Arbitration Clause Disputes Are Heard by Arbitrators, Not Courts

Arbitration Clause Disputes Are Heard by Arbitrators, Not Courts, With Rare Exceptions

The Ontario Court of Appeal has reaffirmed that arbitration clauses in employment agreements are generally effective and enforceable—meaning that arbitrators, not courts, are the proper forum to resolve related disputes.

What Is an Arbitration Clause?

An arbitration clause is a contractual provision stating that certain disputes will be resolved through arbitration instead of civil court. Arbitration is often:

• Faster
• Less costly
• More private

If one party ignores the clause and files a lawsuit, the other party can ask the court to stay the claim and refer the matter to arbitration.

Uber v Heller and the Exception

The 2020 Supreme Court of Canada decision in Uber Technologies Inc. v Heller, 2020 SCC 16, led some to believe that arbitration clauses in employment contracts might be broadly unenforceable. However, the Ontario Court of Appeal’s ruling in Irwin v Protiviti, 2022 ONCA 533, clarified that:

1. Uber created a narrow exception to the general rule.
2. Most arbitration clauses remain valid and enforceable, even if challenged.

This decision underscores the continued strength of arbitration clauses in employment and contractor agreements—except in exceptional cases.

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