Skip to content
HR Lawyers, Employment Lawyers, Workplace Lawyers...whatever you call us, you'll be glad you did.
Text Us: 416-864-8500  |   Meet Us: Employees / Employers |   Phone Us: 416-864-8500

2024 Employment Law in Review, Part 1: The Eras Tour (The Rudner Law Version)

Accommodation | Blog | Damages | Discipline and Dismissals | Employment Contracts | Human Rights

Canada closed out 2024 by hosting the last shows of the Eras Tour, Taylor Swift’s record-breaking show. But what does Swift and the Eras Tour have to do with employment law? If you’ve read our blog, you already know that there is a thematic overlap. Swift’s music resonates with people for how it gets the challenges of relationships, and employment law is all about one of the most important relationships in people’s lives.

At Rudner Law, we understand that the employment relationship is a legal relationship with personal and challenging elements for both employers and employees. For example, dismissals are like breakups: there are right and wrong ways to go about them, all with corresponding legal implications. Similarly, when resolving disputes after the relationship ruptures, it is key to remember that an important part of the process is simply being heard.

Even prior to the beginning of the Eras Tour in March 2023, economic pundits mused about an impending recession. The oft-predicted recession did not materialize, and several articles posited that the Eras Tour was actually boosting the economy. Now that the Eras Tour is over, will we see an economic downturn and the ensuing HR challenges that arise? Our HR Law Eras Tour “set list” takes us through 2024’s notable decisions and developments, with the goal of providing employers and employees with a map of the current landscape that allows them to navigate the challenges ahead.

Setting the Stage

Several decisions generated ample amounts of buzz in 2024, including a notorious Ontario case that expanded the grounds for invalidating a termination clause. Courts continued to be concerned with the power imbalance in the employment relationship, employment contracts, and employer behaviour, building on trends from 2023. We also saw decisions relating to one of Stuart’s favourite topics: after-acquired cause. Further, a novel issue came to the fore: Artificial Intelligence (“AI”) in the workplace. Finally, our legislators legislated, so of course we are covering key legislative updates.

Additional highlights include:

  • Damages in wrongful dismissal cases continued to rise – employers not using enforceable employment agreements paid the price in 2024.
  • A seasonal worker with less than one month of service was awarded five months of notice.
  • Employers were punished for their bad behaviour – courts remained open to awarding damages for bad faith, even without medical documentation.
  • An employer who dismissed an employee right after coming back from medical leave was hit with $50,000.00 in bad faith damages plus pay in lieu of notice.
  • For the HR law nerds: an employee was awarded novel damages for “inconvenience” because of the employer’s wilful delay in issuing a Record of Employment.
  • Our courts confirmed that they will not assess the sufficiency of consideration offered to a worker in exchange for signing a contract, just the existence of consideration; however, they left the door open to overturn bad deals by retaining the right to consider any power imbalance underlying the contract.
  • The use of AI, particularly in the hiring process, became mainstream.
  • An airline was held liable for its chatbot giving a customer wrong information, suggesting that employers can be liable for AI’s actions.
  • Similarly, some legislatures enacted laws aimed at regulating AI in the workplace. We expect the regulatory regime to continue developing throughout 2025.

The Rudner Law Eras Tour discusses these developments, and more, as we summarize the top HR law stories of 2024. Part 1 of our Tour will focus on termination clauses, wrongful dismissals and bad faith, and on human rights law.

Termination Clauses: The Waxing Waksdale Era

The Waksdale Era began in 2020 with the precedential, oft-criticized and game-changing Ontario Court of Appeal decision, and shows no signs of waning. In brief, Waksdale confirmed that termination provisions must be interpreted as a whole; if the “for cause” provision has the potential to breach employment standards legislation, the entire clause is unenforceable. A series of cases have built on this principle, creating a landscape where courts will scrutinize even ancillary provisions, such as confidentiality provisions, and supporting documents for “Waksdale” language.

