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Update on the new, mandatory Ontario Retirement Pension Plan

On December 8, 2014, the Ontario government introduced Bill 56: An Act to require the establishment of the Ontario Retirement Pension Plan regarding the establishment of the new, mandatory Ontario Retirement Pension Plan (ORPP) effective January 1, 2017.  Bill 56 provides information about additional ORPP legislation to come.  It also provides details about the administrative entity that will need to be set up to administer the ORPP and the collection of information that’s necessary for the purpose of establishing the ORPP.

The ORPP was introduced in the 2014 Ontario budget as a new “made-in-Ontario” solution to the federal government’s decision to not expand the CPP.  It will be similar to, and build on key features of, the CPP and will be publicly administered at arm’s length from the Ontario government.  Employers and employees who are required to participate in the ORPP would be required to contribute up to 1.9% each (total of 3.8%) on the employee’s earnings, up to a maximum earnings threshold of $90,000. Additional details about proposed features of the ORPP can be found in our earlier blog posting here.

All Ontario employers should be aware of the ORPP and how it might impact their business.

The main concern for most Ontario employers is whether they will be exempt from mandatory participation in the ORPP.  The only information released by the Ontario government so far is that employees who participate in a “comparable workplace pension plan” will be exempt.  It’s unclear what “comparable” means.  The legislation doesn’t tell us exactly what types of retirement savings plans will exempt employers from the ORPP.

We will continue to provide updates on the ORPP as information becomes available.

If you have questions about the ORPP or would like more information, please do not hesitate to contact one of the pensions and benefits experts at Dentons.

For more information from the Ontario government on the ORPP and Bill 56, click here.

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Update on the new, mandatory Ontario Retirement Pension Plan

An Offer They Can’t Refuse – The Dangers of Recruiting High Level Employees

An employer is paying the price for dismissing an employee who was recruited with an attractive job offer.

Bruce Rodgers had been the president of a transportation company for 11 years when CEVA Freight Canada Corporation approached him with a job opportunity. After being flown twice to Houston, attending 7 interviews, and meeting the CEO of the global parent company, Rodgers was offered a position as CEVA’s Country Manager. He turned it down, and was given a second offer with a higher salary and a signing bonus, which he accepted. Rodgers was also told that he was required to invest in the company to demonstrate his commitment, so he borrowed $102,000 to purchase CEVA’s shares.

A little less than 3 years later, Rodgers was dismissed by CEVA without cause. He was paid 2 weeks’ salary, along with severance of just under one additional week and outstanding vacation pay. His employment agreement had a termination provision that stated: “[y]our employment may also be terminated by our providing you notice, pay in lieu of notice, or a combination of both, at our option, based on your length of service and applicable legal requirements.” CEVA argued that while Rodgers was entitled to some damages, they should be limited by the fact that this provision highlighted length of service and Rodgers was there for less than 3 years.

The Court disagreed, finding that a reasonable notice period for Rodgers would have been 14 months. In the end, CEVA was ordered to pay Rodgers $345,985.

While the Court acknowledged that Rodgers’ short length of service was a relevant factor, it found that it did not deserve any particular weight because the employment agreement was not clear that his length of service would outweigh all other considerations. Instead, the Court turned its focus to the way Rodgers was recruited to the position.

The case serves as an important reminder that even where job security is not explicitly promised, or even discussed, the method of recruitment can be viewed by the Court as an implicit promise of job security. Here, the Court noted the “attractive” financial package Rodgers was offered, and that this was an improvement over the original offer that he declined. The Court was also persuaded by the fact that Rodgers was forced to make an investment in the company, giving him the impression that he could expect above average job security. As such, Rodgers was “induced” to join CEVA, and deserved a longer notice period.

Since inducement tends to be considered alongside other factors, it is difficult to gauge how it will affect the Court’s assessment of the notice period. In this case, there were other issues at play, including the employee’s age, his high level of responsibility, and the difficulty in finding a replacement position. However, the Court was clear that CEVA’s recruitment of Rodgers from a secure position of employment contributed to the long notice period awarded.

