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Ontario Employer Advisor

Keeping Employers Advised on Developments in Labour and Employment Law

Federal Accessibility Legislation in the Works

Posted in Accessibility, Accommodation, Accommodation, Disability, Federally Regulated Employers, Human Rights
Patrick PengellyTim Lawson



The Federal Government has recently commenced a nationwide consultation process with Canadians to inform the development of federal accessibility legislation.  Specifically, the government is seeking input on the following:

  • feedback on the overall goal and approach;
  • to whom would apply;
  • what accessibility issues and barriers it could address;
  • how it could be monitored and enforced; and
  • what else the Government of Canada could do to improve accessibility.

Thus far, there is limited opportunity for public oral consultation.  Brief in-person sessions are taking place in 18 cities across Canada.  These sessions began in September and will continue through to November.  A consultation schedule is available here.  Canadians may also participate by submitting an online survey , or through social media .

Several provinces have already introduced similar accessibility initiatives.  Of these initiatives, Ontario’s Accessibility for Ontarians with Disabilities Act, 2005 (“AODA”) is the only in-force legislative accessibility regime.   The public policy rationales for the AODA parallel the federal government’s initiative, including:

  • the pursuit of equality;
  • the inclusion of persons with disabilities;
  • the reflection of changing public understanding of disability in society; and
  • the elimination of barriers to accessibility for persons with disabilities.

In Ontario, the AODA is very broad in scope, applying to almost every person or organization in the public and private sectors of the Province of Ontario.  Manitoba and Nova Scotia have also taken substantive steps towards enacting accessibility legislation.  British Columbia is not yet at a legislative stage, but the government of British Columbia has held public consultations regarding accessibility issues, resulting in “Accessibility 2024”, a 10-year action plan.

Other than the limited initiatives above, disability law is generally otherwise confined to provincial building codes and human rights legislation, which address disability-related issues as a component part rather than as the primary focus of the statute. The Canadian Charter of Rights and Freedoms further guarantees equal protection and benefit of the law to persons with disabilities with respect to government action.  Also, the Canadian Human Rights Act and the Canadian Charter of Rights and Freedoms operate in the federal sphere as a forum for persons with disabilities to bring complaints of discrimination.

While the federal government is not yet at the legislative stage, it has set accessibility standards for federal buildings, the Internet and workplaces.  These accessibility standards apply to federal government agencies and Crown corporations only.

Until a federal scheme becomes clear, it remains to be seen how the federal government will integrate or ensure consistency with already existing provincial accessibility legislation; the federal government’s constitutional ability to legislate over and above the provinces’ existing standards remains questionable.  Similarly, in provinces where accessibility legislation has not yet been implemented, there exists the jurisdictional issue of whether such a scheme will be confined to the federal sphere, and if not, where the legislative authority for broader compliance measures will be derived from.

The federal government’s public consultation will be open until February 2017.

If you have any questions about this or any other accessibility-related issues, please contact any member of our Labour & Employment team.

Doing Business in Canada 2016: Read the latest updates to our popular guide

Posted in Employee Obligations, Employment, Employment Agreements, Employment Standards


McCarthy Tétrault’s Doing Business in Canada provides a user-friendly overview of central aspects of the Canadian political and legal systems that are most likely to affect new and established business in Canada. The newest edition reflects legislative changes including:

  • Changes to the Competition Act and Investment Act Canada;
  • and an updated Mergers and Acquisitions chapter including new rules on takeover bids in Canada.

General guidance is included throughout the publication on a broad range of discussions. We also recommend that you seek the advice of one of our lawyers for any specific legal aspects of your proposed investment or activity.

Download the updated guide

Employee Travel: Are Your Employees Accruing Overtime Along With Their Air Miles?

Posted in Immigration
Matthew Demeo

Under the Employment Standards Act, 2000 and Ontario Regulation 285/01, “work” is deemed to be performed when an employee is travelling on business, even if that time is non-productive and outside normal business hours. Here are some ways to minimize that liability.

Unless an employee is exempt from overtime, such as a manager, IT professional or a commissioned salesperson, the ESA and its regulations mandate that any time a person spends travelling on business (other than a normal commute) is time “worked” for the purposes of determining employee overtime entitlement.

That means that an employee who is required to fly to another city on business generally must be compensated for the travel to the airport, the time spent waiting at the airport, the time on the plane and the time getting to the final destination upon arrival.  This can be frustrating for employers as employees may be accruing significant amounts of overtime, while performing little or no productive work for an organization.

