Bottom line – a grammar mistake in employment contracts can cost employers millions of dollars if disputed. Employers need to be confident that an employment contract will stand up to scrutiny in the courts. That means ensuring compliance with the latest updates in employment laws as well as something as simple as proper grammar. Improper use of grammar can lead to ambiguities and termination clauses that are open to interpretation.  Employers should regularly review contracts and ensure they are properly drafted.

A single missing comma cost this employer millions. In a famous US case, O’Connor v. Oakhurst Dairy, 851 F.3d 69 (2017), the plaintiffs, the delivery drivers for Oakhurst Dairy, sued the company for overtime pay. The employer argued that these drivers were exempt from overtime pay, because the law states employers are not required to pay overtime to employees whose work involved “canning, processing, preserving, freezing, drying, marketing, storing, packing for shipment or distribution of (1) Agricultural produce; (2) Meat and fish products; and (3) Perishable foods.” Since drivers distributed these products, they were exempted. However, the drivers argued that the phrase “packing for shipment or distribution” should be understood as one single activity, instead of two (i.e., (i) packing for shipment and (ii) distribution); as the drivers were not involved in packing, they were not exempted from overtime pay. The district court ruled in favour of the company. The drivers appealed the decision to the First Circuit court. The First Circuit admitted that because there is no serial comma in the disputed phrase, it created ambiguity regarding whether the phrase meant one single activity or two. However, because ambiguities in the state’s wage and hour laws must be construed liberally to accomplish their remedial purpose, the court ruled in favour of the drivers and reversed the district court’s decision. Later, in 2018, the employer settled the case with the drivers, paying them $5 million in back overtime pay. A missing comma cost this employer $5 million.

In a recent Canadian employment law case, Brocklehurst v. Micco Companies Limited, 2025 NSSC 192 (“Brocklehurst”), a missing comma was fatal to an employment contract’s termination clause, leading to wrongful dismissal damages of over $50,000.

In Brocklehurst, the disputed termination without cause clause provided as follows:

Your employment may be terminated by Micco without cause, upon provision to you of the following payments:
(i)	any portion of the annual salary and accrued vacation pay, if any, that has been earned by your [sic you] prior to the date of termination by [sic, but] not yet paid;
(ii)	continued participation in Micco group health plan for such time as may be required under Nova Scotia Labour Standards legislation; and
(iii)	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.

[emphasis added]

Based on the above subsection (iii), the employer contended that the employee was only entitled to the minimum termination entitlements under the statute. The court disagreed. Because there was no comma before the qualifier, “to which you are entitled under the Nova Scotia Labour Standards legislation”, it may be read such that the qualifier does not apply to the notice of termination, but only to the severance pay.  As such, the provision failed to meet the standard of “express language” that creates a high level of clarity, contracting out of the common law. As a result, with other reasons, the termination clause failed, and the employer had to pay the employee’s entitlements under the common law, which was much higher than the minimum statutory entitlements that the termination clause intended to achieve.

In this case, it was not a million dollar comma, but it could be in other cases. The lesson is clear: a single grammatical oversight in legal documents could be catastrophic. When it matters, let the professionals draft it.

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.

For employers, an outdated employment contract is not just a technical oversight: it is a financial liability waiting to happen. In employment law, the legal landscape is constantly changing; even a single flaw or an outdated clause in employment contracts can turn a manageable termination into an expensive payout.

Employment contracts are only as strong as their most recent review. Laws evolve, courts re-interpret clauses, and what was enforceable last year may be useless in court today. A proactive review protects the business from unexpected costs and lengthy litigation.

The Law Will Not Stand Still — Neither Should Employment Contracts

No termination clause is evergreen. The law is constantly changing, and when a termination clause is found to breach the Ontario Employment Standards Act, 2000 (“ESA”), the result is simple: it is unenforceable. That means the employee receives common law reasonable notice, which is often at least four times the statutory minimum under the ESA.

The 2019 decision in Waksdale invalidated almost all employment contracts by holding that a flaw in part of the termination provision invalidates the entire termination section. In 2024, Dufault made more clauses unenforceable by rejecting language such as “at its sole discretion” and “at any time” as inconsistent with the ESA.

Even punctuation can be costly. This year, a Nova Scotia court struck down a termination clause because of a missing comma and problematic reference to severance pay.

If employment contracts have not been reviewed in years, there is a real risk they contain similar flaws.

Courts Seem to Be Awarding Longer Notice Periods, and It Is Costing Employers

Recent cases show courts granting longer reasonable notice than many employers expect. Employers should regularly review their employment contracts to ensure they are under proper contractual protection.

It is much easier for executives to get longer notice periods, which results in significantly higher severance packages due to their higher salaries. In a recent case, a Vice-President with only 4 years of service was awarded 12 months’ notice. In another case, also in 2025, an executive with only 7 months of service was awarded 14 months because the court found he had been induced to leave secure employment.

Courts have established 24 months as the “rough upper limit” for reasonable notice, which can only be exceeded in “exceptional circumstances.” Now it seems that it is easier for employees to establish “exceptional circumstances” than before. In recent years, courts have awarded employees more than 24 months where “exceptional circumstances” exist, including:

• A lifetime career with a single employer, combined with age and seniority at termination (26 months, a 2016 case).
• Termination effectively amounted to forced retirement, where age, non-transferable skills, and education limited job prospects (26 months, a 2022 case).
• Extremely long service with one employer, leading to concerns about adaptability in a new workplace (27 months, a 2022 case).
• Highly specialized skills tied exclusively to the employer’s operations, limiting re-employment opportunities (30 months, a 2023 case).

For employers, this means that once a termination clause fails, the potential payout could be far greater than expected.