Employers should be aware of the unspoken commitments they make when recruiting employees who are already employed in secure positions. An employer’s efforts to convince someone to leave employment to join its organization may commit that employer to more than it had ever intended on termination. In these cases, it is particularly important to consider termination at the point of hiring, and to give serious thought to whether an appropriately drafted termination provision should be included as part of the employment contract, to avoid disputes as to entitlements on termination of employment.

Rodgers v. CEVA, 2014 ONSC 6583 (CanLII)

 

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An Offer They Can’t Refuse – The Dangers of Recruiting High Level Employees

The Dangers of Unpaid Employment in a Start-Up Company

Unpaid internships were discussed in an April 8th posting in this blog and it is clear that most Ontario interns have to be paid.  But what about employees in start-up companies?  Can employers provide them with stock options, shareholdings or the promise of future payment in lieu of current payment of wages?  The short answer is that except in certain defined circumstances, employees must be paid wages, and they must be paid on a regular basis from the time that they begin working for a company.

The Employment Standards Act, 2000 (Ontario) (the “ESA”) defines an employee as “someone who performs work for an employer for wages”.  In turn,  the term “wages” is defined as “monetary remuneration”.  Section IX of the ESA requires employees to be provided with “at least the prescribed minimum wage”.

The Regulations under the ESA have some exemptions in relation to Section IX, but they are limited and generally only apply to certain defined professionals (eg. doctors, lawyers, engineers, architects, teachers), commissioned salespeople, and other specified groups of employees (certain student employees such as camp counselors, and janitors/superintendents who reside in the building that they are responsible for).  It is particularly important for start-up companies to note that there is no wages exemption under Section IX of the ESA for information technology professionals, managers, supervisors or executives.

In addition, because the ESA expressly prohibits employers and employees from entering into an agreement to circumvent the provisions of the ESA, it is not possible for a company founder or similarly-placed employee to agree to forego wages during the start-up period.  The potential risk to a company which permits employees to work without receiving at least minimum wage, is that the employee can make an unpaid wages claim, which in turn can also be a liability to the directors and officers of the company.  In addition, a failure to pay wages as earned can lead Canada Revenue Agency to have a claim for unpaid tax and other withholdings which should have been made.

While there are risks with entering into independent contractor agreements, particularly if the contractors are actually employees under various legal tests, sometimes the safest path for a financially strapped start-up is to consider short-term contractor arrangements until the company is on its feet and generating revenue which can be used to cover payroll for employees.  This can be a tricky area to navigate and should never be done without legal advice, but done properly, it is a better and safer option than failing to pay employees during the initial start-up period.

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The Dangers of Unpaid Employment in a Start-Up Company

Top Ten Tips for the Workplace

Every now and then, it’s worth it for even the most seasoned HR professional to receive a reminder about best practices in the workplace.  Ensuring compliance with our Top Ten Tips list below will help to keep your workplace running smoothly.

1.  Ensure that all  employees sign employment agreements that clarify potentially contentious issues up front, such as entitlements on termination.

2.  If your workplace has any concerns about protecting company confidential information or intellectual property, ensure that employees also sign some form of Confidential Information and Intellectual Property Agreement (“IP Agreement”).

3.  Remember that employment agreements and IP Agreements must be signed before an employee’s start date.  If that doesn’t happen, then the employee must be provided with some sort of “consideration” for signing (eg. a signing bonus; a promotion and salary increase), and the consideration should be specifically referenced in the agreement(s).

4.  Remember that the law is ever-changing:  a good employment agreement template one year will not necessarily be legally compliant the next year.  An annual legal review of your employment agreement templates will provide a significant cost savings to your business in the long run.

5.  If it is important to your business that restrictive covenants be entered into, ensure that non-competition covenants are not used where non-solicitation and confidentiality covenants would suffice to protect the company.  In addition, ensure that the covenants are sufficiently narrowly drafted in terms of scope, duration and jurisdiction so that they can be upheld by the courts.

