Employment And Labour Law: 2024 Year In Review And Future Trends

Wrongful dismissals

Canadian courts issued several interesting decisions in wrongful dismissal cases that provided guidance to employers on the important topics of employment contracts, just cause terminations and damages.

• When it comes to termination provisions, where you live matters
  
  The British Columbia courts issued several favourable decisions for employers in 2024 when it came to employment contracts. In Egan v. Harbour Air Seaplanes LLP, 2024 BCCA 222, the employee argued that the termination clause was unenforceable because it provided the plaintiff employee with notice and severance in accordance with the Canada Labour Code, without specifying the minimum or maximum amount of notice that would apply. The British Columbia Court of Appeal rejected this argument, confirming that a "practical common-sense approach" to the interpretation of termination clauses should apply and that referencing statutory minimums can displace the common law presumption of reasonable notice, provided the clause is unambiguous.
  
  Such an interpretative approach did not win the day in Ontario. In Dufault v. the Corporation of the Township of Ignace, 2024 ONSC 1029, the Ontario Superior Court of Justice ruled that a termination clause which stated that the plaintiff employee's employment could be terminated "at any time" was unenforceable because there are circumstances under employment standards legislation in which termination is prohibited (e.g. reprisal for attempting to exercise a protected right or on return from a statutory job-protected leave). The Ontario Court of Appeal upheld the decision on the basis that the termination clause had invalid for-cause language, but expressly declined to rule on whether the "at any time" language invalidated the clause. Stay tuned for future cases on this point.
  
  
• Beware of two-step employment offers
  
  In Adams v. Thinkific Labs Inc., 2024 BCSC 1129, acceptance by an employee of a detailed email offer of employment, including compensation, vacation and leave entitlements etc., formed a binding employment contract. A subsequent formal employment agreement without fresh consideration, introducing additional clauses such as a termination clause, was unenforceable.
  
  
• Tricky facts can make for longer notice periods
  
  
  • Seasonal employment can extend common law notice: In Smith v. Lyndebrook Golf Inc., 2024 CanLII 103671, a golf superintendent with under a month of service was awarded five months' pay in lieu of notice. The court emphasized the employee's specialized skills, the seasonal nature of his work and the limited off-season employment opportunities as justifying an extended notice period.
    
    
  • Courts accept that older employees may face a competitive disadvantage due to their age: In Harris v. Town of Hay River, 2024 NWTSC 47, the court ruled that a 69- year-old senior manager with 18 months of service was entitled to eight months of notice. In so doing, the court cited a previous case where a 59-year-old employee with approximately one year of service received 12 months' notice and another instance where a 56-year-old senior employee with 18 months of service received twelve months of notice.
    
    
• Medical evidence not necessary for aggravated damages
  
  In Krmpotic v. Thunder Bay Electronics Limited, 2024 ONCA 332, the Court of Appeal ruled that aggravated damages can be granted without medical evidence. The employer's dishonesty about the termination, coupled with personal and family evidence of mental distress beyond ordinary hurt feelings, were sufficient to justify the trial judge's CA$50,000 aggravated damages award.
  
  
• Long service employees are not immune from just cause terminations
  
  In Arora v. ICICI Bank of Canada, 2024 ONSC 4115, the Court upheld the termination for cause of an Assistant VP with over 15 years of service who was caught sharing company confidential information with competitors, making plans to compete and who was dishonest during the investigation. The Court held that just cause can be justified even for long-term employees with no prior disciplinary issues where fundamental duties like honesty and loyalty are breached.

Takeaways for employers

The case for an annual review of an employer's contractual termination provisions has never been stronger. As employees continue to work into their "golden years" and fears of economic headwinds grow, there is an elevated risk that a court will favour employees and award larger than expected notice periods. In addition, the fact that courts are now comfortable with awarding significant damage awards in the absence of medical evidence supporting an employee's claims for mental distress and aggravated/moral damages means that employers must train their managers to be careful in how they approach the termination meeting.

Human rights

Human Rights Tribunals and Commissions continue to be plagued by delay. In a report issued in November 2024, Tribunals Watch Ontario reported that parties can expect to wait between four and ten years to get to a hearing. Where a case does end up making it to a hearing, the decisions indicate that adjudicators across Canada continue to give the benefit of the doubt to employees alleging discrimination when the facts support a prima facie case. That said, adjudicators have also shown themselves willing to dismiss complaints that do not show a nexus between the treatment of the employee by the employer and a protected ground. Additionally, damages awards continue to increase (for example, in Oliva, Pascoe, and Strong v. Gursoy, 2024 AHRC 45, an employee subjected to sexual harassment was awarded CA$75,000 in general damages, the highest award in Alberta's history).

