Watch the on-demand video of the session, featuring Lai-King Hum, founder of Hum Law Firm:
Transcript
Editor’s note: The following is an unedited, auto-generated transcript. Please check against delivery in the video.
Todd Humber: All right, I can see we’ve got people starting to come into the room, so I think we are ready to get started. We’ve got a really large audience joining us from across Canada today. In fact, we’ve got a couple from the US as well, Lai, so just a FYI, we’ve got a very national and a very international audience today, so…
Welcome, everyone, thanks for joining us today. I am Todd Humber, I’m the publisher of HR Law Canada, and I’ll be your host for this session with our partners at Hum Law Firm.
This is becoming a bit of an annual tradition for us, Lai, because, you know, we’ve heard from you, we heard from you last year. Now we’ve got you lined up again this year to kind of review some of the key changes from 2025, and then what needs to be on our radar as we look ahead, you know, for the coming year for 2026.
Before I turn the reins over to Lai, just a couple of quick notes. You, the audience, are in listen-only mode. That means we can’t hear you or see you today, but we would definitely want to hear from you. There’s a Q&A box that you’ll see at the bottom of your Zoom webinar control panel. You can drop questions anytime during the sessions. We’ll try to get to as many of those as we can today.
We are recording this session, so you’re gonna get a copy of that in your inbox in the next couple of days. That will be sent to the same email you used to register. That comes directly from Zoom, so just keep an eye out for that.
And now it’s my privilege, sorry, to introduce our speaker today. Lai, the founder of Hum Law, is known for expertise in all areas of workplace law. Her practice encompasses employment law, human rights, professional regulation, mediation, litigation, and workplace investigations. She opened her Toronto-based employment law and human rights firm in 2014, having established herself as a leading employment law practitioner at top-tier firms in Ontario and Quebec. So, Lai, it’s so nice to see you, we’re thrilled to have you. Welcome.
Lai-King Hum: Thank you so much, Todd, and I want to wish you and everyone else here a Happy New Year. I hope it’s not too late to say that. It is a Happy New Year for HR Law, anyways, because this is my first presentation for you in 2026.
So, welcome everyone, and it’s always great to start the new year, you know, going through what we learned from 2025, including cases, a lot of cases that took us by surprise, and, you know, take a look at what we can expect in 2026. Now, I do want to say that, hello to everyone across Canada and in the United States. The focus of this presentation is on Ontario, but I will mention where it is applicable to other jurisdictions, and we’ll also touch on new things that are happening at the federal level.
So… let us, so my presentation will be, divided up into three, sort of sections. I’ll go through the key cases, in my view, that, happen in 2025, and you’ll see in the slide the different… the breakdown of those types of cases. I will then take you to the legislative updates, focusing in on new leaves and new obligations in Ontario, and, new leaves at the federal, federally, regulated, jurisdiction. federally regulated employers. So, the new leaves and obligations that you need to be aware of. And finally, I will end with a short session on tips, how to manage risks in 2026.
So, let us, go to the first, thing I want to talk about, which is, the case law. There were many, many cases that you need to be aware of in 2025, and I will, specifically discuss the contradictory decisions on termination clauses and the at-any-time debate. So, even lawyers were left scratching their heads about, well, you know, where are we when it comes to termination clauses?
So, just to give you a bit of background. So, in the slide, you’ll see I’ve divided the cases up into the unenforceable camp and the enforceable camp. Now, if you have, If you are versed in what, has been happening in the employment law, field, you’ll know that there has been a lot of debate on termination clauses.
You will know that in 2024, there was a really important case, Dufault versus the corporation of the township of Ignace, where, the court building on the other, big place, Waxdale, which was in 2020, you know, in Waxdale, The, termination clause, Was that, was rendered unenforceable if the for-cause termination clause was broader than the employment standard’s willful misconduct standard.
So, in Ontario, the regulations to the Employment Standards Act, said that a termination, without notice and without, pay in lieu of notice can be done if The employee has met the willful misconduct stand. But, so Waxdale built, interpreting that, invalidated a termination for clause clause, that did not have that standard.
Will Dufoe, the case of Dufoe in 2024, went further. And it rendered unenforceable any termination clauses that contained words such as at the employer’s sole discretion, or at any time and for any reason. And the reasoning in Dufault was that, That kind of a clause, reached the ESA.
And, the ruling, set off alarms in the… amongst employment lawyers and those in HR, There was shock at the decision, skepticism about whether the decision was correct, and Because of that, urgent, calls or notices, from employment lawyers to their employer clients saying, you’ve got to revise your contracts.
Now, that Dufault case was appealed, but to the disappointment of many people, the Court of Appeal decision in late 2024 upheld the original ruling without determining the issue of At sole discretion, or at any time, the language that was used in the ruling. So it remained an unsettled issue of whether at any time would invalidate every termination box.
The uncertainty continued throughout 2025, which takes me to my slide. And the Ontario, courts gave us two differing, decisions. So, in the unenforceable plan, there are cases like Baker and Chan, which is cited there, that rule, Saying you can… Language using at any time is, unenforceable.