As a result, employers would be wise to (re)assess their policies and procedures surrounding business travel to help minimize their overtime liability. While it may be impossible to outright eliminate overtime accrual, employers interested in limiting overtime pay should consider the following strategies:

  1. Time off in Lieu of Overtime: If an employee agrees in writing, an employer may provide an employee with paid time off in lieu of overtime pay, which is to be provided at 1.5 hours for each hour of overtime worked.
  2. Averaging Agreements: Under an averaging agreement, an employee’s hours of work may be averaged over two or more consecutive weeks for the purposes of determining overtime entitlement. This may have the effect of diluting overtime liability as the extra hours an employee works in one week may be spread over a specified number of weeks.
  3. Scheduled Days off in the Work Week: Employers may provide an employee with days off in the work week so as to avoid having the employee exceed the statutory overtime threshold. For example, if you are aware that an employee will be doing 8 hours of business travel on a Sunday, consider having that employee take the previous Friday off in order to keep the total hours worked under the 44 hour weekly threshold.
  4.  Lower Wage Rate for Travel: Depending on the circumstances, employers can pay employees at a lower wage rate for time spent travelling on business, particularly if the time is non-productive. By taking this approach, overtime entitlement would be calculated at the employee’s average rate, thus reducing overtime liability. Employers would be wise to introduce this approach at the outset of the employment relationship as unilaterally imposing such a condition during the course of employment could result in employee resistance and possible issues of constructive dismissal.  Employers must also be careful to ensure compliance with minimum wage requirements.

In a nutshell, employers can and should be proactive in managing their overtime obligations and potential liability as it relates to business travel. Should your organization require assistance in reviewing and/or revising your policies as they relate to overtime or business travel, do not hesitate to contact anyone in our Labour and Employment Group.

DB Pension Plans and Ontario’s Consultation on Solvency Funding Rules – Now is the Opportunity for Employers to Speak Up

Posted in Benefits, Compensation, Pensions
Jennifer Del Vecchio

Employers that sponsor defined benefit (“DB”) pension plans know that contribution requirements can be volatile and onerous, especially given current low interest rates.

The Ontario Government has taken note. In its recent consultation paper, Review of Ontario’s Solvency Funding Framework for Defined Benefit Pension Plans (“Consultation Paper”), the Government proposes several approaches to change the current DB funding rules, including the complete elimination of solvency funding (as Québec did earlier this year).

Comments on the Consultation Paper are due by September 30, 2016. The Ontario Government then intends to hold a second public consultation on any proposed funding reforms in the Fall 2016.

These proposed changes may result in clearer and more predictable DB funding rules in Ontario, and are part of a recent trend across Canada. However, if employers do not speak up now during the consultation period, there is a risk their concerns will not be fully taken into account in the ultimate funding reform.

Below, we outline the current DB funding regime, the Ontario Government’s proposed changes to that regime, and some funding and “de-risking” options currently available to Ontario employers that sponsor DB pension plans.

Ontario’s Current DB Funding Regime

The Ontario Pension Benefits Act (“PBA”) currently requires that DB pension plans be funded on two different bases:

  • “Going concern” funding, which assumes that the pension plan will continue indefinitely. Any deficiency determined on a going concern basis must be eliminated through special payments over a period of no more than 15 years.
  • “Solvency” funding, which assumes that the pension plan will be wound up on the applicable valuation date. For single-employer plans, any deficiency determined on a solvency basis must be eliminated through special payments over a period of no more than 5 years.

In today’s economic climate, with its low interest rates and unpredictable investment returns, many DB plan sponsors have found the solvency funding requirement onerous.

Proposed Changes to the DB Funding Regime

The Consultation Paper sets out two general approaches to change the current DB funding rules in Ontario. Under each approach, the Government offers various “sub-options”, which may be implemented alone or in combination with each other.

The two approaches are:

  1.  Modify the current solvency funding regime:

Under this first approach, the Government proposes a number of options that are intended to reduce solvency special payments while maintaining an overarching solvency funding requirement. These options include allowing plan sponsors to amortize solvency deficiencies over a longer period of time (e.g., 10 years rather than the current 5 years) and reducing the “target” for solvency funding from the current 100% (e.g., to 80%).

