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Special thanks to Sarah Adler, Immigration Legal Counsel.

Our webinar was designed to bring Canadian in-house counsel and human resources leaders up to speed on the top labour, employment and human rights law developments of 2022 and to prepare them for what’s on the horizon in 2023.  

Using our “quick hits” format, we helped Canadian in-house counsel and human resources leaders track what to keep top-of-mind for 2023 complete with practical takeaways to help navigate the new landscape.

Apply our Annual Canadian Employer Update Takeaways Checklist: Going into 2023 to help your organization’s leadership prepare for some of the most important employment law developments.

Among other topics, we covered:

  • COVID-19 case law updates on vaccinations, masking and workplace health and safety policies
  • Terminations, reductions in force and ways to reduce employer liability in a changing economy
  • Changes to public sector wage caps in Ontario
  • A selection of cross-Canada legislative changes including:
    • Working for Workers (again) in Ontario
    • Paid Sick Leave in BC
    • French Language and Privacy amendments in Quebec
  • Immigration – The solution to labour shortages in a post COVID-19 world?

Click here to view the webinar recording.

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Special thanks to Brendan O’Grady (a senior associate in our Litigation & Government Enforcement Practice Group) and Anton Rizor (articling student in our Toronto office) for co-authoring this blog.

In Flesch v Apache Corporation, the Alberta Court of Appeal (“ABCA”) upheld the certification of an employee class action arising out of the cancellation of long-term incentive compensation plan. This case is significant because the court discussed its gatekeeping function in the certification of class actions, and it serves as a warning to employers who seek to amend or cancel incentive plans.  

Background

In July 2017, the Apache Corporation (“Apache”), an American oil and gas company, announced the closure of its Canadian operations. Through a series of amalgamations, Apache’s Canadian subsidiary, Apache Canada, was sold to the company that became Paramount Resources (“Paramount”). Apache cancelled all awards under its long-term compensation plan, including restricted stock units, stock options, and performance awards. Apache advised the over 300 transferred employees that they would participate in Paramount’s compensation plan.

The employees alleged that Paramount’s plan was less remunerative. They claimed damages for breach of contract, breach of duty of good faith, breach of fiduciary duty, and unjust enrichment.

The chambers judge granted the employee group’s application for class action certification against Apache, Paramount, and individual board members. They appealed certain aspects of the certification.

Decision

The majority of the ABCA upheld the certification, affirming the chambers judge’s reasoning on most grounds. It rejected the appellant’s argument that there was no basis in fact to conclude that they were common employers because they were subsidiaries or affiliates. The court also rejected Paramount’s argument that they should not be included as a defendant because Apache could be held liable.

The ABCA overturned the certification of the unjust enrichment claim as a common issue because it had no reasonable prospect of success.

One element of the test for certification is whether the pleadings disclose a cause of action. The requirement has a lower bar than the other elements. It will be satisfied unless, assuming the facts are true as pleaded, it is “plain and obvious” that the claim cannot succeed. The majority applied this standard test.

In a concurring decision, Justice Slatter held that the court should exercise a more robust gatekeeping function at certification. He noted that “cluttering up class action proceedings with collateral and marginally relevant causes of action” does not serve the objectives of Alberta’s class action regime. Instead, mirroring the Federal Court Rules and jurisprudence, Justice Slatter held that the court should raise the standard to require “pleadings to disclose a reasonable cause of action.” He envisioned that the court would apply a generous test to the main cause of action and the more rigid standard to secondary causes of action.

Takeaways

  • Justice Slatter suggested an enhanced gatekeeping function for courts for certifying class actions. While Justice Slatter concurred in the result, his reasoning was not part of the majority decision, so it’s not clear to what extent his comments will impact future decisions. It will be interesting to see whether other courts follow his suggestion.
  • Employers need to be aware of the risk of class proceedings associated with revising or cancelling incentive compensation programs. This is especially important in the context of workforce transitions.
  • A successor company may not be shielded from class proceedings based on the conduct of prior employers.
  • Employers and their directors need to be aware that class proceedings can be certified against individual managers of incentive programs for breach of fiduciary duty.

