1. Skip to navigation
  2. Skip to content
  3. Skip to sidebar

(Not) April Fools Day – Changes to the Canada Labour Federal Code effective April 1, 2014

For those federally regulated employers that are governed by the Canada Labour Federal Code (the “Federal Code”), there are some substantive changes coming of which you should take note.

The Jobs and Growth Act, 2012 made certain amendments to the Federal Code. The amendments stem primarily from the public consultations that followed the Report of the Federal Labour Standards Review Commission that was released in 2006. The Government has indicated that the amendments are designed generally to make compliance with the Federal Code easier for employers and employees, and to reduce the employers’ costs of administering the legislation.

It has now been announced that the changes will come into force on April 1, 2014.

Limitation Period for Recovery of Wages

Currently there is no established time limit beyond which wages under Part III (labour standards) cannot be recovered. As a result, inspectors can issue written payment orders to employers or directors, ordering them to pay to the employee any wages or other amounts owing to which an employee is entitled going back as far as the evidence establishes that an amount is owing, potentially years prior.

The amendment will set a six-month time limit for the filing of a complaint alleging unpaid wages. As such, if an inspector concludes that an employer has paid to an employee all wages and other amounts under Part III for the six-month period preceding the complaint, the inspector will issue a notice of unfounded complaint. If an amount is found to be owing within this period, the inspector may make an order for wages and other amounts owing for a period starting 12 months (or 24 months for vacation pay) before the date on which the complaint is made, the date on which employment was terminated, or the date on which the inspection started (where a payment order results from a proactive inspection).

For employers, this means that an inspector will not be able to reach back indefinitely in reviewing an employee’s complaint for wages, and brings the Federal Code in line with most provincial statutes in setting a reasonable limit on the inspector’s power to issue orders.

Establishment of a 30-Day Time Period to Pay Vacation Pay on Termination of Employment

The Federal Code currently requires employers to pay outstanding vacation pay “forthwith” to employees when they cease to be employed. As vacation pay is considered wages under the Federal Code, this creates an anomaly, because the Federal Code generally requires employers to pay any wages “within 30 days” from the time when the entitlement to the wages arose. The amendment will ensure that employers pay employees any vacation pay owed within 30 days (rather than “forthwith”) after the day on which the employment ends.

Administrative Review Mechanism for Payment Orders and Notices of Unfounded Complaint

The amendments provide for an administrative review mechanism. Within 15 days of a payment order, the rejection of an unjust dismissal complaint or a notice of unfounded complaint, a person affected by an inspector’s decision can request a review of the decision, with written reasons. An employer or corporate director requesting a review would have to pay the Minister the amount indicated in the payment order as a condition of the review. A payment order or a notice of unfounded complaint could be confirmed, amended or rescinded on review. The decision on review could be further appealed to a referee, but only on a question of law or jurisdiction. The Minister could also refer a complex case directly to a referee, rather than going through the new review mechanism.

While these changes do not represent a major overhaul of the Federal Code, they do move in the right direction, in providing additional clarity and efficiency for employers subject to the Federal Code. The most significant change, the introduction of a limitation period for orders to pay wages, is an important and long overdue addition to the Federal Code, and is a welcome change for employers.

,

(Not) April Fools Day – Changes to the Canada Labour Federal Code effective April 1, 2014

Human Rights claims in the Ontario courts – Now What?

Way back in 2008, the Ontario Human Rights Code was amended to permit human rights claims to be piggybacked onto wrongful dismissal actions in the Ontario courts.  Prior to that time, the only recourse for an employee with a discrimination claim was to make a complaint to the [then] Human Rights Commission.  Some 5 years later, the Ontario Superior Court of Justice has recently released its very first decision in a joint wrongful dismissal/discrimination action.

The case in question was the September decision of Justice Grace in Wilson v. Solis Mexican Foods Inc.  Patricia Wilson was a 16 month employee at the time of her termination, and off work due to back problems.  The reason given for Ms. Wilson’s termination was a corporate reorganization, but the court found that reasoning “[defied] common sense” as Ms. Wilson was never told about the impending reorganization while it was taking place.  The court looked closely at the communications between Ms. Wilson’s doctor and employer, and found that the only conclusion that could be drawn was that the employer was not happy with Ms. Wilson’s ongoing back problems and absences from work, or her requests for accomodation.  Justice Grace reiterated that as long as an employee’s disability is a factor in the decision to terminate, there will be a finding of discrimination.  That is the case whether the disability is the sole factor or simply one small factor in the decision-making process.  In this case it was clear to the judge that Ms. Wilson’s back problems were a significant factor in the decision to terminate, but the result would have been the same even if her back problems were but one factor along with the reorganization.

