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A Truly Poisoned Work Environment – Arbitrator Upholds Discharge of Employee Who Spiked Office Water Cooler with Bleach

In what can only be described as a victory for common sense, an arbitrator recently upheld the discharge of a 27 year employee who was found responsible for spiking the office water cooler with chlorine bleach.

On September 12, 2011, an employee reported to his supervisor that the water from the office water cooler had a “strong chlorine smell” and a “very hard taste”. In reviewing the surveillance video on the day in question, the Grievor is seen exiting his office with an empty water cooler jug, entering the chemical storage room and then leaving the chemical storage room and walking back to his office with a chlorine bleach jug in his hand. As he re-enters his office, the Grievor is seen placing his hand on the cap of the chlorine bleach jug. The Grievor later exits his office with the chlorine bleach jug in his hand. He ultimately returns to his office with a full jug of water for the cooler.

When initially confronted about the situation, the Grievor denied that he had caused the contamination of the water cooler but volunteered no information about why he had obtained the bleach from the chemical storage room. However, in his subsequent meetings with investigators and through his testimony at the hearing, the Grievor’s story evolved to the point where he alleged that he had poured the bleach into two cups – one to be used later in the day to clean some shelves in his office and the other to pour into a dumpster located outside his office in order to kill its odour.

At the hearing, the Grievor’s supervisor rejected the Grievor’s explanation noting that it made no sense for the Grievor to clean the shelves since they were not dirty and they were being dismantled to be taken out of the building. He further testified that he never saw the Grievor use a cup to pour chlorine breach into the dumpster.

In his decision, the Arbitrator found that the Grievor’s testimony lacked credibility. In the Arbitrator’s view, “the Grievor’s many actions, as witnessed on the video and as described in his testimony, when taken together simply defy logic and do not make sense”. As a result, the Arbitrator ruled that it was more likely than not that he was the cause of the chlorine bleach contamination of the office drinking water cooler. With respect to penalty, the Arbitrator held that “…the level of mistruths and evasiveness displayed by the employee, as well as his failure to take responsibility for his actions, irreparably harmed the employee-employer relationship.” There was therefore no basis for the Arbitrator to interfere with the Employer’s decision to dismiss the Grievor for cause.

This case is a good reminder of the importance that credibility will play when an adjudicator is asked to determine which version of events is more likely to have occurred. In conducting investigations, employers should ensure that they take detailed statements from those involved so as to “nail down” the alleged offender’s story. Should the alleged offender later change his or her story, the employer will be in a good position to impeach the employee’s credibility.

Knox v. Treasury Board (Canadian Food Inspection Agency), 2017 PSLREB 40.

 

 

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A Truly Poisoned Work Environment – Arbitrator Upholds Discharge of Employee Who Spiked Office Water Cooler with Bleach

Cheers to the Ontario government: a tonic for dealing with pension statements for missing plan members

A helpful change to Ontario pension law has come into effect, coincident with the arrival of patio season. It is a refreshing tonic that will help administrators deal with pension plan members who are difficult to locate.

Until now, the obligation to send pension statements to former and retired plan members has been an absolute legal requirement. The fact that an administrator did not have correct (or any) address information, did not relieve the administrator from the legal obligation to send pension statements.  That has changed.

The Ontario Superintendent of Financial Services now has the authority to waive the administrator’s legal obligation to provide a pension statement that would otherwise have to be sent to an unlocatable member.  This is not automatic.  The administrator has to write to the Superintendent and demonstrate that the inactive member should be considered “missing”.

A message to pension plan administrators: please take this seriously.  Do not assume that there will be no repercussions if you simply don’t send statements to unlocatable members.  Have any of the biennial statements sent out this spring to former and retired members been returned to sender?  Find out who those people are, and write to the Superintendent now to request that he waive the pension statement obligation for those individuals.  Doing so will demonstrate that you understand and care about compliance with Ontario pension law.