And the reason was the ESA prohibits termination during certain periods, such as during protected leads, like a pregnancy. Parental leave, or even during an employee’s vacation. So, because of those circumstances, I’m in Ontario, in the employment, statute, it protects, termination during those periods, so a term that says, at any time, the court looked at it and said that’s too broad, so it doesn’t comply with the ESA, and therefore, the whole termination clause falls away, it’s unenforceable, it’s of no effect.
But you have on the enforceable side of the camp, there are cases like, Al Azzat, that said such language is generally used to illustrate that, the employer can terminate the employees at any time, they can… it’s not… like they don’t have to wait until they find out about, like, we… you’ve committed a crime, or we find out about, inappropriate, behavior, or your performance lacks, we can do it, It’s just sort of like an illustration. It’s not a, statement of, you know, this is the exact terms upon which we can terminate. And therefore, they concluded, that it actually, does not breach the ESA.
So, the case of Al Azzat, was decided by the Divisional Court. So that’s a higher court. Than the superior Court of justice, which is where we decided back or, in Chads. So some people are hoping that Al Azzat, would remain the decision, as it is, a higher court.
However, the next, issue or problem, and then we look at the enforceable count. Is that Justice Stevenson in this case? Decided on December 13, said that such language can be used, so… Such broad language is not specific enough, And that is okay, if it’s just generally language and it just talks about the right to terminate a sort of a preamble. Then it does not need to be compared with the termination provisions.
For example, the two terminations, clauses, that we see all the time or more commonly. In, all, in the contracts, for cause. Or, without cause. Those are the terms that need to be clear, exact, set out, what it says and what it means, and that should comply with the ESA. And any general language before those two specific provisions, or surrounding those two specific provisions, that are more, you know, a bit lofty, general, or vague. If it’s a preamble or just sort of introductory remarks, and if they don’t fall within the specific causes, they don’t have to comply with the ESA.
The reason being is, if the employer acts in a contrary manner, the courts will look at those actions. And, they will interpret the contract, the whole context, and see whether or not they breach the contract.
So what this case has done in Al Azzat and Al Fattouri is to give maybe a bit of, reasoning, the general language need not comply with the precise requirements of the ESA, as long as the terms themselves, or the specific terms, the for cause and the without cause provisions, comply. So, we have some clarity on that, at least in terms of what the Divisional Court has said.
Now, the other thing is that in Al Azzat, for them to get to a decision, the court did have to, decide, whether or not the other termination provision, the for clause and without clause was enforceable. Obviously in the court. It was. So the whole contract was upheld.
So, it’s a bit of a step away from Dufault, where we said, oh, if there is, a breach, or there’s a problem with the for-clause, the whole contract falls away. And here, the court is still looking, I think, in the usual manner where they say, okay, there’s a problem with a for-clause. Okay, we still… we want to uphold the rest, the contract if we can. And if we have a valid contract on the without-clause termination, then we can, uphold that provision, and that’s all the employer can rely on.
So, the employer, in that instance, can only… terminate without-cause. They don’t have a, for-clause provision that they can rely on. So it’s like, there’s a bit more, I think, specificity, given now that’s easier to kind of navigate through.
Now, just quickly on the same topic, but on wrongful dismissal, in a case call, Murray. Employees, alleged that the employer, pre-planned their termination as terminations were allegedly done to save costs. And the employees tried to argue they should have a notice period starting prior to the day they received notice of their termination.
And, the court, emphatically said, No. The notice period, from the date of termination. And even if the employer had planned ahead to conduct the restructuring, there was no requirement that the employer, must announce it before making the decision. Unless the employment contract, says something like, you’re entitled to notice prior to your termination and which most contracts, don’t say. So, it doesn’t matter if it was pre-planned. The planning, is not held against the employer.
Now, just a few words on constructive, dismissal. Because there were many, many cases, on constructive dismissals that you should be aware of. But, I want to touch on just two points in one. I mean, I want to talk about Switzels, in Ottawa, and I want you to watch out for a case called Shorten, which I don’t think has been, released yet on CanLII. And that will set out, how to calculate, a reasonable notice period, in a constructive dismissal case.
So, in terms of Switzels versus City of Ottawa, the judge talks about the fact that, even if there is, only a perceived, a perceived, or you, you only inferred. A decision that was made by the employer, that, changes a fundamental term of your employment. That is not enough to establish a constructive dismissal. You have to demonstrate objectively, that there was, a decision made, or there’s action taken by the employer, that will unilaterally change a fundamental aspect of your employment. So, you can’t take it the wrong way. You can’t, make an assumption or kind of, pre-emptively make a decision that, they’ve changed, a fundamental term of your employment if it was not the intention of the employer, or was not done, by the employer.
As I said, watch out for Shorten, and where this case was all about, you can construe, you can, find that you’ve been constructively dismissed. Resign, and, have a reasonable notice period based on, you know, Bardell, factors, or even, sometimes even more than the common law. And some of the case, says that you’re entitled to damages, calculated from the time, the wrongful acts occurred or the acts that constitute a breach, to the day you finally resign. Others say no, you should only calculate the… The, damages you’re entitled to, from the date you resigned, because that’s the date of termination.
