In the 2001 case of McKinley v. B.C. Tel, the Supreme Court of Canada ruled that a contextual approach is required in order to determine whether there is just cause for termination of employment.   A recent wrongful dismissal case involving receipt of pornographic material illustrates how the contextual approach will be applied by courts.

In February 2013, the Court of Appeal of New Brunswick upheld a lower court finding in the case of Asurion Canada v. Brown and Cormier,  to the effect that dismissal without notice was a disproportionately severe penalty for receiving pornographic emails at work.  At the time of termination, Cormier had been with Asurion for 8 years and was a call centre supervisor.  Brown was employed by Asurion for 9 years and was vendor payables specialist.  Both men had a good employment history with the company.  Both men, unfortunately, also had a mutual friend who liked to send them pornographic emails.

During the period from mid May to mid July 2010, Cormier and Brown were sent over a dozen unsolicited emails from their friend.  The emails were promptly sent to home email accounts and deleted.  They were not shared with anyone at work. When Asurion became aware of the emails in July as a result of its network monitoring system, both men were dismissed immediately due to breach of the company’s policies and breach of trust.

While the company did have a policy which prohibited “accessing, transmitting, receiving or storing discriminatory, profane, harassing or defamatory information”, the court found that the policy was not reasonable given that: (i) ”receiving” information does not involve a positive act; and (ii) the emails in question were unsolicited.  More importantly, the court confirmed that the response of the company was not proportionate to the actions of the employees.  In particular, these longstanding employees had unblemished records, none of the emails were shared with fellow employees, and the images attached to the emails fell within the category of “perfectly legal adult pornography” and were not in violation of the Criminal Code of Canada.

Asurion had an employee handbook with a comprehensive Computer Use and Harassment policy.  The company’s employees were required to read the company’s policies and there was some suggestion that they were reminded of the Computer Use policy each time that they logged onto their work computers.  The company went even further, and used a network monitoring system in order to ensure that the policies were being complied with.  Ultimately it was all for naught, as the policy was found to be unreasonable and the application of it was disproportionately severe when viewed through the lens of the employees’ years of service and specific actions or inactions in the case at hand.

This recent decision serves as a good reminder that any time a termination for cause is being considered, the employer should consider not just the offending actions of the employee, but the other relevant circumstances of the employee’s employment.

Asurion Canada Inc. v. Brown and Cormier, 2013 NBCA 13 (CanLII)

In a March 2013 decision that is likely to be challenged in the courts, the Ontario Human Rights Tribunal has ordered the reinstatement of an employee a decade after she went on disability leave, together with loss of wages from June 2003 until the date of reinstatement.

In a 2012 decision in  Fair v. Hamilton-Wentworth District School Board, adjudicator Joachim found that the respondent school board had discriminated against the employee by failing to accommodate her disability.  In particular, in 2001 she developed an anxiety disorder as a result of the highly stressful nature of her job, and went on long-term disability.  She was subsequently assessed as capable of gainful employment in 2004.  From mid 2003 onwards however, the school board failed to take any steps to offer her available alternative work, even though similar jobs were advertised and the employee underwent job hardening in positions for which the employer was seeking employees.

In March 2013, adjudicator Joachim rendered her decision in relation to the remedy for this case of discrimination.  She found that because: (i) the employee had commenced her initial complaint with the Ontario Human Rights Commission only 4 months after her employment was terminated; (ii) the delay was largely at the hands of the Commission; and (iii) the employee had confirmed that she was seeking reinstatement when her application was subsequently filed with the Tribunal, there was no good reason to not order reinstatement due to the passage of time.

As a result, the employer was ordered to reinstate the employee despite her absence from work for almost a decade.  In addition, the employer was ordered to pay the employee’s lost wages, benefits, expenses and pension contributions over that period of time, which amounted to over $400,000 (subject to any employment insurance and related deductions).  Finally, adjudicator Joachim awarded the Applicant $30,000 as compensation for the injury to her dignity, feelings and self-respect.

