2022 brought employers and the employment law community a number of interesting and important judicial decisions and legislative updates. Here are the top five developments from HV on HR in 2022:
1. Are post-employment non-compete agreements entered into in Ontario prior to October 25, 2021 void?
In October 2021, the Ontario government amended the Employment Standards Act, 2000 (“ESA”) to ban all non-competition clauses as of October 25, 2021, except if the employee was working in an “executive” role or as part of a sale of business. The courts were then tasked with the question of whether non-competition clauses agreed to prior to the amendment would be retroactively banned. The Court in Parekh et al v Schecter et al, 2022 ONSC 302 held that the ESA’s prohibition against non-competition agreements does not apply to those entered into prior to October 25, 2021. Notably, however, while non-competition agreements entered into prior to October 21, 2021 may not be voided for violation of the ESA, its enforceability will still be subject to the court’s analysis.
2. Province provides guidance on Disconnecting from Work policies
The Ontario government introduced amendments to the ESA that require certain employers to implement written disconnecting from work policies. The guidance specified that the requirement to have a policy in place does not mean there is a free-standing right for employees to disconnect from work or be free from the obligation to engage in work-related communications. Rather, the requirement is that a written policy must be in place with respect to disconnecting from work, which is defined to mean not engaging in work-related communications, including emails, telephone calls, video calls or sending or reviewing other messages, in order to be free from performing work.
3. Terminations for Cause: Ontario Court of Appeal clarifies what is “Willful Misconduct”
In Render v ThyssennKrupp Elevator (Canada) Limited, 2022 ONCA 310, the Court of Appeal reviewed the trial court’s decision regarding an employee’s termination for cause after he slapped a female co-worker on the buttocks. This case illustrates that, in order to establish wilful misconduct, employers will have to demonstrate that the employee engaged in a preplanned and intentional act. Employers will have to pay employees their minimum entitlements under the ESA unless they can establish wilful misconduct occurred. Given this high threshold, employers will have a complicated task in determining whether an employee is entitled to statutory benefits.
4. Reminder to Ontario Employers with 25 or More Employees – Electronic Monitoring Policy
Bill 88, Working for Workers Act, 2022, was put forth amending the ESA requiring employers with 25 or more employees to have a written policy on the electronic monitoring of employees. The policy must include information regarding whether an employer electronically monitors its employees and if so, (a) a description of how and in what circumstances the employer may electronically monitor employees, and (b) the purposes for which the employer may use information obtained through electronic monitoring of its employees. As of January 2023, employers with 25 or more employees must have a policy in place by March 1, 2023.
5. Best Practices for Termination to Avoid Damages Awards for Bad Faith Conduct
In 2022, there were a number of court decisions awarding damages for an employer’s bad faith conduct which appear to have lowered the previously high threshold for additional damages being awarded in wrongful dismissal actions. These decisions have given us insight on best practices for employers to avoid the risk of additional damages. The following case is an example of this: In Pasap v Saskatchewan Indian Gaming Authority and Bear Claw Casino, 2022 SKQB 200, the employee was awarded $25,000 in punitive damages because the employer gave the employee an ultimatum of being terminated or resigning. When the employee said that he was not resigning, the employer asked him to leave his keys, leave, and then maintained that the employee had resigned.
To learn more about these case law and legislative updates, visit our HV or HR newsletter or click on the links in the headings above. If you have any questions regarding employment matters, the lawyers at Heeney Vokey LLP are happy to help.