Major discussions and developments in Ontario employment law in 2021: year in review


The institution of mandatory vaccination policies in the workplace was perhaps the most talked about development in Ontario employment law this year. Photo credit: Canadian Lawyer Magazine


The first three areas of employment law examined below have been much discussed throughout 2021; the last two areas involve new developments – the first on a long-standing legal duty, and the latter involving the creation of a new tort applicable to the employment relationship.   

  1. Mandatory Vaccination Policies

The Courts have yet to weigh in on the issues of employers: (a) terminating the employment of employees: (i) for cause; or (ii) without cause; or (b) placing employees on unpaid leaves of absence for failing to be vaccinated in accordance with their mandatory vaccination policies.

There have been a number of arbitral decisions that have upheld employer mandatory vaccination policies where the policies were reasonable and proportionate to the health and safety risks at issue. Such decisions along with the federal government’s announcement of its intention to require mandatory vaccinations in all federally regulated workplaces, employers’ obligations under the OHSA to protect workplace health and safety, and employers’ obligations to abide by public health guidelines, leave little doubt that the Ontario courts will follow suit and support reasonable and proportionate mandatory vaccination policies.

  1. ESA Termination Clauses

Since the 2020 Court of Appeal decision in Waksdale, employment contracts’ termination clauses that have any component providing less protection than the termination and severance provisions in the ESA are unenforceable with employees being entitled to receive wrongful dismissal damages. That is not the last word from the Ontario Superior Court on the enforceability of ESA termination clauses this year.   

In Rahman v. Cannon Design Architecture the Court held that since the plaintiff is a sophisticated person who had legal advice when entering into her employment contract, the bargain she entered must be upheld – including her entitlements upon termination.  

In Perretta v. Rand Technology the Court held that if an employer refuses to pay out an enforceable termination clause under the employment contract until the employee signs a release, the employer can no longer rely upon that termination provision and the court will award wrongful dismissal damages. Remember, especially when it comes to ESA termination clauses – employers cannot require employees to sign a release as a precondition to receiving their minimum statutory entitlements.

In relation to the $2.5 million payroll threshold for establishing an entitlement to severance pay under the ESA, the Court in Hawkes v. Max Aicher held that if the employer’s worldwide payroll, not just its Ontario payroll, exceeds $2.5 million, then severance pay obligations under the ESA are triggered.

  1. Unpaid (by Employer) IDELs vs. Constructive Dismissal

Whether an unpaid IDEL/temporary layoff under the ESA is a constructive dismissal or whether the ESA permits it without amounting to a termination “in law” remains controversial. What isn’t controversial is the Ontario Superior Court’s determination that where employees acquiesce to extended unpaid layoffs/IDELs, they have lost their right to sue for wrongful dismissal. 

  1. Employers Have a Duty to Act in Good Faith 

There are two Supreme Court of Canada decisions building on this longstanding legal duty.

The first, Callow v. Zollinger, provides that employers must not mislead – actively or passively (e.g., through silence), employees into believing their positions are secure. Where employers have decided to terminate an employee and the employer knows that the employee is under a false impression regarding employment security/continuity, the employer has a duty to correct this false impression.

The second, Wastech v. Greater Vancouver Sewage and Drainage, provides that employers must exercise their contractual discretion, even if absolute, in good faith and in a way that advances the employment contract’s terms (e.g., “discretionary” bonus awards).

  1. Tort of Internet Harassment

In Caplan v. Atlas the Ontario Superior Court created the tort of internet harassment to address only “the most serious and persistent of harassing conduct” and held that this tort and new online enforcement remedies should be recognized as essential tools to combat cyber-stalking and other forms of internet harassment.  

To address the harm caused by this tort, the Court: (a) awarded an injunction against further posts for the plaintiffs and other persons harmed or could be harmed; (b) transferred ownership of the posts to the plaintiffs so they could remove the posts given the determination that doing so avoids defendants’ unwillingness or inability to carry such an order out; and (c) granted “ancillary orders enabling [the plaintiffs] to take steps to have the content removed”.


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