Dismissals, which changed the rules regarding employee eligibility for IDEL, temporary layoffs and constructive dismissals under the ESA. Under the regulation, non-union employees who were not performing their duties, working reduced hours, or receiving reduced wages (at the employer’s discretion) were deemed to be on IDEL for the duration of the COVID-19 period.

The regulation defined the “COVID-19 period” as beginning on March 1, 2020 and was last expected to expire on January 2, 2021. As a result of this new amendment, the COVID-19 period will now expire on July 3, 2021. This means that non-union employees who were not performing their duties, working reduced hours, or receiving reduced wages can remain on deemed IDEL until that time (unless they are recalled before then). Further, any future temporary reductions in hours or wages will not constitute a layoff or a constructive dismissal under the ESA. That is, until July 4, 2021, when the standard rules are expected to be re-engaged.

Concurrently, the Ontario government filed a new regulation under the ESA introducing temporary relief measures for the hospitality, tourism, convention, and trade show industries. Under O.Reg. 764/20, employers and unions in the enumerated industries can negotiate an alternative to putting termination and severance pay into trust for temporarily laid off employees. Where an employer and union agree to apply the new regulation:

  • The union will be able to elect to retain recall rights for some or all of the employees it represents, and the union’s election will be binding on the affected employees unless such employees had already elected to receive their termination and severance payment entitlements under the ESA;
  • Where the union has elected to retain recall rights on behalf of an employee, that employee will not be permitted to renounce the right to be recalled prior to a date agreed to by the employer and the union; and
  • Where the union has elected to retain recall rights on behalf of its members, the union will similarly not be permitted to renounce the right to be recalled on the employee’s behalf.

This arrangement is expected to provide financial relief that would allow employers to remain operational and ultimately preserve jobs. As with many of the measures introduced during the COVID-19 pandemic, the ability to delay termination and severance pay obligations under this regulation is temporary and expected to expire on December 17, 2021.

Key Takeaways

The noted amendments are welcome news for employers impacted by COVID-19. Employers now have increased flexibility and additional time to recover and implement measures to sustain operations going forward.

In the coming months, employers should think about whether they will be able to recall employees who are on a deemed IDEL. If employers cannot recall employees back to work or restore their hours and wages by July 4, 2021, the standard ESA rules are expected to apply. Employers would be able temporarily layoff employees who are currently on IDEL starting July 4, 2021, but should ensure they understand the implications of such measures, including the risk of deemed employment terminations and constructive dismissal claims.

Further, unionized employers in the hospitality, tourism, convention, and trade show industries should consider whether they could benefit from temporarily deferring termination and severance obligations for laid off employees. Employers should consult legal counsel to evaluate the risks before engaging in such discussions with unions.

Many thanks to Dorna Zaboli for her assistance in drafting this article.

Last week, the federal government passed Bill C-44, Budget Implementation Act, 2017, No. 1 (“Bill C-44″), introducing a new administrative monetary penalty system under Part IV of the Canada Labour Code (the “Code“) and broadening the authority of inspectors, among other things.

The changes are set to come into force in the new year on January 1, 2021, and include the following: 

  • New Penalty System: Under Part IV, federally regulated employers will be subject to administrative monetary penalties up to $250,000 for contraventions of provisions under Part II (Occupational Health and Safety) and III (Standard Hours, Wages, Vacations and Holidays) of the Code. The specific violations that would give rise to an administrative monetary penalty have not yet been published but will be identified by regulation on December 23, 2020. Particulars regarding the new administrative penalty system include:
    • any person who fails or contravenes the Regulations established under Part IV will be held liable to a penalty set by Regulation;
    • any penalty amount set by Regulation cannot exceed $250,000;
    • removes certain defences to a person named in the violation, particularly a person or department cannot argue that they exercised due diligence to prevent the violation, or that they “reasonably and honestly” believed in “the existence of facts that, if true, would exonerate the person or department”;
    • where a corporation commits a violation, liability for the administrative monetary penalty will apply to individuals who “directed, authorized, assented to, acquiesced in or participated in the commission of the violation”; and
    • for employers that have received an administrative monetary penalty, the Minister may make public the legal name of the employer, the nature of the violation and the monetary penalty amount imposed.
  • Streamlined Review and Appeal Process: Part IV also creates a framework under which employers who have been found to have contravened the Code can request a review or appeal of the decision within 30 days of receiving notice of a contravention. If an employer is not satisfied with the results of the initial review, the employer may appeal the decision to the Canada Industrial Relations Board (“CIRB“). Any decision rendered by CIRB is final.
  • Increased Inspection & Compliance Order Authority: Inspectors now have increased authority to issue compliance orders where an employer is found to have contravened provisions of Part III of the Code (Standard Hours, Wages, Vacations and Holidays), the corresponding regulations, and conditions related to excess hour permits.