• Despite finding of toxic work environment, Tribunal dismisses discrimination claim
  
  In Thomas v. Signals Design Group, 2024 BCHRT 135, the B.C. Human Rights Tribunal dismissed a complaint alleging sex discrimination where the complainant alleged she received radically different treatment as compared to her male counterparts and had to resign from employment because of the toxic work environment. The Tribunal accepted there was a toxic environment but found that that the employee's allegation that her sex was a factor in the behaviour of the employer was speculative and her evidence did not take her complaint out of the realm of conjecture.
  
  
• Rejection of settlement offer results in no award of damages
  
  In Lambert v. Canadian Natural Resources Limited, 2024 AHRC 105, the Chief of the Alberta Human Rights Commission and Tribunals upheld the Director of the Alberta Human Rights Commission's decision to dismiss a human rights complaint on the basis that the complainant refused a fair and reasonable settlement offer. During the Commission's conciliation process, the respondent employer offered to settle the claim by providing the complainant employee (who had found new employment within four months of their dismissal) with CA$25,000 in general damages for injury to dignity and CA$27,000 (less statutory deductions), representing 14 weeks' base pay for damages for lost wages. The complainant rejected the offer and the Director proceeded to dismiss the complaint as contemplated by section 21(3) of the Alberta Human Rights Act. The Chief held that the respondent's settlement offer was well within a reasonable range of damages and still reasonable even though the offer for lost wages represented a compromise from the complainant's best possible result at the hearing.
  
  
• Québec Tribunal condemns discrimination against transgender worker
  
  In Commission des droits de la personne et des droits de la jeunesse (E.B.) c. 9302-6573 Québec inc. (Bar Lucky 7), 2024 QCTDP 9, a restaurant denied a transgender woman employment as a barmaid after revealing her gender identity to the manager during training. In advancing her claim, the employee noted that up to the point of losing employment she had received positive feedback on her skills. The employer argued that its decision to deny employment was due to its concern that clients could react violently upon learning that they were being served by a transgender woman. The Tribunal held that the employer had breached the Québec Charter of Human Rights and Freedoms, which protects gender identity and expression. The Tribunal awarded the complainant CA$118.40 for material damages, CA$10,000 for moral damages, and CA$2,000 in punitive damages, emphasizing that prejudice or fear of clients being violent cannot justify such discrimination.

Takeaways for employers

It is more important than ever for employers to document matters relating to possible discrimination claims, and collect and preserve evidence of defences as Tribunals across the country continue to struggle to bring matters to adjudication in a reasonable timeframe. To avoid protracted litigation, settlement negotiations to resolve human rights complaints early remains a valid option. Where a settlement does not prove possible, employers may be able to have the complaint dismissed where a complainant fails to accept a fair and reasonable settlement offer (depending on the facts and your jurisdiction).

Labour relations

Unionized employers in Canada continued to deal with the economic consequences of the pandemic as concerns over the cost of living fuelled contentious rounds of collective bargaining across all industries. Despite a series of well publicized labour disruptions, Canadian employers did make gains in the areas of drug and alcohol testing.

• Another year of strike strife
  
  Airlines, Railways, Ports, even Canada Post were on strike in 2024. After a period of relative labour peace, work stoppages have materially increased over the last two years, according to Statistics Canada.

While the growing number of work stoppages is concerning, the fact that parties are increasingly failing to reach a deal at the negotiation table suggests that a new approach to collective bargaining may be necessary. This issue was clearly on display in the federal jurisdiction, as the federal labour minister used its powers under the Canada Labour Code to intervene in disputes involving Canada's railways, ports and postal service and direct the Canada Industrial Relations Board to order workers back to work and attend binding arbitration.

• Federal Court of Appeal upholds preplacement and random alcohol and drug testing for safety-critical workers in the nuclear industry
  
  In Power Workers' Union v. Canada (Attorney General) - Federal Court of Appeal, the Federal Court of Appeal made an important finding that may assist unionized employers who are attempting to introduce or enforce random drug and alcohol testing in safety sensitive environments. In that case, the Power Workers Union challenged a new licensing requirement introduced by the Canadian Nuclear Safety Commission. The impugned requirement mandated both pre-placement, and random, drug and alcohol testing for employees who hold safety sensitive positions in nuclear facilities.
  
  Courts and arbitrators had previously held that employers must demonstrate, among other things, a pre-existing workplace drugs or alcohol problem to justify the introduction of random drug testing. The Federal Court of Appeal rejected that approach. In so doing, the Federal Court of Appeal acknowledged the established law that the introduction of a drug and alcohol testing program must be consistent with any express terms in the applicable collective agreement. Absent such terms, the management rights clause applied subject only to the obligation on the employer to exercise those rights in a reasonable fashion.
  