Having determined that Ms. Wilson had been discriminated against, the court awarded her $20,000 due to the fact that she “lost the right to be free from discrimination” and experienced “victimization”, and due to the fact that the employer orchestrated her dismissal and was disingenuous both before and during the termination.  That amount was in addition to the damages received in lieu of notice of termination.

Interestingly, the court did not comment on whether or not reinstatement of employment was an option, thereby leaving that issue to another court on another day.  While employees pursuing complaints at the Human Rights Tribunal can seek reinstatement, and while the Human Rights Code appears to permit courts to make similar orders, we still have no guidance as to whether reinstatement will become a tool used by our courts.

To view the decision, click here:  http://canlii.org/en/on/onsc/doc/2013/2013onsc5799/2013onsc5799.html

, ,

Human Rights claims in the Ontario courts – Now What?

Technology in the Workplace

I have trouble programming my television and need my teenage daughter to lend a hand.  I also know that I am not alone in this world of rapidly changing technology.  It is of little wonder then, that even the best HR professionals can sometimes use a reminder of best practices when it comes to the use of technology in the workplace.  This ever-changing area encompasses so many technological issues that this is only intended to provide a very high level overview.

Workplace Surveillance:

For employers in a unionized workplace or employers which are federally regulated (eg. banks, telecoms), collective agreements and federal privacy legislation respectively  set out strict parameters with respect to what sort of workplace surveillance is permitted.  For employers in B.C., Alberta and Quebec, applicable provincial privacy legislation may also set out parameters with respect to permitted workplace surveillance.  For all other employers, the workplace surveillance findings of the Privacy Commissioner of Canada are instructive but not generally applicable.

With regard to the Privacy Commissioner’s findings, the use of video surveillance and GPS is generally not permitted for productivity management although it may be permitted if the employer can show a bona fide safety or security reason for the surveillance.  In those cases, employees should be given advance written notice of the surveillance and the surveillance must be reasonable in scope.  On the other hand, unionized workplace arbitration findings sometimes permit keystroke monitoring to manage productivity, but it is considered intrusive and other means of monitoring productivity should be used if possible.

Computer Use in the Workplace:

Much has been written about the extent to which employers can monitor an employee’s computer use in the workplace, particularly in light of the Supreme Court of Canada’s 2012 decision in the case of R v. Cole.  In that decision, the court held that employees have a reasonable expectation of privacy in connection with personal information on workplace computers.  This criminal decision involving Charter rights is only directly applicable to public sector employers, but it gives employers some idea of where the courts may go on this issue in the future.

As a result of this decision and the apparent desire of the courts to protect employee personal information even when located on company property, it is absolutely necessary for employers to have a computer use policy which confirms that: (i) the employer’s computer systems are company property and should only be used for company business; and (ii) employees should understand that they have no expectation of privacy when it comes to personal information when using the employer’s computer systems.  Employees should be regularly reminded about the policy and asked to confirm their understanding and agreement.

Teleworking:

The two biggest issues with allowing employees to work from home are productivity and confidentiality.  With respect to confidentiality, employers should assist in the set-up of the home office and insist upon some or all of the following protections: (i) home computers which are password enabled, email encrypted, firewalled and/or subject to biometric ID; (ii) all company work must go through the company’s internal network through a platform such as Citrix; (iii) sensitive company and customer information should not be maintained on laptop computers, cell phones or other portable devices; (iv) hard copies of sensitive company or customer information kept at home should be stored in a locked filing cabinet; and (v) home computers used for work purposes should not be accessible to family members.  It is also a good idea to conduct periodic checks in order to ensure that your employees are following proper procedures.

