Canada: 10 Key Developments In Canadian Labour & Employment Law In 2018

Canada saw significant developments in labour and employment law in 2018. As we embark on a new year, we will undoubtedly see the landscape in this ever-changing area of law continue to evolve. Below we provide an overview of 10 key 2018 developments for your review:

1. Canada was the first major world economy to legalize recreational cannabis at a federal level.

On October 17, 2018, Canada's Cannabis Act and supporting regulations came into force, making it the first major world economy to establish a legal framework at the federal level for the recreational use of cannabis by adults. The Cannabis Act permits: (a) persons age 18 and over to possess up to 30 grams of dried or fresh cannabis and share it with other adults; (b) the government to authorize the possession, production, distribution, sale, importation, and exportation of cannabis; and (c) persons to possess, sell, or distribute cannabis when authorized to do so under provincial and territorial legislation (Canada's provinces and territories are responsible for regulating the distribution and sale of cannabis within their own jurisdictions). The legalization of recreational cannabis does not provide employees with a right to use it in the workplace and employers are entitled to establish policies prohibiting its use and possession in the workplace. The use of cannabis for medical purposes continues to be regulated under the Access to Cannabis for Medical Purposes Regulations. Under both federal and provincial human rights legislation, employers have a duty to accommodate the use of cannabis by employees medically authorized to do so and those suffering from an addiction to it, unless such accommodation creates an undue hardship to the employer.

2. Legislative initiatives and the #MeToo movement made sexual harassment in the workplace a top priority for employers, while human rights tribunals increased damage awards in sexual harassment cases.

2018 saw a heightened awareness among employers to implement strict policies and procedures regarding sexual harassment, to provide comprehensive anti-harassment training, and to conduct thorough investigations when complaints are made. At the legislative level, lawmakers amended Ontario's Occupational Health and Safety Act to expand the definition of "workplace harassment" to include "workplace sexual harassment" and require employers to create a workplace harassment policy and program that includes workplace sexual harassment. In addition, the Workplace Safety and Insurance Act, 1997 was amended to allow individuals in Ontario who suffer from chronic mental stress in the workplace to make claims for Workplace Safety and Insurance Board benefits, which are available if the chronic mental stress is caused by a work-related stressor arising out of and in the course of the worker's employment. Finally, lawmakers introduced Bill C-65, An Act to amend the Canada Labour Code, which proposes to require federally regulated workplaces such as banks, telecommunications and transport industries to make substantial changes in how they address workplace violence and harassment. Notable judicial decisions also addressed harassment. One decision recognized harassment as a tort upon which a civil cause of action may be based, and another required an employer to pay significant moral damages for a poorly managed investigation of a sexual harassment complaint. In addition, 2018 saw an increased volume of complaints by employees who, emboldened by the #MeToo movement, decided to come forward.

We also witnessed an upward trend in damage awards for sexual harassment in human rights cases. Historically, such awards were low, generally between $10,000 to $25,000 per case. In A.B. v. Joe Singer Shoes Limited, 2018 HRTO 107, the Tribunal granted a damage award of $200,000 for injury to dignity, feelings and self-respect to an applicant who alleged that she had been sexually harassed, sexually assaulted, and was the victim of race discrimination over a period of 20 years by her employer who was also her landlord. In G.M. v. X Tatoo Parlour, 2018 HRTO 201, the Tribunal awarded $75,000 as compensation for injury to dignity, feelings and self-respect to a 15-year-old unpaid intern in a tattoo parlour who had been sexually assaulted by her employer, a trusted family friend. The Tribunal awarded the Applicant the full $75,000 in damages that she sought; however, it might have granted a larger award had she requested one.

3. The Court of Appeal of Ontario provided guidance regarding how employers can maximize the enforceability of termination clauses.

In 2018, the Court of Appeal of Ontario (OCA) rendered two decisions, Nemeth, 2018 ONCA 7 and Amberer, 2018 ONCA 571, which, in a sea of seemingly conflicting and often confusing case law, provided guidance to employers regarding how they should draft termination clauses to maximize the likelihood of their enforceability. The OCA confirmed that although it is presumed that on termination an employee is entitled to common law notice, this notice can be displaced when (a) the employment contract provides for minimum entitlements under the Employment Standards Act, 2000, and (b) the parties' intention to displace common law notice is clearly and unambiguously expressed in the contract. The case law suggests that to maximize enforceability, the clause should state clearly that the parties intend and agree to displace the employee's common law reasonable notice rights and to restrict the applicable notice period to the statutory minimum set out in applicable employment standards legislation; each of the employer's minimum obligations should be explicitly and separately referenced. The importance to employers of avoiding ambiguities was reinforced by the OCA, which emphasized that where a termination clause can reasonably be interpreted in more than one way, the interpretation that favours the employee should be preferred.

