Beyond COVID-19: 2022 Year in Review – Cases and Legislation of Note
Date: January 23, 2023
Employers and human resource professionals will undoubtedly remember 2022 as another year shaped by the pandemic.
But…there were also legal developments in 2022 that were not related to COVID-19. In this FTR Now, we look at some of the past year’s notable “non-pandemic” cases and legislative developments.
CASES OF NOTE
Termination of Employment: Reasonable Notice
- Currie v. Nylene Canada Inc.: The Ontario Court of Appeal upheld a reasonable notice period of 26 months, stating there was ample evidence before the trial judge to find exceptional circumstances warranting an award higher than 24 months. This evidence included the fact the employee had worked for the employer since dropping out of high school, she was 59 years old at the time of termination and in “the twilight stages of her career,” she worked in a highly specialized field, and her experience was limited to one employer in one environment. (See our Case in Point of March 14, 2022.)
- Kosteckyj v Paramount Resources Ltd: The Alberta Court of Appeal allowed an appeal, in part, of a decision of the Alberta Court of King’s Bench in which the Court found the defendant company had constructively dismissed a 47-year-old employee with 6.5 years of service. The Court of Appeal held that the trial judge erroneously applied the test for constructive dismissal and ultimately found that the employee accepted or acquiesced to the new terms of her employment, including a reduced salary. As a result, the Court of Appeal reconsidered the plaintiff’s damages award. It noted that the defendant had admitted to terminating the plaintiff’s employment without just cause. However, as a result of its findings, the Court of Appeal reconsidered the plaintiff’s damages award, calculating damages based upon the reduced salary in place at the time of the termination. The Court of Appeal reduced the amount of judgment from approximately $107,000 for constructive dismissal to approximately $97,000 for wrongful dismissal.
Termination of Employment: Mitigation
- Humphrey v. Mene Inc.: The Ontario Court of Appeal found that an employee failed to mitigate her damages when she unreasonably rejected a comparable job offer seven months after her employment was terminated. It stated that the motion judge “set the bar too high on the issue of mitigation” and that comparable employment does not mean identical employment. It means “a comparable position reasonably adapted to [the plaintiff’s] abilities…” The Court accordingly reduced the reasonable notice period from 11 months to six months. (See our Case in Point of July 19, 2022.)
- Lake v. La Presse: The Ontario Court of Appeal held that a motion judge erred when she accepted that, after a reasonable period of searching for similar employment, a dismissed employee must begin to search for a lesser paying job. The Court stated that the “obligation of a terminated employee in mitigation is to seek ‘comparable employment,’ which typically is employment that is comparable in status, hours and remuneration to the position held at the time of dismissal….”
Termination of Employment: Employment Contracts
- Rahman v. Cannon Design Architecture Inc.: The Ontario Court of Appeal overturned a motion judge decision which found that the provision in an employment agreement denying entitlements upon termination for just cause did not amount to an attempt to contract out of the Employment Standards Act, 2000 (ESA) because, among other things, the employer and employee had equal bargaining power in negotiating the contract. The Court stated that it has “repeatedly held that if a termination provision in an employment contract violates the ESA – such as a ‘no notice if just cause’ provision – all the termination provisions in the contract are invalid.” (See our Case in Point of June 9, 2022.)
- Henderson v. Slavkin et al.: The Ontario Superior Court of Justice found that a termination clause in an employment contract which limited entitlements upon termination to only the minimums required by the ESA was unenforceable due to the wording of the other provisions related to “confidential information” and “conflict of interest.” Each of those provisions stated that a failure to comply with the provision would constitute cause for termination without notice or compensation in lieu of notice. The Court held these provisions did not comply with the ESA standard for just cause and were therefore void. (See our Case in Point of August 24, 2022.)
- M & P Drug Mart Inc. v. Norton: The Ontario Court of Appeal upheld the decision of an application judge which found that a non-competition clause in an employment agreement was ambiguous and overly broad, and therefore unenforceable. It was of no consequence that the employee, a pharmacist, agreed to it. The application judge did not err when he held the restrictive covenant did not only restrict the employee working as a pharmacist for a specific time after leaving the employer’s business, it went further. The Court stated that “the question is one of legal consequences rather than business ethics.” (See our Case in Point of May 19, 2022.)
Wage Restraint Legislation
- Manitoba Federation of Labour et al v The Government of Manitoba: The Supreme Court of Canada dismissed an application for leave to appeal this decision of the Manitoba Court of Appeal. The Court of Appeal had upheld the constitutionality of the province’s public sector wage restraint legislation based on case law which held that broad-based, time-limited wage restraint legislation does not substantially interfere with the collective bargaining process. The challenged legislation, The Public Services Sustainability Act, was never brought into force and was repealed on June 2, 2022. (See our Case in Point of October 27, 2022.)