6.  Provide employees with at least several days to consider any employment agreements that they are being asked to sign, so that they may obtain legal advice if they wish.

7.  Ensure that your workplace is up-to-date and compliant with all of its statutory obligations.  In Ontario for example, that includes ensuring that all employees have undertaken mandatory Workers and/or Supervisors Health & Safety Awareness Training, ensuring compliance with the Access to Ontarians with Disabilities Act (AODA), ensuring compliance with the Pay Equity Act if applicable, and ensuring that your workplace has posted all required Employment Standards Act (2000) posters and all required Occupational Health & Safety Act posters and policies.

8.  In the event of employee disability issues, consider obtaining legal advice to help you to properly assess and monitor the situation, so that both your workplace and the employee are protected and treated appropriately.

9.  In the event that an employee must be terminated, ensure that he/she is provided with reasonable notice in accordance with the applicable statute, any applicable employment agreement, or the common law (except in the case of a just cause termination).  Do not seek a release unless the employee has been offered something more than the minimum statutory entitlements, and if the employee refuses the offer, provide all minimum statutory amounts even in the absence of a release.  Ensure that benefits and vacation pay continue to accrue through the statutory notice period, and ensure that the Record of Employment is properly completed and submitted in a timely manner.

10.  Don’t hesitate to seek legal advice.  Oftentimes, the biggest problems can be made much smaller if legal counsel is contacted before action is taken.

 

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Top Ten Tips for the Workplace

Yet Another Reminder on the Importance of Careful Drafting of Termination Clauses…

As if employers needed one, we now have yet another decision invalidating a termination provision for failure to comply with the Employment Standards Act, 2000 (the “ESA”)Miller v. A.B.M. Canada Inc., 2014 ONSC 4062 (CanLII).

Mr. Miller applied for and obtained the position of “Director, Finance and Business Process Improvement”.  Prior to commencing employment, he had signed an employment contract, which contained the following elements of “remuneration”:

  • A base salary of $135,000 per year;
  • Pension contributions up to a maximum of 6% of base salary; and
  • A car allowance of $680 per month.

The employment contract contained the following provision in respect of termination without cause:

“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.”

 Mr. Miller commenced employment on September 1, 2009 and was dismissed on a without cause basis on January 26, 2011. The primary issue was whether the termination provision limited Mr. Miller’s entitlement to the ESA minimum (two weeks), or whether he was entitled to common law pay in lieu of notice.

After examining the clause and considering case law (including Wright v. Young and Rubicam Group of Companies and Stevens v. Sifton Properties Ltd.), the Court came to the following conclusions:

  • the length of the notice period in the contract, being “the minimum period of notice prescribed by applicable legislation”, was effective to rebut the presumption of reasonable notice according to common law, and as such (provided the remainder of the contract was valid), the amount of notice was legitimately established in the contract as being the ESA minimum; but                                     
  • the contract breached the ESA requirement that if pay in lieu of notice is provided, all benefits must be continued.  The contract only required the payment of “salary” in lieu of notice. The failure of the contract to require payment of the 6% pension contribution and the car allowance rendered the clause contrary to the ESA, and void for all purposes, such that Mr. Miller was entitled to common law pay in lieu of notice.

The Court also made the observation (although technically this was not a required part of the decision and would be considered obiter), that the wording of the provision at issue will determine whether it is enforceable, rather than the actual actions of the parties.  In other words, if a provision is unenforceable because it does not comply with the ESA in some respect, the fact that the employer does actually comply with the ESA will not render the provision at issue enforceable.

Interestingly, the Court held that although the termination provision was invalid, Mr. Miller “cannot escape bearing some responsibility for the fact that both parties entered into a contract which fell below ESA standards”, which seems to suggest that the Court still considered the contract when assessing the common law notice period. Ultimately, after considering Mr. Miller’s age (39), length of service (17 months) and position (Director, Finance and Business Process Improvement), the Court awarded three months of pay in lieu of notice at common law.