Now, this case was about a wrongful dismissal, where Justice Corrick, who’s, with the Ontario Court of Appeal, wanted to set out the principles, and the case is called Mathews, which was more than 30 years old, that set that out. And so if the Mathews case talks about, the damages, being calculated from the date of termination, not the day… Not, like two years earlier, when a wrongful act occurred, Justice Corrick said, you know what, the Mathews, principles applies when there is a dismissal, and a dismissal is very specific, or a termination, it’s very specific, when you’re getting your… Notice.
This case, again, that is going to come out by Justice Correct, is going to talk specifically about constructive dismissal. And, whether, the Mathews, principle applies when there are… There may be repeated, wrongful acts. Right. But this is something that I want you to watch out for, because it will clarify, for everybody involved as well as employers whether you calculate, the notice period of damages from, the date they resign or when the wrongful acts start.
Todd Humber: Right.
Lai-King Hum: So, you… These cases are important for us, if you are going to defend a constructive dismissal claim, you’ll need to know, when does the clock start, in our assessment in terms of your settlement or your, our defense.
Alright, let me just move to the next section, which is, human rights. I have to say that in this past, year, the, issue that I’m seeing on my own, practice. And also issues that are, coming out on, now in case law, has more to do with… What is disability, undue hardship, and, accommodation. We’ll talk about the first two in a second, but first, just briefly, touching on Boland.
Boland versus the City of Thunder Bay said that, the city… The city was found liable, for vicarious liability in the Human Rights Tribunal even though, the, harassment, and discrimination occurred outside the workplace at a non-work-related social event. So we have to watch how our employees behave, outside the workplace. And there’s a, there is a somewhat of a nexus if, you know, work colleagues, were, involved, in a harassment and in a discrimination issue at that, non-work event.
A couple of, cases that really surprised me on what is a disability, for the purpose of the Human Rights Code. There’s two cases that I want to mention. A, Uber drivers versus Uber. The driver. Did not disclose, a mental health disability, when they went through, the hiring process, which involved, getting a police records check, which they failed because, the police records check, came back showing a conviction for an impaired driving.
That was eight years earlier, the driver actually, when they saw that conviction, said, oh, but, you know, I was impaired because I had a depressive disorder. That was undiagnosed, and that impaired my judgment. And therefore, that… That, you know, issue with, my impaired driving is due to a disability.
And, the tribunal said no. You cannot, attribute, conduct, you didn’t know was caused by a mental disability. We’re not gonna, back you up on that. So the disability, was not even diagnosed, the mental, illness was not diagnosed. And you’re trying to say now that, your inability to disclose your criminal record is, due to a disability. You can’t use disability as a excuse. Which I like that decision.
The case of Manzourani versus McMaster University, is a PhD student, who was terminated, or, suspended. From his, PhD program because, he could not demonstrate that he was achieving, for both, intellectual rigor and academic integrity. Despite, concerns raised to him by the university. And this student, attributed his deficiencies, to a mental health issue, to a disability.
And both the Tribunal and the Divisional Court, said no. That disability for the purpose of the code, cannot be made out when, someone says that, whatever my conduct is, was all due to the stress, or it, or if my mental state is… I mean, I would think that everyone can almost claim. Every conduct they do, whether it’s lack of academic rigor and integrity, or whether it’s in the workplace, that I’m not performing it, and you’re disciplining me. I can say, oh, I am feeling stressed, that caused my conduct, it’s a disability.
We all… both the tribunal and the court, very emphatically said, you can’t equate everyday stress with disability. Disability is a physical, psychiatric, or psychological condition, that, impairs your abilities. It’s not, like, about how you attribute, your conduct all the time. Okay. So, again, just… It’s a really important case for employers to understand, also employees too, I think. So, I’m sure more of these cases will come up, at the Human Rights Tribunal, as people, you know, perhaps try to, argue, wrongful termination or discrimination under the code, saying, I have a disability. So employers, understand what is a disability. It has to be very specific. It’s not something that can be created after the fact, or it is not, simply someone being stressed out by their workplace that, can justify, their conduct.
Alright, so let’s move on quickly to another issue, which I think employers will face this year in 2026, and in later years coming, which is, undue hardship. Employers, generally understand that they have to accommodate employees with, disabilities or other code-related grounds, right? So, whether it’s, creed or sex, pregnancy, right? Employers have an obligation to accommodate, right to the point of undue hardship.
Now, I want to talk about undue hardship, and I, will talk about two cases. One is, in Mississauga. And the second one is, a BC. So, just by way of background, to make… to ensure everyone is on the same page, in Ontario, undue hardship is, If, you know, if there’s health and safety concerns that might arise, or if there, is gonna be, you know, like. Destruction or problems with, the contract, the collective agreement. Or any other substantial, issue or substantial cost that, an employer has to incur. And the employer should, those employers are, can raise that as a defense to say, I can’t accommodate. I’ve met my, undue hardship, requirement.
What the case in Mississauga talks about is undue hardship and accommodation, must be applied with consideration to the entire workforce, not just to what the individual, requesting accommodation needs. So in this case, there was an employee who had, an unusual schedule, like start at eleven thirty, end at eight. The employer didn’t want to, approve that, and, the Tribunal said, look, you can’t discriminate against one employee because the rest of the employees would be aggrieved by such an accommodation.
