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

As artificial intelligence and its integration into business operations continues to evolve rapidly, many employers are exploring the use of AI systems in a bid to make hiring decisions more efficient and data-driven. “AI” encompasses a wide range of technologies from simple automated resume screening tools and complex machine learning systems to the forward-looking agentic AI – the kind of AI that does tasks independently.

This rise in the use of AI tools in making employment-related decisions has spurred legislators to regulate their use. This has created a minefield of increased legal liability for employers, especially concerning privacy considerations and the potential for these tools to exhibit biased decision-making. This article provides an overview of the current state of legislative developments related to AI in hiring and recruitment in Ontario, federally, and internationally. It also highlights best practices for employers who are considering the adoption of such tools. 

Legislative Developments in Ontario, the Federal Jurisdiction and Beyond

Ontario

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 by the Ontario government under the “Working for Workers” banner since 2021. Each piece of legislation in this series seeks to address various contemporary issues within Ontario workplaces through amendments to the Employment Standards Act, 2000 (the “ESA”). Bill 149 brings about a number of additional changes that will be relevant for employers (which are summarized in our blog post), especially relating to the use of AI in the hiring process.

Starting January 1, 2026, employers will be required to disclose in job postings whether they are using artificial intelligence in the hiring process (i.e., if AI is being used to screen, assess or select applicants for the given position). For the Ontario government, the purpose of such disclosure is “to strengthen transparency for job seekers given that there are many unanswered questions about the ethical, legal and privacy implications that these technologies introduce.”Continue Reading Artificial Intelligence, Real Consequences? Legal Considerations for Canadian Employers Using AI Tools in Hiring

In the recent case of Preston v. Cervus Equipment Corporation, Ontario’s Court of Appeal offered employers a friendly reminder that well-drafted settlement documents will survive judicial scrutiny.

Key Takeaways for Clients

Preston underscores the necessity of clear and precise language in settlement agreements. Employers should use broad and inclusive release language that can encompass a wide range of claims, even those not explicitly mentioned. By carefully drafting settlement agreements, employers can ensure that the settlement documents have the intended effect of concluding the employment relationship without courts stepping in to frustrate the finality of the settlement documents.

Background

The case revolves around the interpretation of a release and indemnity clause in the settlement documents signed by Mr. Preston after his termination from Cervus Equipment Corporation. Mr. Preston was employed by Cervus from 2014 to 2018 and participated in the company’s Deferred Share Plan.

Upon his termination without cause in January 2018, Mr. Preston had 4,964.04 vested stock units valued at $75,949.81 and 4,499 unvested stock units. Cervus informed him that his vested stock units could be exercised according to the Plan and offered him a severance package of 15 weeks’ pay in lieu of notice. The parties then discussed and settled the matter. The settlement documents included a broad release of claims, which Mr. Preston signed after receiving independent legal advice.

Notably, the release language in the settlement documents did not specifically refer to the stock plan and vested stock units in question, but did reference that Mr. Preston was releasing all claims connected to his employment, and that he had no entitlement or claim with respect to any bonus, share award, stock option, or similar plan that his employer had offered to him.Continue Reading Ontario’s Court of Appeal Highlights the Importance of Respecting Broad Release Language in Employment Settlement Agreements

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.Continue Reading Top 10 Canadian Labour & Employment Law Developments of 2024

We are thrilled to invite you to our upcoming event series, featuring a range of sessions in Canada and across North America.

In our 75-minute Canadian Employer Update webinar, we will bring you up to speed on major developments like Ontario’s ‘Working for Workers’ legislation, managing pay transparency obligations across Canada, significant case law…

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

In 2022, the Ontario government sought to establish a new legal framework for “digital platform work” through the introduction of the Digital Platform Workers’ Rights Act, 2022. It is now set to come into force on July 1, 2025. The Act, stemming from the Working for Workers Act, 2022, introduces new rights and protections for workers within the gig-economy. Specifically, the Act will apply to workers who perform “digital platform work” (such as ride share, delivery, or courier services) and “operators” who facilitate the performance of digital platform work through a digital platform.

Summary of Significant Changes

In conjunction with the Act, the Government of Ontario has recently published regulations that further clarifies the new rights and obligations under the Act. Key worker rights and new obligations include:

  • Right to a Minimum Wage: Digital platform operations will be required to pay a worker at least the minimum wage rate payable under the Employment Standard Act, 2000 (ESA), exclusive of tips and other gratuities, for each “work assignment” performed. Subject to specific exceptions, a “work assignment” will typically begin when a worker accepts a work assignment through a digital platform and ends when the worker performs the assignment.

Continue Reading A New Gig for Digital Platform Work: Ontario’s Legal Framework for Digital Platform Workers Comes into Force July 1, 2025

We’re bringing the world to you. Join Baker McKenzie for our annual Global Employment Law webinar series.

In the face of intensifying geopolitical risk and continuing economic uncertainty, the challenges for global employers to plan carefully and operate strategically to maintain a thriving workforce is greater than ever. We’ll help employers navigate those challenges in…

  • The progress and implications of Ontario’s latest “Working for Workers” legislation
  • Implications of Pay Transparency Legislation in British Columbia and
…

Special thanks to our articling student Ravneet Minhas for contributing to this update.

Federal employers should be aware of recent amendments to the Canada Labour Code, which increased the minimum termination notice period for federally regulated private sector employees.[1] The changes came into force February 1, 2024 and provide employees who have completed at least three years of continuous service with a longer notice period if terminated without cause.

Previously, 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 the employer.Continue Reading Reminder for Federal Employers: Changes to Termination Notice Period in Effect NOW