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Ontario Jury Awards Ex-Employee $1.4 Million for Mistreatment by Former Manager

In a cautionary tale for employers, a jury in Windsor, Ontario awarded $1.4 million in damages to a former Wal-Mart employee who alleged that she had been constructively dismissed after being subjected to intentional infliction of mental suffering by her former manager.

The jury award included $1.2 million in punitive damages and damages for mental distress against the employer, and an additional $250,000.00 in punitive damages and damages for mental distress against the manager. The former employee established that the manager had punched her on the arm on two occasions, and had subjected her to profane and insulting mental abuse. Those allegations were that the manager had called the employee “a [expletive] idiot” in front of her co-workers, and that the manager had made the former employee count skids in front of co-workers in order to prove to him that she could accurately count.

A link to the Windsor Star article on the court decision is attached: http://blogs.windsorstar.com/2012/10/10/walmart-must-pay-1-4-million-for-mistreating-employee/

The employer has already appealed the jury’s verdict to the Ontario Court of Appeal, calling the award “…wholly disproportionate and/or shockingly unreasonable.” This is not surprising, given that this award would set a new high-water mark for punitive damages in a wrongful dismissal case. (It appears that the jury may have based its award roughly on the amount that the former employee, who is currently 42 years of age, would have earned had she remained employed in her position until age 65. This figure had been raised by the former employee’s counsel in his closing submissions, although the trial judge had specifically instructed the jury not to consider that figure.)

Although, in our view, it is likely that the jury award will be set aside or reduced on appeal, this decision does underscore how important it is for employers to have a clear policy against incidents of workplace violence and harassment and to take prompt action to address such incidents when potential allegations of this nature come to light.

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Ontario Jury Awards Ex-Employee $1.4 Million for Mistreatment by Former Manager

Company Director Jailed for Ontario Employment Standards Violations

A director of six Ontario companies has been sentenced to 90 days in jail after those companies systematically ignored orders to pay wages issued by the Ontario Ministry of Labour. The Ontario Employment Standards Act, 2000 does allow individuals to be fined up to $50,000.00 and/or to be imprisoned for up to 12 months if convicted of an offence, although the imposition of jail time for employment standards violations has been exceedingly rare.

However, the facts involved in this situation were particularly egregious. Sixty-one complaints had been filed by employees of the six companies for unpaid wages, all of which were substantiated. Over a period of approximately two years, 113 separate orders to pay had been issued against the six companies and the director to pay some $125,000.00 in unpaid wages. The six companies and the director failed to comply with any of these orders to pay. In addition to imposing the jail time, the Ontario Court of Justice imposed fines of $280,000.00 plus the required 25% Victim Fine Surcharge, for a total fine of $350,000.00. Although company directors that are convicted of employment standards offences are still most likely to be fined if convicted of offences under the Act, Ministry of Labour prosecutors will certainly use this decision as a strong deterrent against employers – and directors – that systematically flout their obligations.

See the Ontario Ministry of Labour press release – http://news.ontario.ca/mol/en/2012/11/director-jailed-and-companies-fined-after-failing-to-pay-employees.html

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Company Director Jailed for Ontario Employment Standards Violations

Ontario Announces Summer Safety Inspection Blitz Of Crane Safety And Surface Mines And Quarries

The Ontario Ministry of Labour recently announced a summer safety inspection blitz targeting construction sites with mobile and tower cranes, as well as surface mines and quarries, as part of its Safe at Work Ontario enforcement strategy.

With respect to the inspection blitz of construction sites, the Ministry of Labour has announced that its inspectors will be particularly focused on ensuring that: (i) cranes have adequate access and fall arrest equipment, (ii) the crane operator is maintaining minimum required distances from energized power lines, (iii) crane operator log books and manuals are being properly kept and maintained; (iv) crane operators are appropriately certified, and (v) there are no issues with the structural, mechanical or foundational integrity of the mobile or tower cranes or their safety systems.