Social Media:

If your organization decides that it wants to permit social media in the workplace, drafting a good policy is your starting point.  Among other things, the policy should: (i) make it clear that employees cannot use social media to disclose company or customer confidential information, engage in workplace gossip, do anything discriminatory or harassing, or otherwise say anything which might harm the company or its customers; (ii) advise employees that their use of social media may be monitored; (iii) advise employees that the use of social media at work is for work-purposes only; (iv) require workplace bloggers to identify themselves by their real names and make it clear that the views expressed are not necessarily those of the organization (unless the organization requires blog entries to be approved prior to posting); and (v) require employees to have a stand-alone work account for their blogs so that they do not use a personal account for work-related matters.

On-Line Recruiting:

To understand what you can and cannot do on an on-line basis when it comes to recruiting, you need to understand what you can and cannot do off-line.  One of the general rules of thumb is that you cannot make a decision to not hire based on an employee’s age, race, religion, ethnicity, sexual orientation, etc.  If an employee is looked up online before a decision is made whether or not to hire, or even whether or not to interview, one runs the risk of finding out something about the employee’s personal background which could lead to a Human Rights complaint.  As a result, it remains best practice to interview first, and then make any hiring decision subject to reference checks and other background checks (and to obtain the prospective employee’s consent for those checks before undertaking them).

Closing:

Although technology is ever-changing and some of the issues set out above will become non-issues with the passage of time and technologies, the one constant thread which runs through most of these issues is the need to have strong policies which outline what is and isn’t permitted in the workplace.  Notwithstanding the same, employers should be aware of the fact that employees may have reasonable expectations of privacy in the workplace, even when using company technology.

,

Technology in the Workplace

Receipt of Pornographic Material was not Just Cause for Dismissal: Appeal Court

In the 2001 case of McKinley v. B.C. Tel, the Supreme Court of Canada ruled that a contextual approach is required in order to determine whether there is just cause for termination of employment.   A recent wrongful dismissal case involving receipt of pornographic material illustrates how the contextual approach will be applied by courts.

In February 2013, the Court of Appeal of New Brunswick upheld a lower court finding in the case of Asurion Canada v. Brown and Cormier,  to the effect that dismissal without notice was a disproportionately severe penalty for receiving pornographic emails at work.  At the time of termination, Cormier had been with Asurion for 8 years and was a call centre supervisor.  Brown was employed by Asurion for 9 years and was vendor payables specialist.  Both men had a good employment history with the company.  Both men, unfortunately, also had a mutual friend who liked to send them pornographic emails.

During the period from mid May to mid July 2010, Cormier and Brown were sent over a dozen unsolicited emails from their friend.  The emails were promptly sent to home email accounts and deleted.  They were not shared with anyone at work. When Asurion became aware of the emails in July as a result of its network monitoring system, both men were dismissed immediately due to breach of the company’s policies and breach of trust.

While the company did have a policy which prohibited “accessing, transmitting, receiving or storing discriminatory, profane, harassing or defamatory information”, the court found that the policy was not reasonable given that: (i) ”receiving” information does not involve a positive act; and (ii) the emails in question were unsolicited.  More importantly, the court confirmed that the response of the company was not proportionate to the actions of the employees.  In particular, these longstanding employees had unblemished records, none of the emails were shared with fellow employees, and the images attached to the emails fell within the category of “perfectly legal adult pornography” and were not in violation of the Criminal Code of Canada.

Asurion had an employee handbook with a comprehensive Computer Use and Harassment policy.  The company’s employees were required to read the company’s policies and there was some suggestion that they were reminded of the Computer Use policy each time that they logged onto their work computers.  The company went even further, and used a network monitoring system in order to ensure that the policies were being complied with.  Ultimately it was all for naught, as the policy was found to be unreasonable and the application of it was disproportionately severe when viewed through the lens of the employees’ years of service and specific actions or inactions in the case at hand.

This recent decision serves as a good reminder that any time a termination for cause is being considered, the employer should consider not just the offending actions of the employee, but the other relevant circumstances of the employee’s employment.

Asurion Canada Inc. v. Brown and Cormier, 2013 NBCA 13 (CanLII)

,

Receipt of Pornographic Material was not Just Cause for Dismissal: Appeal Court

Natural Disasters in the Workplace – What Do I Do?

Did you know that the Ontario Ministry of Labour has a Q&A on how to deal with natural disasters in the workplace?

The Q&A, which can be found at the link listed below, covers issues such as whether or not an employee can be forced to take vacation days in the event of a natural disaster which prohibits him or her from working, or whether an employee must be paid if he or she is told to not come to work during the disaster.

