I. LEGISLATION
(a) Significant Amendments to the Canada Labour Code Coming into Effect
In 2024, several amendments were made to the Canada Labour Code (CLC) for federally regulated employers, with more changes set to take effect in 2025. These employers span industries such as banking, aviation, telecommunications, and inter-provincial transportation.
One key amendment in 2024 brought the minimum statutory notice periods for individual terminations in line with provincial standards. However, the most significant change is set for June 20, 2025, when Bill C-58, An Act to amend the Canada Labour Code and the Industrial Relations Board Regulations, will take effect. This bill introduces a broad prohibition on the use of replacement workers during strikes or lockouts, expanding the scope of who cannot be used as replacements to include new hires, contractors, volunteers, students, or members of the public. Non-compliance can result in fines of up to $100,000 per day.
(b) Changing Workplace Legislation
Across Canada, several jurisdictions are overhauling the legislation governing unionized and non-unionized workers, as well as those in the gig economy.
Manitoba made the most significant changes in 2024, which will have a lasting impact on employers in 2025. These amendments focus on three main areas:
- Moving towards automatic certification based on a card-based system for union support
- Prohibiting the use of replacement workers during strikes or lockouts, along with a broader definition of “replacement workers”
- Expanding the framework for essential services agreements to ensure continuity of services during labour disputes
With these changes, employers in Manitoba should anticipate an increase in union certification applications, as well as disputes regarding the scope of bargaining units. The mandatory essential services agreements will also pose challenges in defining what constitutes essential services and how they are maintained during a labour dispute.
Employment Standards Legislation: Ontario continues to lead the way in the amendment of employment standards. Since 2021, the province has passed six bills under the “Working for Workers” initiative. In 2024, three new laws were enacted, bringing notable changes to the Employment Standards Act (ESA) and the Occupational Health and Safety Act (OHSA).
Notable changes already in effect include:
- Expansion of the definition of 'employee' to cover trial periods
- New requirements on vacation pay administration and tip policies
- A prohibition on requiring medical notes for short-term sick leave
- Increases to maximum fines for ESA and OHSA violations
- Telework provisions and digital conduct in the definitions of workplace harassment and sexual harassment
Further changes will come into effect in 2025, including the introduction of two long-term job-protected leaves:
- A 27-week Long-Term Illness Leave, effective June 19, 2025
- A 16-week Placement of a Child Leave (date TBD)
Employers will also need to revise policies to meet new job posting and information retention standards, with provisions taking effect as early as July 1, 2025.
(c) Supply Chain Transparency
A significant development for private companies last year was the introduction of the Fighting Against Forced Labour and Child Labour in Supply Chains Act (the “Supply Chain Transparency Act”).
By enacting this legislation, Canada has joined other countries in taking a stand against human trafficking and forced labour in corporate supply chains. The Act requires applicable companies to submit an annual report by May 31 of the following year. Non-compliance can result in a fine of up to $250,000.
Companies are obligated to produce reports if they:
- Produce, sell, or distribute goods in Canada or overseas, or import goods into Canada, or control an entity involved in these activities
- Are listed on a Canadian stock exchange, or
- Have a place of business in Canada, conduct business in Canada, or hold assets in Canada, and meet two of the following three criteria for at least one of the two most recent financial years:
- $20 million or more in assets
- $40 million or more in revenue
- An average of 250 or more employees
While the Act does not require companies to create specific policies to prevent forced and child labour or to train employees on these issues, we anticipate that additional, more stringent requirements may be introduced in 2025. Many employers are proactively implementing policies and training programs to comply with the Act.
Gig Workers
The Digital Platform Workers’ Rights Act, 2022, initially passed under Ontario's Working for Workers Act, 2022, will come into force on July 1, 2025. This Act establishes new rights for gig workers engaged in services such as ride-sharing, delivery, and courier services, although it does not apply to taxi services.
The regulation under this Act mandates that all dispute resolution, including arbitration, between gig workers and platform operators, must take place in Ontario. Notably, this legislation stops short of categorizing gig workers as employees, unlike similar legislation in other provinces.
II. LITIGATION
(a) Remote and Hybrid Work, and the Rise of Digital Nomads
Remote and hybrid work arrangements continue to rise in popularity, presenting new legal challenges. In particular, determining which jurisdiction’s laws apply to a remote worker who resides in a different province remains a key issue.
Several cases are already making their way through the courts, including one in which the Quebec Court of Appeal considered whether Quebec employment laws apply to a worker based in Quebec but employed by a company outside the province. In 2025, we anticipate further clarification from the courts, which will provide much-needed guidance for employers navigating this complex issue.
Governments are also addressing remote work in the context of tax and occupational health and safety regulations, and we expect to see ongoing adjustments to policies and contracts to keep up with these changes.
(b) COVID-19 Cases
Although the pandemic is in the rearview mirror, its legal ramifications continue. In 2024, the Ontario Court of Appeal ruled in Croke v. VuPoint System Ltd. that an employee’s refusal to comply with a mandatory vaccination policy led to the frustration of the employment contract. This decision was favorable for employers and concluded a lengthy legal battle.
Additionally, the arbitrator in Oxford County v. CUPE, Local 1146 found that an employee's refusal to undergo rapid testing based on religious beliefs did not amount to discrimination under the employer’s COVID-19 policy.
Though the COVID-19 legal landscape continues to evolve, employers can be cautiously optimistic, as courts and arbitrators have shown a pragmatic approach to these issues, largely deferring to employer policies during unprecedented times.
III. TRENDS
(a) AI in the Workplace
As AI technology becomes increasingly prevalent in the workplace, employers will need to develop policies to address the unique legal and practical challenges it presents. These challenges include issues of intellectual property, privacy, data security, and the use of AI in hiring processes.
By 2025, we anticipate more employers will develop AI policies, especially with new regulations like those in Ontario requiring transparency in job postings regarding AI’s role in hiring decisions. Employers should begin preparing for these legal developments by ensuring they have comprehensive AI policies in place.
(b) Ongoing Inflation and Employee Wage Demands
With inflation continuing to impact the cost of living, employee wage demands have followed suit. In 2024, statutory minimum wages increased in most Canadian jurisdictions, and we expect this trend to continue into 2025. Employers will need to prepare for potential wage increases and the impact on their budgets, particularly as some provinces have built annual reassessments into their minimum wage legislation.
Collective bargaining, particularly in sectors hit hard by inflation, will also see increased pressure, with labour unrest expected to persist across sectors. Employers should carefully consult legal experts when preparing for collective bargaining and consider strategies to avoid a failed ratification vote.