Bhasin v Hrynew is a landmark decision by the Supreme
Court of Canada. The Court has recognized a general principle of
good faith contractual performance. Justice Cromwell, speaking for
the unanimous Court, stated:
"[t]here is a general
organizing principle of good faith that underlies many facets of
contract law ... it is appropriate to recognize a new common law
duty that applies to all contracts as a manifestation of the
general organizing principle: a duty of honest performance, which
requires parties to be honest with each other in relation to the
performance of their contractual obligations."
Justice Cromwell described the decision as an attempt to
consolidate "piecemeal" conceptualizations of good faith
dispersed throughout contract law. For instance, prior to
Bhasin v Hrynew, it was already well-established that
employment contracts were subject to the implied term of good
faith, specifically in regards to the manner of dismissal. This
principle was reinforced a few years ago by the Supreme Court of
Canada in Honda Canada Inc. v Keays.
While having little impact on employees (who already owe a
general duty of fidelity and honesty to their employers) Bhasin
v Hrynew likely expands the obligation of fair and honest
dealings for employers beyond the termination context. Employment
law already offers fertile ground for employees seeking recourse
against their employees so, from a practical perspective, the
change in the law may be more academic than real. However, if ever
an employer needed a reason to treat its employees with honesty and
in good faith, the Supreme Court of Canada has just provided
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Unfortunately, reasonable accommodation for employees in the workplace continues to be the source of significant litigation and even today we continue to see outrageous examples of employers behaving badly.
We are now beginning to see reported cases involving charges and subsequent fines laid against employers for failing to provide information, instruction and supervision to protect a worker from workplace violence.
On October 13, 2016, the Supreme Court of Canada denied leave to appeal an Ontario Court of Appeal decision which ordered an employer to pay a former employee 37 months of salary and benefits following termination.
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