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Changing Workplaces Review to be Released May 22: Media Reports

The countdown is on.

Over the weekend the Toronto Star and the CBC each published stories detailing what Ontarians can expect to see in the long awaited final report from the Changing Workplaces Review when it is released later this month. Citing unnamed government sources, the media outlets report that the Changing Workplaces Review has proposed a number of changes to Ontario’s labour and employment legislation including:

  • making it easier for cleaning staff and home-care workers to unionize;
  • requiring that employers provide employees with paid sick days;
  • increasing the minimum amount of vacation from 2 weeks to 3 weeks;
  • providing certain protections to independent contractors;
  • eliminating some of the exemptions to the Employment Standards Act, 2000 so that more workers are entitled to overtime and certain leaves of absence.

In addition, there is speculation that the Government may increase the minimum wage to $15.00 per hour.

We will continue to follow this story and will provide a comprehensive review once the final report is released.

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Changing Workplaces Review to be Released May 22: Media Reports

Extension of Parental Benefits – What About the Leave?

The Federal government announced in the budget that it intends to “stretch” employment insurance (“EI”) parental leave benefits to up to 18 months at a lower benefit rate of 33% of average weekly earnings (find that announcement here, at page 65).  That raises the question:  what is the employer’s obligation to hold a person’s job and reinstate the employee who wants to take the longer leave?  Is there an obligation to now have the same/comparable position to return to after the 18 months?

For provincially regulated employers, the short answer at this point is “unknown”.  Except in Quebec (which has its own parental insurance plan and is therefore unaffected by the federal changes), EI benefits are payable under the ‎federal Employment Insurance Act, so employees receive EI benefits (including maternity benefits) under that legislation. The right to a pregnancy/parental leave, and the right to reinstatement, arise under the provincial legislation (in Ontario, the Employment Standards Act).

Since benefits are determined under the ‎EI Act, but the right to a leave (and reinstatement) are entitlements granted by virtue of the provincial legislation, an increase in the length of benefit entitlement does not automatically mean an increase in the length of the leave entitlement.  The provincial governments are likely studying this and may change the provincial legislation to make the leave entitlement correspond to the extended benefit entitlement, but perhaps not. We’ll have to wait and see what the provinces do with the new federal EI rules.

For federally regulated employers, the Federal government plans to amend the Canada Labour Code to protect the jobs of federally regulated employees while they are receiving the extended parental leave benefits.

In the meantime, employers should keep an eye on this issue.  In particular if an EI top-up plan is in place in the workplace, employers should consider now how these changes will affect the plan, and whether amendments to the plan are needed in light of these changes.

 

Extension of Parental Benefits – What About the Leave?

Is This The Definitive Word on Termination Provisions/Consideration?

A series of Ontario cases dating back to 2012 has put into issue the question of what does, or doesn’t, make a termination provision enforceable.  After a number of recent employer-friendly decisions, the Ontario Court of Appeal has weighed in with a decision that contains some good news, and some bad news, for employers.

In Wood v. Fred Deeley Imports Ltd., the court primarily looked at: (i) whether or not consideration was required to uphold an employment agreement; and (ii) whether the termination provision in the agreement was unenforceable (thereby opening the door to a common law notice award).  The Plaintiff, Julia Wood, was an 8.4 year employee at the time of her termination.  She signed an employment agreement the day after she started work that contained a termination provision which provided for “2 weeks’ notice of termination or pay in lieu thereof for each completed or partial year of employment…”.  The termination provision also stated that “… the Company shall not be obliged to make any payments to you other than those provided for in this paragraph” and “The payments and notice provided for in this paragraph are inclusive of your entitlements to notice, pay in lieu of notice and severance pay pursuant to the Employment Standards Act, 2000”. On termination, the employer provided Wood with 13 weeks of working notice, followed by a lump sum payment equal to 8 weeks of pay.

In looking first at the consideration issue, the court found that Wood had been provided with a copy of the Agreement prior to her start date, although it wasn’t signed until the day after she started work.  The court determined that this was not a case where Wood was seeing the Agreement for the first time when she signed it, nor was it a case where a new material term was introduced into the Agreement at the time of signing.  The court went on to find that the signing of the Agreement the day after Wood commenced employment was merely an administrative convenience and therefore fresh consideration such as a signing bonus was not required in order to make the Agreement valid and enforceable.  The employer was therefore successful in arguing that the Agreement was not void for lack of consideration.

However, things went downhill from there for the employer.  In looking at the termination provision, the court found that it contravened the Employment Standards Act, 2000 (ESA) and therefore was unenforceable.  It came to this conclusion for two reasons.  First, the court found that because the termination provision did not expressly require the continuation of benefits through the ESA notice period, it was in contravention of the minimum standards of the ESA.  This was so even though the employer gratuitously provided benefit continuance through the entirety of the ESA notice period.

