Beyond COVID-19: 2020 Year in Review – Cases and Legislation of Note
Date: December 21, 2020
Employers and human resource professionals will undoubtedly remember 2020 as the “year of the pandemic.”
But … there were also legal developments in 2020 that were not related to COVID-19. In this FTR Now, we look at some of the year’s notable “non-pandemic” cases and legislative developments of interest. We also identify some decisions and pending legislation to watch for in 2021.
Cases of Note
- The Supreme Court of Canada held that pension plan provisions that did not allow employees who participated in a job-sharing program to “buy back” pension credits were discriminatory on the basis of sex, contrary to s. 15(1) of the Charter of Rights and Freedoms. The majority of the employees using the job-sharing program were women with young children trying to maintain their position in the workplace. (Fraser v. Canada (Attorney General))
- The Ontario Divisional Court upheld two decisions of the Human Rights Tribunal of Ontario (HRTO) pertaining to sex discrimination and pay equity. It found that employers have an obligation to take proactive steps to ensure that sex-segregated workers are compensated in a way that is free from sex discrimination. Failure to do so may result in considerable monetary remedies being awarded against an employer. (Ontario v. Association of Ontario Midwives)
- The HRTO found, among other things, that an applicant had been sexually harassed over a prolonged period by her supervisor. It ordered the supervisor to pay the applicant $170,000 in damages, one of its largest awards to date. (NK v. Botuik)
- An arbitrator held that a school board’s refusal to transfer the grievor, a teacher, to a school located closer to her home to ease her commute did not amount to prima facie discrimination since the request involved the grievor’s “preferences” rather than her medical “needs.” The grievor made the transfer request as she suffered from chronic pain and fatigue. Even if prima facie discrimination had been established, the arbitrator would have found no failure to accommodate. (Ontario Secondary School Teachers’ Federation and Toronto District School Board, Grievance # 13-50 (Accommodation))
- A majority of the Court of Appeal of Newfoundland and Labrador found that a decision of an arbitrator relating to use of medical cannabis and accommodation was unreasonable. The grievor had not been hired into a safety-sensitive position because of his use of medical cannabis and the arbitrator found the grievor could not be accommodated without undue hardship. That decision was upheld on judicial review. The majority of the Court remitted the matter back to the arbitrator for reconsideration, finding that the arbitrator had completed only part of the accommodation and undue hardship analysis and had failed in the analysis to consider alternatives to scientific testing. (International Brotherhood of Electrical Workers, Local 1620 v Lower Churchill Transmission Construction Employers’ Association Inc.)
Termination of Employment
Employment Contracts and Termination Clauses
The Ontario Court of Appeal held that “without cause” and “with cause” termination clauses in an employment contract must be read together: if one clause is not compliant with the Employment Standards Act, 2000 (ESA), both clauses are unenforceable. The decision also confirmed the distinction between “cause” under the ESA and “cause” under the common law – unless an employee has committed wilful misconduct, disobedience or wilful neglect of duty that is not trivial and has not been condoned within the meaning of the ESA, an employer must provide an employee with their minimum entitlements under the ESAupon termination. (Waksdale v. Swegon North America Inc.)
- The Supreme Court of Canada confirmed that where terminated employees would be entitled to a bonus or other incentive payments during the reasonable notice period but for the termination of employment, employers must use clear and unambiguous language to remove or limit their common law rights to damages in respect of such compensation entitlements. The Court also distinguished between the obligation to provide reasonable notice of termination (i.e. wrongful dismissal damages) and damages for the breach of the duty of good faith in the manner of dismissal. Allegations of bad faith or a breach of the duty of good faith should not operate to “bump-up” a reasonable notice period – they are separate and distinct. (Matthews v. Ocean Nutrition Canada Ltd.)
- The Ontario Superior Court considered whether an employee whose employment has been terminated without cause is entitled to damages in respect of awarded but unvested stock options that are scheduled to vest during the reasonable notice period. It held that the employee in this case was entitled to damages for the unvested stock options, even though the stock award agreement’s termination provisions unambiguously displaced an employee’s right to unvested stock awards beyond the period of active employment. The Court’s decision turned on the fact that the employer had failed to give the employee sufficient notice of the “harsh and oppressive” termination provisions in the stock award agreement. (Battiston v. Microsoft Canada Inc.)
- A majority of the Supreme Court of Canada held that Uber’s arbitration agreement with its drivers was unconscionable and invalid. The respondent, an Uber driver, had asserted that he was an employee despite having signed an independent contractor agreement, and sought to certify a class action against Uber for violations of the ESA and related damages. Uber challenged that position up to the Supreme Court. As a result of this decision, the respondent can now proceed to apply for certification of his action as a class action. (Uber Technologies Inc. v. Heller)
- The Ontario Labour Relations Board opined for the first time on the character of an employment relationship in the “gig economy.” The Board held that Foodora couriers more closely resemble employees than independent contractors. Because they are properly characterized as dependent contractors for the purposes of the Labour Relations Act, 1995, the couriers may unionize. (Canadian Union of Postal Workers v Foodora Inc. d.b.a. Foodora)
- The Supreme Court of Canada released companion decisions interpreting Ontario’s “anti-SLAPP” (Strategic Lawsuits Against Public Participation) provisions under the Courts of Justice Act. Those provisions are aimed at discouraging lawsuits that have the harmful effect of chilling individuals and organizations from speaking out on matters of public interest. The Court stated that decision-makers applying the anti-SLAPP regime will be required to balance the public interest in allowing meritorious lawsuits to proceed and the public interest in protecting expression on matters of public interest. The Court also clarified that while anti-SLAPP suits will most frequently apply to defamation cases, they can be used in any proceeding that invokes the public interest – even breach of contract claims. (Bent v. Platnick, 1704604 Ontario Ltd. v. Pointes Protection Association)
- The Supreme Court of Canada provided significant elaboration on the duty of good faith performance of contracts, which has evolved since the duty was articulated by the Court in Bhasin v. Hrynew. It held that the duty of honest performance in contract, which is part of the overarching duty of good faith and which applies to all contracts, requires that the contracting parties must not lie or otherwise knowingly deceive each other about matters directly linked to the performance of the contract. The Court noted that the duty of honest performance does not equate to a positive obligation of disclosure, but may (as in this case) include a duty to correct a false impression which the party itself created. This is an important decision for employers to bear in mind because they are often faced with arguments and claims based on the duty of good faith in employment-related litigation. (C.M. Callow Inc. v. Zollinger)
Cases To Watch For In 2021
Waksdale v. Swegon North America Inc (see summary above): On September 16, 2020, the employer applied for leave to appeal this decision to the Supreme Court of Canada. On December 7, 2020, the materials on the leave application were submitted to the Court for a decision on whether leave will be granted. That decision is pending.
