Our regular readers may remember our previous posts on upcoming changes to the Canada Labour Code. Next week, some of these changes will be coming into effect.

On March 16, 2015:

• A new “holiday pay” formula will apply to federally regulated employers. Under the new formula, holiday pay will be calculated as 1/20^th of the employee’s wages (excluding overtime pay) that were earned in the four weeks preceding the week in which the holiday occurred. This formula will apply to all employees who have been employed for at least 30 days.
• If an employee is paid, at least in part, on commission and has at least 12 weeks of continuous employment, holiday pay will be calculated as 1/60^th of the wages earned in the 12 weeks preceding the week of the holiday.
• Employees who work in continuous operations will not be entitled to holiday pay if they are called in and do not report to work or if they have made themselves unavailable for work. If the employees are required to work on a holiday, they are entitled to be paid holiday pay plus 1.5 times their regular wage rate, but can be given holiday pay at some other time or take a day off and be paid holiday pay for that day.
• Employers must pay all employees with less than 30 days of employment at least 1.5 times their regular rate, if they work on the holiday. However, if the employee works in a continuous operation, the employer is only required to pay his or her regular wage rate.

If you have any questions about the changes, please feel free to contact our office for assistance.

Ontario’s general minimum wage will increase from $11.00 to $11.25 on October 1, 2015. This increase will make the province the second-highest rate in the country (after the Northwest Territories, which will see a jump from $10.00 to $12.50 on June 1, 2015).

Minimum wage will also increase in special categories, including liquor servers, homeworkers, and students.  Click here for details regarding special minimum wage categories.

This increase is the result of recent changes to the Employment Standards Act, 2000 that tied minimum wage to inflation. For some of the other recent and upcoming changes to the ESA, have a look at our blog on Bill 18: Stronger Workplaces for a Stronger Economy Act.

If a change to the minimum wage rate comes into effect partway through an employee’s pay period, the pay period will be treated as if it were two separate pay periods.  The employee will be entitled to at least the minimum wage that applies in each of those periods.

Canada-Wide Minimum Wage Update (as of March 24, 2014)

Ontario is one of many Canadian jurisdictions that will see minimum wage increases this year. For your reference, here are the current and announced minimum wage rates in all Canadian jurisdictions:

To manage expectations, employers often hire temporary workers under a “fixed-term contract”.  But including an end date in the employment agreement can have serious, unintended consequences. The following overview will help you ensure your organization does not fall victim to the pitfalls that are associated with fixed-term contracts.

Fixed-Term Contracts: The Key Issues

• A fixed-term employee who is dismissed before his or her contract expires is generally entitled to the remuneration that would have been received if they had worked until the contract’s end date.  To overcome this general rule, employers must include an enforceable “early termination clause”.
• Courts require clear and unequivocal language before determining that an employment agreement is actually a fixed-term contract.  If fixed-term language is unclear, an employee may be entitled to “reasonable notice of termination” at common law.
• An employee who is retained on a series of fixed-term contracts may be considered by a court to be an indefinite employee, regardless of the language of the employment agreement. If so, the employer will be required to provide all of the entitlements it sought to avoid in the first place.
• If an employee works beyond the end date without having a new contract in place, whether intentionally or inadvertently, the employment relationship may be considered indefinite, and the employee may become entitled to reasonable notice of termination.

Best Practices

Generally speaking, employers who use fixed-term contracts can better minimize their risk of damages by offering indefinite employment contracts that limit entitlements upon termination. By exercising this option, employers have more certainty with respect to their liability, and are free to dismiss employees as business needs change (subject to termination notice requirements which can be limited to statutory entitlements).

Fixed-term contracts may be appropriate in situations where there is a definite and logical end to the employment relationship, such as for employees who cover statutory leaves of absence, carry out time-limited projects or work only during historically busy periods of the year.  If a fixed-term contract is implemented, additional care should be taken in drafting the the employment agreement to maximize flexibility and mitigate risk.  In particular:

• Employers should avoid implementing a series of successive, fixed term contracts.
• Fixed-term contracts should always provide for early termination to avoid a situation where an individual is dismissed early but nevertheless entitled to be paid for the remainder of the fixed-term.
• Early termination clauses must be carefully drafted to ensure they are enforceable and not in breach of legislation.
• Fixed-term contracts should not include automatic renewal provisions.
• The entire contract — not just the term and termination provisions — should be consistent with the fixed-term.  For example, fixed-term contracts should not contemplate benefits entitlements that are only available to permanent employees.

In any event, retaining legal counsel to draft your employment agreements — whether fixed-term or indefinite — is a very good investment.  In fact, it is one of the most cost-effective ways to manage your orgnization’s employment liability.  Please do not hesitate to contact us if you would like more information in this regard.

On June 30, 2015, the Canadian federal government passed a law (“Bill C-377”) requiring unions to publically disclose sensitive financial information within six months of their year-end.  The information will be published on the internet by the Minister of National Revenue.

Unless this law is repealed, it will come into force on December 30, 2015.  Unions who fail to comply may be fined $1,000 per day of non-compliance, up to a maximum of $25,000.

The information unions must disclose includes (among other things):

• a balance sheet
• a statement of income and expenditures
• statements showing purchases and sales of investments and fixed assets
• statements of accounts and loans payable
• a statement of disbursements to officers and employees with compensation of over $100,000

Perhaps Bill C-377’s most sensitive information disclosure requirement is the statement of disbursements to officers and employees with compensation of over $100,000.  Union executives with high levels of compensation may face greater scrutiny from union members whose dues are used to pay their compensation.

Unions have expressed a strong opposition to Bill C-377, but its justification is compelling.  Greater financial transparency encourages greater financial accountability.  Union members will have the ability to access their union’s financial information and see how their money is being spent.  Where a union’s finances are mismanaged, members will be able to raise compelling, fact-based, objections.

