An employee handbook is one of the most important documents an employer can have in place—second only to the employment agreement. An employment agreement establishes terms that apply to a specific employee and, in some cases, includes provisions that may only count if they are in an agreement. By contrast, the handbook sets out the rules that apply across the workplace. It is the document your managers rely on when dealing with day-to-day issues, and what employees look to for what they can and cannot do. It helps ensure consistency across the workplace and can provide support where there is no employment agreement, or where an agreement no longer applies or is not enforceable.
Like any critical workplace document, the employee handbook must evolve alongside the workplace it governs. As workplaces change, policies can quickly fall out of step with how things actually run day to day. What worked a few years ago may no longer reflect how your team works now or the risks that come with it. Some examples include:
- Remote Work – Remote work is now a standard feature of many workplaces. A remote work policy should clearly set out expectations, including: (i) where employees are permitted to work, including whether working outside the province or country is allowed; (ii) what expenses, if any, will be reimbursed; (iii) what is required of the workspace, such as reliable internet and a safe working environment; and (iv) potential liability considerations, including obligations under the Occupational Health and Safety Act.
The policy should also confirm that remote work arrangements may be modified or revoked as business needs change. If the policy does not say this clearly, remote work can start to be seen as part of the employee’s job. In that situation, requiring an employee to return to the workplace may be viewed as a major change to their role. The employee could then claim that they have effectively been fired (i.e. constructively dismissed). - Workplace Recordings – It is now easy, and increasingly common, for employees or customers to record conversations, interactions, or what is happening in the workplace. This may be done to document a disagreement (e.g. a hidden phone recording of a disciplinary meeting), raise a complaint (e.g. taking a video of a workplace incident), or keep a record (e.g. recording a Zoom call with a customer). This recording can be made without you knowing about it. In Canada, only one-party consent is required to record a conversation. In other words, if one person involved in the conversation consents, they can legally record it—even without telling anyone else.
Given this, the employee handbook should include a clear workplace recordings policy. The policy should address when recordings are prohibited, when consent is required, how recordings may be used or shared, and the consequences of unauthorized recordings. Clear guidance helps protect confidential information, manage expectations, and reduces the risk of recordings being misused or relied on in disputes. - Artificial Intelligence (AI) – The use of AI tools in the workplace is increasing quickly, often without clear direction from the employer. Employees may use these tools to draft emails or documents (e.g. using ChatGPT to prepare a client email), research or summarize information (e.g. uploading internal documents to generate a summary), or assist with decisions (e.g. relying on AI to screen resumes or generate reports).
If this is not addressed, employees may input confidential business information, client data, or personal employee information into these tools, or rely on outputs that are inaccurate or incomplete. Given this, a handbook should include a clear AI policy. The policy should address what tools, if any, are permitted, what information can be inputted, expectations around reviewing and verifying outputs, and ownership and use of any work product generated.
Handbooks must also be reviewed in light of evolving employment law. A recent example is the Ontario Court of Appeal’s recent joint hearing of the appeals of Li v Wayfair Canada ULC and Baker v Van Dolder’s Home Team Inc.. At issue in those cases is whether language such as “at any time” or “for any reason” renders a termination provision unenforceable.
There are approximately 47 statutory provisions in Ontario that restrict an employer’s ability to terminate employment, even where minimum entitlements under the Employment Standards Act, 2000 are provided. These protections arise under multiple statutes, including the Occupational Health and Safety Act, the Human Rights Code, and the Labour Relations Act. In these contexts, the law does not simply require providing minimum statutory termination entitlements. Rather, it may prohibit the termination altogether, with remedies that can include reinstatement. As a result, while the Court of Appeal’s decision is pending, employers would be well advised to remove “at any time” or similar language from their employee handbooks.
Co-Authored by: Christine Ashton (Partner) and Joanna Popova (Articling Student).