What Does This Mean for Employers?

Relying on contracts drafted years ago is risky. Termination clauses may be out of date, and courts are leaning toward awarding longer notice periods than ever before.

Review employment contracts regularly, ideally every year, with experienced legal guidance. A relatively small investment in annual reviews can prevent a much larger expense of litigation or inflated termination payouts.

The recent viral Coldplay “kiss‑cam” moment caused quite a sensation on social media and uncovered costly risks for employers to consider. At Coldplay’s July 16, 2025 show, the venue’s “kiss‑cam” panned to two concert goers –tech company Astronomer CEO Andy Byron and Chief People Officer Kristin Cabot – who were embracing when they visibly ducked and turned away. The two executives were seemingly caught very publicly having an affair. The video racked up tens of millions of views on social media and has since led to both Byron and Cabot resigning.

Sifting through all of the satire and unfortunate public statements, it reminded many of last year’s abrupt termination of RBC’s CFO following an internal probe into her undisclosed personal relationship.

Office romances aren’t uncommon, and workplace policies are generally put in place to mitigate any risk that might arise from power dynamics and favouritism, protecting the well-being of a company’s public reputation. These two incidents are stark reminders for employers of how quickly a workplace romance can become a public and legal headache. Employers must have the proper policies and protections in place.

Employers must update harassment and workplace relationship policies to ensure they are legal, enforceable, and reflective of today’s social environment. If you are not working with a legal professional to regularly review these policies, you are opening yourself up to costly lawsuits and public breakdown of trust. Here are several factors to consider as an employer after an office romance emerges.

Verify Consent and Power Dynamics

Before any disciplinary step, discreetly confirm that the relationship is fully consensual. If one party supervises or can influence the other’s job, or if there are any signs of pressure or coercion, you may need to treat the matter as a potential harassment complaint under the Occupational Health and Safety Act or a human‑rights issue under the Human Rights Code.

Leverage and Enforce Policies

If it was a consensual relationship and the undisclosed affair breaches relevant interpersonal policies such as a non-fraternization policy, employers could take actions outlined in those policies, which might include termination.

A written policy about certain types of personal relationships can provide guidance on how to deal with workplace romance, including the reporting process, confidentiality, whistleblower protection, investigation process, consequences of violation, etc. For instance, if a policy specifies that a failure to disclose a romantic relationship with a subordinate will lead to termination, it can more easily justify a termination for cause. Absent such policies, when assessing whether an office romance justifies termination, they need to examine whether it fundamentally undermines the employment relationship by violating an essential contractual obligation or breaching the faith inherent in the trust relationship.

For example, an Ontario court upheld a just‑cause dismissal in Reichard v. Kuntz, 2011 ONSC 7460, where a purchasing manager was terminated after his affair with his subordinate emerged. He violated the non-fraternization policy by lying about the relationship, taking extended lunches, recommending her transfer, and defying orders during the investigation. These actions undermined the trust, integrity, and honesty expected from a manager. As a result, the termination for cause was justified.

Conduct a Workplace Investigation

Many office‑romance policies impose a duty to investigate and provide detailed guidelines. If no relevant policy is in place, employers should still investigate before implementing any disciplinary actions against the employees involved.

The investigation should be conducted in good faith and adhere to proper procedural requirements. In Rutledge v. Markhaven Inc., 2022 ONSC 3183, the employer was penalized for its conduct during the investigation into workplace romance involving its executive director. The court criticized the employer’s investigative process as severely flawed, breaching the duty of good faith and fair dealing. As a result, the employer was ordered to pay $244,852.41, which included $50,000 in moral damages.

Workplace Law Takeaways From the Coldplay Scandal

1. Establish and Regularly Review Policies

The Coldplay scandal shows employers that it is imperative to engage legal counsel to adopt a clear workplace relationship policy before there is an issue. Policies should include a requirement of timely disclosure, particularly in any reporting‑line scenario, and outlines investigation procedures and consequences for noncompliance. Cases show that where an employer has a well-defined workplace policy on intimate relationships, disclosure obligations and conflicts of interest, it is far easier to justify an employer’s disciplinary actions.

Employers should also work with experienced employment lawyers to review existing policies regularly to ensure all approaches will withstand scrutiny.

2. Conduct Proper Workplace Investigations

Employers are encouraged to hire an experienced lawyer to investigate any incidents related to workplace relationships before proceeding with termination. Discipline or termination is rarely justifiable on private moral grounds alone. An experienced investigator will gather any evidence of conflicts of interest, dishonesty, insubordination, or other behaviours, and provide legal advice on the next steps if disciplinary actions are warranted.

3. Extra Considerations for Hiring Executives

When hiring executives, companies should consult a lawyer about the extra requirements for these roles to ensure accountability and enable swift action if the executives cross the line. The Coldplay kiss-cam incident highlights that executives’ behaviour can significantly impact a company’s reputation. For instance, employers may consider including a morality clause in executive employment agreements or codes of conduct. This clause would hold executives to a higher standard of integrity and professionalism, as conduct such as public scandals or convicted criminal offences may result in termination due to the reasonably foreseeable damage to the company’s reputation.

Employees are entitled to a workplace free from discrimination and harassment, and employers have a duty to accommodate. In Ontario, specific legislation is in place to protect employees and guide employers on adequately managing their business. Failure to comply with the existing legislation could be costly.

Understanding Human Rights Legislation in Ontario.

Ontario employers are governed by Ontario’s Human Rights Code (“Code”), which prohibits discrimination based on protected grounds in specific social areas, including employment. The other social areas are housing, services, unions and vocational associations and contracts. There are 17 protected grounds:  citizenship, race, place of origin, ethnic origin, colour, ancestry, disability, age, creed, sex/pregnancy, family status, marital status, sexual orientation, gender identity, gender expression, and record of offences. Employers must familiarize themselves with these protected grounds to prevent breaches of their employees’ human rights.