Internationally, Bill C-377’s financial transparency requirements are not unusual.  For example, in the United States, the Labor-Management Reporting and Disclosure Act establishes strict reporting requirements, including the disclosure of detailed financial statements, and statements of disbursements to officers and employees who received more than $10,000.  The contents of these reports are made public.  Likewise, in the United Kingdom, the Trade Union and Labour Relations (Consolidation) Act requires unions to disclose detailed financial statements, including details concerning the compensation of union executives.

Even within Canada, Bill C-377 is not unprecedented.  For example, registered charities who enjoy tax exemptions similar to that of unions are required to file an annual information return that includes detailed financial statements.  This information is publicly disclosed at www.cra.gc.ca/charitylists.

The full text of Bill C-377 is available here.  Although Bill C-377 has been passed, it will be interesting to see whether it will be affected by the upcoming federal election.  The NDP and the Liberals appear to strongly oppose it.  For example, Justin Trudeau has referred to Bill C-377 as “a direct attack on Canadian workers and an attempt to weaken Canada’s labour movement”, and he has confirmed that the Liberals are committed to repealing it.

We will be watching this bill as December 30, 2015 approaches, and we will provide further information as it becomes available.

Despite the economic controversy, Alberta’s NDP government appears to be following through on its promise to increase the province’s minimum wage to $15 per hour by 2018.  On October 1, 2015, the minimum wage in Alberta will increase from $10.20 to $11.20, with planned further increases in the years to come.  Following this initial increase, Alberta will have one of the highest minimum wages in Canada.

In fact, the minimum wage is about to increase in several provinces.  For your information, we have listed the Canada’s current minimum wages below, and indicated upcoming increases.

October 19, 2015 is federal election day.  Under the Canada Elections Act, employees who are eligible to vote are entitled to three consecutive hours of time off to vote without a reduction in pay. The three consecutive hours must fall within the open hours of local polling stations, which are as follows:

* There are exceptional voting hours in Saskatchewan if an election occurs when the rest of the country is observing daylight saving time.  In such cases, voting hours are from 7:30 a.m. to 7:30 p.m. in areas of Saskatchewan that are in Central Time Zone, and voting hours are from 7:00 a.m. to 7:00 p.m. in that portion of Saskatchewan that is in Mountain Time Zone.

If an employee’s schedule already accommodates voting time requirements, then the employer is not required to make scheduling adjustments.  However, where an employee’s normal work schedule does not accommodate voting time requirements, the employer must determine which hours will be used to accommodate voting time requirements.  On polling day, employees must be paid the same amount they would have been paid had they not exercised their right to voting time.

Example

For example, consider an employee in Calgary who would normally be scheduled to work from 9 a.m. to 5 p.m. on October 19, 2015.  Because there are less than three consecutive local voting hours before and after that employee’s shift, the employer must adjust the schedule to satisfy the voting time requirements. Here are three options that will satisfy the voting requirement:

• The employer could delay the employee’s start time until 10:30 a.m. to ensure the employee has three consecutive hours of voting time prior to his or her shift.
• The employer could end the employee ‘s shift at 4:30 p.m. to ensure the employee has three consecutive hours of voting time after his or her shift.
• The employer could permit the employee to be absent for three consecutive hours during his or her shift.

Penalties

Employers who reduce pay or fail to satisfy the voting time requirements may be liable for a fine of up to $2,000, and/or imprisonment for up to three months, for each violation of the Canada Elections Act.

In British Columbia Teachers’ Federation v. British Columbia (“BCTF“) the British Columbia Court of Appeal (“BCCA“) decided that legislation cancelling terms in a collective agreement, for the benefit of achieving education policy objectives, did not infringe the Canadian Charter of Rights and Freedoms. Practically speaking, BCTF demonstrates that legislators can impose narrow, reasonable restrictions over what can be negotiated at the bargaining table without breaching the Charter‘s freedom of association. Needless to say, this is a welcome development for public sector employers and legislatures who seek to impose reasonable limitations on the collective bargaining process.

Many commentators have argued that the BCTF decision is a surprisingly narrow application of the Supreme Court of Canada’s recent “labour trilogy” which clearly established more rigorous constitutional protections for the collective bargaining process in Canada. In fact, BCTF achieves a delicate balance that was carefully crafted by the Supreme Court of Canada in the new labour trilogy — a balance between:

1. protecting a meaningful process to advance collective aspirations,
2. maintaining an openness to various models of association, and
3. avoiding judicial interference with particular bargaining outcomes.

For further information about the Supreme Court of Canada’s new labour trilogy, review our previous posts here and here.

Background

The historical background to this case is complex. The key points are as follows:

• The B.C. government passed legislation on two occasions which voided certain terms of the collective agreement between the British Columbia Teachers’ Federation (the “Teachers“) and the British Columbia Public School Employers’ Association (the “Employers’ Association”), and prohibited the negotiation of similar terms in collective bargaining.
• The terms at issue touched on issues of educational policy, including class size and composition, staffing levels and student-to-teacher ratios, minimum numbers of teachers, and case loads.
• The initial legislation (“Bill 28“) was successfully challenged by the Teachers as an unjustified breach of the Charter-protected freedom of association. The trial judge declared the legislation to be unconstitutional, but suspended the declaration for one year to allow the government time to address the repercussions of this decision.
• Over the following year, the Teachers participated in discussions with the B.C. government concerning the issues raised under the apparently unconstitutional legislation. Separately, the Teachers collectively bargained with the Employers’ Association.
• On April 14, 2012, the B.C. government passed new legislation (“Bill 22”) that was very similar to the legislation that had been declared unconstitutional. Bill 22, unlike Bill 28, restricted collective bargaining for a temporary period of only fourteen months. At the same time, the government also passed regulations to provide additional funds for classroom resources and to compensate for potentially larger class sizes with extra preparation time, pay, professional development allowances or allowances for classroom supplies an equipment.
• In response to Bill 22, the Teachers’ commenced a new Charter challenge, and succeeded on similar grounds. The focus of the trial judge’s decision was on whether the government’s consultations with the Teachers before the enactment of Bill 22 could “save” legislation that was “duplicative” of Bill 28 and, therefore, inherently unconstitutional. She ultimately concluded that the government consultations were irrelevant because only an employer could engage in collective bargaining with a union such as the Teachers. The trial judge also determined that the government had not engaged with the Teachers in good faith.

