By Howard Levitt and Peter Carey

“So it is written, so it shall be done!” This phrase is exclaimed frequently by Yul Brynner as Ramses II in Cecil B. DeMille’s 1956 epic The Ten Commandments.

That may have been true in ancient Egypt (according to Mr. DeMille anyway) but it is not true in modern-day Canada — particularly in the case of employment contracts , where what is written is often decidedly not what is done.

Just because something is written in your employment contract does not automatically mean that it is legally enforceable. It seldom is.

We are frequently approached by clients who neglect to tell us some important fact concerning their employment issues because, so they advise us, they believed it had already been determined, since “it was in the contract.”

Don’t worry, we always find out whether the contract really is dispositive because we relentlessly cross-examine our own clients to extract as much detail as possible. Contrary to how that sounds, it is a pleasant experience for clients because they are almost invariably delivered very good news.

In no particular order, here are some comments we commonly receive from clients based on their belief that because something is written in their employment contract, “it shall be done.”

1. “I’m not entitled to my bonus because it is discretionary.”

False. Just because a bonus is described as “discretionary” does not mean that the employer can simply decide to not pay it. The basic rule is that a dismissed employee is entitled to all payments they would have received had they worked during the notice period. So, if you would have been paid a bonus had you still been working during the notice period, and if other employees are being paid one too (and possibly even if they are not), you are entitled to it when you are fired.

This also applies to the period when you were employed. If there had been a pattern of regularly paying a bonus and there is no legitimate economic or performance-based reason not to pay it in a particular year, you are entitled to it.

2. “I’m not entitled to the protections that an employee would have because my contract says I’m an independent contractor.”

Just because your contract says you are an independent contractor doesn’t mean that you are one. There is a specific legal test to determine whether an individual is a contractor, a dependent contractor or an employee. Regardless of what the contract says, if you meet the test to be an employee or dependent contractor, you will be treated as an employee. The vast majority of Canadian workers who file tax returns as independent contractors are actually employees.

3. “I’m not entitled to Restricted Stock Units (RSUs) or options or other equity because the plan says the equity stops and/or disappears if I am no longer an employee.”

The basic rule is that you should receive what you would have received had you continued working for the notice period. For a plan to disentitle an employee from receiving the monetary benefits of equity that would have otherwise vested during the notice period, the plan has to have very specific language. A lot of plans do not have sufficient language, even if they seem to, which means that even if you don’t receive the equity, you may be able to receive its monetary equivalent.

4. “My contract says I can be fired ‘ for cause ’ without any payment.”

Such a clause is completely unenforceable, at least in Ontario. If an employment contract contains such a clause, whether or not an employee is being fired for cause, it will invalidate all of the termination provisions in the contract. As an aside, it is extraordinarily difficult to establish cause.

• How workplace investigations quietly stripped power away from CEOs
• Boards are quick to fire CEOs in a crisis, only to find the crisis remains

5. “My contract says the law of (pick a state) applies.”

If you are working in Ontario, you are subject to Ontario employment laws . End of story.

These are just a few of the comments we receive on a fairly regular basis.

You may ask yourself why are employment contracts (or sub-clauses within those contracts) so prone to being held unenforceable? The courts recognize that there is an inherent inequality in the bargaining power between employers and employees. As a result, those contracts are interpreted, whenever possible, in favour of the employee.

In the last several years, the courts have made a number of rulings invalidating employment contracts — or portions of them. They continue to make such rulings. As a result, if your employment contract is more than a few years old, it probably contains at least a few unenforceable clauses.

Finally, it is a good idea, whenever possible, to have your prospective employment contract reviewed by a lawyer before you start your new job. Your new employer may not be willing to change their standard contract, but at least you will know what you are agreeing to and what is currently legally enforceable. If you don’t do that, you will only have yourself to blame if and when relations ultimately turn sour.

Howard Levitt is senior partner of Levitt LLP, employment and labour lawyers with offices in Ontario, Alberta and British Columbia. He practises employment law in eight provinces and is the author of six books, including the Law of Dismissal in Canada. Peter Carey is a partner at Levitt LLP.

Twenty years ago, the most powerful people inside major corporations were obvious.

The CEO. The board chair. Perhaps the founder. Occasionally the CFO.

Today, during moments of internal crisis, the balance of power inside many organizations is very different.

What I see in my board advisory work is that the most influential voices are external investigators, HR executives, employment lawyers, reputational advisors, governance consultants and communications strategists. Quite a team — and not often for the better.

That shift is quietly reshaping corporate leadership in Canada, and most boards have not fully recognized how profoundly the dynamic has changed.

Many of these developments began for good reasons.

Modern corporations face legitimate pressures that barely existed a generation ago: workplace harassment liabilities, whistleblower protections, mental health obligations, social media exposure, activist employees, ESG scrutiny and reputational risks capable of wiping billions from market value within days.

Boards cannot simply ignore workplace complaints or cultural dysfunction. Nor should they.

But over time, the systems designed to manage institutional risk have evolved far beyond their original purposes.

In many organizations, investigative and reputational frameworks now exert enormous influence over leadership itself.

Progressively, corporations are making their most important decisions not through operational leadership structures, but through risk-management systems.

That distinction matters.

