Arbitration clause disputes are heard by arbitrators, not courts, with rare exceptions

The Ontario Court of Appeal has confirmed that arbitration clauses in employment agreements are, in most cases, an effective means of referring a dispute to arbitration as opposed to being determined in civil court.

An arbitration clause is an agreement between contracting parties that certain disputes will be resolved by an arbitrator, not a civil court. Arbitration proceedings are often faster, less costly and more private than those in a court. If an agreement contains an arbitration clause and one party brings a civil claim, the defendant may ask the court to stay the claim and order the matter to arbitration instead.

Two years ago, the Supreme Court of Canada released its decision Uber Technologies Inc. v Heller, 2020 SCC 16, which some have interpreted as limiting the enforceability of arbitration clauses, particularly in employment contracts or independent contractor agreements. However, the Ontario Court of Appeal’s recent decision Irwin v Protiviti, 2022 ONCA 533 confirms that (1) the exception articulated in Uber is a rare exception to the general rule that challenges to arbitration clauses should be referred to the arbitrator, and (2) most arbitration clauses can be relied upon to refer a dispute to arbitration, even in the face of arguments that the clause is not enforceable.