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Critical employment issues facing multinational employers

Join Dentons’ global Employment and Labour practice group for a unique, multi-country panel discussion examining critical employment issues that multinational employers face. The event will be held in person in our New York office and broadcast via webinar.

Agenda and speakers
Panels moderated by global practice leader Brian Cousin

Wednesday, June 29, 2016
3:45 p.m. – Registration
4:30 p.m. – Program
7 p.m. – Cocktail reception

Registration (3:45–4:30 p.m.)

Avoiding Violations of Employee Privacy Rights (4:30–5:20 p.m.) Neil Capobianco (US), Dante Trevedan (Mexico), Michael Bronstein (UK), Katell Deniel-Allioux (France), Markus Diepold (Germany), Grace Aoshuang Young (China), Jeff Mitchell (Canada)

Break (5:20–5:30 p.m.)

Implementing an Effective Restrictive Covenants Strategy (5:30–6:30 p.m) Richard Scharlat (US), Dante Trevedan (Mexico), Michael Bronstein (UK), Katell Deniel-Allioux (France), Markus Diepold (Germany), Grace Aoshuang Young (China), Jeff Mitchell (Canada)

Best Practices in Coordinating Global Human Resource Solutions (6:30–7 p.m.) Richard Scharlat (US), Katell Deniel-Allioux (France)

After the discussion, please stay for a networking cocktail reception.

Venue
Dentons
Tribeca conference room
1221 Avenue of the Americas
New York, NY | Map

Questions For more information, please contact Susan DeLeva at +1 212 398 8474.

Click here to RSVP

Critical employment issues facing multinational employers

Early Termination of Fixed Term Contract Results in Employee Windfall (Or the Dangers of Dubious Drafting)

The Ontario Court of Appeal recently awarded an employee, whose fixed-term contract was terminated on a without cause basis twenty-three months into a five-year term, damages reflecting the balance of his remuneration under the Agreement.

The employee, John Howard, was employed in a management position pursuant to a five-year fixed-term Agreement, which provided for early termination in the event of his resignation, by the employer for cause, or by the employer without cause. If his employment was terminated without cause, the Agreement stated that “… any amounts paid to the Employee shall be in accordance with the Employment Standards Act of Ontario”.

Mr. Howard’s employment was terminated and he brought an action for breach of contract, seeking damages reflecting his remuneration for the balance of the contract, which equated to over three years’ of salary and benefits. In defence, his employer argued that any damages should be limited to the two weeks’ he was entitled to under the legislation.

Mr. Howard sought a motion for summary judgment which the motions judge granted, finding that the clause which provided for early without cause termination was unenforceable due to ambiguity. However, the motions judge did not award Mr. Howard the balance owing to him under his agreement, but rather, awarded him reasonable notice of termination at common law, subject to the duty to mitigate, all of which was to be determined at a mini trial. Mr. Howard appealed. Notably, there was no appeal of the motion judge’s determination that the termination clause in question was unenforceable.

Setting aside the decision of the motions judge on the issue of damages, the Court of Appeal confirmed the common law presumption that every employment contract includes an implied term that an employer must provide reasonable notice to an employee prior to termination of employment, but held that by virtue of choosing a fixed-term arrangement, the parties had “unambiguously ousted” this implied term in favour of a contractual obligation of a five year term.

According to the Court of Appeal, after the parties contracted out of the implied obligation for reasonable notice in this case, Mr. Howard was entitled to receive the balance of his remuneration under the agreement in the event of early termination because the contract did not otherwise specify a pre-determined notice period in the event of the same.

In other words, because the without cause termination clause was unenforceable, it could not operate to reduce Mr. Howard’s damages where reasonable notice was otherwise ousted. The Court rejected the employer’s arguments that this created an unfair windfall for Mr. Howard, as the employer was sophisticated, had drafted the agreement, had elected for a fixed term, and had attempted to limit its liability in the case of early without cause termination to legislative minimums. That this latter clause failed to meet the standards imposed by the courts was inconsequential: “If an employer does not use unequivocal, clear language and instead drafts an ambiguous or vague termination clause that is later found to be unenforceable, it cannot complain when it is held to the remaining terms of the contract”.

