Employment
InjunctionsOur Blog
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Since it was recognized a little over a decade ago in Bhasin v Hrynew, the contours of the organizing principle of good faith and the duty of honest performance in contract law have been gradually clarified by Canadian courts. Most recently, in Ocean Pacific Hotels Ltd v Lee, the British Columbia Court of Appeal considered whether the duty of good faith applied to pre-contractual conduct. In particular, the question in this case was whether an employer’s conduct before an employment agreement was finalized could be scrutinized under the duty of honest performance. Answering that question with a resounding no, the Court of Appeal’s decision provides critical insight into the evolving boundaries of good faith obligations in Canadian contract law.
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In Bertsch v Datastealth Inc, the Superior Court confirmed the enforceability of an ESA-minimum termination clause that excluded common law notice periods. This decision, resulting from a Rule 21 motion to strike, marks a welcome shift for employers in the court’s longstanding reluctance to uphold termination provisions in employment contracts.
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The Court of Appeal for Ontario (“ONCA”) will hear the appeal of Dufault v The Corporation of the Township of Ignace (“Dufault”) this Friday. While Ontario courts previously recognized that creating jurisprudence based on hypothetical situations is a slippery slope, since the decision in Waksdale v Swegon North America Inc, courts in Ontario have repeatedly invalidated termination clauses in employment agreements by considering hypothetical breaches of employment standards legislation.
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After a three-week trial, the Ontario Superior Court has held that the Royal Bank of Canada had after-acquired cause to terminate a senior banker, Aidan Mittra, and dismissed Mittra’s $10‑million lawsuit.
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Lynne McArdle published the first issue of On the Docket: Cases to Watch, which features a collection of cases that move the law forward in some meaningful way. The cases in this edition are diverse in that they arise in different areas of the law: fraudulent conveyances, securities law, class actions, employment law, discovery, and Crown law.
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On November 10, 2023, when the Supreme Court of Canada (“SCC”) released their decision in R v Greater Sudbury (City), the internet responded with widespread panic because, for the first time, the Court has confirmed that a project owner is an employer under Ontario’s Occupational Health and Safety Act (“OHSA” or the “Act”).
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Employment law misclassification class actions are becoming increasingly common. In those cases, the plaintiff says that employees have been misclassified by their employer in such a way as to render them ineligible for certain benefits under applicable provincial employment standards legislation which the employee claims that they should have been eligible for. The two most common categories of alleged misclassification are employees being allegedly misclassified as independent contractors, and ordinary employees being misclassified as managers. While some misclassification cases have been certified, courts have refused to certify many others due to a lack of sufficient commonality. The recent decision of the Ontario Superior Court of Justice in Le Feuvre v Enterprise Rent-A-Car Canada Company is an example of a case that falls into the latter category and was not certified.
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Is an employer obligated to pay overtime if they don’t specifically direct an employee to work overtime? And can an employer’s requirement that employees obtain pre-approval for any overtime they work shield them from the obligation to pay overtime if pre-approval isn’t obtained? These are important issues for any employer.
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A frequently litigated issue in Canadian class actions is the extent to which parties can agree in advance to opt out of class actions in favour of private arbitration. In the context of consumer protection claims, provincial legislatures have generally eliminated the ability of defendants to defeat class actions through arbitrations by declaring clauses requiring the parties to submit such disputes to private arbitrations to be void. However, it has remained an open question as to whether and when courts would enforce arbitration clauses in other contexts, where the effect of such enforcement would be to defeat a proposed class proceeding.
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An invalid termination clause is a former employee’s golden ticket for employment litigation, increasing a notice period from the statutory minimum to what is reasonable at common law. The monetary difference can be substantial. Given the financial implications, there is a large and growing body of case law on when a termination clause will be deemed unenforceable.
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