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Court Allows the TTC to Implement Random Drug and Alcohol Testing

In a recent decision, the Honourable Justice Marrocco of the Ontario Superior Court of Justice denied the request of the Amalgamated Transit Union Local 113 and Robert Kinnear (the “Applicants”) to restrain the TTC from conducting the random drug and alcohol testing of its employees.

The random testing applies to TTC employees who work in safety sensitive, specified management, senior management and designated executive positions, including the TTC’s CEO. The TTC expects to test 20% of its eligible employees per year, which means that statistically, each eligible employee has the chance of being tested once every five years. If selected, employees will be required to take an alcohol breathalyzer test and an oral fluid drug test. A failure to submit to a random test will be a violation of company policy, and employees who test positive will be considered unfit for duty.

The TTC first introduced random testing to its Fitness for Duty Policy in 2011 and the parties have since been involved in an ongoing arbitration on the same issue, which “has no end in sight”. The TTC approved the implementation of the random testing on March 23, 2016. Shortly thereafter, the Applicants applied to the Court for an injunction to stop the testing until the completion of the arbitration hearing.

The Applicants argued that random drug and alcohol testing would cause employees “irreparable harm” by infringing on the employees’ right to be free from unreasonable search and seizure. The Applicants also stated that the random testing: increased the likelihood of psychological harm to the employees, could damage the relationship between employees and management, and raised the risk of false-positive results.

In rejecting the Applicants’ arguments, the Court determined that TTC employees in safety-sensitive positions have a reasonably diminished expectation of privacy concerning their drug and alcohol consumption. In particular the Court noted that:

  • The employees’ duties, which include helping people make approximately 1.8 million journeys on the TTC’s system every day, as well as the TTC’s atypical workplace, which is “genuinely Toronto itself”, reasonably diminish the employees’ expectation of privacy concerning drug and alcohol consumption;
  • The TTC has chosen minimally invasive methods to conduct the random testing, which are superior to other methods available on the market;
  • The nature of the Fitness for Duty Policy is both disciplinary and remedial. Employees have the opportunity to challenge any positive results and have some degree of control over the information collected and generated in the testing process; and
  • Employees whose privacy has been “wrongfully infringed” by random testing have the opportunity to claim, and receive, monetary damages.

As such, the Court concluded that the TTC’s random drug and alcohol testing is an appropriate tool, which “will increase public safety”, as follows:

“After considering all the evidence, including the evidence to which I have referred, I am satisfied that, if random testing proceeds, [it] will increase the likelihood that an employee in a safety critical position, who is prone to using drugs or alcohol too close in time to coming to work, will either be ultimately detected when the test result is known or deterred by the prospect of being randomly tested.”

While the decision provides important insight on how the Court will approach the exercise of balancing employee privacy rights with the needs of a safety-sensitive workplace, it must also be remembered that this was an injunction application to prohibit the introduction of the Policy pending the arbitration, not a decision on the merits of the TTC’s Policy, which will be determined at arbitration. That said, the TTC has announced that the random drug and alcohol testing of its employees will begin this month (see the TTC’s press release here). The Court’s decision will likely encourage other employers in Ontario, particularly those in similarly-situated safety-sensitive workplaces, to follow suit.

A copy of the full decision can be found here: Amalgamated Transit Union, Local 113 v. Toronto Transit Commission, 2017 ONSC 2078

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Court Allows the TTC to Implement Random Drug and Alcohol Testing

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!

British Columbia Arbitrator Reinstates Firefighter Convicted of Possession of Stolen Boat

In a recent grievance decision, Re Prince George and Prince George Firefighters, Local 1372 (Williams), 2016 CarswellBC 2591, a labour arbitrator reinstated a firefighter whose employment was terminated after being found guilty of possession of a stolen boat and trailer.

The arbitrator concluded that in order to justify terminating a unionized employee, there must be a sufficient nexus between the employee’s misconduct away from work, and his employment duties.

Facts

The Grievor had been a firefighter for 11 years with a pristine work record. There were no concerns with his honesty or work.  In 2012, he purchased a boat and trailer for $9,500 from a fellow firefighter.  The boat, reportedly worth approximately $30,000, had been stolen.  The state of the Grievor’s knowledge when he purchased the boat was disputed.

