There have been remarkable advances in good faith and fair dealing requirements in the common law of individual employment in Canada since the early 1990s. However, these advances have been subject to the paradoxical limitation that an employer’s duty of good faith and fair dealing does not arise until the employer has terminated or repudiated the employment contract. This article contends that, despite the unwillingness of the Supreme Court of Canada to recognize that employers have a duty of good faith and fair dealing throughout the life of the employment contract, the essential requirements that would be imposed by such a duty can be found under the guise of other legal obligations placed on employers. The paper first defines the concept of an implied contractual duty of good faith, considering what this duty might look like in the employment relationship. It then traces the origins and development of the duty of good faith and fair dealing in the manner of dismissal. It next describes the various other legal duties and requirements that operate similarly to a duty of good faith during the course of employment, comparing such protections with those provided by the requirement of good faith and fair dealing in the manner of dismissal. It concludes with a brief discussion of the potential legal and policy implications of extending an employers’ duty of good faith and fair dealing throughout the employment relationship.
Banks, Kevin, Progress and Paradox: The Remarkable Yet Limited Advance of Employer Good Faith Duties in Canadian Common Law (October 21, 2011). 32 Comparative Labour Law and Policy Journal 547-592 (2011).