2.   Eliminate the current solvency funding regime, while enhancing the going concern funding requirement:

Under this second approach, the Government would completely eliminate the solvency contribution requirement while enhancing the going concern funding requirement.

Options under this approach include requiring a funding “cushion” (also known as a “Provision for Adverse Deviation” or “PfAD”), which is a required amount in excess of the plan’s liabilities that must be funded before the plan sponsor can take any action that could potentially weaken the plan’s funded position (e.g., benefit improvements or contribution reductions).

Additional options include requiring that any going concern special payments be amortized over a shorter period of time (from the current 15-year period) and requiring that the Superintendent set the maximum interest rate that may be used for the purpose of determining the plan’s going concern funding requirement.

In addition to these two general approaches, the Ontario Government proposes other reform, including requiring that the plan administrator conduct an annual actuarial valuation report (regardless of the plan’s funded status) and that the plan sponsor develop and adopt a written funding policy.

Importantly, the Government further proposes increasing employer-paid assessments to the Pension Benefits Guarantee Fund (or “PBGF”), a fund unique to Ontario that is intended to ensure a minimum pension benefit level for plan members in the event of an employer’s insolvency.

Next Steps

The public consultation for DB funding reform in Ontario is in its infancy. We do not yet know what form this reform will ultimately take (particularly given the number of options offered by the Government), nor do we know when any reforms will be effective.

For Ontario DB plan sponsors who want to take action in the meantime, there are ways to limit or “de-risk” plan funding requirements in the short term, including the following options:

  • Temporary solvency funding relief measures: The Ontario Government recently extended the temporary solvency relief measures for private sector DB plans previously enacted in 2009 and in 2012. This relief applies to the first valuation report filed with a valuation date between December 31, 2015 and December 31, 2018.  The temporary relief includes two options: (i) consolidate existing solvency special payments into a new 5 year schedule; and (ii) extend the solvency special payment schedule to a maximum of 10 years for any new solvency deficiency (subject to member consent).
  • Letters of credit: The Ontario PBA allows employers to obtain a letter of credit (“LOC”) issued by a financial institution to cover a portion of its required solvency payments, to a maximum of 15% of the plan’s solvency deficiencies.  The Consultation Paper includes a proposal to increase this limit on LOCs to a higher (unspecified) percentage of solvency deficiencies (assuming solvency funding requirements are maintained in some form).

These are just a few options available to Ontario DB plan sponsors. Other “de-risking” options include lump sum transfer options, risk-adverse investment strategies, and alternative plan design options (e.g., reducing or removing early retirement subsidies).

For pension plans registered outside of Ontario, there are other options available, such as solvency reserve accounts (available in Alberta and British Columbia, and proposed in Ontario through the Consultation Paper) and conversion to a shared risk or target benefit plan (not yet in effect in Ontario but currently available in some Canadian jurisdictions).

Our pension lawyers have expertise in these and other “de-risking” options.   If you have questions about this or any other pension matter, please feel free to reach out to Jennifer Del Vecchio at 416-601-7774 or to any of our other McCarthy Tétrault pension lawyers.

Vacation in Ontario: 10 Things Employers Need to Know

Posted in Employment Standards, vacation
Justine Lindner

As many employees take time off from work to enjoy the summer months, employers often have questions regarding the calculation of employees’ vacation pay and the scheduling of their vacation time.

To assist provincially-regulated employers in Ontario, we have compiled a list of the ten statutory vacation requirements employers must meet to comply with Ontario’s Employment Standards Act, 2000 (the “ESA”).

