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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

Trend continues in alberta for higher general damages in human rights awards

General damages awarded by human rights tribunals are intended to compensate for discrimination and to act as a deterrent.

The Alberta Human Rights Act provides no statutory limit on how much general damages can be awarded.  However, in the past general damages awarded by the Human Rights Tribunal of Alberta (the “Tribunal”) generally ranged from $3,000 to a top end “cap” of $10,000.

This has changed since the Alberta Court of Appeal decision in 2013 of Walsh v. Mobil Oil Canada.  In Walsh, the court stressed that inadequate damage awards undermined the mandate of human rights legislation to recognize and affirm that all persons are equal, and to protect against and compensate for discrimination.  The court concluded that low damage awards could actually perpetuate discriminatory conduct.

Beginning in 2015 there has been a notable trend towards higher general damages awards, and the Tribunal has issued a number of decisions awarding general damages in the range of $10,000 to $15,000.

In Amir and Nazar v. Webber Academy Foundation the Tribunal found that it was not undue hardship to allow Muslim students to pray during the school day in a secular private school, and awarded general damages of $12,000 and $14,000 to each complainant.

Similarly, in Andric v. 585105 Alberta Ltd. o/a Spasation Salon & Day Spa, the Tribunal found that the employer had unjustifiably changed the complainant’s position and work location of 10 years after she was assaulted by a co-worker. The Tribunal concluded that the shared religious beliefs between the co-worker who assaulted the complainant and the employer were a factor in the respondent’s decision to transfer the complainant.  The complainant was awarded general damages of $15,000 and lost wages for a 24 month period.

More recently, on July 5, 2016 the Tribunal issued its decision in Thu Hien Pham v. Vu’s Enterprise Ltd. o/a La Prep, which continued this trend of higher general damage awards.  The complainant, Ms. Pham was awarded $15,000 in general damages by the Tribunal, who found that Ms. Pham had been harassed by her former employer.  On awarding $15,000 in general damages, the Tribunal chair noted that “it was important to ensure that damages are not so low as to trivialize the protection of human rights”, and “[w]hile I may have been inclined to consider a greater amount…this was the amount requested by the Director and the complainant”.

Accordingly, employers can expect to see larger awards in the future for both general damages and loss of income, and should not discount the risks and exposure of a human rights complaint.

These decisions of the Human Rights Tribunal of Alberta can be found here:

  • Amir and Nazar v. Webber Academy Foundation, 2015 AHRC 8 (currently under appeal): http://www.canlii.org/en/ab/abhrc/doc/2015/2015ahrc8/2015ahrc8.html?resultIndex=1
  • Andric v. 585105 Alberta Ltd. o/a Spasation Salon & Day Spa, 2015 AHRC 14: http://www.canlii.org/en/ab/abhrc/doc/2015/2015ahrc14/2015ahrc14.html?resultIndex=1
  • Pham v. Vu’s Enterprises Ltd., 2016 AHRC 12: http://www.canlii.org/en/ab/abhrc/doc/2016/2016ahrc12/2016ahrc12.html?resultIndex=1

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Trend continues in alberta for higher general damages in human rights awards

A Rose by Any Other Name is Not as Sweet: When a Non-Solicit is Actually a Non-Compete

The Ontario Court of Appeal has held that the words “accept business”, in what the employer intended to be a non-solicitation clause, served to restrict competition and is therefore not merely a non-solicitation clause.

In this case, the personal defendant, Mary Murphy, was employed by the plaintiff Donaldson Travel Inc. (“DTI”) as a travel agent from October 2004 to April 2007 and then again from June 2007 to February 3, 2012, when she resigned from that employment. On February 6, 2012, Ms. Murphy commenced employment as a travel agent with the defendant, Goliger’s TravelPlus (“Goliger’s”).

Following Ms. Murphy’s resignation, DTI brought claims of breach of contract, misappropriation of confidential information, inducing breach of contract and interference with contractual relations against Ms. Murphy, Goliger’s and its President and director. Its claims were dismissed on a summary judgment motion, and DTI appealed to the Court of Appeal.

One of the issues on appeal was whether the motion judge erred in finding that the restrictive covenant in Ms. Murphy’s contract with DTI was in fact a non-competition clause rather than a non-solicitation clause, and therefore that it was unreasonable and unenforceable.

The clause at issue stated:

Mary agrees that in the event of termination or resignation that she will not solicit or accept business from any corporate accounts or customers that are serviced by Uniglobe Donaldson Travel, directly, or indirectly.

The Court of Appeal agreed with the motion judge that, based primarily on the language “or accept business”, the restrictive covenant did in fact restrict competition and was therefore a non-competition clause. Further, the Court of Appeal held that since this non-competition clause contained no temporal limitation, there was no basis on which to interfere with the motion judge’s conclusion that the clause was unreasonable and therefore unenforceable.