Despite the likelihood of an appeal, this is an important decision as it illustrates the potential liability associated with a failure to return an employee to work after his or her disability leave.

Hamilton-Wentworth District School Board, 2013 HRTO 440 (CanLII)

On March 5, 2013, the Ontario government introduced new legislation which, if passed, would create three new job-protected leaves.

The Employment Standards Amendment Act (Leaves to Help Families), 2013, proposes new leaves that build on the existing Family Medical Leave under the ESA.  They are as follows:

Family Caregiver Leave - up to 8 weeks of unpaid leave for employees to provide care and support to a family member with a serious medical condition.

Critically Ill Child Care Leave – up to 37 weeks of upaid leave to provide care to a critically ill child.

Crime-Related Child Death and Disappearance Leave - up to 52 weeks of unpaid leave for parents of a missing child and up to 104 weeks of unpaid leave for parents of a child that has died as a result of a crime.

If passed, the leaves would allow parents and other family caregivers to provide care and support for loved ones without fear of losing their jobs.  These leaves are in addition to the current Family Medical Leave, which is available when a family member has a serious medical condition with a significant risk of death occurring within 26 weeks.  A doctor’s note would be required for the Family Caregiver Leave and the Critically Ill Child Care Leave.

Complementing the new federal Helping Families in Need Act, employees covered by the Critically Ill Child Care Leave and the Crime-Related Child Death and Disappearance Leave would be eligible to apply for federal Employment Insurance benefits.

The Ontario’s government’s news release and “backgrounder” may be accessed here.

Did you know that the Ontario Ministry of Labour has a Q&A on how to deal with natural disasters in the workplace?

The Q&A, which can be found at the link listed below, covers issues such as whether or not an employee can be forced to take vacation days in the event of a natural disaster which prohibits him or her from working, or whether an employee must be paid if he or she is told to not come to work during the disaster.

Apart from basic issues covered in the Q&A, there are a number of other things to be aware of in the event of a natural disaster.  The Emergency Management Statute Law Amendment Act, 2006 (Ontario) permits the Premier and Cabinet to introduce legislation intended to govern emergencies such as natural disasters.  In addition, the Employment Standards Act, 2000 (Ontario)  provides for unpaid emergency leave for declared emergencies such as natural disasters, which is different than the standard emergency leave to deal with an ill or injured family member.

While an employer may not wish its employees to come to work in the event of a natural disaster, there may also be situations where certain employees are in fact required to work precisely because of the natural disaster, even if the workplace is under quarantine.  The ESA specifically permits certain employees to work in those situations, if their skills are required due to an emergency.  Likewise, although employees may rely on the Occupational Health & Safety Act (Ontario) (“OHSA”) to refuse to work if they are concerned that the condition of their workplace may jeopardize their health or safety, exemptions to OHSA require certain essential employees to work notwithstanding those conditions.

In addition to the above, there are a number of other pieces of provincial and federal legislation which work together to answer some of the key questions about how to deal with a natural disaster in the workplace.  Whether that disaster relates to health issues (eg. SARS, H1N1), loss of the workplace premises or something else, this combined legislation will help employers determine the appropriate response to disasters, and it is recommended that employers be proactive about understanding their obligations so that they are prepared in the event that disaster strikes.

To access the Ministry of Labour’s Q&A, click here.  For more information about all of the workplace issues involved in the event of a natural disaster, a more thorough discussion can be found here.

Although human resources professionals are not always recognized for their efforts during a corporate acquisition, the work which they do behind the scenes can often make the difference between an acquisition succeeding or failing.  The following is a brief summary of key issues for HR professionals to stay on top of, long before an acquisition is ever contemplated, during the due diligence phase and right through to closing.

There are two types of transactions which can result in the purchase and sale of a business – a share purchase and an asset purchase.  In a share purchase, the corporate identity of the target company does not change and as a result, the employees remain employed by the same purchaser after closing.  Unless new employment agreements are negotiated with the purchaser, the employment terms and conditions of those employees will not change on closing.  In an asset purchase however, only certain assets of the target company are purchased and the employees are therefore generally terminated by the target company unless they agree to accept new employment with the purchaser.

