This month's edition highlights Canadian court rulings on termination clauses and upcoming provincial labour law changes. It also discusses employer liability under the Economic Crime and Corporate Transparency Act 2023, as well as a recent case regarding protected beliefs.
A fundamental element of a valid contract in common law countries such as Canada is the requirement for valid consideration from both parties and this includes any subsequent changes to the contract.
In a recent BC Supreme Court decision, the issue of valid consideration was at the heart of an employment dispute, In Adams v Thinkific Labs Inc the employer was a software company which issued an offer of employment to the plaintiff which despite being very detailed did not include a termination clause or any provision for non competes. The plaintiff accepted the offer. Later that same day, Thinkific sent the plaintiff an additional document which included a detailed and extensive termination and non-competition provisions, and which was duly signed by both parties. The plaintiff was employed for two years until May 2023 when she was terminated without cause. She claimed wrongful dismissal and her lawyer claimed that she was only bound by the terms in the original document that was issued and not the second document which included the termination and non-compete clauses because she did not receive separate consideration for the duties outlined in this document. The court agreed finding that the second document has no force and awarded her a common law notice period of five months ( a notice period which could potentially have been avoided if the terms in the second document had had contractual force). The case is a warning against drip feeding employment terms unless they are supported by additional consideration (such as a sign-on bonus etc).
Onatario’s labour reform has come through a series of bills referred to as the Working for Workers Acts of which the latest in the series, the Workers for Workers Six Act, received royal assent on 19 Dec 2024.
Employers should be aware of the following upcoming change.
Additionally, at some point this year it is anticipated a new child placement leave will come into force whereby employees with at least 13 weeks service will be entitled to 16 weeks of unpaid leave after the placement of a child into their care through adoption/surrogacy.
The Australia Labour Party (ALP) were re-elected into power following a tightly contested general election. For employers the result provides some degree of certainty- essentially its business as usual - however there were a number of notable areas of reform promoted by the ALP during their campaign summarised below:
Currently under the Employment Ordinance an employee is deemed to be engaged under a ‘continuous contract’ if they have been employed by the same employer for four weeks or longer and have worked for 18 hours or more week.
Employees under a ‘continuous contract’ have increased rights over those that do not – namely access to annual leave, sick pay, maternity and paternity leave, severance pay etc.
The current rule is harsh on employees who only occasionally drop below 18 hours of work per week and are denied employment rights as a result.
To rectify this the Government has proposed that the 4-18 rule will be amended so that an employee will be deemed to work on a continuous contract if the work continuously for four weeks or more and for 17 ours or more per week OR for an aggregate of 68 hours or more during a four week period.
So far, no date has been announced for the change.
The government has announced the abolition of using the accrued benefits derived from employers' mandatory contributions under the Mandatory Provident Fund (MPF) System to offset Long Service Payment (LSP) and Severance Payment (SP) offsetting arrangement, effective May 1, 2025 (the Transition Date).
From the transition date onwards:
Non solicitation cases designed to prevent an ex- employee from poaching employees and clients have for some time been subject to a requirement for reasonableness in their geographical scope and duration. However, a recent Mons Labour Court decision has added a requirement for the employee to receive compensation during the duration of the restriction matching the existing requirement to compensate a former employee for a non-compete.
The court’s approach has raised eyebrows, and it remains to be seen whether future cases will follow the same approach.
Earlier this year the Fourth Bureaucracy Relief Act came into effect introducing significant changes to the form of documentation required in employment. The ‘written form’ requires an original hard copy document to be wet signed and was a requirement for employment contracts until January 2025 when the requirement was relaxed to allow ‘text form’ which simply requires that agreements are in a durable medium with a legible declaration – therefore electronic documents signed electronically are now enforceable (other than for fixed term contracts which still require the ‘written form’).
Now effective from 1 May 2025 requests from an employee for parental leave or part time parental leave can be submitted digitally to their employer without the requirement for a wet-ink signature, and likewise a refusal from an employer to an employee’s request can take a similar form. This does however demand increased vigilance from the employer given that an employee will have protection against dismissal as soon as their email has been submitted and its no longer the case that the employer can rely on the absence of true ‘written form’ to deny an employee their protection.
A recent case before the Federal Labour Court serves as a reminder to German employers that targets for variable compensation must be set in good time otherwise the employee could be entitled to their full target figure as a bonus regardless of performance.
In this case the employer was subject to a collective agreement which stipulated targets would be set by 1 March of each calendar year. In 2029 the targets were only provided in October, and the employee was terminated in November whereupon the employee claimed payment for 100% of his target bonus of €16,000. The court found in favour of the employee. Employers are advised to set targets well in advance of the start if the new bonus year and document their communication with their employee.
The commuter allowance has remained unchanged at 30 cents per kilometre for more than twenty years, even though since 2021 there has been an additional charge of 5 cents starting from the 21st kilometre, and from 2022 of 8 cents. In the coalition negotiations, CDU/CSU and SPD agreed to grant this higher commuter allowance of 38 cents per kilometre starting from 2026 for the first kilometre. Unless the employee lump sum is significantly increased as well, the number of taxpayers claiming the commuter allowance will significantly rise starting in 2026.
