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Special thanks to our articling student Andie Hoang for contributing to this update.

As we wrap up 2024 and look forward to 2025, here are 10 key developments Canadian employers should track:

1. Changes to Termination Notice Periods for Federal Employees

In February 2024, amendments to section 230 of the Canada Labour Code came into effect requiring federal employers to provide their employees with a graduated notice of termination based on the length of an employee’s continuous employment. Prior to this, employers had to provide a minimum of two weeks’ notice of termination or pay in lieu of notice to an employee who had completed at least three months of continuous employment with said employer.

The amendments also require employers to provide a written statement of benefits to employees who have been terminated. Prior to these amendments, this was only required for group terminations, but now will also apply to individual terminations. These statements must outline an employee’s right to vacation benefits, wages, severance pay and any other benefits and pay arising. A federal employer’s obligation to pay severance pay under section 235 of the Code, however, remains unchanged. 

Please see our full blog on the updated amendments and notice lengths, “Reminder for Federal Employers: Changes to Termination Notice Period in Effect NOW.”

2. New Obligations for Ontario Employers Under Bill 149 – Working for Workers Four Act

On March 21, 2024, Bill 149 – Working for Workers Four Act received Royal Assent as part of a series of legislative initiatives that have been introduced under the “Working for Workers” banner since 2021. Each piece of legislation in this series seeks to address various contemporary issues within Ontario workplaces. Bill 149 introduces significant changes to Ontario’s employment law, including:

  • Job Postings: Employers who publicly advertise job postings are now required to disclose either the expected compensation or a range of expected compensation. The range of expected compensation shall be subject to conditions, limitations, restrictions or requirements as may be prescribed. Further, employers will also be required to disclose in job postings whether they used artificial intelligence in the hiring process (i.e., if AI was used to screen, assess or select applicants for the position). These new requirements will come into force on January 1, 2026.
  • Tips and Tip Policies: If an employer has a policy in respect of tip pooling, they are required to both post and keep posted a copy of their policy in a conspicuous place in their establishment where the policy is likely to come to the attention of employees. Further, employers are required to retain copies of any written tip pooling or sharing policy for a period of three years after it is no longer in effect.

The Act brings about a number of additional changes that will be relevant for employers, which are summarized in our blog post, “* UPDATE * Ontario Passes Bill 149, Working for Workers Four Act, 2024, Imposing Pay Transparency Requirements Among Other Things.”

3. Timely Judicial Reminder re Termination Provisions and Fixed-Term Contracts

The Ontario Superior Court of Justice in Dufault v. The Corporation of the Township of Ignace, 2024 ONSC 1029, delivered a decision that will impact the way employment agreements are drafted going forward. The Plaintiff was employed by the Defendant Township on a fixed-term contract. However, with 101 weeks remaining in her contract term, the Township terminated her employment without cause. Following this, the Plaintiff sued the Township for wrongful dismissal, arguing that the termination clause in their contract was unenforceable and that they were therefore entitled to reasonable notice of termination. Ultimately, the Court found the termination provisions unenforceable as the contract did not comply with the Employment Standards Act, 2000, for three reasons.

First, the contract permitted the employer to terminate the employee’s employment without cause in the employer’s “sole discretion” and “at any time.” This violated the ESA as there are periods during which an employer is prohibited from terminating an employee, such as upon the conclusion of a statutory leave or as a reprisal for attempting to exercise a right under the ESA.

Second, through the inclusion of the “for cause” standard in the termination provision (permitting the Township to withhold termination pay and severance pay that did not appear in the ESA) the township had conflated grounds for termination under the ESA with a common law standard not found in the ESA.

Third, the “without cause” provision violated the ESA because an employee is entitled to “regular wages” during the statutory notice period, which can include more than just base salary, such as commissions, vacation pay, bonus and other incentive payments.

The Township sought leave from the Court of Appeal for Ontario to appeal the decision of the Superior Court which has been refused. Looking forward, Dufault should remind employers of the importance of drafting employment agreements carefully, as the decision shows how strict Ontario courts are in reviewing these clauses.

4. Analysis for Resolving Jurisdictional Disputes (Human Rights Tribunals versus Labour Arbitrators)

In London District Catholic School Board v. Weilgosh, 2024 ONSC 3857, the Ontario Superior Court confirmed that labour arbitrators have concurrent jurisdiction with labour arbitrators to interpret and apply the Human Rights Code, meaning that unionized employees can pursue their workplace human rights claims either through the grievance arbitration process or an application before the Human Rights Tribunal of Ontario.