Keeping Your House in Order:

All too often, proposed acquisitions fall through after the purchaser becomes aware of potential employee liabilities which it will have to assume in the event of an acquisition.  As an HR professional, you can assist with minimizing those liabilities long before an acquisition is being contemplated, by ensuring that: (i) well-drafted employment agreements are properly entered into; (ii) the company is protected with any necessary confidentiality, intellectual property and restrictive covenant agreements; (iii) there are no significant wages, vacation pay and overtime pay accruals; (iv) employee claims and complaints are kept to a minimum; and (v) mandatory statutory obligations are complied with (eg. WSIB registration; compliance with the Occupational Health and Safety Act; compliance with the Pay Equity Act).  When potential employment liabilities are kept to a minimum, it greatly reduces the risk of a purchaser walking away from a deal due to the added costs of correcting the liabilities.

Due Diligence:

HR professionals should be aware of the fact that even in an asset purchase, the Employment Standards Act, 2000 contains successor employer provisions.  In particular, section 9 of the ESA states that if a purchaser hires an employee of a vendor within 13 weeks of closing, the purchaser will be deemed to have taken on the employee with all of his or her prior years of service with the vendor.  Therefore, although the inclination may be to think that the purchaser in an asset deal can “fix” employment problems hand-in-hand with the hiring of employees on closing, sometimes employees will balk at going to a new employer if they are not being hired on similar or better terms to those which governed their employment with the vendor.  In this regard, it is often helpful for the vendor to work with the purchaser during the due diligence phase in order to determine who will be provided with offers of new employment and what the new and continuing terms of employment should be.

HR professionals in Ontario should also be aware of the fact that the Personal Information Protection and Electronic Documents Act (PIPEDA) does not yet have a business transaction exemption.  Although employee personal information is not generally caught under PIPEDA, it can be subject to PIPEDA when employee personal information is being collected, used or disclosed for commercial purposes such as an acquisition.  In order to ensure that there are no personal information breaches in connection with the acquisition of a company, if you work for the vendor it is wise to get the employees to sign a consent to the disclosure of their personal information at the time that they are first hired, as to do so in the midst of a transaction can tip employees off before the transaction becomes publicly known.  Whether or not the employees have signed consents at the time of hire, it is also wise for the vendor and the purchaser to enter into confidentiality agreements with respect to employee personal information which may be disclosed in relation to the transaction.

Closing:

As the closing of the transaction approaches, it is particularly important for HR professionals for both the vendor and the purchaser to try to work together to determine such issues as who will take responsibility for accrued vacation, whether releases will be sought from employees who are part of an asset purchase, whether and what type of new employment agreements will be offered to those employees who are remaining on, and ensuring that employees who are not remaining on are properly terminated at or prior to closing.  As well, there is often a need for certain key employees to remain on for a limited period to assist with transition work, and thought often needs to be given to whether those employees should be provided with a special retention bonus agreement or whether the expectation is that they will simply work out their notice of termination period doing transition work.

As always, it is important for HR professionals to obtain legal advice from an employment law specialist in conjunction with the above steps.  Together, they can make the difference between a difficult acquisition and a successful one.

The Ontario Ministry of Labour has announced that it will focus its proactive  inspections for 2012-2013 on workplaces where there is a history of employment standards violations, where young and/or vulnerable workers are employed, and/or where large or increasing portions of the Ontario workplace are employed.

Among the specific sectors identified for targeted proactive workplace inspections in the coming year, are the following:

• auto mechanics
• building services, including security, parking, cleaning and food services
• car dealerships
• fast food restaurant franchises
• gas stations
• hotel/hospitality
• private schools
• temporary help agencies

As always, it is a good practice to be prepared for any surprise workplace inspections which may come the way of your business.  For further information on how best to prepare, please contact FMC Law’s employment and labour group.