Apart from basic issues covered in the Q&A, there are a number of other things to be aware of in the event of a natural disaster.  The Emergency Management Statute Law Amendment Act, 2006 (Ontario) permits the Premier and Cabinet to introduce legislation intended to govern emergencies such as natural disasters.  In addition, the Employment Standards Act, 2000 (Ontario)  provides for unpaid emergency leave for declared emergencies such as natural disasters, which is different than the standard emergency leave to deal with an ill or injured family member.

While an employer may not wish its employees to come to work in the event of a natural disaster, there may also be situations where certain employees are in fact required to work precisely because of the natural disaster, even if the workplace is under quarantine.  The ESA specifically permits certain employees to work in those situations, if their skills are required due to an emergency.  Likewise, although employees may rely on the Occupational Health & Safety Act (Ontario) (“OHSA”) to refuse to work if they are concerned that the condition of their workplace may jeopardize their health or safety, exemptions to OHSA require certain essential employees to work notwithstanding those conditions.

In addition to the above, there are a number of other pieces of provincial and federal legislation which work together to answer some of the key questions about how to deal with a natural disaster in the workplace.  Whether that disaster relates to health issues (eg. SARS, H1N1), loss of the workplace premises or something else, this combined legislation will help employers determine the appropriate response to disasters, and it is recommended that employers be proactive about understanding their obligations so that they are prepared in the event that disaster strikes.

To access the Ministry of Labour’s Q&A, click here.  For more information about all of the workplace issues involved in the event of a natural disaster, a more thorough discussion can be found here.

, ,

Natural Disasters in the Workplace – What Do I Do?

HR Professionals: The Key to Smooth Corporate Acquisitions

Although human resources professionals are not always recognized for their efforts during a corporate acquisition, the work which they do behind the scenes can often make the difference between an acquisition succeeding or failing.  The following is a brief summary of key issues for HR professionals to stay on top of, long before an acquisition is ever contemplated, during the due diligence phase and right through to closing.

There are two types of transactions which can result in the purchase and sale of a business – a share purchase and an asset purchase.  In a share purchase, the corporate identity of the target company does not change and as a result, the employees remain employed by the same purchaser after closing.  Unless new employment agreements are negotiated with the purchaser, the employment terms and conditions of those employees will not change on closing.  In an asset purchase however, only certain assets of the target company are purchased and the employees are therefore generally terminated by the target company unless they agree to accept new employment with the purchaser.

Keeping Your House in Order:

All too often, proposed acquisitions fall through after the purchaser becomes aware of potential employee liabilities which it will have to assume in the event of an acquisition.  As an HR professional, you can assist with minimizing those liabilities long before an acquisition is being contemplated, by ensuring that: (i) well-drafted employment agreements are properly entered into; (ii) the company is protected with any necessary confidentiality, intellectual property and restrictive covenant agreements; (iii) there are no significant wages, vacation pay and overtime pay accruals; (iv) employee claims and complaints are kept to a minimum; and (v) mandatory statutory obligations are complied with (eg. WSIB registration; compliance with the Occupational Health and Safety Act; compliance with the Pay Equity Act).  When potential employment liabilities are kept to a minimum, it greatly reduces the risk of a purchaser walking away from a deal due to the added costs of correcting the liabilities.

Due Diligence:

HR professionals should be aware of the fact that even in an asset purchase, the Employment Standards Act, 2000 contains successor employer provisions.  In particular, section 9 of the ESA states that if a purchaser hires an employee of a vendor within 13 weeks of closing, the purchaser will be deemed to have taken on the employee with all of his or her prior years of service with the vendor.  Therefore, although the inclination may be to think that the purchaser in an asset deal can “fix” employment problems hand-in-hand with the hiring of employees on closing, sometimes employees will balk at going to a new employer if they are not being hired on similar or better terms to those which governed their employment with the vendor.  In this regard, it is often helpful for the vendor to work with the purchaser during the due diligence phase in order to determine who will be provided with offers of new employment and what the new and continuing terms of employment should be.

