Jurisdiction

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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 Bertsch v. Datastealth Inc., 2024 ONSC 5593 (Bertsch), an Ontario court upheld a termination provision that did not specify every detail. While recent decisions suggest that such provisions may have to be flawless to be enforceable, Bertsch is a welcome decision showing that employers do not necessarily have to meet that high bar to protect themselves.

Key Takeaways

Bertsch reminds employers of the importance of including clear and compliant termination provisions in employment agreements. Ontario employers should review their agreements to ensure they meet the requirements of the Employment Standards Act, 2000 to avoid potential legal challenges. Employers should continue to confirm their termination provisions are:

  1. Clear and unambiguous to avoid disputes and potential invalidation by the courts.
  2. Compliant with the ESA and its regulations.
  3. Inclusive of language stating that compliance with the ESA and whatever other entitlements are listed in the employment agreement satisfy any common law notice of termination or pay in lieu thereof.

Bertsch demonstrates that while courts will continue to closely scrutinize termination provisions in employment agreements, employers must only ensure that the provisions are legal and unambiguous. This provides some relief for Ontario’s employers by indicating that they do not necessarily have to rely on “perfect” termination clauses that reference all scenarios and laws in their employment agreements to enforce them.

Even with this positive decision for employers, we continue to encourage all Canadian employers to assess the enforceability of termination provisions in existing employment agreements.Continue Reading Don’t Let Perfect Be the Enemy of Excellent: Ontario Court Validates Termination Clause that is Unambiguous and Legal

Changes to the Canada Labour Code (“CLC” or “Code”) are effective on September 1, 2019.  To ensure compliance, federally regulated employers should review their policies and procedures.

This is part one of a two part series summarizing changes to the Code.  This part focuses on federal employment standards related to vacation, holiday and leave entitlements.  The remaining changes will be summarized in part two.
Continue Reading Now Effective: Changes to the Canada Labour Code (Part One)

In recent years, Canadian courts have increasingly heard large civil claims against Canadian companies for alleged human rights violations in their foreign operations. As we have discussed previously, judges faced with these claims must determine whether the court’s jurisdictional reach extends to the company’s activities in its global supply chain, thus permitting foreign claimants to pursue their action in Canada.
Continue Reading Rana Plaza Class Action Blocked in Ontario & Nevsun Decision Challenged at Canada’s Highest Court

We have written over the past two years about a growing wave of significant lawsuits in Canada against corporations for alleged international labour and human rights violations in their overseas operations or supply chains. As we have reported, Canada’s judiciary is demonstrating a willingness to expand their jurisdictional reach to permit such claims to proceed. Canadian judges are keeping an open mind as to whether a novel duty of care exists between multinational companies and the upstream foreign supply chain workers or the local residents affected by their operations.
Continue Reading Door Still Open? Canada As Safe Harbour For Multinational Human Rights Litigation

A lawsuit brought by several Guatemalans for alleged damages suffered during a 2013 protest at the Escobal silver mine in San Rafael Las Flores has cleared a final hurdle and will now proceed to trial in British Columbia.
Continue Reading BC Trial on Alleged Human Rights Violations by Canadian Mining Company in Guatemala Can Proceed

We recently discussed the rising number of claims against Canadian companies for alleged human rights violations in their overseas operations or supply chains. In that article we described the ongoing class action lawsuit against Loblaws and Joe Fresh launched by Bangladeshi garment workers in response to the 2013 Rana Plaza collapse in Dhaka, Bangladesh. Click here for a link to the article.

We also commented on a general increase in litigation against Canadian multinational corporations, including the current case against Toronto-based, Hudbay Minerals Inc., which was brought by a group of indigenous Guatemalan Mayans for human rights violations related to a mining venture.

The reputational risks associated with these cases are serious, particularly in the age of online media and investor activism. On April 3, 2016, The New York Times published a front-page article on the Hudbay Minerals Inc. case entitled, ‘Outcry Echoes Up to Canada’.
Continue Reading Global Human Rights Compliance & Litigation Update: Hudbay Minerals Inc. Lawsuit Receives International Media Coverage

In today’s rapidly changing world of workplace compliance, global organizations must not only comply with the laws of their headquarters but also the laws of the countries where their workforces and even their suppliers operate. Many seemingly compliant organizations face unseen global workplace and supply chain compliance risks, causing great concern among corporate leaders. In addition to potential harm to workers, failing to manage global workplace risks can have a significant, long-lasting impact on business strategies, legal risk profile and brand reputations. How can you help “save the day” for your company?
Continue Reading Upcoming Webinar – How to Be Your Company’s Superhero: Managing Your Global Workplace and Supply Chain Compliance

(Canadian businesses with U.S. & international operations should consider this webinar.)

2014 has been yet another active year for employers, with significant labor and employment developments in the U.S. Now is the time for employers to update their employment handbooks, policies, and internal company practices to reflect both Federal and state developments from this past year, and for U.S. multinational companies to sharpen their employment-related business strategies for 2015.Continue Reading Navigating U.S. and International Employment Laws (Webinar)