Wrapping Up 2025: Updates for Social Services Employers

Dear Friends,

With the holidays just around the corner, it is a good time to review some developments that may be important for your social services organization and your employees.

First, Mornelle Lee provides guidance regarding the issues that employers will need to consider as the use of artificial intelligence in human resources increases in the workplace.

Next, Madeline Lusk provides a summary of a recent arbitration award that addresses a situation where an employer implemented a Last Chance Agreement was upheld at arbitration after an employee failed to comply with its requirements regarding medical notes. The decision is also a positive development as it found that the misconduct did rise to the level of wilful misconduct which disentitled the employee to any payments under the Employment Standards Act, 2000 (ESA).

Finally, we have a short overview of recent changes to the ESA and workplace health and safety legislation.

We hope that you find this issue of Reaching Out informative and helpful in your daily operations. If you have any ideas for future editions, please do not hesitate to contact me at michael-smyth@hicksmorley.com. It is our goal to make this publication responsive to the needs of employers in the social services sector, and your input is welcomed.

Michael S. Smyth
Editor

AI in Human Resources: Protecting Rights in a Digital Age

By: Mornelle Lee

Artificial intelligence (“AI”) is reshaping workforces at an incredible rate across industries, including the social services sector. While this promise of efficiency is compelling, the rise of AI also brings profound ethical and human rights implications to employers such as concerns about bias, privacy and even accountability in decision-making. This article identifies issues that should be at the forefront for those using AI in their human resources practices and provides tips on how to harness AI responsibly while protecting the rights of their workforces.

Implications and Concerns for Employers

1. Bias

One of the most pressing concerns arising out of AI use in the workforce is bias. AI bias occurs when an algorithm produces results that are systematically prejudiced due to flawed assumptions in the tool’s learning process. For example, when algorithms learn from past hiring decisions, they can inadvertently replicate patterns of discrimination based on race, gender, disability, or on other grounds such as socioeconomic status by disproportionately favouring certain groups. Left unchecked, the usage of AI risks amplifying historical inequities and embedding them deeper into future hiring decisions.

2. Privacy and Data Sensitivity

The use of AI often involves collecting and analyzing vast amounts of data, some of which may be highly personal or confidential. This data could be used to track employees’ behaviour, monitor productivity, and predict future performance, which could create concerns if informed consent is not obtained. Without strong safeguards in place, such practices risk eroding trust and organizational credibility.

3. Accountability and Transparency

AI systems frequently operate as “black boxes” generating probabilistic outputs without clear explanations. This lack of transparency makes it difficult to hold anyone accountable for decisions or to identify and correct bias. Employers are expected to find difficulty in relying on decisions made solely by AI if they do not have an understanding of how those decisions are made and how they can be improved or challenged.

Adapting through Training, Oversight and Transparency

Given the foregoing concerns, employers should ensure that AI tools are used responsibly by their human resources groups and employees, and can consider the following tips to harness AI responsibly in their workforces.

Training: Employers are encouraged to invest in ongoing training programs for staff, particularly if the organization is providing access to and encouraging the use of AI tools amongst its employees. Training should go beyond technical instructions on how to use AI tools and aim to equip employees with the ability to critically evaluate AI outputs, recognize potential biases, and understand the ethical and human rights implications of automated and generative decision making.

Oversight: Employers are also encouraged to put oversight mechanisms in place, which could include developing ethics committees or review boards or conducting impact assessments to evaluate how AI tools are affecting their workforces. Employers can consider the Human Rights AI Impact Assessment (HRIA), published by the Law Commission of Ontario and Ontario Human Rights Commission in November 2024. The HRIA was designed as a tool to provide organizations with a method to assess AI systems for compliance and human rights obligations and serves as a good starting point for employers wanting to ensure responsible application of AI in their workforce.

Transparency: As of now, Ontario employers face limited legal requirement to disclose AI use, apart from the upcoming change to the ESA, which will require employers with more than 25 employees to disclose AI usage in publicly advertised job postings, effective January 1, 2026. While this is a step forward, broader reforms are likely on the horizon, and in the interim, employers are encouraged to offer proactive transparency (to the extent possible) about when and how AI is being used, and to provide avenues for employees to voice their concerns about the usage of AI in their workplace.

Conclusion

AI is no longer a distant concept. To the contrary, it is quickly re-shaping how organizations recruit, manage and support their workforces. Employers that treat AI adoption as a purely technical upgrade risk overlooking its profound impact on fairness, dignity and trust in the workplace. At the same time, those that show proactive commitment to investing in training, oversight, transparency and accountability are expected to become more inclusive, efficient and resilient as they incorporate AI into their human resources practices.

If you have any questions about the growing usage of AI and how it might impact your workplace, please contact your Hicks Morley lawyer.

When Last Chance Truly Means Last Chance: Arbitrator Upholds Termination Over Unauthorized Absence

By: Madeline Lusk

In United Food and Commercial Workers Union, Local 175 & 633 v Cargill Limited (Dunlop), Arbitrator John Martelli upheld the termination of an employee who breached a Last Chance Agreement (LCA) by failing to provide timely medical documentation. The arbitrator found the employee’s conduct constituted both an unauthorized absence under the LCA and wilful misconduct under the ESA.