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To wrap up 2022 and prepare for 2023, we highlighted key developments in Canadian labour and employment law:

1. COVID-19 Update

Workplace Vaccination Policies

Mandatory vaccination policies remained a prevalent issue in 2022. The first decisions to provide guidance on this topic came out of unionized workplaces, with many upholding vaccination policies.

In Toronto District School Board v CUPE, Local 4400, Arbitrator Kaplan upheld the employer’s vaccination policy which stated that unvaccinated employees would be placed on unpaid leaves of absence. Arbitrator Kaplan found that the policy was a reasonable exercise of management rights and that it did not violate the individual’s right to life, liberty or security of the person under s. 7 of the Charter of Rights and Freedom. Similarly, in Power Workers’ Union v Elexicon Energy Inc., Arbitrator Mitchell found an employer’s policy which required employees to be vaccinated with three doses to be reasonable in the circumstances.

While most labour arbitration decisions to date have favored employers, some have not. In FCA Canada Inc. v Unifor, Locals 195, 444, 1285, Arbitrator Nairn held that a  policy which required two doses of the vaccine was no longer reasonable in light of evolving scientific evidence. She cautioned that the reasonableness of mandatory vaccination policies would be assessed on a case-by-case basis by looking at a workplace’s particular circumstances in the context of the changing nature of the pandemic.

In the non-unionized context, the British Columbia Supreme Court in Parmar v Tribe Management Inc. confirmed an employer’s right to place an employee on an unpaid leave of absence for failing to comply with a mandatory vaccination policy. The Court found the employer’s policy to be reasonable given the state of the pandemic at the time it was introduced, and in light of the employer’s health and safety obligations. The Court found that Ms. Parmar was not constructively dismissed when she was placed on unpaid leave for non-compliance with the policy.

Employers should monitor public health directives and review their mandatory vaccination policies regularly to ensure that they remain reasonable and appropriate as circumstances change.

Status of COVID-19 Leaves of Absence

Several provinces implemented paid and unpaid job-protected leaves at the onset of the pandemic for employees who were unable to work for reasons related to COVID-19. Most of these programs have ended or are set to expire within the next few months.

In Ontario, the paid Infectious Disease Emergency Leave (IDEL) still provides workers with up to three days of paid infectious disease emergency leave until March 31, 2023. Employees are also entitled to take unpaid leave if they are not performing their duties because of reasons related to a designated infectious disease. However, deemed IDEL came to an end on July 30, 2022, so non-unionized employees are no longer deemed to be on IDEL if their hours are temporarily reduced or eliminated because of COVID-19. More information on this topic can be found on our blog post here.

In British Columbia, employees are still entitled to an unpaid COVID-19-related leave for as long as they are unable to work. The legislative amendment providing employees with an additional three days of paid COVID-19-related leave was repealed in December 2021. However, all employees based in the province may now take up to five paid sick days per calendar year for any injury or illness, including COVID-19.

In Alberta, all employees who are required to quarantine due to COVID-19 are still eligible for up to 14 days of unpaid, job-protected leave.

2. Employment Terminations Update

Reductions in Force (“RIFs”)

With a drastic slowdown in economic growth in the second-half of 2022, many employers engaged in restructuring. As the market continues to consolidate, this is a trend we believe will continue into 2023.

With group terminations in particular, employers must carefully navigate legislative and contractual obligations to reduce liability. Examples of things employers need to look out for when restructuring include: group termination obligations regarding notice and notification to employment standards directors where appropriate; avoiding discrimination claims by applying objective criteria when selecting employees for redundancy; ensuring employees are provided with their minimum contractual and statutory entitlements to wages, benefits, incentives, etc.; and effectively dealing with any spin-off litigation.

Our In Focus video series titled “Implementing a Reduction in Force in Canada: Mitigating Risks Arising from Major Workforce Changes” addresses these issues and liabilities in greater detail – we encourage any employer considering a RIF to watch these videos.