  1. The obligation to provide vacation arises upon completion of each “vacation entitlement year”.  An employee becomes entitled to vacation after each 12-month vacation entitlement year, which usually begins on the employee’s hire date. Where the employer establishes an alternative vacation entitlement year, the employee is entitled to a pro-rated period of vacation for the stub period from hire date until the start of the alternative vacation entitlement year.
  2. Vacation pay must equal at least 4% of wages. Employees are entitled to a minimum of 4% of the wages they earned during the vacation entitlement year as vacation pay.  “Wages” includes the employee’s regular earnings (including commissions), bonuses or gifts that are not discretionary or which are related to hours work, overtime pay, public holiday pay and termination pay.
  3. Vacation pay must be paid as a lump sum before the vacation time. Generally, vacation pay must be paid to an employee in a lump sum before they take the vacation time earned unless one of the following exceptions applies:
    • The vacation time being taken is less than one week.
    • The employee has agreed in writing that vacation pay will be paid on each pay cheque as it accumulates.
    • The employee has agreed in writing to an alternate time for payment.
    • The employee is paid wages by direct deposit.
  4. Employees are entitled to 2 weeks of vacation time. Employees are entitled to a minimum of two weeks of vacation time per year upon completion of 12 months of consecutive employment.
  5. Employees must take vacation in 1 or 2 week blocks. The ESA requires employers to schedule vacation in 1 or 2 week blocks. An exception to this requirement is available when the employee makes a written request and the employer agrees in writing for the vacation to be scheduled for shorter periods of time. Employers are not required to agree to these requests.
  6. Employers may schedule vacation time. Employers may schedule vacation time. The vacation time does not have to be requested by the employee.
  7. Vacation must be taken within 10 months of the vacation entitlement year. Employers must schedule the statutory vacation time earned to be taken within 10 months of the completion of the vacation entitlement year.  Be careful of this carry-over period when contemplating “use it or lose it” policies.
  8. Vacation must not be scheduled during a period of statutory notice of termination. An employer must not schedule vacation time during an employee’s statutory notice period. An exception is available when, after having received the employer’s written notice of the termination of her employment, the employee agrees to take vacation time during the statutory notice period.
  9. Employees on vacation are entitled to public holiday pay. When a public holiday falls within an employee’s vacation time, the employee must receive either (a) a substitute day off work with public holiday pay within 3 months of the public holiday, or with the employee’s written agreement, within 12 months of the holiday, or (b) with the employee’s written agreement, public holiday pay without a substitute day off work.  In order to qualify for public holiday pay, the employee on vacation must work all of their last regularly scheduled day of work before the public holiday and all of their first regularly scheduled day of work after the public holiday.
  10. Employees on leaves of absence accumulate entitlement to vacation. In general, the period of time that an employee is away from work because they are taking a leave of absence must be counted towards the employee’s completion of a vacation entitlement year or stub period.

When an employer has a vacation policy or has agreed to vacation-related terms in an employment contract that provide a greater benefit to employees than these minimum statutory requirements, the employer should ensure that it complies with the applicable policy or agreement. A unionized employer must ensure their vacation practices comply with any applicable collective agreements.

If you have any questions regarding vacation requirements in Ontario, please do not hesitate to contact any member of the Labour & Employment Group at McCarthy Tétrault.

Employers Should Take Note – The Interim Report on Ontario’s “Changing Workplaces Review” Is Now Available for Comment

Posted in Employment Standards, Labour Relations, Leaves of Absence, Ministry of Labour
Tim LawsonMatthew Demeo

The Interim Report kicks off the next phase of the province-wide consultation on modernizing Ontario’s Employment Standards Act, 2000 and Labour Relations Act, 1995. Employers should note that August 31, 2016 is the deadline for submissions on the Personal Emergency Leave provisions of the ESA and October 14, 2016 is the deadline for all other submissions.

Just over a year ago, we wrote about the public consultations that were taking place as part of the Ontario Ministry of Labour’s (“MOL”) Changing Workplaces Review. This review is part of the MOL’s broader mandate to modernize employment and labour laws in an effort to strengthen protections for “vulnerable and precarious” workers and, as we are constantly being reminded, support businesses in today’s evolving economy. Specifically, the review sought input on changes to Ontario’s Employment Standards Act, 2000 (the “ESA”) and the Labour Relations Act, 1995 (the “LRA”).

Yesterday, the MOL released the much anticipated Interim Report. While the initial public consultation attracted broad and significant interest from interested parties, particularly unions and employee rights activists (who provided the lion’s share of submissions), the Interim Report was released to focus the multiplicity of issues and spur further stakeholder involvement. It is clear that the Special Advisors who authored the Interim Report were concerned that not all interested parties had made submissions nor even understood the scope and impact of the outcomes. The Interim Report seeks to ensure that no one is taken by surprise by the process or by recommendations that may ultimately flow from the review.

Exceeding 300 pages in length, the Interim Report is premised on the theory that vulnerable workers and precarious employment exists in Ontario and is a problem that needs to be addressed. The Interim Report contains no specific recommendations. Nor it is judgmental. Rather it reads like an anthology of modernization options. It summarizes the current law, recounts generally the submissions received through the consultation process and sets outs various options for reform based on the consultation process, academic research, approaches in other jurisdictions (both within Canada and abroad) and the authors own thinking. All of this is presented through the lens of protecting vulnerable workers and enhancing business competition in a globalized and changing economy.

