Notable employment and labour law decisions

In Metrolinx v. Amalgamated Transit Union, Local 1587, the Ontario Superior Court of Justice affirmed an employer’s obligation to investigate workplace harassment – even though the incident occurred over a private group chat on personal cellphones, and the victim did not make a formal complaint.

In September 2019, five male employees (the “Grievors”) made derogatory and sexist comments about a female employee, Ms. A, in a private Whatsapp group chat between the Grievors on their personal cellphones. Ms. A became aware of these comments in 2019, and reported the harassment to her supervisor, but never filed a formal complaint.

The employer nonetheless became aware of the derogatory messages in April 2020 and commenced an investigation, which included a review of the Whatsapp messages. The Grievors were ultimately terminated for just cause.

The Union filed grievances on behalf of the Grievors. At arbitration, the grievance was upheld. The arbitrator found that there was not just cause to terminate, including because no formal complaint was made by the victim, and the messages were exchanged in a private group chat on personal devices which – according to the arbitrator – were subject to the employee’s reasonable expectation of privacy and so should not have been reviewed.

The Ontario Superior Court reversed the arbitrator’s decision. It took issue with the conclusion of the arbitrator for several reasons. First, the Court found that the arbitrator erred in finding that the lack of formal complaint meant no investigation was required. Citing the Human Rights Code as well as the Occupational Health and Safety Act, the Court reiterated that employers are required to investigate both “incidents and complaints” of workplace harassment. While a formal complaint usually prompts the initiation of an investigation, employers also have an obligation to deal with harassment once it is known – no matter how they come to know this.

The Court also found that the arbitrator improperly relied on the victim’s reluctance to report harassment to conclude that investigation was not warranted. The Courts have long recognized that there are many reasons why a victim may abstain from reporting sexual harassment, and this does not relieve an employer from their statutory duty to investigate workplace harassment and protect its workers.

Finally, the Court concluded the arbitrator gave too much weight to the Grievors’ privacy concerns. Ultimately, the derogatory Whatsapp messages were brought to the attention of Ms. A in the workplace and so became a workplace issue. The employer’s investigation into these messages was therefore justified.

The decision demonstrates the right and duty of employers to investigate harassment in the workplace, however it comes to the employer’s attention. The Court recognizes that the fact that victims may refrain from reporting harassment does not impede an employer’s obligations once a potential incident of harassment is known.

This decision also highlights that a right to privacy does not always override an employer’s obligation to address workplace harassment. When private messages between and about employees make their way to the workplace, they may well become a workplace issue.

Special thank you to Erin Clark for her contributions to this article.

In Croke v. VuPoint System Ltd., the Ontario Court of Appeal considered the applicability of the doctrine of frustration to an employment contract that was terminated due to the employee’s breach of a mandatory COVID-19 vaccination policy. Frustration was upheld.

The Respondent employer was engaged in a service contract with Bell Canada. A significant portion of the employer’s business was subcontracting technicians to provide installation work in Bell customer’s homes. The Appellant was one of these technicians.

In September 2021, Bell introduced a policy that required all technicians servicing Bell customers vis a vis service contracts – including the Appellant – to be vaccinated for COVID 19. The policy provided that any breach of this policy could result in termination of the service agreement.

The employer followed suit and implemented its own policy requiring its technicians to be vaccinated, including so it could maintain its service contract with Bell. The Appellant refused to be vaccinated and so in late September 2021, the employer terminated his employment for failing to comply with its policy. The Appellant later sued for wrongful dismissal.

In response to the wrongful dismissal claim, the employer alleged frustration of contract: the introduction of Bell’s new vaccination policy was an unforeseeable event, not contemplated by the parties at the time the employment contract was finalized. The motion judge agreed, reasoning that with the new policy, the Appellant lacked a necessary qualification of the job. This change frustrated the very foundation of the employment contract.