In our view, it is likely that courts will look outside the contract of employment itself and even examine documents such as bonus plans and confidentiality agreements, for any offside language to invalidate the termination clause. In 2024, the Waksdale Era produced another hit: Dufault v. The Corporation of the Township of Ignace (“Dufault”).

Hit Single of the Year

Dufault, arguably 2024’s most significant and controversial decision, held that a termination clause was unenforceable for Waksdale language. The Court then needlessly accepted the novel argument that the termination clause was also invalid because it allowed the employer to dismiss the employee at its “sole discretion” and “at any time,” arguably giving the employer the right to dismiss during statutorily protected times.

Dufault was appealed, but the Court of Appeal opted not to address the novel argument; plaintiff-employees can rely on Dufault to challenge agreements with that sort of language for now.

Dufault reminds us of the importance of careful drafting; moving forward, avoiding extraneous language in employment agreements is certainly a best practice. We wrote about Dufault, and the evolution of the case law leading up to it in detail on our blog.

Confirmed: Invalid Termination Clause Does not Void Fixed Term

We often warn clients about the risks of fixed-term contracts because premature termination without an early termination provision entitles employees to the balance of the term, and many employers forget to renew them at the end, leading to an employee with no contract in place.

In Kopyl v Losani Homes the Employer creatively argued that the invalid termination clause in the contract at issue should void its fixed term. The Ontario Superior Court of Justice (“ONSC”) disagreed – we covered that decision in our 2023 Year in Review.

In 2024 the Court of Appeal upheld the ruling, confirming that a deficient termination clause does not invalidate the fixed-term nature of the contract, clarifying that a fixed-term clause only defines the term of the contract, but is not a termination clause, so deficiencies in the latter will not impact the former. The Employer was not allowed to rely on the deficiency in the contract, and the employee was awarded the balance of the term. We discussed fixed-term contracts and Kopyl in greater detail on our blog.

Wildest Dreams

This next hit reminds us that saving provisions will not save an unenforceable termination clause, not even in our wildest dreams.

In Wilds v 1959612 Ontario Inc., the termination clause had several flaws:

  • it limited statutory entitlements;
  • required a release for all payments; and
  • lowered the bar for dismissing without notice or pay in lieu.

Although the saving provision claimed that the Employer would comply with the Employment Standards Act, 2000 (“ESA”), the termination provision’s clear breaches and confusing language made these provisions irreconcilable. The Court struck the termination clause because it found that the Employer did not draft the contract with the intention of complying with the ESA.

This decision highlights that saving provisions merely confirm that the employer intends to comply with the law regardless of what other provisions state; in past eras, employers used these as a catchall to cure any breaches of employment standards legislation (“ESL”). In our current era, courts are clear that saving provisions cannot be relied on to save a termination clause that is in direct conflict with ESL requirements. We discuss Wilds and saving provisions in detail on our blog.

Portrait of an Enforceable Termination Clause

Not every termination clause brought before the courts in 2024 was struck down. The Employee in Bertsch v Datastealth Inc. (2024 ONSC 5593) sued the Employer for wrongful dismissal after he was dismissed without cause 8.5 months into the job. Unfortunately for him, the Employer was familiar with the greatest hits of the era –  the termination clauses avoided both Waksdale and Dufault language. Instead, it read in part: “…you will be provided with only the minimum payments and entitlements, if any, owed to you under the [ESA] and its Regulations,…”

The Court held that the language did not violate the ESA, and that it was clear and unambiguous as to the Employee’s dismissal entitlements. That this decision is noteworthy underscores that we are in an era which Stuart has characterized as “open season on termination clauses.” This decision is being appealed, so follow our blog for updates.

For the litigation geeks out there, this decision is also noteworthy because the Employer brought a Rule 21.01(1) motion to determine the interpretation of the provisions in question and strike the claim. This approach brought a ruling around 4 months after the termination, which is an exceptionally fast timeline.

Haunted: Wrongful Dismissals and Bad Faith Conduct

On our last Fire Away! episode of 2024, we joked that good HR lawyers are ghost busters because employers and employees can both become haunted by the ghosts of HR decisions.