The Court then held, consistent with previous decisions regarding liquidated damages, that without a contractual requirement to mitigate his loss, Mr. Howard was under no obligation to do so. Where a contract stipulates the penalty for early termination there is no implied duty to mitigate–it matters not whether the penalty is stated expressly, or is by default the balance of the wages and benefits under the agreement. As a result, Mr. Howard was entitled to 3 years of compensation, with no obligation to mitigate.

This case is yet another example of the dangers of using fixed term contracts, and the importance of drafting clear, unambiguous termination provisions.

The Court’s decision can be found at Howard v. Benson Group Inc. (The Benson Group Inc.), 2016 ONCA 256 http://www.ontariocourts.ca/decisions/2016/2016ONCA0256.htm

Early Termination of Fixed Term Contract Results in Employee Windfall (Or the Dangers of Dubious Drafting)

Patently Unreasonable: BC Supreme Court Rejects Human Rights Tribunal’s Landmark Injury to Dignity Award Which Emphasized Professional Status

In 2013 the British Columbia Human Rights Tribunal found that the University of British Columbia had discriminated against Dr. Carl Kelly when it dismissed him from its Family Medicine Residency Program. Dr. Kelly was awarded damages, including, significantly, $75,000 for injury to dignity, feelings and self-respect. At the time, the high water-mark for this head of damages was $35,000; this had been the result of relatively incremental increases to damages for injury to dignity over time. The award to Dr. Kelly exceeded this threshold by $40,000.

In the case of Dr. Kelly, the Tribunal held that the circumstances were such that a substantial award was appropriate, relying in part on Dr. Kelly’s life-long dream to be a physician and the humiliation and isolation from his family and friends he experienced as a result of his dismissal.

The University sought Judicial Review of the Tribunal’s decision on both the finding of discrimination and the damages awarded. In particular, the University argued that the Tribunal had put undue emphasis on the fact that Dr. Kelly was a medical resident, and that the award of $75,000 created a bifurcated approach to injury to dignity: one for professionals and one for other employees.

On September 24, 2015, the Court did not interfere with the Tribunal’s findings on the merits, but overturned the award of $75,000 on the basis that it was patently unreasonable.

Mr. Justice Silverman found that the award of $75,000 for injury to dignity put undue emphasis on the fact that Dr. Kelly was engaged in medical training and was denied access to his chosen profession. The Court held that in doing so, the Tribunal was elevating damage awards for complainants in professional occupations relative to other categories of employment. Disagreeing with the Tribunal’s finding that Dr. Kelly’s context was inherently unique, the Court held that the Tribunal’s award was patently unreasonable because there was no principled reason why this particular complainant’s circumstances warranted more than doubling the previous highest award.

Importantly, the Court did not comment on what would have been a reasonable award in the circumstances; rather, it remitted the decision back to the Tribunal for reconsideration. It therefore remains open to the Tribunal to grant Dr. Kelly an award for injury to dignity in excess of $35,000, ensuring this case will continue to attract considerable attention.

Patently Unreasonable: BC Supreme Court Rejects Human Rights Tribunal’s Landmark Injury to Dignity Award Which Emphasized Professional Status

The Non-Working Worker: A Practical Guide for Dealing with Employee Absences – Seminar

We hope that you will join us in Vancouver on Wednesday, November 20th as we discuss:

  • When They’re Not at Work: Managing Employees on Leave – Jeff Bastien
  • When They Don’t Return: Managing Employees who are Unwilling or Unable to Return – Andrea Raso
  • They’re Baaaaack…: Managing Reintegration and Performance Expectations – Dana Hooker

BC HRMA members – this workshop may be eligible for CHRP recertification credits.

Event Details
November 20, 2013
8:00 AM – 10:00 AM PDT

Terminal City Club
Walker Room
837 West Hastings St.
Vancouver, British Columbia
Canada

This session is complimentary. Please email vancouver.events@dentons.com to RSVP before November 15th.

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The Non-Working Worker: A Practical Guide for Dealing with Employee Absences – Seminar

Fall Employment and Labour Law Update – Seminar

Dentons Canada LLP
77 King Street West, 5th Floor
Toronto, ON M5K 0A1
Canada
 

On October 9th, 2013, Dentons hosted the Fall Employment and Labour Law Update.  This seminar featured presentations from our firm members Anneli LeGaultJeff Mitchell and Andy Pushalik.

