Employment & Labour Law 

We have reported before on the case of Wayne Talos and the Grand Erie District School Board. Mr. Talos was a teacher who chose to continue working past the age of 65, but was denied further benefit coverage due to his age.

Following a lengthy hearing, the Human Rights Tribunal ruled this month that the provision of the Ontario Human Rights Code which permits employers to cease benefit coverage at age 65 is unconstitutional because it violates the equality rights in the Canadian Charter of Rights and Freedoms.

During the hearing the Tribunal heard from various economists, actuaries and other expert witnesses on the sustainability of benefit plans if health, dental and life insurance benefits are to be extended to employees aged 65 and older. The Tribunal concluded that it is not “cost-prohibitive” to continue benefits. In other words, the Tribunal ruled that it is financially sustainable to include employees aged 65 and older in plans that provide health care, dental and modified life insurance benefits.

It remains to be seen whether the decision will be appealed. The Attorney General of Ontario had intervened in the case and submitted that the increased cost of providing benefits to older workers will either significantly increase the cost of benefits or, alternatively, will result in a significant reduction in overall benefits provided to all employees.

A remedy was not ordered by the Tribunal. Instead, the Tribunal ordered the parties to either engage in mediation or to return for a hearing on the remedial order.

The Tribunal assumed that 5 to10% of the School Board’s workforce is 65 or over when calculating the significance of the increased costs. One wonders whether more employees over age 65 will choose to work if benefits are now available, thereby further increasing the benefit costs.

We will update you with further information about this significant decision.

Wayne (Steve) Talos v. Grand Erie District School Board, 2018 HRTO 680

As you are aware, Bill 148 made substantial changes to the Employment Standards Act, 2000 (“ESA”) that took effect on January 1, 2018.  Among those changes was a new formula for calculating public holiday pay.  This new formula required employers to calculate public holiday pay based on the regular wages earned in the pay period before the public holiday, divided by the number of days the employee worked in that pay period.

In a surprising turn of events, the Ontario government announced on May 7, 2018 that it will be reviewing the public holiday provisions of the ESA. The Ministry of Labour will conduct this review in 2018 and interested parties can provide submissions on the Public Holiday Pay Review to exemptions.review@ontario.ca.

More surprising—the government has also enacted a new regulation, Ontario Regulation 375/18, which reinstates, on an interim basis, the old public holiday pay formula for all employers.  As a result, effective July 1, 2018, public holiday pay will be calculated under the old public holiday pay formula as follows:

Public holiday pay is equal to the total amount of the regular wages and vacation pay earned in the 4 weeks before the work week in which the public holiday occurred, divided by 20.

Ontario Regulation 375/18 is a temporary measure while the Public Holiday Pay Review occurs, which means the public holiday pay formula could change again after the Public Holiday Pay Review is complete.

To read Ontario Regulation 375/18, click here: https://www.ontario.ca/laws/regulation/r18375.

For employers who have updated their public holiday policies to reflect the new formula under Bill 148, you will need to revisit these updated policies (or simply revert to your old public holiday policies) in preparation for July 1, 2018. Additionally, employers who have implemented the new public holiday pay formula into their human resources information systems or payroll systems will need to ensure these systems are changed back to the old public holiday pay formula come July 1, 2018.

Start: February 14, 2018, 12:00 PM EST
End: February 14, 2018, 1:00 PM EST

This session is only available via webinar

2018 has arrived with a roar as workplaces across Canada grapple with significant changes to the country’s workplace laws.

Join us for a complimentary 1 hour webinar where we’ll highlight the changes you need to know about and identify the trends that we expect to impact your workplace in 2018.

Topics will include:

• A roundup of the big changes to Canada’s workplace legislation
• #MeToo – How to effectively deal with sexual harassment in today’s workplace
• The coming legalization of marijuana and its impact on the workplace
• Transgender in the workplace: a practical guide

Register now

CPD/CLE Accreditation

LSBC: This session will be registered for 1 hour of CPD credit with the Law Society of British Columbia.
LSO: This program is eligible for up to 1 Substantive Hour with the Law Society of Ontario.
Barreau du Québec: This program will allow participants to earn 1 CLE hour with the Barreau du Québec.

Questions

Please contact Carla Vasquez at carla.vasquez@dentons.com or +1 416 361 2377.

Dentons Canada LLP is committed to accessibility for persons with disabilities. Please contact us at toronto.events@dentons.com in advance of the event if you have any particular accommodation requirements. We will work with you to make appropriate arrangements.

