Introduction
In 2025, while termination clause cases continued to draw significant attention (see our “Top Termination Clauses of 2025” article here) the courts also addressed a wide range of other important employment law issues.
Decisions clarified employer obligations under the Occupational Health and Safety Act (OHSA) to investigate harassment, including off-duty or “private” misconduct that affects the workplace, as well as the consequences of arbitrarily delaying or withholding statutory entitlements. Other rulings emphasized that employer misconduct, such as pressuring employees to sign overly broad releases or failing to honour contractual terms, can constitute repudiation and impact notice and damages.
When “Private” Messages Become a Workplace Issue: Court of Appeal Confirms Employer’s Duty to Investigate
1. Metrolinx v. Amalgamated Transit Union, Local 1587, 2025 ONCA 415
Introduction
In a significant appellate decision regarding the employer’s duty to investigate, the Ontario Court of Appeal upheld the Divisional Court’s ruling overturning an arbitrator’s reinstatement of five employees dismissed for exchanging sexist and derogatory messages in a private WhatsApp group about a colleague. The Court confirmed that employers have both the authority and statutory duty under the OHSA to investigate harassment incidents once they affect the workplace, even if the conduct occurs off-duty, on private devices, and without a formal complaint.
Background
The case arose after Metrolinx terminated five unionized employees who had participated in a private WhatsApp group chat in which they shared derogatory and sexualized comments about a female co-worker, including rumours that she had engaged in sexual activity in exchange for professional advancement.
At arbitration, the Grievance Settlement Board reinstated all five employees. The arbitrator emphasized that the WhatsApp chat was private, occurred off-duty using personal devices, and included only the five participants. The arbitrator also placed significant weight on the fact that the female employee did not wish to file a formal complaint or participate in the investigation. In the arbitrator’s view, there was insufficient workplace impact to justify termination, and flaws in Metrolinx’s harassment investigation meant that the employer should not have relied on its policy as a basis for discipline.
The Divisional Court set aside the award on judicial review, a rare outcome given the deference courts normally show to arbitrators in unionized workplaces, and sent the matter back to a different arbitrator. The Union appealed.
The Court of Appeal’s Decision
The Court of Appeal dismissed the appeal and confirmed that the arbitration award was unreasonable. The matter was remitted to a different arbitrator for a fresh determination.
The Arbitrator Failed to Properly Apply the OHSA
The Court found that the arbitrator failed to meaningfully engage with the OHSA framework governing workplace harassment. In particular, the arbitrator appeared to assume that because the employee did not wish to lodge a formal complaint, Metrolinx had no basis to continue investigating and no obligation to take further action.
The Court noted that this reasoning was inconsistent with the statutory scheme. Under the OHSA, employers have a duty to investigate both complaints and “incidents” of workplace harassment. That duty is not dependent on the victim’s willingness to participate and is owed not only to the affected individual but to the workplace as a whole. As the Court explained, employees may choose not to complain for many legitimate reasons, and the absence of a formal complaint does not negate the existence or seriousness of harassment.
The “Private” Messages Became a Workplace Issue
The Court also rejected the arbitrator’s reliance on the “private” nature of the WhatsApp chat. While the messages originated in a closed forum, screenshots were later shared more broadly and ultimately reached the workplace. Once the content entered the workplace and affected the female employee and the working environment, the conduct could properly be treated as a workplace issue. The arbitrator’s conclusion that there was no meaningful workplace impact was therefore unreasonable in light of the factual record.
Deference Remains the Norm — But Not Where There Are Significant Errors or Issues
Importantly, the Court of Appeal did not suggest that courts will readily revisit arbitral decisions simply because they disagree with the outcome. Rather, the Court reaffirmed that judicial review remains deferential. However, where an arbitration award reflects legal errors, relies on outdated or stereotypical assumptions about harassment, or fails to meaningfully engage with statutory requirements, the award may fall outside the range of reasonable outcomes and be set aside.
Conclusion: The Court of Appeal’s decision confirms that employers’ obligations under the OHSA with respect to harassment extend beyond formal complaints and may be engaged even where conduct originates in “private” settings but later affects the workplace.
Court Awards Punitive Damages for Withholding Statutory Commissions
2. Carroll v. Oracle Canada ULC, 2025 ONSC 4889
Introduction
The Ontario Superior Court of Justice awarded punitive damages after finding that the employer breached its duty of good faith by delaying payment of commissions owed during the statutory notice period under the ESA for eight months. The punitive damages, $57,740.55, equaled the full amount of the withheld commissions.
Facts
Mr. Carroll, a Global Strategic Client Executive at Oracle, was terminated without cause after 3.5 years. His compensation included a base salary of $180,000 and substantial commissions, averaging over $700,000 annually. Following termination, Oracle withheld $57,740.55 in commissions owed under the Employment Standards Act, 2000 (ESA) and delayed payment for eight months.
Reasonable Notice and Damages
Despite his relatively short service, the Court awarded Mr. Carroll 12 months’ notice, considering his age (61), specialized role, and lack of a positive recommendation letter. For commissions during the notice period, the Court applied a three-year averaging approach rather than recent earnings, citing uncertainty about future sales. Damages for lost benefits and RRSP contributions were also awarded, but no damages were granted for unvested RSUs due to clear plan language.