Accommodation: A Central Obligation

The Code imposes a crucial responsibility on employers: the duty to accommodate. This mandate compels employers to make reasonable adjustments or arrangements, up to the point of undue hardship, to meet employees’ needs arising from protected grounds. For example, if an employee has a disability and requests accommodation, employers have an obligation to provide suitable accommodations, such as modifying workstations, providing additional break time, or altering work arrangements.

While employers have a duty to accommodate, employees must also play their role in the accommodation process. Firstly, employees should inform their employer of their need for accommodation. This proactive step ensures that the employer is aware of the need for accommodation and can take appropriate action. When an employee’s need for accommodation is evident, the employer should also proactively inquire whether accommodation is required and act accordingly.

Secondly, employees are expected to work collaboratively with the employer and act reasonably to come to an accommodation arrangement. This means engaging in a constructive dialogue with the employer, providing relevant information about their needs, and being open to discussing potential solutions. Collaboration between both parties is essential to finding accommodation solutions that respect the employee’s human rights while also considering the practical constraints of the workplace. Acting reasonably and in good faith during this process is an obligation and a critical factor in reaching a successful accommodation arrangement that benefits both the employee and the employer.

Undue hardship is a high bar to meet, as some degree of hardship is acceptable. The Code prescribes only three considerations when assessing whether an accommodation would cause undue hardship: cost, outside funding sources (if any), and health and safety requirements (if any). No other considerations can be appropriately considered.

The Cost of Non-Compliance

Employers who fail to meet their obligations regarding human rights and accommodation can face severe consequences, including:

Legal Costs: Employees who believe their human rights have been violated can file complaints with the Human Rights Tribunal of Ontario or a court. If a complaint is substantiated, the employer may be ordered to compensate the affected employee. Defending against human rights complaints and legal actions can be costly, including legal fees, settlements, and potential fines. For example, in Giang v. DBG Canada Limited, 2021 HRTO 97, the Human Rights Tribunal of Ontario found the employer discriminated against the employee, as the employer failed to accommodate the employee’s disability (a heart condition that required an implantable defibrillator) and terminated his employment when he refused to work in areas with high voltage machinery that, in the employee’s opinion, could interfere with his device. As a result, the employer had to pay the employee $20,000 as monetary compensation for injury to her dignity, feelings, and self-respect in addition to the loss of income, $39,697.12, the employee claimed for over a year.

Reputation Damage: News of a human rights violation can tarnish an employer’s reputation, making it challenging to attract top talent and maintain a positive public image.

Productivity Loss: Workplace conflicts resulting from human rights violations can decrease productivity, as employees may feel demoralized and disengaged.

Common Pitfalls

(1) The Code goes beyond the ESA:

Employers must understand the nuanced interaction between the Code and Ontario’s Employment Standards Act, 2000 (“ESA”). While the ESA sets minimum employment standards, compliance with these minimum standards does not guarantee Code compliance. A prime example is sick leave entitlements. While the ESA prescribes a minimum of three sick days, the Code extends additional safeguards.

The Code obliges employers to accommodate employees with health issues to the point of undue hardship. This means that employees requiring more than the mandated three sick days due to a disability or health condition should likely be granted additional sick leave as a reasonable accommodation. Neglecting this responsibility can constitute discrimination based on disability, violating the Code.

Employers must be prepared to exceed the ESA’s minimum requirements when accommodating employees. Employers must remain vigilant regarding their obligations under the ESA and the Code to foster a fair and inclusive work environment.

(2) Apparent Neutral Standards with Discriminatory Effects:

Employers often establish seemingly impartial standards or policies without any intent to discriminate. However, these standards can unintentionally produce adverse discriminatory effects. For example, instituting a physical requirement for a job without considering actual job duties may disproportionately affect individuals with protected grounds. This unintended impact can still be viewed as discriminatory and potentially lead to legal challenges under the Code.

In British Columbia (Public Service Employee Relations Commission) v. BCGSEU, [1999] 3 SCR 3, the employer fired a female firefighter due to her failure to pass the minimum physical fitness standards. However, the Supreme Court found that even though the minimum physical fitness standards were established in good faith without intent to discriminate, the employer failed to prove (i) that the standards were no more than necessary and (ii) that the employee who failed the test would pose a severe safety risk to herself, her colleagues, or the general public. As such, the termination was ruled discriminatory, and the employee was reinstated. Another similar scenario is when an employer uses sales performance to rank their salespersons and treats them differently according to their ranking (e.g., termination, etc.), which may put salespersons who could not perform their jobs full-time due to protected grounds at a disadvantage. This might be considered discriminatory as well.

(3) Failure to Diligently Handle Employees with Protected Grounds:

Even without discriminatory intentions, employers mishandling situations that involve employees with protected grounds, especially during terminations, can invite litigation. Discriminatory termination poses significant repercussions for employers, extending beyond human rights violation damages.  If a termination is found to be discriminatory, the Human Rights Tribunal of Ontario or a court could order that the employer not only reinstate the employee to their previous position, but also damages to compensate the employee for loss of wages and other benefits from the date of termination to the date of reinstatement, in addition to general damages. This financial burden can be substantial, particularly if the reinstatement is delayed. For example, in Hamilton-Wentworth District School Board v. Fair, 2016 ONCA 421, the Ontario Court of Appeal upheld a decision where the employer was ordered to reinstate the employee, provide back pay from June 26, 2003 to the date of reinstatement (about ten years of pay, and likely an amount over $400,000, less any income and non-repayable benefits she received), in addition to $30,000 damages as compensation for the injury to her dignity, feelings, and self-respect and other remedies.