Traditionally, senior executives exercised authority by making decisions, resolving conflict, driving performance and accepting accountability for outcomes. Leadership involved judgment, decisiveness and, at times, necessary confrontation.

Today, many executives operate inside a far more constrained environment.

A difficult performance review may later be characterized as psychological harm. A restructuring may trigger allegations of retaliation. A disagreement over strategy may evolve into a culture complaint. A forceful management style may be reframed as unsafe leadership.

Some allegations are legitimate.

But the broader consequence is that executives growingly govern defensively, aware that ordinary management decisions may later be scrutinized through investigative, legal, reputational and political lenses simultaneously.

The result is subtle but significant: authority itself begins to migrate.

HR departments gain greater institutional influence because complaints flow through them. External investigators gain influence because boards fear appearing insufficiently responsive. Communications advisors gain influence because reputation management becomes central to governance decisions. Employment lawyers gain influence because nearly every internal conflict now carries legal exposure.

And directors themselves increasingly govern through process rather than direct managerial judgment.

This transformation becomes most visible during executive crises.

A senior leader falls under internal scrutiny. Complaints surface. Outside investigators are retained. Internal interviews begin. Communications protocols are established. Legal exposure is assessed. Media contingencies are prepared.

At that point, operational leadership often becomes secondary to containment strategy.

The process itself reshapes the organization long before factual findings are complete.

Executives observe carefully. They learn which behaviours create vulnerability. They become more cautious publicly, more guarded internally and more reluctant to engage in direct conflict. They also learn how they can apply strategic pressure for their own advantage.

Middle management adapts as well.

Difficult conversations become softer, slower and more heavily documented. Performance management weakens. Internal disagreements are escalated earlier. Decision-making becomes proceduralized.

Organizations begin optimizing for defensibility rather than effectiveness.

In moderation, some of this is healthy. Canadian corporations have historically tolerated conduct that would be unacceptable today. Greater accountability has improved workplaces substantially.

But every governance system eventually creates its own distortions. And we are at that point with many Canadian companies today.

The modern corporate risk apparatus increasingly rewards leaders who are politically careful, highly calibrated and procedurally cautious. It often penalizes leaders who are blunt, aggressive, unconventional or willing to create friction in pursuit of results.

That may reduce controversy, but it may not produce stronger companies.

Some of the most effective executives are difficult people. They challenge consensus. They create pressure. They move quickly. They demand accountability. They make others uncomfortable.

Boards once evaluated such leaders primarily through operational performance.

Now they evaluate them through a much wider and more volatile set of reputational and cultural considerations.

The irony is that corporations may now face a growing shortage not of managerial talent, but of managerial courage.

The safest executive today is not the boldest or most capable leader. Increasingly, it is the least politically exposed one.

And when organizations become excessively governed by risk-containment systems, leadership itself erodes.

Boards should pay close attention to that trend.

Healthy corporations require accountability, proper (usually internal) investigations and strong workplace protections. But they also require leaders capable of making difficult decisions without fearing institutional self-destruction every time conflict emerges.

• Boards are quick to fire CEOs in a crisis, only to find the crisis remains
• Canadian workplaces have a conflict problem — but not in the way you think

The challenge for modern boards is not whether to maintain investigative and governance systems.

It is whether those systems have quietly become powerful enough to supplant leadership itself.

Howard Levitt is senior partner of Levitt LLP, employment and labour lawyers with offices in Ontario, Alberta and British Columbia. He practises employment law in eight provinces and is the author of six books, including the Law of Dismissal in Canada.

By the time a board hires outside counsel to investigate a senior executive, the real governance failure has usually already occurred. This is the lesson I have most seen in my board advisory work.

The specific misconduct may be new. The lack of insight into the problems that led to it rarely is.

In my extensive experience, corporate crises seldom emerge out of nowhere. Most are the predictable result of years of institutional neglect: weak oversight, passive leadership, politicized HR structures, unmanaged executive conflict and boards that have long lost the requisite ability to distinguish genuine risk from internal discomfort.

Yet when the crisis finally surfaces, many boards make the same mistake . They focus on the individual executive at the centre of the controversy while ignoring the governance failures that gave rise to the situation in the first place.

The result is often a very expensive illusion of accountability.

The executive is removed. Headlines quiet down. The board congratulates itself on “taking decisive action.” External consultants are retained. New policies are announced. Town halls are held. Culture reviews are commissioned .

And eighteen months later, the organization finds itself in yet another crisis.

Because the underlying problem was never that individual alone .

Increasingly, Canadian corporations are being governed through fear: fear of reputational damage, fear of social media outrage, fear of employee activism, fear of internal complaints, fear of regulators and, perhaps most significantly, fear of making the wrong decision publicly.

That fear changes organizations.

Executives begin managing defensively rather than decisively. HR departments become centres of institutional risk management rather than operational support. Middle managers avoid difficult conversations entirely. Documentation reduces. Performance management weakens. Internal factions grow. Political behaviour flourishes.

Meanwhile, the boards, which have their own governance responsibilities, receive a filtered and sanitized version of reality.

No one wants to be the person who minimizes a legitimate complaint. But no one wants to be the person who questions whether every allegation represents an existential threat.

