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Top Ontario Employment Law Cases of 2024

Employment law continues to rapidly evolve, and staying on top of recent developments is crucial for employers and employees alike. In this post, we summarize some of the most significant cases of 2024, including a countdown of the top five, along with honorable mentions that highlight important legal principles.

Honorable Mentions

While they didn’t make the top five, these seven cases offered valuable lessons and insights:

Krmpotic v. Thunder Bay Electronics Limited, 2024 ONCA 332

An employee was terminated immediately after returning from surgery, leading to an award of bad faith damages for the employer’s poor conduct in the manner of termination. The court accepted representations about the terminated employee’s medical condition without a supporting medical report, illustrating the court’s willingness to do so in appropriate circumstances.

Preston v. Cervus Equipment Corporation, 2024 ONCA 804

An employee lost $76,000 in vested stock units because they weren’t accounted for in the minutes of settlement. The key takeaway? Always ensure that all compensation is explicitly included in settlement agreements, or you risk forfeiting entitlements.

Ratz-Cheung v. BMO Nesbitt Burns Inc., 2024 ONSC 161

BMO argued “after-acquired cause” after discovering that a terminated employee had copied over 4,000 emails onto a USB key. Despite this misconduct, the court rejected the argument, viewing the act as a one-time lapse in judgment during an otherwise stellar 24-year career.

Wilds v. 1959612 Ontario Inc., 2024 ONSC 3452

This case confirmed that defective termination clauses cannot be salvaged by saving or severability clauses. The employer’s failure to comply with ESA minimums resulted in punitive damages—a cautionary tale for employers relying on poorly drafted contracts or considering not paying statutory minimums.

415909 Canada Inc. v. Moghadam, 2024 ONSC 3886

A terminated employee was required to return a company car, even in a wrongful dismissal scenario. The court emphasized that terminated employees can claim the value of lost benefits during the notice period. But they are “not entitled to use the vehicles before proving [their] case for wrongful dismissal, let alone before commencing such an action.”

Mittra v. Royal Bank of Canada, 2024 ONSC 636

The court clarified that statutory severance entitlements in Ontario are triggered after five years of service in the province but do not account for work conducted in other jurisdictions. Additional rulings in the decision addressed honesty obligations for senior bankers and the enforceability of “click-to-accept” bonus plans.

Smith v. Lyndebrook Golf Inc., 2024 CanLII 103671

A seasonal worker employed for just one month was awarded the balance of his fixed term contract – five months’ notice. This serves as a reminder that even short-term employees may be entitled to significant notice periods depending on the circumstances.

The Top Five Cases

These five cases stood out as the most impactful employment law decisions of 2024. These rulings not only helped shape the legal landscape but also provided essential guidance for employers and employees navigating complex workplace issues. Let’s dive into the top five:

#5: Croke v. VuPoint System Ltd., 2024 ONCA 354

Croke was terminated after refusing to comply with a new vaccine policy implemented during the pandemic. Because the company’s primary client, Bell, mandated vaccination for subcontractors, Croke could not perform his duties without being vaccinated.

The court ruled that this situation amounted to frustration of the employment contract, and the termination was therefore not wrongful. The Court of Appeal upheld this decision, with leave to appeal to the Supreme Court denied. 

While mask and vaccination cases are becoming less frequent, it was helful to see that reasonable policies implemented during the pandemic were being upheld.

#4: Giacomodonato v. PearTree Securities Inc., 2024 ONCA 437

In this decision the Court of Appeal reaffirmed the long-standing rule that fresh consideration is required for new employment contracts, but courts will not opine on the sufficiency of such consideration.

The court upheld the lower court’s finding that the employer’s “unforgiving, scorched earth, and bare-knuckle,” litigation strategy unnecessarily increased the costs of the proceeding, justifying an extraordinary $830,761.75 cost award against it and sending a clear message about the risks of overzealous legal strategies.

#3: Bertsch v. Datastealth Inc., 2024 ONSC 5593

In a rare victory for employers, the court upheld a clear and unambiguous termination clause that limited an employee’s entitlements on termination to ESA minimums. The clause avoided common pitfalls like ambiguous “with cause” or “at any time” without cause language. 

The employer’s strategic use of a Rule 21 motion led to an expedited resolution just four months post-termination. This case could set a new precedent for employers seeking efficient resolutions, though the decision is under appeal.

#2: Kopyl v. Losani Homes (1998) Ltd., 2024 ONCA 199

The Court of Appeal clarified that invalid termination clauses in a fixed-term employment contract do not invalidate the fixed-term nature of the agreement. Without a valid early termination clause, fixed-term employees are entitled to full compensation for the remainder of their contract term.

The court upheld the lower court’s decision that a fixed-term clause defines the term of a contract, but is not itself a termination clause. Hence, the invalidity of the contract’s termination clauses did not affect the enforceability of the fixed-term nature of the contract.

Hence the employee was entitled to be paid for the entire balance of the remaining portion of the employment term as of the date they were terminated.

This ruling underscores the importance of carefully drafted termination clauses in fixed-term contracts.

#1: Dufault v. The Corporation of the Township of Ignace, 2024 ONCA 915

The landmark case of the year tackled the enforceability of “at any time” termination clauses. 

The lower court found numerous reasons to find the employment contract was unenforceable including the “with cause” termination clause. However, what made this case noteworthy was the finding that without cause termination clauses which say the employer can terminate an employee in its sole discretion “at any time” violate the ESA. 

The implication of this finding was that the termination clauses of many contracts in Ontario which contain without cause termination clauses using “at any time” terminology are rendered void. Given how widespread such terminology was in existing termination clauses, this became a huge issue for thousands of employers.

The employer appealed the lower court’s ruling. The Court of Appeal upheld the lower court’s ruling finding that the with cause termination clause violated the ESA and made the contract unenforceable.

However, the court passed on the opportunity to add clarity to employees and employers by choosing not to rule on whether “at any time” terminology violated the ESA – leaving that to be decided at a future date in a case where doing so would potentially change the outcome. 

Given the risks of rendering termination clauses unenforceable, employers are now advised to avoid using “at any time” language in contracts. The employer’s appeal to the Supreme Court is pending, so further developments may follow.

Conclusion

The cases of the past year provided valuable lessons for employers and employees alike, from the enforceability of termination clauses to the risks of aggressive litigation tactics. As we head into 2025, these rulings serve as a reminder of the importance of clear, compliant contracts and thoughtful legal strategies.

It will be interesting to see how these cases develop over the next year and what new ones grab our collective interest.