As 2025 draws to a close, Ontario and federal employment law continue to evolve. This year has introduced a combination of new statutory entitlements, compliance responsibilities, and judicial rulings.

Staying informed is essential for employers and HR professionals. The following highlights the most significant developments of 2025, as well as some changes expected in 2026. Review the updates and assess their impact on your organization. If necessary, consult a legal expert. Being proactive now can prevent issues later.

#1: Contradicting Court Decisions: Does “At Any Time” violate the ESA?

Ontario courts issued conflicting rulings in 2025 regarding whether the phrase “at any time” in termination clauses violates the Employment Standards Act, 2000 (“ESA”).

In Baker v. Van Dolder’s Home Team Inc. (“Baker”), Justice Sproat held that “at any time” invalidates the termination without cause clause, quoting Dufault v. The Corporation of the Township of Ignace (“Dufault”). Similarly, in Chan v. NYX Capital Corp., Justice Parghi found the phrase “at any time and for any reason” illegal.

Conversely, in Li v. Wayfair Canada ULC (“Wayfair”), Justice Dow upheld a similar clause containing “at any time for any reason”, stating it was “distinguishable” from previous rulings but without a clear explanation. Additionally, in Jones v. Strides Toronto, Justice Moore ruled that “at any time” alone does not breach the ESA, as it differed from Dufault due to its association with “sole discretion.”

Taken together, some judges view “at any time” as inherently offending the ESA’s protective purpose; others treat it as harmless when paired with clear ESA-anchored language. The Court of Appeal will hear the Baker and Wayfair cases together in early 2026. The “at any time” debate is expected to be resolved next year.

Takeaway: Until the Court of Appeal rules on this issue, employers should avoid “at any time,” “for any reason,” and “in its sole discretion” phrasing altogether and use precise ESA-compliant language to reduce risk.

#2: Ontario Court Of Appeal Upheld an ESA Minimum Termination Clause

Not surprisingly, in Bertsch v. Datastealth Inc., the Ontario Court of Appeal upheld a 2024 lower court decision, holding that a termination clause limiting the termination entitlement to the ESA minimum was enforceable.

Takeaway: Properly drafted termination clauses that clearly exclude common law entitlements and limit termination entitlements to the ESA can withstand court scrutiny. To mitigate the risk of significant common law payouts, employers should seek legal counsel to draft and review these clauses effectively.

#3: Ontario Court Held a Global Contract Unenforceable

On the contrary, in Boyle v. Salesforce.com, the court held that Salesforce’s global “for cause” clause was unenforceable under Ontario law because it created ambiguity and failed to comply with the ESA. The contract combined U.S.-style “at-will” language with local carve-outs, stating that employment could be terminated “at any time, with or without cause,” except in “certain non-U.S. jurisdictions.” The court found it impossible for an Ontario employee to know which provisions governed termination, especially when the agreement directed employees to consult the company’s legal department if uncertain.

The court concluded that the clause was ambiguous and non-compliant with the ESA, rendering the entire termination provision void and entitling the employee to common law notice.

Takeaway: The decision underscores that one global contract is unlikely to fit all jurisdictions. Employers operating in multiple jurisdictions must ensure Ontario contracts have termination language that specifically complies with the ESA.

#4: Arbitrary Definition of “Cause” Invalidates a Termination Clause

Another lesson for employers. In Ghazvini et al v. Canadian Imperial Bank of Commerce, the Ontario Superior Court held that CIBC’s termination clause was illegal and unenforceable because it defined “cause” more broadly than the Canada Labour Code (“CLC”) permits. The clause listed examples such as unsatisfactory performance, breach of policy, and failure to complete training—none of which necessarily meet the statutory threshold of serious misconduct under section 229.1 of CLC. Since the “for cause” wording breached the statute, the entire termination provision was void, and the employees were entitled to common law reasonable notice instead of the contractual two-weeks-per-year formula.

Takeaway: The case reinforces that federally regulated employers should keep their termination clauses simple and avoid any “for cause” definitions that extend beyond statutory limits.

 #5: Termination Clause Unenforceable Because of a Missing Comma

In Brocklehurst v. Micco Companies Limited, the Nova Scotia Supreme Court ruled that the employer’s termination clause did not effectively limit common law notice due to grammatical ambiguity and improper statutory reference. The clause stated that upon termination without cause, the employee would receive “only such minimum notice of termination, or pay in lieu thereof, and severance pay (if applicable) to which you are entitled under the Nova Scotia Labour Standards legislation.”

