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Watch Out: Ontario Ministry of Labour Inspection Blitzes/Initiatives Are Coming

The Ontario Ministry of Labour recently announced its 2016 and 2017 enforcement blitz and initiative schedule. In an effort to emphasize the importance of protecting workers’ rights and ensuring employer compliance with both the Occupational Health and Safety Act (the “OHSA”) and the Employment Standards Act, 2000 (the “ESA”), the Ministry has prepared a coordinated inspection blitz schedule under the Employment Standards Program and the Occupational Health and Safety Program. The blitzes commence this month and are set to continue until March 2017.

The Employment Standards inspection blitzes will focus on high-risk sectors where there is a history of ESA violations and/or where young workers, vulnerable workers and/or an increasing number of Ontarians are employed. This will include the following sectors: Construction, Food Services, Retail Trade, Professional Services, Services to Buildings and Dwellings, Other Amusement and Recreation Industries, and Personal Care Services.

The OHSA inspection blitzes will focus on sector-specific hazards with the aim of raising awareness and increasing compliance with the OHSA. The provincial OHSA Blitzes will target the Construction, Industrial and Mining Sectors with a focus on: Falls, New and Young Workers, Mobile Cranes and Material Hoisting, and Safe Material Tramming Underground.

In addition to province-wide blitzes, the Ministry will conduct local blitzes in predetermined regions throughout the province targeting specific sectors. For the ESA blitzes this will include the Child Day-Care Services, Manufacturing, Fitness Centres, Tow Truck Companies, and Small Manufacturing sectors; for the OHSA blitzes this will include the Industrial and Construction sectors.

The Ministry will report the results of its inspections shortly after they are completed and will track its findings to ensure improvements in compliance and fewer workplace injuries. The Ministry reports that since 2005, it has recovered over $144 million in wages and other money owed to employees through its inspections, claims and collections and, since 2008, has issued more than one million compliance orders for safety issues across all sectors.

Even if you are not in a targeted sector, be aware that in addition to the 2016/2017 inspection blitzes, the Ministry’s officers will continue to conduct their ongoing enforcement efforts, so they may still show up at your door. As such, all employers, and particularly those in sectors targeted by the 2016/2017 blitzes, should take steps to ensure that their workplaces are compliant with both the ESA and OHSA. The Ministry of Labour’s Inspection Blitzes and Initiatives Announcement and 2016-2017 Schedules can be found here.

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Watch Out: Ontario Ministry of Labour Inspection Blitzes/Initiatives Are Coming

Ontario Retirement Pension Plan: a guide

Media coverage about the Ontario Retirement Pension Plan (ORPP) has been unrelenting for the past two years. The Ontario government has made many announcements setting out its vision for its new, government-run defined benefit pension plan for Ontario employees which will be similar to the Canada Pension Plan (CPP).

Are you finding it hard to keep track? Here is an up-to-date guide. More details are in the articles listed at the end of this guide.

When is the ORPP coming into effect?

The Ontario government recently changed the effective dates. It’s likely that the following schedule is final.

Employers who had an active registered pension plan on August 11, 2015, are exempt until January 1, 2020. It doesn’t matter if their existing plan does not currently qualify as “comparable” under the ORPP rules. It doesn’t matter if their existing pension plan doesn’t apply to all of their employees. All of those lucky employers have until January 1, 2020 to decide how to react to the ORPP.

All other employers of Ontario workers will be required to start making contributions to the ORPP on the following dates, unless they adopt a “comparable” registered pension plan:

  • January 1, 2018 if more than 50 employees; and
  • January 1, 2019 if 50 or fewer employees.

What types of pension plans will qualify as “comparable”? 

The Ontario government has not budged from its position that group registered retirement savings plans do not qualify as “comparable”. It is now certain that Ontario employers who offer only a Group RRSP, deferred profit sharing plan or other type of non-pension savings plan, will have to either change their plans, or join the ORPP.

See the links at the end of this guide for details of what registered pension plans do qualify as “comparable.” Beware: this is not a simple, blanket exemption. Every registered pension plan will have to be closely examined to ensure that it perfectly complies with the details of what the Ontario government deems to be “comparable”. Does your registered pension plan have a waiting period for plan entry or service caps? Are there classes of employees who are not required to join your plan (e.g. certain fixed-term, contract, call-in or other classes of permitted excluded employees)? If the answer is yes, not all of your employees will be members of a “comparable” plan for ORPP purposes. Those employees will need to join the ORPP, while your other employees will not.

