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2021 Employment Law Year in Review

December 16, 2021

2021 Employment Law Review

Authors: Anita Nowinka and Catherine Duguay

2021 was an exciting year for employment law developments – but what does it all mean for 2022?

On November 24, 2021, members of Carbert Waite’s Employment Law Group gathered for a fireside chat to discuss some of the key legislative changes, COVID-19 updates, and notable cases to emerge in 2021 as well as their impacts heading into 2022. Read on to see some of the key issues discussed.

Employment Law Legislative Changes

  • Changes to the Occupational Health and Safety Act that came into effect in 2021 are generally less prescriptive and give employers greater flexibility and discretion to meet their health and safety obligations. For an in-depth analysis of these changes, see our blog here.
  • Ontario’s Bill 27, Working for Workers Act, 2021 is not yet in force but may signal future changes to work-life balance policies and the law on non-compete clauses in Ontario. While Bill 27 would impact only Ontario employers, it may be useful for Alberta to keep an eye on these developments. 
  • The federal government created a new statutory holiday, the National Day for Truth and Reconciliation, on September 30. Not every province, including Alberta, has designated September 30 as a statutory holiday, leaving the decision up to individual employers. 

COVID-19 Employment Law Updates

  • With the widespread distribution of vaccines, many employers looked to vaccination policies as a mechanism to return their operations to a “new normal”. Employers can legally implement vaccination policies, but they must be reasonable and consider employee privacy and human rights. For an in-depth analysis of vaccination policies, see our blog here. That said, managing employees who do not comply with a vaccination policy must be a case-by-case exercise as there is no “one size fits all” that will justify terminating unvaccinated employees. 
  • Non-EI government benefits (e.g. CERB) are likely deductible from severance payments, but the law is not yet well settled.
  • Common law reasonable notice periods may be extended as a result of COVID-19; however, Courts have reiterated the pandemic is only one factor to balance as part of the overall analysis. Courts will not automatically extend the notice period by virtue of the ongoing pandemic but rather consider whether COVID-19 contributed to an economic downturn in the employee’s specific industry.
  • Remote work arrangements are likely to continue into 2022. A recent survey shows workers are just as productive (if not more) working from home as they are from the office. Employers need to be prepared to respond to a greater preference for diverse work arrangements. 

Notable Employment Law Cases

  • In Kosteckyj v Paramount Resources Ltd, 2021 ABQB 225, an employer forced a compensation change of between “16.6% and 20%” due to a company cost-savings measure due to COVID-19. The Court held that the reduction of income was enough to trigger a constructive dismissal, which was not justified based on COVID-19.
  • The impact of the Supreme Court of Canada’s 2020 decision in Matthews v Ocean Nutrition, 2020 SCC 26, continued into 2021. Employees are entitled to compensation for all income, benefits, and bonuses the employee would have received during the reasonable notice. Courts in cases such as Humphrey v Mene, 2021 ONSC 2539, and  Kosteckyj v Paramount Resources Ltd, 2021 ABQB 225, reaffirmed that an employment agreement or bonus policy must very clearly state if any compensation is not included following termination, and this exclusion must have been brought to the employee’s attention.
  • The impact of the Ontario Court of Appeal’s 2020 decision in Waksdale v Swegon North America Inc., 2020 ONCA 391, also continued into 2021. On January 14, 2021, the Supreme Court of Canada denied leave to appeal. Therefore, the Ontario Court of Appeal’s decision is the final word on the fact that employment agreements, including termination clauses, must be read as a whole and not on a piecemeal basis. In 5 out of 6 subsequent cases faced with termination provisions that were similarly problematic as the one in Waksdale, courts found that the employment agreements were unenforceable. 
  • In Rahman v Cannon Design Architecture Inc., 2021 ONSC 5961, however, the Court distinguished Waksdale, finding that the contractual interpretation of the agreement should give effect to the mutual intention of the specific parties to the specific agreement in this specific case – particularly given that there was no inequality of bargaining power between the employer and the employee.
  • At issue in Perretta v Rand A Technology Corporation, 2021 ONSC 2111, was an employment contract that granted an employee two weeks of severance pay in addition to the employment standards amount upon termination without cause. When the situation arose, the employer refused to pay the two-week portion without a release. The Court found that the employer repudiated the contract and, as a result, the common law notice period applied. In short, employers must follow their own contracts.
  • In McCallum v Saputo, 2021 MBCA 62, the Court held that an employer does not have a free-standing, actionable duty to investigate the circumstances of its employee’s alleged wrongdoing prior to dismissing the employee for cause. The employer does assume the risk, however, that just cause will not be established at trial (with ensuing damages for breach of contract or punitive damages). 
  • Hettrick v Triple F Paving, 2021 ONSC 208, concerned an employee’s two-year medical leave of absence. When the employee sought a graduated return to work, the employer cited job abandonment. This decision supports careful management of a leave of absence. An employer must make clear to an employee the consequences for failure to take a step. In other words, the standard for job abandonment is high. The Court also mentioned that the duty to mitigate may not apply to an older employee.  
  • Northern Regional Health Authority v Horrocks, 2021 SCC 42, clarified that “where labour legislation provides for the final settlement of disputes arising from a collective agreement, the jurisdiction of the decision-maker empowered by that legislation – generally, a labour arbitrator – is exclusive”. Only clear legislative intent will open the door to competing statutory tribunals. 

If you have any questions or concerns related to your employment or workplace, please contact a member of the Carbert Waite Employment Law Group.