Employers' Advisor

Employers’ Advisor April 2024

Articles:

  1. Well, Gosh: Weilgosh Confirms the HRTO’s and Labour Arbitrators’ Shared Jurisdiction over Human Rights Claims
  2. Employers Beware, Your Termination Clause Could be Struck at “Any Time”, in the Court’s “Sole Discretion”
  3. Working for Workers, One, Two, Three, Now Four – Employers Can Probably Expect More

Well, Gosh: Weilgosh Confirms that Ontario Human Rights Adjudicators and Labour Arbitrators Share Concurrent Jurisdiction over Human Rights Claims 

Nicole Chanderpaul

Overview

In March 2024, the Ontario Divisional Court released its decision in London District Catholic School Board v Weilgosh, a judicial review of a decision by the Human Rights Tribunal of Ontario (“HRTO”) that followed upon the Supreme Court’s decision in Northern Regional Health Authority v Horrocks, 2021 SCC 42 (“Horrocks”).

Background

Karen Weilgosh (“Ms. Weilgosh”) filed an application with the HRTO against her employer, the London District Catholic School Board (the “Board”), alleging discrimination and failure to accommodate. Subsequently, the Supreme Court of Canada released its decision in Horrocks, which held that labour arbitrators appointed under labour legislation in Manitoba have exclusive jurisdiction over human rights claims arising from disputes under a collective agreement – meaning that the Manitoba Human Rights Commissions did not have jurisdiction to adjudicate human rights claims filed by unionized employees.  

In light of the Horrocks decision, the Board raised a preliminary objection before the HRTO in the Weilgosh case. The Board argued that the HRTO lacked jurisdiction to hear the application on the basis that Ms. Weilgosh’s union had filed a grievance on her behalf relating to the same or similar allegations regarding discrimination and accommodation. This was based, in part, upon the Supreme Court’s acknowledgement in Horrocks that sections 45 and 45.1 of the Code empower the HRTO to defer or dismiss complaints if another proceeding has appropriately dealt with it.

The HRTO determined that, despite the Supreme court’s decision in Horrocks pertaining to Manitoba human rights legislation, it did have concurrent jurisdiction to adjudicate Ms. Weilgosh’s human rights complaint. The HRTO found that, given the specific powers granted to it under the Code, there was a clear legislative intent to establish and maintain the HRTO’s concurrent jurisdiction over human rights claims. The HRTO dismissed the Board’s preliminary jurisdictional objection. The Board then sought a judicial review of this decision, claiming that the HRTO erred in applying the test from Horrocks.

Analysis

Using the standard of correctness, the Court reviewed and applied the legal framework from Horrocks and upheld the HRTO’s finding that it had concurrent jurisdiction over the claim.

The Court indicated that Horrocks had made clear that concurrent jurisdiction over human rights matters between labour arbitrators and human rights adjudicators only requires “some positive expression of the legislature’s will,” examples of which included statutory schemes that explicitly contemplated that deferral powers extend to disputes which could be subject to a grievance under a collective agreement.

The Court also found that the HRTO’s decision did not invert the test under Horrocks, as alleged by the Board. Not only was the test applied correctly to find concurrent jurisdiction, but the Court determined that in the circumstances, applying an exclusive arbitral jurisdiction model would defeat, not achieve, the Ontario provincial government’s legislative intent. The application for judicial review was dismissed.

Key Takeaways for Employers

After the issuance of the Supreme Court’s decision in Horrocks, there was some question as to whether unionized employees in Ontario could pursue claims before the HRTO, outside of the labour arbitration context. However, the Court’s decision in Weilgosh confirms that the HRTO is not precluded from determining applications from unionized employees that can also be the subject of labour arbitration proceedings. Employers should, therefore, be aware that unionized employees may raise their human rights complaints in two forums simultaneously, both before the HRTO and in the context of grievance and arbitration proceedings (although typically, in those circumstances, the proceeding in one forum will be deferred pending the conclusion of the other proceeding).  Furthermore, employers should not presume that human rights claims will be automatically resolved or dismissed by virtue of the parties reaching a settlement in the labour relations context, unless such claims are explicitly addressed in the settlement and release agreement.