The ORPP Administration Corporation will soon start communicating with employers to confirm their enrolment date in the ORPP, and to verify which employers have “comparable” plans and are therefore exempt.

Is the ORPP now law?                        

Yes. In 2015 a very brief piece of legislation was adopted without many specifics. On April 14, 2016 the Ontario government released Bill 186, the Ontario Retirement Pension Plan Act (Strengthening Retirement Security for Ontarians), 2016. It is 50 pages of legislative details about the new regime. More details have been promised in regulations that will be released in the summer of 2016.

Will it go away if the Canada Pension Plan is enhanced?

Don’t count on it. Federal, provincial and territorial finance ministers will be meeting in June of 2016 to discuss possible changes to the CPP. It’s a long and uncertain political road to get to an enhanced CPP. It may never happen. Meanwhile, the Premier of Ontario has repeatedly said that the Ontario government is pressing ahead with the ORPP.

What’s new?                                    

The recent introduction of Bill 186 in the Ontario Legislature (on April 14, 2016), with all of its detailed rules about the ORPP, is exciting for lawyers. Details in the Bill include a regime for enforcement, guidelines for the collection of personal information, unsurprising points about the treatment of pensions earned under the ORPP on marriage breakdown, death, and so on. Many of these details are not new, so the Bill is less exciting for employers.

One interesting new detail in the Bill applies to directors of corporations. If they receive a “stipend or remuneration” for their service as a director, they will be subject to the ORPP unless an exemption applies.

Want more information?

Contact any member of the Dentons Canada pension group, or click on the following links:

 

 

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Ontario Retirement Pension Plan: a guide

The Right to Strike: Changes to Alberta Labour Legislation

In light of the Saskatchewan Federation of Labour v Saskatchewan, 2015 SCC 4 decision, the Alberta government has undertaken a review of the Labour Relations Code (“LRC”) and the Public Service Employees Relations Act (“PSERA”). Following a consultation with affected employers, unions and employees, on March 15, 2016 the Alberta government introduced Bill 4, An Act to Implement a Supreme Court Ruling Governing Essential Services (“Bill 4”).

Prior to the amendments, public sector employees governed by PSERA and the LRC could not strike. The new legislation, colloquially known as the essential services legislation, allows for strikes and lockouts of public sector employees who could not previously strike. This includes health care workers employed by Alberta Health Services and other approved hospitals, employees of the provincial government and agencies, boards and commissions and non-academic staff at post-secondary institutions. The amendments do not impact firefighters, non-Alberta Health Services ambulance operators and their attendants, police officers, academic staff and graduate students at post-secondary institutions.[1]

The amendments will allow employees to strike while still maintaining essential services. In order to maintain essential services, the employer and the employees’ union will negotiate essential services agreements. The amendments require the negotiations to be in good faith and make every reasonable effort to enter into an essential services agreement. The following must be included in all essential services agreements:

  1. provisions that identify the essential services that are to be maintained by employees in the bargaining unit in the event of a strike or lockout;
  2. provisions that set out the classifications of employees, and the number of positions in each classification, required to perform the essential services referred to in clause (a);
  3. provisions that set out a method by which the employees capable of performing and qualified to perform essential services will be assigned to perform those services during a strike or lockout;
  4. provisions that set out the procedures to be followed in responding to emergencies and foreseeable changes to the essential services that need to be maintained during a strike or lockout;
  5. provisions describing changes or permitted changes, if any, to the terms and conditions of employment that are to apply to designated essential services workers under sections 130(2) and 147(4) of the Act and sections 24.1(2) and 46(2.1) of the PSERA;
  6. provisions that identify sufficient umpires, but at least one umpire, to be available to provide timely resolution of disputes under section 95.7; and
  7. any other provisions specified in the regulations.

Should parties be unable to agree on the contents of an essential services agreement, they may agree to use an umpire to mediate and, if necessary, may seek guidance from the Commissioner (the individual who oversees the administration of the essential services legislation, as defined in the legislation), to assist with settling the essential services agreement.

Once an essential services agreement is reached, it must be filed for each round of collective bargaining. The parties must also declare to the Commissioner: (a) whether the agreement ensures that essential services are maintained during any strike or lockout; and (b) whether the provision of essential services required by the essential services agreement during a strike or lockout will substantially interfere with meaningful collective bargaining. The Commissioner has several options should an essential services agreement be unacceptable, including making unilateral amendments to the agreement.

An essential services agreement accepted for filing is binding on: (a) the employer; (b) the bargaining agent; and (c) every employee of the employer who is in the bargaining unit represented by the bargaining agent.