The British Columbia Court of Appeal’s Decision

The BCCA overruled the trial judge’s decision. In their view, the case was not about “saving” an unconstitutional law, but rather about whether there was a breach of the Teachers’ freedom to associate in the first place. In particular, the BCCA focused on the issue of whether Bill 22 substantially interfered with the Teachers’ right to participate in a meaningful process by which they could make collective representations about workplace goals (and have those representations considered in good faith).

The most interesting aspect of the BCCA’s decision is the significance it places on pre-legislative consultations. According to the BCCA, the fact that the Employers’ Association did not directly participate in pre-legislative consultations did not render those consultations irrelevant. The Charter analysis must remain open to various models of association and collective representation, and the B.C. government’s consultations with the Teachers were found to be an important part of the context in which the constitutionality of Bill 22 must be assessed.

The BCCA concluded that the B.C. government listened to the Teachers’ collective representations in good faith and was prepared to modify its plans, if not its objectives, in response to compelling objections. This was sufficient for the purposes of the Charter analysis, and it was inappropriate for the court to generally assess the parties’ motives, or the particular outcomes of the consultation and collective bargaining processes.

In sum, Bill 22 interfered with associational activity by reducing the scope of what could be negotiated at the bargaining table, but the interference was not a “substantial” infringement of the employees’ freedom of association.

Conclusions

To fully appreciate the significance of BCTF, context is key. The restrictions that Bill 22 imposed upon collective bargaining were more than just restrictions relating to working conditions; they were restrictions imposed for the purposes of furthering specific education policy objectives. Those restrictions were imposed following several rounds of consultation between the B.C. government and the Teachers, and the Teachers were given a genuine opportunity to make collective representations regarding those restrictions. The existence of a forum for meaningful discussion and debate, whether within or incidental to the collective bargaining framework, is at the heart of the Charter-protected freedom of association, and such a forum was achieved in BCTF.

Above all, BCTF is a reminder that, although the new labour trilogy has expanded the scope of the constitutional protections applicable to the collective bargaining process, those protections are limited. To breach the Charter, legislation limiting the scope of the collective bargaining process must amount to a substantial interference which is unlikely to occur when the restrictions target narrow, reasonable objectives (concerning, for example, class size or student-to-teacher ratios) as opposed to denying employees the right to associate with the union of their choice, or preventing them from taking lawful job action to exert economic pressure over their employer.

Back by popular demand, we highlight the ten most significant developments in Canadian labour and employment law in 2015:

1. Supreme Court of Canada determines “right to strike” is protected under s. 2(d) of the Charter.  In Saskatchewan Federation of Labour v. Saskatchewan, the Supreme Court of Canada confirmed that legislation limiting the right to strike is unconstitutional unless its limits are reasonable and justified in a free and democratic society.  This case establishes a relatively high threshold for justifying laws that limit the right to strike.
2. Supreme Court of Canada clarifies the legal test for constructive dismissal.  In Potter v. New Brunswick Legal Aid Services Commission, the Supreme Court of Canada confirmed that constructive dismissals arise in two primary forms, including: (1) a single, unilateral act of the employer that breaches an essential term of the contract, or (2) a series of employer acts that, taken together, demonstrate the employer intended to no longer be bound by the contract.  Under the first category, a constructive dismissal may arise when an employee is placed on paid non-disciplinary administrative leave, and such action is not exercised in a proportionate and reasonable manner.
3. Without cause dismissals permitted in the federal sector.  In Wilson v. Atomic Energy of Canada Limited, the Federal Court of Appeal determined that employees can be dismissed without cause under the Canada Labour Code.  Leave to appeal to the Supreme Court of Canada has been granted in this case.
4. Substantial changes to the Ontario Employment Standards Act come into force.  Many significant changes to Ontario’s Employment Standards Act came into force in 2015 as a result of Bill 18, including: (i) the elimination of a $10,000 limit on orders for unpaid wages; (ii) increasing the limitation period for unpaid wages claims from six months to two years, and (iii) adopting a system of automatic increases to minimum wage, based on the consumer price index.
5. Ontario Superior Court adopts federal test for family status discrimination. In Partridge v. Botony Dental Corporation , the Ontario Superior Court adopted the federal test for family status discrimination (a.k.a. the “Johnstone test”) under the Ontario Human Rights Code (upheld on appeal).  This test is generally viewed as more favourable to individuals seeking accommodation than previous tests.
6. Metron Construction’s project manager was convicted of criminal negligence causing death and bodily harm.  In R. v Kazenelson, a construction project manager was convicted under the Criminal Code after a swing stage collapsed, killing four workers and seriously injuring another.  At the sentencing hearing on October 16, 2015, the court confirmed that the project manager would serve a term of incarceration. Sentencing details will be released in 2016.  This conviction was closely related to the much-reported case of R. v. Metron Construction–the first Ontario case in which a company was held responsible for a worker’s death under Criminal Code.
7. Duty of honest contractual performance is applied to employment contract negotiations.  In Antunes v. Limen Structures Ltd., the Ontario Superior Court applied the “duty of honest contractual performance” (confirmed by the Supreme Court of Canada in 2014) in an employment context.  In this case, the plaintiff decided to leave his occupation as an independent contractor in the construction industry to accept employment with a construction employer.  At the time of hire, the plaintiff was told that the company was worth $10 million, and was promised $500,000 in shares within one year of commencing employment.  The employee was never provided with the promised shares and the company was not worth $10 million.  The employer was ultimately ordered to pay the employee eight months’ notice, and an additional $500,000 for, among other things, misrepresenting the value of the company when the plaintiff was hired.
8. Human rights damages for injury to dignity rise and fall significantly. In OPT v. Presteve Foods Ltd., the Ontario Human Rights Tribunal issued its highest award yet for injury to dignity, feelings and self-respect, in the amount of $150,000.  On the other hand, in Kelly v University of British Columbia, the British Columbia Superior Court overturned an award of $75,000 for injury to dignity–the British Columbia Human Rights Tribunal’s highest award to date–finding it was unjustifiably high.
9. Ontario introduces significant amendments to employment legislation:
   • On October 27, 2015, the Ontario Legislature introduced legislation as part of its action plan to stop sexual violence and harassment.  Bill 132, An Act to amend various statutes with respect to sexual violence, sexual harassment, domestic violence and related matters, proposes changes to various statutes, aimed at making workplaces, university campuses, and communities safer, while recognizing the needs of survivors of sexual violence and harassment.
   • On December 10, 2015, the Ontario Legislature passed Bill 109, the Employment and Labour Statute Law Amendment Act, 2015, adding (among other things) a new offence to the Workplace Safety and Insurance Act that prohibits employers from acting with the intention of discouraging or preventing a worker from filing a WSIB claim, or inducing the worker to withdraw or abandon a claim for benefits.
   • Also on December 10, 2015, the Ontario Legislature’s Bill 12, An Act to Amend the Employment Standards Act, 2000 With Respect to Tips and Other Gratuities, received Royal Assent, prohibiting employers from withholding, making deductions from, or collecting tips or other gratuities from employees, unless authorized to do so under the Employment Standards Act and its regulations.
10. Significant changes to Part I of the Canada Labour Code (which Justin Trudeau intends to repeal).  In June of 2015, Bill C-525 came into force, making secret ballot votes mandatory in the union certification process under the Canada Labour Code.  That same month, the federal government passed Bill C-377, which would require unions to publically disclose sensitive financial information within six months of each year-end, starting in 2016.  On December 21, 2015, the Liberal government announced it was waiving the financial requirements established under Bill C-377, and it is expected that both Bill C-525 and Bill C-377 will be repealed by the Liberals in 2016.

