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Sarah J. Draper and Darien Ekblad’s article, “Essential Guidelines for Personal Injury Law Firms” has been featured in the March issue of the Ontario Trial Lawyers Association, “The Litigator” Winter 2025/2026 edition. If you are looking for an employment lawyer in the Niagara Region, contact Sarah Draper at Daniel & Partners LLP.
Navigating Employment Law: Essential Guidelines for Personal Injury Law Firms
Sarah J. Draper and Darien Ekblad
As personal injury lawyers, we spend our days navigating complex legal systems to fight for the rights of our clients. But when it comes to managing our firms, we may find ourselves less confident about our own responsibilities as employers. Employment law can be a minefield, and for many lawyers who don’t practice in this area, the risk of non-compliance is real and costly.
Personal injury law firms, like any other business in Ontario, are governed by a suite of employment-related obligations. These include rules under the Employment Standards Act, 2000 (ESA), the Ontario Human Rights Code (HRC), and federal and provincial tax laws. This article aims to demystify the essentials of employment law for non-employment lawyers.
1. Hiring Practices: Getting It Right From the Start
A compliant employment relationship begins at hiring. If we’re not careful, we can unknowingly create legal exposure by mishandling recruitment.
Job postings must comply with the HRC, which prohibits discrimination based on a series of “protected grounds” As set out in Section 5:
Employment
5 (1) Every person has a right to equal treatment with respect to employment without discrimination because of race, ancestry, place of origin, colour, ethnic origin, citizenship, creed, sex, sexual orientation, gender identity, gender expression, age, record of offences, marital status, family status or disability.
Employers with seemingly innocuous preferences toward a certain type of candidate can find themselves in hot water. For example, if a firm posts a job advertisement explicitly seeking an “energetic young lawyer” or conversely a “wise and seasoned lawyer”, it could be seen as discriminating based on age. A compliant posting would describe the skills or experience required without referencing age-related characteristics.
There are exceptions to this rule in certain circumstances: in cases where job postings are positioned under special programs approved by the Human Rights Commission to address historical inequities among underrepresented groups of individuals. Section 14 of the HRC states the following in this regard:
Special programs
14 (1) A right under Part I is not infringed by the implementation of a special program designed to relieve hardship or economic disadvantage or to assist disadvantaged persons or groups to achieve or attempt to achieve equal opportunity or that is likely to contribute to the elimination of the infringement of rights under Part I.
The Human Rights Tribunal of Ontario in Horne v. Public Service Alliance of Canada, 2024 HRTO 1788 found that a job posting for a management role whereby an employer stated the successful candidate would be a “qualified woman” did not constitute discrimination on the basis of sex. An important caveat – the employer created the position pursuant to a well-researched and justifiable equity plan, which the Tribunal determined qualified under s.14(1).
Hiring practices are one of the easiest ways for employers to unintentionally expose themselves to liability. Be mindful of protected grounds, and if your firm is considering a special hiring initiative under Section 14 of the HRC, be sure it’s grounded in evidence and developed with care.
2. The Job Posting is Legal and You’ve Hired a Qualified Employee. Now what?
Who is entitled to what?
Different types of employees are treated differently under the ESA, especially in a law firm context. Most firms are comprised of some combination of lawyers and support staff, such as legal assistants, law clerks, accounting staff, and human resource professionals.
Depending on a particular employee’s role, the ESA imposes varying standards and exempts some roles, especially licenced professionals like lawyers, from key protections. Under Regulation 285/01, section 2(1)(a)(ii), practitioners of law are explicitly exempt from several parts of the ESA, including those related to overtime pay, maximum hours of work, and the “three-hour rule”. In other words, while a legal assistant working more than 44 hours in a week is entitled to overtime compensation, a lawyer toiling through evenings to prepare for trial is not.
This distinction is critical for firm owners to understand when managing employee expectations and drafting employment contracts.
