Lawyer cites 'year of legislative intervention into the working conditions, entitlements and rights of employees'
As December comes to a close, it’s a reminder that employers had plenty to deal with this year in trying to stay on top of changes to their legal obligations and compliance requirements.
“It seems like every year, employers are scrambling to keep up, as there always was a number of big changes [in employment law],” says Joel Smith, a partner at Williams HR Law in the Greater Toronto Area. “Even though we're not dealing with pandemic issues anymore, the changes are still coming at the same pace.”
Some of the most significant employment law changes in 2024 came on the legislative front, particularly in Ontario, according to Smith. The province has introduced six Working for Workers Acts since 2021 - with three in 2024 alone - and all have featured notable amendments to employment standards and occupational health and safety legislation.
Daniel Heath, a labour and employment lawyer at Harris and Company in Vancouver, agrees that legislative changes were a big part of the 2024 employment law landscape.
“I really look at 2024 as a year of legislative intervention into the working conditions, entitlements and rights of employees - particularly in British Columbia, where I am, but it's also the case in Ontario and for federal workers as well.”
Remote work, AI in job postings
Two of the biggest changes in Ontario reflect how work has changed in the past five years, with many workers in remote or hybrid work environments, says Smith. He points to amendments to the province’s Occupational Health and Safety Act (OHSA) that includes virtual harassment and a clarification that employees are still protected under the act when they’re working from home.
We’re also starting to see the beginning of legislation that addresses the rapidly expanding role of artificial intelligence (AI) in the workplace, according to Smith. This includes new job posting rules in Ontario involving the requirement for employers to disclose if AI is being used in the hiring process, along with other obligations such as including the intended salary range for a posted position.
“[Disclosure of AI use in hiring] could lead to employees making allegations that AI was improperly used or they were discriminated against - AI has certain inherent biases,” says Smith. “I think we're going to see more legislation from all levels of government across the country that's intended to address and govern AI, because it’s become such a such a hot issue in workplaces.”
Pay transparency, pay equity
Both Smith and Heath note that employers have been given more responsibilities around employee compensation. The BC government passed the Pay Transparency Act, putting obligations on large employers to prepare pay transparency reports on differences in pay between the genders. This follows changes from late 2023 the require employers to disclose pay ranges for job postings – similar to the new job posting requirement in Ontario – and prohibiting reprisals against employees for discussing their pay.
Federally regulated employers were also presented with new obligations around pay equity, thanks to the federal Pay Equity Act.
“As of September 2024, federally regulated employers are required to publish their pay equity plans - that's brought pay equity to the forefront for a lot of employers, not just with federally regulated employers but also provincially regulated employers as well,” says Smith.
“Although in many provinces there haven't been any pay equity legislative changes in decades, the federal government passing these laws is getting a lot of other employees wondering about it.”
The pay transparency changes in BC are something that employers will have to handle on an ongoing basis, according to Heath.
“Before this was enacted, employers could post a job and not say what they were offering to pay, but now the employer is required to put the expected pay range - that's an effort to shift some of that power imbalance from employers to job applicants,” he says. “And employers are also now prohibited from reprising against employees for discussing their compensation in the workplace, whereas before an employer could dictate whether employees discussed their salary.”
Termination clauses
Federally regulated employers also faced changes to the Canada Labour Code, bringing termination entitlements more in alignment with provincial standards across the country.
“For a long time, they were significantly lower than entitlements under the relevant provincial employment standards statutes,” says Heath. “[The changes] bring federally regulated workers into line with many of the other provinces – it’s a significant change in the federal sphere.”
Most years see notable decisions in case law that can affect the employment relationship, and 2024 was no different. Both Smith and Heath agree that the most significant decisions of the year related to the ever-evolving area of enforceability of termination clauses in employment contracts.
“The Ontario Superior Court decision of Dufault v. The Corporation of the Township of Ignace was the biggest termination clause decision in about four years,” says Smith. “It rendered a lot of termination clauses in existing employment agreements across the province suddenly unenforceable, just like a few years ago when the Ontario Court of Appeal upheld a decision in Waksdale.”
In Dufault, the court decided that if an employment agreement suggests that the employer has the right to dismiss an employee without cause in its sole discretion or at any time, that violates the Ontario Employment Standards Act (ESA) and invalidates the entire termination clause, because there are certain times when an employee's employment may not be terminated legally.
“Employees who have language like that in their contracts, instead of being entitled to [the statutory minimum of] only up to eight weeks or 34 weeks, depending on the size of the employer, they might be entitled to many months - up to two years or more at common law,” says Smith.
A continued deviation between Ontario and BC with respect to the approaches courts take on the enforceability of termination provisions was a big story in 2024, says Heath, pointing to the BC Court of Appeal decision in Egan v. Harbour Air Seaplanes LLP.
Like Dufault, Egan also dealt with the interpretation of a termination provision in an employment contract. The provision stated the employer could terminate employment at any time, without cause, so long as it provided appropriate notice and severance in accordance with the requirements of the Canada Labour Code.
“The court held that this termination clause wasn’t ambiguous and, at the time the employment agreement was entered into, it was clear that the termination entitlements would be governed by the code,” says Heath. “The court said that it was applying a practical and common-sense approach to contractual interpretation, looking at the intentions of the parties.”
“The court in Ontario took a different approach where it searched for any potential ambiguity in the termination provision,” he adds. “It really highlights the difference in the approach that BC courts will take, with that practical interpretation, whereas in Ontario they're taking a more stringent approach and searching for any potential ambiguity that would result in the entire termination provision being unenforceable.”
Employment offers, accommodation
Heath points to two other BC cases - Sui v. HungryPanda Tech Ltd. and Adams v. Thinkific Labs Inc. - as notable for reinforcing why employers should avoid “two-step” employment offers and include all essential terms in a single offer, as the initial offer will be considered a binding contract.
For Smith, two Ontario cases - Leason v. ADAMANDA INC. o/a Dairy Queen Grill and Chill, Huntsville and Aguele v. Family Options Inc. – stand out as examples of employers successfully meeting their duty to accommodate.
“Employers should be monitoring these types of decisions and ensuring that they understand the limits of what they can and can't do when it comes to accommodation, and ensure that they're taking the right steps,” says Smith.
As far as what 2024’s developments mean for the near future, it looks like the pay equity and pay transparency legislative changes will keep employers busy.
“Employers should be taking a look at whether they're compliant with pay equity, as there are all sorts of employers that don't even realize they're not compliant, and we're seeing more complaints of pay equity violations and more enforcement,” says Smith.
Employment contracts
Both lawyers agree that the recent court decisions on termination provisions and a growing difference between how courts treat enforceability in the different jurisdictions could encourage more legal action by dismissed employees, particularly in BC.
“With courts willing to take a practical approach to employment contract interpretation in BC, we’re increasingly seeing terminated employees retaining counsel to enforce their perceived rights on termination,” says Heath. “So it's always a good idea to have your employment contracts reviewed, as they’re coming under attack from employees who are seeking to increase their termination entitlements.”
In 2025 and beyond, both Heath and Smith believe that employers should expect and prepare for more legislative rules around the employment relationship.
“We've been seeing this legislative imposition into the workplace more over the past few years, and we should expect to continue to see that as governments attempt to address what they see as a power imbalance between employers and employees,” says Heath.