Privacy law is responding to disturbing social trends on the internet.  Last week, in Jane Doe 464533 v. N.D. (“Doe“), the Ontario Superior Court recognized a new privacy tort–“public disclosure of embarrassing private facts”.

In this unfortunate case, an unnamed woman in her late teens succumbed to the pressures of an ex-boyfriend’s repeated requests to share a sexually explicit video of herself.  Despite assurances that he would not share the video with anyone, the ex-boyfriend uploaded it to a pornographic website, and showed it to mutual friends.

The unnamed woman was understandably humiliated and devastated.  After the police refused to pursue the matter, she decided to take civil action.  She claimed damages for, among other things, a tortious breach of privacy.

Thanks to the unnamed woman, and to the Honourable Justice Stinson, new recourse is available when private images not intended for public consumption are distributed on the internet.  It is now clearly possible to sue an individual who posts your private images or information online.  To succeed, you will have to prove that “the matter publicized or the act of the publication” is “highly offensive to a reasonable person” and is not “of legitimate concern to the public”.

But this is not the first time Ontario courts have recognized a new privacy tort.  For example, in the seventies, Ontario courts recognized the tort of “appropriation, for the defendant’s advantage, of the plaintiff’s name or likeness” (Athans v. Canadian Adventure Camps).  Furthermore, in 2012, the Ontario Court of Appeal recognized the tort of “intrusion upon seclusion” (Jones v. Tsige).

So…What can employers learn from past experience?   There are at least four important considerations:

1. Employers Must Protect Information – It is now more important than ever to ensure that employee information is protected and only disclosed, with consent, on a need-to-know basis.  For example, human resources files and workplace computer systems often contain very sensitive, confidential information about employees.  This information must be kept secure.
2. Employers Will be Sued – Employers will be named as co-defendants in cases where their employees publicly disclose embarrassing images of, or information about, coworkers.  This is a certainty because employers may be held vicariously liable for acts committed by their employees in the course of their employment, and because employers have deeper pockets.
3. Damages are Higher – This case suggests damages for public disclosure of embarrassing facts may be much higher than damages for intrusion upon seclusion.  In Doe, for example, the court awarded $100,000.**  Only time will tell, but the damages contemplated in this case are clearly much higher than the $20,000 “cap” that was established by the Ontario Court of Appeal under the tort of intrusion upon seclusion.
4. Court of Appeal has Acknowledged this Tort – It is important to note that the Ontario Court of Appeal previously made reference to the tort of “public disclosure of embarrassing facts” (in Jones v. Tsige) but did not go into detail as the facts did not support such a claim in that case.  The fact that an appellate court has already made reference to this tort suggests it is probably here to stay (though it will take many years to sort out the legal nuances).

Employers who have not already done so should take notice.  Privacy policies and practices should be established and reviewed to ensure coworkers are charged with the responsibility of maintaining respect for each other’s privacy–both inside and outside the workplace.  In short, employers must take all reasonable steps to ensure its employees’ private stuff is not publically disclosed.

If you have any questions concerning best practices in workplace privacy, we encourage you to call a member of our team.

**The plaintiff had chosen to commence her claim under a simplified procedure in which damages are limited to $100,000.

Regulations under the Accessibility for Ontarians with Disabilities Act changed on July 1, 2016. The Accessibility Standards for Customer Service were revoked, and a modified version of those standards has been incorporated into the Integrated Accessibility Standards. As a result, organizations must implement the following changes:

1. Employee Training Standards – All members of an organization now need to be trained on accessible customer service and how to interact with people with different disabilities.
2. Feedback – Public feedback processes for customer service accessibility are now more robust. The feedback process must be accessible to people with disabilities, and must be provided in alternative accessible formats, and/or with communication supports, upon request.
3. Policies – Large organizations are now required to notify customers that their accessible customer service policies and temporary disruptions policies are available upon request. This notice can be given by posting the policies in a conspicuous place or on the organization’s website.
4. Support Persons – Before requiring a person with a disability to be accompanied by a support person for health and safety reasons, an organization must first consult with the person who has the disability, review all available evidence, and consider reasonable alternatives.
5. Service Animals – Organizations may continue to request documentation to confirm that a person with a disability requires the use of a service animal, but this documentation may now come from a wider variety of regulated health professionals, including audiologists, speech-language pathologists, chiropractors, nurses, occupational therapists, optometrists, physicians, surgeons, physiotherapists, psychologists, psychotherapists and mental health therapists.

