Canada: 2025, Looking Ahead

Author: Emily Elder

In Looking Ahead 2025, we explore the trends and developments in labour and employment law that we expect will impact employers operating in Canada in the year to come.

LEGISLATION

(a) Supply Chain Transparency

One of the most critical developments for private companies in the last year was the coming into force of the Fighting Against Forced Labour and Child Labour in Supply Chains Act (the “Supply Chain Transparency Act”).

With the enactment of this legislation, Canada joined a number of countries in their attempts to combat human trafficking and forced/coerced labour in the supply chains of companies operating on their respective soil. The Supply Chain Transparency Act imposes an annual reporting deadline on applicable companies of May 31 for any given previous fiscal year. Failure to comply can lead to a $250,000 fine.

Companies have to produce annual reports if they:

1. Produce, sell, or distribute goods in Canada or overseas, or import goods into Canada, or control an entity that does any of these things, and
2. Are listed on a stock exchange in Canada, or
3. Have a place of business in Canada, do business in Canada, or have assets in Canada, and meet two of the following 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 Supply Chain Transparency Act does not specifically require companies to develop a policy on the prevention of forced labour and child labour, or train employees on same, we may see more robust requirements put into place in 2025. Accordingly, many employers have implemented policies and training in order to promote compliance within their organizations.

(b) Significant Amendments to the Canada Labour Code Coming into Effect

For federally-regulated employers, 2024 included a number of amendments to the Canada Labour Code, with more coming into force in 2025. Federally regulated employers in Canada span diverse industries including banking, aviation, telecommunications, and inter-provincial transportation.

In 2024, the federal government amended the minimum statutory notice periods for individual terminations governed by the Canada Labour Code, bringing these more in line with provincial employment standards legislation.

Looking ahead, on June 20, 2025, Bill C-58, An Act to amend the Canada Labour Code and the Industrial Relations Board Regulations, comes into effect. The most significant change for employers is that they will now face a broad prohibition against using replacement workers during lockouts or strikes. This bill not only bans employers from delegating bargaining unit work to any employee or manager hired after the employer or union gives notice to bargain, but for employees hired before the notice, employers will only be able to use those employees if they normally worked at the location where the strike or lockout has occurred. The bill further prohibits employers from assigning bargaining unit work to contractors (regardless of when they were engaged), volunteers, students, or members of the public. Violations can result in fines of up to $100,000 per day.

(c) Changing Workplace Legislation

Many Canadian jurisdictions are overhauling the legislation that governs workplaces for unionized workers, non-unionized workers, and gig economy workers.

Labour Law: In the realm of labour law, Manitoba was the Canadian jurisdiction with the most dramatic statutory amendments in 2024, which will have significant implications for affected employers in 2025 and beyond.

The recent amendments address three main aspects of labour law: a shift towards card-based, automatic certification upon the requisite level of support; a near-complete prohibition against using replacement workers in cases of strike or lockout, along with an expansive definition of replacement workers; and an expanded framework for essential services agreements.

Based on trends in British Columbia following the passing of similar legislation regarding certification, we expect that employers operating in Manitoba will see more applications for union certification. We also expect to see an increase in legal disputes over the scope of the bargaining unit and employee eligibility to be part of the union.

The move towards mandating essential services agreements is part of a broader trend in Canadian labour law. These agreements are intended to ensure continuation of essential services during labour disputes. However, as employers and unions must negotiate these agreements, it may prove challenging for the parties to agree on what services are truly essential, and how those will be continued through a labour stoppage. Employers operating in Manitoba will need to prepare for these agreements carefully, as allegations of failure to comply with them can be litigated as an unfair labour practice at the Manitoba Labour Board.

Employment Standards Legislation: Many provinces have amended their employment standards legislation in recent years, often introducing new job-protected leaves or making amendments to reflect remote work. However, this trend is most pronounced in Ontario – Canada’s most populous and economically significant province – where, since 2021, the provincial government has enacted six bills and related regulations in the “Working for Workers” series of legislation.

In 2024, no less than three new laws were passed and enacted, though not all changes have yet come into force. These bills were the Working for Workers Four Act, 2024 (Bill 149, which received Royal Assent on March 21, 2024); the Working for Workers Five Act, 2024 (Bill 190, which received Royal Assent on October 28, 2024); and the Working for Workers Six Act, 2024 (Bill 229, which received Royal Assent on December 19, 2024). Each of these bills amended both the Employment Standards Act (ESA) and the Occupational Health and Safety Act (OHSA), among other work-related statutes.