That distinction matters.

Not every difficult executive is toxic. Not every aggressive leader is abusive. Not every internal disagreement is retaliation. Not every workplace investigation is truly about workplace safety or psychological health.

But once organizations lose the confidence to distinguish between misconduct and mere conflict, institutional paralysis follows.

Some of the most successful executives I have encountered were deeply imperfect. Demanding. Intense. Impatient. Occasionally abrasive. Often politically tone-deaf.

But they also built new divisions, drove revenue, rescued failing operations and made difficult decisions others avoided.

Boards today struggle with that tradeoff.

Many directors now operate under the assumption that reputational risk must be eliminated at almost any cost. Yet reputational risk cannot be eliminated. It can only be managed intelligently.

And, paradoxically, organizations often create far greater risk when they begin governing primarily through optics.

The most dangerous corporate cultures are not always the harshest ones. Increasingly, they are the most performative ones: organizations where leadership becomes afraid to speak candidly, where difficult personalities are discussed privately but never managed directly, where investigations become substitutes for leadership and where everyone, quickly or eventually, learns that perception matters more than truth.

This dynamic becomes especially dangerous at the executive level.

Senior leadership teams are inherently political environments. Ambition, succession planning, compensation, influence and power intersect. Complaints are not always invented, but they are not always free from strategic motivations.

Boards that fail to recognize this reality are easily manipulated by internal narratives they do not fully understand, and they are never given the information to do so. External workplace investigators, purportedly hired to determine the facts, are instead motivated to deliver the “truth” they think their client wants to hear and arrive with the perceived (if not explicit) desired result.

I have seen organizations remove highly effective executives not because the facts demanded termination, but because the board lost confidence in its own ability to withstand controversy.

That is not governance. That is institutional panic cloaked in the language of governance.

The irony is that many boards now face the exact opposite problem they feared 20 years ago.

Historically, boards were criticized for protecting powerful executives for too long. Today, many sacrifice executives too quickly, often before fully understanding the organizational dynamics at play.

Both failures stem from the same root problem: weak oversight.

Strong governance does not mean reflexively defending executives. Nor does it mean reflexively removing them. It means having the judgment, independence and institutional courage to properly assess risk before reacting to pressure.

• Canadian workplaces have a conflict problem — but not in the way you think
• Corporate Canada has a new strategy for firing senior execs: managed executive disengagement

That requires directors who understand not only compliance and policy, but human behaviour, organizational politics, leadership dynamics, reputational escalation, media pressure, compensation structures, succession risk, litigation consequences and at least a modicum of employment law.

In other words, boards today require strategic judgment, not merely procedural process.

The corporations that will thrive over the next decade will not be the ones with the most policies, the largest HR departments or the most carefully crafted public statements.

They will be the organizations with directors who govern calmly under pressure.

Because the next generation of corporate failures will not primarily come from executives who were too aggressive.

They will come from boards that were too passive to manage conflict before it became crisis.

Howard Levitt is senior partner of Levitt LLP, employment and labour lawyers with offices in Ontario, Alberta and British Columbia. He practices employment law in eight provinces and is the author of six books, including the Law of Dismissal in Canada.

By Howard Levitt and Dante Capannelli

A manager avoids giving direct feedback to an underperforming employee for fear of triggering a complaint. A supervisor hesitates before documenting misconduct because the employee has previously raised concerns about workplace culture. An HR team delays discipline pending legal review, not because the facts are unclear but because the risk of escalation feels too high.

Individually, these decisions may be understandable. Collectively, they point to a growing feature of modern Canadian workplaces : an increasing reluctance to engage directly with conflict.

What looks like conflict avoidance may be better understood as growing institutional caution around everyday management decisions.

Employers now operate in an environment shaped by human rights legislation, workplace investigation requirements, reprisal protections and escalating reputational risk. Routine management decisions that once relied primarily on judgment and experience are increasingly filtered through legal, HR and institutional risk frameworks.

The consequence is not necessarily weaker but more cautious leadership.

Managers soften language, delay difficult conversations, involve HR earlier and avoid direct confrontation where possible. In many organizations, the practical goal has subtly shifted from resolving workplace issues to minimizing the risk of complaints, investigations or public escalation.

The modern workplace has become deeply invested in concepts such as psychological safety, respectful work environments and inclusive leadership — frameworks intended to ensure employees can raise concerns and speak openly without fear of retaliation, discrimination or hostility.

Yet, employers retain the right and obligation to manage performance, set expectations, address misconduct and make operational decisions that will not always be popular.

These principles coexist in law, but they do not always coexist comfortably in practice.

Conflict is not inherently negative. In employment relationships, it is often unavoidable. Performance management, discipline, restructuring and accountability conversations frequently generate disagreement or dissatisfaction. That does not make them improper.

The concern arises when fear of escalation begins shaping decision-making itself.

In some workplaces, managers fear becoming the subject of complaints themselves for engaging in ordinary performance management. A difficult conversation about attendance, conduct or accountability can quickly evolve into allegations of disrespect, retaliation or psychological harm.

The challenge for employers is not to distinguish clearly abusive management from appropriate oversight. It is navigating the growing grey area in between.