The court found that the phrase “to which you are entitled” could only attach to “severance pay,” not “notice of termination,” due to a missing comma, leading to ambiguity. Additionally, the reference to “severance pay,” a term not recognized in Nova Scotia’s Labour Standards Code, further complicated the clause’s intent and reinforced its ambiguity. As a result, the employer was ordered to pay 8 months’ reasonable notice under common law, instead of the 4-week statutory minimum.

Takeaway: Employers should realize the necessity for clear and unambiguous language in termination clauses. Even a grammatical error can lead to a huge payout.

#6: “Buyer’s Remorse” Doesn’t Change the Settlement Deal in Emails

In Johnstone v. Loblaw Companies Limited, the Ontario Superior Court upheld that a settlement agreed upon via email is binding, even without signed formal minutes. Mr. Johnstone, an employee of Loblaws, accepted a settlement offer that was contingent on mutual agreement on documentation. After receiving a draft, he attempted to include new conditions regarding a house purchase, but Loblaws declined to renegotiate and sought summary judgment to enforce the settlement.

The court ruled that all essential terms—such as notice, legal fees, and reference letters—were agreed upon and that the “subject to mutual agreement on the supporting documentation” phrase did not provide an escape. The court noted that unsigned documentation does not prevent a binding agreement when key terms are mutual. Johnstone’s attempt to modify terms was deemed “buyer’s remorse,” which cannot undo an otherwise enforceable contract. The court granted summary judgment to Loblaws and dismissed the employee’s wrongful dismissal claim.

Takeaway: Once the parties confirm agreement on essential terms, even in an informal way, a party cannot later withdraw simply because formal minutes remain unsigned. Maintain clear, contemporaneous records of settlement negotiations and terms agreed upon, as these will determine enforceability if disputes arise.

#7: Ontario: Long-term Illness Leave in Effect

On June 19, 2025, a maximum 27-week long-term illness leave for employees who have worked at least 13 consecutive weeks came into effect, under the ESA. This leave is unpaid. An employee must obtain a medical certificate indicating a serious medical condition and the duration of time the employee will be unable to work due to this condition. Employers must retain records related to the leave for 3 years after it ends.

Takeaway: The new long-term illness leave policy will require Ontario employers to be prepared to manage workforce coverage during extended absences, revise leave policies and properly retain HR records.

#8: Ontario: Certain Information Must Be Provided to Employees

Beginning on July 1, 2025, under the ESA, certain employers must provide new employees with the following written information before their first day of work or as soon as possible after:

• Legal and any operating business name
• Contact information (address, phone number, contact names)
• General description of the initial work location
• Starting hourly wage or commission
• Pay period and payday
• Description of initial anticipated work hours

Takeaway: Although exemptions apply to employers with fewer than 25 employees and to assignment employees from temporary help agencies, it is still recommended for all employers to include the information above in their written employment contracts/offers.

#9: Federal: Leave Related to Pregnancy Loss

Under expected changes to the CLC, employees in federally regulated workplaces will be entitled to a leave of absence after a pregnancy loss , if:

• their pregnancy does not result in a live birth;
• their spouse or partner’s pregnancy does not result in a live birth; or
• they intended to be the legal parent of a child from another person, like a surrogate.

The leave’s length will be up to eight weeks for stillbirths (after the 20th week or 500g) and up to three days for other pregnancy losses. The first three days are paid. These changes are expected to take place by the end of 2025.

Takeaway: Federally regulated employers should prepare to implement policies and support structures that accommodate the new leave provisions for pregnancy loss under the CLC, and consider these provisions when making workforce management plans.

#10 Ontario: New Job Posting and Pay Transparency Requirements in 2026

In 2026, Ontario employers with 25 or more employees must disclose the expected compensation or a salary range when publicly posting job openings. The salary range must not exceed $50,000. This requirement does not apply to positions offering salaries over $200,000.

Additionally, employers must indicate whether artificial intelligence (AI) is involved in the hiring process. Employers are prohibited from requiring Canadian experience. Job postings must clearly specify whether they pertain to an existing vacancy. Lastly, candidates must be informed of hiring decisions within 45 days following their interviews.

#11: Federal New Leaves in 2026

• Certain Bereavement Leaves May Become Longer in 2026

CLC currently permits 10 days of leave of absence in the event of the death of a member of their immediate family, or the death of a family member for whom the employee was taking compassionate care leave or critical illness leave. Amendments to CLC will permit up to eight weeks of bereavement leave for the death of an employee’s child or the child of their spouse or partner. These amendments may come into effect in 2026.

• Leave for Placement of Child May Come into Effect in 2026

A new unpaid leave of up to 16 weeks has been introduced to CLC to assist federally regulated employees who need to manage responsibilities related to placing a child(ren) in their care, whether it be through adoption or surrogacy. Employees can receive EI benefits during this leave. This new leave may take effect in 2026.