The Appellant appealed, but the appellate court upheld the motion judge’s decision, and confirmed the doctrine of frustration applied in this case.

The Appellant argued that his voluntary choice to remain unvaccinated should prevent the doctrine from applying, but the Court held that voluntariness was not relevant in this case. It was not the choice of the employee that made him unable to work, but instead, the introduction of a new requirement which he simply did not satisfy.

The Appellant further tried to assert that he was caught off guard by the termination and was not given adequate time to “mend his ways.” The Court emphasized that once a contract has been frustrated, all obligations are discharged, and there is no requirement that an employee must be given opportunity to rectify the frustrating event.

This case demonstrates to both employees and employers that refusal to comply with a COVID-19 vaccination policy may result in frustration of the employment contract. Further, it highlights that once an employment contract is frustrated, the employer is entitled to immediately end the contract without giving the employee an opportunity to rectify the underlying issue.

Special thank you to Erin Clark for her contributions to this article.

In Marentette v. Canada (Attorney General), the Federal Court of Canada emphasized the importance of respecting the principles of procedural fairness during workplace investigations.

In April 2021, the Applicant, a federally-regulated employee, filed a Notice of Occurrence alleging seven separate incidents of workplace harassment and violence involving six supervisors between 1995 and 2020.

The employer took no steps to investigate the Notice of Occurrence until May 2022, (almost one year later). Only four of the six supervisors whom the Applicant made allegations against were interviewed by investigators, and the Applicant was not given the opportunity to respond to the supervisors’ versions of events. The Applicant was then informed by the employer, on three separate occasions between August and November 2022, the investigation was complete. However, contrary to the employer’s workplace investigation policies, he was not provided a copy of the preliminary findings of the investigation nor given an opportunity to respond before the final report as issued.

Ultimately, the investigation determined that none of the seven incidents alleged were workplace harassment, and no further measures would be taken to address the allegations. The Applicant’s Notice of Occurrence was closed.

The Applicant challenged the procedural fairness of the investigation before the Federal Court, by filing a Notice of Application for judicial review. Specifically, he alleged that he was denied the opportunity to respond to the supervisors’ evidence and to the preliminary report.

The Court largely agreed with the applicant’s reasoning, stating that workplace harassment investigations require a high level of procedural fairness. It concluded that the applicant should have been given a “reasonable opportunity” to respond to the evidence and preliminary report – particularly as the employer’s policies explicitly provided for this.

The Court ultimately ordered a new investigation involving a different investigator.

This case demonstrates the importance of procedural fairness during investigations into workplace harassment and violence – including the Applicant’s ability to respond to contrary evidence.

It also reiterates that an employer must be careful to comply with its own internal investigation policies. Employers should therefore only include procedures over and above what the law requires if they are prepared to ensure those procedures are followed.

Special thank you to Erin Clark for her contributions to this article.

In Smith v Alberta (Alberta Human Rights Commission), 2024 ABKB 187 (CanLII), the Court confirmed that common ailments, such as the flu, do not fall under the definition of ‘disability’ under the Alberta Human Rights Act and so are not a protected ground of discrimination.

The Applicant was unable to attend work due to the flu. However, he was absent for more than three days without providing notice to his employer in accordance with its attendance management policy. He was dismissed from his employment on this basis.

The Applicant argued (among other things) that the flu was a disability and so his dismissal was discriminatory under the Alberta Human Rights Act. He cited several cases that spoke to the fact that disabilities under the Act do not require permanence or a certain level of severity. On this basis, according to the Applicant, the employer was required to accommodate his illness rather than discipline under its policies.

The Court rejected the argument that the flu falls under the definition of disability. While a disability does not have to be permanent, the Court reasoned that the term is not meant to encompass common illnesses that last only a few days. In this case, the Applicant was ill for less than a week, and so there was no disability at issue.