Okay. But the Divisional Court said, overturned that ruling, and said, the code, does not limit this consideration, only to the employee seeking accommodation. So the employer should look at the workforce overall. All employees who would be affected. And if, that other employee, those other employees are somehow aggrieved or impacted significantly enough, that can amount to undue hardship, I e. Burden on the employer to say, sorry, I can’t, accommodate you in that way.
The BC case is, interesting. A person who worked remotely, wanted to switch, her schedule. To work in a different time zone. And the employer said no. And the tribunal, said that undue hardship can be established if granting that accommodation, would result in, a significant operational, change. For example, the, employer’s ability to communicate and collaborate with the employee would be severely impaired. If the employee works in a different time zone, The employee also, might have duties to interface with people and other offices or, clients. That might be hampered because, of the time zone shift that would happen if she works in a different time zone. So it’s not just, oh, I work from home, and I can work from any time zone. There’s operational considerations that the tribunal said the employer can raise, in terms of undue hardship.
And a last thing I want to say, because I’m running out of time on the case law is that, just two rulings on employees’ duties. These rulings come from the, Tribunal. And they’re important because sometimes people don’t remember that the employee has a duty to participate, to be a part of the accommodation process. So, the case of Jain… And this case of Penton versus Ministry of Children says that employees, can’t provide medical documentation and then refuse to talk. They’re, you know, like, here are my doctor’s notes, and I’m not gonna engage with you. That is not gonna, be, acceptable. They, employees, have a duty and obligation, to participate in the accommodation process.
So, but going back to the employer, you can’t just, say, you know, show me that you can work. It’s not really accommodation. You can’t ask someone to write an exam and pass the exam, and if they can pass exam, you can accommodate, but before that, no. Now, the employer has to, facilitate the accommodation process, especially now, you know, people are getting greater awareness, or greater, trying to raise, you know, people with disabilities, or people with, you know, issues related to protected grounds, so that they can join the workforce, and they can participate in the workforce.
To have proper, assessments, get proper information about, you know, how we can accommodate. I think those are really important, steps for us employers to take, rather than say, oh, I’m gonna, you know, set up a threshold that you got to reach before we accommodate you, which might be an artificial, barrier for people who truly deserve accommodation. Alright. Let’s move on now to the legislative updates. There’s a few, that I want to talk about. Some of them are, you know, for, the workplace misconduct leave. But one leave, is a relatively new leave, which is a leave, for employees who have experienced, interpersonal violence in a relationship.
So, a brief overview for you. If you, are an employee who experienced, violence, or threats of violence at the hands of, someone who you live with, or someone who you are in an intimate relationship with, or someone who you’re in a familial relationship with, then you can take a leave from work without, giving any reason.
Now, many, employers, might know about the, five-day domestic violence and sexual violence leave. Where the employees can take leave after experiencing such violence. Now, this new leave is a separate, leave. It’s a separate entitlement, and there is no maximum. There is no maximum. So employees can take the leave because they need to attend at court, they need to speak, to lawyers, they need to get, therapy, as a result of the violence or threatened violence, they can take a leave to find, a new, housing, or living arrangement. I mean, all of those things that come up, after someone experiences violence, or threatened violence.
So, this is, in my view, a good, step to, protect, people who have experienced that, and to help, you know, empower people, so that they can leave an abusive, relationship. Alright, so, when does it start, right on February first. Okay. If you are a BC employee, there’s similar provisions that’s coming out in April. So, that’s April 20, in fact. But anyways, it’s also, you know, like similar, leaves.
In Ontario, one thing I want to point out is if you are receiving, or you’re in the… If you are, the accused, the other party, you cannot take that leave. So I mentioned sometimes, you know, there’s obviously… It’s… when there’s a fight or there’s a, problem and an issue. There’s always two sides, you might have both sides, you know, potentially taking the leave. But the law says that, you can’t do that. You can’t take the leave if you are the one who’s alleged to have committed the violence, or threatened the violence.
And the onus, if you do need to tell your employer the reason why you’re taking the leave, that you are alleged to be the victim of violence. And the onus will be on the employer to… If they find out that you are, that the, person who, allegedly committed the violence, Then it’s on the employer to, check, and to say, no, you can’t take this leave, then. And we’re very clear with the employee that, you know what, you’re not entitled to it, because, allegedly, you have, commit, you know, we have information to believe that you’re the one that committed the violence.
Alright, so let me just say a few words on the, workplace misconduct leave, which is also February 1st, 2026. It is a very, very detailed and cumbersome process and policy that employers have to get themselves familiar with now, if they’re not already. For those who are, I mean, I’m sure I’ll hear about, some of the challenges that are gonna arise.
This kind of leave applies when the employer, is investigating allegations of misconduct. So for example, like, harassment, and, sexual assault, criminal conduct, that is alleged to have occurred in the workplace, or during the course of employment, you can place an employee on this leave.
And, I want to go through very, very quickly what the, employer’s obligations are in order to, make this a valid, workplace, misconduct, leave. So, you as an employer must have an investigation policy. So, to make this valid, if you don’t have it in place, then you better get it, because if you don’t have it, then you’re not complying with your employment standard’s obligations. At least, according to the workplace misconduct leave requirements.