HR professionals in Ontario should also be aware of the fact that the Personal Information Protection and Electronic Documents Act (PIPEDA) does not yet have a business transaction exemption.  Although employee personal information is not generally caught under PIPEDA, it can be subject to PIPEDA when employee personal information is being collected, used or disclosed for commercial purposes such as an acquisition.  In order to ensure that there are no personal information breaches in connection with the acquisition of a company, if you work for the vendor it is wise to get the employees to sign a consent to the disclosure of their personal information at the time that they are first hired, as to do so in the midst of a transaction can tip employees off before the transaction becomes publicly known.  Whether or not the employees have signed consents at the time of hire, it is also wise for the vendor and the purchaser to enter into confidentiality agreements with respect to employee personal information which may be disclosed in relation to the transaction.

Closing:

As the closing of the transaction approaches, it is particularly important for HR professionals for both the vendor and the purchaser to try to work together to determine such issues as who will take responsibility for accrued vacation, whether releases will be sought from employees who are part of an asset purchase, whether and what type of new employment agreements will be offered to those employees who are remaining on, and ensuring that employees who are not remaining on are properly terminated at or prior to closing.  As well, there is often a need for certain key employees to remain on for a limited period to assist with transition work, and thought often needs to be given to whether those employees should be provided with a special retention bonus agreement or whether the expectation is that they will simply work out their notice of termination period doing transition work.

As always, it is important for HR professionals to obtain legal advice from an employment law specialist in conjunction with the above steps.  Together, they can make the difference between a difficult acquisition and a successful one.

,

HR Professionals: The Key to Smooth Corporate Acquisitions

Social Media & Employees: When Every Little Thing Is Searchable

The scope of an employer’s right to discipline and terminate an employee for indiscreet or inappropriate remarks in social media is far from settled. Given that an employee’s social media activities have the potential to “go viral” (or at least be seen by hundreds, if not thousands of people), organizations must assess whether the activities of employees outside of work have the potential to negatively affect, even transiently, the reputation and goodwill of the organization.

Currently, the legal battle over an employer’s legitimate interest in an employee’s use of social media is being played out among employees who are relatively junior within organizations and may, justifiably or unjustifiably, believe that their actions are not under the gaze of their employers.

This post compares two recent cases from the United States and the United Kingdom with an earlier case from Canada.

Don’t Make Fun of the Customers

In a recent U.S. National Labour Relations Board (NLRB) decision, Karl Knauz Motors, Inc. (Re), the NLRB considered whether a car dealership could terminate a salesperson for comments on Facebook about an accident that involved a customer of the dealership. The customer had driven into a pond and the salesperson posted photos on Facebook with sarcastic comments. The employer argued that the comments violated employee handbook rules that required employees to be “courteous, polite, and friendly to our customers, vendors and suppliers, as well as to their fellow employees” and which prohibited conduct that was “disrespectful” or involved the “use of profanity or other language which injures the image or reputation” of the employer. In addition, not long before the post about the customer, the same salesperson had posted photos and comments criticizing food that had been served at a sales event at the dealership. The tenor of the earlier post was that the dealership should have served better food given the profile of the sales event.

The salesperson claimed that he was terminated in violation of the protections afforded by section 7 of the National Labor Relations Act (NLRA), which, among other things, provides rights to participate in concerted activity for the purpose of collective bargaining or other mutual aid or protection. The NRLB has previously issued decisions and guidance documents this year warning that social media policies must not stifle workers from communicating about workplace conditions as this would offend section 7 of the NLRA.

An administrative law judge concluded that the postings about the car accident did not fall within section 7 of the NLRA because it was posted by the employee on his Facebook page and not discussion took place on Facebook about the post. By contrast, the comments about the food at the sales event were made in the context of an exchange among employees on Facebook. The administrative law judge concluded that the comments were related to the dealership’s image at the event and this could affect the working conditions of the employees by affecting sales.

In a split decision, the NLRB upheld the decision of the administrative law judge. The employee’s termination for the comments about the customer was not protected by the NLRA. However, the NLRB ordered that the employee handbook rules were overbroad and not enforceable.

The dissenting NLRB member concluded that the requirement to be courteous did not violate section 7 of the NLRA and held that:

“[r]easonable employees know that a work setting differs from a barroom, room and they recognize that employers have a genuine and legitimate interest in encouraging civil discourse and non-injurious and respectful speech.”