The Interim Report is divided into two parts. The first part addresses LRA reform. Most of the options in this section orient towards increasing unionization rates whether through relaxing certification rules, allowing organizing or consolidation of bargaining units on by industry sector or geography, or adding more severe consequences to employer misconduct. This is not surprising because the unions dominated the volume of submissions during the consultation process, proposing a wide array of reforms. The employer community was quieter on the LRA and most submissions simply advocated for status quo. The second part deals with the ESA. Here, every section of the ESA is addressed in one way or another. The sheer spectrum of options presented in the Interim Report on ESA reform – some of which are extremely creative – is mind-boggling. The Special Advisors certainly showed great skill, fortitude, patience and detailed thought in this section.

It is important to repeat that this Interim Report does not contain any proposal or recommendation. Ultimately that is what the review process will conclude with, but it will be up to the Ontario Government to pass any reform measures. Given the magnitude of the Changing Workplaces Review, there is an inevitability to significant changes being made to Ontario’s ESA and LRA, if not a total overhaul (with the exception of the LRA construction sections which were not under review)

Employers who wish to provide feedback on the Interim Report can do so via e-mail or regular mail and should note the following deadlines:

  • August 31, 2016 – Submissions on the Personal Emergency Leave provisions under the ESA are due.
  • October 14, 2016 – Submissions on all other subjects in the Interim Report are due.

We are in the process of reviewing the Interim Report in detail and will be providing further updates on the Changing Workplace Review as it progresses. In the interim, if you have any questions regarding the Changing Workplaces Review or on how your organization can make submissions, do not hesitate to contact anyone in our Labour and Employment Law Group in Ontario.

The Deadline is Fast Approaching: Top 5 Items to Prepare for Bill 132 OHSA Compliance

Posted in harassment, Occupational Health and Safety, Sexual Harassment, Sexual Violence, Workplace Investigations

Navigating the complexities of workplace harassment is a challenging process for employers.  It often requires the allocation of considerable time and resources to investigate complaints and has the potential to result in significant costs to an organization if it is required to defend its actions or response to litigation.

With the changes to the Occupational Health & Safety Act (OHSA) under Bill 132 that come into effect on September 8, 2016, workplace harassment will continue to be a top priority for employers.

What has changed with Bill 132?

  • As we have outlined in a previous post, Bill 132 expands the definition of workplace harassment under the OHSA to specifically include workplace sexual harassment as a workplace safety issue.
  • It also creates an obligation on employers to take a more proactive approach to addressing workplace harassment through clearly defined complaint mechanisms, written procedures outlining the investigation and reporting process as well as various training obligations.

Top 5 Things for Employers to Address Before September 8, 2016:

  1. Review and update policies on workplace violence and harassment to ensure that the definition of workplace sexual harassment is specifically addressed.
  2. Ensure there are clearly defined mechanisms for making a complaint:
    • Employees must have the ability to report an allegation of workplace harassment to someone other than their supervisor or manager in the event he/she is involved in the complaint.
  3. Develop a consistent process and procedure to investigate complaints and report the results:
    • Under Bill 132, employers have an obligation to investigate complaints in a “manner appropriate in the circumstances”. From an HR best practices standpoint, while there is no clear definition of what is considered appropriate, employers should have a consistent practice in place and ensure managers and individuals who may be required to investigate an allegation of workplace harassment (including sexual harassment) are trained in their obligations and how to respond to a complaint.
    • Employers are also required to provide written results of the investigation and any corrective measures that may be taken to the complainant and the alleged harasser. As harassment investigations typically involve sensitive information, maintaining confidentiality is critical to the integrity of the process. With these new reporting requirements, employers must find a balance between these privacy concerns and the obligation to provide the required information.
  4. Emphasize the importance of taking complaints seriously:
    • Bill 132 provides the Ministry with the ability to order employers to engage a third party to investigate complaints of workplace harassment, a cost which will be borne solely by the employer. In order to mitigate this risk, it is important to ensure that incidents and complaints are taken seriously and all actions taken by the employer to investigate the complaint are well documented.
  5. Create a plan to train all employees and managers on workplace violence and harassment and ensure the policy is reviewed at least annually.

