Articles:

1. Buyer’s Remorse Not for Sale: Ontario’s Superior Court Draws a Line
2. Calling in Sick? BC Employees Won’t Need a Note… But We Have Several
3. Integrated and Interchangeable: When the Use of Agency Staff Becomes Contracting In

 

Buyer’s Remorse Not for Sale: Ontario’s Superior Court Draws a Line

Sharon Canete

In its recent decision of Johnstone v. Loblaw, 2025 ONSC 4755 (CanLII), the Ontario Superior Court of Justice, the Court enforced a binding settlement agreement between parties despite the lack of a fully executed Minutes of Settlement.

Background

In Johnstone, the Plaintiff was an employee of Defendant, Loblaw Companies Limited (“Loblaws”) for just over seven years. Shortly before his termination, the Plaintiff relocated from Winnipeg to Ottawa and was in the process of purchasing a new home in the area when his employment was terminated without cause.

Following his termination, the parties engaged in settlement negotiations. Specifically, the Plaintiff sought an enhanced severance package from Loblaws which included a longer notice period, a positive reference letter, a legal fee contribution, and a commitment from Loblaws to guarantee the Plaintiff’s mortgage payments until he became re-employed.

After several exchanges, the parties ultimately reached a settlement. As a term of settlement, Loblaws ultimately confirmed that it would be providing the Plaintiff with a letter confirming his employment income during the notice period for the purposes of his mortgage application. The Plaintiff accepted these terms on May 28, 2022, through his counsel via email. In this correspondence, counsel stated: “I can confirm receipt of instructions to accept your most recent proposal, subject to mutual agreement on the supporting documentation that I would suggest you prepare for our review.”

Following this email exchange, Loblaws circulated draft Minutes of Settlement based upon the agreed upon terms.

On June 4, 2022, the Plaintiff advised Loblaws that it required revisions to the Minutes of Settlement, including but not limited to inclusion of the following terms:

1. A fundamental term that the settlement was contingent on the Plaintiff’s successful completion of his home purchase;
2. An additional two weeks of short-term living accommodation; and
3. A commitment that the Plaintiff’s performance rating would remain at the same level as in previous years to ensure his bonus would not be affected in a negative way.

In response, Loblaws advised Plaintiff’s counsel that the revisions constituted new terms that were never raised in settlement discussions. Ultimately, the Plaintiff did not sign the Minutes of Settlement and issued a Statement a Claim seeking damages for breach of contract and wrongful dismissal. In response, Loblaws paid out the amounts contemplated for in the Minutes of Settlement (with the exception of the legal fees payment) and brought forward a motion for summary judgement to enforce the terms of settlement between the parties.  

The Court’s Analysis

In its analysis, the Court ruled that to constitute a binding settlement, parties must have intended to intentionally create a legally binding relationship and agreed on all essential terms of said relationship. If such an agreement was reached, the Court indicated that incomplete settlement documentation (i.e., Minutes of Settlement) would not preclude enforcement of such a settlement agreement.

In applying the forementioned principles, the Court ruled that the parties had reached a binding agreement on all essential terms of settlement, as evidenced by the May 28, 2022 correspondence from the Plaintiff’s counsel. All essential terms of this settlement were subsequently captured in the draft Minutes of Settlement prepared by Loblaws.

With respect to the Plaintiff’s attempts to include three new terms into the Minutes of Settlement, the Court noted that these requests were never discussed between the parties prior to the June 6, 2022, correspondence. As such, these requests were attempts by the Plaintiff to change essential terms of an already agreed-upon settlement. The Court ultimately concluded its decision by noting that, “Buyer’s remorse, a change of heart, or even growing concern about his ability to close his house purchase do not entitle [the Plaintiff] to renege on a settlement.” The Court held that the parties’ settlement was enforceable despite the lack of any executed Minutes of Settlement

Key Takeaways

The Johnstone decision reinforces the notion that Employers should ensure that all communications with respect to settlement negotiations be clear, concise, and unambiguous. Further, Employers should clearly communicate their positions on all proposed terms and conditions of a settlement throughout the entire negotiation process. Detailed records of all settlement negotiations should be also be stored and maintained. Employers should bear in mind that an employee’s failure to accept settlement documentation due to “buyer’s remorse” after an agreement has been reached (either without the involvement of legal counsel or, as in Johnstone, through the exchange of correspondence between counsel), does not automatically release said party from the terms of settlement. These agreements can, and should be, treated as enforceable settlements binding upon the parties. 

