CANADA Trends and Developments Contributed by: Andrew Shaw, Ryan Carroll and David McIsaac, Baker McKenzie
Canada Labour Code changes On 20 June 2025, new federal legislation came into force. Bill C-58 amended the Canada Labour Code to restrict federally regulated employers from using replacement workers – commonly known as “scabs” – to perform the duties of unionised employees dur - ing a legal strike or lockout. Employers can no longer use external replacement workers (hired to replace unionised staff during a strike or lockout) or internal workers (including new hires or existing non-union staff) to cross picket lines and take over bargaining unit duties. Managers cannot fill in unless the work is part of their regular duties. Bill C-58 also expedited the process for mainte - nance of activities agreements between employers and unions (the “parties”) by removing certain notice requirements. Maintenance of activities applies when the cessation of work during a strike or lockout would result in immediate or serious danger to the public’s health or safety. The parties must come to an agree - ment on maintenance of activities within 15 days from the notice to bargain. If an agreement is reached, it must be immediately filed with the Minister of Labour and the Canadian Industrial Relations Board (CIRB). If the parties agree no activities must be maintained, that agreement must also be filed with the Ministry of Labour and CIRB. If no agreement is reached, either party may apply to the CIRB for a determination on maintenance of activities issues. The CIRB must then issue a decision within 82 days of that application. British Columbia expansion of pay transparency requirements The British Columbia Government’s Pay Transpar - ency Act became law on 11 May 2023, and required employers, inter alia, to prepare a pay transparency report by 1 November of each year. In 2025, the pay transparency report requirement expanded to all employers with 300 or more employees in British Columbia. The report is due on 1 November 2025. Nova Scotia’s Stronger Workplaces for Nova Scotia Act On 20 September 2024, Nova Scotia’s Stronger Work - places for Nova Scotia Act, which amended the Work - er’s Compensation Act, the Occupational Health and Safety Act, and the Labour Standards Code, received
ONCA 260 . It affirmed the Superior Court of Ontario’s decision that the “without cause” termination provi - sion was unenforceable because the “for cause” ter - mination provision violated the ESA and was therefore unenforceable. The Court of Appeal agreed with the lower court’s reasoning that the definition of “cause” was too broad and allowed for termination without notice in situations not permitted by the ESA. The “for cause” provision included a list of possible reasons to justify termination. The list was introduced with the words “shall include” suggesting a non-exhaustive definition of “cause” which contravenes the ESA. The Court of Appeal also rejected the argument that the contract’s intent to comply with the ESA could over - ride the language used. If the employment agreement violates the ESA, the employer cannot excuse it by claiming that was not its intention. Although it seems termination provisions are rarely upheld, recent case law suggests that Ontario Courts will do so if the provision is clear, unambiguous, and compliant with employment standards legislation. The Ontario Court of Appeal followed a similar principle in Bertsch v Datastealth Inc, 2025 ONCA 379 . It affirmed the Superior Court of Ontario’s decision to uphold a termination clause limiting the employee’s entitle - ments to the minimum standards under the ESA. It rejected the argument that the termination provision could be misinterpreted by the average employee to mean they can be terminated “for cause for any rea - son without payment”. To reach that conclusion, the employee would need to “ignore the words ‘with or without cause’.” The Court of Appeal’s reasoning affirms that a termi - nation provision is not unenforceable simply because an employee may misinterpret its meaning. Rather, enforceability depends on whether the provision is objectively clear and compliant with legislation. The decision also confirmed that employers can limit termi - nation entitlements to ESA minimums. Notwithstand - ing this rare Ontario decision in favour of employers, it is important to regularly review and update employ - ment agreements to ensure termination provisions are enforceable.
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