Stay tuned for upcoming information about McCarthy Tetrault’s innovative solution to help ensure your organization is compliant with the changes to workplace violence and harassment requirements under OHSA, including training requirements.  In the interim, if you have any questions about these changes or your obligations under Bill 132, please contact any member of our Labour & Employment team.


Dismissing an Employee in the Federal Sector? You Will Need More Than a Severance Package

Posted in Damages, Federally Regulated Employers, Just Cause, Termination, Wrongful Dismissal
Matthew DemeoTim Lawson

Today, the Supreme Court of Canada allowed the appeal in Wilson v Atomic Energy of Canada Limited, and ruled that federally regulated employers must provide justification for dismissing a non-unionized employee or risk facing the “galaxy of discretionary remedies, including, most notably, reinstatement” provided for under the Canada Labour Code (the “Code”).  Unfortunately for federally regulated employers, this decision overturns the Federal Court of Appeal ruling we wrote about early last year and confirms the notion that federally regulated, non-unionized employees cannot be dismissed without cause or reasons.  In other words, a federal sector employer cannot simply terminate the employment of an employee by providing reasonable notice, whether measured by the statutory minimums provided under the Code or the common law.


The facts in this case are straightforward. Joseph Wilson had been employed by Atomic Energy of Canada Limited (“AECL”) for 4.5 years when he was dismissed without cause and without reasons. AECL provided Wilson with a generous severance package of 6 months’ pay in lieu of notice, well above the statutory requirements.

Wilson filed an “Unjust Dismissal” complaint claiming he was unjustly dismissed contrary to section 240(1) of the Code. The primary issue at the hearing was whether AECL could lawfully terminate Wilson on a “without cause” basis. At the original hearing, the adjudicator acknowledged that decision makers were divided into “two camps” on the issue. The first camp recognized a right to “without cause” dismissal under Code, while the second camp did not.

After reviewing the jurisprudence under the Code, the adjudicator held that AECL could not avoid an Unjust Dismissal determination by providing a sizable severance package. However, on judicial review and appeal, both the Federal Court and the Federal Court of Appeal disagreed with the adjudicator and decided that the common law rule that an employee can be dismissed without cause if provided with reasonable notice remains in place under the Code.

Wilson appealed to the Supreme Court of Canada.

The Supreme Court of Canada’s Decision

In a 6-3 decision, Justice Abella wrote for the majority and restored the adjudicator’s original decision. Ruling that the adjudicator’s decision was reasonable, the majority held that sections 240 – 246 of the Code displace an employer’s ability at common law to fire an employee without reasons if reasonable notice is given.  The majority supported its decision by reviewing the statutory language in the Code, Parliament’s intent when enacting the provisions, the arbitral jurisprudence and labour relations practice.

Implications for Federally-Regulated Employers

With this ruling, the Supreme Court of Canada has confirmed that the statutory scheme provided for under the Code offers expansive protections to non-unionized federally-regulated employees, much like the protections available to unionized employees covered by a collective agreement.  It sets the federal sector apart from most Canadian provinces (other than Québec, which offers similar protections to employees with two years of continuous service, and Nova Scotia, for employees with ten years of continuous service) by providing federal sector employees with a much higher degree of employment protection, and correspondingly higher limits on employer flexibility (while still being fair to employees in terms of severance).  It effectively applies and results in an inconsistent approach to Canadian labour laws that otherwise, particularly on the common law front, have become more uniform over past years.

We are hopeful that in the current review of the federal workplace, the Federal Government will review this ruling and realize that the Code is out of step with the majority of the rest of Canada.  In the interim, however, federally regulated employers must be careful to ensure they are able to and do justify their dismissal decisions with reasons, such as demonstrating “just cause”, a layoff for lack of work or the discontinuance of a function. Without proper justification, an employee may be entitled to a host of remedies under the Code including, but not limited to, reinstatement of employment with back pay, which can be much costlier and more problematic than pay in lieu of reasonable notice.

If you have any questions with respect to the decision or how to plan for and manage the dismissal of a federally-regulated employee, please contact any member of the National Labour & Employment Group at McCarthy’s.

