2022 brought with it many ongoing changes in employment law. Understanding these changes will help businesses navigate the upcoming 2023 year.

In this post we identify some of the major challenges that have emerged for employers in this last year, along with key trends to look out for in the new year.

Accommodation requirements in hybrid work environment

Even in work-from-home or hybrid environments, the duty to accommodate employees remains. Accommodation can be both physical, such as accessibility and specialized equipment, and non-physical, such as changes to work schedule and responsibilities. Employers have a duty to ensure their employees have the tools necessary to allow them to work.

As an employer, it is important to understand the difference between an employee’s needs and wants, as the former comes with a duty to accommodate while the latter does not. This applies to an employee’s request to be allowed to work from home for some or all of the week. If the request for a hybrid or work-from-home environment is merely a preference, then there is no duty to accommodate this request. However, if the request is made on the basis of human rights (e.g. a medical requirement), then the duty to accommodate is triggered.

Still, these requests do not have to be accepted without question.  Employees need to provide reasonable evidence to support their accommodation request. Additionally, employees must be collaborative in determining a reasonable accommodation.

These principles were consolidated in the case of Ontario Energy Board v Society of United Professionals, 2020 CanLII 64845 (ON LA), where it was determined that work-from-home requests may be taken as a recommendation rather than a strict request, and that employees must give reason as to why this accommodation specifically is necessary for them to complete the required work, before it can be considered a true restriction. While an employer is obliged to review and accommodate any medical restrictions to the point of undue hardship, an employer need not accept the suggested method of accommodation. The identification and implementation of appropriate workplace accommodation is at the discretion of the employer, who is best able to determine its business and operational needs. 

Managing overtime for work-from-home employees

Another challenge arising with work-from-home employees is managing overtime hours and pay. Firstly, it is important to know which of your employees are entitled to overtime pay.

If you have a significant number of employees who are entitled to overtime, make sure that you have a solid overtime policy in place to avoid miscommunication. A key element of such a policy would be a tracking method for overtime hours worked. It is also important for managers to check in with employees regularly to confirm their regular hours of work along with any potential overtime they believe they have worked. This will help eliminate surprises , particularly  in a virtual work environment where it can be difficult to gauge exactly how many overtime hours employees are working in any given week.

Finally, if overtime becomes an issue, employers may opt to explicitly limit their employees’ hours of work to the regular eight hours, or the standard for the industry and communicate this in writing.

Ensuring Good Faith Conduct  

Increasingly, courts have begun penalizing companies for engaging in bad faith conduct (for example – being untruthful, misleading, or unduly sensitive) and this trend is likely to continue into 2023. In the case of Pohl v Hudson’s Bay Company (2022 ONSC 5230), a former employee of Hudson’s Bay was awarded $55,000 in combined moral and punitive damages because of how the employer conducted the termination. Some examples of the conduct included a significant  delay in providing the ROE (the ROE contained several errors upon review), failure to comply with the ESA with respect to payment of severance, and offering the terminated employee an inferior position characterized as a “resignation” and escorting the employee out the door despite no claims of misconduct..

Similarly in Rutledge v Markhaven (2022 ONSC 3183), the former employee in this case was awarded $50,000 for bad faith damages, due to concerns about the manner in which the employer had conducted an investigation into her relationship with another employee. Major issues with the investigation included the fact that the employee was informed that the investigation would be conducted by a third party when it was actually conducted by an investigation business associated with the company, and part of the investigation was conducted at a local Tim Hortons where many employees went for coffee, thereby failing to conduct the investigation in a confidential manner. The scope of the investigation was also expanded beyond its original intent and information was gathered from the employee without her prior knowledge.

In both cases, the employers did not treat employees fairly and reasonably during the termination process, and this led to a large damages award to the employee. It is important to remember that terminations must be conducted in good faith and that employees must be treated with respect and dignity before, during, and after termination.

Increased scrutiny of restricted covenants

Another ongoing trend is the banning of non-competes in employment agreements, and the shifting reliance on non-solicitation clauses. Since the passing of the Working for Workers Act in December 2021,, employers have been prohibited from entering into employment agreements with an employee that includes a non-compete, as per the Employment Standards Act, 2000 (ESA), (with narrow exceptions) and non-compete agreements entered into before that date have variable enforceability.

The ESA does not, however, prohibit non-solicitation agreements, which prohibits employees from soliciting or actively pursuing clients, customers, vendors, business partners, or other employees of their employer. Often, the non-solicitation agreement is only applied to a specified period after the end of employment.

Both non-solicitation and non-disclosure agreements can be used to protect a company’s interests, but employers are increasingly restricted in their options for doing so. Hence, employers should reach out to an employment lawyer to help draft a narrowly defined non-solicitation clause to ensure its enforceability, as well as clear and unambiguous confidentiality clauses to further protect the business.

We expect these trends to continue and look forward to seeing which new trends emerge in 2023 and to helping our clients navigate the ever-changing landscape of employment law.

Please reach out to our team at [email protected] or complete out contact form here if you require additional guidance.