 Conclusion

As we look ahead, it is crucial for employers in Ontario and across federally regulated workplaces to stay informed and proactive regarding these evolving employment laws. The developments of 2025 highlight the importance of careful compliance and the nuances involved in drafting employment documents, including contracts, policies, and job postings. Employers should consult with legal experts to ensure their documents align with the latest legal requirements while effectively addressing the needs of their workforce.

Ontario employers have a legal duty to accommodate employees with family obligations that affect their work schedules. This responsibility requires reasonable adjustments to support employees’ needs while balancing business requirements. The recent Aguele v. Family Options Inc., 2024 HRTO 991 decision (“Aguele”) provides valuable insights into how employers can navigate these accommodations effectively.

Understanding Employer’s Duty to Accommodate in Ontario

In Ontario, employers have a duty to accommodate employees based on family status, meaning they must make reasonable efforts to adjust work schedules or conditions if employees have family obligations that affect their availability. This duty is not absolute and is limited by the principle of “undue hardship,” a high standard that allows employers to justify why they cannot accommodate an employee. Whether this standard is met, multiple factors such as cost, health, safety, and the impact on the organization’s operations should be taken into consideration.

However, undue hardship is not the only limitation of this duty. Courts and tribunals have clarified that employees are not entitled to “perfect accommodations” but rather to those that are reasonable under the circumstances. This distinction means accommodations must address human rights needs rather than personal preferences and be balanced against the business’ operational requirements. 

Insights from Aguele v. Family Options Inc.

The recent decision by the Human Rights Tribunal of Ontario (HRTO) in Aguele offers practical guidance for employers. In this case, an employee—a single mother—struggled with shift scheduling allegedly due to childcare obligations. After the employer denied certain shift modifications and reduced her shifts, she quit and alleged discrimination and constructive dismissal based on family status.

The HRTO ultimately found that the employer had fulfilled its duty to accommodate. It was noted that the employee’s shift requests were largely based on preference rather than necessity, as she admitted she could work some shifts but found them “not ideal” and was “not happy” doing so.

The HRTO emphasized that employees “are not entitled to perfect accommodation, but rather to accommodation that is reasonable in the circumstances.” Interestingly, what is considered reasonable in the circumstances also depends on the nature of the employer’s business. In Aguele, the employer is a provider of residential housing and support services to adults with developmental and intellectual disabilities; as it serves a highly vulnerable population, and due to the importance of consistency, the employer “usually schedules staff to work in only one home at a time and requires them to be available to work regularly, with most or all schedules including at least some weekends or evening shifts.” As a result, some of the shifts or changes requested by the employee were simply not feasible, given the nature of the employer’s service, their clients’ needs, and their funding model.

Practical Guidelines for Employers

•  Reasonable, not perfect, accommodations: Employers are required to offer reasonable accommodations but not to meet every preference. In Aguele, the HRTO confirmed that dissatisfaction with shifts does not always justify claims of discrimination if reasonable accommodations are made.
• Consider business context: The nature of the business plays a significant role in determining what constitutes reasonable accommodation. For example, in Aguele, the employer provided essential services to vulnerable populations, requiring consistent staff schedules that limited flexibility. Employers should evaluate whether operational necessities justify certain limits on accommodation.
• Engage in a cooperative process: Accommodation is a two-way process, requiring employers and employees to cooperate. Employees must provide sufficient information about their family needs, and employers must reasonably inquire further if there are indicators of difficulty due to family obligations. Open dialogue and thorough understanding of each party’s role in the accommodation process are essential to avoid conflicts or disputes.

Key Implementation Takeaways for Employers

•  Making Inquiries: First, when there is reasonable grounds to suspect that employees may need accommodation, ask them if that’s the case and what accommodation they need; second, ask them why they need or prefer certain accommodations so you can assess and retain evidence on whether the requests are made due to human rights need or personal preference; third, if necessary and reasonable under circumstances, ask employees for evidence to support their accommodation requests.
• Clarity on limits: Employers should be clear about the limits of accommodation based on undue hardship and communicate any constraints due to the nature of the work.
• Document accommodation efforts: Maintain detailed records of discussions and efforts to accommodate employee requests to ensure transparency and legal compliance.
• Seek professional guidance: Legal or HR consultation can help employers navigate complex situations where family status and business operations intersect, avoiding potential misinterpretations of the law.

The Aguele decision underscores the importance of reasonable accommodation efforts while balancing business needs. By adopting a proactive, communicative approach to accommodation, employers can meet legal obligations and support a cooperative work environment.