Presentations include:

  • AODA Update: What Employers Should Know About the Accessibility for Ontarians with Disabilities Act, 2005, presented by Anneli LeGault
  • Return to Work Strategies: Sick and Disabled Employees, presented by Jeff Mitchell
  • Non-Solicitation and Non-Competition Covenants: Making them Enforceable, presented by Andy Pushalik

CHRP Accreditation

This program may be eligible for recertification points.

CPD Accreditation

This 1.5 hour program can be applied toward 9 of the 12 educational hours for Continuing Professional Development required annually by the Law Society of Upper Canada. Please note that these CPD hours are not accredited for the New Member Requirement.

This seminar is also offered via webinar.

To download a PDF of the presentation, or the seminar booklet, click here.

To view the full presentation, click here.

For additional information, please contact:

Marina Tsouloufas
Event Specialist, Toronto
+1 416 361 2398
marina.tsouloufas@dentons.com

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Fall Employment and Labour Law Update – Seminar

Canada’s Highest Court Rules on Employee Privacy Rights over Work Computer

This article was written by Andrea Raso Amer and Eric Sherbine.

In R. v. Cole, 2012 SCC 53, the Supreme Court of Canada held that a warrantless search and seizure by police of a teacher’s employer‐issued computer containing sexually explicit images of a female student were in violation of the teacher’s rights under the Canadian Charter of Rights and Freedoms. In a time when employers are increasingly allowing (either explicitly or implicitly) employees to use employer‐issued laptop computers, smart phones, and other digital devices for their own personal use, this decision, as summarized below, offers a number of important lessons.

Click here to read more.

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Canada’s Highest Court Rules on Employee Privacy Rights over Work Computer

Accommodation is a Two-way Street

What is an employer to do with an employee who demands changes to a job, without ever having done the job? A recent arbitration decision, Child Development Institute and the Canadian Union of Public Employees, local 2132 (June 21, 2012), unrep. (Charney), considered this issue.

The grievor succeeded in her application for a full-time family violence clinician position. Prior to being awarding the job, the grievor had worked for the employer in a part-time capacity. She expressed great enthusiasm and no reservations when she accepted the job. Almost immediately thereafter though, she requested changes to the job’s design. These changes initially were expressed as a preference and were not supported by medical documentation. The grievor seemed to think her changes would be a better way to run the program. The employer disagreed.

Shortly before commencing the job, the grievor raised a concern as to trauma and then provided documentation that she was suffering from serious depression. Her psychiatrist recommended that the employer implement all of the job design changes identified by the grievor.

Although the arbitrator queried, “why one would apply for a job and then without ever trying to do it, decide that it needs to be accommodated”, given the psychiatric evidence that doing the work, as constituted, would either continue or worsen the grievor’s depression, the arbitrator found that she required accommodation. After a few months – which the arbitrator excused as a reasonable period of time – the employer offered the grievor her choice of two possible reintegration plans. The grievor refused both on the basis they did not exactly fit with the accommodation she required. The employer’s third offer of accommodation also was refused.

The arbitrator was critical of the grievor’s intransigence finding that she had a duty to explore the possibilities of the accommodation offered by the employer. According to the arbitrator, “What works and what doesn’t work is an inexact science and to be able to forecast that nothing will work except the exact accommodation that the grievor has sought is a difficult proposition …. It would be more understandable to me that if she attempted the work hardening process and then if it didn’t work she continued to be unable to function, that could be dealt with.”

Given the employer’s limited funding and the funding required to achieve the grievor’s preferred accommodation, the arbitrator found “a classic example of undue hardship”. He also concluded that the employment relationship had completely broken down and it was inconceivable she could return to work. Accordingly, the arbitrator dismissed the grievance.

This decision is a good reminder that there, in fact, are limits to the duty to accommodate and that employees must work with their employers as part of the accommodation process, not simply make unreasonable demands.