The Grievor was arrested in 2013. The RCMP phoned the Grievor and asked to attend his property to investigate a tip that a stolen boat was located on his property.  Within minutes of the call, the Grievor hooked the boat and trailer up to his car and began towing it away from his property.  However, the Grievor’s property was under surveillance and he was arrested.

The Grievor lied about his acquisition of the boat and trailer in his initial statement to police, providing a story about how he purchased the boat, and three different purchase prices. He later admitted to the RCMP that he bought the boat from a fellow firefighter for much less, but he did not admit to knowing the boat was stolen.  However, he made some comments that he had doubts about the deal, and suggested he “had an inkling in the pit of his stomach” about it.

The employer investigated and the Grievor reluctantly admitted to the arrest. The Grievor was placed on leave, but the employer did not initially ask if he knew the boat was stolen.  When asked in a subsequent interview, the Grievor said it was a “grey area”.  He also advised the employer of his attempt to flee with the boat.  The employer allowed the Grievor to return to work with conditions, accepting that he was being forthright.

In the criminal proceedings, the court did not accept the Grievor’s evidence, and he was found to have known the boat was stolen. The trial was widely reported in the local media.

Upon learning of the verdict, the employer terminated the Grievor’s employment. The employer’s reasons, as stated at arbitration, included: the comments made by the judge regarding the non-acceptance of the Grievor’s evidence and his credibility, dishonesty and lack of judgment; the media reports and negative publicity; and concerns about the Grievor’s honesty during the employer’s investigation.

Arbitrator’s Reasons

The arbitrator found it difficult to reconcile evidence regarding the Grievor’s police statement and his evidence at trial and arbitration that he had no concern the boat was stolen. She noted that she had “grave doubts” as to his understanding of the underlying issue of his honesty.  Nevertheless, she proceeded to consider the question of whether termination was excessive in the circumstances.

To this end, relying on Millhaven Fibres Ltd. and OCAW, Local 9-670, Re, [1967] O.L.A.A. No. 4 (Ont Arb), the arbitrator noted that in determining whether the Grievor’s conduct away from the place of work was a justifiable reason for discharge, there was an onus on the employer to show that:

  1. The conduct of the Grievor harms the employer’s reputation or product;
  2. The Grievor’s behaviour renders the employee unable to perform his duties satisfactorily;
  3. The Grievor’s behaviour leads to refusal, reluctance or inability of the other employees to work with him;
  4. The Grievor has been guilty of a serious breach of the criminal code and thus rendering his conduct injurious to the general reputation of the employer and its employees;
  5. The conduct causes difficulty in the way the employer properly carries out its function of efficiently managing its works and efficiently directing its working force.

The arbitrator found there was no direct link between the misconduct and the Grievor’s duties. There was no suggestion he could not be trusted to do his firefighting duties. The arbitrator accepted that it was an isolated incident by an employee with a pristine work record, not likely to be repeated.  Moreover, he was not in a fiduciary position, and his duties did not expose him to the temptation of greed.

In short, the arbitrator concluded that there was an insufficient nexus between the Grievor’s misconduct and his duties to warrant termination. Accordingly, the arbitrator reinstated the Grievor, but declined to award wages, seniority or benefits from the date of termination to the date of reinstatement.

Take Away

Criminal convictions in and of themselves may not justify termination of an employee on the basis of dishonesty and lack of trust. Despite findings of misconduct in criminal proceedings, employers terminating for cause must establish that the misconduct actually relates in more than a general manner to the duties to be performed by the employee.

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British Columbia Arbitrator Reinstates Firefighter Convicted of Possession of Stolen Boat

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

Increase to the Alberta Minimum Wage

Alberta employers are reminded that the general minimum wage in Alberta will be increased on October 1, 2016 to $12.20 per hour, up from $11.20 per hour. Additionally, the current liquor server rate will be eliminated effective October 1, 2016 and these employees will also now earn the general minimum wage. Employers are reminded to update their employment contracts and practices to ensure they reflect the new minimum wage.

The minimum wage will increase a further $1.40 to $13.60 per hour on October 1, 2017, and by $1.40 to $15.00 per hour on October 1, 2018.

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Increase to the Alberta Minimum Wage

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