Mr. Miller thus received three months of pay in lieu of notice, rather than the minimum two weeks pursuant to the ESA.  This case stands as yet another reminder that termination provisions must be carefully drafted to meet the ESA in every respect, or they will be subject to attack, resulting in the employee potentially being entitled to common law pay in lieu of notice.

Miller v. A.B.M. Canada Inc., 2014 ONSC 4062 (CanLII)

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Yet Another Reminder on the Importance of Careful Drafting of Termination Clauses…

Your Partners Are Not Your Employees: Supreme Court of Canada Clarifies the Application of the Control/Dependency Test

In 2009, John McCormick, an equity partner in the law firm Fasken Martineau DuMoulin LLP (the “Firm”) filed a complaint with the British Columbia Human Rights Tribunal, alleging the Firm’s requirement that equity partners retire from the partnership and divest their equity at age 65 was age discrimination in employment, contrary to section 13 of the British Columbia Human Rights Code, R.S.B.C. 1996, c. 210 (the “Code”).

The Firm applied to have the complaint dismissed on the basis that the matter was not within the jurisdiction of the tribunal, and that there was no prospect that the complaint would succeed. The Firm’s primary position was that because Mr. McCormick was an equity partner in the firm, there was no employment relationship that could be the subject of a complaint under section 13 of the Code. The Tribunal denied the Firm’s application to dismiss however, and concluded that the relationship between Mr. McCormick and the Firm was one of “employment” for the purposes of the Code.

On judicial review, Justice Bruce of the Supreme Court of British Columbia agreed with the Tribunal, indicating that the application of the Code must be based on a conclusion that the complainant and the alleged offender are in an employment relationship in fact and in substance. In Mr. McCormick’s case, many of the attributes of his relationship with the Firm were the same as those found in a traditional employer/employee relationship and therefore the Tribunal’s decision to deny the Firm’s application to dismiss was justified.

The Court of Appeal disagreed however, and held that despite the broad, liberal and purposive interpretation that must be given to the Code, it is a legal impossibility for a partner to be employed by the partnership of which he or she is a member. The fact that the Firm’s management may exercise similar aspects of control over the partners as may be exercised by the management of a corporation over its employees does not change the relationship from one of partners running a business to one of employment by one group of partners over an individual partner. Accordingly, in a unanimous decision the Court of Appeal determined that there was no employment relationship, so the complaint should be dismissed. Mr. McCormick was subsequently granted leave to appeal this decision of the Court of Appeal to the Supreme Court of Canada.

On May 22, 2014 the Supreme Court of Canada released its highly anticipated decision dismissing Mr. McCormick’s appeal. Unlike the Court of Appeal which held that as a rule, it was impossible for a partner to be employed by the partnership of which he or she was a member, Madam Justice Abella, on behalf of a unanimous court, took a more contextual approach holding that that the primary question was to examine the essential character of the relationship between Mr. McCormick and the Firm and the extent to which it was a dependent relationship. While Justice Abella agreed with the Court of Appeal that on the circumstances of this case, it was impossible for Mr. McCormick, an equity partner in the Firm, to be employed by the partnership, she refused to close the door on finding a partner could be an employee in other situations. The key, according to Justice Abella, was “examining how two synergetic aspects function in an employment relationship: control exercised by an employer over working conditions and remuneration, and corresponding dependency on the part of a worker.” (at para. 23)

In this case, the Supreme Court confirmed that the Code is quasi-constitutional legislation and that the definition of employment for the purposes of the Code must be approached “consistently with the generous, aspirational purposes set out in s. 3 of the Code and understood in light of the protective nature of human rights legislation which ‘is often the final refuge of the disadvantaged and the disenfranchised’ and of ‘the most vulnerable members of society’”. (at para. 19, references omitted) Nevertheless, even considered in this philosophical framework, the Court found that the protections of the Code could not extend to Mr. McCormick.