Are large punitive damages awards in wrongful dismissal coming back?  Looking at the trial court’s decision in the case of Pate v. Galway-Cavendish and Harvey (Townships), which is currently under appeal, one wonders.

Mr. Pate was a 9+ year employee at the Townships, who was terminated for cause due to his alleged non-remittance of building permit fees.  When he refused to resign (after being given no details of the allegations against him), he was dismissed and the matter was reported to the police.  In part due to the allegations against him and the ensuing criminal trial, Mr. Pate’s marriage and his side business with his wife both failed.  In addition, he was unable to re-establish a career as a municipal official.

Mr. Pate was subsequently acquitted, and it was determined by the trial judge that the employer had failed to disclose key information to the Crown which would have resulted in no charges having been laid in the first place.  The trial judge felt that the employer’s conduct merited relief in the form of a punitive damages award, due to the fact that damages for wrongful dismissal could not adequately address the fact that Mr. Pate’s career was effectively destroyed due to the allegations.  However due to the principle of proportionality, the trial judge awarded Mr. Pate only $25,000 in punitive damages.  The Ontario Court of Appeal subsequently overturned that decision and ordered that a new trial be conducted with respect to the quantum of punitive damages and another issue.

With reference to the damage caused to Mr. Pate as well as the fact that both the criminal proceedings and the wrongful dismissal trial took years to be dealt with, on the second time around the trial judge took full advantage of the Court of Appeal’s open invitation to punish the employer for its conduct, and increased the punitive damages award from $25,000 to $550,000.

While the matter is under appeal once again and it may be that the $550,000 was excessive, the Court of Appeal’s unusual invitation to the trial judge to reassess punitive damages at a higher amount makes it clear that our province’s highest court is not averse to punishing employers whose conduct is deserving of signficant punishment.

Pate Estate v. Galway-Cavendish and Harvey (Townships), 2011 ONSC 6620 (CanLII)

An employee’s guide dog causes a severe allergic reaction for co-workers.  A religious employer requires employees to sign a faith-based code of conduct as a term of their employment. These are examples of cases where competing human rights may exist in the workplace.

In order to assist organizations working through disputes which pitch competing human rights against one another, the Ontario Human Rights Commission developed a policy earlier this year which is meant to be a tool for resolving those disputes.  Although any dispute which pits competing human rights against one another will inevitably be determined based on the specific facts involved, the Commission’s policy has created a framework to assist with resolving those disputes before they become the subject of litigation.

The process for addressing competing human rights claims is as follows:

STAGE ONE: Recognizing competing rights claims:

Step 1: What are the claims about?

Step 2: Do the claims connect to legitimate rights?

(a) Do the claims involve individuals or groups rather than operational interests? (b) Do the claims connect to human rights, other legal entitlements or bona fide reasonable interests? (c) Do the claims fall within the scope of the right when defined in context?

Step 3: Do the claims amount to more than minimal interference with rights?

STAGE TWO: Reconciling competing rights claims

Step 4: Is there a solution that allows enjoyment of each right?

Step 5: If not, is there a “next best” solution?

STAGE THREE: Making decisions

- Decisions must be consistent with human rights and other laws, court decisions, human rights principles and have regard for Ontario Human Rights Commission policy

- At least one claim must fall under the Ontario Human Rights Code to be actionable at the Human Rights Tribunal of Ontario

It is important to note that the Commission’s policy is not “law”, but rather is the Commission’s recommended approach.  The Commission does not have the legal authority to require employers to follow the policy.  In any event, employers should take proactive steps to address competing rights by being familiar with caselaw and considering the Commission’s policy.  A full copy of the Commission’s policy can be found at the following link:

http://www.ohrc.on.ca/sites/default/files/policy%20on%20competing%20human%20rights_accessible_2.pdf

A termination for good business reasons does not always equate to a termination for just cause.  In the recent decision of the Ontario Superior Court in Barton v. Rona Ontario Inc., Mr. Justice Lauwers stated that even if an employee’s serious misconduct was such that the employer concluded that it needed to dismiss him to make an example of him, the misconduct might not necessarily be sufficient to warrant a termination without notice.

