If 2024 was the year employers hesitated, 2025 was the year they attempted to reassert control — cautiously and, when done properly, successfully.
Courts, legislators and unions have all been busy this past year. Some employer instincts are being vindicated; others are being punished. Here are the 10 employment-law realities now defining the workplace and the costly mistakes I see repeated daily.
1. The end of the “new normal” — returning to in-person work
Remote work is no longer sacred. It weakened supervision, eroded accountability and, in many workplaces, gave poor performers cover. Employers are right to bring people back to the office. But they must do so carefully.
Where remote work became entrenched, a sudden recall can amount to constructive dismissal. Reasonable notice is essential. Even better: contracts that clearly define the limits of future remote or hybrid work. Otherwise, the return-to-office push will end not with productivity but litigation.
2. Employment’s AI conundrum
Artificial intelligence is here to stay. It boosts efficiency and cuts costs. But employers who hand decision-making over to algorithms play with fire.
AI depends on historic data. Flawed data produces flawed, discriminatory outcomes. And when that happens, courts will hold the employer liable, not the large language model.
Use AI as a tool, not a decision-maker. Hiring and firing decisions must be vetted by humans. And AI should never, under any circumstances, be relied on for legal advice.
3. Employers still underuse working notice
Working notice remains one of the most misunderstood tools available to employers. Properly implemented, it benefits everyone. Employees receive income and time to transition; employers dramatically reduce severance exposure, adding actual work instead of simply paying severance.
Yet, too many employers still terminate outright, only to find themselves in avoidable litigation over reasonable notice. I have written repeatedly on this topic. My hope is that next year I can finally say employers listened. Too many HR departments militate against this. They are wrong. Speak to me.
4. Hiring transparency under Ontario’s Working for Workers legislation
Ontario has quietly transformed the hiring process. Employers with 25 or more employees must now document job postings, retain application records and notify candidates of interview outcomes within 45 days.
This is not aspirational. It is law. Non-compliance will be punished. Employers outside Ontario should take note; other provinces will assuredly follow.
5. Unions are as problematic as they are powerful
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Unions no longer limit themselves to bargaining tables, although our government gives them various favourable tax status because of their role in representing employees.
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This year, they inserted themselves into geopolitics, national shutdowns and public policy campaigns far removed from workplace terms. The Air Canada and Canada Post strikes demonstrated just how far union decisions ripple. They do not just affect employers and employees; they affect all of us.
For non-union employers, the message is blunt: prevention is everything. Once organizing begins, employer rights shrink fast. Stopping that train is rarely possible. Instead, employers should be mindful, alert and proactive in advance.
6. Harassment can happen anytime, anywhere — and employers must act
In Metrolinx vs. Amalgamated Transit Union, Local 1587, five employees were fired for cause over comments made in a private group chat. The Ontario Court of Appeal upheld the employer’s duty to investigate harassment, even when the victim does not ask for one.
Under occupational health and safety law, knowledge alone triggers responsibility. Employers who fail to act do so at their peril. And the peril is expensive.
7. Severance cashouts keep growing …
Miller v. Alaya Care Inc. should terrify complacent employers. A vice-president employed for just seven months received 14 months’ notice. Inducement was decisive. The tired rule of thumb — one month per year of service — is long dead. Courts are weighing seniority, vulnerability and inducement heavily, and notice awards are rising accordingly.
8. … but well-written contracts still matter
In Bertsch v. Datastealth Inc., the Ontario Court of Appeal upheld a termination clause limiting entitlements to statutory minimums. The language was refreshingly simple: employees would receive “only the minimum payments and entitlements, if any” under the Employment Standards Act.
This is welcome news, but likely temporary. Courts are always hunting for reasons to invalidate termination clauses. Employers should enjoy this victory triumphantly, but cautiously.
9. Calling workers “independent contractors” means little
Labels do not determine reality. Courts look at control, dependency and integration. If you dictate hours, control work and embed individuals into your operation, you have employees, regardless of what the contract says, whether they invoice you or are incorporated. Misclassification remains one of the fastest ways to invite expensive liability.
10. Mass layoffs may be necessary; mishandling them is not
Earlier this year, I called Bell’s layoff of 700 managers a masterclass. Managers receive fewer federal statutory protections, their roles are often absorbable and they are more likely to accept packages without suing.
With economic pressures mounting, mass layoffs will increase. Employers should study the Bell approach carefully. When downsizing is unavoidable, litigation should not be.
The lesson from 2025 is simple: employers can regain ground, but only those who move strategically, deliberately and legally will keep it. The rest will continue funding the next generation of employment law judgments.
Source – https://financialpost.com/fp-work/howard-levitt-10-employment-law-realities-that-define-workplace