Employers must recognize that the cost of discriminatory termination may encompass damages for human rights violations, loss of wages, and the potential for reinstatement and back pay. Hence, it is imperative to ensure that termination decisions comply with the law, avoiding discrimination based on protected grounds.

Terminating a disabled employee without adequately documented performance issues, especially if the process appears rushed or unfair, may also raise suspicions of discrimination. For example, in Luckman v. Bell Canada, 2022 CHRT 18, the tribunal found that Bell discriminated against the employee by terminating him. As a result, Bell was ordered to pay more than $120,000 in damages to the employee.

(4) Failure to address Workplace Sexual Harassment adequately:

As a form of discrimination related to gender, the Code prohibits sexual harassment in employment. Workplace sexual harassment is not just a dispute between employees. Employers have a duty to provide a safe and healthy workplace for employees and conduct workplace investigations under certain circumstances. Under certain circumstances, employers could even be jointly liable for their employees’ workplace harassment.

Disregarding workplace sexual harassment can have severe consequences. It poisons the work environment, resulting in costly workplace investigations, litigation, and reputational damage. Employers should implement robust anti-harassment, including sexual harassment, policies, provide regular training, and promptly investigate and address complaints. Ignoring or downplaying such issues can tarnish a corporate reputation and cause significant financial consequences. For example, in Escobar v. WCL Capital Group Inc., the Human Rights Tribunal of Ontario found that the CEO/President of the employer sexually harassed the applicant, an employee, in breach of her human rights. As the CEO/President of the employer was the directing mind of the employer, the employer was also liable. The tribunal ordered the CEO and the employer jointly and severally to pay the employee $50,000 as monetary compensation for injury to dignity, feelings and self-respect.

Conclusion

In Ontario’s complex employment landscape, understanding and navigating human rights and accommodation are imperative for employers. By upholding these principles and avoiding common pitfalls, employers can create inclusive workplaces that respect employees’ rights and dignity while safeguarding their interests and reputation.

Losing your job can be devastating and overwhelming.  But right after you lose your job, there are steps you can take to make that might lessen that devastation. Here are some tips for Ontario employees to navigate that difficult period right after being terminated, including what to do and what to avoid.

What to Do:

Consult a Lawyer before You Sign Anything.

You will have received something in writing terminating your employment and offering you a severance package. You may have been asked to sign a release before receiving some or all of that package. You should seek legal advice before signing anything because the package offered to you might be less than what you are legally entitled to.  An experienced lawyer can carefully review your package, look at any written employment agreement you have, and give you peace of mind that you are not being short-changed on your termination pay entitlement, and help you understand the implications of any release or other agreement you might be asked to sign. Taking this initial step can be the “linchpin” in securing a fair resolution to your termination.

Understand Your Rights and Check Your Employment Contract.

If terminated without cause, by default, you are entitled to common law reasonable notice. However, you might be entitled to significantly less if there is an enforceable employment agreement that limits your entitlements to Ontario’s Employment Standards Act, 2000 (“ESA”). The ESA sets minimum standards for termination notice that must be provided to you.

If there is no written employment contract or offer, you are most likely entitled to the common law reasonable notice. For long-term employees, up to 2 years compensation, and sometimes more in exceptional circumstances, may be owed. Entitlements under the common law are generally much more than the ESA minimum standards, sometimes about four times more.

Fired for Cause?

If you are terminated for just cause, you may not be entitled to common law reasonable notice but could still be eligible for ESA minimum payments.

Wilful misconduct, which is more severe than just cause, disqualifies employees from receiving both ESA and common law notice. You may face termination without any compensation if you are guilty of wilful misconduct. This includes disobedience, wilful neglect, or serious misconduct that is not trivial and has not been condoned by the employer.

Employers may sometimes allege just cause or wilful misconduct to avoid paying termination pay. In many cases, these allegations can be challenged and reversed. If you find yourself in either scenario, it is advisable to seek legal advice promptly to understand your right to termination pay. Consulting with an employment lawyer can help you understand your rights regarding termination pay and navigate the legal aspects of your situation.

Assess, Calculate and Negotiate.

If you are entitled to common law reasonable notice, your entitlement is calculated based on what is referred to as the Bardal Factors that is your age, length of service, characteristics of the position, and availability of similar employment, but also other factors that are relevant to your situation.  For instance, if you have worked as a senior manager for over 5 years, are 60 years old, and there are very limited opportunities in your field, you might be entitled to up to 12 months reasonable notice or pay in lieu.  Many termination packages start with a low offer, and you might be entitled to significantly more.

Consider Litigation.

Employees may negotiate with employers to resolve disputes, but legal action may be necessary in those cases where the employer is not prepared to negotiate.  Many people fear litigation; however, there is no need to.  As noted above, litigation is relatively rare, and most claims are settled early in the process. If needed, litigators will drive this forward.

Job Search – Mitigate Your Loss.

After being terminated, you have the legal obligation to use reasonable efforts to replace the job you lost with a comparable one, to mitigate the loss of your job.  Your lawyer should be advising you to keep a record of your efforts, in case it is later needed during litigation to prove you have not breached your duty.

Other mitigation steps could include: updating your resume and LinkedIn profile;  attending networking events, or reaching out to professional contacts can help;  exploring opportunities for re-education or skills enhancement if that would help you to find comparable employment in a difficult market.

Apply for Government Benefits.

Employees who are terminated may be eligible for Employment Insurance (“EI”) benefits. Visit the Government of Canada’s website to learn more about eligibility criteria and how to apply for EI benefits. While receiving EI can avoid gaps in your income, please also keep in mind that you may need to remit what you get after receiving your severance package or judgment.