The Facts:

Barton was employed by the defendant for over 10 years and at the time of termination he was an assistant store manager.  Under his watch, an order picker truck was used to lift a wheelchair-bound employee from the ground floor to a second floor training centre and back again, for computer training (due to the fact that the only training office in the store was on the second floor and not otherwise accessible to wheelchairs).  This incident was contrary to the defendant’s safety expectations as set out in the Employee Handbook, the Health and Safety National Manual and the Occupational Health and Safety Act.  While Barton indicated his discomfort with the planned incident to both the operator of the order picker truck and the disabled employee, he was aware that the disabled employee wanted to attend the training and he did nothing to stop the employees from proceeding with their plan.  The incident turned out to be even more dangerous than might otherwise have been the case, as the wheelchair was not secured to the skid during the descent to the ground floor, and as the area around the order picker truck was not secured and someone walked under it during the lift. Fortunately for all, nobody was hurt during the incident.

Several employees were disciplined due to their part in the incident, but Barton’s employment was terminated for cause due to the fact that he was held to a higher standard than the non-managerial employees.

The Decision:

Mr. Justice Lauwers referenced Mr. Justice Echlin’s statement that just cause is “the capital punishment of employment law”.  He also referenced the contextual approach set out in the leading case of McKinley v. B.C. Tel and stated that although Barton’s misconduct was serious, his performance appraisals were good, he had no disciplinary record and he did not give permission for the lift or descent (although neither did he stop them).  By applying the principle of proportionality set out in McKinley, he found that Barton’s actions were not sufficient to warrant a with-cause termination.  He found that while there may have been good business reasons for Rona to terminate Barton’s employment and make an example of him in order to ensure that this sort of incident did not happen again, those reasons were not sufficient to elevate the termination to one without notice.  As a result, Barton was awarded 10 months of damages due to wrongful dismissal.

Barton v. Rona Ontario Inc., http://canlii.ca/t/fs8n7

In the recent decision of Downey v. Ecore International Inc., the Ontario Court of Appeal found that a confidentiality agreement signed by a consultant on his first day of work was not void for lack of consideration.

Paul Downey entered into discussions with Ecore in 1999 for employment with the company.  One of the key terms of his employment was to be the signing of a confidentiality agreement, due to the nature of Ecore’s business and Downey’s position.  He then asked whether he could instead provide services to Ecore as a consultant through his company CSR Industries Inc., as it would be more advantageous from a tax perspective, and a consulting agreement was subsequently executed between Ecore and CSR.  Although Downey was not a signatory to the consulting agreement, he was described within it as a “Key Person of the Consultant”.  A couple of weeks later, on the first day of work, Downey executed a confidentiality agreement in favour of Ecore, in his personal capacity.

In 2011 Downey commenced an action against Ecore on the basis that it allegedly owed him compensation for his assignment to the company of inventions he had created.  In response, the consulting agreement was terminated.  A central question in the resulting jurisdictional motion was whether or not the confidentiality agreement signed by Downey was invalid due to a lack of consideration.  The initial motions judge determined that it was indeed invalid, as it was CSR rather than Downey who was a party to the related consulting agreement and deriving compensation as a result of the arrangement.

The Court of Appeal had a different view of the matter.  Simply put, it found that the confidentiality agreement formed part of a single transaction between Ecore, Downey and CSR, constituted by both the consulting agreement and the confidentiality agreement.  It came to that conclusion upon a review of each agreement, as well as the evidence of initial employment discussions between Ecore and Downey.  When looking at the totality of the evidence of the intentions of the parties as well as an interpretation of the agreements, the court found that the true business reality of the relationship emerged.

