Keeping the faith, for now: the Supreme Court of Canada
maintains the status quo on the duty of good faith, but leaves the
door ajar for future claims.
As an employer in Canada, you may have received a demand letter
from a dismissed employee alleging that the company has breached a
‘duty of good faith'. Generally speaking these
claims don't go anywhere because the law in Canada is very
clear that there is no ‘duty of good faith' that
pervades the entire employment relationship. Our courts have
recognized that an employer must act in good faith in the manner in
which it dismisses an employee, for example by treating them with
dignity, respect, and honesty. Beyond that, an employer does
not have to consider an employee's best interests when making
decisions about their employment, for example, around incentive
compensation, or position changes, or restructuring. That
being said, the law on this area is constantly developing and it is
not hard to imagine a duty of