Sexual Misconduct

In Render v. ThyssenKrupp Elevator (Canada) Limited Group, the Ontario Court of Appeal redefined wilful misconduct as that term is understood under the Employment Standards Act, 2000 (“ESA“) and confirmed the modern day approach to assessing sexual harassment in the workplace.

The Ontario Court of Appeal determined that an employee who slapped a female co-worker on her behind did not commit wilful misconduct under the ESA, and was therefore entitled to his minimum entitlements thereunder, but was not entitled to common-law notice.

The Court of Appeal reiterated that proving wilful misconduct under the ESA is more onerous than proving just cause at common-law and found that, in order to prove wilful misconduct under the ESA, an employer must prove that the employee’s misconduct was both intentional and preplanned. Please refer to our full blog here for a more detailed analysis of this case.

3. Bill 124 Struck Down for Being Unconstitutional

In Ontario English Catholic Teachers Assoc. v. His Majesty, the Ontario Superior Court of Justice held that Bill 124Protecting a Sustainable Public Sector for Future Generations Act (the “Act“), was void and of no effect.

Bill 124, originally introduced in June 2019, limited salary increases for public sector employees to 1% per year during a three-year “moderation period”. For a detailed blog post on Bill 124, please go here.

Labour organizations challenged the constitutionality of Bill 124 on the basis that it limited the freedom of association, freedom of speech and equality rights of their members under the Canadian Charter of Rights and Freedoms. Ontario denied any infringement and argued, in the alternative, that if Bill 124 did infringe on any Charter rights, it was saved by s. 1 of the Charter.

The Court sided with the labour organizations and struck down the Act for being unconstitutional. The Court held that while the Act did not breach the organizations’ freedom of speech and equality rights, it did violate the right to freedom of association because it substantially interfered with collective bargaining. The Court also found that Bill 124 was not a reasonable limit on a right that could be demonstrably justified in a free and democratic society under s. 1 of the Charter. The consideration of remedies was deferred to a further hearing.

The Ontario government announced that it would appeal this decision. At this time, Bill 124 is not in effect.

4. Immigration Compliance Changes

Immigration, Refugee, and Citizenship Canada (IRCC) incorporated new compliance requirements in its regular audits on employers engaging in the Temporary Foreign Work Permits program. These requirements aim to enhance protections for temporary foreign workers (TFWs) in Canada. Notably, audits now require documentation which had not previously been asked of employers, including proof that TFWs received a pamphlet with information on their rights in Canada, and proof that the company complied with recruitment law in the applicable province, among other things. Please consult our full blog post here for more information on these changes.

5. Federal/Ontario Legislation

Competition Act Changes

The Government of Canada amended the federal Competition Act to criminalize wage-fixing and no-poach agreements between employers, effective June 23, 2023.

The amendments introduced provisions criminalizing any agreement between employers to fix, maintain, decrease or control wages (wage-fixing agreements) or terms and conditions of employment, or which prohibit employers from soliciting or hiring each other’s employees (no-poach agreements). This prohibition will apply to all employers, regardless of whether they compete directly with each other.

The criminalization of no-poach, wage-fixing and other employment-related agreements is something all employers should be wary of. Employers can face fines and executives can potentially face prison time. Consistent with amendments that will remove the existing cap on criminal fines that apply to anticompetitive, buy-side competitor agreements (currently CAD $25M), the employment-related prohibitions will similarly have no maximum. In addition, private parties can also pursue civil actions, including class actions, against employers for breach of these provisions.

Before the amendments come into effect, employers should review existing agreements, conduct a risk assessment, and update internal policies and compliance programs. We have provided more detail on these changes and recommended actions for employers in our blog post here.

Bill 26 – Strengthening Post-secondary Institutions and Students Act, 2022

On December 8, 2022, Bill 26 – Strengthening Post-secondary Institutions and Students Act, 2022, received royal assent. Most of the changes mentioned below will come into effect on July 1, 2023, and will transform how post-secondary institutions and private career colleges address sexual misconduct by faculty and staff.

