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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 ambiguity. 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.