- Ontario English Catholic Teachers Assoc. v. His Majesty: The Ontario Superior Court of Justice declared that Bill 124, Protecting a Sustainable Public Sector for Future Generations Act, 2019, was unconstitutional and therefore “void and of no effect.” Bill 124 was proclaimed into force in 2019 and provided a three-year window of salary moderation and compensation restraint measures for non-union and unionized employees employed by the Ontario government, Crown agencies, the broader public sector and a range of organizations that receive provincial funding. The Court held that Bill 124 substantially interfered with the right to collective bargaining, violated section 2(d) of the Canadian Charter of Rights and Freedoms (Charter) and was not justified under section 1 of the Charter. At the request of the parties, the Court deferred the question of remedy to a future proceeding. (See our FTR Now of November 30, 2022.)
- Turkiewicz (Tomasz Turkiewicz Custom Masonry Homes) v. Bricklayers, Masons Independent Union of Canada, Local 1 and Enercare Home & Commercial Services Limited Partnership v. UNIFOR Local 975: In these two decisions, the Ontario Court of Appeal considered the Divisional Court’s application of the reasonableness standard in judicially reviewing decisions of the Ontario Labour Relations Board (OLRB) made pursuant to the related employer provision (s. 1(4)) of the Labour Relations Act. The Court held that the Divisional Court failed to demonstrate the appropriate deference for the specialized expertise of the OLRB. The related employer findings of the OLRB were therefore restored. (See our Case in Point of November 25, 2022.)
- Weilgosh v. London District Catholic School Board: The Human Rights Tribunal of Ontario (HRTO) determined that it has concurrent jurisdiction to decide claims of discrimination and harassment falling within the scope of a collective agreement. The decision addressed a significant legal question arising from the decision of the Supreme Court of Canada in Northern Regional Health Authority v. Horrocks. The HRTO concluded that the broad discretion provided to it by the Human Rights Code indicates a legislative intent for it to maintain concurrent jurisdiction, thereby displacing labour arbitration as the sole forum for human rights disputes falling within the scope of a collective agreement. (See our FTR Now of October 6, 2022.)
- Incognito v. Skyservice Business Aviation Inc.: The Ontario Superior Court struck a claim brought by the plaintiff which asserted the defendant was vicariously liable for the actions of another employee who she alleged sexually harassed and assaulted her. The Court stated that there is no independent tort of sexual harassment in Ontario, concluding that the “Court of Appeal’s comments in Merrifield about the possible recognition of a tort of harassment in the future do not modify or overrule the principles set out by the Supreme Court of Canada in Bhadauria [which held that the Human Rights Code ‘forecloses any civil action based directly upon a breach thereof”].” The claim of vicarious liability for sexual harassment against the corporate defendant was struck without leave to amend.
- Ontario (Health) v. Association of Ontario Midwives: The Ontario Court of Appeal upheld an HRTO decision that found the Ministry of Health and Long-Term Care engaged in gender discrimination in setting compensation practices for midwives. Among other things, the Court held that the HRTO properly applied the test for prima facie discrimination, that it was reasonable to use community health clinic physicians as the appropriate comparator group, and that the remedy was consistent with the evidence led before the HRTO. (See our Case in Point of June 22, 2022.)
Adverse Effect Discrimination
- N.B v. Ottawa-Carleton District School Board: The HRTO held that a grade-one student did not experience adverse effect discrimination on the basis of sex or gender identity when her teacher made the statement, “There is no such thing as boys and girls.” Among other things, the HRTO concluded that the student was not singled out or differentiated as an individual, nor did the comments undermine her status as a cisgender girl. (See our School Board Update of September 28, 2022.)
- A.B. v. C.D.: The HRTO awarded $25,000 in damages, as well as lost wages, to an applicant who had been the subject to discrimination on the basis of sex. The individual respondent and employees of the organizational respondent were ordered to undertake human rights training, and the respondents were ordered to retain an expert to develop and implement human rights policies for the workplace.
- The Labourers’ International Union of North America, Local 183 v Clark Construction Management Inc.: Arbitrator Horan ordered an employer to pay human rights damages of $80,000, as well as lost wages and lost pension contributions as a result of mistreatment and anti-Black discrimination experienced by the grievor from his co-workers and supervisors. The employer was also ordered to implement systemic remedies such as human rights training in the workplace.