Importantly, the court also decided that the company’s grant of permission to Downey to access Ecore’s proprietary information in order to perform services under the consulting agreement, had been independent consideration for signing the agreement. In that respect, the court noted that the “Background” preamble to the agreement stated:

“Employee will be granted access to confidential and proprietary information of the Company as part of his employment.  Employee is entering into this Agreement to grant to the Company protections regarding the Company’s proprietary information.  The parties of [sic] this Agreement agree and intend to be legally bound by the covenants as set forth in this Agreement.”

The court stated that,” The mutual promises contained in this provision constitute a quid pro quo that formed the basis for the Confidentiality Agreement: Downey would be granted access to Ecore’s Proprietary Information, which was necessary to allow him to perform the Services under the Consulting Agreement, and the information so disclosed would be subject to confidentiality protections in favour of Ecore.”

Downey v. Ecore International Inc., http://canlii.ca/t/frz4j

Ontario’s Human Rights Code, which is celebrating its 50th anniversary on June 15th, is being amended to protect transgendered people after a landmark vote in the Ontario legislature yesterday.  The amendment will prohibit discrimination in employment and other areas, on the basis of gender identity and gender expression.

From June until the end of August, 2012, the Ontario Ministry of Labour will be undertaking proactive inspections of temporary help agencies across multiple sectors.  Approximately 735,000 Ontarians work in temporary jobs, arranged through nearly 1,000 temporary help agencies.  The purpose of the blitz is to ensure that those agencies are in compliance with the 2009 Employment Standards Amendment Act (Temporary Help Agencies).

Among other things, the Ministry will be checking for compliance with:

-  displaying employment standards information in the workplace

-  issuing complete wage statements

-  rules related to hours of work, eating periods and overtime pay

-  minimum wage

-  public holiday rules

-  vacation pay and vacation time

-  the prohibition against agencies charging illegal fees to employees

Further information can be found at the following link:  http://news.ontario.ca/mol/en/2012/06/protecting-vulnerable-workers.html

La décision qu’a rendue la Cour supérieure de justice de l’Ontario (CSJO) dans l’affaire Wright v. The Young and Rubicam Group of Companies a confirmé que les dispositions de cessation d’emploi qui figurent dans les contrats de travail ne seront pas reconnues valides si le texte de celles-ci est ambigu.

En 2005, Wright a été embauché à titre de cadre par la société défenderesse. Avant son premier jour de travail, il avait déjà signé un contrat prévoyant des droits en cas de cessation d’emploi, lesquels allaient d’une semaine de préavis à 34 semaines de salaire de base, selon le nombre d’années de service. Lorsqu’il a été congédié en 2010, Wright a reçu 13 semaines de salaire en guise de préavis, conformément au contrat en question. Insatisfait du montant reçu, il a intenté une action et présenté une requête en jugement sommaire.

Lors de l’audience, la juge Low a invalidé le contrat de travail, car elle estimait, comme Wright, que ce dernier aurait dû recevoir le préavis de licenciement prévu sous le régime de la common law. Le contrat a été invalidé pour deux raisons. Premièrement, le contrat ne respectait pas les normes minimales fixées par la Loi de 2000 sur les normes d’emploi de l’Ontario (la « LNE ») et, par conséquent, M. Wright aurait pu toucher une indemnité plus élevée, pour quelques-unes des années visées, en vertu du délai de préavis prescrit et de la prestation de départ prévue par la LNE qu’en vertu des clauses de son contrat. Cela n’est pas permis, même dans les cas où il n’existe qu’une faible possibilité que le contrat soit moins généreux que la LNE. La deuxième raison, mais la plus importante, c’est que la disposition sur la cessation d’emploi ne contenait aucune mention relative au traitement des avantages sociaux durant la période vidée par le préavis. La juge Low n’a pas jugé pertinent le fait que les avantages sociaux aient été fournis à Wright durant la période visée par son préavis statutaire et a déclaré que la disposition sur la cessation d’emploi aurait dû énoncer clairement les droits aux avantages sociaux, de même que les droits en matière de préavis et d’indemnité de départ.

