Emond Harnden Legal Counsel Alanna Twohey says there’s one main thing she always tells employers when they’re crafting their employment policies.
“They’re not worth the paper they’re printed on if your employees don’t know what they say,” she explains. “Having a policy is great. But it’s not going to protect you, as an employer, if you haven’t made sure your employees have read it, reviewed it, and signed off on it.”
That’s just one of many key insights Twohey has for employers with questions about employment policies, their interplay with employment contracts, and related best practices. Let’s get into the rest.
‘Cost them upwards of $600,000’
Illustrating the critical importance of policy-related employer-employee communication is a 2024 Ontario case, Boyer v. Callidus Capital Corp., which resulted in the employer paying hundreds of thousands of dollars in damages to a former executive.
The reason? The employer failed to prove that the employee was aware of the company’s use-it-or-lose-it vacation policy, or that bonuses were only to be paid during active employment. “There was no evidence that this executive had ever been provided with or was aware of these policies,” explains Twohey.
“The employer put mechanisms in place for exactly these circumstances, but missed the critical final step of making sure the employee had reviewed the policies and was aware of them” she adds. “And that cost them upwards of $600,000.”
That’s why Twohey says it’s crucial for employers to give plenty of notice before implementing or updating employment policies, along with ample time to ask questions. Ideally, employees should also acknowledge in writing their receipt and understanding of the new or modified policy.
Which policies are required by law in Ontario?
While there can be legislated differences, often depending on company size, Twohey says the basics of drawing up, implementing, and communicating required employment policies are fundamentally the same for most organizations.
Companies throughout Ontario, for example, must abide by the Occupational Health and Safety Act (OHSA)’s policy requirements around health and safety, workplace violence prevention, and workplace harassment prevention.
The Accessibility for Ontarians with Disabilities Act also sets out requirements for accessibility policies.
Other mandatory policies in Ontario include the ones prescribed by the Employment Standards Act, 2000 around electronic monitoring and disconnecting from work (for companies with 25-plus employees).
“Policies often have really specific requirements, and you might need legal advice to know what policies apply to you and what you have to do to meet those requirements,” explains Twohey.
Which policies are recommended?
When it comes to voluntary employment policies, Twohey says these often depend on the nature of the particular workplace. The most common recommended policies are the type “you’d see in an employee handbook or manual,” she explains, including rules around confidentiality, social media and technology use, and codes of conduct.
Given the potential for damages if a step is missed, however, Twohey recommends consulting with legal counsel when crafting employee manuals.
“Just to make sure,” she says. “There are some points where you need a bit of legalese, or the wording needs to be specific.”
What about employment contracts?
It’s also important to remember that employment contracts and policies aren’t the same thing, and that things like vacation time and termination entitlements may best be determined individually.
As Twohey explains, employers should ask themselves, “Do you have the same entitlements for all your employees? If it’s something you’re going to negotiate with each employee, it’s best addressed in the contract.”
Twohey says contracts should reference the employment policies the employer wishes to incorporate into the contract, and that those policies should be handed to employees when they sign their agreement. “Make sure the two go hand in hand,” she says. “That way, down the road, the employee is way less likely to claim they were unaware.”
Always seek legal advice when changing policies or contracts
Changing or updating policies can also be risky because employees can claim constructive dismissal if an employer unilaterally changes significant employment terms.
Twohey says the same best practices apply here: if you’re making a change, always provide ample notice, allow employees to ask questions, and be sure to get their sign off.
And, to cover your bases, always check with your lawyer.
“The bottom line is that, if you’re making a significant change to an employment contract or policy, always seek legal advice to mitigate risk.”
To receive regular updates on labour and employment law, subscribe to Emond Harnden’s complimentary Focus Alerts.
This article is intended to provide readers with general information only. It should not be regarded or relied upon as legal advice or opinion. Accessing, reading, relying on or otherwise using this article does not, under any circumstances, create a lawyer-client relationship between you and Emond Harnden.