This case helps clarify that more common and fleeting ailments will not necessarily trigger protection under human rights legislation. In turn, it substantiates an employer’s ability to enforce its attendance management policies when minor illnesses are at issue – without breaching human rights legislation. However, given this legislations’ broad employee protections, discipline in the face of medical issues must be handled carefully and with circumstance-specific consideration.

Special thank you to Erin Clark for her contributions to this article.

In Krmpotic v Thunder Bay Electronics Limited, the Court of Appeal for Ontario considered whether medical evidence is necessary to establish physical incapacity to mitigate damages. The Court also contemplated the requirements of awarding aggravated damages, and whether they can be awarded in cases where the employer acted in bad faith.

The employee was a labourer employed with the same employer for 30 years before his employment was terminated without cause or notice. This termination occurred hours after the employee returned to work from medical leave and was still physically recovering from back surgery.

The employee sued the employer for wrongful dismissal. He sought pay in lieu of notice, as well as damages for mental distress and aggravated or moral damages.

At trial, the employer sought a reduction in the pay in lieu of notice award on account of what it saw as the employee’s failure to mitigate his damages by pursuing new employment. The Court rejected this argument, finding the employee was unable to perform any meaningful physical labour during the notice period on account of his back injury and recovery. However, no medical evidence was proffered by the employee in this regard.

The employer appealed to the Court of Appeal, again claiming a failure to mitigate. It argued that the trial judge ought to have considered medical evidence to determine whether the employee was able to pursue work during the reasonable notice period. Instead, the trial court merely accepted the employee’s own testimony.

The appellate court rejected the employer’s argument, stating that physical incapacity is a matter of fact and there is no general principle requiring that it solely be ascertained by medical evidence.

The Court also rejected the Appellant’s argument that evidence of mental distress was strictly necessary to justify aggravated damages, noting that the argument “reflects an unduly narrow view of the employer’s duty of good faith during the termination process.” The Court insisted that the Appellants had breached this duty of good faith in several ways, as articulated by the trial judge. As such, the Court concluded that the employee was entitled to aggravated damages.

Special thank you to Erin Clark for her contributions to this article.

In York Region District School Board (YRDSB) v. Elementary Teachers’ Federation of Ontario,1 the Supreme Court of Canada (the “Court”) ruled that teachers are protected by section 8 of the Canadian Charter of Rights and Freedoms (the “Charter”) against unreasonable search and seizure on the basis that Ontario public school boards are inherently governmental for the purpose of section 32 of the Charter.

This is an important decision and impacts public school boards and their employees across Ontario.

Two York Region District School Board (the “Board”) teachers kept a log using a personal email account to discuss their negative feelings about another teacher.

The principal entered one of the teacher’s classrooms and saw that the Board issued laptop that was used by the teacher was open. The principal then proceeded to touch the mousepad, found the logs open on the screen, and scrolled through the document - all while using his cellphone to take pictures of the logs.

The teachers were reprimanded by the Board for these logs and their union filed a grievance claiming that the search was in breach of the teacher’s right to privacy. A labour arbitrator dismissed the grievance and found that there was no breach of the teachers’ reasonable expectation of privacy when balanced against the Board’s interest in managing the workplace. The arbitrator’s decision did not consider whether section 8 of the Charter had been infringed, but principles derived from section 8 jurisprudence were used.

What is the appropriate standard of review?

Justice Rowe, writing for the majority, determined that the correctness standard must apply to the determination of:

1. Whether the Charter applies to school boards, and
2. The arbitrator’s decision, because at heart they are both constitutional questions that require a final and determinate answer by a court.2

Does the Charter apply to public school boards?