Peu importe la fréquence à laquelle votre société examine et révise ses contrats de travail, un examen approfondi est toujours recommandé. De plus, à la lumière du jugement de la CSJO, les employeurs devraient envisager d’inclure, dans leurs contrats de travail, le traitement des avantages sociaux en cas de cessation d’emploi.

Wright v. The Young and Rubicam Group of Companies :
http://www.canlii.org/en/on/onsc/doc/2011/2011onsc4720/2011onsc4720.html

In the recently released Ontario Superior Court of Justice decision in Wright v. The Young and Rubicam Group of Companies, it was confirmed that a termination provision in an employment agreement will not be upheld if there are any ambiguities in the language of the provision.

Wright was hired in 2005 as an executive at the defendant company.  He signed an agreement prior to his start date, which provided for entitlements on termination ranging from 1 week of notice to 34 weeks of base salary, depending upon his length of service.  On being terminated in 2010, he was given 13 weeks of pay in lieu of notice pursuant to that agreement.  Unhappy with that amount, he commenced a claim and brought a motion for summary judgment.

At the hearing, Justice Low overturned the employment contract and agreed with Wright that he should have received common law notice of termination. The contract was overturned for two reasons.  First, because it did not track the language of the Employment Standards Act, 2000 (Ontario) (the “ESA”) carefully, there were a few years under which Wright might have earned more by way of statutory notice and statutory severance under the ESA than under his contract.  That is not permitted, even in cases where it is only a contingent possibility that a contract may undercut the ESA.  Secondly and more importantly, the termination provision did not mention the treatment of benefits during the notice period.  Justice Low found that it was irrelevant that benefits were in fact provided to Wright during his statutory notice period, and stated that the termination provision should have clearly set out the benefits entitlement as well as the notice and severance entitlement.

No matter how many times your company may review and revise its employment agreements, a further review is always recommended.  And in light of this decision, employers should consider dealing, in the employment agreement, with treatment of benefits on termination.

Wright v. The Young and Rubicam Group of Companies:  http://www.canlii.org/en/on/onsc/doc/2011/2011onsc4720/2011onsc4720.html

La Cour d’appel de l’Ontario a récemment rendu sa décision dans l’affaire Veolia ES Industrial Services Inc. v. Brulé et confirmé que le retrait de termes ambigus dans une clause de non-concurrence ou de non-sollicitation n’est permis qu’en de rares occasions. En 2009, dans l’affaire KRG Insurance Brokers (Western) Inc. c. Shafron, la Cour suprême du Canada a statué que la réécriture de clauses restrictives ambiguës peut prendre deux formes : (i) la divisibilité fictive – attribuer une interprétation atténuée à une disposition contractuelle de façon à la rendre légale et applicable et (ii) la technique du trait de crayon bleu – la suppression d’une partie d’une disposition contractuelle. La cour a confirmé qu’il est possible d’avoir recours à la technique du crayon bleu pour une clause restrictive ambiguë uniquement dans les cas où la partie retranchée peut clairement être séparée du reste de la clause, est dénuée d’importance et ne fait pas partie de l’objet principal de la clause restrictive.

Lorsqu’elle a rendu sa décision dans l’affaire Veolia v. Brulé, la Cour a déterminé que les parties à la clause de non-concurrence n’auraient pas accepté de retirer les mots jugés ambigus sans modifier d’autres dispositions de la clause. La juge Hoy, qui s’exprimait au nom de la Cour, a conclu que les termes ambigus n’étaient pas futiles, puisqu’ils concernaient la durée de la restriction (l’une des parties les plus importantes d’une clause de non-concurrence). La Cour a par conséquent infirmé la conclusion du juge de première instance selon laquelle la clause de non-concurrence avait été violée.

Cette affaire est la plus récente d’une longue liste de décisions canadiennes confirmant clairement que les clauses restrictives ne sont pas perçues de manière favorable par nos tribunaux et qu’elles seront généralement annulées, sauf dans des cas spéciaux. Si les clauses restrictives sont essentielles pour votre organisation, demandez l’avis d’un professionnel et veillez à ce que vos ententes soit claires, car les tribunaux ne déploieront pas d’efforts particuliers pour dissiper les ambiguïtés, le cas échéant.

