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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

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

A Reference Guide for Reference Letters

One of the more confusing issues that employers deal with is what to do in the face a request for a reference letter by a departing employee. While dealing with a reference letter for a stellar employee is easy, the task becomes more difficult when determining what to do with a request for a reference letter from an employee whom the employer was glad to see go or whom the employer was forced to dismiss.

A.  When should a reference letter be provided?

There are two reasons why an employer should think carefully before refusing to provide a letter of reference to a departing employee.

First, a reference letter generally assists a departing employee in finding new employment. As a result, on a practical level it is usually in the best interest of both the employer and the employee for the employer to provide a reference letter.

Second, in Canada the courts impose a duty of good faith and fair dealing in their treatment of departing employees. As part of this duty, employers are expected to be candid, reasonable and honest in dealing with departing employees. Where an employer breaches this duty, the employer may be held liable for damages to the employee that arise as a result of the breach.

One of the obligations that has been identified as part of the duty of good faith and fair dealing is for the employer to provide a letter of reference to a departing employee where there is no legitimate reason for refusing the request. For example, employers have been found to have breached their duties of good faith where the refusal to provide a letter of reference was calculated to purposefully make it harder for an employee to find new employment, to pressure the employee into settling a wrongful dismissal claim or to punish the employee. As a result, an employer must have a legitimate reason for refusing to provide a letter of reference. Where there are no specific performance issues and the employee was not terminated for cause, the safest course is to provide a letter of reference.

As a consequence, the better practice is to only refuse to provide a letter of reference in cases where the employer has a legitimate reason for the refusal, such as where the employee’s performance during employment was unsatisfactory.

B.  What should the reference letter say?

Reference letters can cover the range from a glowing endorsement, to a neutral confirmation of employment to a warning to prospective employers regarding a highly unsuitable employee. In order to know how to approach the reference letter, it is important to know something of potential liabilities.

For the most part the liability that arises out of authoring a reference letter is governed by the law of tort with liability focusing on two primary groups of potential claimants – the former employee and the new employer.

a) Liability Toward the Departing Employee

With respect to the former employee, claims will generally arise as a result of a negative reference letter that damages the former employee’s reputation or interferes with the former employee’s ability to find work and maintain employment. In order for liability to attach, the former employee will have to show that the letter materially affected his or her ability to find work and that the negative reference was either untruthful or misleading in some way. Common examples of such liability include:

  • Liability in defamation for statements made about the employee in a reference letter that are untrue and are damaging to the employee’s reputation;
  • Liability under the principles of interference with contractual relations or inducement of breach of contract where an untrue reference provided by the former employer causes the employee’s current employer to terminate the former employee’s employment. A common example of this would be where a former employer decides to unfairly “blackball” a former employee in a particular industry;
  • Liability in the form of increased exposure to damages in the case of a wrongfully dismissed employee where the employee is unable to find alternative employment as quickly as he or she may have otherwise found alternative employment due to a misleading or untruthful reference; and
  • Liability imposed as a result of a breach of the duty of good faith as a result of the employer providing a misleading or untruthful reference.

b) Liability Toward a Prospective Employer

In contrast to the liabilities that may arise with respect to former employees, the liability that may arise with respect to prospective employers is usually based on reference letters that are unjustifiably positive.

In general terms such liability arises out of the principles of negligent misrepresentation. Liability for negligent misrepresentation can arise where a prospective employer reasonably relies on a misleading positive reference from a former employer in making a hiring decision that goes very badly.

An example of such a situation might be where a former employer who has terminated an employee for theft proceeds to negligently provide a positive reference for the employee to a prospective employer for a position where the employee will be handling large sums of cash in an unsupervised position. Should the employee subsequently steal from his or her new employer, the former employer may be held at least partially liable for the loss.

c) Avoiding Problems

To avoid problems, there are a number of guidelines to follow.

  1. Make sure the information in your reference letters is accurate. Most if not all liability arises out of reference letters that are either misleading or untrue.
  2. Avoid subjective opinions and stick to objective facts.
  3. Do not use reference letters to “punish” a former employee or make it more difficult for the former employee to find alternate employment.
  4. Use caution in drafting negative reference letters. Negative reference letters should be reserved for the clearest of cases involving employee misconduct that is objectively verifiable and well documented. When in doubt, the employer should err on the side of caution and either refuse to provide a reference or in more marginal cases provide a neutral reference that merely provides confirmation of past employment without any comment on the employee’s suitability.

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A Reference Guide for Reference Letters

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

Fixed Term Contracts: Damages for “trouble and inconvenience”

In a recent decision[1], the Superior Court of Quebec held that the termination of a fixed term contract of employment constitutes a breach of contract which may allow for an award of damages for “troubles and inconveniences” suffered by the employee, in addition to damages for early termination.