DTI’s appeal was dismissed with costs of $7,500.00 awarded to each defendant.

The key takeaway from this case is to ensure that the language of restrictive covenants is carefully chosen, so as to avoid inadvertently going beyond what is considered sufficient in the circumstances (in this case a non-solicitation clause) to protect an employer’s proprietary interest.

The Court of Appeal’s decision in Donaldson Travel Inc. v. Murphy, 2016 ONCA 649 (CanLII) can be found here:  https://www.canlii.org/en/on/onca/doc/2016/2016onca649/2016onca649.html.

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A Rose by Any Other Name is Not as Sweet: When a Non-Solicit is Actually a Non-Compete

B.C. and Canada Adopting Gender Identity and Gender Expression Human Rights Protections

Both the British Columbia and the Federal Government have recently introduced legislation to amend their respective human rights legislation to include gender identity and gender expression among the protected grounds of discrimination. These amendments will mean that individuals will have a right under the respective legislation to make a complaint if they have been discriminated against because of their gender identity or expression, including in employment settings.

Federally regulated employers and employers in British Columbia should review and update their policies on non-discrimination to ensure that these two new prohibited grounds of discrimination are covered.

British Columbia’s Human Rights Code Amendment Act, 2016, S.B.C. 2016, c.26 was passed on July 25, 2016 and came into force on July 28, 2016 whereas the Federal Bill C-16 passed first reading in the House of Commons on May 17, 2016 and has yet to become law.

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B.C. and Canada Adopting Gender Identity and Gender Expression Human Rights Protections

Ontario Pension Plan Members Will Soon Have Significant New Rights

Ontario is on the verge of implementing new rights for members of registered pension plans. Members will have the right to form committees that will have broad rights to review information about all aspects of plan administration including investments.  Employers who sponsor or administer a registered pension plan should familiarize themselves with these new Ontario legal requirements.  They are not yet law, but likely will be in a matter of months.

Last week the Ontario government released revised draft regulations about these new legal requirements, seeking comments by September 12th, 2016.  The new requirements have been kicking around in draft for the past six years and will replace current Ontario legislation regarding member advisory committees.  Most employers probably haven’t heard of the current requirements regarding such committees, because the current rules have no teeth.  The new ones will.  You can find the new requirements here.

The new requirements will apply to pension plans that have at least 50 members (including retirees). For those plans, if 10 members (or their union) notify their plan administrator of their desire to form a member advisory committee, a process must be launched to inform all plan members and conduct a vote.  If a majority of members vote in favour of establishing an advisory committee, it should be established in a matter of months.  The plan administrator will have no right to representation on the committee.  Reasonable expenses of the committee are payable from the pension fund.

Once a new committee is formed, the plan administrator must:

  • arrange for the plan actuary (for defined benefit plans) to meet with the committee at least annually;
  • give the committee access, at least annually, to an individual who can report on the plan’s investments; and
  • give information to the committee, and allow it to examine the plan records.

These new legal requirements will not give plan members a say on how their plan should be administered, but they certainly will change the landscape of members’ access to information about their pension plan. The new requirements will come into play only where there is sufficient interest among members, or unions, in forming a member advisory committee.

These new Ontario rules will create an entirely new type of scrutiny of pension plan administration. Prepare now.

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Ontario Pension Plan Members Will Soon Have Significant New Rights

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

Bill 132 Update: MOL Releases Code of Practice to Help Employers Comply with OHSA’s Harassment Provisions

Further to our series of posts on Ontario’s new Sexual Violence and Harassment Legislation, which amends the Occupational Health and Safety Act, the Ontario Ministry of Labour has recently issued a Code of Practice to Address Workplace Harassment under Ontario’s Occupational Health and Safety Act. The Code of Practice deals with the OHSA’s new Workplace Harassment provisions, which come into force on September 8, 2016. The Code of Practice is effective as of that same date.

Importantly, although employers are not legally required to comply with the Code of Practice, those who do will be considered by the Ministry to have complied with the harassment provisions of the OHSA. As such, the Code of Practice is a practical tool that employers can use to ensure compliance.

The Code of Practice is divided into four Parts, each of which is further subdivided into a “General Information” section, which provides guidance on the interpretation of the OHSA’s Workplace Harassment provisions, and a “Practice” section, which details requirements that employers may follow to comply with the OHSA.

