Canada saw significant developments in labour and employment law in 2019.  As we embark on a new decade, we will undoubtedly see the landscape in this ever-changing area of law continue to evolve.   Here is our Littler LLP overview of 15 key developments in 2019 with links to more detailed articles and commentary:

1. Ontario Arbitrator Found Employers Must Assess If They Can Accommodate Employees Who Engage in Serious Misconduct Due to Substance Abuse Disorder Even When the Misconduct May Justify Dismissal

A labour arbitrator decided in Regional Municipality of Waterloo (Sunnyside Home) v. Ontario Nurse’s Association, 2019 CanLII 433 (ON LA), that when an employee breaches workplace rules because they suffer from a substance abuse disorder—a disability under Ontario’s Human Rights Code (Code)—the employer must satisfy its procedural obligation under the Code to consider how the employee might be accommodated. Failure to do so can result in the employer being found to have engaged in prima facie discrimination, and the employer may be required to pay general damages to the employee for breach of its duty to accommodate. Employers must keep in mind that their duty to accommodate continues to exist even when the employee engages in serious misconduct that may justify dismissal.  A link to a more detailed article is here. 

2. British Columbia Court of Appeal Affirmed Employees in the Province Must Continue to Meet a High Standard to Establish "Family Status" Discrimination

In Envirocon Environmental Services, ULC v. Suen, 2019 BCCA 46 (Suen), the British Columbia Court of Appeal refused to reconsider the high burden test for establishing family status discrimination set out in Health Sciences Assoc. of B.C. v. Campbell River and North Island Transition Society, 2004 BCCA 260 (Campbell River), and applied that test to the case at hand.  The Campbell River test provides that a prima facie case of discrimination on the basis of family status is made when: (a) there is a change in a term or condition of employment imposed by an employer; and (b) the change results in a serious interference with a substantial parental or other family duty or obligation of the employee.  This standard is more stringent in British Columbia than in other jurisdictions.  The Supreme Court of Canada dismissed an application for leave to appeal from the judgment in Suen.  Links to more detailed articles are here and here.   

3. Supreme Court of Newfoundland and Labrador Affirmed Inability to Measure Impairment Caused by Medical Cannabis Can Constitute Undue Hardship

The Supreme Court of Newfoundland and Labrador rendered a welcome decision for employers that have been struggling to balance their obligations under occupational health and safety legislation and human rights legislation regarding medical cannabis use and work in safety-sensitive positions.  In International Brotherhood of Electrical Workers, Local 1620 v. Lower Churchill Transmission Construction Employers’ Association Inc., 2019 NLSC 48, an employee was denied employment on a safety-sensitive project due to his use of medically prescribed cannabis.  On judicial review, the court agreed with the arbitrator that to accommodate the employee would constitute undue hardship because the risk of impairment from cannabis on the job could not be readily measured based on currently available technology and resources.  Employers of employees in safety-sensitive positions may look to this case for support of any undue hardship defense, at least until reliable testing methods become available.  A link to a more detailed article is here.      

4. Ontario Court of Appeal Found Employers that Re-hire Employees who Victimized a Current Employee by Sexual Harassment or Otherwise Risk Liability

In Colistro v. Tbaytel, 2019 ONCA 197, the Ontario Court of Appeal put employers on notice that if they re-hire an employee who has a history of victimizing a current employee by sexual harassment or otherwise, and the current employee finds continued employment intolerable, they risk liability for constructive dismissal.  The decision further cautioned that, absent an offer to accommodate the aggrieved employee to avoid imposing mental suffering, employers also risk liability for intentional infliction of mental suffering.  Finally, this case is significant for the principle that an employee who successfully sues an employer may be required to pay the employer’s costs if there is a substantial disparity between damages sought by the employee and damages awarded by the court.  The application for leave to appeal from that judgment was dismissed by the Supreme Court of Canada.  A link to a more detailed article is here.    

5. Common Law Tort of Harassment Abolished by Ontario Court of Appeal

In Merrifield v. Canada (Attorney General), 2019 ONCA 205, the Ontario Court of Appeal decided that a lower court decision establishing a common law tort of harassment was made in error, and declined to recognize the tort. The application for leave to appeal from that judgment was dismissed by the Supreme Court of Canada.  A link to a more detailed article is here. 

6. Federal Government Launched Employment Insurance Parental Sharing Benefit for Eligible Two-parent Families

On March 17, 2019, the federal government launched a new parental sharing benefit.  Two-parent families are eligible for the benefit, including adoptive and same-sex parents of children born or placed for adoption on or after March 17, 2019.  If the parents agree to share parental benefits, the duration of employment insurance parental benefits will increase by an additional five weeks if the standard parental option is chosen by the parents, or by an additional eight weeks if the extended parental option is chosen. 