Organizations should also be aware that, for the purposes of the customer service standards, the definition of a “large organization” has changed from “20 or more employees” to “50 or more employees”. Organizations with more than 20, but less than 50, employees are no longer required to document certain policies and practices. However, an employer who already has documented policies and procedures in place should keep them in place, and should continue to update them.

To date, enforcement measures have been limited, but there are signs that they are increasing. For example, last fall, the Ministry of Economic Development and Growth announced AODA compliance audits targeting large retail organizations with 500 or more employees. It is therefore increasingly important to ensure your organization is compliant.

For general background on the evolution of AODA requirements, see our previous posts here and here.

On July 14, 2016, the Supreme Court of Canada confirmed that most federally-regulated, non-union employees can only be dismissed for “just cause” after 12 consecutive months of service (Wilson v. Atomic Energy, 2016 SCC 29). As a result of this decision, it is now clear that employees who are regulated under Part III of the Canada Labour Code cannot, following their first year of employment, simply be provided with termination notice or pay in lieu, absent a compelling reason for terminating the employment relationship.

Due to widespread legal uncertainty that existed prior to 2015, many federally regulated employers will already understand the consequences of this case, but the administrative and financial implications are far-reaching. In most cases, federally-regulated employers who dismiss their employees for poor performance and/or misconduct will face a significant risk that an adjudicator will order reinstatement and “back pay”. Furthermore, in cases where reinstatement is determined to be inappropriate, damages awarded to employees for “unjust dismissal” are likely to increase.

Federally-regulated employers who have embraced “without cause dismissals” as a result of the Federal Court of Appeal’s decision in Wilson v. Atomic Energy of Canada Limited, 2015 FCA 17 must re-adjust. It is now more important than ever for federal employers to implement rigorous and well-documented performance management processes–processes which are crucial for proving just cause if litigation ensues. Practically speaking, the Supreme Court of Canada’s decision also increases the importance of establishing carefully-crafted written employment agreements for all non-union employees, implementing an effective probationary period, and administering redeployment policies where appropriate.

For background on this case, see our previous post (here) where we outline the facts and describe the Federal Court of Appeal’s decision (which the Supreme Court of Canada has now overturned).

Key elements of Bill 132, Sexual Violence and Harassment Action Plan Act (Supporting Survivors and Challenging Sexual Violence and Harassment), 2016 (“Bill 132”) come into force today, amending the Occupational Health and Safety Act (“OHSA”). As a result, employers are required to implement comprehensive policies, programs, and investigative procedures to address workplace harassment. Bill 132 also expands the definition of “workplace harassment” to include “workplace sexual harassment”.

As we stated in our blog post earlier this year, Bill 132 will require most Ontario employers to revisit their workplace harassment policies and programs. Employers who have not already done so, should expeditiously do the following:

1. In consultation with the committee or health and safety representative, if any, amend their existing workplace harassment policies and programs to comply with OHSA requirements. Among other things, this includes:
   • specifically include “workplace sexual harassment” in the policies and programs;
   • ensure investigations “appropriate in the circumstances” are conducted into incidents and complaints of workplace harassment;
   • set out how investigations will be carried out, including how a worker who has allegedly experienced workplace harassment and the alleged harasser “will be informed of the results of the investigation and of any corrective action that has been taken or that will be taken as a result of the investigation”;
2. Ensure sufficient information and instruction is provided to incoming and existing employees regarding workplace harassment; and
3. Set a timeline to review the policies and programs at least annually.

We anticipate that the Ministry of Labour will conduct inspections to ensure employers are complying with the new legislative requirements. Employers who do not comply with the new requirements may be liable for non-compliance, which may include a substantial fine. We would be pleased to assist employers in meeting the requirements of Bill 132. If you require assistance, please contact a member of our team.

On July 15, 2016, we wrote about the Supreme Court of Canada’s recent decision in Wilson v. Atomic Energy, 2016 SCC 29 (“Wilson”).  In that case, the SCC held that most federally-regulated, non-union employees with 12 or more consecutive months of service can only be dismissed for “just cause”. See our earlier blog post here.

Following the Wilson decision, many federal employers were left wondering whether they still have the right to downsize or impose layoffs in response to a decline in their business.  Such employers will be happy to learn that “downsizing” imposed for legitimate business reasons is still possible (subject to certain restrictions).  Under s. 242(3.1)(a) of the Canada Labour Code, RSC, 1985, c L-2 (the “Code“), an adjudicator will not consider the complaint of an employee who has been laid off due to a “lack of work” or “discontinuance of a function”.

The legal test under s. 242(3.1)(a) is well-established. Federal employers must show a compelling economic justification, and provide a reasonable explanation for the choice of employee to be laid off.  Employers who satisfy these criteria can rely on s. 242(3.1)(a) for temporary or permanent layoffs, as long as they are acting in good faith, abiding by the terms of the particular contract in issue, and complying with the Canadian Human Rights Act.

From a business perspective, the scheme makes sense. Employers should be free to restructure and reorganize their businesses to satisfy market demands.  Indeed, most collective agreements provide employers with the right to impose layoffs when business declines, and the SCC’s commentary in Wilson confirms that the purpose of the Code‘s unjust dismissal provisions is to mirror the arrangement that has developed in the collective bargaining context.