Pension, Benefits and Executive Compensation
- Rayonier v Unifor, Locals 256 and 89: Arbitrator Knopf upheld a grievance challenging the reduction of life insurance coverage for employees who die after having reached age 65, finding that the relevant provision of the insurance policy had not been incorporated into the collective agreement. In the same decision, the Arbitrator dismissed two policy grievances challenging the termination of long-term disability insurance at age 65, finding that the carve outs for age-based distinctions in provincial employment and human rights legislation are reasonable limits on employees’ rights to equal treatment under the Charter. (See our FTR Now of September 20, 2022.)
- Carvalho v. Amorim: The Ontario Court of Appeal upheld a decision of an application judge in which the judge found that the parties (Mr. Carvalho and Ms. Amorim) had been living separate and apart when Mr. Carvalho applied for a disability pension and, therefore, Ms. Amorim did not meet the eligibility requirements of a “spouse” under section 44 of the Pension Benefits Act. The Court found that the judge had applied the correct legal test and had considered the list of indicia outlined in Greaves v. Greaves to determine whether the parties were living separate and apart. Notably, the judge found that the parties had been physically separated (Mr. Carvalho lived in Canada and Ms. Amorim lived in Portugal), that they did not participate in each other’s lives in any meaningful way, and that there was no evidence of any sustained or significant interaction between the parties at the time Mr. Carvalho began receiving his pension. The Court found no reviewable errors in the judge’s finding of fact, noting that these findings were supported by the record and entitled to deference.
- Coca Cola Ltd. v. Ontario (CEO of FSRA): The Ontario Financial Services Tribunal determined that a one-time cash transition payment as well as a one-time lump sum car loss payment an employee received from the applicant employer should not be included as pensionable earnings. Under the plan text, a payment to an employee qualifies as earnings if the payment was “remuneration,” which is not defined in the plan. However, the Tribunal noted that courts have consistently held that remuneration means payment for services rendered or a quid pro quo payment. On the issue of the transition payment, the Tribunal held that it could not be seen as payment received for past or future services; rather, it was intended to stand in the place of the DB benefits the employee would have otherwise received in the future (had the plan not been frozen), and to mitigate the risks of constructive dismissal. Similarly, the Tribunal concluded that the car payment was not paid in consideration for work done or to be done by the employee. It was a one-time payment to mitigate the loss of a benefit (the car allowance), and could not be properly characterized as pensionable earnings without express inclusion as such in the pension plan. The Tribunal highlighted that the fact a payment may be included in an employee’s income for tax purposes in the year of receipt is not necessarily determinative of whether or not that amount should be included in pensionable earnings.
- Owsianik v. Equifax Canada Co.: The Ontario Court of Appeal held that a claim for the tort of intrusion upon seclusion does not apply to companies who store personal information for commercial use when those databases are hacked by third parties. The Court’s reasoning was applied to two other cases—Obodo v. Trans Union of Canada, Inc. and Winder v. Marriott International, Inc.—all rendered concurrently. (See our Common Ground? Class Action Updates of December 8, 2022.)
- Johnson v. Ontario: The Ontario Court of Appeal articulated a new test that governs a court’s discretion on whether to provide class members with an extension to opt out of class proceedings under the Class Proceedings Act, 1992 (CPA). The test “requires the class member to show that their neglect in complying with the court-imposed deadline is excusable and that an extension will not result in prejudice to the class, the defendant, or the administration of justice.” (See our Common Ground? Class Action Updates of October 26, 2022.)
- Montaque v. Handa Travel Student Trip Ltd.: The Ontario Superior Court approved a settlement in the first volunteer misclassification class action in Canada. The class action had been certified against four related companies that operate a travel business selling vacation tours to students. The class was comprised of individuals who were trip leaders on guided tours for students. The representative plaintiff claimed the class members were misclassified as volunteers when they should have been classified as employees and therefore receive the protections and benefits of the ESA. A settlement between the parties was reached which was approved by the Court on the basis that the judge found it fell within the “zone of reasonableness” required by the CPA. (See our Common Ground? Class Action Updates of August 23, 2022.)
CASES TO WATCH FOR IN 2023
- Rahman v. Cannon Design Architecture Inc. (see summary above): On September 8, 2022, the employer filed an application for leave to appeal to the Supreme Court of Canada.
- Ontario English Catholic Teachers Assoc. v. His Majesty (see summary above): The government of Ontario has filed a notice to appeal this decision.