Second, the court found that although it was possible that the termination provision could provide notice and statutory severance in accordance with or even in excess of the ESA, it was also possible for it to undercut the minimum provisions of the ESA.  Simply put, even though the “2 weeks per year” calculation could potentially result in the employee receiving more than her ESA notice and severance entitlements, it could also have the opposite effect.  In particular, Wood received less than her ESA severance in the case at hand because the payment of 8 weeks at the end of her working notice period was less than the 8.4 weeks of severance that she was entitled to under the ESA.

The court reviewed termination provisions in other cases and once again made it clear that each case will be decided based on its own facts.  For example, a termination provision which is not well drafted but does not expressly contract out of the ESA may yet be enforceable, despite this case. On the other hand, a termination provision which expressly contracts out of the ESA, as was the case here, will not be enforceable.

The broken record continues – the importance of properly drafting termination provisions cannot be understated and with so much at stake, it is critical that employers regularly review and update their termination provisions with the assistance of legal counsel.

The court’s decision in Wood v. Free Deeley Imports Ltd. may be found here.

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Is This The Definitive Word on Termination Provisions/Consideration?

2016 Labour and Employment Law – A Year in Review (in 140 characters or less)

As we close out the first month of 2017, we thought it appropriate to briefly review the cases which caught our eye in 2016 in 140 characters or less:

  1. Wilson v. Atomic Energy of Canada Ltd., 2016 SCC 29 – @SCC_eng confirms Federally regulated employers cannot be dismissed without cause.
  2. Paquette v. TeraGo Networks Inc., 2016 ONCA 618 / Lin v. Ontario Teachers’ Pension Plan, 2016 ONCA 619 – Requirement of “Active Employment” on payout date without something more is not enough to limit employee’s bonus entitlement over notice period.
  3. Oudin v. Centre Francophone de Toronto, 2016 ONCA 514 – ONCA upholds less than perfect termination provision that does not contemplate the continuation of benefits.
  4. Amalgamated Transit Union, Local 113 v. Toronto Transit Commission (Use of Social Media Grievance) – Beware, Twitter can be an extension of the workplace.
  5. Strudwick v. Applied Consumer & Clinical Evaluations Inc, 2016 ONCA 520 – Court of Appeal doubles the initial award of damages against employer for bad behaviour.

Turning to the future, we invite you to join us at our complimentary webinar on February 9, 2017 as we will be discussing the trends that employers can expect to see in 2017.

Details are available by clicking here

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2016 Labour and Employment Law – A Year in Review (in 140 characters or less)

Ontario Minimum Wage Increase Now in Effect

Ontario employers are reminded that the general minimum wage in Ontario increased on October 1, 2016 to $11.40 per hour, up from $11.25 per hour.  The liquor server minimum wage also increased to $9.90 per hour and the student minimum wage is now $10.70 per hour. The Ontario minimum wage is indexed to Ontario’s Consumer Price Index so future increases will be published on or before April 1 and will come into effect on the following October 1.

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Ontario Minimum Wage Increase Now in Effect

Ontario Court Rules that ESA Temporary Layoff may still Result in Constructive Dismissal

An Ontario Court has ruled in Bevilacqua v Gracious Living Corporation, 2016 ONSC 4127 that even in cases where an employer has complied with the temporary layoff provisions of the Employment Standards Act, 2000 (the “Act”), the layoff does not protect the employer from a successful claim in constructive dismissal by the employee at common law. In the case, a 15 year Facilities Manager was told by his employer that he was being temporarily laid off and that he would be recalled in three months. His company benefits were continued during the layoff period. While the layoff was done in accordance with the Act, the employee immediately took the position that he had been effectively terminated when he was placed on layoff. The Court agreed with the employee, and held that absent a provision in the employee’s employment contract allowing for a temporary layoff, a unilateral layoff constituted a constructive dismissal, regardless of whether it was done in compliance with the Act. The employee in the case, who was unemployed for 15 months after he was placed on layoff, was less successful with the remedy that the Court ordered. The employee was entitled to be paid for the three months he was on layoff, but the Court found that he had failed to mitigate his damages when he declined the employer’s offer to return to his old job after the layoff period was over.

Employers who wish to place employees on unpaid layoff should use this case as a reminder to update their employment agreements to provide for the right to unilaterally impose temporary layoffs in accordance with the Employment Standards Act, 2000 without further notice or compensation.

To view the decision, click here: http://www.canlii.org/en/on/onsc/doc/2016/2016onsc4127/2016onsc4127.html.