This case follows the Supreme Court of Canada decision in Northern Regional Health Authority v. Horrocks, 2021 SCC 42, where the Court considered whether the Manitoba Human Rights Commission could adjudicate a human rights complaint from a unionized employee. The Court proceeded to establish a two-part analysis for resolving jurisdictional disputes between labour arbitrators and competing statutory tribunals. The first part of the analysis calls for an examination of the legislation to determine whether it grants exclusive jurisdiction to the labour arbitrator and, if so, over what matters. If the labour arbitrator is found to have exclusive jurisdiction, the second part of the analysis determines whether the dispute falls within the scope of the labour arbitrator’s jurisdiction, while considering the ambit of the collective agreement and the factual circumstances underpinning the dispute.

In Weilgosh, the Superior Court concluded that there was concurrent jurisdiction between the HRTO and labour arbitrators. This was in consideration of “the broad language used in the Code, its statutory scheme and the broader legal context of the legislative and jurisprudential history of the  Code … [as] applying an exclusive arbitral jurisdiction model would defeat, not achieve, the legislative intent.”

This decision provides certainty for employers that the statutory regime created under the Code allows for the Tribunal to maintain concurrent jurisdiction over human rights issues arising in a unionized workplace. However, the Tribunal still maintains the power to defer applications where parallel proceedings have been commenced before a labour arbitrator, and to dismiss applications under section 45.1 of the Code where another proceeding (such as a labour arbitration) has properly dealt with the substance of the application, so there are still some mechanisms in place to reduce or prevent forum shopping by applicants.

5. Pay Equity Obligations in Federally Regulated Workplaces

2024 saw the Pay Equity Regulations under the Pay Equity Act amended to provide more further guidance to employers in implementing their pay equity plans. Federally regulated workplaces with 10 or more employees were required to post their pay equity plans and notice of increases as of September 3, 2024 and provide any required increases in compensation by September 4, 2024. Further, such employers must proactively examine their compensation practices and ensure that workers receive equal pay for work of equal value in predominantly female job classes.

Employers who fail to comply with provisions of the Act or Regulations may also be subject to monetary fines of up to $50,000.

6. Amendments to the Canada Labour Code: Bill C-59 (Pregnancy Loss)

Amendments to the Canada Labour Code related to leave related to pregnancy loss and bereavement, were introduced aspart of the Federal Government’s Bill C-59 – Fall Economic Statement Implementation Act, 2023. Receiving Royal Assent on June 20, 2024, employees who experience a pregnancy, or the pregnancy of their spouse or common-law partner, that does not result in a live birth are eligible for partially paid and protected leave. The leave of absence may be up to 8 weeks if the pregnancy results in a stillbirth, or three days in any other case. Employees with three consecutive months of continuous employment are eligible to have the first three days of the leave paid at the regular rate of wages.

In terms of bereavement leave, Bill C-59 made changes to the pertinent provisions under the Canada Labour Code to better align them with other categories of leave. Under these amendments employers are required to reinstate employees to a comparable position upon return from leave and to continue pension, health and disability benefits for employees on leave as long as, where required, employees continue to pay their contributions. Further, employers are prohibited from taking reprisal against an employee for taking leave. However, these amendments do require employees to inform their employers of the reasons behind their leave and their intended length of leave.

7. (More) Amendments to the Canada Labour Code: Bill C-69 (Disconnecting from Work)

Further amendments to the Canada Labour Code came into force, with the Royal Assent of Bill C-69 – An Act to implement certain provisions of the budget tabled in Parliament on April 16, 2024. Employers subject to the Canada Labour Code, are now required to have a disconnecting from work policy that must include the employer’s expectations around communicating outside scheduled hours of work and any opportunity to disconnect from means of communication. Employers will have one year to develop such a policy and will have a duty to consult employees in its development, with a mandatory 90-day period for comments. Employer reprisals and threats are prohibited against employees who: ask an employer to comply with their policy; ask about their rights under the policy; file a complaint under the policy; or exercise or attempt to exercise a right under the policy.

Another amendment of note introduces a new presumption of employee status (i.e. in employee/independent contractor disputes). Previously, the assumption was for an individual asserting employee status to prove it. Now, employers will bear the onus of providing non-employee status.

8. Significant Changes Under Bill 190 – Working for Workers Five Act

On October 28, 2024, Bill 190 – Working for Workers Five Act received Royal Assent, amending both the Employment Standards Act, 2000 and Occupational Health and Safety Act. Bill 190 introduces significant changes to Ontario’s employment law address various contemporary issues within Ontario workplaces. Changes under Bill 190 include the following:

  • Employment Standards Act, 2000
    • Employers are now prohibited from requiring an employee to provide a certificate from a qualified health practitioner (a “sick note”) as evidence of their entitlement to three sick leave days available under the ESA. Employers, however, retain the right to ask an employee to provide information “reasonable in the circumstances” but may no longer require a sick note.
    • The maximum fine for an individual convicted of violating the ESA has now doubled to $100,000.
    • Employers who publicly advertise job postings are now required to indicate whether the positing is for an existing job vacancy. Further, all employers who interviews applicants for a publicly advertised job posting must provide the applicant with prescribed information within a prescribed time period.
  • Occupational Health and Safety Act
    • The most significant change to OHSA may be the expansion of its jurisdiction to include telework performed in or about a private residence, expanding the scope of employers’ general duty under the OHSA to “take every precaution reasonable under the circumstances for the protection of the worker.”
    • The definition of both workplace harassment and workplace sexual harassment is now broadened to include harassment that occurs in a workplace “virtually through the use of information and communications technology” or in other words within the context of remote work.