Understanding Leaves of Absence
Law firm employers must also be mindful of the various leaves of absence provided for under the ESA. These statutory leaves are job-protected, meaning an employee is entitled to return to their role (or a comparable one) after the leave ends without penalty, demotion, or reprisal. Importantly, unlike the ESA’s exemptions for lawyers in other contexts, these leaves apply to all eligible employees, regardless of whether they are salaried, hourly, part-time, or full-time.
Common examples include pregnancy and parental leave, sick leave, and family responsibility leave, amongst others. To be sure of exactly how much leave an employee is entitled to, consult Part XIV of the ESA and/or an employment lawyer.
3. Notice or Pay in Lieu: The Basics
One of the most misunderstood areas of employment law is the obligation to provide notice of termination, or pay in lieu, when ending an employment relationship without cause.
The ESA Minimums
Section 54 of the ESA requires employers to provide written notice or pay in lieu upon terminating employees who have been continuously employed for more than three months. The amount of notice increases in connection with the employee’s length of service, up to a statutory maximum of eight (8) weeks as provided by section 57.
In addition to termination notice or pay in lieu, employers may also be required to provide statutory severance pay under section 64 of the ESA. This is distinct from termination pay and applies only if the employee has five or more years of service and the employer either (a) has payroll of $2.5 million or more, or (b) has permanently discontinued the employment of 50 or more employees, within a six-month period. The statutory severance pay equals one week of regular wages per year of service, to a maximum of twenty-six (26) weeks.
But wait, there’s more! An overview of common law reasonable notice
Statutory notice is just the floor. Without a valid employment contract limiting entitlements, courts turn to the common law, where notice periods can be far more generous.
The concept of reasonable notice as we know it today first took shape in the 1960 case of Bardal v Globe & Mail Ltd., 1960 CanLII 294 (ONSC). In that case, John Bardal, the advertising manager for the Globe & Mail, was terminated after 17 years of service at age 54, without cause. He had no written employment contract limiting his entitlement on termination. The court found that he was entitled to “reasonable notice” of dismissal based on a contextual analysis of his role, tenure, age, and the job market. Justice McRuer’s often-cited formulation continues to guide courts to this day:
“There can be no catalogue laid down as to what is reasonable notice in particular classes of cases. The reasonableness of the notice must be decided with reference to reach particular case, having regard to the character of the employment, the length of service of the servant, the age of the servant and the availability of similar employment, having regard to the experience, training and qualifications of the servant.”
As you might imagine, these factors are given different weight by different judges faced with different fact scenarios. Accordingly, common law reasonable notice can range widely. For example, in Linton v Blaney McMurtry LLP, 2021 ONSC 321, a 69 year old legal assistant was terminated without cause after 15 years of service. The firm continued to pay her statutory minimums for 8 weeks and paid her 15 weeks’ salary plus vacation accrued but not taken. The firm also offered to pay her a further lump-sum payment equivalent to 7 months’ salary and benefits which would have brought her total remuneration, or reasonable notice, to just over 12 months. The legal assistant refused the offer and sued for wrongful dismissal.
On summary judgment, the judge sided with the firm, determining 12 months was a reasonable period of notice.
On appeal, the legal assistant sought a notice period of no less than 24 months, asserting that the motions judge gave disproportionate weight to the character of her employment and inadequate weight to the evidence that she had no luck at all in finding replacement employment. The court admitted the 12-month notice period fixed by the motions judge was at the low end of the range, however, still acceptable in the circumstances. The appeal was dismissed.
4. Watch Your Wording: The Risk of Invalid Termination Clauses
Termination clauses are an important staple of employment contracts, but if they aren’t drafted carefully, they can unravel at exactly the moment you need them most. One of the most common and expensive traps employers fall into is relying on outdated, boilerplate termination clauses that are out of step with the ESA and common law. When these clauses fail to meet ESA minimums, courts may not strike out only the problematic section – they may throw out the whole provision, even with a severability clause.
The termination clause in an employment contract is meant to define what an employee is entitled to if their employment ends. If properly drafted, it can limit the employee to ESA minimums and avoid liability for common law reasonable notice (which, as explained above, can be months or even years of pay). But if the termination clause violates the ESA, even in part, the entire clause becomes unenforceable, and the employer loses the benefit of insulation from the common law.