A recent case from the Ontario Superior Court of Justice may cause some employers to reconsider the scope and application of their non-competition covenants. In Ceridian Dayforce Corporation v. Daniel Wright, 2017 ONSC 6763, the Plaintiff employer brought a summary judgment motion for a declaration that the non-compete clause in its former employee’s employment contract was binding and enforceable.

The Judge summarized the key provisions of the non-compete provisions as follows:

1. The non-competition period, defined as the “Restricted Period” means the period up to 12 months from the date the employee ceases to be employed by the Company as determined by the Company in its sole unfettered discretion, provided that the Company informs the Employee of the length of the period within 5 business days of the Employee ceasing to be employed by the Company.
2. The Employee shall not, “directly or indirectly provide services, in any capacity, whether as an employee, consultant, independent contractor, owner, or otherwise, to any person or entity that provides products or services or is otherwise engaged in any business competitive with the business carried on by the Company or any of its subsidiaries or affiliates at the time of his termination (a “Competitive Business”) within North America”.
3. The Employee shall not “be concerned with or interested in or lend money to, guarantee the debts or obligations of or permit his name to be used by any person or persons, firm, association, syndicate, company or corporation engaged in or concerned with or interested in any Competitive Business within North America”.
4. Nothing restricts the Employee from holding less than 1% of the issued and outstanding shares of any publicly traded corporation.
5. During the Restricted Period, the Company is to pay the Employee his or her base salary, less applicable deductions.

In striking the clause down, the Judge ruled that the non-compete was overly broad for a number of reasons, the most important being that it prevented the employee from providing services in any capacity to any competitive business. To make her point, the Judge noted that the clause, if upheld, would prevent the employee from working as a janitor for a competing business or starting a band in Mexico and being engaged as an independent contractor by a competitor to play at a staff retreat in Cancun. In the Judge’s view, this was a complete restraint of trade which went far beyond what was necessary to protect the Plaintiff employer’s proprietary interest. The fact that the prohibition stretched to include affiliate companies which were engaged in lines of business that were completely unrelated to the Plaintiff employer’s business and prevented the employee from holding 1% or more of the issued and outstanding shares of any publicly traded corporation was cited as additional protections which were unreasonable.

With respect to the clause’s temporal scope, the Judge ruled that the evidence did not support the need for a 12 month period. Moreover, the clause was ambiguous because it did not set the time period of the restriction until after the employee’s employment was terminated.

Lastly, it is important to note that none of the problems with the non-compete clause that were identified by the Judge were cured by the fact the company had intended to pay the employee his salary for the duration of the restricted period.

This decision serves as a good reminder to employers about the need to draft non-competition clauses as narrowly as possibly and tailor them to the job in question. As this case demonstrates, a blanket prohibition which blocks a departing employee from pursuing any activity with a competitor is unlikely to withstand judicial scrutiny.

In conjunction with its overhaul of the Employment Standards Act, 2000, the Ontario government has also published an updated version of the Employment Standards Poster. Employers must post the poster in the workplace in an area where it is likely to come to the attention of employees and provide a copy of the poster to its employees. As employment standards officers will no doubt be on the look-out for this poster, employers should ensure that they take steps to comply with this easy to spot obligation.

The new poster can be downloaded from the Ministry of Labour’s website at: https://www.labour.gov.on.ca/english/es/pubs/poster.php.

As we begin 2018, we bring you a review of 10 employment law cases that we thought were worth tweeting about in 2017.