Importantly, Justice Abella held that control and dependency are more than a function of whether a worker receives immediate direction from or is affected by the decisions of others, but whether the employee has the ability to influence decisions which critically affect his or her working life. In the case of Mr. McCormick, as an equity partner for some 30 years, he was part of a collective of individuals who had control over workplace conditions and remuneration—i.e. he was part of the collective employer and was not necessarily someone who was in a vulnerable position vis-à-vis that group. The Firm’s management structure and administrative polices to which Mr. McCormick was subject were not viewed as limitations on his autonomy making him dependent on the Firm, but rather, were viewed as necessary incidents of its management. Furthermore, though his income was pooled with his colleagues, his remuneration was set in accordance with his contributions to the Firm, in accordance with polices he would have had a right to vote to implement, and he drew income from the Firm’s profits and was liable for its debts and losses. Overall, the Court found that he was not working for the benefit of someone else, but to his own benefit.

Referring specifically to the decision of the Human Rights Tribunal, Justice Abella found that the Tribunal, in considering the control aspect of the relationship had given insufficient consideration to the underlying power dynamics of the relationship between Mr. McCormick and the Firm, and had focused unduly on the administrative polices which governed his activities within the Firm. In this case, where there was no genuine control over Mr. McCormick, an employment relationship could not be established for the purposes of the Code.

Justice Abella was careful not to close the door on other partners being found to be employees for the purposes of the Code in other circumstances. However, she was clear that such a situation would require normal partnership rights, powers and protections to be “greatly diminished”. (at para. 46). The Court was also careful to point out in obiter that while Mr. McCormick might not be able to avail himself of the protections of the Code, partners alleging discrimination nevertheless could have recourse against their partners with respect to the duties of utmost fairness and good faith required by the Partnership Act. However, the Court was careful to avoid commenting on whether such recourse was available in this instance.

Noteworthy, also released today was the United Kingdom Supreme Court decision of Clyde & Co LLP and another v. Bates van Winkelhof, [2014] UKSC 32. In that case, an equity partner in a law firm sought whistleblower protection granted to employees under the Employment Rights Act 1996. In this decision the Supreme Court came to the conclusion that the partner was a “worker” (as defined) for the purposes of that legislation. In that case, the Court was clear that there was no contract of employment between the partner and the firm in question, rather the decision turned on whether under the partnership agreement in question, the partner had undertaken “to do or perform personally any work or services for another party to the contract whose status is not by virtue of the contract that of a client or customer of any profession or business undertaking carried on by that individual.” In this case, whether or not the partner was a worker turned largely on interpretation of the applicable statute in conjunction with the applicable partnership legislation. However, the Court also reviewed the concept of “subordination” (a permutation of the control and dependency test) and held that because the partner could not market her services to anyone other than the firm with which she was employed, and because she was an integral part of her business, she fell within the definition of worker in that case. Notably, the partner in question, although an equity partner, was junior in the sense that she received a fixed income and that there was a level of Senior Equity Partner above her, the antecedents to which appeared to fall more in line with the traditional benefits of partnership. Nevertheless, the Court in Clyde & Co did not necessarily focus on these factors in rendering its decision.

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Your Partners Are Not Your Employees: Supreme Court of Canada Clarifies the Application of the Control/Dependency Test

Discrimination due to Family Status – The Final Word?

In a just-released decision, the Federal Court of Appeal has confirmed that the ground of discrimination due to family status under the Canadian Human Rights Act includes parental obligations which engage a parent’s legal responsibility for a child, such as childcare obligations.  But fear not employers - parental choices such as voluntary family activities will not trigger similar claims of discrimination due to family status.

Background:

On May 2, 2014, the Federal Court of Appeal released its long-awaited decision in the case of Johnstone v. Canada Border Services Agency (“CBSA”).  Fionna Ann Johnstone had been employed by the CBSA since 1998, and her husband was employed by the CBSA as well.  After having children, Johnstone asked for accommodation to her work schedule at Pearson International Airport.  The CBSA had a complicated work schedule for its full-time employees, which included rotating through 6 different start times over the course of days, afternoons and evenings with no predictable pattern, as well as working different work days during the duration of the schedule.  The schedule was based on a 56 day pattern and subject to change on 5 days’ notice.  Johnstone could not find a caregiver due to her schedule and her husband was unable to cover her work days with any certainty as he was subject to the same unpredictable schedule, albeit one that was not coordinated with hers.