Now, the second thing is that when you place an employee on this leave, you have to give them at least two days’ notice. So think about it. If there’s an allegation, and you want to… You’re doing an investigation, you want to remove that person from work, you have to give them two days notice. Which means, like, to me, if there was, someone who committed an assault, you got to wait two days before they leave. The employer can ask that the employee, work from a place or work remotely, if possible, or if it’s safe. To continue working during those two days.
Now, the length of this leave is two weeks. And you can extend, for up to two more weeks, so four weeks, in total. If you do not find out or conclude the investigation within four weeks, and there are circumstances and facts, in the case that requires the employer to extend the leave, but I’m gonna just, not dive into that. If you have questions, please send me a message or write me an email. But anyways, you can extend.
And so this process is very, very different to what we knew. Which is, look, there’s an allegation of misconduct, remove the person, investigate, and once you conclude, you make your decision. Now, when this leave first comes up, you know, it’s February first and if you do put someone on this leave, you do need to maintain their pay and their benefits. And you have to give them proper notice of, who the investigator is, and you’ve got to give them notice of when they can come back to work.
Now, a bunch of, other obligations, but I I think for me, my initial comments are, I find that it’s going to be difficult to immediately say you’re on leave, you’ve got to give me two days’ notice. There may be a lot of resistance to maintaining pay and benefits if there was an assault or serious, misconduct, alleged. So, while I know what Ontario is trying to get at, there’s going to be challenges on this, very new procedure.
Let’s look at, when the employee can come back from the leave, right? So, when the employer concludes an investigation, you make a determination whether the employee committed the misconduct. If you find them having committed the misconduct, then you can decide, what your next step is, whether they come back to work or not. There’s no minimum notice period. I would say, in my view, it’s probably best for you to, if you do find that they’ve committed the misconduct. This is a precursor to a termination, which you have to comply with the ESA requirements.
But if you didn’t find that they’ve committed the misconduct, and you want them back at work, then yes, you have to give them, at least a day’s notice, and at the same time, you should also, let the alleged victim know. If there’s an alleged victim, that they’re coming back to work, right? And you can implement, like measures to, help these two parties, get reintegrated in the workplace, such as, you know, separating them and, like keeping, remote work, blah blah blah. Any of those things. So again, detailed, like, cumbersome. So when this first starts, I’m sure you’re gonna see, a lot of guidance being, you know, requested or provided on what employers should do.
Now, we don’t have a lot of time, but I just want to go through a couple of, federal, leave, that has kicked in, in, 2025. And the ones that are kicking in, in 2026. So there are people who work in federal, you know, employees in, federally regulated workplace. So, a lot of things that I’ve just talked about in Ontario does not apply, because the laws that govern them is under the Canada Labor Code.
So, the major, leave that started in, last year, last year was, medical assistance in dying leave. That’s just similar to Ontario. But also, the fertility treatment leave. And this started in, late December, 2024. Okay. So anyone who are undergoing fertility treatment or planning for it, they can apply for the leave to, attend medical appointments, all of that. The, leave is for five days per cycle of treatment, and they can extend it. Now, if they have a doctor’s note and say, Oh, you know, I need more for my recovery because, there’s complications, then, the employer can extend it. So, but otherwise, it’s five days per treatment cycle. And, you know, if the employee, is taking the leave, for fertility treatment, for their spouse or for their partner, they still can get it up to five days.
All right. The next one is the pregnancy loss leave that started on January 1st, 2026. Employees who have lost a pregnancy, who have, you know, pregnancy at any stage, and they’ve lost it, can request up to eight weeks of leave. If your spouse or your partner is the person who has, experienced a pregnancy loss, you still can request the leave. I believe it’s less, but certainly you can.
Now, coming in 2026, April 30, is the neurodivergent employment accommodation leave. So there’s, up to four weeks, of unpaid leave, and the, intention is to, provide employees more time, access appropriate resources so that they can be properly accommodated, in the workplace. I mean, we’re seeing this, you know, more and more with AI, with, individuals who, have, you know, disabilities, right, ADHD, all of that. There are more, I think, focus on, letting them, participate in workplace, and this is that, leave.
Along the same, you know, similar train of thought, disability and accommodation assessments leave, which is kicking in on July 1, 2026. Now, this is if the employee needs to attend medical appointments, or, undergo an assessment. So that they can get the proper, diagnosis for their disability to, you know, be recorded, in order to apply for, and ask for, accommodations, right? So to, help them, participate in this workforce.
In Ontario, you have, The interpersonal violence leave, in the Federal, it’s the family violence leave. And I’ll end on that and we’ll move on to, looking at tips on how to minimize your risk in the coming year. I’ve got a couple of minutes, I think. To, touch on that. Let me just see my timing. This one. Okay. Um, what is it? Did I click on the wrong? Sorry, I’m being a little bit discombobulated by my screen. Okay. Where am I? Here we go. Okay. Yeah. Alright, so here are some tips to help you, minimize risk in the coming year. So from what I talked about today. You’ll understand that termination clauses, they can still challenge, and people can argue that, it should be, you know, it is not. That’s difficult to, to resolve. So my first tip to you is that when you’re reviewing termination clauses, have an employment lawyer, assist you with that.