 

Employers Beware, Your Termination Clause Could be Struck at “Any Time”, in the Court’s “Sole Discretion”

Ernest Tam

In Dufault v. The Corporation of the Township of Ignace (“Dufault”), the Ontario Superior Court of Justice recently held that a termination provision that permits an employer to terminate an employee “at its sole discretion… at any time” is in violation of the Employment Standards Act, 2000 (“ESA”), and therefore unenforceable.

In Dufault, the employee had signed a fixed-term agreement ending December 31, 2024. On January 26, 2023, the employee’s employment was terminated on an without-cause basis. The employee was provided with their statutory entitlements upon termination under the ESA. The employee sued for wrongful dismissal and moved for summary judgment on the basis that the termination provision in their employment contract was void. The termination clause stated the following:

4.01 The Township may terminate this Agreement and terminate the Employee’s employment at any time and without notice or pay in lieu of notice for cause. If this Agreement and the Employee’s employment are terminated with cause, no further payments of any nature, including but not limited to damages, are payable to the Employee, except as otherwise specifically provided for herein, and the Township’s obligations under this agreement shall cease at that time…

4.02 The Township may, at its sole discretion and without cause, terminate this Agreement and the Employee’s employment thereunder at any time upon giving to the Employee written notice as follows:

  • the Township will continue to pay the Employee’s base salary for a period of two (2) weeks per full year of service to a maximum payment of four (4) months or the period required by the Employment Standards Act, 2000, whichever is greater. This payment in lieu of notice will be made from the date of termination, payable in bi-weekly installments on the normal payroll day or on a lump sum basis at the discretion of the Township, subject at all times to the provisions of the Employment Standards Act, 2000.

Ultimately, the Court determined that the termination provision was invalid, and the employee was awarded the value of the remainder of her fixed-term contract (101 weeks less the two weeks statutory notice provided to her). In reaching this conclusion, the Court held that the termination provision was invalid for three reasons:

  1. Article 4.01 permitted the employer to terminate the employee’s employment “for cause” without notice or pay in lieu of notice, which is a common law term that is not recognized in the ESA. This violates the ESA because the threshold for conduct underlying a termination “for cause” is lower than that of the “wilful misconduct” standard in the ESA, and therefore the ESA could still require payment of an employee’s statutory entitlements in the event of a “for cause” termination;
  2. Article 4.02, the “without cause” termination provision, also violated the ESA because it only provided the employee with their “base salary” rather than their “regular wages” over the statutory notice period; and
  3. Article 4.02 violated the ESA because it gave the employer the “sole discretion” to terminate the employee’s employment “at any time.” The Motion Judge noted that the right to dismiss is “not absolute” and suggested that this language contravened the ESA since employers are prohibited from terminating employees upon the conclusion of an employee’s statutory leave of absence under s. 53, or in reprisal for attempting to exercise their rights under the ESA.

Although the first two reasons of the Court follow the existing case law with respect to the validity of termination provisions in employment contracts, the third reason is a novel one. Previously, the Ontario courts had not specifically held that a termination clause would be void on the basis that it provides the employer the “sole discretion” to terminate the employee’s employment “at any time.” The Dufault case is also a reminder that, in the absence of an enforceable termination clause, employees subject to fixed-term employment contracts may, upon termination, be entitled to damages equal to the amount of money they would have earned had they remained employed until the end of the term – even if those damages are well in excess of what their “common law” entitlements would otherwise have been.

The difference between a termination clause that is enforceable and one that is unenforceable can amount to multiple years’ worth of damages payable by the employer. Employers should, therefore, regularly review their employment contracts, and in particular their termination clauses, to ensure that the language is up-to-date with current case law and compliant with the ESA.