After reviewing the Ontario Education Act, the Court determined that Ontario public school boards are governmental by nature and additionally, that public education is an inherently governmental function that has a unique constitutional quality.3 The Court found that effectively, Ontario public school boards are an arm of government in that they exercise powers conferred on them by provincial legislatures.4

Application of section 8 and the error of the Arbitrator’s reasons

The Court’s majority ruled that the arbitrator failed to appreciate the constitutional dimension of the searches conducted by the principal and ought to have applied the Charter. Justice Rowe went on to say that the constitutional right to a reasonable expectation of privacy and the right to privacy in an arbitral sense is completely different. Based on the foregoing, the Court concluded that the arbitrator’s reasons disclosed a fundamental error as she had an incorrect understanding of the type of privacy which was at stake. When reviewing an administrative decision maker’s decision, courts simply do not have the ability to accept a substitute for Charter rights when they should have been applied. Courts also cannot read an administrative decision maker’s reasons as if they applied a Charter right when they did not.5

As such, the Court’s majority found that section 8 of the Charter protected public school teachers from unreasonable search and seizure in their place of employment.

In light of the YRDSB decision, Ontario public school boards must consider and be mindful of privacy rights when conducting searches of board property and/or devices. Supervisors and those performing managerial functions should be cautioned by public school board employers on searching classrooms, laptops, and other pieces of technology – including those that are technically the property of the school or school board. As the Court stated, this right goes beyond a reasonable exception of privacy and is one that is enshrined in the constitution, and the school board’s right to manage the workplace may largely be irrelevant.

While the Court expressly cautioned that this ruling only applied to Ontario public school boards, YRDSB may set a helpful precedent for teachers in other provinces who are employed by public school boards.

Special thank you to Erin Clark for her contributions to this article.

1. York Region District School Board v. Elementary Teachers’ Federation of Ontario, 2024 SCC 24. [YRDSB]
2. YRDSB at paras 62 & 63.
3. YRDSB at paras 79 & 81.
4. YRDSB at para 79.
5. YRDSB, at para 68.

On February 12, 2024, the Ontario Court of Appeal (“ONCA”) held that Bill 124, the Ontario government’s public sector wage restraint legislation, was unconstitutional in its application to unionized workers, as it violated their collective bargaining rights. However, the same bill was found to be constitutional in its application to non-unionized workers, where collective bargaining is not a right. The Ontario government has since repealed Bill 124 in its entirety but has stated plans to reintroduce new regulations in the future.

Bill 124 purported to cap public sector wage increases to 1% per year for a three year period, for most employees in a variety of public sector settings. The lower court struck the bill down in 2022, finding it breached workers’ freedom of association under Section 2(d) of the Canadian Charter of Rights and Freedoms. It was also found that this breach could not be “saved” by Section 1 of the Charter, which permits the government to limit Charter rights in certain circumstances, if the limit is reasonable and in response to a pressing objective. 

The Ontario government appealed that decision to the ONCA, which narrowed the lower courts’ decision. It found that the bill was in breach of Section 2(d) of the Charter as it applied to unionized workers. This was including because Bill 124 broadly defined “compensation” so as to significantly reduce the scope of items that could be negotiated during collective bargaining. It was also inconsistent with recent public sector collective bargaining agreements not subject to Bill 124, which permitted higher wage increases.

The ONCA also maintained that this breach of Section 2(d) could not be saved by Section 1 of the Charter. However, unlike the lower court, the ONCA found that managing government finances and budgetary considerations was a pressing objective that could trigger Section 1. With the said, the ONCA also found that Bill 124 did not provide reasonable or proportional means to achieve this objective. This was including because the Government failed to demonstrate why wage restraint could not have been achieved through less obtrusive means, including through the collective bargaining process.

Conversely, the ONCA found that the bill was not in breach of Section 2(d) of the Charter as it applied to unionized workers. This is because Section 2(d) of the Charter does not apply to workers who are not represented by a union and so do not collectively bargain.

On February 23, 2024, the Ontario Government repealed Bill 124 in its entirety. The Government had previously announced that it would not be appealing the ONCA’s decision and would instead urgently introduce new regulations. At the time of writing, no regulations have been introduced.