For employers, this can be:

  • reputational damage,
  • lofty legal bills,
  • severance payments upwards of the six figure range, or
  • all of the above.

For employees, this can be in the form of:

  • harm to their career,
  • harm to their reputation, or
  • heightened emotional distress.

To proactively avoid hauntings, we advise our employer clients to implement strong employment agreements, consult with us whenever they are considering a dismissal, and plan the dismissal to minimize risk.

For employees, we advise them to review employment agreements before signing, and to seek counsel if dismissed, as their entitlements may be much higher than what is on the table.

Big Reputational Damages

In Krmpotic v Thunder Bay Electronics Limited, a 59 year old employee with 29 years of service was dismissed without cause mere hours after returning to work from medical leave due to a back injury. The Ontario Court of Appeal upheld the lower court’s award of 24 months of reasonable notice and $50,000.00 in damages for the mental distress caused by the Employer’s bad faith conduct.

What makes this case stand out is that the Court of Appeal upheld the bad faith damages without requiring medical evidence for mental distress, noting that: “…there is a spectrum along which the manner of dismissal has caused mental distress that does not reach the level of a diagnosable psychological injury.” On top of these hefty damages, the Employer also took a big reputational hit by becoming a precedent. We covered this decision, and the trends it built upon, on our blog.

Holding a Grudge

The Court of Appeal for British Columbia dropped a fresh hit with its decision in British Columbia v Taylor. The Employee raised allegations of bad faith in the manner of dismissal, including conduct from 2012.

The Employer brought a motion arguing that the bad faith pleadings should be struck, as the duty of good faith in the manner of dismissal is only engaged then. The Court rejected that argument, upholding the lower court’s decision, and finding that pleadings should be read generously at the early stage of proceedings to allow for the development of the law. Further, since the Employee alleged that the 2012 conduct was indicative of a pattern of bad behaviour, the pleadings were not obviously bound to fail.

This decision cautions employers that good employment agreements are only half the battle; bad faith in the manner of dismissal is a surefire way to be on the hook for additional liability.

Sorry for the Inconvenience

If the potential of becoming a precedent is not incentive enough to work with HR counsel, then perhaps the desire to avoid becoming a precedent for a novel type of damages will do the trick. This was the fate of the Employer in the undefended action in Khanom v. Idealogic PDS Inc., which concerned wrongful dismissal, human rights breaches, bad faith conduct, and novel damages for inconvenience.

At the outset of the pandemic, the Employee asked the Employer if she could work remotely out of concern for her husband’s health. The Employer rejected her request and dismissed her the following day without paying her statutory entitlements; she had 13.5 years of service.

The Employer coded her Record of Employment (“ROE”) as a resignation, so she was without Employment Insurance benefits for 10 months. The ONSC found that the Employer acted in bad faith and violated her rights under the Human Right Code, 2000, causing “inconvenience and stress.” Consequently, she was awarded:

  • 14 months’ notice;
  • $15,000.00 in general damages for human rights violations;
  • $3,000.00 in damages for bad faith; and
  • $1,000.00 in damages for inconvenience associated with the ROE.

While it remains to be seen if this decision will set a trend for awarding damages for inconvenience, it is a stark reminder to employers to comply with their statutory obligations properly. We covered this decision and its novel damages on our blog.

Cruel Summer

Smith v Lyndebrook Golf Inc. made quite the statement: the Employee was awarded with five months of reasonable notice after being dismissed less than one month into the job.

The ONSC focused on two key factors:

  • the Employee worked at a golf course and was dismissed at the start of the season; and
  • his experience and skillset were specialized, limiting him to work on golf courses.

As such, the Court found that since golf courses do not hire mid-season, the Employee was entitled to an extended notice period as he likely would not find work until the following season.

This is a great example of the fact that reasonable notice is not assessed solely based on the common factors like length of service, age and position; courts will consider other factors which impact the amount of time it will take the employee to find new work. In a case of would’ve, could’ve, should’ve, the Employer could have avoided paying anything had it used an enforceable employment agreement; they made the mistake of thinking that seasonal employment was casual, and did not use a written agreement. We discussed this decision and how its mistakes can be avoided (or exploited) on our blog.