With respect to surface mines and quarries, the Ministry of Labour has indicated its intention to target pits and quarries that have not been previously inspected, or where compliance issues have been previously identified. As part of the safety blitz, MOL inspectors will be focusing on: (i) the adequacy and safe use of traffic control procedures, including appropriate training and signage, (ii) the condition of vehicle braking, steering, lighting and other safety components on mine or quarry vehicles, and (iii) confirmation that vehicle safety components are being tested, and that testing records are being maintained, as required by the Regulation for Mines and Mining Plants, R.R.O. 1990, Reg. 854.

For more information, check out the Ministry of Labour’s press release: http://news.ontario.ca/mol/en/2012/07/summer-safety-inspections-target-workplace-hazards.html.

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Ontario Announces Summer Safety Inspection Blitz Of Crane Safety And Surface Mines And Quarries

Preventing Heat Stress In The Workplace

As many places in Canada are sweltering under a summer heat wave, employers should assess the risk of heat exposure in their workplace and, where appropriate, develop and implement workplace policies to reduce the risk of illness or injuries relating to heat stress. Most Canadian provinces have enacted specific regulatory requirements to combat thermal stress arising from extreme heat or cold. However, even in those provinces where no specific regulatory requirement exists relating to thermal stress (for example, like in Ontario and Alberta), an employer still has an obligation to prevent heat stress in the workplace as part of its general duty to protect the health and safety of its workers.

Although a number of manufacturing activities can expose workers to heat year-round, incidents of workplace heat exposure and heat stress clearly increase in the summer, particularly where employees are engaged in outdoor work activities. If there is a risk of excess heat exposure in the workplace, an employer is well-advised to take the following steps to prevent heat stress:

  • Train supervisors and workers to recognize early signs and symptoms of heat stress in themselves and their co-workers, including excessive sweating, dizziness and nausea
  • Where working in hot environments, arrange work schedules to permit employees to become acclimatized to heat
  • Provide adequate supervision and don’t allow individuals to work alone in conditions where heat stress is a legitimate risk
  • Determine appropriate work-rest cycles that allow time for workers to cool down
  • Provide shaded or well-ventilated areas for breaks and rests and, where appropriate, reduce temperature and humidity through air conditioning
  • Schedule more physically demanding work at cooler times of the day and, where possible, rotate work activities to reduce heat exposure
  • Make cool drinking water available and remind workers to drink water regularly to stay hydrated (i.e. approximately 250 mL of water every 20 minutes)
  • When working outdoors, remind workers to wear light-coloured, loose-fitting clothing that is breathable
  • Encourage workers to wear long-sleeved shirts and pants and keep their heads covered to reduce direct exposure to the sun when working outdoors
  • If you suspect that a worker is suffering from heat stress, move him or her to a cool, shaded area, provide the worker with water and appropriate first aid

There are a number of helpful on-line resources to help employers develop workplace policies and programs to combat heat stress in the workplace. For more information on preventing heat stress in the workplace, employers are encouraged to take a look at the following publications:

Ontario Ministry of Labour – Heat Stress Guideline – http://www.labour.gov.on.ca/english/hs/pubs/gl_heat.php

Ontario WSIB – Guide to Preventing Heat Stress – http://www.wsib.on.ca/files/Content/PreventionHSGuide/HeatStressGuide.pdf

WorkSafe Alberta – Best Practices for Working Safety in the Heat and Cold – http://www.employment.alberta.ca/documents/WHS/WHS-PUB_gs006.pdf

WorkSafe BC – Preventing Heat Stress at Work – http://www.worksafebc.com/publications/health_and_safety/by_topic/assets/pdf/heat_stress.pdf

Québec – CSST – Guide de prévention des coups de chaleur – http://www.csst.qc.ca/publications/200/Pages/dc_200_16184.aspx

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Preventing Heat Stress In The Workplace

Overtime Class Actions: Ontario Court of Appeal Releases Trilogy of Judgments

Earlier today, the Ontario Court of Appeal released its highly anticipated trilogy of judgments in the high-profile overtime class action cases of Fulawka v. Bank of Nova Scotia, Fresco v. Canadian Imperial Bank of Commerce and McCracken v. Canadian National Railway Company.  Previously, the lower courts had certified the overtime class actions against the Bank of Nova Scotia and CN Railway but had refused to certify the class action against CIBC.