Background

The Grievor, a butcher in Cargill’s Fabrication Department, found himself subject to a 24-month LCA in April 2022 following an extended unauthorized absence, after he had failed to return from an approved vacation on the originally scheduled date, remaining out of country for over three months due to an expired permanent residency card. Investigation further revealed he had deliberately booked a return flight for four days after the originally scheduled return-to-work date, which the employer characterized as material dishonesty.

Rather than termination, Cargill offered the Grievor a second chance through an LCA which stipulated “zero tolerance for any violation of the attendance management program” during the subsequent 24 months. The LCA specified that “any unauthorized absences will warrant termination” and explicitly removed the arbitrator’s jurisdiction to substitute a lesser penalty if breached.

Pattern of Non-Compliance

Following the LCA’s execution, the Grievor had further undocumented absences. On April 10, 2023, he was absent for two days without initially providing medical documentation and was given an Attendance Coaching Notice. He was specifically warned that he must provide documentation for any future sick leave absences.

Two months later the Grievor was again absent without providing documentation, this time after exhausting his ESA sick days. Following that unexcused absence, he was issued another Attendance Coaching Notice, and he was warned he “absolutely has no more chances” and must bring a medical note for any sick time. The Grievor promised “it would not happen again.”

The Final Absence and Termination

Less than a month later, on July 17, 2023, the Grievor failed to report for work. Upon returning the next day, he submitted an absence form stating he “was feeling sick” but provided no medical documentation. After a week passed without any supporting documentation being submitted, Cargill terminated the Grievor’s employment for violating the LCA, specifically citing the agreement’s zero tolerance provision for attendance violations. The union filed a grievance the same day. Almost 4 months later the union provided the employer with doctor’s notes indicating the Grievor suffered from a chronic condition which could cause sleep disruption due to frequent urination during the night.

The Union’s Position

The union argued the termination was discriminatory, contending that since the absence was caused by his medical condition, the termination was linked to the protected ground of disability. The union submitted that parties cannot contract out of human rights obligations and that the employee was entitled to accommodation.

The union further claimed that the employer’s conduct—allowing previous absences without documentation—created ambiguity and “lulled” the employee into a false sense of security. The union argued this lack of clarity constituted a “strong and compelling reason” to intervene despite the LCA’s language.

The union sought the Grievor’s reinstatement with back pay. Alternatively, the union argued that even if a breach occurred, the employee’s conduct did not meet the high bar for “wilful misconduct” under the ESA, therefore entitling the Grievor to severance pay.

The Arbitrator’s Analysis

With respect to the discrimination argument, Arbitrator Martelli found no causal connection between the Grievor’s medical condition and his failure to obtain timely medical documentation. The evidence showed that the Grievor’s family physician could have provided a note within days had he sought one. The termination was for the procedural failure to provide documentation, not for the disability-related absence itself.

While Arbitrator Martelli acknowledged that the initial leniency in April 2023 may have caused some confusion, he held that the unequivocal warning in June 2023 cured any false sense of security. That final warning made it “crystal-clear” that the employee had “absolutely no more chances” and reinforced the strict terms of the LCA.

Moreover, Arbitrator Martelli found that the Grievor’s conduct did constitute wilful misconduct as per O. Reg. 288/01 under the ESA. The Grievor’s failure to secure a medical note “was deliberate and intentional” despite knowing “it was vital that he get one,” underscoring that the Grievor’s conscious disregard of the final warning constituted serious misconduct, disentitling him to statutory severance pay.

In dismissing the grievance, Arbitrator Martelli stressed that his jurisdiction was limited by the LCA to determining, on a balance of probabilities, whether a breach had occurred, not whether the employer had “just cause” for termination.

Key Takeaways

Employers can enforce LCA terms strictly even after past leniency, provided they issue a clear, unequivocal final warning. Termination for failing to provide medical documentation—rather than for the absence itself—will be upheld when an employee knowingly disregards that warning, and may constitute wilful misconduct under the ESA, eliminating statutory severance entitlements.

Working for Workers Seven Act, 2025 Now in Force

By: Michael S. Smyth

The Working for Workers Seven Act, 2025 received Royal Assent on November 27, 2025. Many of the provisions in the legislation affecting workplaces came into effect on Royal Assent.

As a brief reminder, this legislation makes several amendments to the ESA, Occupational Health and Safety Act, and Workplace Safety and Insurance Act, 1997 (WSIA).

The ESA amendments create a new unpaid job-seeking leave and extend layoff provisions.

The WSIA changes introduce enhanced fraud prohibitions and create a new offence for failure to pay premiums. The legislation also establishes administrative penalties for employers who make false or misleading statements to the Workplace Safety and Insurance Board, fail to maintain accurate wage records, or fail to pay premiums when due.

For more information about these changes and how they may impact your organization, please read our FTR Now which outlines the key changes introduced by the legislation. Please do not hesitate to reach out to your Hicks Morley lawyer if you have any questions.

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. ©