The Biggest Stories in Labour & Employment Law in 2018

Happy New Year and welcome to 2019! Here's hoping that everyone is back and that the hang-over has worn off.

2018 was a turbulent year for labour and employment law in Ontario. As we look back on the year, here, in no particular order, are the biggest stories that affected workplace law.

The Swinging Pendulum of Legislative Reform: Bills 148 and 47 and beyond...

With a provincial election looming, the (then) Liberal Government of Kathleen Wynne introduced a whole slate of changes to the Employment Standards Act, 2000 and the Labour Relations Act, 1995 in Bill 148. Included in the package were:

• An increase to the minimum wage in two large increments in 2018 and 2019;
• New equal pay provisions that would require employers to pay part-time, casual, temporary and seasonal employees on par with full-time workers;
• New provisions with respect to temporary help agencies that would require notice to agency workers where an assignment of 3 months or more is ended early and making unionization easier (card-based);
• Expansion of the 3-hour rule to include a requirement to pay on-call employees for a minimum of 3 hours pay and to compensate employees with 3 hours' pay where their shift is cancelled with less than 48 hours' notice;
• An additional week of annual vacation with pay for employees with five or more years' service;
• A requirement that the first two (of 10 annual) Personal Emergency Leave days be paid, and the elimination of an employer's ability to request a doctor's note to substantiate personal illness;
• Additional leaves of up to 15 weeks and 10 days for employees who experience domestic or sexual violence, with the first 5 days of leave being paid;
• Changes to the manner of calculating public holiday pay (which were effectively repealed mid-2018); and
• A variety of changes to how the ESA is enforced, including increased fine amounts.

Under the Labour Relations Act, Bill 148 introduced a process by which a union could obtain lists of employee contact information from an employer by simply showing support of 20% of the employees in a proposed bargaining unit. The remedial certification provisions (dealing with situations where employer misconduct deprived employees of the ability to express their true wishes) were enhanced, with the Board no longer having discretion to decide whether to certify or conduct a vote. The Board was also given the authority to review bargaining unit structures where certain conditions were met. Card-based certification was extended to home care and community services, building services and the temporary help sector.

The Liberals also introduced legislation to require "pay transparency" commencing in January 2019. The legislation would require all employers to track and report on compensation differences based on gender and other diversity characteristics, would require that job postings include compensation ranges, and would prohibit asking candidates about their former compensation.

Of course, after the Wynne government was defeated in June, the Conservatives made it a top agenda item to repeal many of these changes. Through a number of new pieces of legislation (many of them omnibus bills, affecting a variety of statutes, but most notably Bill 47), the government has rolled back much of what was introduced in early 2018:

• The three-hour rule only applies to situations where the employee is not provided at least 3 hours' work - will not apply to on-call shifts or shift cancellations. Other changes with respect to scheduling will also not be implemented;
• The 2019 minimum wage increase will not be implemented (holding minimum wage at $14/hour);
• The calculation of public holiday pay will revert to the pre-Bill 148 method (i.e., 4 prior weeks' wages divided by 20);
• Personal Emergency Leave provisions scrapped, and cumulative entitlement to Sick Leave, Family Responsibility Leave and Bereavement Leave reduced to a total of 8 days, all unpaid. Employers can once again request a doctor's note to support absences due to personal illness; and
• Fine amounts returned to pre-Bill 148 levels.

It should be noted that the Ford government did not touch the added vacation pay entitlement or the new leaves for victims of domestic and sexual violence.

Virtually all of the changes to the Labour Relations Act were repealed. Implementation of the Pay Transparency Act, 2018 has been delayed indefinitely (i.e., to a date to be proclaimed).

In addition to these roll-backs, the current Ontario government has also tabled a variety of other measures, including further changes to the ESA (removing the obligation to post the ESA poster, eliminating the need for approval of excess hours and overtime averaging arrangements), exempting municipalities and other public bodies from the application of the Labour Relations Act construction industry provisions, modifying fire fighter labour relations (including putting an end to the OPFFA's prohibition on "two-hatters"), and making several amendments to the Pension Benefits Act. It seems likely that further tweaking (or even wholesale changes) may be in the offing. Employers and employees alike will continue to suffer from legislative whiplash.