Key changes include the following:

  • Amending the Ministry of Training, Colleges and Universities Act (the “Act“) to include a definition of “sexual misconduct,” defined as sexual relations, sexual touching, or remarks of a sexual nature that constitute an offence under the Criminal Code, that infringes the right of a student to be free from a sexual solicitation or advance under the Human Rights Code, and/or that contravenes an institution’s sexual abuse and misconduct policies or any other rule or requirement of the institution respecting sexual relations between employees and students.
  • Amending the Act to stipulate that any discharge or discipline by an institution for sexual misconduct is for just cause.
  • Preventing an institution from rehiring an employee who was discharged or who resigned after they were found to have committed sexual misconduct.
  • Preventing institutions from entering into agreements which would preclude the institution from disclosing that an allegation has been made against an employee who committed an act of sexual misconduct.
  • Requiring all institutions to have an employee sexual misconduct policy.

In light of these upcoming changes, post-secondary institutions and private career colleges in Ontario should review their policies to ensure compliance. We have provided more detail on this legislative change in this blog post.

Bill 88 – Working for Workers Act, 2022

On April 11, 2022, Bill 88 received royal assent, introducing significant changes to a number of employment-related statutes and introducing the Digital Platform Workers Rights Act, 2022.

The most significant changes introduced by Bill 88 are:

  • It made certain business consultants and information technology consultants exempt from the hours of work provisions, overtime provisions, and termination pay and severance obligations of the Employment Standards Act, 2000.
  • It required employers with twenty-five or more employees to develop and implement a written electronic monitoring policy by October 11, 2022, and make copies of the policy available to all of their employees.
  • It enacted the Digital Platform Workers Rights Act, 2022, which establishes rights for workers who perform digital platform work. This new Act provides that digital platform operators must provide workers with:
    • information on how pay is calculated;
    • the right to a recurrent pay period and pay day, minimum wage for each work assignment performed by a worker, and amounts earned and tips and other gratuities;
    • the reasons for being removed from a platform, and be given two weeks’ written notice if access is removed for more than twenty-four hours;
    • the right to be free from reprisal and to resolve work-related disputes with platform operators in Ontario; and
    • record-keeping obligations for platform operators, director liability provisions, and detailed complaints and enforcement provisions.

Please refer to our full blog post here for more details regarding Bill 88.

6. Quebec Legislation

Bill 59 – An Act to modernize the occupational health and safety regime

In October 2021, the Quebec Government passed Bill 59, which makes substantive changes to statutes involving health and safety in the workplace. These changes will gradually come into effect, with some already in force since October and others coming into force from now until 2024.

The Bill introduces new provisions to the Act respecting occupational health and safety (the “AOHS”), including the following:

  • Workplaces with 20 or more workers must establish and implement a prevention program that is specific to the workplace. Workplaces with less than 20 employees must establish an action plan to eliminate or reduce dangers to health, safety, and wellbeing.
  • All workplaces with 20 or more workers must establish a health and safety committee. Committees must include at least one individual that represents the workers and another that represents the employer.
  • Employers are obligated to take necessary measures to ensure the protection of a worker exposed to violence in the workplace.
  • The AOHS applies to teleworking, where applicable.

The Bill also introduces new provisions under the Act respecting industrial accidents and occupational diseases, such as a presumption of reinstatement for a worker who has suffered an employment injury and a Regulation that contains a list of diseases that are presumed to have been contracted in the workplace.

More information can be found in our blog post here.

Bill 64 – An Act to modernize legislative provisions as regards the protection of personal information

On June 12, 2020, the Quebec government introduced Bill 64. The first round of requirements brought on by Bill 64 came into force on September 22, 2022.

The Bill proposes to modernize the existing framework applicable to the protection of personal information by amending various public, and private sector Quebec laws, to align closer with the requirements under the federal Personal Information Protection and Electronic Documents Act and the European General Data Protection Regulation.

The Bill will also significantly impact Quebec’s private sector laws on privacy – the Act respecting the protection of personal information in the privacy sector.