In the case of Veolia ES Industrial Services Inc. v. Brule, the Ontario Court of Appeal recently confirmed that the severance of ambiguous terms in a non-competition or non-solicitation restrictive covenant will only be permitted on rare occasions.  In the 2009 Supreme Court of Canada decision in KRG Insurance Brokers (Western) Inc. v. Shafron, the court stated that severance of ambiguous restrictive covenants takes two forms: (i) notional – the reading down of a contract term to make it legal and enforceable; and (ii) blue pencil – the removal of part of a contract term.  The court confirmed that blue pencil severance of an ambiguous restrictive covenant will only be permitted where the portion being removed is trivial.

In the Veolia v. Brule decision, the court determined that the parties to the non-competition covenant would not have agreed to remove the words which were ambiguous, without varying other terms of the covenant.  Justice Hoy, writing for the court, found that the ambiguous words were not trivial, as they went to the duration of the restriction (one of the most important parts of a non-competition covenant).  As a result, the court overturned the trial judge’s finding that the non-competition covenant had been breached.

This case is the latest in a long line of Canadian decisions which make clear that restrictive covenants are not viewed favourably by our courts and will generally be overturned other than in special cases.  If restrictive covenants are critical for your organization, seek legal advice and try to ensure that there are no ambiguities in the agreement, as the courts will not go out of their way to help cure those ambiguities.

In the November 2011 Ontario case of Hussain v. Suzuki Canada, the court awarded 26 months’ notice to a 36 year employee who was almost 65 years old. The fact that the employee was close to what once would have been a reasonable retirement period did not seem to matter, as there was no evidence that he was set to retire imminently. Based on his exceptional circumstances, the employee was awarded 26 months. In addition, given the employee’s age and length of service, the court found that there was only a 1% change of re-employment. Therefore, the mitigation reduction in this case was only 2 weeks.

This case is interesting because our courts used to exceed the 24-month “cap” if they provided extended notice for bad faith terminations. However that disappeared with the Honda v. Keays decision, at which point the cap came back down to 24 months.

This case demonstrates that some judges, in exceptional cases, will still exceed the 24-month notice “cap”.

The Public Service Labour Relations Board has reinstated a 27 year federal civil servant who was fired for spending between 50 – 75% of his workday surfing the internet, including pornography.

The adjudicator held that the employer did not have a clear-cut computer-use policy and in particular, it did not define excessive personal computer use (some undefined amount of personal use was permitted by the employer). In addition, the employee had an excellent record, was long-term and he apologized immediately and explained that the only reason for the excessive computer use was that he didn’t have enough work to do.

The adjudicator said that this wasn’t really a time theft case, as time theft usually indicates a fraudulent intent to steal time. However, she found that the employee violated employer policies, misused the employer’s equipment that was for work purposes and engaged in behaviour “that has no place at work”.

Although the termination was overturned, the employee was given a lengthy without pay suspension from the date of termination (November 2009) to the date of the decision (August 2011) due to the serious nature of the misconduct.

Andrews v. Deputy Head (Department of Citizenship and Immigration): http://pslrb-crtfp.gc.ca/decisions/fulltext/2011-100_e.asp

On December 8th, the Ontario Government introduced Bill 30, an amendment to the Employment Standards Act, 2000 which, if passed, will create a new Family Caregiver Leave as of July 1, 2012. The purpose of the leave is to give caregivers up to 8 weeks of unpaid leave to care for a relative who is suffering from a “serious condition”. This is in addition to other leaves such as Family Medical Leave (which applies when a relative is terminally ill) and Emergency Leave (which provides for one-off absences to deal with sickness and other emergencies). The provincial government has indicated that if the Bill passes into law, it will press the federal government to approve EI benefits for employees who are required to take Family Caregiver Leave.