 

What Not to Do:

Don’t Disparage.

Avoid venting your frustrations on social media or speaking negatively about your former employer. During this challenging time, it is essential to maintain professionalism.

Disparaging and defamatory comments could expose you to liability, and also cause difficulties in negotiations. If you do bring a claim against your former employer, it could also lead to a counterclaim for damages against you. Tempting as it may be to vent your frustrations, it is best to maintain a positive and constructive attitude, regardless of any negative experiences.

Don’t Rush into Accepting a Job Offer out of Desperation.

It is important to take the time to carefully consider any job offer you receive, especially if you are feeling desperate for employment. You are only legally required to accept comparable jobs, not any job.  You should also bear in mind that any income you earn might be set off against termination pay that you might be claiming from your former employer.

Conclusion

Losing your job can be overwhelming, but following these steps can help you navigate the process more effectively. Remember that you have rights as an employee in Ontario, and seeking legal advice can be a crucial step in ensuring you are treated fairly during your termination.

As an employee, it is important to understand how your contractual benefits work in wrongful termination cases. Recent developments in Canadian employment law have brought attention to this issue, and it can have significant financial consequences for employees, especially those in executive positions. In one case, the court awarded an employee a bonus of over $1 million under a long-term incentive plan. In another case, the court granted the employee travel privileges valued over $1.8 million. If you are not aware of your entitlements, you could be leaving a lot of money on the table during negotiations if your employer has not structured your severance package correctly.

What Counts as Contractual Benefits?

Contractual benefits generally include the financial payments and non-monetary benefits provided to an employee on top of their base salary. For executives, contractual benefits often include short-term bonuses, long-term incentive plans (“LTIPs”), and other benefits such as stock options or RSUs. In many wrongful dismissal cases, employees often wonder if their bonuses should be paid out as part of severance package calculations. The answer to that is often yes.

In O’Reilly v. IMAX Corporation, 2019 ONCA 991 (“O’Reilly”), the Ontario Court of Appeal stated that contractual benefits include “pension benefits, bonuses, stock options, or other incentives.”

Sometimes, contractual benefits may include privileges like a company car, a business-paid cellphone, and, at the highest level, access to private travel by rented or owned jet. For example, in Ruel v. Air Canada, 2022 ONSC 1779 (“Ruel”), the Ontario Superior Court confirmed that the flight passes or travel privileges of the plaintiff, who was an executive of Air Canada, would fall with the rubric of “other incentives.”

Legal Framework

In the landmark case of Matthews v. Ocean Nutrition Canada Ltd., 2020 SCC 26 (“Matthews”), the Supreme Court of Canada (“SCC”) affirmed a pivotal doctrine: in the event of an employee’s termination without just cause, that employee is entitled to compensation equivalent to what they would have earned during the notice period, including contractual benefits, unless there is language unambiguously excluding that entitlement.

For employees to claim these contractual benefits during the reasonable notice period, two prerequisites need to be considered under the Matthews framework:

1. Would the employee have been entitled to contractual benefits as part of their compensation during the reasonable notice period?

The SCC confirmed the first arm of the test set out in Paquette v. TeraGo Networks Inc., 2016 ONCA 618 (“Paquette”), with some modifications. It agreed with the Ontario Court of Appeal that “courts should examine whether, but for the termination, the employee would have been entitled to the bonus during the reasonable notice period.”

In favour of the employee, the SCC found that the “integral” test in Paquette is not required in every situation, especially when the benefits are not discretionary. For instance, if the realization event of an LTIP occurs during the reasonable notice period, the LTIP payment is assumed “integral” to his compensation because it is not based on the employer’s discretion.

Courts should only assess whether the benefits are “an integral part” of the employee’s overall compensation in cases where they are discretionary, similar to Paquette.

In other words, if the realization event, such as the maturity date, falls within the reasonable notice period, an employee can say that satisfies the first arm of the test.

2. If yes, do the terms of the employment contract or incentive plan unambiguously take away or limit that right?

The SCC confirmed the second arm of the Paquette test. That is, whether the terms of the employment contract or incentive plan clearly limit or remove that common law right. Courts always interpret the terms in favour of employees.

The SCC noted that only using the terms such as “full-time” or “active” does not remove an employee’s common law right to damages for loss of bonus/incentives, because the employment contract is not considered “terminated” for calculating wrongful dismissal damages until after the reasonable notice period. If the employee had received adequate notice, they would have been actively employed full-time during the reasonable notice period. As such, even if the clause explicitly refers to an “unlawful termination,” it still will not clearly and unambiguously affect the employee’s common law entitlement.

Further, in O’Reilly, the Ontario Court of Appeal held that the simple term “termination for any reason” does not unambiguously take away the employee’s entitlement to contractual benefits upon wrongful dismissal. Similarly, simple language like “termination with or without cause” does not exclude an employee’s entitlement to benefits.

In other words, “unambiguity” means that the exclusion or limiting clauses must be very detailed to clearly cover every circumstance that may lead to the end of an employment relationship. Employees should receive all contractual benefits absent such an unambiguous exclusion clause.

 

Stock Options and Restricted Stock Units

When it comes to stock options or Restricted Stock Units (“RSUs”), things can be more complex since the concepts of “granting” “vesting”, and “exercising” can be confusing to employees.

When employees are granted either stock options or RSUs, it does not mean they obtain ownership immediately of any shares or cash in lieu. Employees do not own either until they are vested. Typically, they vest in tranches over a period of time, such as 25% per year over four years.  Once stock options are vested, an employee has the right to “exercise” the vested options by purchasing shares at a pre-determined price (of great value if the business is doing well and the stock price is rising).  In contrast, once an RSU is vested, the employee is usually paid out in shares, without having to purchase them, or provided with a cash amount pegged to the price of shares, depending on the RSU plan’s terms.