 

Calling in Sick? BC Employees Won’t Need a Note… But We Have Several

Jakob Sanderson

The British Columbia government has established new regulations restricting when employers can and cannot ask employees to present a sick note if they do not attend work for certain short-term health related reasons.

On November 12, 2025, the Employment Standards Regulation was officially amended to largely prohibit employers from requiring employees to provide sick notes to substantiate short-term absences related to the health, illness, or injury of either the employee or a member of an employee’s immediate family. 

This change – while challenging for employers – is akin with a recent trend across Canadian provinces. Ontario, Quebec, Nova Scotia, and New Brunswick have all adopted specific limitations on sick note requests from employers for short-term health-related absences.

Under the new Regulations in B.C., an employer is now prohibited from requiring a sick note, or another health record  (which has been broadly defined) from an employee’s health care provider, if an employee’s health-related leave meets both of the following criteria:

• the leave is five (5) days or fewer; and
• the employee has taken no more than one other health-related leave for a period of no more than 5 consecutive days.

The newly published guidelines issued by the Employment Standards Branch indicate that each “type” of health-related leave taken is to be considered and counted separately when considering the above criteria.  For instance, if an employee is absent for four days due to their own illness, and absent for their next three shifts due to the illness of a family member, the employer may not request a medical note despite the employee being absent for a total of seven consecutive work days.

This regulation applies only in “calendar” years. Therefore, if an employee takes a three-day leave in December, a two-day leave in February, and a three-day leave in March, the employer may not request a medical note despite the employee having taken three health-related leaves in a twelve-month span. The employer must wait until the third such leave within the same calendar year before it may mandate the provision of a doctor’s note to substantiate an absence. Additionally, the timing of an employee’s leave is assessed based on when the leave began. This means a leave from December 29, 2025 through January 3, 2026 will be deemed to have occurred in 2025 for the purposes of the aforementioned criteria.

Upon the third health-related leave within a calendar year, the employer’s ability to request a sick note is still not absolute. Rather, the request must be one that is “reasonable” in the circumstances. While “reasonable” is broad term, the Government’s published guidelines provide the example that it would be unreasonable for an employer to demand a medical note from an employee who purports to be home with a cold, because individuals do not typically go to a doctor to seek treatment for a common cold.

These changes do not prevent employers from requesting medical notes and information for the purposes of assessing an employee’s fitness to return to work, or for the purposes of assessing whether and how it may accommodate disabilities under the BC Human Rights Code or Workers Compensation Act, where that documentation may be necessary for those purposes.

These amendments also do not alter the existing minimum entitlements for illness or injury leave prescribed under the Employment Standards Act, which provide eligible employees with up to five days of paid sick leave per year, and three additional unpaid days of paid sick leave per year. However, the changes do ensure that employees may access all five days of their paid sick leave entitlement without needing to demonstrate proof of illness.

Employers should review their existing sick leave policies and practices to ensure they are in compliance with the new regulations.   Policies which require medical notes for all absences (or for absences of five days or less) are no longer compliant with the Employment Standards Act in British Columbia.

If you require a review of your sick leave policies or practices, or have any questions about this legislative change and its impact on your business or operations, please reach out to one of Mathews Dinsdale’s British Columbia lawyers. 