Many employers have implemented COVID-19 vaccination policies to meet their obligations under the Occupational Health and Safety Act (“OHSA”) to provide a safe workplace. Some have done this on their own accord, while others were required to by law. Canadians are being encouraged to get a third dose of the COVID-19 vaccination, with many employers now requiring that their employees get booster shots.

The purpose of a COVID-19 vaccination policy is to provide a safe workplace. It could be considered reasonable to require employees receive boosters to satisfy this obligation. In effect, there is no difference between the original two doses and a booster, they all serve to create a safe workplace.

 

Important steps to draft and implement a proper COVID-19 vaccination policy

However, vaccination policies have become a difficult issue, and a source of litigation. Adding to the complexity, provincial governments have started to relax restrictions. We recommend employers take the following steps to protect their business:

1. Ensure your COVID-19 vaccination policy allows for refusals based on medical or religious grounds protected by Ontario’s Human Rights Code (“Code”);
2. If you intend to place employees on unpaid leave or terminate them for cause due to non-compliance with the COVID-19 vaccination policy, ensure that is clearly communicated;
3. Ensure your COVID-19 vaccination policy clearly lays out that employees will be required to get boosters;
4. Ensure all new employment agreements permit temporary layoffs and explicitly state that employees must comply with the COVID-19 vaccination policy; and
5. Require new employees to disclose their vaccination status before offering them a position; and make any offer contingent upon them explicitly agreeing to the terms of the vaccination policy.

Can an employee be terminated for refusing to comply with a vaccination policy?

The question that most employers are asking is whether they can terminate an employee for cause due to non-compliance with a COVID-19 vaccination policy. In this case, it would be due to refusing to get a booster.

While the reasonableness of COVID-19 vaccination policies is starting to be addressed in the unionized context, a legal decision has not yet touched on whether a termination for cause is reasonable. Further, no court has wrestled with the issue of COVID-19 vaccination policies in a non-unionized workplace.

An employer can always terminate an employee without cause. If you have recently updated your employment contracts, and have consulted with an experienced employment lawyer to ensure the termination provisions are enforceable, this may be the safest way to terminate an employee due to non-compliance with a COVID-19 vaccination policy. With properly drafted termination provisions you can limit an employee’s entitlement to the Employment Standards Act, 2000 (“ESA”) minimums. Further, it will dissuade employees, and their lawyers, from claiming wrongful dismissal.

Alternatively, you can terminate an employee for cause due to non-compliance with your COVID-19 vaccination policy. There are, however, risks associated with this approach. As noted, no court has determined whether termination for cause due to non-compliance with a COVID-19 vaccination policy is reasonable. Presently, decisions related to unionized workplaces suggest courts will take a contextual approach, weighing factors such as whether the COVID-19 vaccination policy is necessary to ensure workplace safety. This means that employers should act cautiously and terminate employees without cause where reasonable, such as when the employee’s entitlements are limited to the ESA minimum and have been reviewed against the Waksdale precedent which invalidated ESA limitations.  More practically, when employees are offered no termination package upon termination, they are significantly more likely to claim wrongful dismissal.

Vaccination policies, including those that require employees receive booster shots, are likely reasonable if clearly drafted and transparently rolled out. Issues may arise, however, when employers are forced to terminate employees due to non-compliance.

Many employers are wondering whether their mandatory COVID-19 vaccination policies will be upheld in court. The answer is simple: it depends.

The answer depends on many factors, such as the employment relationship, the nature of the work, the content of the policy, and our ever-evolving knowledge about COVID-19.

Recent decisions in unionized workplaces may shed some light on how various factors will affect whether a mandatory vaccination policy will be upheld or not.

The actual employment relationship and the nature of work is an important factor for deciding whether a certain mandatory policy is reasonable. In a recent labour arbitration decision, United Food And Commercial Workers Union, Canada Local 333 v Paragon Protection Ltd (“Paragon“), Arbitrator Von Veh, upheld the employer’s vaccine policy. He noted that according to their collective agreement, if an employee is assigned to a client site where specific vaccination or inoculation is required, the employee must agree to receive such vaccination or inoculation. The majority of the employer’s clients have also implemented their own vaccination policies. As a result, employees and contractors must be fully vaccinated in order to work or remain working at these client sites. This was a contributing factor for the arbitrator to uphold the mandatory vaccine policy.

The arbitrator in Paragon also noted a previous case (St. Michael’s Hospital v Ontario Nurses’ Association) where an annual influenza vaccine and wearing of masks policy was held unreasonable, as, among other things, COVID-19 is more infectious and deadly than seasonal influenza. As the Omicron variant is grabbing headlines, this ever-evolving virus may further tilt the scale of deciding the reasonableness of a mandatory vaccine policy.

