Termination of Employment

What Canadian Employers Need to Know to Ring in 2024

In 2023, we helped Canadian employers overcome a host of new challenges across the employment law landscape. Many companies started the year with difficult cost-cutting decisions and hybrid work challenges. We’ve worked hard to keep our clients ahead of the curve on these issues, as well

Special thanks to our former summer associate Thanusa Sounthararajah for contributing to this update.

On July 1, 2023, the Employment Standards Act, 2000 (“ESA“), was amended to require temporary help agencies (“THAs“) and recruiters to obtain a license to operate in Ontario as of January 1, 2024. In addition, the Ontario

On March 20, 2023, Bill 79, Working for Workers Act, 2023, carried on a first reading in the Ontario legislature. If passed, Bill 79 will significantly amend several employment-related statutes and expand on legislative changes introduced in the Working for Workers Acts, 2021 and 2022.

Summary of Key Changes

The most important potential changes include:

  • Mass Termination: Employees who work remotely from home will be included in the count for mass termination provisions under the Employment Standards Act, 2000 (“ESA“). The result is that remote employees will receive the same eight-week minimum notice of termination or pay-in-lieu as their in-office colleagues. Currently, the meaning of “establishment” under the mass termination provisions only encompasses the physical location at which an employer carries on business, and does not include an employee’s private residence. If Bill 79 is passed as currently drafted, the proposed amendments to the mass termination provisions will come into force on the later of July 1, 2023, or the date on which Bill 79 receives Royal Assent.
  • Health and Safety: The maximum fine that may be imposed on a corporation convicted of an offence under the Occupational Health and Safety Act will increase from $1.5 million to $2 million.
  • Reservist Leave: The Employment Standards Act, 2000 will be amended to entitle an employee who is in treatment, recovery or rehabilitation in respect of a physical or mental health illness, injury or medical emergency that results from participation in certain operations or activities to reservist leave. Further, reservists who are deployed to emergency operations inside Canada will be entitled to take this leave immediately regardless of the length of their employment, and the length of employment required to take this leave for all other reasons will be reduced from three months to two months.
  • Personal Information in Post-Secondary Education: Section 15 of the Ministry of Training, Colleges and Universities Act will be amended to permit the collection, disclosure and use of personal information for purposes related to certain employment programs and services. This includes disclosing personal information to persons or entities that administer, evaluate or deliver employment programs or services funded by the Ministry of Labour, Immigration, Training and Skills Development for the purpose of administering and delivering those programs or services.
  • Temporary Foreign Workers: The Employment Protection for Foreign Nationals Act, 2009 will be amended to increase penalties employers and people who are convicted of taking possession of or retaining a foreign national’s passport or work permit. For individuals, the penalty will increase to a fine of not more than $500,000 and/or imprisonment for a term of not more than 12 months. For corporations, the penalty will increase to a fine of not more than $1,000,000.
  • Job Information Transparency: Employers will be required to provide employees starting a new job with information about their job, such as pay, work location and hours of work, and the date by which that information needs to be provided. These draft regulations have not been published yet, but we will continue to monitor this significant amendment closely.

Continue Reading Bill 79, Working for Workers Act, 2023 Carries on First Reading, with Potential for Major Changes Ahead

We are pleased to share a recent Benefits Canada article, “Employers can’t rely on original termination clauses when employee responsibilities increase: court,” with quotes from George Avraam. A recent Ontario Court of Appeal decision upheld a motion judge’s award of over $400,000 to an employee on the basis of the changed substratum doctrine. The case

Special thanks to Oscar Ramirez (articling student in our Toronto office) for co-authoring this blog.

In Celestini v. Shoplogix Inc., 2023 ONCA 131, the Ontario Court of Appeal recently upheld a motion judge’s award of over $400,000 to an employee on the basis of the changed substratum doctrine.

What is the changed substratum doctrine?

The changed substratum doctrine recognizes that the employment relationship evolves over time such that sometimes it may be inappropriate to apply the provisions of an out-dated employment contract to a job that has changed significantly. The doctrine applies in situations where the employee’s duties have fundamentally expanded to a point where the underlying employment contract has substantially eroded, or it can be implied that the employment contract could not have been intended to apply to the employee’s latest role.

Factual background

In 2005, Mr. Celestini became Shoplogix Inc.’s Chief Technological Officer through a finance arrangement with a venture fund. As part of the deal, he would step down as Shoplogix’s CEO and serve as its CTO under a written employment contract, which he signed in 2005. The employment contract limited Mr. Celestini’s entitlements upon termination of employment.

In 2008, Mr. Celestini and Shoplogix entered into an Incentive Compensation Agreement (“ICA“) which significantly altered Mr. Celestini’s bonus entitlements. Shoplogix did not amend the 2005 employment contract at this time.

There was an expansion of Mr. Celestini’s workload and responsibilities that coincided with the execution of the ICA and a change in leadership. His new responsibilities included: “managing important aspects of sales and marketing; directing managers and senior staff who were reassigned to report to him; travelling to pursue international sales; handling all of the company’s infrastructure responsibilities; and soliciting investment funds.”

In 2017, Shoplogix terminated Mr. Celestini without cause. Shoplogix took the position that Mr. Celestini’s rights were governed by the employment contract he signed in 2005. But Mr. Celestini argued that the termination provisions in the 2005 contract were unenforceable because of the substantial changes to his position, and he was therefore entitled to reasonable notice at common law. He claimed he was entitled to common law damages for wrongful dismissal on the basis that Shoplogix breached the implied term to provide reasonable notice of termination.Continue Reading The Changed Substratum Doctrine Strikes Again – Ontario Court of Appeal Upholds Massive Damages Award Where Employee’s Duties Significantly Expanded

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

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

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

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

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