Key provisions of the proposed Bill include:

  • Greater fines and administrative penalties for privacy violations.
  • Requiring businesses to appoint an individual to be responsible for overseeing the protection of personal information.
  • Requirements for breach notifications when a “confidentiality incident” presents a “risk of serious injury” to the impacted individual.
  • A mandatory obligation for organizations to conduct a privacy impact assessment.
  • Requiring organizations to conduct a privacy impact assessment to ascertain whether information transferred outside of Quebec will receive a level of protection equivalent to the one granted under the Act.
  • More details around the type of disclosures that must be available to individuals upon collecting their information.
  • Additional rights to a person to whom personal information relates.

Additional information on Bill 64 can be found in our detailed post here.

Bill 96 – An Act respecting French, the official and common language of Québec

On June 1, 2022, Quebec passed Bill 96, An Act respecting French, the official and common language of Québec. Bill 96 introduces significant changes to the Charter of the French Language and other laws.

Among the changes, Bill 96 requires employers to:

  • Provide mandatory employment documentation in French, as well as written communications unless an employee requests that such communications be in another language. This includes things like job application forms, group benefits information, and training documents, with no exception.
  • Provide individual employment contracts that are contracts of adhesion in French (i.e., contracts where the terms are imposed on the employee and which are non-negotiable).
  • Make job postings available in French in a comparable manner as their non-French version.

Most of these amendments came into force on June 1, 2022, but parties have one year from the Act’s effective date to translate any required documents to French. Employers that fail to implement these and the many other requirements imposed by Bill 96 could face fines up to $30,000 for a first offence. For our full blog outlining the new requirements imposed by Bill 96, please go to our blog here.

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The new year brings new challenges for employers. Join us as we take stock of changes over the last year and strategize for what’s on the horizon. 

In our 75-minute “quick hits” format, we’ll help Canadian in-house counsel and human resources leaders track what to keep top-of-mind for 2023. We’ll also provide practical takeaways to help navigate the new landscape.

Among other topics, we will cover:

  • COVID-19 case law updates on vaccinations, masking and workplace health and safety policies
  • Terminations, reductions in force and ways to reduce employer liability in a changing economy
  • Changes to public sector wage caps in Ontario
  • A selection of cross-Canada legislative changes including:
    • Working for Workers (again) in Ontario
    • Paid Sick Leave in BC
    • French Language and Privacy amendments in Quebec
  • Immigration – The solution to labour shortages in a post COVID-19 world?

Date: Wednesday, February 1

Time: 10:00 am to 11:15 am ET

We look forward to connecting with you!

Click here to register for the webinar.

Also presenting: Sarah Adler.

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In 2023, uncertainty is the new certainty, with the economic cycle replacing Covid-19 as the main driver of instability. Experience, along with the insights we’ve gathered from more than 600 senior lawyers at large corporations across the globe, point to an anticipated rise in employment disputes. Organizations should proactively identify risk and involve dispute practitioners as early as possible to mitigate the impact of this rise in complaints.

Uncover the outlook in our sixth annual report, The Year Ahead: Global Disputes Forecast 2023. Featuring results from our global survey of 600 senior lawyers at large organizations, we unpack the survey findings and highlight the top disputes risks across key industry sectors and locations. See full report and highlights

And — to go deeper, register here for The Year Ahead: Global Disputes Forecast 2023 – Employment webinar scheduled for February 21, 2023, 8:00 am CT.

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As we near the end of 2022 and bonus season is right around the corner, now is a great time for employers to review and update their employment agreements. In order to make changes to an existing employment agreement, the employer must give the employee “consideration.” Without consideration, the changes would not be enforceable.

Consideration can come in many different forms, but is generally a benefit that the employee would not have received had they not signed the amended employment agreement. Typically, it comes in the form of a one-time payment, an increase in salary or hourly wage rate, or increased benefit entitlements or vacation. A non-discretionary bonus payment that the employee would have earned at the end of the year regardless of whether they signed the revised employment agreement would not be sufficient consideration, but a discretionary bonus can be. If the employer can show that the employee was not guaranteed an end of year bonus, and that the bonus—or a portion of it—was paid in exchange for the employee signing the amended employment agreement, this will likely be sufficient consideration.