7. Significant Amendments Made to Federal Canada Labour Code

Some Canada Labour Code (CLC) amendments in Bill C-44, the Budget Implementation Act, 2017, No. 1 (Bill 44) came into force in 2017, and additional amendments came into force as of April 1, 2019 and July 29, 2019. Key 2019 amendments relate to the right of the Minister of Labour to order an employer to conduct an internal self-audit, the employee complaint procedure, the transfer of the powers, duties and functions of appeals officers, and the transfer of responsibility for unjust dismissal complaints to the Canada Industrial Relations Board. Bill C-44’s monetary penalty system to promote compliance with Parts II and II of the CLC is not yet in force.  Bill C-63, the Budget Implementation Act, 2017, No. 2 (Bill C-63) and Bill C-86, the Budget Implementation Act, 2018, No. 2 (Bill C-86) came into force on September 1, 2019. Key amendments in Bill C-63 relate to the flexibility of work arrangements, overtime, shift changes, leaves of absence, and vacation. Key amendments in Bill C-86 relate to notice of work schedule, breaks, rest periods, vacation, minimum length of service requirement, leaves of absence, and continuity of employment.  A link to a more detailed article is here.    

8. Ontario’s, Alberta’s and British Columbia’s Employment Standards and Labour Relations Legislation Amended

Ontario

Ontario’s Bill 66, Restoring Ontario’s Competitiveness Act, 2018 received Royal Assent on April 3, 2019, and amended the Employment Standards Act, 2000 (Ontario ESA) and the Labour Relations Act, 1995 (LRA).  Amendments to the Ontario ESA came into force on Royal Assent and pertain to the transfer of responsibility for preparing and publishing the poster containing information about employee rights and employer obligations under the Ontario ESA, the employer’s responsibilities in relation to the poster, employer responsibilities to employees working more than 48 hours in a week, and employer responsibilities in regard to averaging an employee’s hours of work for the purpose of determining the employee’s entitlement to overtime.   Amendments to the LRA involve the removal of certain public-sector entities from the construction labour relations model in the statute.  With the exception of the “opt in” election procedure that became effective on Royal Assent and expired within three months, all amendments made by Bill 66 to the LRA were proclaimed in force effective July 4, 2019.  A link to a more detailed article is here.     

Alberta

Alberta’s Bill 2, An Act to Make Alberta Open for Business (Bill 2), received Royal Assent on July 18, 2019.  Bill 2 made amendments to Alberta’s Employment Standards Code relating to holiday pay and overtime agreements that came into force on September 1, 2019.  Bill 2 also amended Alberta’s Labour Relations Code relating to union certification votes and marshalling proceedings that came into force on Royal Assent.  Changes to employee supports came into force on October 1, 2019.

British Columbia 

British Columbia’s Bill 8, The Employment Standards Amendment Act, 2019 (Bill 8) received Royal Assent on May 30, 2019.  Bill 8 made significant amendments to British Columbia’s Employment Standards Act (BC ESA) including, among other things, the addition of two new leaves (Domestic or Sexual Violence Leave and Critical Illness Leave), and the requirement that the main elements of collective agreements meet or exceed requirements under the BC ESA.  British Columbia’s Bill 30, Labour Relations Code Amendment Act, 2019 (Bill 30) received Royal Assent on May 30, 2019.  Bill 30 made significant amendments to the Labour Relations Code including, among other things, clarifying the definition of “picket” and “picketing,” providing the Labour Relations Board (LRB) with authority to certify a union when there has been an unfair labour practice, and adding consequences upon the failure of parties to file a collective agreement with the LRB.  With a few exceptions, amendments made by Bill 8 and Bill 30 came into force when Royal Assent was received for each bill. 

9. Supreme Court of Canada Provided Guidance on Factors to be Considered in Determining Employee or Independent Contractor Status

In Modern Cleaning Concept Inc. v. Comité paritaire de l’entretien d’édifices publics se la region de Quebec, 2019 SCC 28, the Supreme Court of Canada (SCC) provided guidance on the factors to be considered in determining employee or independent contractor status.  Although the case involves a Quebec statute and its unique definition of “employee,” and a tripartite franchise model that is uncommon in Canada, the guidelines are highly relevant to employers across the country.  The SCC left no doubt that how a worker is identified in an agreement will not be the factor that will determine how the worker should be characterized; the determination will be based on substance, not form.  The test for proper characterization involves conducting a highly contextual and fact-specific inquiry into the nature of the relationship to determine which party bears the business risk and corresponding ability to make a profit; if it is the worker, then the worker is an independent contractor.  Otherwise, the worker is an employee.  Employers are encouraged to conduct such an analysis of their business models to ensure that they have properly characterized their workers.  A link to a more detailed article is here.     