As a result, some managers become reluctant to confront problems directly at all — not because authority has disappeared, but because the perceived personal and institutional risks associated with exercising it have changed significantly.

Employees receive less direct feedback. Workplace problems remain unaddressed until they become more serious. And when formal action is finally taken, it can feel abrupt because managers spent months avoiding difficult conversations.

At the same time, employees are more aware than ever of their legal rights and the mechanisms available to enforce them. Workplace culture has shifted toward greater transparency and accountability, reinforced by formal complaint systems, human rights protections, occupational health and safety frameworks and the amplifying force of social media.

These developments reflect meaningful progress in fairness and inclusion. But they also contribute to a more sensitive environment in which managerial decisions are scrutinized through legal and reputational lenses.

The result is a structural tension: employers are expected to be highly responsive to employee concerns while remaining decisive in managing performance and operations.

Nowhere is this tension more visible than in HR processes. Workplace investigations, once relatively informal fact-finding exercises, are now frequently structured, documented and legally reviewed. While procedural rigour is important, process usually overshadows practicality.

The answer is not to abandon psychological safety or respectful workplace principles. Nor is it to return to outdated management styles that tolerated intimidation or unchecked authority. The challenge is balance.

Effective workplaces require both respect and clarity. Employees must feel safe raising concerns, but managers must also feel supported in addressing performance issues, misconduct and operational problems directly and professionally.

Canadian employment law does not prohibit difficult conversations. What it demands is fairness, good faith and procedural integrity.

Canadian workplaces are not becoming conflict-free. But they are becoming increasingly conflict-averse.

And in employment relationships, avoidance is rarely a sustainable management strategy.

• Employee mental health concerns now at the core of workplace litigation
• Corporate Canada has a new strategy for firing senior execs: managed executive disengagement

Howard Levitt is senior partner of Levitt LLP, employment and labour lawyers with offices in Ontario, Alberta and British Columbia. He practises employment law in eight provinces and is the author of six books, including the Law of Dismissal in Canada. Dante Capannelli is a partner at Levitt LLP.

By Howard Levitt and Jeffrey Buchan

There has been a quiet but unmistakable shift in Canadian workplaces — one that many employers do not fully grasp until it is too late.

Employee mental health is no longer a peripheral concern confined to cases of harassment or abuse . Increasingly, it sits at the centre of workplace litigation. Claims rooted in psychological harm are emerging not from shocking misconduct but from the ordinary frictions of work: strained reporting relationships, clumsily handled performance reviews and, particularly, workplace investigations that drag on without clarity or resolution.

What employers once dismissed as routine workplace stress is now forming the backbone of constructive dismissal claims, human rights applications and occupational health and safety complaints.

The legal exposure is not coming from a single direction. It is converging.

More than ever, courts are willing to scrutinize not only what employers do, but how they do it. A heavy-handed disciplinary approach, public criticism or an abrupt and insensitive termination can ground findings of bad faith. Where those actions are tied to demonstrable psychological harm, damages may extend well beyond reasonable notice/severance into aggravated, moral and punitive damages.

Overlay that with human rights legislation, where mental health conditions are firmly recognized as disabilities, and the duty to accommodate to the point of undue hardship is triggered — a duty far easier to state than to apply. Mental health issues are rarely obvious and often disclosed incrementally. An employee may first present as underperforming or frequently absent with no immediate indication of an underlying medical issue. By the time disclosure occurs, decisions may already have been made that are difficult, if not impossible, to reverse.

The real risk for employers is not simply failing to accommodate but failing to recognize when the duty to accommodate has been triggered at all.

Workplace investigations present another growing pressure point.

Allegations of harassment increasingly include claims of psychological harm or toxic environments. Employers are legally obligated to investigate, yet the process itself has become a source of harm. Delays, poor communication, perceived bias and obviously predetermined results by investigators exacerbate the very issues the investigation is meant to address.

It is not uncommon for employees on both sides of a complaint to report deteriorating mental health as an investigation unfolds. And investigators are often just hired guns for the employer with the mission to find cause to terminate and develop evidence to do so. Workplace investigations have become the major boondoggle of employment law. They are often bad faith incarnate and something from which no subject employee ever returns. Without legal representation, investigated employees are simply sitting ducks.

At the same time, occupational health and safety obligations — particularly in Ontario — now explicitly encompass workplace harassment. While these regimes have not traditionally been associated with damages for mental distress, they impose real regulatory obligations that can lead to such an outcome. A failure to provide a psychologically safe workplace can attract consequences even where civil liability is not ultimately established.

None of this transforms employers into guarantors of employee well-being. The law does not require a workplace free of stress, conflict or difficult conversations. It does, though, require a workplace free from conduct that is unfair, discriminatory or carried out in bad faith. That distinction is critical, but in practice can be difficult to maintain.

Compounding the problem is a familiar but persistent issue: documentation — or the lack of it. Employers who manage performance informally often find themselves exposed when mental health allegations surface. Without a clear record of expectations, feedback and support, legitimate management decisions can appear arbitrary — or worse, punitive — when viewed in hindsight.

There are, however, practical steps employers can take to mitigate these risks.