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Accommodation is a Two-way Street

Denunciation, Deterrence and Retribution: Jury Awards Dismissed Employee $573,000 in Punitive Damages

The Vancouver Sun has reported that a British Columbia jury recently awarded employee Larry Higginson over half a million dollars in punitive damages, on top of a $236,000 award for wrongful dismissal, taking damages flowing from a wrongful dismissal to new heights in Higginson v. Babine Forest Products Ltd. and Hampton Lumber Mills Inc.

The Jury decision is not reported, however according to reports, Mr. Higginson had been employed for 34 years with the Defendant, Babine Forest Products Ltd., until he was dismissed on October 14, 2009, apparently for just cause. The employer alleged that Mr. Higginson failed to perform his duties as a manager. In response, Mr. Higginson alleged that cause had not been established and that the employer had set him up for termination of employment, had made his working environment miserable and had alleged cause to avoid the obligation to pay notice of termination of employment to long-term employees.

The Prince George B.C. jury found that the employer did not have cause to terminate his employment, and awarded damages in excess of $800,000 as a result of the wrongful dismissal.

Such a large punitive damages award has not been seen since the 2008 Ontario Superior Court of Justice awarded $500,000 to a wrongfully dismissed employee in Keays v. Honda Canada Inc.  However, in Keays, the Supreme Court of Canada (2008 SCC 39) overturned the punitive damages award on appeal.

A Notice of Appeal was filed in Higginson on July 18, 2012.

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Denunciation, Deterrence and Retribution: Jury Awards Dismissed Employee $573,000 in Punitive Damages

Get your jab! – British Columbia Government Imposes Flu Vaccination Requirement for Health Workers

This article originally appeared on occupationalhealthandsafetylaw.com.

In hopes of driving up immunization rates among BC health care workers, the Government of British Columbia is imposing strict flu-season requirements on workers who come into contact with patients at publicly-funded health care facilities or in the community. Starting with the upcoming flu season, applicable health care workers (including health-authority staff, physicians and residents, volunteers, students, contractors and vendors) will be required to either obtain a seasonal influenza vaccine or to generally don a mask at all times during the flu season.

B.C. Provincial Health Officer Dr. Perry Kendall, who recommended these measures to the Provincial Government, wrote that less than 50 percent of health care workers are immunized against influenza each year, despite being in contact with high risk populations such as seniors, pregnant women, young children, and the immuno-compromised. Citing evidence from long-term care facilities that health care worker vaccinations results in diminished illness and fewer deaths each flu season, the physician argued that “[g]etting the flu shot should be considered standard patient safety practice for all health-care workers who come into contact with patients – as important as following effective hand hygiene practices, staying home when ill or wearing a mask in the operating room.” British Columbia will be the first jurisdiction in Canada to implement such a policy.

According to media outlets, the unions representing health care workers are generally supportive of vaccinations, although the British Columbia Nurses Union has said it will not yet formally respond to the directive and has rather referred to its October 2011 Press Release on the issue where it stated that vaccinations should be promoted through education, rather than through a punitive approach by the employer.

A Government of British Columbia “Backgrounder”, cites influenza as causing the most deaths among vaccine-preventable diseases.

According to Dr. Kendall, in U.S. jurisdictions where similar requirements have been imposed, health care worker immunizations levels have reached approximately 95 percent.

The Government’s Press Release, Dr. Kendall’s Opinion Editorial and the BCNU Press Release on Influenza vaccinations can be accessed at:

http://www.gov.bc.ca/health/

http://www.newsroom.gov.bc.ca/ministries/health/factsheets/opinion-editorial-flu-shots-save-lives-protect-patients.html

https://www.bcnu.org/News/news.aspx?page=Bulletins_Oct 21, 2011

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Get your jab! – British Columbia Government Imposes Flu Vaccination Requirement for Health Workers

Balancing Rights of Privacy with Accommodation of Invisible Disabilities: Employers Have Rights and Employees Have Obligations Too

An employer’s duty to accommodate employees with disabilities to the point of undue hardship is well known and particularly challenging when it comes to accommodating employees with invisible disabilities, such as mental illness. What has been less thoroughly canvassed are the obligations of employees seeking accommodation, particularly when it comes to the disclosure of medical information that would otherwise be private. A recent arbitration board decision: Complex Services Inc. (c.o.b. as Casino Niagara and Niagara Fallsview Casino Resort) v. Ontario Public Service Employees Union, Local 278, 2012 CanLII 8645 thoroughly and thoughtfully considers these very thorny issues and how they must be balanced.