This welcome change to Ontario pension law does not solve the problem of what to do with the payments owed to unlocatable members.  The Ontario government has promised to address that challenge.  In its April 2017 Budget the government stated that it was considering initiatives such as the possible establishment of a public registry where employers or administrators could post information regarding missing beneficiaries and individuals could search for missing benefits.  There may be more good news on this front in the coming months.

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Cheers to the Ontario government: a tonic for dealing with pension statements for missing plan members

Interesting times for employers with Ontario pension plans

Yesterday the Ontario Deputy Superintendent of Pensions released a formal statement that included the comment:  “these are interesting times in the pension sector.”  How true.

Many long-anticipated improvements to Ontario pension legislation, regulation and policies are finally coming into force.  The pension regulator will have more specific, helpful powers to target non-compliance issues.  Plan sponsors will have more choices in the design of pension plans, especially in the defined contribution sphere.  And many employers who sponsor defined benefit pension plans will be pleased by this morning’s Ontario government announcement about an entirely new framework for funding defined benefit pension plans, which will come into effect “in the coming weeks”.

We have written about some of these promised changes in prior posts (here and here).  We will be providing more details and strategic suggestions about these interesting developments, in future articles.  In the meantime, you can find information about this this morning’s announcement by the Ontario government here.

Please contact a member of Dentons’ Pensions and Benefits group for information and advice about how these significant changes will affect your business.

 

 

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Interesting times for employers with Ontario pension plans

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

Changes to the Canada Pension Plan: a field guide for Ontario employers

Are you an employer who is uncertain about what you should be doing to prepare for the changes to the Canada Pension Plan (CPP)?  This guide will help you.

The changes were announced by the federal government a year ago, and formal rules became law at the end of 2016.  Unlike the infamous Ontario Retirement Pension Plan, these government-run pension changes are here to stay.

Here is a summary of the changes.

 Mandatory contributions to the CPP by employers and employees will increase, starting January 2019.  The increases will be phased in gradually over several years.  By 2023 employers and employees will each be paying 5.95% of their eligible income to the CPP.  Right now they are each contributing 4.95% of eligible income.

It’s a significant increase in contributions.  The combined employer and employee mandatory contributions to the CPP will go from 9.9% of employees’ eligible income to 11.9% of their eligible income.  That’s a 21% increase.

And it’s an even bigger hit for higher-income employees and their employers.  Anyone with an annual salary of more than $70k (approximately), and their employers, will have to make additional contributions commencing 2024.

The upside is that the amount of the CPP benefit paid to Canadians will increase.  It is expected that the annual benefit paid by the CPP will increase by as much as 50%.  In today’s dollars, the maximum CPP annual payout would go from $13,370 to $20,000.  This full enhancement to the CPP benefit probably won’t be seen for approximately 40 years.

If you have Quebec employees, beware:  the CPP does not apply.  Changes to the Quebec Pension Plan are being considered, but it’s not known whether or when any changes will be made.

January 2019 is not far away.  If you will be making changes to retirement and savings plans as a result of the CPP changes, you may want to communicate those changes to employees in the next year or so.

As a starting point, here are some high-level strategic suggestions:

 If you have a Group RRSP or defined contribution pension plan:

  • Consider whether to reduce the amount of required employee contributions to your plan, so that there will be little or no impact on your employees’ take-home pay.
  • Consider reducing employer contributions to your Group RRSP or defined contribution pension plan, so that the overall employer costs of contributing to the CPP and your employer-sponsored plan remain level.  If you decide to do so, communicate the changes to employees now, so they are well aware in advance of any changes.

If you have a defined benefit pension plan:

  • Find out if there is anything in your pension plan that relates to the CPP.  Are employee contributions computed based on how much they contribute to the CPP?  Is there a “bridge benefit” that relates to the CPP?
  • Ask your actuary whether the liabilities of your pension plan will increase as a result of any provisions that relate to the CPP.
  • Consider amending your pension plan to lessen the impact of the CPP changes, if any, on the design of your plan.