 

Working for Workers, One, Two, Three, Now Four – Employers Can Probably Expect More 

Anthony Kwong

On March 21, 2024, the Government of Ontario announced that the Working for Workers Four Act, 2023 (the “Act”) had received Royal Assent. The Act implements a number of legislative amendments to several workplace statutes, including the Employment Standards Act, 2000 (the “ESA”) and the Workplace Safety and Insurance Act, 1997 (the “WSIA”), creating further protections for workers and further obligations for employers in Ontario. Also included are minor changes to the Digital Platform Workers’ Rights Act, 2022 (the “DPWRA”), and the Fair Access to Regulation Professions and Compulsory Trades Act, 2006 (the “FARPCTA”).

The changes build on a number of expanded protections for employees enacted through multiple Working for Workers Acts, which the Government has passed since 2021.

Employment Standards Act Amendments

The following changes introduced by the Act are now in force with immediate effect:

  • Unpaid trial shifts, common in the restaurant and service industries, are banned by amending the definition of “employee” such that “training” specifically includes work performed during a “trial period”; and
  • Employers are expressly prohibited from withholding or deducting from an employee’s wages where a customer of a restaurant, gas station, or other establishment has left without paying (a “dine and dash”).

The following changes introduced by the Act will take effect on June 21, 2024:

  • Employers are required to pay employee tips or gratuities by cash, cheque payable only to the employee, or direct deposit;
  • Where payment is made by cash or cheque, it must be given to the employee at the workplace or some other place agreeable to the employee;
  • Where payment is made by direct deposit, it must be into an account selected by the employee and in the employee’s name;
  • Where the employer has a tipping policy where the employer (or a director or shareholder of the employer) shares in the pooling of tips and/or gratuities, the policy must be in writing and posted in the workplace (and must be retained for three years after the policy ceases to be in effect); and
  • Agreed-upon alternate vacation pay arrangements (involving the payment of vacation pay accruing during a pay period on the pay day for that period) between an employer and an employee must be in writing.

The following changes introduced by the Act will take effect on a date to be proclaimed:

  • All publicly advertised job postings are required to include the expected compensation or range of compensation for the position;
  • Where the employer uses artificial intelligence (AI) to screen, assess or select applicants for a position, the employer is required to include a statement disclosing the use of AI in the publicly advertised job posting;
  • Employers are prohibited from requiring Canadian experience in a publicly advertised job posting or an associated application form; and
  • Employers are required to retain copies of all publicly advertised job postings for three years after access to the posting by the general public has been removed.

Workplace Safety and Insurance Act Amendments

The following changes introduced by the Act will take effect on a date to be proclaimed:

  • Permitting “super indexing” increases to Workplace Safety and Insurance Board (“WSIB”) benefits above the annual rate of inflation to increase pay for injured workers; and
  • Enhancing cancer coverage for firefighters and fire investigators by making them presumptively entitled to WSIB benefits after 15 years of employment.

Other Amendments

The DPWRA has been amended to provide for government regulations: (a) limiting the length of a recurring pay period and the amount of time between a pay day and the end of a pay period; and (b) prescribing rules to determine compliance with the minimum wage requirements under the DPWRA. Both changes are to take effect when the minimum wage provisions of the DPWRA come into force.

The FARPCTA has been amended to provide that certain government-prescribed requirements must be satisfied in order to determine whether a regulated profession assesses qualifications in a way that is transparent, objective, impartial and fair. These requirements must also be met by any third parties making such assessments. These changes will take effect on a date to be proclaimed.

Key Takeaways for Employers

Many of the amendments simply clarify existing obligations or codify best practices (such as the changes related to unpaid trial periods, deductions for cash shortages for loss of property, or the requirements with respect to the payment of tips or gratuities). These changes have either already come into force or will come into force on June 21, 2024, so employers should ensure that they are in compliance with these obligations as soon as possible.  

The various requirements with respect to job postings represent a more significant change and will therefore require greater scrutiny and consideration by employers with respect to their recruitment and hiring processes. Employers can probably expect regulations clarifying and setting clearer parameters on precisely what these requirements entail. Employers should also keep updated on potential future Working for Workers Acts, as the Government has shown that these kinds of incremental changes (and the naming convention) are here to stay.

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This newsletter is not intended as legal advice.  Any employer or organization seeking assistance should feel free to contact a Mathews Dinsdale lawyer for assistance.

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