(Likely) Coming Soon to a Federally Regulated Workplace Near You – Flexible Work Arrangements

Posted in Accommodation, Accommodation, Family Status, Federally Regulated Employers, Flexible Work Arrangements
Patrick Pengelly

The Federal Government has pledged to amend the Canada Labour Code to allow federally regulated workers to formally request flexible work arrangements from their employers, noting that a statutory right to request flexible work arrangements would align with existing obligations under human rights law (e.g. family status protections around an employee’s childcare obligations).

Following this pledge, the Federal Ministry of Employment, Workforce Development and Labour recently published a discussion paper on the topic, and announced that it will be conducting public consultations about flexible work arrangements, including flexibility around work schedules, hours of work, location or work, leaves, and rest periods.  The consultations are focused on the implementation of such arrangements – that is, the Federal Government has been clear that these consultations “are an important step” in eventually legislating the right to request flexible work arrangements.

The Government has also pledged to engage workers, employers, labour and employer organizations, academics, experts, and other organizations “concerned about work-life balance”.  At this point, these proposals are in the early stages and many details remain to be seen – for example, the circumstances in which an employer may decline an employee’s request for flexible work arrangements (e.g. for good business reasons), or whether certain employers may be exempt (e.g. small businesses).

We will continue to monitor these developments.  In the interim, if you have any questions about flexible work arrangements and employers’ existing obligations vis-a-vis the same, please contact any member of the Labour & Employment Group at McCarthy’s.

Are the Tides Finally Turning? Ontario Court of Appeal Upholds Termination Provision Providing Only for “Notice” Under the ESA

Posted in Contractual Termination Provisions, Employment Agreements, Employment Standards, Termination
Sean Porter

In a recent case, Oudin v Centre Francophone de Toronto (“Oudin”), the Ontario Court of Appeal has offered potential relief to employers whose contractual termination provisions provide an employee with only his or her minimum “notice” entitlement under the Employment Standards Act, 2000 (the “ESA”).

The State of the Law Prior to Oudin

As a general principle, if an employer wants to limit an employee’s entitlements upon a without cause termination to the minimums established by the ESA, the contractual provision must ensure that the employee will be provided with at least their ESA minimum entitlements to notice, severance and benefits continuance. If a court finds that a provision may provide an employee with less than these ESA minimums (including by virtue of having failed to explicitly address ESA entitlements such as benefits continuance and severance), it will likely find that the parties have illegally attempted to contract out of the ESA and will deem the contractual provision unenforceable, resulting in the employee being entitled to common law notice, which is almost uniformly well in excess of the ESA minimums.

For example, in Stevens v. Sifton Properties Ltd., the Ontario Superior Court of Justice considered a termination provision that provided: “The Corporation may terminate your employment without cause at any time by providing you with notice or payment in lieu of notice, and/or severance pay, in accordance with the Employment Standards Act of Ontario.” The Court found that this provision was void because it failed to address the employee’s right to benefits continuation during the notice period.

The Court of Appeal’s Shift in Oudin

In this case, which was an appeal to the Court of Appeal from a decision of Dunphy J., the termination provision in Mr. Oudin’s employment agreement allowed the employer to terminate him with the greater of 15 days’ notice or the minimum “notice” required by the ESA. The provision did not explicitly address benefits continuation or severance entitlements under the ESA. The employee argued that it was therefore unenforceable.

The motion judge at the original summary judgment motion rejected this argument and found in favour of the employer, deciding that the intent of the contractual termination provision was to provide the employee with (all of) his ESA entitlements and that a reasonable interpretation of the provision supported that.

On appeal, the employee argued that the motion judge erred by failing to consider that the termination provision only provided for “notice” and was therefore contrary to the ESA. The Court of Appeal rejected this argument and affirmed the motion judge’s decision.

Notes for Employers

Given that this is a departure from prior lower court decisions, employers should still be cautious and ensure careful drafting of termination provisions to explicitly address ESA benefits and severance entitlements in addition to “notice”.  However, this case does provide a helpful precedent that employers and employer counsel should be aware of when addressing claims from employees who are challenging the enforceability of such provisions.   It is too early to say whether this will “turn the tide” against previous lower court decisions, but the weight of this decision coming from the Ontario Court of Appeal will hopefully influence lower courts not to view the failure to explicitly invoke the “magic words” of notice, severance and benefits continuance as fatal to the enforceability of termination provisions.

If you have any questions about this decision or about the enforceability of your contractual termination provisions, please reach out to the members of the Labour & Employment Group at McCarthy’s.