With that in mind, we have highlighted some areas that employers may want to shore up in their employment agreements:

  1. Termination provisions: This is typically one of the most important clauses in an employment agreement, and one which employers should review and update regularly. In the last couple of years, the majority of termination clauses have been rendered unenforceable by operation of Waksdale v. Swegon North America Inc., 2020 ONCA 391, where the Ontario Court of Appeal determined a termination clause was unenforceable because the “just cause” provision allowed the employer to terminate an employee without notice or pay in lieu for reasons that did not constitute cause under Ontario’s Employment Standards Act, 2000 (“ESA“). We have now seen Waksdale applied in a number of cases, and it is clear that it is here to stay. In Gracias v. Dr. David Walt Dentistry, 2022 ONSC 2967, the Ontario Superior Court reiterated the rule from Waksdale and found that a termination provision will not be saved by a severability clause. In Rahman v. Cannon Design Architecture Inc., 2022 ONCA 451, the Ontario Court of Appeal found that the employee’s sophistication and the parties’ subjective intention to not contravene the ESA an employment agreement was not relevant when assessing the enforceability of the termination provision. The Court of Appeal held that the just cause provision in the employment agreement ran into a Waksdale problem and was therefore unenforceable.
  2. Unpaid layoff provisions: This is something we saw a lot of during the COVID-19 pandemic, when employers needed to temporarily lay off employees to match a slow down in work, particularly in manufacturing and service industries. Unless there is a provision in the employment agreement allowing an employer to temporarily lay off an employee without pay, the employee may argue that doing so constitutes a constructive dismissal. While many provinces enacted legislation during the pandemic which technically allowed employers to engage in temporary layoffs, this did not stop employees from bringing claims for constructive dismissal under the common law. Coming out of the pandemic, we recommend to all of our clients that they have language in their employment agreements permitting them to temporarily lay off employees without pay.
  3. Long term and short term incentive plans: We are seeing more and more litigation regarding the payout of long and short term incentives. Recent case law[1] has made it clear that unless the language of the incentive plan specifically excludes payout during a notice period, it will be payable. Language requiring an employee to be “actively employed” to qualify for payment will not suffice. Employers with this kind of language in their employment agreements and bonus plans will need to pay out an employee’s incentives during the notice period, including bonus payments, stock option vesting, etc. Combined with an unenforceable termination provision and an employee with an extended length of service, the liability for something like this could be significant. Avoiding this requires updating not only the respective incentive plan document (if any), but also the termination provisions used in employment agreements.

Takeaways for Employers

Making changes to an employment agreement requires consideration and employers can make good use of their discretionary end of year bonuses to do so. Employers should review and revise their employment agreements regularly and have them updated to address changes in the law. Above are some examples of provisions or language that often require changes, but there are certainly others. If you have not had your employment agreements reviewed in the last year, we recommend doing so prior to payout of discretionary bonuses.


[1] In Matthews v. Ocean Nutrition Canada Ltd., 2020 SCC 26, the Supreme Court of Canada found that an employee was still entitled to a bonus payment under a long term incentive plan (“LTIP”) even though language in the employment agreement precluded any such payment. In Matthews, the employer’s company was sold 13 months after the employee resigned, which constituted a “Realization Event” under the LTIP and triggered bonus payments to qualifying employees. The plaintiff sought damages for constructive dismissal, including the bonus payment, and the employer argued that no bonus payment was owing under the LTIP since the plaintiff was not an employee. In finding for the employee, the Court reiterated that reasonable notice upon termination includes all salary and benefits, including bonuses that an employee would have earned had the employee continued to work through the reasonable notice period. The language of the LTIP did not unambiguously limit or remove the employee’s common law right to damages. Matthews emphasizes the need for employers to review the language of their incentive plans to ensure that they are carefully drafted and comply with the analytical framework provided in the decision.

 

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Special thanks to Sarah Adler, Immigration Legal Counsel, and Simran Nandha for their assistance with this blog.