- Neufeld v. Hansman: On October 11, 2022, the Supreme Court of Canada heard an appeal from this decision of the British Columbia Court of Appeal. The Supreme Court will consider British Columbia’s “Anti-SLAPP” legislation, which allows for the possibility of early dismissal of Strategic Lawsuits Against Public Participation (SLAPPs). In this case, a school trustee had posted negative comments about materials to be used in schools to promote inclusive environments, among other things, regarding sexual orientation and gender identity. The head of the British Columbia Teachers’ Federation spoke publicly on those comments and the trustee brought an action against him for defamation. The application judge dismissed the action as being Anti-SLAPP; the Court of Appeal reversed that decision.
- Ontario (Labour) v. Sudbury (City): On October 12, 2022, the Supreme Court of Canada heard an appeal from this decision of the Ontario Court of Appeal. The Court of Appeal held that an “owner” of a construction project can also be considered an “employer” under the Occupational Health and Safety Act, even where it does not employ or exercise control over workers performing the construction work on the project.
Set out below are some key “non-pandemic” legislative developments from 2022.
Employment Standards Act, 2000
- Electronic Monitoring Policies: Bill 88, Working for Workers Act, 2022, amended the ESA to require employers with 25 or more employees on January 1 of each year to have a written policy in place regarding electronic monitoring of employees by March 1 of that same year.
- Right to Disconnect Policies: Bill 27, Working for Workers Act, 2021, amended the ESA to require certain employers to have a written policy on disconnecting from work in place by June 2, 2022. Beginning in 2023, employers who meet the 25 or more employee threshold on January 1 of each year must have a policy in place before March 1 of that same year.
- Minimum Wage: Effective October 1, 2022, the general minimum wage in Ontario increased from $15.00 to $15.50 per hour. Varying minimum wage rates also increased on the same date for students under age 18, homeworkers, and hunting, fishing and wilderness guides.
Health and Safety
- Increased Penalties under the Occupational Health and Safety Act (OHSA): Bill 88 amended the OHSA to increase the fines for a contravention of the OHSA by a person to a maximum of $500,000 (from $100,000). A new penalty has been created for directors or officers of a corporation who do not take reasonable care to ensure that the corporation complies with the OHSA and related orders. On conviction, they are liable to a fine of not more than $1,500,000 or to imprisonment for a term of not more than 12 months, or both. Aggravating factors must be taken into account in determining the appropriate penalty.
- Naloxone Kits in the Workplace: Bill 88 amended the OHSA to require employers who become aware or ought reasonably to be aware that there may be a risk of a worker having an opioid overdose in the workplace to provide a naloxone kit in the workplace and put the kit in the charge of a worker who has been trained on recognizing an opioid overdose and how to administer naloxone. This provision comes into force on June 1, 2023.
- Rights for Digital Workers: Bill 88 enacts a new statute, the Digital Platform Workers’ Rights Act, 2022, which establishes a number of rights for digital workers, such as the right to minimum wage, the right to resolve digital platform work-related disputes and the right to be free from reprisal, among other things. While digital workers who are engaged as employees fall within the protections of the ESA, the new Act will apply to any person engaged as a digital worker, including those engaged as contractors. This Act will come into force upon proclamation.
- Post-Secondary Requirements to Address Sexual Misconduct: Bill 26, Strengthening Post-secondary Institutions and Students Act, 2022,comes into force on July 1, 2023. Bill 26 amends the Ministry of Training, Colleges and Universities Act and the Private Career Colleges Act, 2005 to provide measures for post-secondary institutions to address faculty and staff sexual misconduct towards students. (See our FTR Now articles of October 28, 2022 and December 12, 2022.)
- Sexual Violence Policies for Universities and Colleges: O. Reg. 646/21 amending O. Reg. 131/16 (Sexual Violence at Colleges and Universities) made under the Ministry of Training, Colleges and Universities Act came into force on March 1, 2022. It requires universities and colleges to ensure that their sexual violence policies preclude discipline against a student who is found to have violated the institution’s drug and alcohol policies when such a violation is disclosed in the course of good faith efforts to report sexual violence, among other things. (See our Human Resources Legislative Update of February 15, 2022.)
Pension and Benefits
- Requirement to File Pension Funding and Governance Policies: On December 8, 2022, Bill 36, Progress on the Plan to Build Act (Budget Measures), 2022, received Royal Assent. Among other changes, Bill 36 includes amendments to the Pension Benefits Act. These amendments include a requirement that the documents that create and support a pension plan set out the pension plan’s funding and governance policies. At first, this requirement will apply only to pension plans that provide target benefits, but it will eventually be extended to all pension plans. This will come into force on a day to be proclaimed. (See our Human Resources Legislative Update of November 18, 2022.)