Clear, well-drafted policies addressing harassment, discrimination and workplace violence are no longer optional. Whether standalone or embedded within broader employee handbooks, these policies must set out transparent reporting mechanisms and outline how complaints will be addressed. Equally important, employees must be trained on how to use them.

This is not merely formality. Its absence has real legal consequences.

It is increasingly common for dismissed employees to allege after the fact that they were subjected to harassment in an effort to bolster claims for bad faith damages. Those arguments carry significantly less weight where no concerns were raised during employment, particularly where the employer had clear policies and accessible reporting channels. In such cases, the absence of any complaint is difficult to reconcile with allegations of an ongoing toxic workplace.

The same logic applies to constructive dismissal claims. An employee who resigns and later alleges a poisoned work environment without having raised concerns beforehand faces an uphill battle.

But employers should take little comfort in that.

The moment an employee does come forward with a complaint, the legal landscape shifts. At that point, inaction becomes the greatest risk. Employers who fail to respond, or who respond superficially, often forfeit otherwise viable defences. A complaint left unaddressed can quickly transform a defensible situation into a costly legal problem.

• Canada's top executives are shrewd negotiators — except in matters of their own interest
• The most expensive employee to fire is the one you thought you could afford to lose

The obligation is straightforward even if execution is not: act promptly, investigate fairly, document thoroughly and communicate throughout.

In today’s workplace, mental health is no longer a side issue. It is a legal one. And employers who continue to treat it otherwise are inviting scrutiny — from courts, tribunals and regulators alike.

Howard Levitt is senior partner of Levitt LLP, employment and labour lawyers with offices in Ontario, Alberta and British Columbia. He practices employment law in eight provinces and is the author of six books, including the Law of Dismissal in Canada. Jeffrey Buchan is an associate at Levitt LLP.

When the economy softens, employers tend to reach for the same lever : headcount.

It feels rational. Revenues shrink, forecasts blur, and payroll, usually the largest expense, becomes the obvious place to act. In a weak job market, the assumption follows naturally: employees have fewer options, less leverage and more incentive to accept whatever package is put in front of them.

That assumption is wrong. Worse, it is expensive.

In my practice, I consistently see a pattern emerge during downturns. Employers become more confident in their ability to terminate because it makes economic sense and seems necessary, just as the risks associated with doing so quietly increase. The result is not savings, but liability, often far greater than anyone anticipated at the outset.

The first mistake is believing that a weaker job market reduces the likelihood of litigation. In reality, as I discussed in my last column, it tends to do the opposite.

An employee who loses their position in a strong market will often move on quickly. An employee terminated into uncertainty has both the time and the incentive to challenge the terms of their departure. What might have been accepted with minimal negotiation a year ago is now examined closely, often with legal advice and, increasingly, the willingness to pursue it.

Courts are not indifferent to context. While the law has not formally changed, its application reflects economic reality. Judges understand that re-employment will take longer, particularly for older or more specialized employees. That understanding finds its way into damage awards, even if it is not always explicitly stated.

The second mistake is relying on outdated assumptions about severance.

Employers frequently benchmark against prior internal decisions or general rules of thumb. But severance is not static. It is shaped by risk, and risk is shaped by circumstances. In a market where finding comparable employment may take significantly longer, “reasonable notice” stretches, subtly but materially.

An employer who budgets for termination based on last year’s environment may find that the numbers no longer hold. The gap between expectation and reality is often where disputes begin.

The third, and increasingly significant, cost is reputational .

Terminations no longer occur in isolation. A dismissal today can become a public narrative tomorrow, shared across professional networks, discussed internally and noted by those you would prefer to retain. High-performing employees, in particular, pay close attention to how organizations behave under pressure. They draw conclusions quickly, and act on them quietly.

What was once a contained decision now has the potential to influence recruitment, retention and culture in ways that are difficult to measure but easy to feel.

But the most costly mistake is also the least visible: cutting the wrong people.

In uncertain times, employers often gravitate toward those who are easiest to manage rather than those who create the most value. The dependable but unremarkable employee is retained. The independent, higher-impact and more challenging employee is let go.

• Why the internal job posting is often misleading — and legally risky
• Employers are avoiding terminations by not-so-subtly phasing employees out. Cue the lawsuits

It is a decision that can stabilize the short term while undermining the long term.

None of this is to suggest that employers should avoid terminations. Businesses must adapt, and cost structures matter. But the idea that a weaker market makes termination simpler or safer is a dangerous illusion.

In fact, it does the opposite. It changes the behaviour of employees, the lens through which courts assess outcomes, and the speed at which reputational consequences unfold.

The employers who face the largest payouts are rarely the reckless ones. They are the confident ones. Those who believed the market had shifted in their favour.

It hasn’t.

It has simply changed the cost of being wrong.

Howard Levitt is senior partner of Levitt LLP, employment and labour lawyers with offices in Ontario, Alberta and British Columbia. He practices employment law in eight provinces and is the author of six books, including the Law of Dismissal in Canada.

For many Canadian employees, the most misleading document they will encounter is not an employment contract. It is an internal job posting.

Employers increasingly promote the idea of “careers within.” Roles are posted, competitions run, interviews conducted . The process appears structured, fair and transparent.

It is often none of those things.