Bill 4 has since undergone its second reading and amendments during the Committee of the Whole and on April 16, 2016, the Bill passed its third reading in the legislature. Bill 4 is currently waiting Royal Assent. The deadline to amend the legislation was extended to the end of the spring 2016 sitting of the Alberta Legislature.

Once given Royal Assent and the amendments have come into force, a number of public sector employees will now have the right to strike with only essential services designated workers being prohibited to do such.

[1] However, the Post-secondary Learning Act is currently under review.

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The Right to Strike: Changes to Alberta Labour Legislation

Miscarriage is a Disability

In a recent interim decision of the Ontario Human Rights Tribunal, adjudicator Jennifer Scott found that miscarriage could constitute a “disability”.  The door was also left open for employees terminated due to miscarriage to claim discrimination due to sex.

In the case of Mou v. MHPM Project Leaders, Mou was off work for approximately 3 weeks in January 2013 due to injuries sustained from a slip and fall accident.  She subsequently suffered a miscarriage in June of the same year and was off work for 2 days.  Her employment was terminated in February 2014 and Mou alleged that the termination related to her absences from work.  In February of 2016, a hearing took place to determine the threshold issue of whether Mou had established that she suffered from a disability.

The employer argued that in order for an illness or injury to constitute a disability, there must be some aspect of permanence or persistence to the condition.  In short, the employer argued that Mou’s health issues were temporary in nature and that Mou fully recovered from them prior to her termination.  Adjudicator Scott felt otherwise.  In coming to her decision she noted that while normal ailments such as a cold or flu are transitory, a miscarriage is not a common ailment and is not transitory.  In reaching that conclusion, Adjudicator Scott made reference to the fact that Mou continued to feel “significant emotional distress from the miscarriage” to the date of the hearing.

No mention is made in the decision as to whether any expert evidence was adduced by the employer with respect to whether miscarriage is a common ailment and it is suspected that no such evidence was provided.  One wonders whether the decision might have been different if the adjudicator had heard evidence to the effect that at least 1 in every 4 pregnancies is believed to end in miscarriage, or that a majority of women have at least one miscarriage during their childbearing years.  While there is no doubt that miscarriage can lead to emotional distress and even physical problems, it is possible that had this expert evidence been provided, it might have affected the adjudicator’s conclusion that miscarriage is not a common ailment.

Separate and apart from the issue of the miscarriage, it is clear from the decision that Mou’s slip and fall injuries also constituted a disability as they took approximately 3 weeks to heal.  Just as importantly, Adjudicator Scott made note of the fact that the employer invited Mou to apply for short-term disability coverage after her slip and fall, which is presumed to have been an indication that the employer believed her to be disabled.

It is important to note that although the Tribunal concluded that a miscarriage can constitute a disability, there has not yet been a final hearing in this case and no determination has been made as to whether Mou’s disability was a factor in her employer’s decision to terminate employment.

The case of Mou v. MHPM Project Leaders may be found here:  http://www.canlii.org/en/on/onhrt/doc/2016/2016hrto327/2016hrto327.html.

 

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Miscarriage is a Disability

UPDATE ON THE EXEMPTION FOR NON-RESIDENTS FROM PAYROLL WITHHOLDING

The Canada Revenue Agency (“CRA”) recently introduced a program to ease the administrative burden associated with Canadian withholding on the salary, wages, or other remuneration paid to non-resident employees performing their duties in Canada for a short period of time. These measures aim to remove certain ‘qualifying non-resident employers’ and ‘qualifying non-resident employees’ from the withholding requirements imposed under subsection 153(1) of the Income Tax Act (Canada) (the “Tax Act”). Furthermore, these measures will alleviate the need for qualifying non-resident employees to apply for waivers from withholding (commonly known as regulation 102 waivers).

THE EXISTING EMPLOYEE WITHHOLDING REGIME AND NON-RESIDENTS OF CANADA

The Tax Act imposes employee withholding on non-residents to the extent they perform any employment duties in Canada regardless of whether these non-resident employees will ever have an ultimate tax liability under the Tax Act (for instance where an income tax treaty applies). The Tax Act also imposes penalties for failure to withhold amounts required even where no tax would ultimately be payable. Amounts which are withheld and remitted can only be recovered by the employee if they file a Canadian income tax return.