And if you have existing contracts, I mean, existing employment, I’m assuming that you probably would need to amend the existing ones. So you would need fresh consideration for that. And the question might come up is like, do I really need to amend if they’ve been employed with me for three years, five years, 10 years? And I would say, don’t wait. Right. Don’t you know, like? Don’t wait until an employee is terminated. Because when you terminate them, there might be an argument that the contract is not enforceable. And you’re paying more. So, the sooner you amend and get, valid termination clauses, if your existing clauses are deemed to be unenforceable, the better.
Now, every time you’re conducting accommodation, which I think we are conducting more and more, make sure you have a process. As I said, you know, the current, process would be, get medical information. Get it… some of it might not be, specific enough. Right? So know when to ask the right questions. And when to ask for, and when to, challenge any medical documentation that does not give you enough information. And you do need a lot more information, if they’re asking for significant, changes in terms of their work arrangements or working from home, because they have a disability. The more significant it is, I think the more the employer should understand, what is needed. And you need to document the entire process.
That is very important because, if you ever have to defend, a claim of, failure to accommodate, you got to show all the steps you took. In defending, a constructive dismissal claim. Document, all the communications with the employee. Did you have letters, conversations that talks about, you gave them appropriate notice, that any changes that might have occurred, is consensual, or was, you know, within your power, your rights. Any, discussions on this, significant, topic on fundamental terms of employment, that has been agreed to by the employee. A lot of the constructive dismissal claims can be defeated if employers know how to, you know, like, implement, any changes that might look fundamental. Such as a demotion or such as a, suspension without pay. That kind of thing. So documentation is key.
And, as I mentioned also, you know, on the workplace misconduct, leaf, make sure you have a policy in place. If you already have a policy in place, great, review your policy. Because you need to check whether your policy has… Are appropriate to what the law, requires now. Or is it deficient? So you got to amend or add to your policy, if needed.
You should also be prepared to provide paid leave, to, people who are alleged to have committed misconduct during the course of the investigation. So, plan for it, budget for it. And we’re talking about, the immediate two weeks that you’ve placed them on leave, plus any extensions that you do, up to four weeks. I really, really hope that you would try to, to conclude the investigation within four weeks, but there are gonna be circumstances where it takes longer.
And, you should also consider, if it does take longer, whether, the alleged, misconductor should be put back to work. And then, what does that look like, right? When you’re investigating misconduct, and you placed them on, leave, and that leave has to end for whatever reason, and that person’s coming back. What does it look like? Do you put them in a different location? Do you, you know, do the work from home? Do they manage a different group? I, you know, think you’re gonna have to consider that, before you place them on leave, because all of that comes up while you’re conducting the investigation.
Now, you should also be mindful that the same workplace, misconduct policy applies when the employer is investigating a non-employee. So for example, a contractor or someone who’s an independent contractor. or a gig worker. You, you know, that policy still applies. So in terms of how you’re going to allow that non-employee to make comments on the allegations. The issue. And, how you’re gonna provide them with, I don’t know the, the process, right? Now, we don’t know yet whether the pay, and, or fee for their service. Has to continue while they’re on leave, because, I think the pay and benefit provisions don’t apply to non-employees. But you have to think about that.
Now, a good overview. Oh, lastly, I want to say, you know, just make sure we’re aware of the new leaves, because, if you’ve got employees, who are affected by interpersonal violence, you know, in a relationship. And they need to take, time off, that, you know, that, this is a leave that is, they’re entitled to. Okay. I don’t want to say it’s unpaid leave, but it’s a leave, that they are entitled to. And I would… I do believe, and I hope it helps. I hope it protects, those who, need that protection. From, you know, abusive relationships.
Alright, so those, those are just all my thoughts on what you should be aware of from last year and coming into this year. And I’m happy to take questions now.
Todd Humber: Excellent. Thank you so much, Lai. That was a whirlwind tour through what’s happening in the employment law landscape here in Ontario and across Canada and at the federal level there. Yeah, we do have quite a few questions, so I will try to get through as many of these as I can. I will start with this one here. An employee’s attorney sent us a letter demanding payment for wrongful dismissal. We agree we owe notice, but disagree on the calculations. Is it better to settle or go to court?
Lai-King Hum: You know, there’s… that, that question has a lot of like, varying, factors. So I’m not sure if I can give you a definitive answer, but I will say a few things. Going to trial is, for some employers, important. It is important because, there’s a principal issue that they have to defend. And, you should be ready, for trial, if you want to defend it.
But, in most cases where you can settle, it’s always better to settle. It saves your time, it saves the stress and cost, and resources for both parties. So, I do encourage, you know, most matters to settle. Because you can have some control on what the outcome is as opposed to putting it before a court or a judge, a jury, or a tribunal. And letting them decide for you.
I would say, I mean, I’ve practiced over 25 years. I can’t say that every case, I can… I tell the client for sure you’re gonna win or you’re gonna lose. I think you get a sense of it based on legal principles and the evidence, and then, and also what I would say the mood. So anyways, um, I would say settle. Unless you have something that you need to defend, like a case, or… an issue of principle, or you want to say that no, you know, like, there’s a, point that we need to tell our workforce.