Changes already in force include: an expansion of the definition of “employee” in the ESA to cover work performed in a trial period; a change to the ESA’s requirements on administration of vacation pay; certain new requirements in the ESA regarding tip policies; a prohibition against requiring medical notes for the three days of ESA-protected sick leave; and increases to the maximum fines for violations under the ESA and the OHSA. The OHSA has also been amended to: cover telework; include digital conduct in the definitions of “workplace harassment” and “workplace sexual harassment”; require all employers to have personal protective equipment (PPE) that properly fits women’s and diverse bodies; permit electronic posting of required information; and allow mandatory meetings to be held virtually.

These three bills also included some future changes, including changes to job postings and information retention that had unspecified dates. Those dates have now been set, and employers can plan for the significant changes that will come into effect over the upcoming year.

Furthermore, Bill 229 includes two new long-term job-protected leaves. The new 27-week Long-Term Illness Leave will come into effect June 19, 2025, while the 16-week Placement of a Child Leave will come into effect on a date yet to be set. Both leaves reflect leaves in applicable federal legislation. Employers will want to revise policies with careful attention to these provisions.

As of July 1, 2025, employers will have to give employees certain information before or as soon as possible after the employee commences their employment (provided the employer has 25 or more employees on the relevant employee’s first day of work). This information must include the legal name of the employer and its operating or business name, plus complete contact information, as well as basic information about where the employee will first work, their expected hours of work, their starting compensation, and their pay period and pay day.

The job posting changes will come into effect on January 1, 2026, and apply to employers with 25 or more employees on the date of the posting. As of this date, job postings must include pay transparency about expected compensation, disclosure of the use of artificial intelligence to screen, assess, or select applicants for the position (if applicable), and whether the posting is for an existing vacancy. If an employer interviews an applicant for a publicly advertised job posting, within 45 days of the interview the employer will have to tell the interviewee whether a hiring decision has been made. Employers will also have to retain every publicly advertised job posting and any associated application form for a period of three years after public access to the posting is removed, as well as all above information provided to interviewed candidates for three years after providing that information.

Gig Workers: The Digital Platform Workers’ Rights Act, 2022 was enacted in April 2022 under the Working for Workers Act, 2022 to establish legal framework for “digital platform work” in Ontario, but not declared in force at the time. On September 5, 2024, the government announced that the Act and its associated Regulation will come into force on July 1, 2025. This statute implements new rights and protections for workers providing ride share, delivery, and courier services via online platforms (though not taxi services). The recently published regulations under this Act expand upon the rights and protections outlined in the Act, which mirror some of the minimum statutory standards applicable to employees under the ESA. Perhaps most notably, all dispute resolution between the digital platform worker and the operator of the platform – including any arbitration – must take place in Ontario. However, this Act stops short of imputing an employment relationship between gig workers and the operators of digital platforms, which sets it apart from similar legislation in other Canadian jurisdictions such as British Columbia.

LITIGATION

(a) Remote and Hybrid Work, and Rise of Digital Nomads

Remote and hybrid work arrangements seem to be emerging as “the new normal,” and continue to raise legal issues within workplaces. In turn, these issues elicit both litigation and organizational responses from governments and employers alike.

In particular, it can be difficult to know what laws apply to a remote worker who is in a different jurisdiction than the employer. No Canadian appellate court has yet considered this issue.

We expect that will change in 2025, as the Quebec Court of Appeal has already heard one key case and granted leave to two more cases since 2023. All three of these cases raise different but related issues about the extraterritorial application of provincial workplace laws. One case, Marchetta c. Petros 724 Inc. (leave decision: 2023 QCCA 1276), raises the issue of whether Quebec employment standards legislation applies to an employee living in Quebec who works remotely online for an American company with no place of business in Quebec. While the decision under appeal held that the Quebec legislation did not apply to the employee, cases from other provinces have found the opposite, holding that if an employee is resident in a province, that province’s laws do apply.

We expect that two additional cases will be heard by the Quebec Court of Appeal in 2025. As they raise similar issues regarding the application of the Quebec Labour Code to remote workers, they may be heard together. In July of 2023, the Quebec Court of Appeal agreed to hear Unifor, section locale 177 c. Groupe CRH Canada inc. (leave decision: 2023 QCCA 972). That case asks: pursuant to the Quebec Labour Code, do remote workers count as “replacement workers” during a strike or lockout? The Court may decide to join that case with the case of Syndicat national des employés de garage du Québec inc. c. Brandt Tractor Ltd. (leave decision: 2024 QCCA 879). The issue in that case is whether the employer can use a remote worker who has never worked on the locked-out site to do the job of an employee who is locked out.