The Dangers of “For Cause” Language
In recent years, one of the most frequent pitfalls for employers stem from termination “for cause” provisions that rely on broad or vague language inconsistent with the ESA and its regulations.
The ESA is clear on dismissal for cause: to deny statutory notice or termination pay, the employee must have committed wilful misconduct, disobedience, or wilful neglect of duty, and the conduct must not be trivial or condoned (O. Reg. 288/01, s. 2(1)3.
Clauses that depart from the precise language set out above fail to satisfy the ESA. In Waksdale v Swegon North America Inc., 2020 ONCA 391, the Ontario Court of Appeal struck down the entire termination provision of an employment contract because the “with cause” language reached beyond what the ESA permits.
This decision has enormous practical consequences. Instead of owing an employee ESA minimums, poor drafting can result in the employer being liable for full common law reasonable notice.
5. Buying a Practice? Beware of Successor Employer Risks
When a lawyer takes over another lawyer’s practice, whether through a formal acquisition or a retirement transition – they may not realize that they could be absorbing decades of hidden liability. If long-serving employees stay on with the new firm, both the ESA and the common law may treat their employment as continuous, meaning the new employer could be saddled with several years of seniority, which comes attached with significant financial obligations.
Under section 9(1) of the ESA, if an employer sells a business and the purchaser employs one or more of the seller’s employees, their employment is “deemed not to have been terminated for the purposes of the Act.” In other words, the buyer inherits seniority for ESA purposes. The purchaser becomes what is known as a “successor employer.”
The decision in Manthadi v ASCO Manufacturing, 2023 ONSC 3499 highlights just how high the stakes can be when successor employer obligations are overlooked. In that case, Sandra Manthadi worked as a blaze welder for over 36 years at 63732 Ontario Limited, operating under the name ASCO Manufacturing. A new corporation, 2603420 Ontario Inc. purchased the assets of the business and continued operations under the same name.
Manthadi continued working for the new ASCO seamlessly after the sale without any break in service. She signed a Release Agreement with the previous owner providing notice in full satisfaction of her time with the company, but was not provided any written employment contract by the new ASCO, nor any clarification about how her long-time service would be treated. She was laid off about a month later and never recalled. When she brought a wrongful dismissal claim against the new ASCO, the company argued that she had only been hired as a temporary general labourer for short term purposes. The court found otherwise.
The court held that ASCO had purchased the business as a “going concern”, continuing the operation of the same business with the same name, equipment, and workforce. Critically, ASCO had failed to provide a written employment contract, communicate any terms of Sandra’s new employment, specify that prior service would not be recognized, or offer notice of termination when her employment ended.
The court determined that in the absence of documentation to the contrary, Manthadi was employed on an indefinite basis, and her past experience and continuity of service was relevant in assessing common law reasonable notice. Importantly, the court declined to mechanically stitch together the two periods of service, instead using a contextual approach that factored in the benefit ASCO had received from hiring a skilled, long-serving employee without having to find and train a new one.
The result? Manthadi was awarded 12 months’ pay in lieu of notice, courtesy of the new ASCO – a significant cost for the new owners who had only benefited from a month’s worth of Manthadi’s skill set.
Similar successor liability risks may arise even when a new partner joins the firm and brings their own staff, such as a long-serving law clerk. While there is no formal “sale of business”, courts and tribunals may still view the employment relationship as continuous where the clerk seamlessly transitions to your payroll and performs the same work under the new partnership.
To avoid these situations, successor lawyers should:
Ignoring these steps, as Manthadi illustrates, can lead to significant liability.
In Summary:
For personal injury lawyers, the demands of practice often leave little time to focus on the day-to-day mechanics of running a business – especially as an employer. But the risks of overlooking employment law obligations are real, and as the cases and examples in this article illustrate, even small missteps can carry significant legal and financial consequences.
With careful planning, up-to-date documentation, and a willingness to seek advice when needed, personal injury firms can confidently navigate their dual roles as advocates and employers. The law protects employees, but it also rewards employers who treat that protection seriously and proactively.