The Code of Practice’s Preface indicates that following its requirements is “just one way in which employers can meet the legal requirements regarding workplace harassment” and a failure to comply with all or part of the Code of Practice may not be a breach of the OHSA. However, the Code of Practice also states that, while employers may choose to adhere to one or all of the Code of Practice’s Parts, if an employer does adhere to a Part, it must adhere to all of the Practice requirements under that Part in order to be deemed in compliance with the related Workplace Harassment provision in the OHSA.

The Code of Practice’s “General Information” sections provide guidance on the interpretation of the OHSA’s Workplace Harassment provisions, as follows:

  • Part I: Workplace Harassment Policy – This section outlines the contents of a Workplace Harassment Policy and explains that employers may choose to prepare a separate Workplace Harassment Policy or combine it with their workplace violence, occupational health and safety and/or anti-discrimination and anti-harassment policies. A template Workplace Harassment Policy is included in the Code of Practice (Sample Workplace Harassment Policy)
  • Part II: Workplace Harassment Program – This section considers reporting mechanisms for incidents and complaints of Workplace Harassment. In particular, it clarifies that a person who receives a complaint of Workplace Harassment should not be under the alleged harasser’s direct control. Further, in instances where the worker’s employer or supervisor is the alleged harasser, an alternate person who can “objectively address the complaint” must be designated to receive reports of Workplace Harassment, such as an employer’s board of directors and/or a consultant. Further, the Workplace Harassment program should set out whether this person would only receive the complaint, or whether this person would be expected to carry out an investigation.

    This section also considers the consequences of incidents of Workplace Harassment. In incidents arising from individuals who are not the employer’s workers, the section suggests that employers could either modify or refuse its services to such people. Consequences for workers could include: apologies, education, counseling, shift changes, reprimands, suspension, job transfer, termination or, in instances where workplace harassment is prevalent or commonplace, training for everyone in the workplace.

  •  Part III: Employer’s Duties Concerning Workplace Harassment – This section relates to investigations into Workplace Harassment and provides that: an “appropriate investigation” must be “objective”; the investigator must not be “directly involved in the incident or complaint” or “under the direct control of the alleged harasser”; and the investigator should have knowledge of how to conduct an investigation appropriate in the circumstances. The parties to the complaint should be updated periodically on the status of the investigation. The Code of Practice includes a sample investigation template, which can be found here: Sample Investigation Template
  • Part IV: Providing Information and Instruction on a Workplace Harassment Policy and Program – This section outlines the scope of the “Information and Instruction” that an employer must provide to its workers under the OHSA. Employers provide information and instruction on “what conduct is considered workplace harassment” and supervisors need to receive specific instruction on “how to recognize and handle a workplace harassment incident”. The employer should keep records of the information and instruction provided to its workers for at least one year.

Notably, the “Practice” sections list additional requirements that are not contemplated by the OHSA’s new Workplace Harassment provisions, including, but not limited to:

  •  Indicating, in a Workplace Harassment Program, when an external person will be retained to conduct a workplace harassment investigation (for example, but not limited to, when the alleged harasser is a president, owner, high-level management or senior executive);
  • A timeframe of 90 calendar days or less to complete an appropriate investigation, unless there are extenuating circumstances warranting a longer investigation (e.g. more than five witnesses or key witnesses unavailable due to illness);
  • Listing seven steps to an investigation that an employer must complete, at a minimum, including giving the alleged harasser(s) the opportunity to respond to allegations raised and, in some circumstances, providing the worker who has experienced Workplace Harassment with a reasonable opportunity to reply; and
  • That corrective action, if any, that is or will be taken as a result of the investigation, must be communicated in writing within 10 calendar days of the investigation being concluded.

The Code of Practice attaches a Sample Workplace Harassment Program, which provides guidance on addressing the Code of Practice’s requirements.

The Ministry of Labour indicates that the Code of Practice is “designed to help employers meet their obligations” with respect to the OHSA’s Workplace Harassment provisions. As such, it provides insight on the Ministry of Labour’s expectations for developing, implementing and maintaining Workplace Harassment Policies and Programs. While employers do not need to comply with the Code of Practice’s requirements to ensure compliance with the OHSA, a consideration of the information and requirements set out in the Code of Practice will help employers address Workplace Harassment in a manner that is consistent with the Act and the Ministry’s expectations. The full text of the Code of Practice can be found here.

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Bill 132 Update: MOL Releases Code of Practice to Help Employers Comply with OHSA’s Harassment Provisions

Double Check those Bonus Plans!

The Ontario Court of Appeal’s decision in the case of Paquette v. TeraGo Networks Inc. should have all employers running to double-check and possibly amend their bonus plans.  A further case released on the same day by the same panel of judges further confirmed the law set out in the Paquette decision.