Key Takeaways

These amendments are primarily procedural but should not be taken lightly. If ignored, federally regulated employers could face significant fines and risk their names being made public. It’s important to note that a contravention of the Code that continues for multiple days will be treated as a separate contravention for each day it continues. If this occurs, an employer may be subject to a fine in the upper range of the maximum fine limit.

In light of the above, employers should take proactive steps to ensure their workplaces are compliant with the Code. By reviewing workplace policies and practices now, employers can avoid facing such enforcement measures in the future. Employers who are alleged to have contravened the Code should contact legal counsel to discuss their options.

 

Many thanks to Dorna Zaboli for her assistance in drafting this article.

Last week, the Government of Canada passed the Regulations Amending the Employment Equity Regulations (the “Amended Regulations“) introducing new pay transparency measures, effective January 1, 2021. The Amended Regulations aim to clarify and improve the data gathering processes that govern the reporting of salary data by federally regulated employers with 100 or more employees.

Background

Federally regulated employers are required to file an annual employment equity report with the Minister of Employment, Workforce Development and Labour on or before June 1 in each year.

The Amended Regulations were introduced in response to the federal government’s 2018-19 budget commitment to introduce pay transparency measures that address wage gaps in the federally regulated private sector. Beginning January 1, 2021, federally regulated employers that are covered by the Employment Equity Act will be required to include aggregated wage gap information in their annual employment equity report.

Summary of Amended Regulations

  • Simplified Salary Calculation & Reporting: Employers are no longer required to annualize salaries (i.e., calculate all remuneration paid for work performed by an employee in the form of salary, wages, commissions, tips bonuses and piece rate payments, rounded to the nearest dollar) for the purposes of reporting. Under the Amended Regulations, employers will be required to submit information relating to specific data elements, including hourly rate of pay, bonus pay, overtime pay, and overtime hours, to determine hourly wage, bonus, overtime hours, and overtime pay gaps.
  • New Definition of Designated Groups: Under the previous Regulations, employers were required to conduct a workforce survey using a self-identification questionnaire in which they could use their own definition for designated groups. The Amended Regulations now provide a definition for certain designated groups, including women, Aboriginal people, persons with disabilities, and members of visible minorities, which employers are required to use in their questionnaire. This amendment ensures consistency in self-identification data from employer to employer.
  • Mandatory Record Retention: In addition to the current list of records, employers are required to maintain records of the new salary data elements. This includes employees’ salary, not including any bonus pay or overtime pay; the period over which the salary was paid; the number of hours worked that can be attributed to the salary earned; the bonus pay paid during the reporting period; the overtime pay in the reporting period; and the number of overtime hours worked to which the overtime pay can be attributed. Employers must also retain information about each employee’s occupational unit group classifications and code, consistent with the North American Industry Classification System.

Key Takeaways

Canada is now the first country in the world to make wage gap information regarding women, Indigenous people, persons with disabilities and members of visible minorities working in federally regulated workplaces publicly available.

Federally regulated employers should be ready to navigate the new requirements prescribed by the Amended Regulations. Employers will need to review and update applicable salary reporting policies and best practices to ensure they are meeting their obligations under both the Amended Regulations and also the Act.

Many thanks to Dorna Zaboli for her assistance in preparing this post.

Last week, the Ontario government passed its latest budget bill, Bill 229: Protect, Support and Recover from COVID-19 Act (Budget Measures), 2020 (“Bill 229”). Bill 229 implements initiatives contained in Ontario’s 2020 budget through amendments to existing statutes.

Amendments to key employment statutes include:

Protecting a Sustainable Public Sector for Future Generations Act, 2019:

Bill 229 amended Bill 124: The Protecting a Sustainable Public Sector for Future Generations Act, 2019 (“Bill 124”) to clarify the moderation period for a group of non-union employees who are certified by a trade union after June 5, 2019, or to a group of unionized employees who decertify. In short, where employees have already commenced their moderation period before the change in status, they will get credit for the time spent in their moderation period before their change in status. If they have not commenced their moderation period before the change in status, then the 3-year moderation period will apply under their new status.