Benefits Beyond Age 65: The Talos Decision

In a potentially precedent-setting case, a former teacher took his employer to the Human Rights Tribunal of Ontario, complaining that the practice of ending employment-related benefits for employees at age 65 was in violation of the Canadian Charter of Rights and Freedoms. Specifically, group health, dental and life insurance benefits were in issue, the parties having agreed to exclude pension, superannuation and LTD coverage from the argument. Mr. Talos argued that provisions of the Human Rights Code and the Employment Standards Act, 2000 which permitted discrimination in relation to benefits programs toward individuals at or over age 65 were contrary to the Charter, and could not serve as a defence for the practice. While the legislature had ended mandatory retirement in 2006, it had permitted this form of discrimination to continue, thereby perpetuating ageism contrary to the Charter. The Tribunal accepted Mr. Talos' argument and rejected arguments by the employer and the Ontario government that the reduction in entitlements at age 65 did not diminish the respect and dignity shown to the employee because he became eligible for other benefits at that age. The Tribunal concluded that there was no objective evidence of prohibitive costs in supplying benefits to employees over age 65, or any other compelling reason that would justify limiting older workers' rights in this manner. Because the Tribunal does not have the authority to strike down legislation (only to render it of no force and effect with respect to this particular case), the exemption from age discrimination for benefits plans remains in place. However, the case will have precedential value and is likely not the last word on whether age-limited benefits are a permissible limitation on Charter rights. Employers would be well-advised to either gather actuarial evidence of increased costs, or be prepared to extend benefits to all employees, irrespective of age.

Release Found Unenforceable: Watson v. The Governing Council of the Salvation Army of Canada

As noted in an earlier comment, the decision in the Watson case should make the blood of most employers run cold (or boil, perhaps). In that case, the employee was terminated, but negotiated a severance payout, plus 4 months' benefits continuation, in exchange for executing a full and final release of "any and all claims I have or may have against The Salvation Army, past, present or future, known or unknown, which arise out of or which are in any way related to or connected with my employment or the ending of my employment." When an investigation was conducted following the employee's termination, it was determined that she (and a number of other workers) had been exposed to workplace harassment by a manager, who was then terminated. The employee commenced an action against the employer alleging negligence, intentional infliction of emotional harm and breach of fiduciary duty. The employer's argument that the claim was barred by the release signed by the plaintiff was rejected, the Court finding that "[w]hile many of the alleged events occurred at the place of employment and, perhaps, because of the employment, sexual harassment, intimidation and other improper conduct are not connected to employment. They are clearly separate matters." Therefore, these claims did not "arise out of" the employment, and were not precluded by the terms of the release. It remains to be seen whether this issue will be revisited in the courts. Until then, employers will want to be very broad in the wording of any releases they ask employees to sign.

Enforceability of Termination Clauses: Amberber v. IBM Canada

The courts in Ontario and elsewhere in Canada have been engaged in a robust and oftentimes confusing debate over the interpretive principles that apply when considering the enforceability of a termination provision in an employment contract. As many of you will know, the issue often turns on whether the contract language meets or exceeds the minimum requirements of the ESA. Any clause that does not do so, amounts to an attempt to contract out of the minimum legislative standards is void, meaning that the common law (i.e., reasonable notice) would apply. Unfortunately, the courts have muddied the issue up significantly over the last few years, with many provisions being found to be substandard.