For employees fighting wrongful dismissal cases involving stock options or RSUs, the key is examining the language used in the plans. Specifically, they need to see if the exclusion clause unambiguously restricts or eliminates the stock options or the RSUs from being vested during the reasonable notice period. If it does not, the employee likely has the right to continue the vesting process even after termination.

Conclusion

Employees are generally entitled to nondiscretionary contractual benefits during the common law notice period, unless their employment contracts or bonus/incentive plans clearly and unambiguously limit or remove the entitlement.

The intricate legal interplay between wrongful dismissal cases and contractual benefits, like bonuses, incentives, stock options, and RSUs, underscores the necessity of understanding how courts have looked at employees’ termination entitlements and the importance of carefully examining the contractual language. In navigating the complexities of contractual benefits, employment documents and termination packages, employees are strongly advised to engage legal counsel to ensure their rights and entitlements are safeguarded.

In Ontario, employers have specific responsibilities regarding harassment in the workplace under the Occupational Health and Safety Act (“OHSA”). Employers have a responsibility to ensure a safe and inclusive work environment for their employees, which includes addressing issues related to workplace harassment. Additionally, preventing workplace harassment is crucial as it may lead to discrimination under the Ontario Human Rights Code (“OHRC”) and result in costly liabilities.

What are the statutory responsibilities of employers regarding workplace harassment?

As per Clause 32.0.1 (1) (b) of the OHSA, employers are obligated to create a policy concerning workplace harassment. Moreover, Clause 32.0.6 of the OHSA mandates employers to establish and maintain a documented program to execute the workplace harassment policy.

Employers have a responsibility under Clause 32.0.7 of the OHSA to safeguard their workers from workplace harassment. This includes:

1. Conducting appropriate investigations into any harassment incidents or complaints, and
2. Informing both the worker who allegedly experienced the harassment and the alleged harasser (if they are also a worker of the employer) of the investigation results in writing.
3. Corrective action taken or to be taken as a result of the investigation should also be communicated.
4. Review of the workplace harassment program, which should be implemented according to Clause 32.0.6, at least once a year to ensure it is effective.
5. Any other duties that may be prescribed.

 

What is the liability of a company when an employee is guilty of harassment in the workplace?

Typically, employers cannot be held responsible for instances of harassment committed by their employees. However, courts have held employers vicariously liable when the harassment occurred “within the scope of employment”.

The Supreme Court of Canada formulated a test for determining the question of an employer’s vicarious liability in Bazley v Curry. In Bazley, the Supreme Court set out a list of factors relevant to analyzing the connection between an employer’s creation or enhancement of a risk of sexual harassment by an employee.

In Ivic v Lakovic, the Ontario Court of Appeal summarized the Bazley factors, which include:

1. the opportunity that the enterprise afforded the employee to abuse his or her power;
2. the extent to which the wrongful act may have furthered the employer’s aims (and hence be more likely to have been committed by the employee);
3. the extent to which the wrongful act was related to friction, confrontation or intimacy inherent in the employer’s enterprise;
4. the extent of power conferred on the employee in relation to the victim;
5. the vulnerability of potential victims to wrongful exercise of the employee’s power.

In Osmani v. Universal Structural Restorations Ltd., the Ontario Superior Court of Justice applied the Bazley test to determine the company’s vicarious liability for its employee’s wrongful acts. This decision is also a reminder for employers that, besides the OHSA, failing to address workplace harassment may incur liabilities under OHRC. In that case, the supervisor harassed and assaulted the plaintiff. The Court opined that the hierarchy in the company placed the plaintiff in the supervisor’s crew, and he was subject to the supervisor’s direction and control in relation to duties performed for the company. Additionally, the company failed to fulfill its obligation to conduct an appropriate investigation into the allegations of workplace harassment. This failure in the circumstances amounts to discrimination under s. 5(1) of the OHRC.

Therefore, in addition to $110,000 as the damages for battery and assault, the company was held vicariously liable for $50,000 as the damages for discrimination under the OHRC.

In summary, when the wrongful act (sexual harassment, for example) was not authorized by the employer, the imposition of vicarious liability on the employer will be justified, if the wrongful act of an employee is sufficiently related to conduct authorized by the employer.

What if the employer fails to address workplace harassment?

As noted above, employers may face vicarious liability for employees’ workplace harassment. In addition, the failure to address the issue of workplace harassment may attract constructive dismissal claims.

In Disotell v. Kraft Canada Inc., the Ontario Superior Court of Justice has made it clear that an employee who experiences prolonged harassment from colleagues can be considered constructively dismissed from their job. The employer has a clear obligation to maintain a harassment-free work environment, and failing to take necessary actions after receiving a verbal complaint from the employee’s manager is a clear violation of this obligation. It is imperative that employers take all necessary steps to prevent and address workplace harassment to ensure the safety and well-being of all employees.

What if the harassment occurred outside of the workplace?

Under OHSA, employers have an obligation to prevent workplace harassment, investigate incidents and make policies and programs related to workplace harassment. According to Clause 1 (1) of OHSA, workplace harassment means “(a) engaging in a course of vexatious comment or conduct against a worker in a workplace that is known or ought reasonably to be known to be unwelcome, or (b) workplace sexual harassment”. OHSA defines a workplace as meaning any “land, premises, location or thing at, upon, in or near which a worker works”.