At issue in the case were two competing grievances: a union grievance alleging discrimination and harassment in the accommodation process including the employer’s imposition of an unpaid medical leave of absence and an employer grievance alleging failure on the part of the grievor to provide medical evidence to support her accommodation demands. The grievor, a security associate, claimed two disabilities: one physical with respect to which the employer had implemented accommodation requirements and one mental that was the source of the dispute. The grievor advised the employer of the accommodation she required for her mental illness (which included certain shift times and days worked and “to only deal with one matter at a time” with respect to certain managers only and with union representation present), but, in no uncertain terms, refused to provide medical documentation in support for confidential medical privacy reasons.

In a unanimous decision, the chair of the arbitration panel, George Surdykowski, succinctly sets out each party’s respective rights and obligations in the accommodation process. His findings include the following:

  • “In the purely technical sense of the term, an employee has an ‘absolute’ right to keep her confidential medical information private. But if she exercises that right in a way that thwarts the employer’s exercise of its legitimate rights or obligations, or makes it impossible for the employer to provide appropriate necessary accommodation, there are likely to be consequences, because an employee has no right to sick leave benefits or accommodation unless she provides sufficient reliable evidence to establish that she is entitled to benefits, or that she has a disability that actually requires accommodation and the accommodation required. Although an employer cannot discipline an employee for refusing to disclose confidential medical information, the employee may be denied sick benefits, or it may be appropriate for the employer to refuse to allow the employee to continue or return to work until necessary such information is provided.” [para. 86]
  • “The Human Rights Commission’s Policy indicates the employee has an obligation to ask for accommodation and to provide sufficient information, including necessary otherwise private confidential medical information, to establish the accommodation required, and to participate in and facilitate both the search for and implementation of accommodation – whether or not the accommodation available is ‘perfect’ from the grievor’s subjective perspective. The employer has a legitimate need for sufficient information to permit it to satisfy its accommodation obligations. An employee can neither expect accommodation if she withholds the information to establish that she requires it, nor dictate the accommodation required.” [para. 88]
  • “Accommodation is a matter of equal treatment required by the Code. It is not intended to be, and no employee is entitled to, a superior working arrangement merely because that is what she wants or thinks is best.” [para. 89]
  • “The cases demonstrate that the following otherwise confidential medical information will generally be required for accommodation purposes:

1. The nature of the illness and how it manifests as a disability (which may include diagnosis, particularly in cases of mental illness).

2. Whether the disability (if not the illness) is permanent or temporary, and the prognosis in that respect (i.e. the extent to which improvement is anticipated, and the time frame for same).

3. The restrictions or limitations that flow from the disability (i.e. a detailed synopsis of what the employee can and cannot do in relation to the duties and responsibilities of her normal job duties, and possible alternative duties).

4. The basis for the medical conclusions (i.e. nature of illness and disability, prognosis, restrictions), including the examinations or tests performed (but not necessarily the test results or clinical notes in that respect).

5. The treatment, including medication (and possible side effects) which may impact on the employee’s ability to perform her job, or interact with management, other employees, or customers.” [para. 95]

  • “It is cases of invisible disability, particularly mental illness, that questions most often arise about an individual’s request for particular accommodation and the adequacy of supporting information. The employer is entitled to seek confirmation or additional information from an appropriate medical health professional to obtain further information if there is a reasonable and bona fide basis for doing so. … Although an [Independent Medical Examination] is a resource of last resort, there are cases in which one is necessary and appropriate. An employee who exercises her right to refuse the incontestably intrusive IME when one is objective justified may find herself unable to continue or return to the work.” [para. 118]

The decision is a balanced consideration of what is required to make the accommodation process succeed in cases of invisible disabilities. To the extent that it thoroughly outlines both the employer and the employee’s role in this process, it provides welcome guidance for employers.

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Balancing Rights of Privacy with Accommodation of Invisible Disabilities: Employers Have Rights and Employees Have Obligations Too