In Amberber, the contract contained language entitling the employee to the greater of one month's salary or one week's salary per completed 6-month period up to a maximum of 12 months' salary. The contract also contained a provision that, if the employment standards legislation provided a greater benefit, he would receive his statutory entitlement instead. Surprisingly, the Superior Court of Justice agreed with the employee that the clause was ambiguous, could potentially generate a termination entitlement below the statutory floor, and that the "failsafe" provision could not remedy the shortfall. Accordingly, the employee was entitled to reasonable notice, rather than the contractual formula. The Court of Appeal overturned this ruling. Of particular interest to employers, Gray J. observed at para. 63:

In my view, there is no ambiguity. As stated by Laskin J.A. in Chilton v. CoOperators General Insurance Co. (1997), 32 O.R. 161 (C.A.), at p. 169, “[t]he court should not strain to create an ambiguity where none exists.” In my view, the motion judge strained to create an ambiguity where none exists. 

By reading the provisions of the contract piecemeal, rather than viewing them as a whole, the judge had made a fatal error in interpreting the contract. Accordingly, because the provision complied with the ESA and was applied appropriately by the employer, the employee was found to be owed nothing more.

The case is a small ray of sunshine for employers, who will now want to review their contractual language to ensure they have a solid argument that reasonable notice should not apply.

Cannabis Legalization and Workplace Rules

Following through on Justin Trudeau's campaign promises from a couple of years ago, cannabis legalization arrived on October 17, 2018. While this development has raised concerns for many employers (especially those with safety-sensitive workplaces), and for provincial governments who have scrambled to catch up (nudge, nudge... I'm looking at you, Ontario), it is too early to say just what impact it will likely have on the employment relationship. Still, by the fall, most employers were scrambling to have their alcohol and drug policies reviewed, to ensure that they were still compliant in the new pot-positive reality of 2018. A couple of observations are in order:

• Having a Policy is generally better than not having one, because it helps to establish reasonable expectations for employee behaviour and a backdrop for accountability if those expectations are not met.
• Recreational marijuana is simply another impairing substance that employers have to contend with. Alcohol has been around for a long time and the sky has not fallen (though we've all experienced low ceiling conditions on occasion). Tailoring provisions of your Policy to deal with recreational cannabis in the same manner as alcohol is likely prudent. One difficulty - testing. The science has lagged behind social policy, unfortunately, so employers may want to rely on objective observations of behaviour/appearance/smell and forebear from testing until better techniques are developed to establish actual impairment.
• Medical marijuana (or at least those products which contain THC and which are likely to cause impairment) should be treated like any other prescribed treatment which may hamper an employee's ability to perform his/her role in a safe and efficient manner. The Policy should require employees to disclose any potentially impairing prescribed medication before working so that the employer can assess risks and any potential modifications that may need to be implemented.
• Remember that legalization does NOT mean that an employer must tolerate the use or possession of cannabis products on its premises - property rights still permit the employer to make reasonable rules regarding activities at its sites.
• Ensure that the Policy addresses the duty to accommodate, whether it's substance abuse (which could include cannabis addiction) or inability to perform the essential duties of the job (due to the use of medical marijuana), as well as the key objective of ensuring workplace health and safety.

In 2019, we should start to get a better sense of how legalized cannabis is affecting the Canadian workplace. But having an effective Policy is a good starting point for responding to this development.

Death of the 24-month Cap on Reasonable Notice?: Dawe v. Equitable Life Insurance

At least one Ontario Court has suggested that the end of mandatory retirement, and the financial challenges faced by older Canadian workers, justifies a rethinking of the common law. In particular, the 24-month cap on reasonable notice has again come under scrutiny. In Dawe, a Senior Vice President was terminated without cause following a dust-up over the use of promotional sports tickets. He had been employed by the insurer for over 30 years, but was offered only the statutory minimum termination and severance pay. He sued, claiming entitlement to 30 months' pay in lieu of notice, as well as a sizeable bonus covering that same period. After making some less than flattering observations about the employer's motivation and conduct, the Court considered whether the plaintiff's entitlement to reasonable notice ought to be capped at 24 months (as was argued by the employer). The Court acknowledged that 24 months "has been identified as the maximum notice period in most cases", but went on to state (at para. 31):

