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Key Takeaways from Mondaq webinar by McCarthy Tétrault LLP - Canadian Employment Law Considerations in 2023

On May 17, 2023, members of our Labour and Employment Group joined Mondaq to host a webinar for an international audience. The webinar focused on important developments in employment law impacting businesses and organizations operating in Canada in 2023. The webinar covered significant legislative changes, including recent amendments to Canada's Competition Act and Québec’s new obligations regarding the French language in the workplace. Speakers also discussed considerations for terminations and how to minimize some of the potential costs associated with them as well as best practices for remote or hybrid work arrangements.

The following are key takeaways from the webinar. You are also welcomed to download our recently updated Cross-Border – Navigating Canadian Employment Law Guidebook which breaks down the key differences between Canadian and U.S. labour and employment laws to help you avoid missteps in navigating local labour, employment and human resources issues.

Amendments to Canada’s Competition Act

Recent amendments to section 45 of Canada’s Competition Act introduced new prohibitions on wage-fixing and no-poach agreements, coming into force on June 23, 2023. Violation of section 45 may result in unlimited personal or corporate fines or jail time of up to 14 years imprisonment. Specifically, the new amendments will criminalize two categories of agreements between unaffiliated employers:

  • Agreements to fix, maintain, decease or control salaries, wages, or terms and conditions of employment; and
  • Agreements not to solicit or hire each other’s employees.

Such agreements need not be explicit to violate section 45. The draft Enforcement Guidance released by the Competition Bureau in January 2023 provides some examples and clarifications on what conducts may be caught.

While the offences are broadly drafted, the statute contains available exceptions and defences that may temper their impact. For example, the new offences do not apply to collective bargaining activities or agreements between affiliated entities. A defence may also be established if the impugned agreement is ancillary to a broader or separate legitimate agreement.

See our blog here for a more detailed discussion of the Competition Act amendments.

Québec: Bill 96 Introduces New Obligations Regarding French in the Workplace

On May 24, 2022, Bill 96, An Act respecting French, the official and common language of Québec ("Bill 96"), was adopted by the Québec’s National Assembly. Bill 96 received Royal Assent on June 1, 2022.

Bill 96 aims to further promote the use of the French language in Québec and to reiterate the formal recognition of French as the only official language in Québec. Under Bill 96, employers are required to take all reasonable means to avoid requiring a person to have knowledge of a language other than French to obtain or keep a position. Employers must also use French in any written employment-related agreement and communications, with all or part of the staff, a worker in particular or an association of workers representing all or part of the staff. Employers with 25 or more employees will also be required as of June 1, 2025, to register with the Office and receive certification attesting that the use of French is generalized in their entire workplace, and more.

Bill 96 also creates a new complaint mechanism and increased fines for non-compliance offences, as well as administrative and penal sanctions.

See our blog here for a more detailed discussion of Bill 96 and how it might impact on your workplace.

Termination Considerations for Employers

Terminations in Canada are becoming increasingly costly. Similar to the civil law province of Québec, employers operating in common law provinces are more frequently unable to limit entitlements upon termination as Canadian courts continue to target the enforceability of termination clauses. This growing inability to limit entitlements upon termination, coupled with significant growth in notice awards and the uphill battle that employers face in establishing a terminated employee has failed to mitigate, are resulting in employers bearing more costs for terminations.

In addition to being sure to draft clear, concise and unambiguous termination clauses, here are some best practices to minimize some of the potential costs associated with terminations:

  • treat employees respectfully upon exit to avoid bad faith allegations;
  • make strategic and creative without prejudice offers;
  • provide letters of employment, letters of reference and outplacement regardless of whether the parties enter into a settlement agreement;
  • regularly review employment contracts and termination clauses; and
  • be aware of rolling time frames for mass termination.

In addition, the Ontario government tabled Bill 79, Working for Workers Act, 2023 (“Bill 79”), on March 20, 2023. If passed in its current form, Bill 79 will, among other things, amend the definition of “establishment” to include an employee’s private residence if the employee performs work in their residence and does not perform work at another location where the employer carries on business.

Our team is continuing to track the progress of Bill 79 but in the meantime, see our blog here for a more detailed discussion of the proposed changes.

Post Pandemic Workplace Considerations in Remote and Hybrid Work Environments

Employers have had to adjust to growing employee demands for flexible work environments during the pandemic and after the pandemic. Employers entering into hybrid and remote work arrangements should have clear workplace policies and/or remote work agreements with employees that contemplate, among other things, reporting relationships, hours of work (including the ways in which overtime will be addressed), confidentiality, and use of authorized devices.

Employers will also want to consider how frequently employees may be required to attend at the workplace, whether remote work arrangements are intended to be temporary or permanent and whether employees in these arrangements are permitted to work from anywhere or whether there are restrictions on where they can work from.

For other considerations and a more detailed discussion on this topic, see our blog here.



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