Minimum wages continue to rise across Canada. Recent increases have been implemented in British Columbia, Ontario, Prince Edward Island and Saskatchewan.  As well, Alberta’s NDP government has continued to pursue its goal of a $15 per hour minimum wage by 2018 by implementing incremental increases.  Several other provinces will see a further increase in their minimum wage in April. 

For your information, we have set out the current minimum wages, and upcoming increases, below.

To ring in the New Year, we highlight the ten most significant developments in Canadian labour and employment law in 2016:

1. For Federal Employers, a Dismissal “Without Cause” is an “Unjust Dismissal”.  In Wilson v. Atomic Energy, the Supreme Court of Canada confirmed that, after 12 consecutive months of service, most federally-regulated, non-union employees can only be dismissed for “just cause”. Consequently, it is now clear that employees who are regulated under Part III of the Canada Labour Code cannot, following their first year of employment, simply be provided with termination notice or pay in lieu, absent just cause.  Federal employers may nevertheless dismiss an employee who has been laid off due to a “lack of work” or “discontinuance of a function”.
2. HRTO Revisits the Test for Family Status Discrimination.  In Misetich v. Value Village Stores Inc., the Human Rights Tribunal of Ontario was critical of the current test for family status discrimination—a test that was established and upheld by the Federal Court of Appeal in Johnstone v Canada.  In Misetich, the HRTO set out a new test that would not require the applicant to establish that their family obligation engages a “legal” responsibility.  The proposed new test would also relax the current standard of requiring the applicant to demonstrate they made a reasonable effort to “self-accommodate”.
3. Employer Held Liable for Failing to Protect Employees Against Social Media Harassment.  In Toronto Transit Commission and ATU, Local 113, a labour arbitrator held an employer was liable for failing to protect its workers against harassment in customer posts associated with the employer’s Twitter account. Employers with a social media presence now face a greater risk of liability for failing to prevent workers from being exposed to harassment in the workplace by way of social media.
4. Litigation in Canada for Overseas Workplace Human Rights Violations Now More Likely.  In Araya v. Nevsun Resources Ltd., the British Columbia Supreme Court ruled that a lawsuit commenced in Canada by Eritrean miners may proceed.  The miners allege they were forced to work in a mine, located in Eritrea, owned by a Canadian mining company.  This is the first time that foreign claimants have been able to proceed to trial in a lawsuit in Canada against a Canadian company for alleged human rights abuses overseas (based on violations of customary international law).
5. ONCA Raises the Bar for Enforcing Fixed Term Contracts.  In Howard v. Benson Group Inc., the Ontario Court of Appeal confirmed that, if an early termination provision in a fixed term contract is too ambiguous or vague to be enforced, the employee may be entitled to full wages for the remainder of the term of contract.  The employee will not have to make reasonable efforts to secure alternate income during the remainder of the fixed term unless there is a specific provision of contract to the contrary.
6. Canada Pension Plan Enhancement Appears Imminent.  On October 6, 2016 the federal government introduced Bill C-26, which sets out amendments to the Canada Pension Plan.  If passed (and this appears likely), Bill C-26 will increase CPP contributions over 7 years, commencing in 2019.  Among other things, Bill C-26 would increase the maximum CPP benefit from 25% of earnings to 33% of earnings (up to the year’s maximum pensionable earnings).
7. Independent Contractor Class Action Certified in Canada.  In Omarali v. Just Energy, an Ontario court certified a class action against Just Energy, a natural gas and electricity retailer.  In this case, 7,000 of Just Energy’s sales agents claimed they were misclassified as independent contractors. This case is the first of its kind to be certified in Canada.  If the sales agents are successful, the company could face significant liability for unpaid wages (including overtime, vacation and public holiday pay), and for failure to apply statutory deductions.
8. New Privacy Tort – Public Disclosure of Embarrassing Private Facts.  In Jane Doe 464533 v. N.D., the Ontario Superior Court of Justice recognized the tort of “public disclosure of embarrassing private facts”.  The tort requires the plaintiff to prove that “the matter publicized or the act of the publication” is “highly offensive to a reasonable person” and is not “of legitimate concern to the public”.  It is likely that employers will now face claims for liability under this tort, including claims for vicarious liability.
9. OHSA Amendments Strengthen Protections Against Workplace Harassment.  On September 8, 2016, portions of Bill 132 came into force, amending (among other things) Ontario’s Occupational Health & Safety Act.  These amendments increase protections against workplace harassment, which now expressly includes “workplace sexual harassment”.  Central to these amendments are more robust workplace investigation requirements.
10. Court of Appeal Rules Termination Clause Without Benefits Continuation is Enforceable.  In Oudin v. Centre Francophone de Toronto, the Ontario Court of Appeal upheld a decision enforcing a termination clause that established a termination notice period without mentioning benefits continuation.  While enforceability will continue to turn on the language of the employment contract in issue, this case marks a departure from a recent trend towards striking down termination clauses.

On May 23, 2017, Ontario’s long-anticipated Changing Workplaces Review Final Report (“Report”) was released.  The Report contains 173 recommendations for changes to the province’s employment standards and labour relations laws.

The final recommendations would, if legislated, have a significant impact on the application of labour and employment laws to franchised businesses operating in Ontario.  To help businesses prepare for the possibility of these significant reforms, we have summarized below the recommendations that would most significantly impact the franchise industry. “Broader-Based Bargaining” under the Labour Relations Act

Recommendations regarding restructuring collective bargaining rights for employees of franchised companies are among the most profound recommendations set out in the Report.

Essentially, the proposed model would allow for the Ontario Labour Relations Board to order separate franchisees of the same franchisor to “bargain centrally” with certified or voluntarily recognized bargaining units represented by the same union.  Similar to the model currently in place in the construction industry, an “employer bargaining agency”, composed of representatives of the separate franchisees, would represent the franchisees at the bargaining table with the union.