Punitive Damages
The Court awarded punitive damages of $57,740.55, equal to the withheld commissions. Oracle’s failure to pay statutory entitlements without a defensible reason and its insistence on limiting payment to minimal statutory entitlements were found to breach the duty of good faith and fair dealing. Justice Koehnen emphasized that employers must act fairly and honestly, particularly upon termination, and punitive damages serve both to denounce misconduct and deter similar conduct.
Trust Breached, Employment Terminated: Dell v Brookfield and Enforcing Anti-Bribery and Conflict of Interest Policies
3. Dell v Brookfield Residential (Alberta) LP, 2025 ABKB 403
Introduction
The Alberta Court of King’s Bench dismissed a wrongful dismissal claim and upheld the employer’s decision to terminate a sales manager for cause. The Court found that multiple breaches by the employee of the employer’s clear, zero-tolerance anti-bribery and conflict-of-interest policies warranted immediate termination for cause.
Facts
Mr. Dell managed Brookfield’s Calgary sales office and supervised a small team. An internal investigation found he had recommended a third-party vendor, California Closets, to clients and facilitated change orders that allowed the vendor to supply products. While Mr. Dell denied receiving any incentives, evidence, including contemporaneous emails and witness testimony, indicated he had entertained and accepted an incentive offer.
Decision
The Court found that Mr. Dell had participated in an incentive program and failed to comply with Brookfield’s Code of Conduct and Anti-Bribery Policy by not disclosing a potential conflict of interest. Even without evidence that he received a financial benefit, his actions, recommending the vendor and facilitating change orders, demonstrated a breach of trust and exposed the company to reputational risk.
The Court noted that although Mr. Dell was not part of senior management, he supervised a small team and influenced the culture at the Show Home. His failure to disclose the conflict of interest heightened the risk to Brookfield’s reputation, particularly given its zero-tolerance anti-bribery policies and global operations.
Considering the seriousness of the misconduct, Mr. Dell’s leadership role, and his completion of policy training, the Court concluded that immediate termination was a proportionate response. Progressive discipline was unnecessary because the relationship of trust had been irreparably damaged, and failing to act would have signaled that Brookfield did not take its policies seriously.
Employer Repudiation Leads to Substantial Notice Award
4. Timmins v. Artisan Cells, 2025 CanLII 2387
Introduction
The Ontario Superior Court of Justice held that the employer repudiated Dr. Timmins’ employment agreement by failing to pay the contractual and statutory severance without justification and by pressuring him to sign an overly broad release as a condition of payment.
Facts
Timmins’ employment was terminated on March 3, 2023, on a without-cause basis. Notwithstanding that he was continuously employed for more than 3 years, the termination letter provided for only 1 week of ESA termination pay, rather than the statutory entitlement of 3 weeks or the remainder of the contractual 3 months. The termination letter further purported to withhold the balance of the severance provided for in the contract unless Timmins signed a full and final release covering non-disclosure and non-disparagement obligations.
Decision
The Court found this conduct demonstrated an intention not to be bound by the agreement and, in essence, displaced the previously agreed-upon termination provision.
With the contractual provision set aside, Dr. Timmins was entitled to common law reasonable notice. The court fixed a nine-month notice period, considering his senior role, niche expertise, high compensation, and limited market opportunities. Damages included salary, benefits, RRSP contributions, a two-year average bonus, and reimbursements, less prior payments, totaling $456,908.82, with no deduction for mitigation.
Lawsuit During Working Notice Period Constitutes Repudiation, But Not Just Cause
5. Adrain v Agricom International Inc., 2025 BCSC 1842
Introduction
The Supreme Court of British Columbia held that an employee suing her employer during a working notice period does not amount to just cause for termination, but does constitute repudiation of the employment contract.
Facts
Ms. Adrain, a senior administrator with 30 years of service, was given 13 months’ working notice in April 2025. During that period, she sent demand letters and commenced a wrongful dismissal action. Agricom terminated her in June 2025, asserting just cause and repudiation. The Court rejected the just-cause claim, confirming that initiating litigation alone does not justify dismissal.
Decision
The Court found that suing during working notice generally constitutes repudiation unless the employee can show prior constructive dismissal or employer repudiation, neither of which applied here. Agricom effectively accepted the repudiation, which ended future obligations but did not affect accrued rights, including notice entitlements. Considering Ms. Adrain’s age, long service, and senior role, the Court determined a reasonable notice period of 24 months. After deducting the unworked portion of the employer’s actual notice and applying a one-month contingency for potential re-employment, damages were calculated at 11.5 months’ pay.
Key Takeaways
- Employer Duty to Investigate: Off-duty or “private” misconduct may constitute a workplace issue when it affects the work environment. Employers have a duty to investigate such conduct, even where there is no formal complaint from the affected employee.
- Timely payment of statutory entitlements is essential: Delaying or withholding commissions or other statutory payments without justification can result in punitive damages and breach of the duty of good faith.
- Clear policies and training support terminations for cause: Well-communicated anti-bribery and conflict-of-interest policies, combined with employee training, strengthen an employer’s position when dismissing for breaches of trust.
- Employer misconduct can constitute repudiation: Failing to follow contractual termination provisions, pressuring employees to sign broad releases, or withholding severance can amount to employer repudiation.
- Litigation during working notice does not automatically justify dismissal: While pursuing legal claims during a working notice period may constitute repudiation, it does not give the employer just cause for immediate termination, and accrued entitlements remain payable.
This publication provides general information and should not be relied on as legal advice or opinion. This publication is copyrighted by Hunter Legal LLP and may not be photocopied or reproduced in any form, in whole or in part, without the express permission of Hunter Legal LLP.