The Plaintiff had been terminated without cause 15 months before the expiry of the term of his employment contract. The Court concluded that the unilateral termination of the Plaintiff’s fixed term contract was illegal and ordered the Employer to pay the Plaintiff an indemnity equivalent to the wages he should have received until the end of the contract.

The main interest of this case is the Plaintiff’s claim for $50,000 as damages for “troubles and inconveniences”, which required the Court to consider whether such damages could be compensated in the context of a fixed term contract of employment.

In its analysis, the Court first establishes that, while the termination of the Plaintiff was not based on serious grounds, it was not made in an abusive or humiliating fashion. However, the judge accepted that it had nonetheless caused severe stress and anxiety to the Plaintiff, as is almost always the case when a person is terminated.

The Court noted that according to a well-established jurisprudence[2], in the case of an indeterminate term contract, its unilateral termination by the employer is not, in itself, a civil fault, even if it prejudices the employee. Consequently, except when the termination is made in an abusive way, the compensation for troubles and inconveniences is not available to the employee. This rationale is grounded in the principle that either party to an indeterminate term contract of employment may terminate it by giving notice of its termination to the other party, as recognized under Section 2091 of the Civil Code of Quebec.

However, a fixed term contract is binding on the parties until its expiry and may only be unilaterally resiliated for a serious reason. Thus, the employer who, without a serious reason, resiliates the fixed term contract of an employee does not exercise a right, but rather breaches one of its contractual duties. If the evidence shows that this breach of contract caused troubles and inconveniences, such as stress or anxiety, the terminated employee could be compensated for these damages. In this matter, the Court awarded the Plaintiff $5,000 for troubles and inconveniences.

Thus, according to this decision, a distinction must be made between the unilateral resiliation of indeterminate and fixed term contracts with regards to the award of damages for non-pecuniary loss.

[1] Bouasse v. Gemme canadienne PA inc., 2016 QCCS 1263.

[2] 1994 CanLII 5837 (QC CA).

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Fixed Term Contracts: Damages for “trouble and inconvenience”

The Duty to Provide Reasonable Notice of Termination Cuts Both Ways

It is a relatively little-known fact to non-lawyers that just as employers are required to provide employees with reasonable notice of termination, employees are likewise required to provide employers with reasonable notice of resignation.  A 2016 Ontario Superior Court of Justice case has recently confirmed same.

In the case of Gagnon & Associates Inc. v. Jesso et al., the company sought damages from employee Barry Jesso (“Jesso”) for having resigned his employment without notice.  Jesso had been employed by Gagnon & Associates Inc. (the “Company”) for 10 years and at the time of resignation was responsible for approximately 30% of the Company’s annual HVAC sales.  His colleague Patrice Comeau, also a defendant in the litigation, was responsible for a further 30% of the Company’s annual sales.  In 2006 Jesso and Comeau approached one of the Company’s competitors and entered into an agreement with it to open a satellite office.  It was at that point that they both provided the Company with their notices of resignation.

The court stated that the notice of resignation period required by an employee will be a function of the employee’s position with the employer and the time that it would reasonably take the employer to replace the employee or otherwise take steps to adjust to the loss of the employee.  The court then made a finding on the evidence that although Jesso was not a fiduciary employee, a reasonable notice of resignation period was 2 months given that: (i) Jesso was responsible for a significant percentage of the Company’s sales; (ii) the market for experienced HVAC salespeople was limited and it would likely take approximately 2 months to find a replacement; and (iii) Jesso knew that the Company’s other senior salesperson was resigning on the same day, thereby putting the Company in a very difficult position.

It is important to bear in mind that where an employee has signed a proper employment agreement which sets out a notice of resignation period, the employee will probably be bound by that contractual provision.  Likewise, for employees who work in jurisdictions that have employment standards legislation containing a notice of resignation provision, they may be bound by same.  Finally, there is a long line of separate case-law which confirms that fiduciary employees have obligations to provide reasonable notice of resignation to their employers.  That said, the Gagnon v. Jesso case is a helpful reminder that even when there is no contract, no legislation and no fiduciary relationship, an employee may still owe his or her employer a reasonable notice of resignation period.

The case of Gagnon & Associates Inc. v. Jesso et al. can be found here:  https://www.canlii.org/en/on/onsc/doc/2016/2016onsc209/2016onsc209.html?autocompleteStr=gagnon%20%26%20associates&autocompletePos=3.

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The Duty to Provide Reasonable Notice of Termination Cuts Both Ways