Under the provisions of the GDPR a data controller has the responsibility, and liability, for the personal data under their control. In McShane v Data Protection Commission (DPC) McShane was employed by the Ireland Health & Safety Executive (HSE) and complained to the DPC that personal data on his work supplied phone was unlawfully breached and as a result he lost €1400 from his cryptocurrency account. The DPC dismissed the claim on the basis that the HSE was not the data controller of the non-work related personal data held on the phone. The fact that the HSE had a staff policy that prohibited non-work related use of their phones was a persuasive factor in the case and therefore employers are advised to operate an acceptable use policy to avoid liability for non-work personal data.
On 8 March the government announced that in scope employers will be required to use a new portal for gender pay gap reporting. This year the headcount threshold for gender pay gap reporting was reduced so that employers with 50 or more employees are now considered to be in scope.
The portal will be launched in Autumn this year ahead of the November reporting deadline.
As a refresh employers are required to report on the following
The Employment (Contractual Retirement Ages) Bill 2025 is currently progressing through parliament. The Bill seeks to allow employees subject to contractual retirement ages below the State Pension Age (currently 66) to object to retirement – on receipt of an objection the employer will only be able to enforce retirement if it can be objectively and reasonably justified.
The Working Environment Act sets out a duty on the employer to regulate the psychosocial work environment however without any clarification on the requirements.
The government has proposed revised wording introducing a new paragraph stating that work must be organised, planned, and carried out in such a way that the psychosocial work environment factors in the enterprise respect an employees’ health, safety, and well-being. A second paragraph will be added several factors that an organisation should focus on, which include:
The government has stressed that the revisions don’t actually change the responsibilities of an employer given that there has always been a duty to consider the psychosocial aspects of the working environment – however the update does provide additional focus on an area that was previously ignored by many employers who should now be guided to take proactive steps to ensure that they are operating a safe working environment for their employees.
The Ministry of Finance has announced that there will be changes made to the way the social security health contribution is calculated for entrepreneurs (self-employed). From 1 January 2026 there will be a basic flat rate of 9% of 75% of the minimum wage and 4.9% applied to income in excess of 1.5 times the State average monthly salary (the rate will be 3.5% on income that exceeds three times the threshold).
A parliamentary bill to update the Labour Code requiring the disclosure of all components of salary and benefits to candidates in addition to ensuring adverts are gender neutral and non-discriminatory has been reduced in scope – however it is still hoped that the bill is robust enough to have a positive impact. A date has yet to be announced for its launch.
Although the electronic billing law came into force in 2022, last Tuesday, April 1, the Council of Ministers approved the extension of the deadline, until 2026, for companies and professionals to adapt their invoicing programs to the new electronic invoicing obligations. Specifically, legal entities must do so until January 1, while the self-employed will have until July 1 next year.
The value of nursery, cultural and meal vouchers will increase from April; accordingly, nursery vouchers will increase by 10 lei, and meal vouchers by 14 bani, in the first semester of this year. Furthermore, an order already published in the Official Gazette provides the increase of cultural vouchers as well.
Following the enactment of Emergency Ordinance No. 107/2024 on the regulation of certain fiscal-budgetary measures, the Ministry of Public Finance has adopted the procedure for the application of the 3% tax credit, applicable to taxpayers liable to corporate income tax or microenterprise tax for the 2024 fiscal year, or for the amended fiscal year commencing in 2024.
Furthermore, the standard templates for the issuance, amendment, or revocation of the Decision granting the 3% tax credit have been approved.
Since 1 July 2025, tribunal claims in connection with wages have been subject to a two-year backstop, with the result that an employer could be confident that their liability didn’t stretch back further than this. However, in the recent case of Afshar and others v Addison Lee Limited the Employment Tribunal held that the two-year backstop is ultra vires, and that the employee could claim for losses extending back further than two years. Given that the decision was just a first instance tribunal decision, it is not binding on future cases, but it is an interesting development worth monitoring against future tribunal decisions.
From 1 September 2025, employers may be held criminally liable for an employee’s fraud where it is intended to benefit the employer, or in some cases a client, and the employer did not have reasonable fraud prevention procedures in place. Employers are advised to ensure that appropriate staff policies and processes are put in place or existing policies reviewed.
In a recent Court of Appeal case (Higgs v Farmor’s School), the court held that the dismissal of an employee for expressing gender critical beliefs was unfair. The claimant in the case was the school’s pastoral administrator and had expressed ‘homophobic and prejudiced views’ on her Facebook page in which she objected to government policy on sex education in primary schools and the perceived promotion of gender fluidity. The posts were posted in the claimant's maiden name, did not refer to the school and were mainly quoted from other sources. The claimant claimed against the school for direct discrimination and harassment on the grounds of religion nor belief.
The Court of Appeal found in the claimant's favour, stating that if an employee is terminated for expressing a religious or other protected belief, this will constitute unlawful direct discrimination. They also commented, however, that if the termination was not due to the belief itself but because of something objectionable inn the way that the belief was expressed (manifestation of beliefs) a termination can be lawful so long as the employer can objectively justify their decision. The burden of proof is on the employer to prove all of the following:
The forum, context, content and manner of what is said are relevant to what is proportional and the Court in this case held that the termination was not proportionate, given that she was a long serving member of staff and her comments were not grossly offensive and had not negatively impacted the reputation of the school.
The case is a reminder to employers that a broad range of beliefs are capable of protection under the Equality Act, even if they are offensive to others, and their actions need to be considered and proportionate so as to avoid potential risk.