To deal with such situations where a treaty applies, the CRA allows for employees resident in a country with which Canada has a tax treaty to apply for a regulation 102 waiver which can be presented to the employer in order to waive the withholding requirements. However, the process for obtaining a regulation 102 waiver requires at least thirty days of lead time and is time consuming to complete, making the application impractical in many situations. Moreover, the CRA has imposed its own administrative policies over and above the requirements set out in most treaties, making regulation 102 waivers costly and burdensome to obtain.

THE NEW EXEMPTION

Recognizing that the existing system was impractical for many business travelers, an additional program was announced, allowing “qualifying nonresident employers” to forego Canadian tax withholding on amounts paid to “qualifying non-resident employees”.

A ‘qualifying non-resident employee’ is defined in the Proposed Amendments to mean an employee who (a) is, at that time, resident in a country with which Canada has a tax treaty, (b) not liable to tax under Part I of the Tax Act in respect of the payment because of that treaty, and (c) works in Canada for less than 45 days in the calendar year that includes that time or is present in Canada for less than 90 days in any 12–month period that includes that time.

A ‘qualifying non-resident employer’ is defined in the Proposed Amendments to mean an employer whom, (a) is resident in a country with which Canada has a tax treaty, (b) does not, in the relevant year, carry on business through a permanent establishment in Canada, and (c) is certified by the CRA by making an application in the prescribed form at least 30 days prior to the employee performing the services in Canada.

Because of this arbitrary restriction set out in the Proposed Amendments, there could still be a large number of business travelers who will either be required to apply for a regulation 102 waiver, or be subject to withholding tax and be required to file a return to obtain a refund of the tax pursuant to protections under one of Canada’s tax treaties.

RECORD KEEPING AND REPORTING FOR QUALIFYING NON-RESIDENT EMPLOYERS

It should be noted that even though this process removes the employer from the withholding and remitting requirements for qualifying non-resident employees, certain reporting obligations remain. Qualifying nonresident employers will be required to:

  1. determine whether the employees are resident in a country with which Canada has a tax treaty,
  2. track and record the number of days each employee is either working in Canada or is present in Canada and the income attributable to these days,
  3. complete and file the applicable Canadian income tax returns for the calendar years under certification, and
  4. prepare and file a T4 Summary and Information Return for the employees that are not excluded by proposed subsection 200(1.1) of the Regulations.

Proposed subsection 200(1.1) of the Regulations exempts T4 reporting for amounts that qualify under these new exemptions if the employer, after reasonable inquiry, has no reason to believe that the employee’s total amount of taxable income earned in Canada under Part I of the Act during the calendar year is more than $10,000.

WHAT THIS MEANS FOR NON-CANADIAN BUSINESSES

While these new exemptions do not cover every type of business traveler to Canada, they are very helpful for employers that periodically send employees to Canada for short periods of time. This is especially true in circumstances where business trips are unplanned or occur in a manner that does not allow sufficient time to obtain a regulation 102 waiver. For these non-resident employers, it will certainly be easier to comply with this new program, rather than rushing employees to obtain a regulation 102 waiver or withholding and remitting tax on the employees’ behalf. Once in the program, qualifying non-resident employers should continue to monitor employee travel and require employees that will be working in Canada for more than 45 days or present in Canada for more than 90 days to apply for regulation 102 waivers to ensure no withholding will be required.

We would be pleased to assist should you require assistance in making an application for the new program.

 – –Larry Nevsky, Associate, Dentons Canada LLP, [Toronto].(A modified version of this article originally appeared in CCH Tax Topics, number 2289, January 21, 2016).

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UPDATE ON THE EXEMPTION FOR NON-RESIDENTS FROM PAYROLL WITHHOLDING

What If Your Independent Contractor Is Really a Dependent Contractor?

Many employers hire independent contractors to assist in their workplace and in most cases, the assumption is that doing so will result in minimal or no notice of termination having to be paid at the end of the relationship.  A recent case has confirmed that that assumption can be a risky one to make.

Earlier this year, the Ontario Superior Court of Justice released its decision in the case of Keenan v. Canac Kitchens.  For those familiar with employment law in Ontario, the name Canac Kitchens will be familiar as it has been on the losing end of a number of employment law cases.

In this particular case, Lawrence and Marilyn Keenan were employed by Canac Kitchens beginning in 1976 and 1983 respectively.  In 1987, both were advised that their employment was coming to an end but that they could carry on as independent contractors.  Independent contractor agreements were signed and the Keenans carried on as before.  They continued working for Canac until the company closed its operations in 2009.  No notice of termination or pay in lieu of notice was provided.