In a growing number of cases, the successful candidate has been selected before the posting goes live. The “competition” that follows exists for optics, internal policy compliance or to maintain morale. Other candidates are invited to apply and, critically, given reason to believe they might well get the job — or at least that the outcome is uncertain.

It is not.

From a business perspective, this may be benign, but from a legal one, it is laden with risk.

Courts do not police whether employers make the “right” promotion decision. They do, however, scrutinize representations made to employees — and the consequences when those representations are relied upon.

That distinction is where liability begins.

When an employee is told they are a leading candidate, a “natural successor” or that a role is effectively theirs to lose, the employer moves beyond mere encouragement. It creates a representation. If the employee relies on that representation — by declining another offer, say, remaining in their role for longer or altering their career plans — the legal analysis shifts.

At that point, the issue is no longer who deserved the promotion. It is whether the employer induced reliance on an outcome that was never available.

Canadian courts have long recognized claims for misrepresentation where an employee is induced to join — or remain with — an employer based on assurances that prove untrue. The principle is not confined to hiring. It also applies within the employment relationship.

Where that reliance is established, damages may follow.

In the context of a subsequent termination , the consequences can be more significant. Misleading an employee about advancement opportunities may support a claim for bad faith in the manner of dismissal, attracting additional damages. Where the failed process leaves the employee sidelined or diminished, constructive dismissal may also be alleged.

Employers often underestimate how easily casual language becomes evidence. Internal candidates are not external applicants. They work within the organization. They know how decisions are made. A manager’s offhand assurance may carry far more weight than intended — and far more than a court will ignore.

The more formal the process, the greater the risk. Detailed postings, multiple interview stages and documented feedback all reinforce the appearance of a genuine competition. Where that appearance is false, the record does not assist the employer but undermines it.

None of this prevents employers from promoting whom they choose. It just requires honesty.

If a decision has been made, there is little to be gained — and much to be lost — by staging a competition suggesting otherwise.

And if a process is undertaken, communications must be measured. Encouragement is permissible. Assurances are not.

Employers adopt internal competitions to signal fairness and transparency. They are often achieving the opposite.

Courts are unlikely to be concerned with whether an employee was disappointed.

They will be very concerned if that disappointment was manufactured.

• Employers are avoiding terminations by not-so-subtly phasing employees out. Cue the lawsuits
• How Roberto Alomar and Bill Ackman offer valuable, if opposing, lessons in accountability

Howard Levitt is senior partner of Levitt LLP, employment and labour lawyers with offices in Ontario, Alberta and British Columbia. He practices employment law in eight provinces and is the author of six books, including the Law of Dismissal in Canada.

By Howard Levitt and Arash Omidvar

There is a quiet but persistent fiction in employment law — one that circulates in boardrooms and, more worryingly, as careless legal advice — that a severance offer can be accepted as a placeholder, revisited at leisure and later discarded if, upon reflection, it proves unsatisfactory. Agree now, reconsider later, litigate if necessary.

It is a fiction the Stribling v. Starbucks Coffee Canada Inc. decision of the Ontario Superior Court of Justice just dismantled with unmistakable force.

It is an issue about which I often have to reassure my employer clients when an employee refuses to sign a release. Don’t worry, I advise, we can always enforce the settlement in court and have the employee pay most of your costs of doing so.

The Court in this case did not dress its conclusion in doctrinal complexity. It did not need to. Once an employee accepts the essential terms of a termination offer, the bargain is struck. The absence of a signature on a release is not a lifeline. It is, at best, an afterthought. At worst, it’s the beginning of a breach.

In the Stribling case, the facts read almost as a template for modern severance negotiations. The employee was presented with a binary choice: return to work under specified conditions or accept a defined separation package — eight weeks’ pay in exchange for a full and final release.

He did what prudent employees are told to do. He paused. He negotiated for time. He consulted counsel. And then, in writing, he accepted the offer, confirming that he would execute the release upon receipt.

That, in law, was the moment of consequence. Everything that followed was an attempt to unwind it.

Instead of completing the paperwork, however, the employee pivoted to litigation. The strategy was neither subtle nor novel: secure the deal, reassess the landscape and, if a more lucrative path appears, abandon the bargain and sue. It is a tactic born of opportunism and sustained by a misunderstanding of how contracts are formed.

The Court’s response was clear.

A contract does not emerge from ceremony. It does not wait upon formality. It arises — and always has — from the meeting of offer and acceptance on essential terms. Here, those elements were not merely present; they were explicit. The acceptance, conveyed by email, was clear and unequivocal. That was enough. It has always been and always will be more enough.

The employee’s central argument was that the unsigned release meant there was no binding agreement, which inverted the legal reality. The signing of a release does not create the deal. It memorializes and completes it. Once acceptance was communicated, the parties were already bound. The subsequent refusal to sign did not preserve a right. It it violated one.

The peripheral arguments did not fare any better. The plaintiff complained that an error in the original documentation, which referenced termination for cause, vitiated the settlement. The court noted that the initial administrative misstep was corrected and treated it for what it was: a clerical error, not a contractual defect. Courts do not permit minor imperfections to metastasize into escape routes.

The employee also argued there was no meeting of the minds. The Court found that equally unpersuasive. The essential terms were neither obscure nor ambiguous. They were articulated, understood and accepted. The expectation that formal documents would follow is not evidence of incompleteness; it is the ordinary rhythm of settlement.