Some labour arbitrators have already awarded additional wage increases for certain public sector workers affected by Bill 124, largely in cases where the applicable collective agreement includes a “reopener clause” (i.e. a negotiated term that enables the parties to renegotiate terms of an ongoing collective agreement before its term expires). Public sector employers who were implicated by Bill 124 will want to review their collective agreements to understand if such “reopening” is possible.

In addition, and even in the absences of a contractual reopening clause, public sector employers in the union space in particular will want to assess how the repeal of wage restraints may impact future negotiations, including with respect to unions’ wage expectations.

Special thank you to Madison Frehlick for her contributions to this article.

In Dufault v The Corporation of the Township of Ignace, the Ontario Superior Court (the “Court”) again took issue with the wording of contractual termination clauses, finding new reasons to render both with and without cause termination language unenforceable.

Looking first at the employment contracts without cause termination language, the Court took issue with its statements that the employer could terminate employment at “its sole discretion” and “at any time”. It concluded that this language permitted the employer to contravene the Employment Standards Act, 2000 (“ESA”). In most circumstances, the ESA prohibits an employer from terminating the employment of an employee is on an ESA leave of absence. The ESA also prohibits termination of employment as means of reprisal against an employee who exercises their rights under the ESA. As a result, the Court reasoned, an employer cannot terminate “at any time” or in “its sole discretion” as the contract purported as, in some circumstances, this will be contrary to their ESA obligations. 

The Court also took issue with the language used in the contract’s termination with cause provisions. In that regard, the contract stated that the employee’s employment could be terminated “for cause” and “without statutory notice and severance pay”. While the common law relies on a “for cause” standard to enable termination without common law reasonable notice, the ESA relies on a different and higher standard – i.e. that employee must be “guilty of wilful misconduct, disobedience or wilful neglect of duty that is not trivial and has not been condoned by the employer” – to enable termination without ESA minimum notice.

There will therefore be scenarios where the grounds for termination meet the common law standard of “for cause” termination (and so common law reasonable notice is not owing); but do not meet the higher ESA standard for “wilful misconduct, disobedience or wilful neglect of duty” (and so statutory minimum notice and severance pay is still owing). As a result, the Court reasoned, an employer cannot purport to terminate “for cause” and without statutory minimum notice or severance pay as, in some instances, this will be this will be contrary to their ESA obligations. 

Ultimately, the Court deemed the termination clauses at issue to be unenforceable. The employee was therefore not limited to the clause’s restrictions to notice on termination of employment, but rather, availed to the greater period of notice available at common law.

It is yet to be seen if this decision will be appealed and so its full impact is unknown. However, the case serves as a sharp reminder that Ontario courts continue to erode an employer’s ability to enforce contractual restrictions on notice of termination of employment (whether with or without cause). Given the language permitted by the courts has proven to be a moving target, employers are encouraged to review their contracts regularly to ensure this language is up to date.

Special thank you to Madison Frehlick for her contributions to this article.

As the September 2024 deadline looms for many federally-regulated employers to implement a pay equity plan under the federal Pay Equity Act (the “Act”), case law from the federal Pay Equity Commissioner (the “Commissioner”) remains closely watched. Of these cases, a recent decision from the Commissioner provides further insight for employers considering whether to establish multiple pay equity plans – versus the presumptive single plan. 

The Act presumes that employers will have a single pay equity plan for all employees, regardless of the diversity of many organizations. However, this presumption can, in limited circumstances, be rebutted. The Commissioner may permit an employer to maintain multiple pay equity plans if each plan contains “enough” predominantly ‘male’ job classes to enable the comparison to ‘female’ job classes (i.e. sufficient male job classes in both quantity and quality), and if the Commissioner is satisfied that multiple plans are “appropriate in the circumstances”.

In the limited case law to date, establishing the appropriateness of multiple plans has proven elusive. However, in a recent decision from the Commissioner, the employer was partly successful in its application for multiple plans. In that case, the employer sought three separate pay equity plans: one for non-unionized management employees, one for those in a particular technical role (the “TRE’s”) and one for everybody else (including both union and non-union employees).