Quebec is unique in Canada, as our only civil law jurisdiction. This may mean that the Quebec Court of Appeal’s decisions will be of limited assistance for employers throughout the world with employees working remotely from Quebec. One way or the other, however, 2025 will almost certainly provide welcome guidance from one appellate court, which will help employers and their counsel analyse the question of what employment and labour law regimes apply in remote work situations.

It is worth noting, however, that governments have also been addressing remote work in the context of both tax and occupational health and safety legislation.

In 2024, employers had to revise existing policies and contracts to respond to both practical realities and the changing legislative frameworks discussed above. We expect to see employers continuing to review and implement policies and employment contracts that formalize and refine these types of working arrangements, within the rapidly-evolving legal landscape.

(b) COVID-19 CASES

The COVID-19 pandemic continues to produce labour and employment litigation. In an important win for employers, in 2024, the Ontario Court of Appeal in Croke v. VuPoint System Ltd. (2024 ONCA 354) held that an employee’s refusal to comply with the mandatory vaccination policy of their employer’s main client was a frustration of the employment contract, disentitling the employee to any wrongful dismissal damages. The Supreme Court of Canada recently refused leave to appeal, ending this saga on a positive note for employers.

On the labour front, and in line with previous cases, in Oxford County v. CUPE, Local 1146, an arbitrator held that a griever who refused to undergo rapid antigen testing in accordance with the employer’s COVID-19 policy based on religious beliefs did not experience discrimination, as there was no nexus between religious belief (creed) and the vaccination policy.

While we expect to continue to see cases related to COVID-19 working their way through various forums, it seems that employers can be cautiously reassured and optimistic that both courts and arbitrators are approaching these matters in pragmatic ways that seem to defer to employer’s decisions during such a challenging and unprecedented time.

TRENDS

(a) AI in the Workplace

One trend we are certain to see in 2025 is the ongoing need for legal and practical responses to the growing prevalence of AI. More employers are using AI in their organizations and sometimes in their hiring practices. Employees are using AI in a variety of ways, including to create work products. This raises a range of issues that we know will continue to impact organizations and workplaces, such as issues surrounding intellectual property and copyright infringement, concerns regarding accuracy of information, confidentiality and privacy breaches, as well as concerns about data security.

While no jurisdiction in Canada obliges an employer to have a policy on AI use in the workplace, these tools are exploding in availability and popularity. In 2025, employers will want to stay ahead of the curve and develop policies on the use of AI in their workplace, as well as ensure that they are up-to-date with any legal developments regarding the regulation of AI where they might operate. For example, Ontario imposed in its recent Working for Workers bill series an obligation on employers to disclose in job postings whether they use AI in their hiring practices. As this obligation comes into effect on January 1, 2026, employers operating in Ontario may wish to ensure that their human resources departments prepare for compliance in 2025.

(b) Ongoing Inflation and Employee Wage Demands

As inflation and the cost of living continue to rise, both statutory minimum wages and employee wage demands have been following suit.

In keeping with the trend observed in 2023, in 2024, statutory minimum wages increased in all Canadian jurisdictions except Alberta. We expect to see this trend continue (if not accelerate) in 2025, especially as a number of jurisdictions have now explicitly built annual reassessments into their minimum wage legislation or corresponding regulations.

On the collective bargaining front, cost of living issues have driven labour unrest across all sectors. In the latter half of 2024, we saw three major strikes in the federal sector – namely in rail workers, dock workers, and the Crown corporation Canada Post – as well as cross-border spill over from US labour unrest in the hotel industry. We also noted a trend towards bargaining unit employees refusing to ratify collective agreements that were bargained and recommended by their bargaining agents.

As economic pressures do not show signs of letting up, employers will likely continue to face compensation demands from both unionized and non-unionized employees. Employers with non-unionized workforces will want to consider the likelihood of statutory minimum wage increases when considering their economic plan for 2025 and beyond. Employers with unionized workforces will want to closely consult with experienced counsel when preparing for collective bargaining and develop strategies to minimize the risk of a failed ratification vote and to respond if such an event occurs.