The three appeals dealt with the first-level “certification” issue of whether a class action was an appropriate process for resolving these overtime claims.

Ultimately, the Ontario Court of Appeal decided to allow the class actions against the Bank of Nova Scotia and CIBC to proceed, while refusing to certify the class action as against CN Railway.  In reaching these different outcomes, the Court drew a distinction between the alleged theory of liability for unpaid overtime advanced against the two banks (breach of a policy) and the theory advanced against CN Railway (misclassification of a group of employees as managers) in assessing whether or not there was a sufficient commonality of interest among the proposed class members to warrant the overtime claims proceeding as a class action.

In the Bank of Nova Scotia and CIBC decisions, both groups of employees alleged that the banks had implemented overtime policies that imposed more restrictive conditions on receiving overtime pay than those contained in the Canada Labour Code or as provided for under the express or implied terms of individual employment contracts.  In particular, the claimants alleged that the overtime policies implemented by the banks created institutional or systemic impediments to overtime pay claims.  The Court found that the terms of these overtime policies could support a conclusion before a common issues trial judge that all uncompensated overtime hours were required or permitted by the banks.

The Court recognized that, even if individual issues concerning each employee’s overtime entitlement (if any) would still remain after the common issues trial, there was sufficient commonality among class members in the CIBC and Bank of Nova Scotia cases that would allow elements of liability to be determined on a class-wide basis.  In the CIBC decision, for example, the Court wrote:

“The terms and conditions in CIBC’s overtime policies governing overtime compensation, and the accompanying standard forms that class members submit when requesting such compensation, apply to all class members regardless of their own particular job responsibilities or job titles.  To the extent that the policies and record-keeping systems of CIBC are alleged to fall short of CIBC’s duties to class members, or to constitute a breach of class members’ contracts of employment, these elements of liability can be determined on a class-wide basis and do not depend on individual findings of fact.”

In contrast, the action against CN Railway alleged that the company had misclassified a group of First Line Supervisors as managerial employees, thereby exempting those individuals from being eligible for overtime pay under the Canada Labour Code.  The Court held that, for the class action to proceed, the employees had to establish that the job functions and duties of the various employees were sufficiently similar so that the “misclassification” issue could be resolved without considering the individual circumstances of class members.

Instead, the Court concluded that there was a wide range of job functions among First Line Supervisors at CN Railway, depending on which job title they held, where they worked, and whether the class members worked alongside other First Line Supervisors or higher-level managers.  The Court also found that the use of the term “First Line Supervisors” to describe the class created a “false impression of commonality” given that class members had different job responsibilities, a variety of job titles, and worked in a variety of workplaces with different reporting structures and different sizes of workforce.  In short, the Court decided that a trial judge could make no determination about whether or not a First Line Supervisor was in fact a managerial employee or a non-managerial employee without resorting to the evidence of individual employees in the proposed class, as opposed to resolving that issue once for the entire class.  As a result, there was not sufficient commonality among class members to permit the class action to proceed.

Employers should review their overtime policies in light of the court’s decisions, which show the importance of the language used in those policies.

A link to each of the decisions in the trilogy is posted below:

•  Fulawka v. Bank of Nova Scotiahttp://www.ontariocourts.ca/decisions/2012/2012ONCA0443.pdf

•  Fresco v. CIBChttp://www.ontariocourts.ca/decisions/2012/2012ONCA0444.pdf

•  McCracken v. CN Railwayhttp://www.ontariocourts.ca/decisions/2012/2012ONCA0445.pdf

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Overtime Class Actions: Ontario Court of Appeal Releases Trilogy of Judgments