Two Key Employment Updates to Start 2025: Upcoming Changes to Hiring Practices and Latest Decision on Termination Provisions in Ontario

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This two-part article addresses upcoming changes to hiring practices in Ontario and examines an important Ontario Court of Appeal decision concerning the enforceability of termination provisions.

Part I: Upcoming Changes to Hiring Practices in Ontario

The Government of Ontario recently announced the effective dates and accompanying regulations for a series of changes to the Employment Standards Act, 2000 (the “ESA”), which were introduced in 2024 as part of the Working for Workers Act suite of legislation.

Job Postings

As of January 1, 2026, all publicly advertised job postings are subject to the following requirements:

• Pay Transparency: All job postings must identify the expected compensation or range of compensation for the position in the posting. Where a range is identified, the difference between the top and bottom ends of the range cannot exceed $50,000 (e.g., $40,000-$90,000).

  
  Note that the definition of compensation includes all aspects of an employee’s wages; accordingly, employers should carefully consider whether a position that provides for variable compensation is excluded from the above-noted requirements.

  Job postings for positions with an expected salary range greater than $200,000 are exempt from these requirements.

• AI Disclosure: All job postings must identify whether AI will be used to sort, screen and/or assess potential applicants.
• Canadian Experience: The job posting cannot require that potential candidates have or need Canadian-related work experience.
• Vacancy: The job posting must identify whether it is for an existing vacancy.
• Record Retention: The employer must maintain a copy of the job posting for a period of three years.

Under the ESA, “publicly advertised job posting” includes any external job posting an employer uses to advertise to the general public. It does not include general recruitment campaigns which do not specify a position, “help wanted” signs, internal job postings that are not available to the general public, or a posting where the work is performed outside of Ontario.

The job posting requirements outlined above do not apply to employers who, on the date of the job posting, have less than 25 employees.

Post-Interview Followup Requirements

Effective January 1, 2026, employers are obligated to notify candidates who apply to a publicly advertised job posting within 45 days of the date of their last interview as to whether a hiring decision has been made. This information may be conveyed to the candidate in writing, in person or using technology (e.g., a Zoom or Teams call).

Under the ESA, the definition of “interview” includes most forms of communication between an employer and an applicant in which the employer assesses the applicant’s suitability for the position. However, it does not include any preliminary screening of an application before selecting potential interview candidates. These requirements also include situations where an external recruiter meets with the candidate on behalf of the business to assess their suitability.

New Hire Information

Effective July 1, 2025, employers must provide all new employees with information in writing providing details about their employment on the first day of employment or as soon as reasonably possible thereafter. Employees are entitled to the following information:

1. The employer’s legal name and any operating or business name of the employer, if different from the legal name;
2. Contact information for the employer, including address, telephone number and one or more contact names;
3. A general description of where it is anticipated that the employee will initially perform work;
4. The employee’s starting hourly or other wage rates and/or commission, as applicable;
5. The employer’s regular and established pay period and pay date; and
6. A general description of the employee’s initial anticipated hours of work.

The informational requirements outlined above do not apply to employers who, as of the employee’s first day of work, have less than 25 employees.

These changes mirror the recent amendments to the Canada Labour Code, impacting federally regulated workplaces. To the extent it is not already, employers should consider including this information in their employment agreements or offer letters to prevent any inadvertent breaches and easily satisfy these requirements. It is unclear whether making this information available through the intranet or a program such as Workday is sufficient to fulfil an employer’s obligation. We recommend that employers err on the side of caution and provide the new hire information to employees directly.

Part II: Dufault v. Ignace (Township), 2024 ONCA 915 – Important Decision Concerning Enforceability of Termination Provisions

On December 19, 2024, the Ontario Court of Appeal released a long-awaited decision in Dufault.

We previously wrote about the lower court’s decision in Dufault here, which concerned the enforceability of a fixed-term employment agreement. The agreement contemplated that the employment relationship would continue for a fixed term of two years. The employer ended the employment relationship three weeks into the term, relying on the agreement’s early termination provisions.

The lower court determined that the agreement’s “for cause” and “without cause” provisions were written in such a way that they could, theoretically, breach the employee’s rights under the ESA. Specifically, the inclusion of the fairly common language permitting the employer to terminate an individual’s employment at “any time” or in the employer’s “sole discretion” were found to potentially violate the statutory leave and/or reprisal provisions under the ESA.

Note that no evidence was raised that the employer actually did violate, or intended to violate, the ESA. However, the presumption that the language technically permitted such a breach rendered the termination provisions unenforceable. As a result, the employee was awarded the balance of the fixed term – 101 weeks of additional compensation.

The lower court’s decision created new worries for employers in Ontario, particularly as references to “any time” or “sole discretion” were common among previously enforceable employment agreements but now exposed employers to reasonable notice at common law which far exceeds the minimum requirements to notice and severance under the ESA.

Court of Appeal Decision

Unfortunately, the Court of Appeal refused to comment on the inclusion of language that permits an employer to terminate an employee at “any time” or at the employer’s “sole discretion,” which was the main point of contention stemming from the underlying decision. Instead, the court decided the appeal exclusively on the basis that the “for cause” provision was offside in the ESA in that it improperly defined the circumstances wherein the employee could be terminated without notice more broadly than the wilful misconduct standard required under the ESA, which was already well-established precedent in Ontario per the well-known Waksdale decision. As a result, the court deemed it unnecessary to consider any additional issues raised on appeal.

Takeaways for Employers

Employers should assess their existing talent acquisition practices and develop internal processes to integrate the new legislative requirements noted above. In addition, employers should consider whether they presently deploy artificial intelligence in their recruiting practices.

For employers, the Dufault decision is unfortunate as it is likely that the inclusion of “at any time” or at the employer’s “sole discretion” (language that has been present in most employment agreements in the province for decades) will now be frequently argued to be offside under the ESA. Practically, this requires a review and update of employment agreements, ideally done with the assistance of legal counsel. Particularly for fixed-term agreements, which tend to carry more risks than rewards, not doing so can be costly.

If you have any questions or require assistance ensuring your talent acquisition practices are in compliance or updating your employment agreements or templates, please do not hesitate to contact a member of our Workplace Law Group.