Battiston v. Microsoft Canada Inc (see summary above): On August 18, 2020, the employer filed a Notice of Appeal of this decision with the Ontario Court of Appeal. A decision from that Court has not yet been rendered.
Northern Regional Health Authority v Manitoba Human Rights Commission et al. On February 16, 2021, the Supreme Court of Canada is scheduled to hear an appeal from a decision of the Manitoba Court of Appeal. It will consider whether a human rights tribunal has jurisdiction to hear a discrimination complaint brought by a unionized employee, or whether the ability to hear such a complaint lies solely with an arbitrator appointed under the terms of a collective agreement.
Set out below are some key “non-pandemic” legislative developments from 2020. We have included new leaves of absence that originated in response to COVID-19, but which may apply more broadly in the future.
Employment Standards Act, 2000 (ESA)
Bill 186, Employment Standards Amendment Act (Infectious Disease Emergencies), 2020 amended the ESA to add “Emergency Leave: Declared Emergencies and Infectious Disease Emergencies.” In addition to the existing declared emergency leave, there is now an unpaid leave for employees impacted by infectious disease emergencies. The “infectious disease” must be designated by regulation. Employees are entitled to the leave if they are unable to work for one of the enumerated reasons, including but not limited to having to quarantine or to provide care for children and other specified individuals as result of the infectious disease. The new leave provisions came into force on March 19, 2020.
- Class Proceedings Act, 1992 (CPA): The CPA was one of several statutes amended by Bill 161, Smarter and Stronger Justice Act, 2020. Effective October 1, 2020, the CPA now requires a stricter certification test and contains provisions to facilitate early resolution of some proceedings and to facilitate dismissal for delay, among other things.
- Rules of Civil Procedure: Amendments to the Rules of Civil Procedure (Rules) will come into effect on January 1, 2021. The changes modernize the existing Rules by amending numerous provisions relating to, among other changes, hearings by videoconference, electronic certified copies, electronic signatures and electronic issuing of decisions and documents.
Canada Labour Code (CLC)
- Quarantine Leave: Among other things, Bill C-13,COVID-19 Emergency Response Act, added entitlement to an unpaid medical leave of absence of up to 16 weeks as a result of quarantine. This change came into effect on October 1, 2020.
- Workplace harassment and violence: Effective January 1, 2021, the CLC’s new workplace harassment and prevention regime will come into force. The legislative changes are supported by the Work Place Harassment and Violence Prevention Regulations and an Interpretations, Policy and Guidelines document titled, “Work Place Harassment and Violence Prevention”.
- Administrative Monetary Penalties: Effective January 1, 2021, the new Part IV of the CLC, “Administrative Monetary Penalties,” will come into force. Among other things, Part IV establishes a penalty system to promote compliance with Parts II and III of the CLC. Penalties for non-compliance, to be set by regulation, can be up to $250,000.
- New Federal Holiday: On September 29, 2020 the federal government tabled Bill C-5, An Act to amend the Bills of Exchange Act, the Interpretation Act and the Canada Labour Code (National Day for Truth and Reconciliation). If passed, the Bill would create a new federal holiday entitled the “National Day for Truth and Reconciliation.” Among other things, it would amend the definition of “General Holiday” in the CLC to include the new holiday, which is to be observed on September 30 of each year.
Employment Equity Act (EEA)
Effective January 1, 2021, new pay transparency requirements under the federal EEA will come into force, together with supporting regulatory amendments. The changes will affect federally regulated private sector employers which employ 100 or more employees. Among other things, affected employers will now be required to report on new prescribed salary data for their employees.
Bill C-11 Digital Charter Implementation Act, 2020
Bill C-11, if passed, will repeal Part 1 of the Personal Information and Electronic Documents Act (PIPEDA) and replace it with the Consumer Privacy Protection Act (CPPA). Highlights of the proposed CPPA include, but are not limited to, permitting individuals to request the deletion of their personal data (subject to certain exceptions), updates to the existing consent framework found in PIPEDA and a requirement that organizations subject to the CPPA implement a privacy management program.
Federal Legislation to Watch for in 2021:
It is anticipated that the following legislative changes, which have already passed, will come into force in 2021:
The article in this client update provides general information and should not be relied on as legal advice or opinion. This publication is copyrighted by Hicks Morley Hamilton Stewart Storie LLP and may not be photocopied or reproduced in any form, in whole or in part, without the express permission of Hicks Morley Hamilton Stewart Storie LLP. ©