In December 2017, Ontario instituted a civil cause of action for employees who experience reprisals from their employers for providing information or assisting in certain other ways in regulatory or criminal investigations or proceedings involving contraventions of securities or commodity futures laws (whistleblowing).
The identical amendments to s. 121.5 of Ontario’s Securities Act and s. 54.1 of the Commodity Futures Act are wide in scope and protect “whistleblowers” as follows:
- The new civil cause of action may entitle the employee to reinstatement or to payment of two times the amount of any remuneration they were denied as part of the reprisal;
- Employees are protected against reprisals for providing cooperation, testimony, information or other assistance to regulators or law enforcement authorities or in investigations, or even for merely “[seeking] advice about providing information” or “[expressing] an intention to provide information” about a contravention;
- The protections extend to assistance to regulators such as the Ontario Securities Commission (OSC), the Investment Industry Regulatory Organization of Canada (IIROC), the Mutual Fund Dealers Association (MFDA), or law enforcement agencies;
- The employee need only “reasonably believe” the reported conduct is contrary to Ontario securities or commodity futures law or IIROC or MFDA regulations or by-laws: it is not necessary that misconduct be ultimately proven;
- Prohibited reprisals under the new provisions including termination, demotion, suspension, other penalties, threatening any such consequences, or intimidation or coercion of the employee; and
- The demands for compensation for reprisal may be pursued before an arbitrator under a collective agreement, in a civil proceeding before the Superior Court of Justice, or pursuant to other avenues such as private arbitration, if available.
The amendments add to existing provisions instituted in 2016 under Ontario’s Securities Act and the Commodity Futures Act which allow regulators to take action against employers who retaliate against whistleblowers, and which invalidate any term in an employment contract that prevents employees from whistleblowing.
As a result of these changes, employers are well advised to ensure that appropriate internal whistleblower policies and training are in place to minimize the risk of disgruntled employees alleging that they experienced reprisals. In particular, employers should be cognizant of whistleblower protections when disciplining or dismissing any employee who has been involved in any regulatory investigation or proceeding.