And then there was the predictable appeal to financial duress, which failed because the law does not equate economic pressure with coercion. To set a settlement aside demands something more — illegitimate compulsion that strips away meaningful choice. Here, the employee had time, advice and the opportunity to negotiate. That is not duress but deliberation.

What makes Stribling significant is not that it charts new territory. It is that it reasserts, with clarity, a principle that has been allowed to blur at the edges. The growing tendency to treat acceptance as provisional — as a strategic waypoint rather than a legal endpoint — was firmly rejected.

For employers, the decision restores commercial certainty. An offer, once clearly accepted, is not a tentative arrangement awaiting signature on a release. It is a binding agreement the courts will enforce. The notion that an employee can accept, hedge and later retreat has been decisively curtailed.

For employees, the implications are more exacting. The decisive moment is not when the release arrives for signature, nor when funds change hands. It is the instant acceptance is communicated. That is when rights are surrendered, obligations crystallize and options narrow to one.

Too often, that moment is mistaken for the beginning of a process. In law, it is the end of one.

• Air Canada's Rousseau affair shows the high cost of a seemingly 'soft' skill
• Why fear of firing is more damaging than firing itself

Stribling serves as a pointed reminder that contracts are not elastic instruments, to be stretched or abandoned as circumstances evolve. They are, at their core, expressions of finality.

And courts, increasingly, are insisting they be treated that way.

Howard Levitt is senior partner of Levitt LLP, employment and labour lawyers with offices in Ontario and Alberta, and British Columbia. He practices employment law in eight provinces and is the author of six books, including the Law of Dismissal in Canada. Arash Omidvar is an articling student at Levitt LLP.

My initial temptation was to dismiss the latest controversy surrounding Michael Rousseau as political theatre — another Quebec language storm that will pass as quickly as it formed. How could an employer that knowingly hired a unilingual CEO take issue when it becomes an embarrassment?

That would be a mistake. Beneath the noise lies a serious employment law question which Canadian employers ignore at their peril: when does language proficiency stop being a preference and become a legal obligation?

The facts? Following a fatal crash at New York’s LaGuardia airport, Air Canada released a video statement from its CEO, Michael Rousseau, offering condolences. Apart from a token “bonjour” and “merci,” the message was entirely in English . One of the deceased pilots was francophone. The flight originated in Montreal. The intended audience included grieving families in Quebec.

The backlash was immediate. Prime Minister Mark Carney weighed in. François Legault and the Quebec legislature expressed their outrage in the form of a unanimous vote demanding Rousseau’s resignation. Influential institutions such as La Caisse de dépôt et placement du Québec — one of Air Canada’s largest shareholders — demanded accountability.

At first glance, this appears to be a communications failure — and it certainly was that. But it raises a deeper issue: what are an employer’s obligations when language is central to its public identity, and what duties does a senior executive owe?

Canadian employment law has long held that job requirements must be bona fide, derived in good faith. Employers cannot impose arbitrary qualifications unrelated to the role. But the inverse is equally true: where a requirement is intrinsic to the position, the employer is entitled, indeed expected, to enforce it.

For a Montreal-based airline marketing itself as a national carrier, bilingualism is not performative or cosmetic. It is, as the outrage has made clear, a core competency. It goes to brand, regulatory environment and corporate legitimacy in a bilingual country.

That does not mean that every employee must be bilingual. But it is difficult to argue that the chief executive officer of such an organization can be functionally unilingual without creating foreseeable risk; reputational, operational and legal.

This is not Rousseau’s first encounter with the issue. In 2021, shortly after assuming his role, he acknowledged that he was not comfortable speaking French, despite living many years in Montreal. He promised improvement.

That commitment matters. In employment law , representations made by an employee, particularly a senior one, can crystallize into expectations, even legal obligations.

Employers sometimes include “best efforts” and developmental commitments in executive contracts: to achieve financial targets and potentially to integrate into corporate culture. Language acquisition, in the right context, can fall within that.

If so, the failure to make meaningful progress is not merely a public relations misstep. It may constitute a failure to meet a fundamental aspect of the role. But could this justify termination, as I suspect occurred? That depends.

Courts will examine whether bilingualism was an explicit or implicit requirement of the position, whether the employer communicated that expectation clearly and whether the executive was provided a reasonable opportunity and the support to meet it. They will also consider whether the deficiency caused actual harm — not just embarrassment, but a measurable impact on the business.

In Quebec, the analysis is further complicated by the province’s French language Charter, which imposes obligations on businesses to operate in French. While that Charter does not dictate the language abilities of a CEO, it strengthens the legal argument that leadership must reflect and uphold the company’s linguistic commitments.

There is also a governance dimension. Boards of directors are not permitted to be passive observers. If a known and recurring risk, such as the CEO’s inability to communicate in a core language of the business, results in predictable crises, questions will be asked about oversight. In extreme cases, that can translate into fiduciary concerns.

For employers, the lesson is straightforward.

If a skill is essential, define it. If it is defined, enforce it. And if you are prepared to overlook it, do not be surprised when the cost of that decision eventually arrives — often at the worst possible moment.