 

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Ontario Court Rules that ESA Temporary Layoff may still Result in Constructive Dismissal

BC Minimum Wage Increase Now in Effect

British Columbia employers are reminded that the general minimum wage in British Columbia increased on September 15, 2016 to $10.85 per hour, up from $10.45 per hour.  The liquor server minimum wage also increased to $9.60 per hour. Employers are reminded to update their employment contracts and practices to ensure they reflect the new minimum wage.

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BC Minimum Wage Increase Now in Effect

RECORDS OF EMPLOYMENT – NOT JUST FOR TERMINATIONS

The end of summer is (unfortunately) just around the corner, which for many employers means saying goodbye to student employees and seasonal workers. Most employers know that they need to complete a record of employment (ROE) when an employee terminates, but there are a number of other circumstances that require an ROE. Now is as good a time as any for a quick refresher on when employers need to complete a record of employment (ROE) for an employee and why it is important to do so correctly. My goal is not to give detailed instructions about completing ROEs; but to highlight the importance of properly issuing them and the potential liability from failing to do so.

ROE Overview

The ROE is the form employers complete when an employee receiving insurable earnings stops working such that he/she experiences an interruption of earnings. Service Canada considers ROEs to be the single most important documents in the Employment Insurance (EI) program.

When to Complete an ROE

You may have noticed I used the term “interruption of earnings” above and not “termination of employment” when describing when an ROE is required. That is because, as mentioned, ROEs are required in a wider range of circumstances (I will not get into the technical definition of “insurable earnings”, but suffice to say it includes most employees’ salary or wages).

An interruption of earnings occurs in the following situations:

  • when an employee has had or is anticipated to have seven consecutive calendar days with no work and no insurable earnings from the employer (the “seven-day rule”);
  • when an employee’s salary falls below 60% of his/her regular weekly earnings because of certain absences (illness, injury, quarantine, pregnancy, parental leave, compassionate care leave or family responsibility leave); or
  • when an employee starts receiving wage loss insurance payments.

In addition to the above interruptions of service, employers must also complete ROEs in the following instances:

  • when Service Canada requests an ROE for an employee;
  • when an employee’s pay period type changes (e.g., weekly to bi-weekly);
  • when an employee is transferred to another Canada Revenue Agency (CRA) payroll number;
  • when there is a change in ownership leading to a change in the employer;
  • when the employer declares bankruptcy;
  • when a part-time, on-call or casual worker is no longer on the employer’s active employment list or has not done any work or earned any insurable earnings for 30 days; or
  • when an employee is on a self-funded leave of absence.

The Importance of ROEs

There is not a great deal of litigation relating to ROEs, but incorrectly completing (or failing to complete) an ROE has attracted common law liability for employers.

One type of case occurs when an employer intentionally misrepresents the reason for the interruption of service or withholds an ROE from a departing employee. Allegations of misconduct on an ROE can disqualify an employee from eligibility for EI. If the allegations are untrue, or if an ROE is withheld, the employer can be liable to the employee for the resulting loss of EI payments and potentially for additional damages for bad faith conduct towards the employee.

Liability may also arise in cases where an ROE is used as evidence that a seasonal or fixed-term employee is in fact a permanent employee and therefore entitled to common law notice.  Courts have found that using the word “unknown” instead of “not returning” on an ROE for a seasonal worker indicated that the employment was permanent and that the seasonal return date was simply unknown at the time. Similarly, failing to issue an ROE at the end of each of a series of fixed-term contracts has been evidence that an employee was a permanent employee.

ROEs may be a hassle to complete, but it is important that employers keep track not only of when they need to be issued, but to ensure that they are completed correctly and accurately. For more information about completing ROEs, the CRA provides a helpful guide (Guide) and, of course, you may get in touch with a member of Dentons’ Labour and Employment group.

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RECORDS OF EMPLOYMENT – NOT JUST FOR TERMINATIONS

Sale of a Business is Not Constructive Dismissal

In the decision 2108805 Ontario Inc. v. Boulad[1] rendered on January 25, 2016, the Quebec Court of Appeal overruled the trial judge who had considered that the change of employer resulting from a change of ownership constituted a unilateral and substantial modification of Mr. Boulad’s essential terms and conditions of employment and therefore awarded him an indemnity in lieu of notice of termination of employment equivalent to 24 months of salary and benefits.

Mr. Boulad was director of a hotel owned by the Westmount Hospitality Group (“Westmount“) an important international hotel group. Westmount sold the hotel for which Mr. Boulad was responsible to Jesta, a much smaller hotel group.  Pursuant to the transaction and to section 2097 of the Civil Code of Quebec (“CCQ“), Jesta undertook to continue Mr. Boulad’s employment under the same terms and conditions of employment.  Mr. Boulad refused to pursue employment with Jesta and asked Westmount to relocate him at another hotel or pay him a severance package.  Westmount denied Mr. Boulad’s request as it considered his employment was being continued with Jesta pursuant to section 2097 CCQ.  Mr. Boulad sued Westmount claiming that the change of employer amounted to a constructive dismissal, namely considering the loss of prestige associated with his employment with an important hotel group and the loss of transfer and promotion opportunities at the international level.