The Commissioner deemed it appropriate to have a separate pay equity plan for TRE’s, given the complexity of their job evaluation and pay structures. These structures – and in particular, the job evaluation tool used to assess them – were highly technical, specialized and specific to TRE work. They would therefore pose unjustified complexity to the pay equity analysis of non-TRE employees, and so a separate pay equity plan for TRE’s was appropriate. 

However, the Commissioner refused to permit separate plans for each the management and non-management groups. In an effort to justify these separate plans, the employer explained the challenges of designing a job evaluation tool that could measure and compare the distinct responsibilities of its management workforce, with the fundamentally different skills and responsibilities of its non-management workforce. The employer also explained that when many different jobs are included in the same job evaluation tool, small difference between jobs can become impossible to meaningfully distinguish and therefore gender gaps can be unintentionally obscured. The Commissioner was ultimately unsympathetic the challenges raised by the employer. Quoting an earlier decision on the same issue, the Commissioner noted that:

The legislators were undoubtedly alive to the challenges of creating one pay equity plan in large organizations. Yet, that is what is required by the legislation. Any exception to this requirement [i.e. the exception of multiple plans] must be carefully applied.

The decision therefore reiterates that the ‘typical’ organizational and administrative difficulties of creating a single pay equity plan are unlikely to justify the use of multiple plans. However, the case does suggest that there are nonetheless some scenarios that are sufficiently complex and unique to render multiple pay equity plans appropriate.

Special thank you to Madison Frehlick for her contributions to this article.

In Shalagin v. Mercer Celgar Limited Partnership 2023 BCCA 373, the British Columbia Court of Appeal (the “BCCA”) confirmed that an employee’s repeated, secret recording of coworker conversations can justify cause for dismissal. This was despite the fact the employee claimed the recordings were meant to capture discrimination in the workplace.

The employee, an accountant, was initially terminated from his employment on a without cause basis prompting him to commence lawsuits against the employer for both wrongful dismissal and alleged breaches of human rights legislation. As these claims progressed, evidence came to light that, over a 10-year period and while employed, the employee had surreptitiously recorded over 130 conversations with co-workers while still employed. The material recorded was predominantly confidential, personal and/or sensitive.

In an effort to explain the secret recordings, the employee claimed to have made them to substantiate his belief that he was being discriminated against at work. However, the employer alleged that the recordings were improper and resulted in having “after acquired” cause to terminate the employee’s employment (even though he had initially been dismissed on a without cause basis). 

The employee challenged the employer’s after acquired cause position in court. He was unsuccessful in both the lower court and on appeal to the BCCA. After acquired cause was upheld.

The BCCA substantiated the lower court’s findings.  It found the factors substantiating dismissal for cause included that the employee was aware that the recordings were contrary to his professional duties as an accountant, the confidentiality duties he owed to his employer and general privacy concerns. The information recorded was also sensitive and often included personal details about coworkers, and so the recordings would reasonably have made coworkers uncomfortable. The court was also compelled by the sheer number of the recordings. Finally, it was acknowledged that failure to censure the employee’s behavior might embolden other employees who perceived themselves as ill-treated at work to improperly start recording others.

The BCCA did acknowledge that the employee may have initially had a basis to record conversations due his fears of discrimination. However, it further stated that the fact the employee continued to record conversations – including over a 10-year period – went far beyond this.

This decision shows the growing importance British Columbia courts place on the privacy rights of individuals, even in the employment context. Depending on the scale and severity of the misconduct, infringing on the privacy of co-workers can sufficiently undermine trust and constitute just cause for termination.

The decision also highlights the importance of employers explicitly incorporating employee privacy and confidentiality obligations into every employment agreement. This serves to both reiterate workplace expectations and substantiate any related discipline, up to and including dismissal for cause.

Special thank you to Madison Frehlick for her contributions to this article.