1. Buchanan v. Introjunction Ltd, 2017 BSCS 1002 – Employee who was dismissed before actually starting work gets 6 weeks’ notice.
2. Brake v. PJ-M2R Restaurant Inc., 2017 ONCA 402 – Mitigation Madness! Employment income earned during “statutory entitlement period” and/or from “inferior position” may not be deductible from wrongful dismissal damages.
3. Wood v. Fred Deeley Imports Ltd., 2017 ONCA 158 – Another termination clause bites the dust! In order to contract out of the common law, employers must use clear and unambiguous language. An employer cannot fix an otherwise illegal and unenforceable termination clause through its post-termination conduct.
4. Amalgamated Transit Union, Local 113 v. Toronto Transit Commission, 2017 ONSC 2078 – Ontario Court allows the Toronto Transit Commission to implement random drug and alcohol testing.
5. Krishnamoorthy v. Olympus Canada Inc., 2017 ONCA 873 – Court of Appeal confirms that in an asset sale, a purchaser’s offer of employment constitutes sufficient consideration for changes in an employment contract – including the introduction of a termination provision.
6. McLeod v. 1274458 Ontario Inc., 2017 ONSC 4073 – Working Notice Doesn’t Work for Disabled Employees. Court rules that employers cannot provide working notice to employees on disability leave because they are incapable of working.
7. Lalonde v Sena Solid Waste Holdings Inc, 2017 ABQB 374 – Employer’s “shoot first ask questions later” approach to termination results in $75,000 in aggravated damages. Employers must conduct a thorough investigation which gives the employee a proper opportunity to present his/her side of the story.
8. British Columbia Human Rights Tribunal v. Schrenk, 2017 SCC 62 – The scope of human rights legislation is broad enough to protect employees who suffer discrimination from co-workers – even if the co-worker is employed by a different employer.
9. Bottiglia v Ottawa Catholic School Board, 2017 ONSC 2517 – Some helpful guidance on when an employer can request an independent medical examination! Where an employer has a reasonable and bona fide reason to question the adequacy and reliability of the information provided by its employee’s medical expert an IME will be warranted.
10. Papp v Stokes et al, 2017 ONSC 2357 – Employer’s negative reference does not trigger damages because it was substantially true and is covered by qualified privilege (so long as there is no proof of malice).

Stay tuned for details on our upcoming webinar where we highlight the employment and labour law trends to be prepared for in 2018!

The Ontario government has just passed the Bill 148 which amends the Employment Standards Act and the Labour Relations Act with a target effective date of January 1, 2018.  The Bill still needs to receive Royal Assent.

Key changes to the Employment Standards Act will include:

• Raising the general minimum wage to $14 per hour as of January 1, 2018 and $15 per hour as of January 1, 2019
• As of April 1, 2018 requiring the same rate of pay as paid to full-time employees for employees doing substantially the same kind of work including temporary help agency staff, casual, part time, temporary and seasonal workers
• Increasing the minimum vacation to three weeks per year after an employee has five years of service
• Increasing parental leave for birth mothers who have taken maternity leave to 61 weeks (from the current 35 weeks);  increasing parental leave for adoptive parents and fathers to 63 weeks (from the current 37 weeks)
• Extending the availability of personal emergency leave days to employers with under 50 employees
• Requiring the first two days per year of personal emergency leave to be paid with the remaining eight days unpaid
• Extending the leave of absence to 104 weeks for death of a child as a result of a crime to the death of a child for any reason
• Increasing the current 52 week leave of absence in the case of child disappearance as a result of a crime to 104 weeks
• Increasing family medical leave from 8 weeks to 28 weeks
• Adding a new domestic violence/sexual violence leave of absence ; up to 10 days off and up to 15 weeks of leave per year will be available (first five days to be paid) where an employee or an employee’s child experiences domestic or sexual violence and needs time off for medical attention, counselling, to relocate, for legal assistance or law enforcement reasons

There are numerous changes that will come into effect on January 1, 2019 concerning scheduling including the following:

• If a shift is cancelled within 48 hours of its start, employees will be paid 3 hours of pay
• Employees can refuse a shift without repercussion if they receive less than 96 hours of notice
• On-call employees who are either not called into work or work fewer than three hours must be paid three hours of their regular pay rate

The Ministry of Labour has announced that it will hire up to 175 additional Employment Standards Officers to enforce the changes.

Key changes to the Labour Relations Act will include:

• Card-based union certification for the building services industry, the home care and community services industry and the temporary help agency industry
• Allowing unions to access employee lists and certain contact information provided the union can demonstrate that it has the support of 20% of employees in the proposed bargaining unit.
• OLRB can conduct votes outside the workplace, including electronically and by telephone
• Employees in a bargaining unit may only be disciplined or discharged for just cause in the period between certification and the date on which a first contract is entered into, and during the period between the date the employees are in a legal strike or lock-out position and the date a new collective agreement is entered into (or the date on which the union no longer represents the employees)
• Maximum fines will increase to $5,000 for individuals and $100,000 for organizations (formerly these fines were $2,000 for individuals and $25,000 for organizations).

In what can only be described as a victory for common sense, an arbitrator recently upheld the discharge of a 27 year employee who was found responsible for spiking the office water cooler with chlorine bleach.