In its decision, the Court of Appeal confirmed the imperative and declaratory nature of section 2097 CCQ which stipulates that the employment contract continues to be in force and binding following the alienation of an enterprise.

The change of employer shall not be considered a substantial modification of the essential terms and conditions of employment for the sole reason that the new employer becomes the debtor of the previous employer’s obligations. The Court of Appeal also acknowledged that a business is not static and may evolve through time.  The workplace atmosphere and environment, as well as transfer and promotion opportunities are generally not part of the terms and conditions of employment unless expressly stipulated in the employment contract. In this particular case, the evidence fell short from demonstrating that Westmount and Mr. Boulad had agreed to such considerations being part of the terms and conditions of employment.  Both Westmount and Jesta abided by their legal obligations pursuant to section 2097 CCQ and Mr. Boulad could not legally or contractually require Westmount to relocate him or pay him severance. Mr. Boulad’s refusal to work for Jesta therefore constituted a voluntary resignation.

Accordingly, an employee who does not wish to continue employment with a successor employer may resign from employment but will have no recourse against the vendor or the purchaser, subject to specific undertakings in the employment agreement.

[1] 2016 QCCA 75.

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Sale of a Business is Not Constructive Dismissal

July 1 Changes to AODA Customer Service Standards

Effective July 1, 2016, the Customer Service Standard Regulation will be revoked.  An expanded Integrated Accessibility Standards Regulation will include all standards, including customer service requirements.

Following public consultations, there are certain changes to the accessible customer service standard:

Training Required for ALL Employees 

The primary change is with respect to the extent of training required on accessible customer service.  As you will recall, training on accessible customer service has been required for employees and third parties who work with customers or who participate in developing your policies on accessible customer service.  As of July 1, 2016 all employees must be trained on accessible customer service, as well as any third parties who provide goods, services or facilities on your behalf to the public or participate in developing your policies (for example, a member of your board of directors).  While the government has been notifying organizations that the training must be completed by July 1, 2016, the Regulation states that the training must take place “as soon as practicable”.  Ongoing training is also required on any changes to the company’s policy.  All organizations with 50 or more employees must keep records of the training provided, including the dates of training and the number of people trained.  We advise sign-in sheets or on-line logs with names included.  In addition, all organizations with 50+ employees must prepare a document that describes the training policy, summarizes the content of the training, specifies when training is to be provided and, on request, provide a copy of this document to any person who so requests.

Expanded Definition of “Service Animal”

While this is unlikely to affect many customer service policies, the definition of a service animal has been expanded to include a number of ways in which the individual with the service animal can confirm that they need the service animal for reasons relating to a disability.  Documentation from a number of different regulated health professionals will be acceptable, including, for example, a member of the College of Psychologists of Ontario.

Support Persons

In the event that your organization has health and safety reasons  to require a person with a disability to be accompanied by a support person when on your premises, you must consult first with the person with the disability, consider the available evidence and make a determination that the support person is necessary and there is no other reasonable alternative.

Expanded Feedback Process

The feedback process that you have established under the Accessible Customer Service Standard to allow the public to comment on how you provide accessible customer service has been expanded.  The feedback process must be accessible to people with disabilities, and accessible formats and communication supports must be provided on request.  Organizations with 50 or more employees must prepare a document describing the feedback process, provide this document to anyone on request and include a notice on the premises and/or on the website (or any other reasonable method) that this document is available upon request.

Because the Regulation now defines a large organization as having 50 or more employees, a business with 20 to 49 employees is no longer legally required to have the accessible customer service policy in writing or to make it public.  However, it is advisable, in our view, to have the policy in writing in the event of any complaints or disputes.

Reporting Online

As a reminder, the Regulation sets out the following timetable for filing the online compliance report:

  • Government of Ontario – annually commencing December 31, 2013
  • Public sector organizations – every 2 years commencing December 31, 2013
  • Large organizations with 50 or more employees – every 3 years commencing December 31, 2014
  • Organizations with 20 to 49 employees – every 3 years commencing December 31, 2014, but only with respect to the accessibility standards for customer service
  • Organizations with 1 to 19 – no online compliance reporting is required.

The Ontario government is preparing a new training module, expected to be available in August 2016.  In the meantime, you can access a free customer service training module at: http://curriculum.org/sae-en/index2.php Just click on the “Start course” button.

July 1 Changes to AODA Customer Service Standards