  In considering the balancing of rights in the context of the matter before them, the Federal Court of Appeal agreed with the lower court that employees in safety sensitive positions have a diminished expectation of privacy in the workplace. In effect, this reduces the evidentiary burden on employers to show an existing problem. In the words of the lower court at paragraph 30 of the Federal Court of Appeal's Decision: "one cannot 'wait and see' given the severe consequences that often result from nuclear incidents."

Takeaways for employers

As inflation eases, the hope is that the amount of work stoppages starts to return to pre-pandemic levels. That said, labour disruptions are rarely caused solely by monetary items. As a result, employers should continue to take steps to ensure that nonmonetary items related to working conditions remain a focus.

Further, as the law on drug and alcohol testing continues to evolve it is important to note that while the context in the Federal Court of Appeal's ruling was the nuclear sector, it is now open for employers who operate in other safety sensitive environments to make the same argument to support the imposition of their own drug and alcohol testing programs.

Occupational health and safety

Canadian legislatures continued to focus on workplace safety in the 2024 legislative cycle with a flurry of legislative amendments that increased penalties and introduced new measures on workplace violence and harassment. In addition, following the Supreme Court of Canada issuing its highly anticipated decision in R. v. Greater Sudbury (City), 2023 SCC 28, the Ontario Superior Court of Justice issued its own decision on the merits of the employer's due diligence defence.

• Ontario proposes increased fines for employer health and safety breaches
  
  On November 27, 2024, the Ontario government proposed amending the Occupational Health and Safety Act to set a minimum fine of CA$500,000 for a second (or subsequent) offence that results in death or serious injury of one or more workers in a two-year period. If passed, this would represent a significant change as there are currently no minimum fines set under the Occupational Health and Safety Act. Moreover, the maximum fine that may be imposed upon a corporation, if convicted of an offence under the Occupational Health and Safety Act, is CA$2,000,000.00.
  
  
• Alberta introduces changes to its workplace violence and harassment laws
  
  Alberta recently implemented amendments to the Occupational Health and Safety Code, including changes to Part 27, Violence and Harassment, that reflect a shift toward streamlining and simplifying regulatory obligations for employers. Previously, employers were required to develop, implement, review and revise, as needed, a violence prevention plan (consisting of a violence prevention policy and violence prevention procedures) and a harassment plan (consisting of a harassment prevention policy and harassment prevention procedures). With the recent amendments, employers are now required to develop, maintain, review and revise, as needed, an "allin-one" violence and harassment prevention plan. While this plan must still include many of the same elements as previously required, the requirements are simplified which gives employers more flexibility in how they structure the plan. In addition, the previously mandatory requirements to include certain specific statements and commitments in the policies have been repealed. The province has implemented a transition period until March 31, 2025, during which time employers can comply with the previous requirements or the new requirements under the Occupational Health and Safety Code.
  
  
• New first aid regulations in British Columbia
  
  Effective November 1, 2024, all provincially regulated employers in British Columbia are required to complete a new first aid assessment to ensure appropriate workplace coverage and compliance with updated regulations. Key changes include aligning first aid certification levels and kit contents with Canadian Standards Association (CSA) standards, adding BCspecific requirements like personal protective equipment and oxygen therapy for advanced kits. Employers must also conduct annual first aid drills, maintain records and meet specific standards for less-accessible workplaces.
  
  
• Ontario Superior Court of Justice rules on merits of employer's due diligence defence
  
  Shortly after the Supreme Court of Canada issued its highly anticipated decision in R v. Greater Sudbury (City), 2023 SCC 28, the Ontario Superior Court of Justice released its decision upholding the trial judge's finding that the employer exercised due diligence. In particular, the Superior Court considered the relevant considerations that the Supreme Court identified in its 2023 decision and concluded: (i) the employer did not have control over the workplace and the workers on it, (ii) the employer delegated control to the constructor to overcome its own lack of skill, knowledge or expertise, (iii) the employer evaluated whether the constructor had the capacity to perform the work safely and enforce compliance with the regulations under the Occupational Health and Safety Act before engaging the constructor to perform the work and (iv) the employer monitored and supervised the constructor's work. As a result, the Superior Court dismissed the Crown's appeal. 

Takeaways for employers

Provincially regulated employers in Alberta have until March 31, 2025, to review their workplace violence and harassment plans to ensure that they comply with the new requirements under the Occupational Health and Safety Code. Similarly, employers in British Columbia should review their first aid procedures and processes to ensure that they remain in compliance with the amendments to the Occupational Health and Safety Regulation.

In addition, the Supreme Court and Superior Court's decisions in R v. Greater Sudbury (City) remind employers of the importance of ensuring that they are exercising their due diligence by pre-screening contractors for expertise and their safety record, expressly requiring contractors to control the work that they are engaged to perform (and ensure safety in the performance of that work) and effectively monitoring the contractor's safety practices that are in place while the contractor performs the work

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