On September 12, 2011, an employee reported to his supervisor that the water from the office water cooler had a “strong chlorine smell” and a “very hard taste”. In reviewing the surveillance video on the day in question, the Grievor is seen exiting his office with an empty water cooler jug, entering the chemical storage room and then leaving the chemical storage room and walking back to his office with a chlorine bleach jug in his hand. As he re-enters his office, the Grievor is seen placing his hand on the cap of the chlorine bleach jug. The Grievor later exits his office with the chlorine bleach jug in his hand. He ultimately returns to his office with a full jug of water for the cooler.

When initially confronted about the situation, the Grievor denied that he had caused the contamination of the water cooler but volunteered no information about why he had obtained the bleach from the chemical storage room. However, in his subsequent meetings with investigators and through his testimony at the hearing, the Grievor’s story evolved to the point where he alleged that he had poured the bleach into two cups – one to be used later in the day to clean some shelves in his office and the other to pour into a dumpster located outside his office in order to kill its odour.

At the hearing, the Grievor’s supervisor rejected the Grievor’s explanation noting that it made no sense for the Grievor to clean the shelves since they were not dirty and they were being dismantled to be taken out of the building. He further testified that he never saw the Grievor use a cup to pour chlorine breach into the dumpster.

In his decision, the Arbitrator found that the Grievor’s testimony lacked credibility. In the Arbitrator’s view, “the Grievor’s many actions, as witnessed on the video and as described in his testimony, when taken together simply defy logic and do not make sense”. As a result, the Arbitrator ruled that it was more likely than not that he was the cause of the chlorine bleach contamination of the office drinking water cooler. With respect to penalty, the Arbitrator held that “…the level of mistruths and evasiveness displayed by the employee, as well as his failure to take responsibility for his actions, irreparably harmed the employee-employer relationship.” There was therefore no basis for the Arbitrator to interfere with the Employer’s decision to dismiss the Grievor for cause.

This case is a good reminder of the importance that credibility will play when an adjudicator is asked to determine which version of events is more likely to have occurred. In conducting investigations, employers should ensure that they take detailed statements from those involved so as to “nail down” the alleged offender’s story. Should the alleged offender later change his or her story, the employer will be in a good position to impeach the employee’s credibility.

Knox v. Treasury Board (Canadian Food Inspection Agency), 2017 PSLREB 40.

A helpful change to Ontario pension law has come into effect, coincident with the arrival of patio season. It is a refreshing tonic that will help administrators deal with pension plan members who are difficult to locate.

Until now, the obligation to send pension statements to former and retired plan members has been an absolute legal requirement. The fact that an administrator did not have correct (or any) address information, did not relieve the administrator from the legal obligation to send pension statements.  That has changed.

The Ontario Superintendent of Financial Services now has the authority to waive the administrator’s legal obligation to provide a pension statement that would otherwise have to be sent to an unlocatable member.  This is not automatic.  The administrator has to write to the Superintendent and demonstrate that the inactive member should be considered “missing”.

A message to pension plan administrators: please take this seriously.  Do not assume that there will be no repercussions if you simply don’t send statements to unlocatable members.  Have any of the biennial statements sent out this spring to former and retired members been returned to sender?  Find out who those people are, and write to the Superintendent now to request that he waive the pension statement obligation for those individuals.  Doing so will demonstrate that you understand and care about compliance with Ontario pension law.

This welcome change to Ontario pension law does not solve the problem of what to do with the payments owed to unlocatable members.  The Ontario government has promised to address that challenge.  In its April 2017 Budget the government stated that it was considering initiatives such as the possible establishment of a public registry where employers or administrators could post information regarding missing beneficiaries and individuals could search for missing benefits.  There may be more good news on this front in the coming months.

Yesterday the Ontario Deputy Superintendent of Pensions released a formal statement that included the comment:  “these are interesting times in the pension sector.”  How true.

Many long-anticipated improvements to Ontario pension legislation, regulation and policies are finally coming into force.  The pension regulator will have more specific, helpful powers to target non-compliance issues.  Plan sponsors will have more choices in the design of pension plans, especially in the defined contribution sphere.  And many employers who sponsor defined benefit pension plans will be pleased by this morning’s Ontario government announcement about an entirely new framework for funding defined benefit pension plans, which will come into effect “in the coming weeks”.

We have written about some of these promised changes in prior posts (here and here).  We will be providing more details and strategic suggestions about these interesting developments, in future articles.  In the meantime, you can find information about this this morning’s announcement by the Ontario government here.

Please contact a member of Dentons’ Pensions and Benefits group for information and advice about how these significant changes will affect your business.