Johnstone requested accommodation in the form of a fixed full-time schedule but was only offered a fixed part-time schedule.  Interestingly, the CBSA had previously accommodated disabled employees with a fixed full-time schedule, but it refused to do so in this case because it felt it had no duty to accommodate Johnstone’s childcare responsibilities.

The case moved through a long and circuitous route beginning in 2004 from the Human Rights Commission to the Federal Court, back to the Human Rights Tribunal and finally to the Federal Court of Appeal (with judicial review of some decisions along the way).

The Decision:

After reviewing the law in great detail, the Federal Court of Appeal determined that family status includes childcare obligations which a parent cannot neglect without engaging his or her legal liability.  The court was careful to confirm however, that voluntary family activities such as family trips and extracurriculars do not fall under the family status protections, as they result from parental choices rather than obligations.

In turning to whether or not a prima facie case of discrimination due to family status has been made out, the court stated that an employee must be able to demonstrate the he or she has unsuccessfully sought out reasonable alternative childcare arrangements, and is unable to fulfill his or her parental obligations as a result.  More particularly, the court invoked a four-part test under which the individual making the claim of discrimination must show: (i) that a child is under his or her care of supervision; (ii) that the childcare obligation at issue engages the individual’s legal responsibility for that child, as opposed to a personal choice; (iii) that he or she has made reasonable but unsuccessful efforts to meet those childcare obligations through reasonable alternative solutions; and (iv) that the workplace rule interferes in a manner that is more than trivial or insubstantial with the fulfillment of the childcare obligations.

Based on all of the above, the Court upheld the finding in favour of Johnstone, together with most of the remedies awarded by the lower court (lost wages and benefits from 2004; $15,000 for pain and suffering; $20,000 in special compensation due to the fact that CBSA was found to have engaged in a discriminatory practice wilfully and recklessly).  In addition, the CBSA was ordered to consult with the Canadian Human Rights Commission to develop a plan to prevent future incidents of discrimination due to family status.

There remains just one ground of appeal left for this matter, and it will be interesting to see whether the CBSA moves for leave to appeal to the Supreme Court of Canada.

 

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Discrimination due to Family Status – The Final Word?

Join us May 1st for Dentons’ Spring Employment and Labour Law Update

Please join us on May 1st for a complimentary seminar /webinar on the following topics:

July 1st Deadline Looming: How to Comply with Ontario’s New Safety Awareness Training Regulation
Adrian Miedema

Internal Fraud — Managing Termination and Asset Recovery Options
Mark Evans and Blair McCreadie

An Update on Ontario’s Workplace Violence and Workplace Harassment Law
Saba Zia

CHRP Accreditation
This program may be eligible for recertification points.

CPD Accreditation
This 1.5 hour program can be applied toward 9 of the 12 educational hours for Continuing Professional Development required annually by the Law Society of Upper Canada. Please note that these CPD hours are not accredited for the Professionalism Requirement.

Event Details

May 1, 2014
Registration & Breakfast
8:00 – 8:30 a.m. EDT
Seminar
8:30 – 10:00 a.m. EDT

Dentons Canada LLP, 77 King St West, North Building, 5th Floor, Toronto

Or by webinar

To RSVP:

RSVP to Carla Vasquez, Specialist, Marketing and Events at carla.vasquez@dentons.com.