10. Ontario Court of Appeal Left No Doubt:  Absent Exceptional Circumstances, 24 Months is “High End” of Reasonable Notice

In Dawe v. The Equitable Life Insurance Company of Canada, 2019 ONCA 512, the Ontario Court of Appeal held that the motion judge took an incorrect approach to reasonable notice when he substantially extended the traditional 24 month upper limit on the reasonable notice period for an older, long-term, senior manager who was unable to secure comparable employment (Dawe v. Equitable Life Insurance Company, 2018 ONSC 3130).  The motion judge awarded 30 months’ notice and stated that, if asked, he would have awarded 36 months.  The Ontario Court of Appeal held that that absent exceptional circumstances, 24 months is the “high end” of reasonable notice on termination for older, long-term, senior managers.  Notably, the court emphasized that factors such as an employee’s senior position, long service, and advanced age are not exceptional circumstances supporting a notice period in excess of 24 months, and that these factors are already recognized and rewarded by 24 months’ notice.  A link to a more detailed article is here.     

11. Ontario Court of Appeal Decided Employee Rights to Shares Governed by Shareholders’ Agreement Throughout Employment and on Termination

In Mikelsteins v. Morrison Hershfield Limited, 2019 ONCA 515, the Ontario Court of Appeal clarified that when an employer terminates an employee, the employee may have two distinct sets of rights: rights at common law pursuant to the employment contract, and rights pursuant to the terms of any other contracts between the employee and employer.  With regard to the latter, their express terms apply to the employee’s entitlements under such contracts upon the employee’s termination and otherwise.  Accordingly, as in Mikelsteins, when an employee enters into a shareholders' agreement with their employer, the employee’s rights with respect to their shares purchased under that agreement will be governed by its terms, both throughout employment and upon termination.  A link to a more detailed article is here.      

12. Federal Accessible Canada Act Proclaimed in Force

Bill C-81, An Act to ensure a barrier-free Canada, was proclaimed in force as of July 11, 2019, thereby enacting the Accessible Canada Act (ACA), which applies to federally regulated organizations in the private and public sectors.  The stated purpose of the ACA is to remove barriers for persons with disabilities in relation to employment, among other things. Organizations subject to the ACA are required to prepare and publish accessibility plans and establish processes for receiving and addressing feedback with regard to those plans.      

13. Ontario Court of Appeal Decided When Employee Will have Right to Damages in Lieu of Lost Opportunity to Earn Incentive Plan Compensation During Reasonable Notice Period

In Manastersky v. Royal Bank of Canada, 2019 ONCA 609, the Ontario Court of Appeal considered whether a terminated employee was entitled to be awarded damages in lieu of a lost opportunity to earn incentive plan compensation during the employee’s reasonable notice period.  The court determined that the answer would depend on the contractual language of the incentive plan, which it examined strictly.  Accordingly, employers that want to eliminate their employees’ rights to such compensation should ensure that all documentation pertaining to the employee’s position, including the language in their incentive compensation plans, contains clear and unambiguous terms to that effect, and clarifies what entitlements the employee may have upon termination of employment.  A link to a more detailed article is here.     

14. Human Rights Tribunal of Ontario Required Employer to Pay Applicant $120,000 in Damages for Violating Ontario’s Human Rights Code by Denying the Applicant Employment Because He Was Not Permanently Eligible to Work in Canada

In Haseeb v. Imperial Oil, 2019 HRTO 1174, the Human Right Tribunal of Ontario (HRTO) rendered its decision on remedy in connection with its 2019 decision that an employer’s practice of requiring job applicants to be permanently eligible to work in Canada violated Ontario’s Human Rights Code (Haseeb v. Imperial Oil Limited, 2018 HRTO 957, reconsideration denied, 2019 HRTO 271). The HRTO awarded the applicant lost wages of $105,000, representing the income he would have earned from March 2, 2015 to May 30, 2019, the period when he would have commenced employment with Imperial Oil until he left his other employment to pursue different career opportunities. The HRTO also awarded the applicant $15,000 for compensation for injury to dignity, feelings and self-respect.  Canadian employers should review their job applications and policies to ensure compliance with applicable human rights laws. Employers can and should still require applicants to be legally authorized to work in Canada for the duration of their employment.  Links to more detailed articles are here and here.    

15. Cannabis Regulations Governing Legal Production of Edible Cannabis in Force

On October 17, 2019, exactly one year after the federal government legalized the adult recreational use of dried or fresh cannabis, amendments to the Cannabis Regulations that govern the legal production of cannabis-infused products (edible cannabis, cannabis extracts, and cannabis topicals) came into force.  Since federal license holders are required to provide 60 days’ notice to Health Canada of their intent to sell new products, cannabis-infused products did not appear in physical or on-line cannabis stores until mid-December 2019.  The availability of edibles coupled with the unique workplace challenges created by their legalization (e.g., difficulty identifying them, delay before effects are felt, risks of over-consumption, long duration of impairment), would suggest that Canadian employers take reasonable steps to update their workplace policies, including as they relate to drugs and alcohol, health and safety, and accommodation; educate managers, supervisors and employees about the updated policies; provide detection training to managers and supervisors, and training to document signs of impairment to justify testing and disciplinary action, if applicable. This issue is of particular importance in safety-sensitive workplaces.  A link to a more detailed article is here.    

Littler LLP looks forward to following the evolution of labour and employment law in Canada in 2020.  We will continue to report on developments as they unfold.