Any strike or ratification vote would involve the entire constituency of bargaining units (as opposed to individual bargaining units).  However, each franchisee would have individual responsibility for compliance with the resulting collective agreement and would normally sign an agreement binding only its unionized employees.

The recommendations do not provide a franchisor whose franchisees may be subject to the central bargaining with the right to sit at the bargaining table during negotiations unless it operates company units or is otherwise  the employer (or common employer) of employees who belong to certified or voluntarily recognized bargaining units.  The Board would have the authority, if requested by a party involved, to direct that the terms of a collective agreement between a franchisee and a union be extended to apply, with or without modifications, to a newly certified bargaining unit involving the same union and a different franchisee (under the same franchise system).

To put these recommendations into perspective, it is important to understand it is already possible for franchisees and franchisors to be treated as a single employer for purposes of collective bargaining.  However, current legislation on permits this to occur where there is “common control or direction” of franchise entities, which depends on how the particular franchise is structured and managed.  What is significant about the above proposals is that separate franchisees could be ordered to bargain together regardless of whether there is “common control or direction”.  The proposed change would therefore eliminate a significant barrier to “broader-based bargaining” among employees of franchised systems, and will have a significant impact on the organization of, and bargaining with, employees for a franchise system having multiple franchisees or company units in Ontario.

New “Related Employer” Definition Under the Employment Standards Act

Under the current Employment Standards Act, 2000 (“ESA”), separate entities are only treated as a single employer if the structure has the “intent or effect” of defeating the intent and purpose of the ESA.  The Report recommends that the “intent or effect requirement” be eliminated, permitting separate entities to be treated as a single employer if they simply carry on associated or related business activities.

Eliminating the “intent or effect” test removes a significant barrier to establishing that separate franchise entities are “related employers”.  In many cases, this would allow employees to file ESA complaints against the franchisor, the franchisee or both, as opposed to just the franchisee.  This could also expand the Ministry of Labour’s jurisdiction to inspect franchisors, and to engage directly with franchisors on enforcement initiatives under the ESA, even when they are not operating company units in Ontario.

Incremental ESA Changes

In addition to the fundamental changes outlined above, the Report also recommends many incremental changes to employment standards that would significantly impact all franchise systems operating in Ontario, including:

• requiring part-time, casual, temporary and seasonal employees to be paid the same rate of pay as comparable full-time employees of the same employer, subject to limited exceptions
• providing certain employees with a “right to request” changes in their work hours or location, with protection from reprisal;
• increasing vacation time to 3 weeks and vacation pay to 6% after 5 years of employment;
• eliminating the student minimum wage and the liquor servers’ minimum wage;
• revising the test for the manager/supervisor exemption for overtime entitlement;
• eliminating the requirement to obtain approval before requiring employees to work between 48 and 60 hours in a week; and
• limiting overtime averaging to a compressed work week, continental shift or other limited exceptions.

A formal response from the Ontario Government is expected within the next week.  At this stage, it is not clear when, or if, proposed legislative changes will be introduced. It could take months or years before any of the recommended changes are legislated.  The enactment of any amendments could also be impacted by Ontario’s next provincial election which is scheduled to be held on or before June 7, 2018.

The Ontario Report may be viewed as part of a broader trend in a number of countries (including the United States, Australia and France) to re-examine the employment relationship in the context of franchising through administrative, legislative and judicial action. As yet, no clear consensus has emerged.

By Jordan Kirkness and Kevin Maher.

The Ontario government has announced that it will introduce legislation, The Fair Workplaces, Better Jobs Act, 2017, in the coming days to reform the province’s employment standards legislation. The announcement follows last week’s release of the Changing Workplaces Review Final Report which contained a myriad of recommendations for reforms to benefit employees.[1]

The key changes to the Employment Standards Act, 2000 (“ESA”) that the government has indicated will be included in the proposed legislation are summarized below.

Minimum Wage Hike

Ontario’s minimum wage rate would increase to $15.00 by January 1, 2019. If passed, the current rate of $11.40 will increase to $14.00 on January 1, 2018 and increase again to $15.00 on January 1, 2019 under the proposed legislation. While this is a significant increase, it is consistent with planned increases in Alberta. At $12.20, Alberta has the highest minimum wage among Canada’s provinces. Alberta will increase its minimum wage to $13.60 on October 1, 2017 and to $15.00 on October 1, 2018.

Misclassifying Prohibited

Misclassifying employees as independent contractors would be prohibited under the  ESA and subject to a range of penalties, including prosecution, public disclosure of a conviction and monetary penalties. In addition, the person receiving the worker’s services would have the burden of proving that the worker is not an employee in the event of a dispute. This change will enable workers who believe they have been misclassified to more easily pursue claims against the employer without resorting to litigation.

Hurdle Removed for Related Employers

The ESA’s “related employer” provision would be rewritten such that separate but related legal entities could be treated as one employer if they simply carry on associated or related business activities. Currently, separate entities will only be treated as one employer if they have also acted in manner which has the intent or effect of defeating the purpose of the ESA. Eliminating the “intent or effect” test removes a significant barrier to establishing that separate entities are related employers.

Part-Time Workers Entitled to Same Pay as Full-Time Workers

Part-time, casual, temporary and seasonal employees would be entitled to the same rate of pay as comparable full-time employees of the same employer. Exceptions to this rule would be permitted for seniority, merit, systems that set pay by quantity or quality of production, or other objective factors that justify a difference in pay. Employers would need to respond to an employee’s pay review request with either a written explanation or an adjustment in pay. Employees would be protected from reprisal for inquiring about their pay.

Similarly, agency employees would be entitled to the same rate of pay as comparable permanent workers of the employer and have protection from reprisal. Agency workers would also be entitled to one weeks’ notice where their assignment is terminated early, if the assignment was scheduled to last longer than three months.