In Ontario Power Generation v The Power Workers’ Union (“PWU”) Arbitrator Murray upheld the employer’s COVID-19 vaccination policy. The policy in PWU required employees to either be vaccinated or submit to testing twice a week. The policy required the employees to bear the testing costs, and the time spent testing was unpaid. Employees who refused to comply were subject an initial leave of absence followed by a termination with cause. Arbitrator Murray concluded that disciplinary penalties for unvaccinated employees who refused to test were reasonable because it was minimally invasive. However, Arbitrator Murray noted that, due to the employer’s size, it was reasonable that they should cover the testing costs, but was not obligated to pay employees for the testing time. It appears that the approach of a combined vaccine policy will be viewed more favourably by decision makers.

The arbitrator in Bunge Hamilton Canada v UFCW, Local 175 (“UFCW”) also upheld the employer’s vaccination policy. In that case, the arbitrator considered a vaccination policy that required employees provide full proof of vaccination within 76 days. If they failed to do so, or were not vaccinated, they would be placed on an unpaid leave of absence, with the potential to be terminated with cause. Arbitrator Herman found that the health and safety risks posed by COVID-19 warranted a disciplinary measure of an unpaid leave. However, they did not go so far as to say termination with cause was justified, but only that a policy where termination with cause is possible is reasonable.

On the contrary, in another recent labour arbitration decision, Electrical Safety Authority and Power Workers Union (“ESA“), Arbitrator  Stout, found the employer’s mandatory vaccine policy unreasonable.  The arbitrator’s decision was based on factors that specifically contradicted the decision in the Paragon case. The arbitrator pointed out,

“I need only state that this award (i.e., Paragon) arises in a different context involving a different union and a different employer (a security company whose employees perform all their work at third-party sites) and specific language in the applicable collective agreement that requires employees to receive a specific vaccination required at an assigned site (see art. 24.05).”

In ESA, the content of the vaccine policy also proves to be fatal to its reasonableness. Unlike many other combined vaccine policies, where unvaccinated employees are given the choice of rapid testing, remote working, or other accommodations, the employer in ESA gave no alternative to their employees. Their policy required the employees to be fully vaccinated, unless they were exempted under human rights law. The arbitrator noted:

“I have no evidence that these concerns have manifested themselves in any actual problems in the workplace that cannot be reasonably addressed under a policy that provides for a combined vaccination or testing regime or other reasonable means… mandatory vaccinations is not the only reasonable response at this time and in these circumstances… In my view, disciplining or discharging an employee for failing to be vaccinated, when it is not a requirement of being hired and where there is a reasonable alternative, is unjust.”

Had this employer opted for a combined vaccine policy, where reasonable alternatives are available, their vaccine policy may have become reasonable. It suggests when a reasonable alternative to mandatory vaccination, such as rapid testing,  could have been available, the employer will have a hard time justifying disciplining or discharging an employee with cause simply for not being vaccinated.

More recently, in Chartwell Housing Reit (The Westmount, the Wynfield, the Woodhaven and the Waterford) v Healthcare, Office and Professional Employees Union, Local 2220 (“Chartwell”) Arbitrator Misra struck down portions of the employer’s mandatory vaccination policy permitting automatic termination due to non-compliance with the policy.  The policy stated that employees who were not fully vaccinated would be placed on unpaid leave or terminated. In Chartwell, the Collective Agreement stated the Union must agree to modifications of “existing rights, privileges, benefits, practices and working conditions” and, in this case, the employer failed to do so. Further, the policy’s specific wording permitted termination without the employer satisfying the just cause standard, which contravened the Collective Agreement. Essentially, the policy’s specific wording on termination permitted the employer to automatically terminate the employee due to non-compliance with the policy without establishing just cause. Consequently, the termination option in the policy violated the Collective Agreement. Notably, the arbitrator did not state whether failure to comply with the policy amounted to just cause.

The above decisions, while in unionized workplaces, will affect non-unionized workplaces as well but some considerations may vary. However, it is expected that the general principles will be similar that whether a vaccine mandate will be upheld depends on the specific context of the policy. It will be a case-by-case decision with no easy answers to employers.

As such, employers should exercise caution when implementing mandatory vaccination policies, especially when they are trying to terminate employees with cause for not following the vaccination policy. A vaguely drafted workplace vaccination policy or one that does not account for specific accommodations could be costly for employers.

 

If you need guidance from an experienced employment lawyer, call Hum Law today at (416)214-2329 or Complete our Free Assessment Form Here.