Todd Humber: Okay, great. Next question up. Why would an employer change a contract? If they don’t, and the contract becomes unenforceable, wouldn’t the employee still have to go to court to claim common law notice? If it means potentially months of work, perhaps the employee won’t pursue it, won’t pursue the claim.
Lai-King Hum: Oh, well, you know what, there are lawyers, who will take employees on who do not have the money to pay legal fees. And so they will pursue it. And in most cases, when you are a represented by a lawyer and and you’re going to fight a case, employers most often do settle. Because they don’t, they, you know, like, once a statement of claim is, filed. It’s like, well, I mean, this person is going to be going through with it. And, I think rather than go through the motions and the cost, employers are pretty good at, settling cases.
So, you know, you might think, well, they don’t have the money, so they won’t pursue it, and I’ll be protected by the law of limitation, which is two years. But, you know what, if they did file a claim, or they did, make a written demand of you, the clock’s gonna stop. And, you can’t just put your head in the sand and hope that that would, you know, resolve the issue.
So, my encouragement is, like always, you know, amend, the contract to, what the current law says. And, my only argument on that is that, you know, the law may change and what is needed now. Might change again in two years time, and you’ll say to me, well, you know, well, how often do I have to amend? And I don’t know that answer. You know, if you look at the, law going back to 2020 on Waxdale, it’s already 2026. So, like, you know, it’s coming up to being six years old. I think that’s, worth it.
Todd Humber: Okay, great. Next question up. What are you seeing on decisions on damages in the two to three years following the Mathews case? Does it seem like there’s been more of an effort to narrow damages? Have there been any interesting decisions on what the real requirements are to prove mitigation?
Lai-King Hum: You know, there’s always a duty to mitigate. And the decision on damages has always been, I think, what the court says is, that, you know, we have to, look at like the employer’s obligation to… mitigate. No, sorry, the employee’s, duty to mitigate. And, that duty, sometimes is, assessed by the court in the way that is, stricter or less strict, depending on who’s looking at the case.
I think what Mathews talks about is, you know, like, being very specific, almost like itemizing, to show, the losses. That the employee has suffered. It has to be the kinds of loss that is, supported by, you know, losses at common law or damages, at common law. And you can’t just make up a loss or, all, all of a sudden, you know, like, I suffer this kind of, psychological, you know, impact. When you didn’t get medical treatment or you didn’t get a therapist. You didn’t show any of those things that might have caused you, the loss. Or the loss that might have continued and you didn’t take any steps to remediate it.
So, I think those are all specific, factors for an employee to show. And if they don’t show it, and if the employer can show, for example, during cross-examination, or during their submissions to the court, that the employee, didn’t do what they could, and didn’t seek the help that they were entitled to. Or didn’t, look for jobs and shows that they did not mitigate their losses. Those are really, you know, that can help with the damage assessment.
Going back to the case that is gonna come out by Justice Corrick, this case will talk about, you know, what the losses are from a constructive dismissal. So that it may be slightly, that is, it’s going to be more specific than the Mathews case. And I’ll, I can, upon release, I can circulate that. So watch out for it.
Todd Humber: Sure. That’s great. Okay, next up, with the Ontario termination clause debate not fully settled between federal and Ontario courts, how are employers supposed to navigate this uncertainty? Should we draft new clauses or wait for clearer jurisprudence?
Lai-King Hum: I think most people say, you know what, get get your lawyers to review and, and draft, a new clause. I don’t believe, and I like this is… I can’t say that every clause I look at will be unenforceable. It really depends on it so much. But my statement is that… be proactive. Do it before you need it, which is when you’re terminating the employment.
Todd Humber: Right, yeah. Excellent. Okay. Next question up is, given the frequent changes to termination clauses, should employers rewrite contracts on an annual basis or upon every major judicial or legislative decision?
Lai-King Hum: I, I cannot say that you have to do it every year, but, you know, in, if you keep abreast of what’s happening. And it might be good to just, you know, do an annual review or biannual review, but keep, to the changes. And I can’t tell you that every year there’s gonna be like, significant changes. I, I do think, like, that’s why things like these sessions and presentations are important, for you to determine that. And if there’s a lot of things happening, you know, like that really, I’m really concerned about this. You’ve gotta pay attention to it then.
Todd Humber: And there are a couple of questions here based on wording and it’s always hard because I’m not a lawyer, and I don’t even play one on TV, and these are quite specific. So I am not gonna, cover both of those. And I will have to, maybe let the lawyers on the line…
Lai-King Hum: Yeah, send an email to me. I’d be happy to look at it.
Todd Humber: Yeah, yeah. Perfect. Okay, so let’s… let’s go to a couple others here. I’m sorry if I’m mispronouncing the name here, is it Dufoe or is it…?
Lai-King Hum: Dufault.
Todd Humber: Dufault, okay. Can you, can you elaborate on this a little bit? The person says it seems to me that the decisions have become more and more legal and less and less common sense.
Lai-King Hum: You know, I would, I… I’m not gonna comment on whether… it… Like, whether it’s legal versus common sense. I, I will say that there’s always a bit of a debate, amongst lawyers and, I think, judges too. And you know how to interpret a, statute, right? Is it like the purposive approach? Is it the, you know, literal approach? Or is it, like, you know, you look at the harmonization of the legislation? My statement, my comment would be, different interpretations of, the law by different, judges. And I wish we didn’t have like such polarizing views of it. But what I will say is I think there are some clarifications by the divisional court in the case of Al Azzat. And that’s the law, you know, and, it has clarified it. And, you know, we’ll keep watching the case law and how that, gets interpreted. But I wouldn’t say, you know, it’s so… like it’s going back and forth as such. It’s just different, interpretation.