Although OHSA seemingly only captures harassment “in a workplace”, it is worth noting that courts and tribunals tend to give a broad definition of workplace. In Rainy River v Olsen and Ontario (Ministry of Labour) v. 614128 Ontario Ltd. (Trisan Construction), both the Ontario Superior Court of Justice and Ontario Court of Justice state that the definition of “workplace” should be broadly viewed. Given that OHSA is remedial legislation, it is to be interpreted and applied in order to protect and enhance the rights of workers and, more specifically, to promote public safety and to prevent harm in a wide variety of circumstances.

Similarly, in Miller Group Kakabeka MDMC v A Director under the Occupational Health and Safety Act, the Ontario Labour Relations Board held that the definition of a workplace under Clause 1 (1) should be interpreted broadly in order to extend protection to the full breadth of workers as intended by OHSA. As a result, the tribunal found that the snowplough in which the worker was physically located at the time of the traffic accident and the highway on which he was operating that snowplough can be construed as his “workplace” for the purposes of OHSA.

Additionally, harassment, even outside of the workplace, may attract discipline and even constitute just cause for termination. In Simpson v Consumers’ Association of Canada et al, the Ontario Court of Appeal unequivocally ruled that an employer could rightfully, under common law, terminate a supervisor who sexually harassed employees under his supervision outside the workplace during off-duty hours. In upholding the termination, the Court held that:

“[I]t would be artificial and contrary to the purpose of controlling sexual harassment in the workplace to say that after-work interaction between a supervisor and other employees cannot constitute the workplace for the purpose of the application of the law regarding employment-related sexual harassment.”

What are the liabilities of an employer related to harassment if their employees work remotely?

The pandemic has introduced a novel method of working for numerous individuals – from the convenience of their homes. As noted above, the definition of a “workplace” under Clause 1 (1) of OHSA is broad enough to encompass workers working remotely. Therefore, employers are generally bound by the same obligations even in a fully remote work environment.

It is important for employers in Ontario to familiarize themselves with the OHSA to understand their obligations and responsibilities regarding workplace harassment. Seeking guidance from legal professionals specializing in employment law in Ontario will provide further clarity on employer liabilities and obligations under the OHSA.

In recent years, we have seen various forms of toxic workplace allegations gain increasing attention as more individuals speak out about their experiences of harassment, discrimination, and abuse in the workplace. Employees also feel more empowered to share their stories publicly in an increasingly digital and socially aware world.  Employers are at risk of significant operational missteps, which can create reputational damage or put their entire brand at risk, if toxic behaviour is not corrected.

The end results of a recent high-profile example played out late in December 2022.  News anchor Lisa LaFlamme had her award-winning career cut short in June 2022 in a way that caused shock waves within journalism circles but also in social media due to the manner in which she was fired. After the abrupt firing by former CTV network VP Michael Melling, LaFlamme and her supporters, and many in the journalism community, alleged that sexism and ageism, endemic in media workplaces, played a role in her ousting. There was an  immediate, intense and ongoing public outcry, and subsequent reputational damage to Bell Canada and CTV News network. As a result, Bell Media, a subsidiary of Bell that owns both Bell Canada and CTV News, commissioned an independent third-party workplace review “to address concerns raised regarding the working environment in the newsroom.” The review found that CTV’s workplace culture had fostered a lack of respect in the newsroom and a “fear of reprisal or inaction” when voicing concern. Overall, employees had “a desire to improve working conditions.” Public records of the review did not include any language about ageism or sexism. Melling, who had been on leave immediately since the workplace review was launched, was then permanently reassigned.

It is worth noting that Bell Media has conducted several workplace reviews in the past few years stemming from complaints of “bullying, racism, and sexism in the newsroom.” In each of those cases, the investigation was cloaked in secrecy and confusing to employees. Many employees indicated they did not feel comfortable sharing details with investigators – both internal and external for fear of reprisal. In at least one instance, an independent arbitrator disagreed with the findings of the investigation and a complainant was awarded damages. In each case, a lack of change following the outcome of the investigation caused employees to lose confidence in the investigation process.

This case echoes another high-profile one that occurred a few years ago, albeit the person at the centre resigned. Julie Payette’s resignation as governor general was preceded by a media storm of controversy over allegations that she had created or allowed a toxic workplace.  An independent report, based on interviews of individuals in the workplace, detailed allegations of how Payette and her second-in-command, Assunta Di Lorenzo, presided over a toxic work environment.  A week after receiving an early copy of this independent report, Payette resigned.  While the report did not make findings of fact (as the CTV workplace culture report did), the details were not only devastating for  Payette personally, but also damaging to the vice-regal position of the Governor Genera of Canada.

High stress, low productivity

Toxic workplaces can have a detrimental effect on employees’ mental and physical well-being, leading to elevated levels of stress, anxiety, and even depression. In addition to affecting employees’ health, toxic workplaces usually lead to a lack of productivity and a high turnover rate. There are reports of Bell Media employees crying at work and being belittled and made to believe they are replaceable. Additionally, many workers are temporary contract workers who have no job security. In another recent case, Patricia Jaggernauth, a popular on-air personality, cited health issues that landed her in the hospital after she was overworked due to fear of her contract being terminated if she said no.

Increased legal risks: Be prepared for a costly lawsuit

In addition to the reputational or brand damage to employers, there is also increased legal and financial risk where they have allowed a toxic work environment to persist to the point where employees trigger the need for an investigation or initiate a law suit.

In one case, the Middlesex-London Health Unit spent about $135,000 from 2018-2021 investigating workplace harassment of an internal toxic work environment.

In 2021, the Calgary Board of Education was sued for $40 million in a class-action lawsuit for their negligence and failure to investigate and prevent historical sexual abuse by a teacher.