Say What You Will About Gay Marriage

In the Smith v. Trafford Housing Trust, a housing manager of the Trust read a news article online regarding gay marriage and posted the link to his Facebook account with the comment “an equality too far”. The manager’s Facebook privacy settings had been set so that his posting could be viewed by his “Friends” and also “Friends of Friends”. This prompted an exchange with one of the employee’s colleagues at work, which was quite tempered but suggested that those gays and lesbians “have no faith and don’t believe in Christ”. The employee was suspended and subjected to a disciplinary proceeding that resulted in a finding of gross misconduct. The employee was offered a demotion to a non-managerial position in view of the length of his service.

According to the decision of the English High Court of Justice (Chancery Division), the Trust had over 300 employees. The court found that at the material time, the employee listed that he was a manager at the Trust. His profile stated “What can I say – it’s a job and it pays the bills”. He described his religious views as “full on charismatic Christian.” His profile and wall pages also listed that he was a manager at the Trust. In putting the post into context, the court held that it was one of a number of posts about “sport, food, motorcycles and cars.”

The court concluded that a reasonable reader of the manager’s wall would not have understood him to be a spokesperson for the Trust. The court rejected that any loss of reputation by the Trust would arise in the mind of a reasonable reader. The manager’s Facebook wall “was primarily a virtual meeting place at which those who knew of him, whether his work colleagues or not, could at their choice attend to find out what he had to say about a diverse range of non-work related subjects.” The court minimized the broader access to his wall by “friends of friends” by stating that “actual access would still depend upon the persons in that wider circle taking the trouble to access it.” The court found that the manager did not thrust his views onto colleagues at the office. The medium and context was not “inherently” work related. In the result, the court concluded that the manager had been constructively dismissed.

Don’t Diss and Threaten Other Employees or Your Employer

The problems for the employees in Lougheed Imports Ltd. (West Coast Mazda) v. United Food and Commercial Workers International Union, Local 1518 started when one of the employees posted on Facebook a post that could be interpreted as threatening: “Sometimes ya have good smooth days when nobody’s [expletive] with your ability to earn a living … and sometimes accidents DO happen, its [sic] unfortunate but thats [sic] why there [sic] called accidents right?” Another employee also was posting derogatory comments about managers.

The employees had close to 100 and 377 “friends” respectively. Significantly, the posts were escalating in tone and extreme enough that one person “de-friended” and even the girlfriend of one of the employees commented that ”[s]omethings just shouldn’t be broadcasted on facebook, especially when you still work there.”

The employer terminated the employment of the two employees. The union grieved but lost. In an interesting counterpoint to the Trafford Housing Trust case, the British Columbia Labour Relations Board concluded that there the comments on Facebook had sufficient proximity to the employer’s business. The comments had been used as a “verbal weapon”. They went beyond shop floor comments to insubordination in front of employees who were friends of the employees by degrading a manager and referring to discipline. The comments also counselled Facebook friends not to shop at the employer. In the result, the termination was upheld.

Substance, Purpose and Context

One should be careful to draw conclusions from a handful of cases in multiple jurisdictions with different approaches to employment and privacy laws. However, one theme that emerges in all three cases is that, in addition to the substance of the social media posts, the purpose and context for those postings are important considerations in concluding whether the employer has a legitimate interest in the activity of the employee’s social media activities.

 

,

Social Media & Employees: When Every Little Thing Is Searchable

The Return of Large Punitive Damages Awards in Wrongful Dismissal Cases?

Are large punitive damages awards in wrongful dismissal coming back?  Looking at the trial court’s decision in the case of Pate v. Galway-Cavendish and Harvey (Townships), which is currently under appeal, one wonders.

Mr. Pate was a 9+ year employee at the Townships, who was terminated for cause due to his alleged non-remittance of building permit fees.  When he refused to resign (after being given no details of the allegations against him), he was dismissed and the matter was reported to the police.  In part due to the allegations against him and the ensuing criminal trial, Mr. Pate’s marriage and his side business with his wife both failed.  In addition, he was unable to re-establish a career as a municipal official.

Mr. Pate was subsequently acquitted, and it was determined by the trial judge that the employer had failed to disclose key information to the Crown which would have resulted in no charges having been laid in the first place.  The trial judge felt that the employer’s conduct merited relief in the form of a punitive damages award, due to the fact that damages for wrongful dismissal could not adequately address the fact that Mr. Pate’s career was effectively destroyed due to the allegations.  However due to the principle of proportionality, the trial judge awarded Mr. Pate only $25,000 in punitive damages.  The Ontario Court of Appeal subsequently overturned that decision and ordered that a new trial be conducted with respect to the quantum of punitive damages and another issue.