4. Ontario's Government made major reforms to workplace statutes and then substantially reversed many reforms.

On November 27, 2017, Bill 148, The Fair Workplaces Better Jobs Act, 2017 (Bill 148), received Royal Assent. It significantly amended Ontario's Employment Standards Act, 2000 (ESA), Labour Relations Act, 1995 (OLRA) and the Occupational Health and Safety Act. Some of these amendments included a minimum wage increase, 10 personal emergency leave days per year for almost all employees, scheduling rights for employees and recordkeeping requirements for employers with respect to those rights, the introduction of card-based union certification for certain industries, and providing unions with access to employee contact information if the union can establish at least 20% support of the employees involved. Most Bill 148 amendments took effect by April 1, 2018, with the remaining amendments to the ESA scheduled to take effect on January 1, 2019. On November 21, 2018, Bill 47, Making Ontario Open for Business Act (Bill 47), received Royal Assent, effectively reversing certain changes made by Bill 148. With one minor exception, Bill 47's changes to the ESA came into force on January 1, 2019. The changes to the LRA came into force on Royal Assent (i.e., on November 21, 2018). This legislative roller coaster forced employers to consider amendment of hiring letters, employment contracts, policies and collective agreements twice: first, with respect to the amendments that came into force as a result of Bill 148, and then with respect to the reversals that came into force as a result of Bill 47.

5. Major amendments were made to Alberta's, Quebec's and British Columbia's workplace legislation.

Alberta's Bill 17, the Fair and Family-friendly Workplaces Act, received Royal Assent in 2017 but took effect on January 1, 2018. It made amendments to Alberta's Employment Standards Code, including the enhancement of current leaves, the introduction of new leaves, and a new administrative penalty for employers that contravene the statute. Bill 17 also made amendments to Alberta's Labour Relations Code, including the availability of a card-based certification process if certain threshold criteria are met, and the availability of First Contract Arbitration to end difficult negotiations between an employer and a newly-certified union. Alberta's Bill 30, An Act to Protect the Health and Well-being of Working Albertans received Royal Assent in 2017 but took effect on June 1, 2018. Bill 30 made amendments to Alberta's occupational health and safety and workers' compensation statutes.

The National Assembly of Quebec made amendments to its Act respecting labour standards through Bill 176, An Act to amend the act respecting labour standards and other legislative provisions mainly to facilitate family-work balance, which received Royal Assent on June 12, 2018. While many of the amendments came into force on that date, others come into force as late as January 1, 2019. Some of the amendments include enhanced vacation entitlement, enhanced and additional leaves, more employee control over working hours, the express inclusion of sexual harassment in the definition of "psychological harassment", and a prohibition against paying workers less than colleagues performing the same tasks at the establishment solely because of the worker's "employment status" (and the express expansion of this prohibition to include agency employees).

British Columbia's Bill 6, Employment Standards Amendment Act, 2018 received Royal Assent on May 17, 2018 and came into force on that day. The amendments to British Columbia's Employment Standards Act include a longer period of job protection for pregnancy/parental leave, an increase of the available time for compassionate care leave, and two new unpaid job-protected leaves (for eligible employees upon the disappearance of a child due to a suspected crime and upon the death of a child under 19 years of age for any reason). Additional amendments to British Columbia's employment standards legislation and amendments to its Labour Relations Code are anticipated.

6. Ontario introduced Bill 203, Pay Transparency Act—and then delayed its coming into force date indefinitely.

In April 2018, Ontario's government passed Bill 203, An Act Respecting Transparency of Pay in Employment (the "Act Respecting Transparency"), which was to come into force on January 1, 2019. On November 15, 2018, the government introduced Bill 57, Restoring Trust, Transparency and Accountability Act, 2018, which received Royal Assent on December 6, 2018, and amends the Act Respecting Transparency by changing the effective date from January 1, 2019 "to a day to be named by proclamation of the Lieutenant Governor." The 2018 Ontario Economic Outlook and Fiscal Review¹ indicated that the reason for the delay, the first of its kind in Canada, is, ". . . to allow for consultation. Complying with the Act's current reporting requirements would have significantly increased costs for businesses and affected some sectors more than others." Accordingly, amendment may occur in the future. The stated purpose of the Act Respecting Transparency is to "increase transparency in hiring processes and give women more information when negotiating compensation that is equal to their male peers." In its current form, the Act: (a) prohibits employers from asking job applicants about their compensation history; (b) requires employers to include a range of expected compensation for any publicly advertised job posting; (c) requires employers with 100 or more employees (and prescribed employers) to prepare a "transparency report" highlighting compensation gaps, if any, based on gender and diversity (which must be posted online or in a conspicuous place in every one of the employer's workplaces and submitted to the Ministry of Labour); (d) permits employees to share their compensation with other employees and inquire into differences in pay; and (e) prohibits employers from engaging in or threatening reprisal against employees who do so.

