2019 in review: A look back at the top cases

2019 was a tumultuous year for employers with significant changes to workplace legislation both provincially and federally and a number of noteworthy decisions. Throughout the year, CCP has kept you up-to-date on these developments through our Employers’ Edge blog and our Lawyers for Employers podcast. We are now happy to provide a recap of our top cases and legislative changes of the past year, along with links to our original blogs. Enjoy!

Legislative Changes

• Bill 66 – Restoring Ontario’s Competitiveness Act, 2019: Bill 66 is an omnibus bill that amended a number of statutes, which included changes to the excess hour agreements and overtime averaging agreements provisions under the Employment Standards Act, 2000 (ESA), and significant changes to the construction industry provisions under the Labour Relations Act, 1995 (LRA).
• Bill 124 – Protecting a Sustainable Public Sector for Future Generations Act, 2019: Bill 124 introduced a 1% cap on public sector wage increases, annually, for a 3 year moderation period that affect both unionized and non-unionized employers.
• Bill C-86 – the Budget Implementation Act, 2018: the sweeping changes made to Part III of the Canada Labour Code came into effect on September 1, 2019. The most notable amendments include changes to the hours of work, vacation, holiday, leaves of absence, termination, equal pay for equal work, and temporary help agency provisions.
• The WSIB established an operational policy setting out guidelines for entitlement to, review of, and payment for medical cannabis under the Workplace Safety and Insurance Act, 1997 (the Act), which came into effect on March 1, 2019. This policy outlined a number of important guidelines for the use of medical cannabis, including categories of persons for who use of medical cannabis was not recommended, designated conditions for which there is evidence of therapeutic efficiency for medical cannabis, entitlement criteria for medical cannabis, and for a review of cannabis entitlement.
• As of October 17, 2019, the production and sale of edible cannabis, cannabis extracts and cannabis topicals became legal.

Top Labour and Employment Cases of 2019:

• Heller v Uber Technologies Inc., 2019 ONCA 1: The Court of Appeal determined that Uber’s arbitration clause, which precluded drivers from accessing the Ontario courts by requiring disputes to be addressed through arbitration in the Netherlands, was not binding because it had the effect of illegally outsourcing an employment standard. The Court of Appeal remarked that the arbitration clause sought to take advantage of the significant disparity in bargaining power and financial means between Uber and its drivers because drivers would be forced to pay over $14,000 USD just to file for arbitration under this process.
• Ontario (Labour) v New Mex Canada Inc., 2019 ONCA 30: In this case, two workers were killed in a workplace accident and the corporation and its directors were charged. At trial, the corporation was sentenced with a $500,000 corporate fine and both directors received jail sentences. On summary appeal, the judge overturned the corporate fine and director jail sentences and imposed a $50,000 corporate fine and $15,000 fine to each of the two directors. The Ministry of Labour appealed this decision to the Court of Appeal in the hopes of having the initial sentences reinstated. Although the Court of Appeal dismissed the appeal, this decision nonetheless has important implications for employers. Along with reiterating important sentencing principles for regulatory offences, the Court of Appeal stated that it does not oppose jail sentences for OHSA offences as was previously suggested by the lower courts. In cases where it appears that a fine will not have a deterrent effect, a jail sentence is very much in play.
• Carter v Chrysler Canada Inc., 2019 ONSC 142: The Ontario Divisional Court upheld the Ontario Human Rights Tribunal decision which found that an employer was permitted to have preferential treatment for accommodations for work-related injuries as opposed to non-occupational injuries. Although prioritizing the work-related injuries clearly creates a distinction in treatment between the two classifications of disability, the Court confirmed that this distinction did not meet the test required by Ontario’s Human Rights Code for discrimination. This decision may help employers make difficult decisions on how to assign modified work. However, employers should note that even if they are prioritizing WSIB injuries they must continue to seek accommodation for non-occupational injuries. 
• Merrifield v Canada (Attorney General), 2019 ONCA 205: The Court of Appeal for Ontario held that the tort of harassment does not currently exist in Ontario and that this case did not present a “compelling reason” to create one. While the Court did not rule out the possibility that harassment may one day be recognized as an independent tort, for now it is not a tort Ontario employers need be concerned with. That said, it is important to remember that under the Ontario Occupational Health and Safety Act and the Canada Labour Code (for federally-regulated employers) employers have specific legislative obligations to address and prevent harassment in the workplace.
• Ruston v Keddco Mfg. (2011) Ltd., 2019 ONCA 125: The Court of Appeal for Ontario upheld the trial judge’s determination that the employer’s hardball tactics in bringing a 1.7 million dollar counter-claim and making allegations of cause that they couldn’t prove at trial justified an award of $125K in punitive and moral damages. In doing so, the Court of Appeal sent a clear message that it will not interfere in a well-reasoned decision of a lower court where the evidentiary record supported damages for egregious conduct. The pivotal finding by the trial judge that the counter-claim was initiated solely for the purpose of intimidating the plaintiff should serve as a stern reminder to employers that the use of counter-claims in wrongful dismissal litigation as a negotiating tool can have serious repercussions. 
• Teamsters Local Union No. 230 v Innocon Inc. (Toronto Ready Mix Concrete), 2019 CanLII 9237 (ON LA): In this case, the union grieved discipline against an employee who had been caught on video violating company policy by recently installed in-cab cameras in the employer’s fleet of concrete delivery trucks. The arbitrator dismissed the grievance because she found that although the drivers did have a privacy interest that was impacted by the DriveCam system, that impact was limited because “only a small amount of footage is even viewed after the event with the Drive Cam system and of that, an even smaller percentage is provided to the Employer.”  This was balanced against the fact that the issue the employer sought to resolve was a “serious one”, in terms of both safety of the employee and the status and health of the company itself, since its safety rating with the Ministry of Transportation threatened the company (and along with the very jobs of the union members). This case is good news for employers in that it explicitly recognizes that a threat to the employer’s ongoing viability is a significant factor in determining the balance between the employer’s and the employee’s interests.  
• Modern Cleaning Concept Inc. v Comité paritaire de l’entretien d’édifices publics de la région de Québec, 2019 SCC 28:The Supreme Court of Canada ruled that an individual who owned a part-time cleaning business and entered into a franchise agreement to clean commercial buildings was an employee and not an independent contractor. Importantly, the Court established that in determining whether a worker is an employee or independent contractor, it is the actual relationship that will carry the day, not just the words in a contract. Employers should heed this decision and recognize that a worker is not an independent contractor simply because there is a written agreement which purports to classify the worker as such.
• Ontario Nurses’ Association v Participating Nursing Homes, 2019 ONSC 2168: The Court overturned the Pay Equity Tribunal’s long standing practice of not requiring employers to use the proxy method of comparison to go back to the original proxy employer for updated male comparator information to maintain pay equity. As a result, broader public sector employers should review and evaluate their current pay equity status to ensure their pay equity efforts are in order and carefully consider their position in any collective bargaining negotiations.
• Katz et al. v Clarke, 2019 ONSC 2188: The Ontario Divisional Court established that frustration of contract can be resolved by way of summary judgment. Although the employee desired to return to work in this case, the Court determined that employer the was not obligated to accommodate the employee and return him to work where there was no objective medical evidence to support that he was able to return. The Court reiterated that “an employer's duty to accommodate ends where the employee is no longer able to fulfill the basic obligations associated with the employment relationship for the foreseeable future.”
• English v Manulife Financial Corporation, 2019 ONCA 612: The Court of Appeal for Ontario overturned the motion judge’s finding that the plaintiff could not rescind her notice of resignation. The Court found that the employee’s “resignation notice was equivocal given the circumstances in which she presented it to Manulife, and she was entitled to withdraw it.” This decision shows that employers must account for surrounding circumstances in determining whether an employee has clearly and unequivocally resigned.
• Morningstar v Hospitality Fallsview Holdings Inc., 2019 ONWSIAT 2324: The Workplace Safety and Insurance Appeals Tribunal took away Ms. Morningstar’s right to sue her employer for constructive dismissal related to workplace harassment. The result of this decision was that Ms. Morningstar’s only path to compensation for workplace harassment is under the Workplace Safety and Insurance Act (WSIA) in a claim to the Workplace Safety and Insurance Board (WSIB). This is a welcome decision for employers because it demonstrates that where a claim (however it’s framed) amounts to a claim for compensation for a workplace injury that falls within the scope of the WSIA, the WSIAT will determine that the right to sue for that compensation is taken away by the WSIA.
• Thurston v Ontario (Children’s Lawyer), 2019 ONCA 640: The Court of Appeal clarified what level of dependency is required to “tip the balance” from an independent contractor to a dependent contractor. The Court explained that dependent contractor status is a non-employment relationship in which there is “a certain minimum economic dependency, which may be demonstrated by complete or near-complete exclusivity”. This threshold of near complete exclusivity requires “substantially more than a majority of the dependent contractor’s income [to be] earned from the contracting party.” 
• Cormier v. 1772887 Ontario Ltd. (c.o.b. St. Joseph Communications), 2019 ONCA 965: The Court of Appeal upheld the motion judge’s ruling that a termination clause in an employment agreement was invalid and the award of 21 months’ wrongful dismissal notice was reasonable. In doing so, the Court addressed two issues in this decision: 1) appropriate termination language for continuing benefits during the notice period; and, 2) the notice period for dependent contractor. First, the Court found the termination provision was invalid because it excluded the continuation LTD and STD during the notice. More significantly, the Court found that the termination language stating the continuation of benefits was “subject to the consent of the Company's insurers” also constituted contracting out of the ESA and invalidated the termination clause. This finding is troubling since it is the insurer and not the employer that provides the actual group insurance benefits. Second, the Court found that the calculation of the reasonable notice period includes time the worker spent as a dependent contractor prior to becoming an employee. This should serve as a cautionary note to employers: all history and circumstances surrounding employees should be taken into account in order to properly protect the organization with a well-crafted employment agreement.