Trevor Paquette had been employed by TeraGo Networks for approximately 14 years at the time of termination.  He brought a motion for summary judgment and his common law notice period was found to be 17 months.  The motions judge also determined that he was entitled to damages in lieu of his remuneration for the entire notice period, although he denied entitlement to damages in lieu of bonus entitlement over the notice period.  The matter proceeded to appeal solely on the basis of whether or not Paquette was entitled to damages in lieu of bonus during his 17 month notice period.

Paquette’s bonus plan stated that he had to be “actively employed” at the time the bonus was paid in order to receive same.  The Court of Appeal reviewed a number of similar bonus and stock option plan cases, and confirmed that the following is the state of the law in Ontario:

  • Subject to contractual terms, a terminated employee is entitled to compensation for all losses arising from the employer’s failure to give proper notice, and the damages award should place the employee in the same financial position he or she would have been in had such notice been given.  In Paquette’s case, since he would have earned a bonus had he been given working notice, the use of the words “active employment” could not be used as an end-run around his claim for the bonus over the pay in lieu of notice period.
  • The test to be followed is two-fold: (i) the first step is to determine an employee’s common law rights and whether a bonus forms an integral part of the employee’s compensation; and (ii) the second step is to determine whether there is something in the bonus plan that would specifically remove that common law entitlement.
  • An “active employment” requirement does not preclude the employee from receiving damages representing compensation for the bonuses which the employee would have received if employment had continued through the reasonable notice period.

The key for employers then, is to ensure that the language of any bonus plan is sufficiently clear that the common law entitlement to damages in lieu of bonus is expressly removed.  As every bonus plan is different and as the drafting of this sort of exclusionary language is obviously complex, legal advice should always be sought by employers when it comes to limitations set out in bonus plans.

The Court of Appeal’s decision in Paquette v. TeraGo Networks Inc. can be found here:  http://www.canlii.org/en/on/onca/doc/2016/2016onca618/2016onca618.html.

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Double Check those Bonus Plans!

Intrusive surveillance systems for security purposes: the line Big Brother must not cross

Technological developments and the need for employers to monitor employees’ activities and to minimize accidents and hazards require constant adjustments in order to respect the right to privacy. While it may be tempting for employers to replace old surveillance methods with new technologies capable of watching their personnel’s every move, the inclination to use easier and more reliable ways of supervising employees must nonetheless not violate employees’ right to privacy, which, while being more limited in a work context, nevertheless exists.

In a recent Quebec arbitration ruling, Sysco, a food delivery company, had decided to install a DriveCam® safety program inside the drivers’ cabins of its trucks in Quebec. The Union disagreed with the introduction of this new surveillance measure and filed a grievance to have said cameras removed, alleging that they were not only violating the truck drivers’ rights to privacy and dignity, but that they were also leading to unfair and unreasonable working conditions.  In addition, the Union claimed that Sysco had failed to establish serious motives which would justify its resort to the use of such invasive surveillance, especially considering the existence of a no‑fault system in Quebec.  On its end, Sysco claimed that it was justified to install the cameras as they were meant to (i) be used as a training tool for the drivers, (ii) increase and encourage safe driving and (iii) assist with liability determination or exoneration in case of accident.

In ruling that Sysco was not justified in installing those cameras and ordering that they be removed, the Arbitrator used a two-fold analysis. First, did Sysco have a specific problem that needed to be addressed with these cameras?  Second, were these cameras the only way to fix the alleged problem, or was there a less intrusive way to achieve similar results?

On the first part of the analysis, the Arbitrator found that Sysco had failed to establish that it had an existing problematic situation that needed to be fixed. The employer’s concern for prevention regarding safe driving and liability determination or exoneration did not constitute strong motives for which the surveillance would be warranted.  Considerable risks revealing an existing problem would have been enough to establish the presence of a problem, but Sysco had not established such a problem. For example, a widespread problem having to do with alcohol or drug consumption during working hours would have constituted a great risk in the matter of safe driving.

With respect to the second aspect of the analysis, Sysco’s concern could easily have been addressed by other less intrusive means, such as training, random safety spot-checks, or cameras installed outside of the trucks rather than inside the cabins. In fact, cameras constantly filming the drivers inside the trucks’ cabins had even proven to be distracting for the drivers, thus potentially creating a greater risk from a safety perspective.

Employers who may be tempted to install such surveillance systems on their fleet will need to remember that any such violation of their employees’ right to privacy will only be justified by identifying an existing specific problem that cannot be fixed by a less intrusive means than the surveillance system the employer wishes to install.

The decision can be found here: Syndicat des travailleurs et travailleuses de Sysco-Québec-CSN et Sysco Services alimentaires du Québec, 2016 QCTA 455.

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Intrusive surveillance systems for security purposes: the line Big Brother must not cross