Whether it is exceptional circumstances or recognizing a change in society’s attitude regarding retirement, the particular circumstances of the former employee must be considered. For many years, the usual retirement age was considered to be 65. Pension plans improved as a result of the labour movement, introducing, for example, an 80 factor for most employees in the public sector and many in large companies in the private sector. That lead to some individuals retiring between the age of 50 and 60. But many were not ready to fully retire. They sought out additional employment or simply continued to work in their existing position. Further, mandatory retirement was abolished in 2006 in Ontario to protect against age discrimination. Many employees have continued past 65. In result, it is important to recognize that each case is unique. Presumptive standards no longer apply. 

In the circumstances, the plaintiff was found to be entitled to 30 months' notice (the Court stated it would have likely given him 36 months' notice, if his lawyer had advanced that position), and further found that he was entitled to bonus for the entirety of this period. Given his compensation package (which was over $600,000 per year at time of termination), the award was very large indeed. The decision serves as a caution to employers that they may want to consider whether they continue to cap pay in lieu of notice, particularly for employees who have very long service (over 30 years) and hold senior positions.

Sexual Harassment Law Still a Work in Progress: Doe v. Attorney-General of Canada

In the era of #MeToo and constant media attention on inappropriate sexual conduct in the workplace, most employers seem to be waking up to the need to make the workplace a safe and healthy environment for all employees, not just men. However, there is apparently work still to be done, as the decision in the Doe case illustrates.

Ms. Doe was a Border Services Officer in B.C. She filed two grievances, alleging that the employer had failed to provide a harassment-free workplace. The issue started with crude and vulgar sexual comments made by a male co-worker (which had escalated to the point of being sexually explicit and violent on several occasions). However, subsequently, the same co-worker engaged in behaviour that constituted a sexual assault on the grievor. He was suspended and assigned to a different work location. The grievor applied for worker's compensation benefits, based on the co-worker's conduct, and was approved. The employer acknowledged that the grievor was sexually harassed and assaulted by her co-worker, but denied her grievances. Ultimately, they were referred to arbitration before the Public Service Labour Relations and Employment Board. One grievance was dismissed, and the other only partially upheld, with the grievor being found to not be entitled to any form of compensation. The grievor sought judicial review at the Federal Court of Appeal on the basis that the refusal to award damages was unreasonable.

The Court's review of the reasons of the PSLREB are startling and eye-opening. Some of those reasons were cited in the Court's decision:

• "By all accounts, the applicant was a confident employee who handled the work easily and had aspirations of joining the management team. She was well-liked by the other Border Services Officers and engaged in friendly banter with them, including the co-worker. Sometimes that banter had sexual content. …"
• "There were steps that a confident employee such as the applicant could have taken to deal with the harassment" (reasons, paragraph 143).
• It was “unlikely, to say the least” that the sexual assault, characterized by the Board to be a “vulgar prank”, “caused the extreme emotional impact described by the grievor” and her fiancé (reasons, paragraph 144).
• While the Board accepted that the applicant “was angry and that she felt demeaned”, on all of the evidence the Board could not make a finding that “this one unpleasant experience caused a sea change in the grievor’s personality and lifestyle from confident, cheerful, and outgoing to timid, anxious and fearful” (reasons, paragraph 146).
• The Board could not conclude that the applicant’s experience rendered her unfit to work at the Douglas port of entry for 5 ? years as of the date of the hearing (reasons, paragraph 147).
• The Board concluded that the applicant’s “reaction was extreme and that the pain and suffering that she feels she incurred as a result of the co-worker’s act is grossly exaggerated” (reasons, paragraph 148).
• The Board found that there was no case for damages arising from CBSA’s failure to exercise all due diligence to prevent the occurrence of harassment in the workplace (reasons, paragraph 152).