Further, the Management Board of Cabinet can now issue directives requiring employers to provide information related to collective bargaining compensation for compliance purposes. Under this provision, the Management Board of Cabinet has the authority to withhold funds from the employer or employers’ organization if a directive is not complied with, and contains measures that might result in the forfeiture of any withheld funds.

Employer Health Tax Act:

Back in March, the government temporarily increased the Employer Health Tax (“EHT”) exemption for 2020 from $490,000 to $1 million. Bill 229 amended the legislation to make this permanent. The EHT exemption will be adjusted according to inflation in 2028, following which it will be adjusted for inflation every 5 years. The Ontario government also amended the Act to increase the installment threshold from $600,000 to 1.2 million for the 2021 tax year. Under this new installment threshold, all employers would only be required to remit monthly installments when their payroll reaches $1.2 million.

Pension Benefits Act:

In 2010, the government amended the Pension Benefits Act to include a target benefits framework, among other things. These provisions were never proclaimed into force and were subject to automatic repeal under Ontario’s Legislation Act after 10 years, on December 31, 2020. Bill 229 re-enacted the target benefits provisions, but these provisions will come into force on a future date to be proclaimed by the Lieutenant Governor of Ontario.

Other noteworthy provisions that have now been automatically repealed under the Legislation Act include provisions relating to phased retirement and the requirement to provide advance notice for plan amendments.

Many thanks to Dorna Zaboli for her assistance in drafting this article.

2020 has posed unprecedented challenges for Canadian Employers. We know that in addition to keeping your employees safe and maintaining business continuity, it’s a challenge to keep track of all the changes to the employment law landscape in Canada.

These two, 60 minute virtual sessions are designed to help you stay abreast of what changed in 2020 and be prepared for what’s on the horizon in 2021.

We will review the key developments impacting Canadian employers and provide practical tips for navigating the new normal. Among other topics, you will hear about:

    • COVID-specific laws applicable to Canadian employers
    • Navigating leaves of absence and the duty to accommodate during the pandemic
    • Revisiting substantive equality & compensation for work performed
    • Remote working best practices
    • Workplace violence and harassment
    • Independent contractor update
    • Employment agreement enforceability
    • Mitigating business disruption caused by Canada’s border closures and quarantine requirements
    • Strategies relating to union organizing during the time of COVID and labour update
    • Trade and labour adoption of international labour standards

Click here for more information and to register.

Special thanks to Sanjay Khanna for this piece.

Amidst the planetary emergency of climate change, the COVID-19 pandemic is testing modern civilization’s preparedness for shocks across spheres of finance, economics and technology; global, national and regional governance; global and population health; social cohesion and food security. While the vast majority of businesses around the world are today in the throes of the immediate impacts of the pandemic, it is important to state that the consequences of this abrupt global change will reverberate beyond the coming decade, much like the repercussions of the 2007-10 financial crisis.

Continue Reading Unprecedented: Converging Crises | Foresight View

The Supreme Court of Canada’s recent decision in Fraser v. Canada (Attorney General), 2020 SCC 28 (“Fraser“) raises fundamental questions about how allegations of discrimination under human rights legislation and the Canadian Charter of Rights and Freedoms (“Charter“) will be adjudicated in the future. At a minimum, employers should carefully review distinctions drawn under workplace policies, practices, and benefits plans—particularly distinctions between full-time employees, part-time employees, and employees on a leave of absence—to ensure those distinctions do not disproportionally impact women with children. Continue Reading Supreme Court Revisits Workplace Discrimination in the Context of Pension Service Buy-Back

We thank Glenn Gibson, John Pirie & Michael Nowina for this post.

In an unreported judgment Pallotta v. Cengarle, Court file CV-16-56337 released on February 27, 2020, Faieta J. found real estate lawyer Licio Cengarle vicariously liable for his clerk’s mortgage fraud scheme as well as for breach of trust. This case is a cautionary tale for professionals and employers about the need for internal controls. Continue Reading Ignorance of Fraud is No Defence: Employer Vicariously Liable for Rogue Employee