Employment Law Trends in Ontario

Dec 29, 2015

Employment Law Trends in Ontario

In this blog I will reflect on two employment law trends that are developing in Ontario and outline how the MacLeod Law Firm is responding to these trends.

Ontario’s Workplaces are More Regulated than Ever Before

I advise small to medium size employers on a daily basis. Margins are often tight and resources are usually limited. Ontario employers are increasingly competing against companies operating in unregulated labour markets. Against this backdrop, there is increasing government regulation.

In Ontario, the Kathleen Wynne government has introduced and implemented many changes to the province’s employment laws. Payroll taxes continue to increase, new mandatory training has been introduced in a number of areas, and the definition of an “employee” has been expanded to include non-traditional employees such as volunteers and contractors. The government is currently holding public consultations on changes to the Employment Standards Act and the Ontario Labour Relations Act. And more changes are coming: a new mandatory pension system is expected in 2017 which is in addition to the CPP, and employers will be required to investigate all sexual harassment “incidents” under Bill 132.

Ontario Employers Are Not Aware of the New Employment Laws

In my experience, many small and medium size employers are simply not aware of some of these new employment laws.

For example, news reports suggest that over 65 % of Ontario businesses have not complied with a regulation under the Accessibility for Ontarians with Disabilities Act (“AODA”) that took effect 2012.

Did you know that as of July 1, 2014 almost every Ontario employer should have provided mandatory health and safety training to all employees? My guess is that less than 25% of employees who work for small and medium size employers have received this training.

Furthermore, one of the 2015 amendments to the Employment Standards Act requires employers to provide a poster to employees which educates them on their rights under that law. My guess is that less than 25% of employees who work for small and medium size employers have received a copy of this poster.

Our legal system is built on the rule of law which means we must obey the laws of the land and that ignorance of the law is no defense to non-compliance with a law.

I am concerned the rule of law is breaking down in Ontario as it relates to employment laws because small and medium size employers simply cannot keep track of all the employment laws.

The MacLeod Law Firm Keeps Employers Up to Date on New Employment Laws

Every two weeks, I write a blog about changes to Ontario’s employment laws. Some of the changes are introduced by the Ontario government. Some of the changes are as a result of court decisions. I encourage you to subscribe to our blog so you can keep up to date on changes to Ontario’s employment laws.

For my blog on the top 10 employment stories of 2015, click here.

The MacLeod Law Firm Seamlessly Integrates into Your Human Resources Infrastructure

We give an employer confidence and peace of mind because we quickly and competently deal with workplace issues in a way that makes business sense.

If you are a small organization without a dedicated human resources person then we can quickly assess whether your organization is complying with Ontario’s employment laws and tell you what you need to do to get into compliance. In addition, we will defend any legal proceeding an employee (or former employee) commences against you on your behalf.

If your organization has a dedicated human resources person then we can act as a sounding board and trusted advisor on all workplace issues. We are only a phone call away and we can often immediately answer your questions which allows you to address an issue before it escalates. We also act as an early warning signal by raising issues with you before they turn into problems. For example, did you know a new regulation is taking effect under AODA on January 1, 2016 for employers with 50 or more employees and we offer a fixed fee service to review your current HR practices to ensure they comply with this new law? For information on this service, click here.

For the past 25 years, Doug MacLeod of the MacLeod Law Firm has been advising and representing employers. If you have any questions, you can contact him at 416 317-9894 or at [email protected]

There are many ways to attack the termination clause in an employment contract. 

I am now surprised if employee counsel does not claim that their client’s  termination clause is not legally enforceable - usually because the termination clause does not allegedly comply with the Employment Standards Act.

This blog considers a case, McKercher v Stantec Architecture Ltd., 2019 SKQB 100, where an employee successfully attacked the termination clause in his contract because he did not explicitly agree to it after being promoted. 

The Facts

In 2006, Mr. McKercher commenced employment as a staff architect. The termination clause in his employment contract stated: 

Termination other than for cause will be with notice or pay in lieu of notice, based on your length of service. If the Employer terminates your employment for other than just cause you will receive the greater of:

  1. a)   Two weeks notice or pay in lieu of notice during the first two years of employment increasing by one week for each additional completed year of employment to a maximum of three months notice or pay in lieu of notice.

      or

  1. b)   The minimum notice of termination (or pay in lieu of notice) required by applicable statutes.

Eleven years later, when Mr. McKercher was employed as a Business Centre Sector Leader, his employment was terminated. The employer paid him the three months termination pay he was owed under his employment contract.

 

Another way to attack a termination clause: What is the changed substratum doctrine?

An Ontario judge in a 2012 case, MacGregor v National Home Services, 2012 ONSC 2042 (CanLII), described this legal doctrine as follows: "The changed substratum doctrine … provides that if an employee enters into an employment contract that specifies the notice period for a dismissal, the contractual notice period is not enforceable if over the course of employment, the important terms of the agreement concerning the employee’s responsibilities and status has significantly changed."

 

The rationale for this doctrine has been described by one judge, Schmidt v AMEC Earth & Environmental Ltd., 2004 BSCS 2012 (CanLII), as follows: "In my view, it was incumbent on the defendants to advise Mr. Schmidt that they intended to continue to rely upon the termination provision set out in the Agreement when substantial changes in his employment occurred. This would have allowed him to consider the matter and to negotiate for other terms. If the defendants wished to continue to rely on the termination provisions there ought to have been a ratification of the provisions as the nature of Mr. Schmidt’s employment changed."

 

Decision

The judge hearing this case relied on the following factors when deciding not to enforce the termination clause in the employment contract: ”...there is no evidence that (the employer) made it clear to the (employee) that the notice of termination provisions were intended to apply to the positions to which he was promoted. The employment agreement contains no express wording to this effect, nor does it contain any wording to support the inference of such an intent. Further, and in keeping with the analysis in Schmidt, the Court received no evidence that, as it promoted the plaintiff, SAL reasserted its understanding and expectation that the notice of termination limit would remain in effect.”

 

Lesson to be learned:

An employer should make it clear that the termination clause in an employment contract applies when an employee is promoted. This expression of this intent should be in writing and should be clear and unambiguous. I recommend that an organization’s employment be reviewed by an employment lawyer every year or two. If your employment contract does not address this issue then think about doing so the next time it is reviewed.

 

For 30 years, Doug MacLeod of   the MacLeod Law Firm has been advising employers on all aspects of the employment relationship. If you have any questions, you can contact him at 416 317-9894 or at [email protected]

The material and information in this blog and this website are for general information only. They should not be relied on as legal advice or opinion. The authors make no claims, promises, or guarantees about the accuracy, completeness, or adequacy of any information referred to in this blog or its links. No person should act or refrain from acting in reliance on any information found on this website or blog. Readers should obtain appropriate professional advice from a lawyer duly licensed in the relevant jurisdiction. These materials do not create a lawyer-client relationship between you and any of the authors or the MacLeod Law Firm.

 

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