With reference to the damage caused to Mr. Pate as well as the fact that both the criminal proceedings and the wrongful dismissal trial took years to be dealt with, on the second time around the trial judge took full advantage of the Court of Appeal’s open invitation to punish the employer for its conduct, and increased the punitive damages award from $25,000 to $550,000.

While the matter is under appeal once again and it may be that the $550,000 was excessive, the Court of Appeal’s unusual invitation to the trial judge to reassess punitive damages at a higher amount makes it clear that our province’s highest court is not averse to punishing employers whose conduct is deserving of signficant punishment.

Pate Estate v. Galway-Cavendish and Harvey (Townships), 2011 ONSC 6620 (CanLII)

, ,

The Return of Large Punitive Damages Awards in Wrongful Dismissal Cases?

Canada’s Highest Court Rules on Employee Privacy Rights over Work Computer

This article was written by Andrea Raso Amer and Eric Sherbine.

In R. v. Cole, 2012 SCC 53, the Supreme Court of Canada held that a warrantless search and seizure by police of a teacher’s employer‐issued computer containing sexually explicit images of a female student were in violation of the teacher’s rights under the Canadian Charter of Rights and Freedoms. In a time when employers are increasingly allowing (either explicitly or implicitly) employees to use employer‐issued laptop computers, smart phones, and other digital devices for their own personal use, this decision, as summarized below, offers a number of important lessons.

Click here to read more.

,

Canada’s Highest Court Rules on Employee Privacy Rights over Work Computer

Termination For Cause: Another Case of “Employer Beware”

A termination for good business reasons does not always equate to a termination for just cause.  In the recent decision of the Ontario Superior Court in Barton v. Rona Ontario Inc., Mr. Justice Lauwers stated that even if an employee’s serious misconduct was such that the employer concluded that it needed to dismiss him to make an example of him, the misconduct might not necessarily be sufficient to warrant a termination without notice.

The Facts:

Barton was employed by the defendant for over 10 years and at the time of termination he was an assistant store manager.  Under his watch, an order picker truck was used to lift a wheelchair-bound employee from the ground floor to a second floor training centre and back again, for computer training (due to the fact that the only training office in the store was on the second floor and not otherwise accessible to wheelchairs).  This incident was contrary to the defendant’s safety expectations as set out in the Employee Handbook, the Health and Safety National Manual and the Occupational Health and Safety Act.  While Barton indicated his discomfort with the planned incident to both the operator of the order picker truck and the disabled employee, he was aware that the disabled employee wanted to attend the training and he did nothing to stop the employees from proceeding with their plan.  The incident turned out to be even more dangerous than might otherwise have been the case, as the wheelchair was not secured to the skid during the descent to the ground floor, and as the area around the order picker truck was not secured and someone walked under it during the lift. Fortunately for all, nobody was hurt during the incident.

Several employees were disciplined due to their part in the incident, but Barton’s employment was terminated for cause due to the fact that he was held to a higher standard than the non-managerial employees.

The Decision:

Mr. Justice Lauwers referenced Mr. Justice Echlin’s statement that just cause is “the capital punishment of employment law”.  He also referenced the contextual approach set out in the leading case of McKinley v. B.C. Tel and stated that although Barton’s misconduct was serious, his performance appraisals were good, he had no disciplinary record and he did not give permission for the lift or descent (although neither did he stop them).  By applying the principle of proportionality set out in McKinley, he found that Barton’s actions were not sufficient to warrant a with-cause termination.  He found that while there may have been good business reasons for Rona to terminate Barton’s employment and make an example of him in order to ensure that this sort of incident did not happen again, those reasons were not sufficient to elevate the termination to one without notice.  As a result, Barton was awarded 10 months of damages due to wrongful dismissal.

Barton v. Rona Ontario Inc., http://canlii.ca/t/fs8n7

, ,

Termination For Cause: Another Case of “Employer Beware”

Pregnancy/Parental Leave Statistics Released by Statistics Canada

Based on data collected from parents of 10,810 children in 2010 and 2011, Statistics Canada’s study reveals that 90% of Canadian children outside Quebec had working mothers who took some type of leave following the birth of their child.  On average, the leave lasted 44 weeks.  Only 26% of these children had working fathers who took leaves, with the average leave being 2.4 weeks.