The court looked back at the 2009 Ontario Court of Appeal decision in McKee v. Reid’s Heritage Home Limited and confirmed that employment relationships exist on a continuum, with employees at one end, independent contractors at the other, and dependent contractors in the middle.  The court also confirmed that unlike independent contractors, dependent contractors are entitled to reasonable notice of termination.  In determining the status of the Keenans, the court looked to the following:

  • Whether the individuals were limited exclusively to the service of the company;
  • Whether the individuals were subject to the control of the company, not only as to the product sold, but when, where and how it was sold;
  • Whether the individuals had an investment in the “tools” relating to their service;
  • Whether the individuals undertook any risk in relation to their business, or had an expectation of profit apart from a fixed fee or commission; and
  • Whether the business was that of the individual or the company.

While there were some factors in this case which suggested an independent contractor agreement, the court was particularly fixated on the fact that the Keenans worked exclusively for Canac until 2007.  Although they did some small amount of work for a competitor between 2007 and 2009 due to a shortage of work at Canac, the judge accepted that Canac turned a blind eye to same.  In other words, for all intents and purposes the Keenans provided services only to Canac for almost the entire duration of the relationship.  Moreover, Canac had almost complete control of the work performed by the Keenans.

As a result, the court found that although the Keenans were contractors, they were in a dependent relationship to Canac and therefore entitled to notice of termination.  Due to the 32 and 25 years of service provided by Lawrence and Marilyn respectively (which resulted in an average length of service of 28.5 years between the two of them), the court found that a whopping 26 month notice period was reasonable.

As always, independent contractor agreements should be entered into with careful consideration as to the true nature of the relationship between the parties.  As the saying goes, “if it walks like a duck and talks like a duck, the chances are good that it’s a duck”.  In such a case, no amount of contractual drafting will lead to another conclusion.

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What If Your Independent Contractor Is Really a Dependent Contractor?

Ontario’s Changing Workplaces Review

In May, Ontario’s Ministry of Labour commenced what is being called the “Changing Workplaces Review”.  The review is intended to take a close look at the Employment Standards Act, 2000 (“ESA”) and the Labour Relations Act, 1995 (“LRA”), with the special advisors making recommendations to the Ontario government.  The review has been ordered both to address the significant period of time which has passed since both statutes were enacted, and the changes that have occurred in the workplace and society since then.   The special advisors appointed to conduct the review and issue recommendations are Michael Mitchell, a former Toronto partner from employee-side law firm Sack Goldblatt Mitchell, and the Honourable John Murray, a former judge and former a management-side lawyer.

It is anticipated that the advisors’ report to the government will touch on such things as: (a) the increase in non-standard working relationships (eg. involuntary part-time work, temporary jobs, and self-employment); (b) greater workplace diversity; (c) technological change; and (d) minimum standards under the ESA and LRA.  More specifically, and with reference to the questions posed in the government’s Guide to Consultations, it can be expected that the advisors may look at things like: (i) whether there should be more or less (or different) overtime exemptions for different groups of employees; (ii) whether additional types of leaves of absence are recommended; and (iii) whether the notice of termination provisions currently set out under the ESA are sufficient.

Public consultations are being held across the province from June through September, and written submissions can also be provided to the advisors by email, fax or regular mail prior to September 18th.  For further details on the dates and locations of public consultations, as well as where to direct written submissions, please click here.

 

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Ontario’s Changing Workplaces Review

Another Ontario Termination Clause Decision in Favour of Employees…

The Ontario Divisional Court recently affirmed the lower court’s decision in the case of Miller v. A.B.M., an important case with respect to the interpretation of termination provisions in employment contracts. Regular readers of this blog may recall our earlier blog discussion about the lower court’s decision.

In Miller, the employee signed an employment agreement with the following termination clause: “Regular employees may be terminated at any time without cause upon being given the minimum period of notice prescribed by applicable legislation, or by being paid salary in lieu of such notice or as may otherwise be required by applicable legislation.” The termination provision did not expressly state that benefits would be continued during the statutory notice period under the Employment Standards Act, 2000 (the “ESA”). As a result, the court found that the termination provision contravened the ESA. In upholding the lower court’s decision that the termination provision was void and common law notice should instead be substituted, the Divisional Court made the following findings.

First, the court stated that the employment agreement in question distinguished salary, pensions and car allowance under the heading of ‘remuneration’, but that the termination provision specifically just referenced salary. As a result, it was clear that just salary was to be provided on termination.