Scheduling Requests Permitted

Employees with three or more months’ service would have a “right to request” changes in their work hours or location, with protection from reprisal. At present, the ESA does not contain rules regulating how employers set work schedules. The Federal Government made a similar proposal in Budget 2017 which would permit employees to request more flexible work arrangements.

Incremental Changes

Other incremental changes to the ESA, which employers are likely to feel on their bottom-line, are also proposed:

• increasing vacation time to 3 weeks of paid vacation after 5 years of employment;
• increasing the student minimum wage to $14.10 by January 1, 2019;
• increasing the liquor servers’ minimum wage to $13.05 by January 1, 2019;
• extending personal emergency leave to all employers, including those with less than 50 employees;
• increasing family medical leave to up to 27 weeks in a 52-week period; and
• providing a leave of up to 104 weeks for child death from any cause.

Enforcement Efforts to be Strengthened

Up to 175 additional Employment Standards Officers would be hired to carry out inspections and investigate potential non- compliance with the ESA. A goal of inspecting 1 in 10 Ontario workplaces has been set.

Publication of Names of Non-Compliant Employers

In addition to greater flexibility for enforcement officers to issue administrative monetary penalties, the names of individuals who have been issued a penalty would be publishable along with a description of the contravention and the amount of the penalty.

Ontario Premier Kathleen Wynne has indicated that the proposed legislation will be introduced in the coming days. It is anticipated that it could take months before the legislative changes are brought into force.

[1] Ontario’s Changing Workplaces Review is an independent review commissioned by the Ontario government in early 2015. The Special Advisors appointed to undertake the Review, Mr. Justice John Murray and Michael Mitchell, were given a mandate to identify potential reforms to the Employment Standards Act, 2000 and the Labour Relations Act, 1995 to ensure that these statutes reflect modern realities. Within this broad mandate, their key focus has been identifying legislative amendments needed to protect vulnerable workers in precarious jobs.

Further to our recent blog post about the Ontario government’s reform of the employment standards legislation through The Fair Workplaces, Better Jobs Act, 2017, employers can also expect significant changes to the legislation governing unionized workplaces. The key changes proposed in respect of Ontario’s Labour Relations Act (“LRA”) concern union certification, bargaining unit structure, first contracts, just cause protection, return-to-work rights and procedures, successor rights, and fines for individuals and organizations, which are summarized below.

Support for Unions Seeking Certification

Unions would benefit from new provisions under the proposed legislation aimed at supporting certification efforts:

• unions would be granted access to employee lists and certain contact information where the union can demonstrate it has achieved 20% of employee support;
• certain conditions for remedial union certification would be eliminated, permitting unions to be certified more easily where employer misconduct contravenes the LRA;
• the Ontario Labour Relations Board (“OLRB”) would be empowered to conduct votes outside of the workplace – electronically and by telephone – and be able to authorize Labour Relations Officers to give directions relating to the voting process in furtherance of voting neutrality; and
• card-based certification for workers in the temporary help agency industry, building services sector, and home care and community services industry.

Restructuring Bargaining Units Possible

Currently, the OLRB has the authority to determine the appropriate bargaining unit with respect to each application for certification. Under the proposed legislation, the OLRB would also have the power to revise and revamp existing bargaining units. Specifically, the OLRB would be empowered to:

1. change the structure of bargaining units within a single employer where the existing bargaining units are no longer appropriate; and
2. consolidate newly certified bargaining units with existing bargaining units of the same union and employer.

It remains to be seen what criteria, if any, the OLRB will need to take into account in reaching a restructuring decision.

Easier Access to First Contract Arbitration

Access to first contract arbitration will be easier and the process will include an intensive mediation component. First contract mediation-arbitration applications will need to be addressed by the OLRB before it may deal with displacement and decertification applications.

Just Cause Protection Enhanced

Employees would have greater protection from discipline or discharge without just cause in the period between certification and the conclusion of a first contract, and between the date of a legal strike or lock-out and the new collective agreement.

Return-to-Work Rights Strengthened

Employers would have to reinstate employees when a lawful strike or lockout has concluded, subject to certain conditions, and the employee would have access to grievance arbitration for enforcing that obligation. This proposal is aimed at prohibiting employers from refusing to reinstate an employee on the basis of his or her conduct in relation to the strike or the labour dispute.

The LRA currently provides, subject to certain conditions, that an employee engaging in a legal strike may make an unconditional application to return to work within six months of the commencement of the strike. The proposed legislation seeks to remove the six-month limitation.

Successor Rights Extended for Building Services Contracts

Successor rights would extend to the retendering of building services contracts and would enable the government to apply these expanded rights to the retendering of other publicly funded contracted services.

Fines Increased

Maximum fines for contravention of the LRA would be increased from $2,000 to $5,000 for individuals, and from $25,000 to $100,000 for organizations.

Coming Into Force

If passed, these proposals would be effective six months after The Fair Workplaces, Better Jobs Act, 2017 comes into force.

* The authors gratefully acknowledge Courtney Laidlaw’s assistance in preparing this post.

We recently wrote about the Ontario government’s proposed changes to the province’s employment standards and labour relations legislation – see our blog posts here and here. On June 1, 2017, the Minister of Labour, the Honourable Kevin Flynn, introduced legislation to affect these changes. Bill 148, An Act to amend the Employment Standards Act, 2000 and the Labour Relations Act, 1995 and to make related amendments to other Acts (“Bill 148”) unanimously passed First Reading with approval coming not only from the governing Liberals but also from a significant number of members of the opposition parties.

This early approval suggests that many key amendments in Bill 148 may become law prior to Ontario’s next provincial election – to be held on or before June 7, 2018. At present, Bill 148 has been referred to the Standing Committee on Finance and Economic Affairs (with dates scheduled in the coming months for the Committee to meet to consider Bill 148).

While Bill 148 is consistent with many of the recommendations in the Changing Workplaces Review Final Report, it does not reflect the recommendation that multiple franchisees of the same brand operating without common control and direction may be required to bargain together centrally.

We will continue to monitor the progress of Bill 148.