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Join us May 1st for Dentons’ Spring Employment and Labour Law Update

Benefits for Employees over Age 65

As of December 2006, the Ontario Human Rights Code was amended to abolish mandatory retirement. However, the provincial government intentionally did not make corresponding revisions to the Employment Standards Act or the Workplace Safety and Insurance Act. As a result, the law prohibits employer-initiated termination of employment because an employee has reached the age of 65. Voluntary retirement remains acceptable and common. However, employees who work past age 65 are not covered for work-related injuries and need not be covered by group benefit plans. The maximum period for which loss of earnings benefits will be paid under the workers’ compensation system is two years after the date of injury if the employee was age 63 or older on the date of injury. While some employers have arranged for benefit plans to cover employees over age 65, given the increased premium costs, this can lead to a decrease in benefit coverage for all employees or other types of trade-offs. In addition, some unionized employers have been required to provide group health benefits to employees over age 65 due to the wording of a collective agreement – typically a benefits clause which describes the benefits for all members of the bargaining unit.

It was foreseeable that this hybrid status of a worker over age 65 – legally protected from mandatory retirement but not legally protected to receive continued benefits – would lead to litigation. Such an employee would face difficulty succeeding with a complaint under the Employment Standards Act, Human Rights Code or Workplace Safety and Insurance Act since these provincial laws all permit this differentiation.

The Human Rights Tribunal of Ontario (HRTO) is currently hearing such a case. The employee is a unionized teacher who is representing himself. His union cannot bring forward a grievance because it has reached an agreement with the school board in exchange for lump sum payments to teachers over age 65. Nor is the union appearing at the HRTO proceedings. So far, there have been a number of Interim Decisions and Case Assessment Directions issued in the case and the teacher has been unsuccessful in alleging unlawful age discrimination. The final argument, which continues to proceed through the HRTO process, is whether the Human Rights Code of Ontario contravenes the equality rights provisions of the Canadian Charter of Rights and Freedoms, a significant legal challenge for a lone, unrepresented employee.

We will be following this important case as it continues to unfold.

Talos v. Grand Erie District School Board, 2013 HRTO 1949; 2014 HRTO 529

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Benefits for Employees over Age 65

Not Quite an Eye for an Eye – Judge rules that Employee’s “Kick in the Butt” Excuses Co-Worker’s Punch in the Mouth

Does a “kick in the butt” excuse a punch in the mouth? That was the question facing the Court in the recent case of Li v Furguson, 2013 CanLII 91746 (Ont. Sm. Cl. Ct.).

Peng Li and Winston Furguson worked in the shipping and receiving department of a furniture company. Li and Furguson’s coexistence was initially uneventful; however, their relationship had begun to disintegrate following allegations by Li that Furguson was stealing from the company.

On April 19, 2011, things between Li and Furguson reached a boiling point. After searching for Furguson throughout the warehouse, Li finally found his target and confronted him. What happened next was a source of disagreement between the parties, although the judge adopted the following facts. Li began speaking very closely to Furguson; so close that spit was transferred to Furguson’s face, albeit unintentionally. As Furguson tried to break free, Li kicked Furguson in the “butt” with his steel-toe boots. Furguson then wheeled and punched Li twice – one blow was inconsequential, the other was not as it resulted in Li incurring over $7,000.00 in costs for restorative dental services.

At trial, Li argued that he was entitled to damages from Furguson for the tort of battery. However, in the judge’s view, Li’s actions amounted to implied consent to the battery:

Having insulted, berated and confined a person at close quarters, then scuffled with them and kicked them I cannot see how a reasonable person could maintain that a punch or two in return was beyond their reasonable contemplation as being with the scope of what they had implicitly consented to.

 

In addition, the judge held that Li had provoked Furguson by kicking him. Although provocation was not a complete answer to Li’s claim of battery, it nonetheless operated to mitigate the damages that Li had in turn claimed.

In light of these facts, the judge dismissed Li’s claim in its entirety.

It is important to note that while Li had originally brought an action against his employer in which he made a number of claims, including one for “wrongful dismissal”, this action was discontinued before trial. Regardless, apart from the civil liability above, the altercation between Li and Furguson would certainly attract the attention of any employer’s workplace violence policy and potentially lead to discipline.

Li v Furguson, 2013 CanLII 91746 (Ont. Sm. Cl. Ct.)

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Not Quite an Eye for an Eye – Judge rules that Employee’s “Kick in the Butt” Excuses Co-Worker’s Punch in the Mouth