Second, the court found that the employment agreement’s silence on providing benefits during the notice period did not lead to a presumption that benefits would be provided. At best, the court found that there was an ambiguity in the agreement with respect to the question of whether benefits would be continued, and ambiguities should be interpreted against the drafter (in this case, the employer).

This case confirms the law set out in earlier decisions such as Wright v. Young and Rubicam Group of Companies and Stevens v. Sifton Properties Ltd. In short, in order to ensure that the termination provision in an employment agreement is not set aside, it must be carefully drafted and it must not appear to undercut the minimum provisions of the ESA. If the termination provision does not expressly state that benefits will continue during the ESA notice period, then the employer risks having the termination provision set aside.

For employers who have not had the termination provisions in their employment agreement templates reviewed recently, now would be a good time to ensure that they are in order and to consider updating them if they are not.

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Another Ontario Termination Clause Decision in Favour of Employees…

Required New ESA Poster for Ontario Workplaces

The Ontario Ministry of Labour has prepared and published a new Employment Standards Act, 2000 (“ESA”) poster entitled “Employment Standards in Ontario”. The poster is version 6.0 in a long line of ESA posters and Ontario employers were required to post it in the workplace effective as of May 1, 2015. The poster outlines for employees their rights under the ESA and the requirements of employers under the ESA.

The Ministry’s rules regarding the new ESA poster are as follows:

  • The poster must be in English but if the majority workplace language is other than English and if the Ministry has version 6.0 available in that language, then both posters must be posted side by side.
  • Version 5.0 should be removed at the time that version 6.0 is posted.
  • In addition to posting the poster in the workplace, employers are also required to give a copy of the poster to each employee by June 19, 2015.
  • New employees hired after May 20, 2015 must be given a copy of the poster within 30 days of hire.
  • The poster may be given to employees in hard copy form, as an email attachment, or as a link to an internet database (but then only if the employer ensures that the employee has reasonable access to the database, a computer and a printer).
  • The poster is available in English, French, Arabic, Chinese, Hindi, Portuguese, Punjabi, Spanish, Tagalog, Thai and Urdu.

An English copy of the poster can be obtained at http://www.labour.gov.on.ca/english/es/pdf/poster.pdf and a French copy of the poster can be obtained at http://www.labour.gov.on.ca/french/es/pdf/poster.pdf. For copies of the poster in other languages, please go to the following link: http://www.labour.gov.on.ca/english/es/pubs/poster.php.

 

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Required New ESA Poster for Ontario Workplaces

A Definitive Ruling on the Issue of Without Cause Terminations under the Canada Labour Code

Federally regulated employers take note.  The Federal Court of Appeal has recently confirmed that without cause dismissals are not automatically deemed to be “unjust” under the provisions of the Canada Labour Code (the “Code”).

For decades, adjudicators have been at odds with one another regarding the question of whether the Code permits dismissals on a without cause basis.  As a matter of background, the Code applies only to federally regulated employers such as banks, railways and telecoms.  After years of uncertainty in this area, the Federal Court of Appeal recently decided to end the discord and definitively determine the legal point.

In the case of Wilson v. Atomic Energy of Canada Limited, Mr. Wilson was employed for 4.5 years before being terminated on a without cause basis and offered a common law package equal to about 6 months of pay.  Mr. Wilson chose not to sign a release in exchange for the offer and instead filed a complaint under the Code which alleged that he had been unjustly dismissed.

After both an adjudication and a Federal Court hearing, the matter proceeded to the Federal Court of Appeal, which found that a dismissal without cause is not automatically “unjust” under the Code and that adjudicators must examine the circumstances of each particular case in order to decide whether or not a dismissal is unjust.  In its analysis, the court determined that Part III of the Code (which contains exceptional remedies such as reinstatement of employment) is merely intended to offer employees more remedies than exist under the common law, but only if the dismissal is unjust.  The extra remedies granted under Part III do not, however, mean that all without cause dismissals under the Code are automatically unjust.

As a result, federally regulated employees who are terminated without cause must prove that they have been terminated unjustly if they want that conclusion to be drawn.  In practical terms, this means that where there is no finding of unjust dismissal, a federally regulated employee can be terminated without cause and simply provided with a notice or severance package.  In order to gain the benefit of Code remedies which do not exist under the common law, such as the right to reinstatement, the employee must go the extra step and establish that the without cause termination was “unjust”.

The decision in Wilson v. Atomic Energy of Canada Limited can be found here: http://decisions.fct-cf.gc.ca/fca-caf/decisions/en/item/100689/index.do.

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A Definitive Ruling on the Issue of Without Cause Terminations under the Canada Labour Code