7. Ontario's Police Record and Checks Reform Act, 2015 came into force and is the first of its kind in Canada.

Ontario's Bill 133, The Police Record and Checks Reform Act, 2015 (the "Checks Reform Act"), which applies to police record checks conducted to determine suitability for employment, among other things, came into force on November 1, 2018. The Checks Reform Act, which is the first of its kind in Canada, was created in response to concerns about barriers created by the inappropriate release of sensitive information about an individual (mental health history, non-criminal contact with police, unproven allegations, and police "carding" information, i.e., intelligence gathering by the police involving the stopping, questioning, and documenting of individuals when no particular offence is being investigated), and inconsistencies in the information collected and disclosed. The statute authorizes police services in Ontario to conduct three types of police record checks (criminal record checks, criminal record and judicial matter checks, and vulnerable sector checks (i.e., checks made when, after reviewing entries relating to the individual, the police record check provider has reasonable grounds to believe that the individual has been engaged in a pattern of predation indicating that the individual presents a risk of harm to a child or a vulnerable person), standardizes the process for conducting them, and prohibits the police record check provider from disclosing information unless authorized to do so in accordance with the law. Non-conviction information may be obtained only in relation to a vulnerable sector check and when stringent criteria for "exceptional disclosure" are met. The police record check provider may not provide a copy of the information to the person or organization who requested it unless the individual screened provides their consent twice: (a) to the particular type of check, before it is conducted; and (b) once the results are available and they have been disclosed to the individual, to disclosure of the information.

8. The federal government introduced a new Pay Equity Act; it received Royal Assent at the end of 2018, but its effective date has not yet been announced.

On October 29, 2018, the federal government introduced Bill C-86, Budget Implementation Act, 2018, No. 2 ("Bill C-86, No. 2"), which, among other things, introduced the Pay Equity Act. The purpose of the Pay Equity Act is "to achieve pay equity through proactive means by redressing the systemic gender-based discrimination in the compensation practices and systems of employers that is experienced by employees who occupy positions in predominately female job classes." The statute applies to federally regulated employers with ten or more employees. Once effective, it will require federally regulated employers to (a) evaluate their compensation practices to ensure they are providing equal pay for work of equal value; (b) establish a Pay Equity Plan within three years from the date on which they become subject to the law; and (c) if the employer has more than 100 employees (or less than 100 employees if the employees are unionized), establish a Pay Equity Committee to develop and update the Pay Equity Plan. The Pay Equity Act also provides for the appointment of a Pay Equity Commissioner under the Canadian Human Rights Act who will be responsible for the law's administration and enforcement. Bill C-86, No. 2 received Royal Assent on December 13, 2018, but the effective date is currently unknown. The timing will be announced by an order of the Governor in Council.

9. We learned that a major legislative event is pending at the federal level: the modernization of the Canada Labour Code.

Prime Minister Justin Trudeau instructed the Minister of Employment, Workforce Development and Labour, to update the Canada Labour Code. Between May 2017 and March 2018, consultations were held with Canadian employees, unions and labour organizations, employers and employer organizations, academics, other experts and advocacy groups to get their perspectives. On August 30, 2018, the Government of Canada issued a report called, "What we heard: Modernizing federal labour standards," which summarizes the views shared during the consultations. The government stated it is committed to proposing updated legislation that reflects the realities of the 21st century workplace and that it will carefully consider the views shared during the consultations as it moves forward with the modernization process. In early September 2018, the Minister of Employment indicated that the updated legislation will be introduced by Labour Day 2019. The proposals are likely to focus on restoring work-life balance and providing better protections to part-time, temporary, and contract workers.

10. The Nova Scotia Court of Appeal and the Human Rights Tribunal of Ontario rendered important decisions regarding what does, and does not, constitute human rights discrimination.

Two decisions issued in 2018, resolving disability- and age-related claims, provided insight into the types of conduct that rises to the level of prohibited employment discrimination. Due to the prevalence of medical cannabis use in Canada and its significant cost, employers with group benefit plans are being asked with increasing frequency to provide coverage for medical cannabis. On April 12, 2018, in Canadian Elevator Industry Welfare Trust Fund v. Skinner, 2018 NSCA 23, the Nova Scotia Court of Appeal held that administrators of employee group benefit plans have the discretion to set limits on plan coverage and that the denial of coverage of medical cannabis does not constitute discrimination against an employee "based on" his disability. The employer's plan did not cover medical cannabis because it was not approved by Health Canada; indeed, no one in the plan received drugs unless covered by Health Canada. While deprived of coverage for his medical marijuana, the employee in question had access to all of the medications available to any other eligible plan member. As there was no connection between the employee's disability and the decision to deny him coverage, the court found no discrimination.

On May 18, 2018, the Human Rights Tribunal of Ontario (HRTO) declared in Talos v. Grand Erie District School Board, 2018 HRTO 680, that section 25(2.1) of the Ontario Human Rights Code (OHRC), which allowed employers to terminate employee benefits at age 65, was unconstitutional. The HRTO concluded that the distinction created by section 25(2.1) was a prima facie violation of section 15 of the Charter of Rights and Freedoms, a part of Canada's Constitution, which protects every Canadian's right to be treated equally under the law and prohibits discrimination on the basis of age. Employers in Ontario that provide group health benefits but terminate employee entitlement at age 65 should be aware of the Talos decision. Indeed, such employers should consider appropriate adjustments to their benefit plans to stave off any potential discrimination claims.

Footnote

1 2018 Ontario Economic Outlook and Fiscal Review, available at www.fin.gov.on.ca/fallstatement/2018, p. 40.

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