The changes introduced by Bill 190 are significant and were introduced largely without companion regulations or guidelines from the Ontario’s Ministry of Labour, Immigration, Training, and Skills Development to direct employers on how to meet their new obligations.

9. Exclusion of Employee’s Common Law Entitlements

In Bertsch v. Datastealth Inc., 2024 ONSC 5593, the Ontario Superior Court of Justice upheld the enforceability of a termination clause in an employment agreement that limited the plaintiff’s entitlement to only the minimum standards under the Employment Standards Act, 2000. The employment agreement included a termination provision that limited the plaintiff’s rights on termination to the minimum entitlements prescribed by the ESA while explicitly confirming that the plaintiff contracted out of their common law notice entitlements.

The Court rejected the plaintiff’s argument that the provision was ambiguous and failed to properly reference the statutory exemptions from compensation on dismissal. Deeming the provision valid and binding, the Court held there was no reasonable alternative interpretation that might result in an illegal outcome – i.e. an interpretation which would be contrary to the minimum standards in the ESA. Though recognizing the presumptive power imbalance between an employee and employer, the Court noted that where the proper meaning of the provision is clear, the normal power imbalance of an employment relationship would not be relevant and ought not to change the outcome. In this case, the provision did, in fact, caution the plaintiff that in accordance with the ESA, there could be circumstances in which he would have no entitlement to any notice of termination, pay in lieu of notice, severance pay or benefit continuation.

This Court distinguished its decision from the Ontario Court of Appeal’s decision in Waksdale v. Swegon North America Inc., 2020 ONCA 391, where termination provisions were found to be unenforceable for allowing dismissals without notice on grounds broader than what the ESA permits.

Comparing the cases, however, in Bertsch the termination provisions were carefully aligned with the ESA minimum requirements. The termination provisions explicitly provided that, if Bertsch’s employment was terminated with or without cause, he would receive only the minimum payments and entitlements owed to him under the ESA and Ontario Regulation 288/01. Furthering demonstrating adherence to the ESA’s dismissal for cause standard, the contract did caution that in certain situations, Bertsch would not be entitled to any notice of termination, pay in lieu, severance, or benefit continuation.

The decision in Bertsch is a favourable one for employers and serves as a useful reminder of the strategic advantage of using termination provisions that aim to displace the right to common law notice, so long as they are carefully drafted.

10. Key Changes Contained in Bill 229 – Working for Workers Six Act

On November 27, 2024, the Ontario Minister of Labour, Immigration, Training and Skills Development provided an early holiday gift and introduced Bill 229 – Working for Workers Six Act, building on the previous Working for Workers Act legislation. Proposed with the intention to protect “the health and wellbeing of workers, bring more people into the skilled trades and keep costs down for Ontario workers,” employers should be aware of the potential impact their operations. Noteworthy changes introduced in this bill include:

  • New Leave Categories: Bill 229 intends to introduce two new sections to the Employment Standards Act, 2000 including:
    • a new placement of a child leave, entitling an employee with at least 13 weeks of service to an unpaid leave of up to 16 weeks after the placement or arrival of a child into the employee’s custody, care and control through adoption or surrogacy and;
    • a long-term illness leave, entitling an employee with at least 13 weeks of service to an unpaid leave of up to 27 weeks if the employee is unable to perform the duties of their position because of a serious medical condition
  • Changes to the Occupational Health and Safety Act (OSHA): This Bill also proposes certain amendments to the OHSA, including imposing a minimum fine of $500,000 for any corporation found guilty of a second or subsequent offence under the OHSA that results in the death or serious injury of one or more workers; enhancing  the powers of the Chief Prevention Officer (CPO), regarding training programs, policies on training requirements, and collection of personal information; and requiring employers to ensure that personal protective equipment that is provided, worn, or used is properly fitted and appropriate in the circumstances.

Given how recently Bill 229 was introduced, it remains to be seen how its proposed amendments will affect the operations of employers.

For bespoke implementation advice, or any needed clarification on the new obligations outlined above, please contact your Baker McKenzie employment lawyer. We’re here to support you in 2025 and beyond.