In 2018, a former law school dean sued Thunder Bay’s Lakehead University for a total of $2.67 million for “constructive dismissal and racial discrimination” that was allegedly caused by a toxic work environment. The case was later settled in 2020 for an undisclosed amount.

Reputational damage leads to lack of public trust

While LaFlamme’s case is a high-profile example of allegations of ageism and sexism, unfortunately these elements exist within many modern workplaces. With employees more empowered to speak out and communities of public supporters, a toxic workplace puts an organization’s reputation and the public’s trust in them and their brand at risk.  Even if the allegations are later not substantiated, earning the public’s anger can cost larger organizations billions and lower revenues and profitability in the long-term.

Perception of a toxic workplace is just as detrimental

Sometimes, perception of toxic workplaces could have the same detrimental effects as actual toxic behaviour. For example, even if there is no ill intent, miscommunication, misunderstanding, or internal conflicts between departments can arise. These situations may inadvertently create a working environment that negatively affects business operations. This could result in key personal resignations, project suspensions, expensive internal investigations, or even legal disputes, such as allegations of discrimination and constructive dismissal.

Employers need to proactively address toxic workplace behaviour

Employers are reminded that they have a legal obligation to address toxic workplace behaviour and resolve conflicts promptly and carefully. This includes establishing clear workplace policies and procedures for dealing with harassment and discrimination, providing regular training on these topics, fostering an environment of respect, open communication and inclusivity, and holding individuals accountable for their actions. I n addition, it is important for employees to feel they can speak out about their experiences, without the fear of reprisal. They should be encouraged to speak up, as this can prevent toxic or potentially toxic behaviour from going unnoticed and allow employers to resolve it before it becomes a bigger problem.

Laflamme’s situation at CTV News serves as a reminder of the importance of preventing toxic workplaces. Employers should really be taking a proactive approach to create a healthy and safe working environment.  However, at the very least, employers need to promptly take appropriate action when a situation arises suggesting a potentially toxic workplace.

Employers are obligated to create a workplace free from harassment or any form of discrimination. Therefore, employers should take workplace harassment complaints seriously and address them expeditiously. However, not every harassment complaint requires an investigation. It is crucial to understand what harassment is and consult with experienced legal counsel quickly to determine a sufficient and cost-effective approach.

Defining workplace harassment

Not all objectionable workplace conduct is harassment. Rather, harassment is defined as conduct that a reasonable person in the complainant’s position would consider unwelcome, vexatious, and abusive.

If a co-worker or superior’s improper conduct, behaviour, or actions could be deemed unwelcome to a reasonable bystander in the complainant’s circumstances, it will constitute workplace harassment. In each case, however, whether an employee was subjected to harassment would be mostly fact-driven.

Section 1(1) of the Occupational Health and Safety At (“OHSA”), reproduced below, defines both workplace harassment and sexual harassment:

“workplace harassment” means,

(a)  engaging in a course of vexatious comment or conduct against a worker in a workplace that is known or ought reasonably to be known to be unwelcome, or

(b)  workplace sexual harassment; (“harcèlement au travail”)

“workplace sexual harassment” means,

(a)  engaging in a course of vexatious comment or conduct against a worker in a workplace because of sex, sexual orientation, gender identity or gender expression, where the course of comment or conduct is known or ought reasonably to be known to be unwelcome, or

(b)  making a sexual solicitation or advance where the person making the solicitation or advance is in a position to confer, grant or deny a benefit or advancement to the worker and the person knows or ought reasonably to know that the solicitation or advance is unwelcome; (“harcèlement sexuel au travail”)

 

When to investigate

Employers in Ontario have statutory obligations to investigate discrimination and harassment allegations under the OHSA and the Human Rights Code (“Code”).

In Laskowska v. Marineland of Canada Inc., 2005 HRTO 30, the Human Rights Tribunal of Ontario (“HRTO”) recognized the procedural obligation on employers to investigate a harassment complaint based on discriminatory practices under the Code. This means employers will be legally liable if genuine complaints of discrimination or harassment allegations are not addressed in the workplace. Additionally, even in the absence of a complaint by an employee, employers with actual or constructive knowledge are obligated to address workplace misconduct. However, this is not to say that an employer must, in all circumstances, trigger a full-blown investigation. Employers can dismiss a harassment claim where their preliminary findings point out that the allegations are unfounded or the complainant’s requests for accommodation are unwarranted. In all situations it is likely wise to consult legal counsel before doing so.

Reducing liability through proper investigation

An effective and appropriate workplace investigation into claims of harassment can reduce an employer’s liability. For example, in Robichaud v. Canada, [1987] 2 SCR 84, the Supreme Court of Canada stated:

An employer who responds quickly and effectively to a complaint by instituting a scheme to remedy and prevent recurrence will not be liable to the same extent, if at all, as an employer who fails to adopt such steps.

By contrast, a biased and inadequate investigation in a case of harassment would result in a damages award. Such was the case in Doyle v. Zochem Inc, 2017 ONCA 130. The Ontario Court of Appeal found that the employer’s investigation into a case of sexual harassment was shoddy and unfair. This warranted moral and human rights damages in favour of the harassed employee.

Hiring an ill-equipped investigator or using a potentially biased employer’s representative to undertake harassment investigations into sensitive complaints involving senior management or complex  situations could have two effects:

• It will affect workplace morale negatively.
• It will enhance a damages award in favour of the claimant.

Accordingly, employers should at all times take time to consider: does the complaint raise discrimination or harassment allegations that make an investigation necessary? What kind of investigation is appropriate in the circumstances? Is it necessary to retain an external investigator? Employers will want to ensure that they have someone able to assess misconduct allegations to determine if, based on the evidentiary record, harassment occurred. If the investigator is a lawyer, they will also be able to provide the employer with legal advice.