For executives, the message is even more clear. The more senior the role, the fewer deficiencies can be excused as ancillary. What might be tolerable in middle management becomes untenable in executive leadership.

This was not, in the end, a tempest in a teapot but a case study on how a seemingly “soft” requirement — language — can harden into a legal and governance issue overnight.

And in employment law, those are precisely the issues that matter most.

Howard Levitt is senior partner of Levitt LLP, employment and labour lawyers with offices in Ontario and Alberta, and British Columbia. He practices employment law in eight provinces and is the author of six books, including the Law of Dismissal in Canada.

• Howard Levitt: Why fear of firing is more damaging than firing itself
• When seasonal hires look more like permanent employees, be prepared to pay

Small business owners are gripped by an insidious fear: the dread of terminating employees. I hear it virtually every time I speak to a new employer client.

It is a fear cloaked in legality, draped in potential confrontation and rationalized by uncertainty — yet it is quietly devouring profitability, corroding workplace culture and driving away the talent that sustains the enterprise. While employers deliberate, indecision accrues cost and every day of inaction compounds losses in revenue, morale and future opportunities.

The truth is uncomfortable: fear of firing is more damaging than firing itself. Retaining employees who underperform, undermine or demoralize the team is a silent, relentless drain on both finances and culture — and it is far more common than most employers and their HR departments admit.

Consider Sara, a receptionist at a boutique accounting firm. She routinely missed client calls, overlooked critical appointments and exasperated clients and colleagues.

The owner, immobilized by fear of legal ramifications, retained her. In six months, missed calls alone translated into more than $75,000 in lost revenue, not including the reputational damage that quietly eroded client loyalty. Morale among other staff began to fray as frustration simmered beneath the surface, and the firm’s productivity suffered quietly but measurably.

Then take Mike, a sales representative at a small hardware store. Chronically underperforming and openly resentful of procedural changes, he was tolerated out of fear of litigation.

The collateral damage was immediate: the store’s top-performing salesperson resigned in frustration, leaving the owner scrambling to fill the void. Lost sales, recruitment costs and the time invested in onboarding his replacement exceeded $45,000, yet the owner continued to cling to a false sense of security by keeping Mike on payroll.

Finally, consider Tom, a line manager at a small manufacturing company. He openly undermined decisions, created conflicts among staff and fostered a toxic environment. The employer, immobilized by apprehension over potential legal exposure, retained him.

Within a year, absenteeism surged, morale plummeted and productivity declined — conservatively estimated at a $100,000 diminution in output. Clients began noticing delays, deadlines slipped and the firm’s reputation eroded, all while the owner remained paralyzed.

These are not aberrations; they are emblematic of a pervasive malaise in small business management. The underlying pathology is fear: fear of litigation, fear of confrontation, fear of “making a mistake.” The paradox is stark: while the legal risks of termination are usually overstated, the costs of inaction are tangible and exponentially greater.

Why is termination so terrifying for owners? The answer is twofold.

First, the labyrinthine landscape of employment law looms large in the imagination. Owners worry about wrongful dismissal claims, human rights complaints and employment standards violations. These concerns are not ill-founded, but they are entirely manageable with proper documentation, contracts and process.

Second, emotional entanglement complicates judgment. Small business owners often perceive employees as extensions of a familial structure; firing someone feels deeply personal. Yet failing to act does far more harm — to your business, your top performers and ultimately the employee you refuse to let go.

The remedy is deceptively simple: preparation, meticulous documentation and unwavering consistency.

• Employment agreements should delineate roles, responsibilities, expectations and termination protocols with clarity.
• Performance records must be scrupulously maintained: missed targets, infractions and formal warnings must be documented. Evaluations must be hardheaded, putting employees in the worst category and warning of dismissal if they deserve it, regardless of how uncomfortable that may make a supervisor feel.
• Uniform policy enforcement protects against claims of inequity or favouritism.
• Professional, factual communication ensures the termination is unambiguous, respectful and legally defensible.

When these principles are rigorously applied, termination is no longer a perilous gamble; it becomes a strategic business maneuver.

Every day of hesitation amplifies the cost. Fear is expensive. Indecision is expensive. Retaining employees who do not belong? That is the most expensive misjudgment of all.

Business owners must recognize that decisive action is not punitive — it is protective. Termination, when executed correctly, is a calculated measure designed to safeguard the enterprise, reinforce standards and sustain a culture of accountability. Legal guidance ensures that this action is defensible, measured and compliant, transforming what initially feels risky into a prudent, strategic imperative.

Businesses are preserved not by inertia but by the courage to make difficult decisions. Firing when warranted is not only prudent — it is critical in protecting both the culture and profitability of the organization.

• When seasonal hires look more like permanent employees, be prepared to pay
• So your employees have started a union drive. Here's what you can and cannot say

In business, hesitation can be fatal. Decisive action, underpinned by sound legal principles, is invaluable. Those who delay, who cling to fear over judgment, invariably learn that their inaction has cost far more than any termination could.

Howard Levitt is senior partner of Levitt LLP, employment and labour lawyers with offices in Ontario and Alberta, and British Columbia. He practices employment law in eight provinces and is the author of six books, including the Law of Dismissal in Canada.