Read the Fine Print

Settling a wrongful dismissal matter is always a relief. However, as this next case reminds us, always be sure to read the fine print in the settlement documents.

In Preston v. Cervus Equipment Corporation, the Ontario Court of Appeal overturned a decision awarding the Employee previously vested stock units valued at $76,000.00 because the stock units were not referenced in the Minutes of Settlement, which specifically excluded all other claims. The Court found that the lower court erred by essentially rewriting the terms of the settlement to the benefit of the Employee.

This decision highlights that courts will not rewrite the terms of a settlement when they are carefully and properly drafted. In this case, the Employee should have specifically claimed the vested stock units, but he failed to do so and both parties executed the agreement before the Employer was asked to transfer the stock units.

Human Rights: Robust but not Unlimited

Across Canada, our human rights regimes are generally robust – workers enjoy strong protections against discrimination on several grounds. However, these rights are meant to allow those who can work to do so, and to prevent employers from making discriminatory decisions. As the two cases discussed below illustrate, they are not meant to allow workers to impose their own definition of discrimination onto their employers, nor are they meant to force employers to create new jobs as a form of accommodation.

Allegations that didn’t Stick

In Zanette v. Ottawa Chamber Music Society, a volunteer usher who identified as a member of the 2SLGBTQ2 community was asked to remove a rainbow sticker from his nametag; the request was made in accordance with the Employer’s policy against altering nametags. The volunteer filed an application with the Human Rights Tribunal of Ontario (the “HRTO”) alleging discrimination on the basis of his sexual orientation, gender identity, and gender expression.

The HRTO found that there was no discrimination because the request was made with the purpose of compliance with the policy, which was uniformly applied. The HRTO further found “no evidence that the wearing of a rainbow sticker was an essential element of being a member of the 2SLGBTQ2 community.”

This decision underlines the importance of workplace policies, and of their consistent application. Had other workers been allowed to have stickers on their nametags, except for this volunteer, then the claim of discrimination would have been stronger.

Accommodation: Reasonable and Collaborative

In Aguele v. Family Options Inc., the Employee, a single mother, claimed that the Employer discriminated on the basis of family status by failing to accommodate her childcare needs. The HRTO found that there was no discrimination, because she did not collaborate with the Employer to find a reasonable accommodation. Instead, she dismissed the Employer’s alternate shift suggestions and insisted on her preferred form of accommodation, which involved splitting shifts or creating shifts that did not exist. Her proposals were unfeasible given the Employer’s work (social services provider) and the needs of its clients.

This decision emphasizes a key principle in the duty to accommodate: the employer decides what is reasonable, not the employee.

Interlude: End of Part 1

This wraps up Part 1 of the Rudner Law Employment Law Eras Tour. Stay tuned for Part 2, which discusses decisions dealing with consideration in contracts, mitigation, just cause, the impact of AI in the workplace, and key legislative updates.

Other Blogs

Stuart and others on the team at Rudner Law are frequent contributors to the following sites: 

First Reference Employment Law Resources
Canadian HR Reporter Blog
Rudner Employment Lawyer in the Lawyer's Daily
Legal Matters Employment Law Canada

Fire Away with Stuart Rudner

Fire Away! The Employment Law Show

Rudner Law hosts a monthly Q&A show streamed live on Facebook and to Youtube.

Rudner Law's Employment Law Newsletter

Join our Email List

Stay Up To Date. Subscribe To Our Newsletter.

Employment Lawyers - Rudner Law
Alternative Dispute Resolution Rudner Law

Rudner Law
15 Allstate Parkway
Suite 600
Markham, ON
L3R 5B4

Phone: 416-864-8500
Text: 416-864-8500

Email: info@rudnerlaw.ca

Google Rating
4.7
Based on 74 reviews
Rudner Law - Employment Lawyers
ADR Services for Employment Law
Back To Top