 

Integrated and Interchangeable: When the Use of Agency Staff Becomes Contracting In

Lijing Black

In the Unity Health Toronto v CUPE Local 5441 decision issued earlier this year, a labour arbitrator addressed a grievance in which the Union alleged that Unity Health Toronto (the “Hospital”) had violated the parties’ Collective Agreement by virtue of its extensive use of agency RPNs and PSWs to perform bargaining unit work. Article 11 of the Collective Agreement prohibited “employees not covered by the terms of this Agreement” from performing work normally performed by the Union’s bargaining unit members, “except for the purposes of instruction, experimentation, or in emergencies where regular employees are not readily available.”  There was no real dispute that the Hospital had used agency staff for years in circumstances that did not fit the aforementioned exceptions. The central question before the Arbitrator was therefore whether the agency RPNs and PSWs were truly employees of the agencies or, for labour relations purposes, whether they were in substance the Hospital’s employees falling within the scope of the Union’s recognition clause.

If the Hospital was found to be the “true employer” of the agency workers, this would mean the Collective Agreement had been breached as a result of an impermissible “contracting in” of agency staff. A “contracting in” arises where non-bargaining unit personnel are brought into the workplace to work alongside bargaining unit employees doing indistinguishable work under the employer’s supervision with the same materials and equipment, which arbitrators have found to be “inherently destructive” to the bargaining relationship, effectively allowing the employer to retain a “shadow work force” which it is not required to employ in compliance with the collective agreement.

In determining which entity was the “true employer”, the Arbitrator sought to determine which party had fundamental control over the employment relationship (as opposed to, for example, merely providing day-to-day oversight of the employees).

In Unity Health, the Hospital’s control over the agencies’ deployment of workers and on-site work was crucial to the Arbitrator’s determination. The evidence established that the Hospital sometimes requested that specific agency workers be referred to work with the Hospital, restricted referrals to those who had previously worked in particular units, rejected referrals without Hospital onboarding or “barcodes,” and used a “Do Not Book” list that functioned as a gatekeeping mechanism over who could work at the Hospital. Once agency staff were at the premises, the Hospital, not the agencies, engaged in the on-site direction of their work.  Agency RPNs and PSWs worked side-by-side with Hospital staff, under the Hospital’s supervisory structure, using Hospital equipment, and following Hospital policies and routines, with no meaningful agency supervision (e.g. site visits) at the Hospital during the relevant period.  The Arbitrator ruled that this day-to-day direction and control was an extremely important consideration pointing to the Hospital being the true employer of the agency staff. The Hospital’s control over agency staff in the performance of their work was far more akin to its manner of directing and supervising its own employees than it was to a true subcontractor relationship.

The decision also highlights the significance of training and disciplinary practices in the “true employer” analysis. Mandatory completion Hospital-specific onboarding and e-learning modules, which were based on Hospital-produced materials and required as a condition of referral, were found to reinforce the Hospital’s fundamental control of the workers in question, as opposed to the agency exercising employer control on its own behalf. 

In respect of discipline and managing performance, even though agencies could take steps after receiving the Hospital’s reports about staff, the agencies depended entirely upon Hospital for monitoring and reporting substantive workplace issues regarding the agency workforce. Additionally, the Hospital made consequential decisions to address issues – including whether to give an individual warning, send them home mid-shift, restrict them to working on certain units, and/or place them on a “Do Not Refer” list which affected future access to work. While the agency retained the ultimate authority to “terminate,” the Hospital’s authority to dismiss agency staff from the premises was treated as being similar to having the power to issue discipline.

In considering and balancing all the factors, the Arbitrator concluded that agency staff functioned, in substance, like a casual workforce integrated into the Hospital’s core operations, acting more like casual float pool than a true contracting out of work. The Arbitrator ruled that the Hospital held the “seat of fundamental control” despite hiring formalities through the agencies and worker perception of the agency as their employer. Accordingly, the Arbitrator found that the Hospital’s use of agency RPNs and PSWs breached the Union’s recognition clause and Article 11.01 of the Collective Agreement.

This decision demonstrates the risks where an employer “plugs” agency workers into its own core work to be performed using to its own policies, training requirements, supervision, equipment, and gatekeeping functions resembling discipline. Such arrangements can lead to a finding that it is in fact the true employer for labour relations purposes, and therefore liable for breaching a collective agreement through a “contracting in” of work.

 

Subscribe here to receive electronic copies of the Employers’ Advisor.

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.