Further to the increased compliance requirements from Employment and Social Development Canada (ESDC) and Immigration, Refugee, and Citizenship Canada (IRCC) on all employers which commenced on September 30, 2022 (Government of Canada strengthens protections for temporary foreign workers as new regulations come into force – Canada.ca), IRCC has now incorporated these requirements in its regular audits on employers engaging in the Temporary Foreign Work Permits program in Canada.  In particular, the audits are focused on employees’ rights and program compliance.

Specifically, these changes to regular audits are requesting certain documentation that has not previously been asked of employers, including:

  • Proof that the employee received a copy of the pamphlet entitled International Mobility Program: Get to Know Your Rights While working in Canada. See the following link:  International Mobility Program – Get to know your rights while working in Canada – Canada.ca
    • A copy of the pamphlet must be provided to the employee in their official language of choice on or before the first day or work, and proof of provision of the pamphlet must be provided upon request.
    • The pamphlet must also be readily available within the workplace in both official languages.
  • Proof that the company is compliant with recruitment law in the applicable Province (if applicable);
  • Copy of the employment agreement signed by the employer and the foreign worker prior to the submission of the foreign worker’s work permit application (which is indicated in the attestation section of the Offer of Employment filing);
    • Note that IRCC is currently recognizing that Employment Agreements between the foreign worker and the Canadian company are not always applicable, for example in the case of intermittent travellers, and are currently reviewing their position on this. In the meantime, we recommend that applicants at least have an assignment letter from the company confirming the terms and conditions of their employment in their home office remains applicable.
  • Copies of policies and procedures that address situations of abuse in the work force, and a description of the mechanism to resolve situations of abuse;
  • Proof of training within the last two years provided to employees and supervisors to recognize and address abuse.

In particular these compliance requirements are being implemented to better protect temporary foreign workers from potential reprisal by employers for bringing forward reasonable complaints and prohibiting employers from charging recruitment fees to workers.  Also, there is an increased focus on providing temporary foreign workers with reasonable access to health care services.

Should you have any questions regarding the above, please feel free to reach out to the Employment or Immigration teams here at Baker McKenzie.

 

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Summary

On November 14, 2022, Bill 26 – Strengthening Post-secondary Institutions and Students Act, 2022, passed second reading in the Ontario legislature. If passed, Bill 26 will be effective on July 1, 2023, and will transform how post-secondary institutions and private career colleges address sexual misconduct by faculty and staff.

Bill 26’s key changes will be:

  • Sexual misconduct will be defined as: (a) physical sexual relations with a student, including touching of sexual nature or behaviour or remarks of a sexual nature toward a student, or (b) reprisals or threat of reprisal for rejection of sexual solicitation and advances. The definition of sexual misconduct also encompasses acts that constitute an offence under the Criminal Code, acts that infringe the right to be free from a sexual solicitation or advance under the Human Rights Code, and acts that contravene an institution’s sexual abuse and misconduct policies.
  • It would allow an institution to discharge and discipline an employee for an act of sexual misconduct. Sexual misconduct will constitute just cause for all disciplinary purposes, and the employee would not be entitled to notice of termination, termination pay, or any other form of compensation or restitution. An adjudicator can’t substitute the penalty imposed by the institution.
  • It would prevent an institution from rehiring an employee who was discharged or who resigned after they were found to have committed sexual misconduct.
  • It would prevent institutions from entering into agreements, including collective agreements or settlement agreements, which preclude the institution from disclosing that an allegation has been made that an employee of the institution committed an act of sexual misconduct toward a student of the institution. The Bill’s latest version provides for an exception to this prohibition in cases where a student requests a non-disclosure agreement and: (a) the student had an opportunity to receive independent legal advice, (b) there have been no undue attempts to influence the student with respect to the request, (c) the agreement includes an opportunity for the student to waive their own confidentiality in the future and the process for doing so, and (d) the agreement is of a set and limited duration.
  • It would require all institutions to have an employee sexual misconduct policy, whether a standalone policy or as part of another policy. This policy must specify the institution’s rules about sexual behavior between employees and students. It must also include examples of potential disciplinary measures. The policy may specify what kind of conduct amounts to sexual misconduct.