If you have a union:

  • Find out if there are sections of the collective agreement that will restrict you from making changes to your retirement savings plans.  Consider letting the union know, in collective bargaining, that changes may be made due to CPP changes.
  • If the term of the collective agreement goes beyond 2018, formulate a plan to communicate to the union the fact that employee take-home pay will go down as a result of higher CPP contributions.

Please contact a member of the Dentons Canada pension and benefits group for assistance in understanding how the CPP changes will impact your organization.  Be prepared.

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Changes to the Canada Pension Plan: a field guide for Ontario employers

Costs of Accommodation: British Columbia Supreme Court Reaffirms High Threshold for Undue Hardship

In a July 2016 decision, Providence Health Care v. Dunkley, 2016 BCSC 1383, the British Columbia Supreme Court held that Providence Health Care (PHC) and the University of British Columbia (UBC) failed to establish that the costs of providing interpreter services for a deaf medical resident constituted undue hardship.

The decision is a reminder of the demands placed on employers to accommodate, and that a successful undue hardship defence based on financial reasons will require extensive financial disclosure on the part of the employer and related entities.

Briefly, the facts of the case were as follows. The claimant secured a residency position at PHC, a local hospital. Due to a profound hearing loss, she required the use of sign language interpreters. On the residency start date, arrangements for interpreter services had not been made and a few months later, the claimant was placed on paid leave, followed by unpaid leave.  PHC subsequently informed her that accommodation could not be provided and dismissed her from PHC as an employee and from UBC as a resident.  The claimant filed a complaint with the British Columbia Human Rights Tribunal, who found that PHC and UBC had discriminated against her on the basis of her physical disability.  The Tribunal concluded that PHC discriminated against the respondent regarding employment, contrary to s. 13 of the British Columbia Human Rights Code, while UBC discriminated against her by denying her accommodation, services or facilities customarily available to the public, contrary to s. 8 of the Code.

On judicial review, the British Columbia Supreme Court upheld the Tribunal’s decision.  The Court reaffirmed that the relevant considerations were the employer’s efforts to accommodate; the options explored and/or offered to the employee; and explanations given for the absence of such offers.

The Court upheld the Tribunal’s finding that PHC had used an unreliable cost estimate, and that both PHC and UBC had failed to undertake a reasonable investigation into the true cost of accommodation. Further, the Court confirmed that PHC could not base its claim of undue hardship only on its own budgetary restrictions.  The financial resources of UBC, Vancouver Coastal Health Authority (VCHA) and the Ministry of Health were also relevant since those entities were either affiliates of PHC or had agreed to provide it with funding for the UBC residency program.  Consequently, PHC should have explored the possibility of obtaining additional financial resources from those entities or establishing a cost sharing model as part of its investigation into costs.

The Providence Health Care v. Dunkley decision highlights that employers must prove that they have engaged in a comprehensive investigation into the true cost of accommodation, including an assessment of all sources of funding available, before they successfully rely on undue hardship.

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Costs of Accommodation: British Columbia Supreme Court Reaffirms High Threshold for Undue Hardship

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?

Who is a “parent” in the Ontario pension world? And why does it matter?

Any person who is the “spouse” of a member of a registered pension plan in Canada has rights regarding the pension entitlement of his or her partner. That important policy has been entrenched in pension legislation for decades.  Exactly who is a “spouse”?  The answer to that question has recently become a bit more complicated.

The Ontario government changed the Ontario Pension Benefits Act effective January 1, 2017 to recognize the evolving definition of a family, for legal purposes.  Administrators of registered pension plans should take steps now to ensure that their pension plan documentation and administration is keeping up with these changes.  Reputational and financial costs could be imposed on pension plan administrators who fail to recognize spouses’ rights to pensions, in this modern world where there has been an evolution of what constitutes a spouse.

