Our Labour & Employment team delivered significant insights at its annual Client Conference held on November 22, 2024. In addition to providing a thorough recap of important legislative and caselaw updates from 2024, the group offered practical advice to employers on the following topics: accommodation and frustration of employment; off-duty conduct; and incentive compensation.

Here are some of the key takeaways from the conference.

1. “2024: A Year in Review” – Significant Legislative and Caselaw Updates

2024 brought with it several legislative updates. Our team discussed amendments for federally regulated employers under the Canada Labour Code and the Pay Equity Act. With respect to provincially regulated employers, we identified the key changes made by Working for Workers Five Act, 2023 (“Bill 190”), which builds on the government’s prior Working for Workers acts by introducing further amendments to several workplace and employment-related statutes. We also identified crucial updates in the caselaw of interest to employers including with respect to termination provisions, saving provisions, investigations, procedural fairness and discrimination.

2. Managing Accommodation Requests and Frustration of Employment

Ontario employers have a duty to accommodate employees who require accommodation based on a protected ground under the Human Rights Code. With respect to the scope of this duty, our team discussed the factors that are taken into consideration in determining whether an employer has accommodated up to the point of undue hardship, with a particular focus on disability and family status related accommodations. We identified that an employment relationship may become frustrated but cautioned that the test to establish frustration requires evidence that there is no reasonable likelihood of the employee being able to return to work within a reasonable time. We concluded by advising employers to engage in dialogue with employees requesting accommodation, diligently document the accommodation process and implement consistent touchpoints with employees receiving accommodation.

3. The Do’s and Don’ts of Regulating Employee Off-Duty Conduct

The prevalence of social media in our society means that the concept of the “workplace” as we know it is constantly evolving. As a result, employers must be aware that such platforms can and do operate as forums for off-duty misconduct. Our team stressed that no conduct is automatically considered to be “off-duty misconduct” and that each case will be assessed on its own, considering the individual employee’s conduct and the employer’s business interests and industry. We highlighted that when an employer seeks to rely on reputational harm that is associated with off-duty conduct, they must show a “material connection” between the conduct and the workplace. Our team also provided proactive and reactive measures for addressing off-duty misconduct and advised employers about the importance of capturing evidence in a timely manner, which may include involving a forensic expert.

4. Legal Considerations and Risks Regarding Incentive Compensation

Our Pensions, Benefits, & Executive Compensation Group identified that the typical forms of equity compensation include stock option plans, share appreciation rights, deferred share unit plans, and restricted share unit plans. From there, our Labour & Employment team discussed a handful of considerations that tend to arise in the employment context with respect to incentive compensation. We advised that whether an employee is entitled to equity compensation during the notice period following termination will depend, among other things, on whether the rights to that compensation are acquired as a shareholder, or as an employee. We also noted that the enforceability of non-competition clauses differs between the employment and commercial context and cautioned that such clauses should be drafted with precision and clarity. We concluded by emphasizing the importance of ensuring that such agreements are drafted in compliance with Canadian employment standards legislation to improve the likelihood of enforceability.

Conclusion

We encourage you to reach out to McCarthy Tétrault’s trusted team of labour and employment experts should you have questions about any of these topics. Our team would be pleased to assist you.