- Protections for Pension Plan Whistle-blowers: On December 9, 2021, Bill 43, Build Ontario Act (Budget Measures), 2021, received Royal Assent. Among other things, Bill 43 amends the Financial Services Regulatory Authority of Ontario Act, 2016 (FSRA Act) to include protections for whistle-blowers in the pension sector and other sectors regulated by the Financial Services Regulatory Authority of Ontario. In addition to various confidentiality protections, the amendments prohibit reprisals against whistle-blowers. Those who contravene the prohibition against reprisals are guilty under the FSRA Act of an offence and, if convicted, penalties include significant monetary fines. These amendments were proclaimed in force on April 29, 2022. (See our FTR Now of November 11, 2021.)
- Easing Regulatory Burdens for Administrators of DC Pension Plans: O. Reg. 66/22 amending R.R.O. 1990, Reg. 909 under the Pension Benefits Act came into force on February 11, 2022. It eliminates certain prescribed requirements for administrators of defined contribution (DC) pension plans: (1) removes the requirement for administrators of member-directed DC pension plans to establish and maintain a Statement of Investment Policies and Procedures (SIPP), and (2) removes the requirement for administrators of DC pension plans with assets in excess of $10,000,000 to file an audited financial statement. The CEO of the Financial Services Regulatory Authority has the authority to require an administrator of a DC pension plan to prepare and file an audited annual financial statement if the CEO is of the opinion that there are reasonable and probable grounds to believe that there is a substantial risk to the security of plan benefits or that there has been a significant change in the circumstances of the plan. DC pension plan administrators must continue to file unaudited annual financial statements. (See our FTR Now of October 18, 2021.)
- Paid Medical Leave: The Canada Labour Code has been amended with respect to paid medical leave. Employees with 30 days of continuous employment will be entitled to three days of paid medical leave of absence. Following that period, they may accrue one day of paid medical leave per month of continuous employment. The maximum paid medical leave an employee may earn is 10 days per calendar year. Supporting regulations were published on November 7, 2022. These changes came into effect on December 1, 2022. (See our Federal Post articles of May 5, 2022, October 11, 2022 and November 9, 2022.)
- Wage Fixing/No-Poach Agreements: Bill C-19, Budget Implementation Act, 2022, No. 1, amends the Competition Act to make it an offence for employers to agree to fix, maintain, decrease or control wages or other terms of employment (“wage-fixing agreements”) and to refrain from hiring or trying to hire one another’s employees (“no-poach agreements”). This provision comes into effect on June 23, 2023. (See our Human Resources Legislative Update articles of October 25, 2022 and January 19, 2023.)
- Extension of Employment Insurance Sickness Benefits: The amendments contained in Bill C-30, Budget Implementation Act, 2021, No. 1, which permanently extend the maximum number of weeks available under employment insurance (EI) sickness benefits, have been proclaimed into force effective December 18, 2022. Under these changes, the maximum number of EI sickness benefits that can be paid to eligible insured and self-employed workers who are unable to work because of illness, injury, or quarantine and who establish a new claim on or after December 18, 2022 will be increased from 15 to 26 weeks. (See our FTR Now of December 6, 2022.)
- Pension Priority in Insolvency Proceedings: Bill C-228, Pension Protection Act, a private members’ bill, proposes to amend the Bankruptcy and Insolvency Act and the Companies’ Creditors Arrangement Act to require that claims in respect of unfunded liabilities or solvency deficiencies of pension plans and claims relating to the cessation of an employer’s participation in group insurance plans are paid in priority to other creditors in the event of bankruptcy proceedings. It also amends the Pension Benefits Standards Act, 1985 to provide for the tabling of an annual report respecting the solvency of pension plans. On November 23, 2022, Bill C-228 passed third reading in the House of Commons, and, at the time of writing, has completed second reading in the Senate.
- Modernizing Canada’s Privacy Laws: On June 16, 2022, the federal government introduced Bill C-27, Digital Charter Implementation Act, 2022. If passed, Bill C-27 would repeal Part 1 of the Personal Information Protection and Electronic Documents Act (PIPEDA) and replace it with the new Consumer Privacy Protection Act (CPPA). It would enact the Personal Information and Data Protection Tribunal Act (PIDPTA) which creates a new administrative tribunal to hear appeals of decisions made by the Privacy Commissioner (Commissioner) under the CPPA. (See our FTR Now of June 21, 2022.)
For more information on any of these developments, please contact your regular Hicks Morley lawyer.
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. ©