The basic rules in Ontario are that two people are spouses for pension purposes if they are married to each other, or they fall within one of the following two categories:

  • they have been living in a conjugal relationship continuously for at least three years, or
  • they have been living in a conjugal relationship of some permanence for less than three years and are the parents of a child.

Effective January 1, 2017 a change was made to Ontario pension benefits legislation that is relevant to the phrase, “parents of a child”.

Prior to 2017, the Ontario legislation said that spousal pension rights under the parent category were triggered if the plan member and his or her partner were “the natural or adoptive parents of a child”.  That wording was simple.  Arguably, it did not capture circumstances where a child was conceived with assisted reproduction.  And it certainly did not address the complex issues of surrogacy or sperm donors.

The Ontario government has stepped in to address these complex issues. The definition of “parents of a child” in the Ontario pension benefits legislation now refers to provisions of the Ontario Children’s Law Reform Act.  That legislation has detailed provisions that address the complicated question of “who is a parent?”.  These are not simple provisions.  For example, they address circumstances of surrogacy where entitlement to parentage has been waived.  They also address circumstances of sperm donors where there is a written agreement, prior to conception, confirming that the donor does not intend to be a parent.

Pension plan administrators should consult their advisors to understand how to navigate these new requirements. Pension plan texts, member booklets, forms, and all other communications and administration must align with these changes.  Administrators will have to rely on experts to determine whether an individual is a spouse of a pension plan member, if the two individuals have been living together for less than three years, but may qualify as “spouses” because there is a child.

Administrators have a legal obligation to ensure that the correct individuals receive their pension entitlements. That means that these new Ontario requirements should be considered and implemented in all aspects of documentation and administration.

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Who is a “parent” in the Ontario pension world? And why does it matter?

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 regulatory form regarding pension plan contributions: comply!

Trustees and administrators of Ontario registered pension plans: beware of Form 7.

That’s the form that administrators of registered pension plans must complete, and send to their pension fund trustees, that summarizes the estimated employer and employee contributions that will be due to be made to the pension plans in future. The form must be provided by the registered administrator of every Ontario registered pension plan to the trustee, at least annually.  If there’s a change to the estimated future pension contribution requirements, the administrator must send a revised Form 7 to the pension fund trustee within 60 days of becoming aware of the change.

Trustees of pension plans (which for this purpose include insurance companies) are not required to complete Form 7’s. But trustees have an important, independent legal obligation to notify the Ontario Superintendent of Financial Services if they do not receive the required Form 7.  Further, if contributions to the pension plan are not received by the trustee in accordance with the estimates in the Form 7 received by the trustee, the trustee must notify the Superintendent.  There are prescribed time limits for all of these requirements.

In essence, the Form 7 rules require pension fund trustees to police timely plan contributions. The law requires trustees to blow the whistle if a plan administrator is not making contributions on time.

In 2013 a trustee was prosecuted in Ontario for failing to report the non-filing of a Form 7 with respect to a plan administrator who eventually filed for bankruptcy protection from its creditors. The trustee plead guilty and was fined $50,000.

The gravity of compliance with Form 7 rules was recently emphasized by the Ontario pension regulator in an announcement that can be found here.  A few days ago, the regulator released a revised Form 7 that can be found here, as well as a comprehensive User Guide that can be found here, to assist plan administrators in completing Form 7.  It also released two new standardized templates, to be used by pension fund trustees to report to the Superintendent when a plan administrator fails to submit a Form 7, or fails to make the contributions as summarized in a Form 7.  The templates can be found here.

Although Form 7 is a prescribed form, it does not have to be filed with the Ontario pension regulator. It is simply a required communication from plan administrators to pension fund trustees.  Do not take this as an indication that the Ontario pension regulator is indifferent about compliance with the Form 7 rules.  It has clearly demonstrated that it requires compliance, and it has provided a guide and templates to assist the pension industry with the rules.

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Ontario regulatory form regarding pension plan contributions: comply!