Todd Humber: And we’ve got a question on that that kind of says what you just said there. How worried should we be about the pendulum swinging from enforceable back to unenforceable and vice versa? Are they going back and forth, essentially? And you were just saying there that you don’t really feel that that’s the case.
Lai-King Hum: But it is a possibility. So, I don’t know if it’s a going back and forth as such. I do believe that, courts have just started to look at what breaches the Employment Standards Act, and But, as Justice Stevenson said, where it is clear and unambiguous, the courts will uphold the termination laws.
Todd Humber: Right. Okay, next up, this one’s on constructive dismissal. We had an employee threaten us with a constructive dismissal because they’re making less than a new hire in a similar, but not identical role. They saw the salary range posted in our job ad. We don’t believe a difference in pay is constructive dismissal, and we have a defensible reason for the wage differential. Are we correct?
Lai-King Hum: You know, that’s an interesting, thing about, pay transparency. This will, might happen more and more. Without knowing any other details, I’m a bit wary to step into this. As a general statement, I will say that if you’re not unionized, and there isn’t a set pace scale. at least… Likely can pay, employees what, they’ve agreed to.
Todd Humber: Sure, and I would never want to inject my own opinion, but my understanding has always been that constructive dismissal requires a change. Is that correct?
Lai-King Hum: Oh, yeah, yes, yes, yes, yes, yes. So, sorry, I was looking at it just simply on, whether they can challenge whatever they’re being paid, but a constructive dismissal, there hasn’t… hasn’t been any unilaterally… unilateral a change to a fundamental term of their employment. So, not a constructive dismissal, but the question I was considering was whether or not they could challenge what they are being paid based on what the new hire is being paid.
Todd Humber: Right, that’s a different risk, right.
Lai-King Hum: Yes, yes.
Todd Humber: Okay, let’s go to the next one here. If one used at any time for any reason in its sole discretion, but added something like, subject to the ESA, does that help?
Lai-King Hum: I think you would have to be even more clear than that, because it… to me, it still leaves some ambiguity. I know what you’re trying to get at. So you could say that, well, we are… Yeah, I think you would need a bit more than that, but if you’re going to be amending your contracts in any event, why wouldn’t you do the simpler thing and just eliminate that language, rather than trying to fix it so that It’s good. So, you know, my recommendation now has been the cleaner, the simpler, the better.
Todd Humber: Good advice. Next question. If the compensation range… sorry, compensation range span for a role starts lower than $200K, and ends over $200K, Does it fall within the exception? For example, they say here, if it’s 180 to 220.
Lai-King Hum: You know, just offhand, I don’t know. I would read the language more closely to see if it falls within that, and whether or not you have to disclose it.
Todd Humber: Yeah. It is clear if it’s above 200. Now, there’s… it’s interesting how many questions we have on that kind of an issue all the time, right? This is something new, right? And people are still trying to figure out exactly how to handle these certain specific circumstances.
Lai-King Hum: Exactly.
Todd Humber: Next question, what are the record-keeping requirements for interviews and interviewees?
Lai-King Hum: You know, offhand, I don’t know. The, yeah. So, I can look into it and, come back with an answer.
Todd Humber: No, that’s… that’s totally acceptable. We’ve got time for a couple more, maybe I’ll squeeze in. let’s… okay, this one’s about AI. For the AI requirements, if you do not use AI, and never have, is it safe to say you do not have to input that on the posting, or should you put that we don’t use it?
Lai-King Hum: The requirement is you have to put it if you do use it. There’s no requirement about saying you don’t. If you want to make it a feature of the ad that you don’t, you know, that’s up to you.
Todd Humber: Yeah. Okay. And then, let me just quickly look here, we’ve got a bunch… Maybe I’ll throw this one at you. Is there a nuance between just cause and for cause, or can the terms be used interchangeably?
Lai-King Hum: I always associate for cause as common law cause and just cause, which is a very specific term, under the Canada Labor Code, so… You know, it’s so nuanced, we have, on the one end cause, common law cause, for cause, just cause, and willful misconduct under the Employment Standards Act. There’s, you know, slight differences, but there is a bit of a spectrum.
Todd Humber: That’s great, and I think we should probably leave it there. We’re at the top of the hour. So that’s going to wrap up our session for today. I want to thank you, Lai, so much for joining us. It’s always great to hear your thoughts on these. There’s so much happening on this front, right? Like, I feel… Yeah, so obviously we’ll keep talking about this, we’ll keep talking to you about this, and keep putting out information about all these changes and what’s happening. So, yeah, thank you so much for joining us and sharing your thoughts. Just a reminder to everybody on the line that you are going to receive a recording. for the session at the same email that you used to register. So that’s it. On behalf of HR Law Canada and our friends at Hum Law, we wish you a safe and productive rest of your day. Thank you.
Lai-King Hum: Bye, everyone!