The Court observed that some of the Board's findings were at odds with the evidence that was presented (including "extensive medical evidence" of her psychological state and the employer's acknowledgment that the grievor had "suffered significant emotional trauma" as a result of the harassment), and inconsistent with the provisions of the Canadian Human Rights Act. Given the evidence and the language of the Act, compensation was warranted and the Board's refusal to award damages was unreasonable.

While the Court determined that it need not rule on whether the Board's decision gave rise to an apprehension of bias (as it had found the decision was unreasonable), it did feel compelled to make a couple of comments (at paras. 37 ff):

First, it is correct that the Board never referred to the culminating incident as a “sexual assault”, notwithstanding that in its reply to the final level grievance the CBSA acknowledged that the applicant had been “the victim of a sexual assault” [applicants record page 49].

There are typically a number of reasons why a judge or adjudicator may use certain language to describe offensive, unacceptable conduct. One reason may be an effort to be sensitive to the victim of such conduct. However, at the same time, it is necessary to take care not to inappropriately downplay or diminish the seriousness of unacceptable conduct. The sexual assault at issue in this case could not be reasonably characterized as a “prank”.

Second, a review of the Board’s reasons for not awarding compensation, read in the context of the medical evidence, shows that the Board failed to grapple with the evidence. The Board never explained, for example, why it preferred one expert’s evidence over another on the issue of the impact of the applicant’s divorce on her condition. Instead, again by way of example, the Board relied on its characterization of the applicant as a “confident employee” to find that there were steps a confident employee could have taken but the applicant did not take in order to conclude that the work environment created by the co-worker was to the applicant “not as difficult to cope with as [she] now describes it” (reasons, paragraph 143).

Similarly, instead of dealing with the expert evidence as to the effect the sexual assault had on the applicant, the Board simply concluded “it seems unlikely, to say the least, that it caused the extreme emotional impact described by” the applicant and her fiancé (reasons, paragraph 144).

The Supreme Court has cautioned that there is “no inviolable rule on how people who are the victims of trauma like a sexual assault will behave” (R v. D.D., 2000 SCC 43, [2000] 2 S.C.R. 275, at paragraph 65). It follows from this that any delay in the disclosure of an assault may not give rise to an adverse inference against the credibility of a complainant.

In my view, characterizing an employee as a “confident employee who handled the work easily and had aspirations of joining the management team” (reasons, paragraph 142) similarly does not permit an inference to be made that such an employee would react in a particular way to an escalating number of sexually explicit and violent comments made by a co-worker. One employee might complain immediately to management while another might “go along to get along”. It was an error for the Board to conclude that the applicant exaggerated how difficult it was to cope with her work environment on the basis that the Board characterized the applicant to be a “confident” employee.

Equally, because there is no one typical response by victims to a sexual assault, there was no basis for the Board to infer mainly from the applicant’s responses that the co-worker’s conduct could not have caused the harm described by the applicant. This is particularly troublesome when the Board’s own concept of logic or common sense was substituted for its assessment of the actual evidence before it. 

In the result, the Court remitted the matter back to another member of the Board for determination of the appropriate remedy.

The decision of the Board, and the Court's reaction to it, stands as a stark reminder of how far we have yet to go. When an adjudicator appointed to rule on someone's legal rights can exercise such dated, stereotypical and ungrounded views, it is no wonder that female claimants are unwilling to come forward. For any litigant, it should also serve as a reminder of the dangers of placing your fate in the hands of an appointed decision-maker, no matter how strong you think your case is or how important the principle.

For employers, the message is clear: it is not enough to acknowledge wrongdoing by staff or managers. Something meaningful and effective must be done when the employer learns of workplace harassment.

Are you an employer with questions about workplace laws? Contact [email protected] for expert guidance.

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Operating as Ceaser Work Counsel since early 2014, Lance Ceaser is a 15+ year management-side labour and employment lawyer operating from London, Ontario, where he resides with his lovely spouse, a dog and 2 cats. Lance has provided timely, cost-effective advice to organizations of all sizes in virtually every sector of industry and the public sector throughout his career.