Major points

Bill 26 will have important implications for post-secondary institutions and private career colleges in Ontario. They will have to review and adjust their policies to ensure compliance with the new provisions. The Bill will also affect their approach to employee discipline and discharge for sexual misconduct, and how such cases are litigated. Following the proposed changes, the only issue in any ensuing litigation would be whether the institution has proven sexual misconduct.

If you have any questions, please contact a member of our team.

Special thanks to Anton Rizor for his assistance with this blog. 

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Special thanks to Arlan Gates and Justine Johnston.

Amendments to the Competition Act that come into force on June 23, 2023 will make it a criminal offence for employers to enter into no poach, wage fixing or other agreements related to the terms and conditions of employment in Canada.

In this In Focus video, our Labour and Employment and Competition and Foreign Investment Review lawyers discuss the risks associated with non-compliance and what employers should consider as they prepare for the prohibition to come into effect.

Click here to watch the video.

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In September 2022, the Ontario Court of Appeal in Pavlov v. The New Zealand and Australian Lamb Company Limited (“Pavlov“) confirmed that an employer may be liable for a longer notice period, even for a short-term employee, based on prevailing economic factors beyond the parties’ control. In this case, it was COVID-19.

Background

Phillip Pavlov was hired by The New Zealand and Australian Lamb Company Limited (“NZAL Co.”) as their Director of Marketing and Communication on June 12, 2017. Pavlov’s employment was terminated on May 28, 2020. As a result, Pavlov brought an action for damages for alleged wrongful dismissal. Given that NZAL Co. did not argue that this was a termination for just cause, which would not have required notice, the main issue centred around the reasonable notice period, or pay in lieu thereof, that Pavlov was entitled to.

At trial, the judge turned to the well-established Bardal factors to determine the length of reasonable notice, including the age of the employee, character of employment, length of service, and availability of similar employment. In the Court’s analysis, it considered that Pavlov was forty-seven years old at the time of termination, had only served a short term of approximately three years in his position, and although his position was a senior role, he was not a corporate director or an officer. Nevertheless, the Court emphasized the “prevailing economic uncertainties” of COVID-19 which had a negative impact on Pavlov’s ability to secure similar alternative employment. As a result of these circumstances, the Court determined that Pavlov was entitled to ten months’ reasonable notice of termination, and consequently pay in lieu thereof, as opposed to the three to five months offered by NZAL Co. The Court also rejected NZAL Co.’s argument that Pavlov failed to mitigate his damages by not seeking adequate employment. On the contrary, Pavlov gave evidence accepted by the Court demonstrating that he applied to over 100 jobs for which he was qualified, but remained unemployed at the time of trial. Finally, the Court found that Pavlov was eligible for his annual bonus and benefits that he would have earned during his notice period.

On appeal, NZAL Co. challenged the following: (1) the trial judge’s application of the Bardal factors in determining the notice period; (2) Pavlov’s entitlement to his annual bonus during the notice period; and (3) the costs awarded to Pavlov in the amount of $50,000. In response, the Ontario Court of Appeal found that the lower court made no error in its analysis or conclusions and ordered NZAL Co. to pay an additional $24,000 in costs.

Key Takeaways

Employers are not in the clear from the effects of COVID-19. When considering termination, Pavlov serves as a reminder to employers about the additional liabilities they may have to their employees. In fact, as stated in the lower court and affirmed by the Ontario Court of Appeal, it should have been known by NZAL Co. at the time of Pavlov’s dismissal that the effects and uncertainties of the COVID-19 pandemic were obstacles to Pavlov’s efforts to obtain alternate employment.

Pavlov‘s emphasis on considering the “prevailing economic uncertainties” when conducting the Bardal analysis can likely extend to present day, in light of the current shift in the economic climate and potential recession. To help navigate the anticipated workforce changes and mitigate risks in the process, you can check out our recent 3-part video series on Reductions in Force.

Many thanks to Eloise Somera for her assistance with this blog.