The situation differed quite dramatically in Quebec, with almost 99% of working mothers taking some form of leave; on average, the leave lasted 48 weeks.  Fathers took leave in 76% of cases in Quebec.

83% of mothers outside Quebec took paid leave, and 21% reported some unpaid leave.  The average paid leave in such cases was 40 weeks, while the average unpaid leave was 4.5 weeks.  In Quebec, 97% of mothers took paid leave, with 21% reporting some unpaid leave.

Not surprisingly, a number of factors, including socio-economic, child and maternal health characteristics, and self-employment, were associated with whether mothers and fathers took leave and the length of the leaves.

To read the study in its entirety, please consult the July 2012 online issue of Canadian Social Trends, no. 94 (http://www.statcan.gc.ca/pub/11-008-x/2012002/article/11697-eng.pdf).

, ,

Pregnancy/Parental Leave Statistics Released by Statistics Canada

Statistique Canada publie une étude sur les pratiques relatives aux congés des parents après une naissance ou une adoption

Une étude de Statistique Canada s’appuyant sur des données recueillies auprès de parents de 10 810 jeunes enfants en 2010 et en 2011 révèle que, dans le cas des enfants vivant hors Québec, 90 % des mères qui travaillaient ont déclaré avoir pris un congé sous une forme ou une autre après la naissance de leur enfant. La durée moyenne du congé était de 44 semaines. Seuls 26 % de ces enfants avaient des pères ayant déclaré avoir pris un congé, dont la durée moyenne était de 2,4 semaines.

La situation est considérablement différente au Québec, où environ 99 % des mères qui travaillaient avant la naissance de leur enfant ont déclaré avoir pris un congé sous une forme ou une autre, dont la durée moyenne était de 48 semaines, et que 76 % des pères ont déclaré avoir fait de même.

Plus des quatre cinquièmes (83 %) des mères hors Québec ont déclaré avoir pris un congé payé et un cinquième (21 %) avoir pris un congé non payé. La durée moyenne des congés payés était de 40 semaines, comparativement à 4,5 semaines pour les congés non payés. Au Québec, 97 % des mères ont déclaré avoir pris un congé payé et 21 % un congé non payé.

Évidemment, certains facteurs, notamment la situation socioéconomique, les caractéristiques liés à la santé de l’enfant ou de la mère ou le fait d’être une travailleuse ou un travailleur autonome, peuvent avoir une incidence sur la décision de prendre ou non un congé et sur la durée de celui-ci.

Pour lire l’étude dans son intégralité, veuillez consulter le numéro 94 (juillet 2012) du bulletin électronique Tendances sociales canadiennes (http://www.statcan.gc.ca/pub/11-008-x/11-008-x2012002-fra.htm).

 

,

Statistique Canada publie une étude sur les pratiques relatives aux congés des parents après une naissance ou une adoption

Évitez les mauvaises surprises : notions de base en droit canadien de l’emploi, de l’immigration et du travail

L’article dont il est question dans le présent billet a été rédigé par Andrea Raso Amer et Tony Schweitzer.

Bien que le Canada et les États-Unis entretiennent d’étroites relations et que leur gouvernance et leurs lois présentent de nombreuses similarités, il existe entre les deux pays des différences importantes et distinctes, dont il faut tenir compte dans la conduite d’activités commerciales transfrontalières. La façon d’attirer, de gérer et de fidéliser les employés est notamment assez différente au Canada et toutes les entreprises qui songent à brasser des affaires au nord de la frontière devraient être informées de certains points très importants à prendre en considération.

FMC vous invite à lire un article traitant de différents sujets de façon approfondie, notamment les permis de travail, les membres de la famille qui accompagnent les travailleurs, les heures supplémentaires et les congés.

Pour lire l’article, veuillez cliquer ici (en anglais seulement).

 

,

Évitez les mauvaises surprises : notions de base en droit canadien de l’emploi, de l’immigration et du travail

Avoiding Frostbite: A Primer on Canadian Employment, Immigration and Labour Laws

This article was written by Andrea Raso Amer and Tony Schweitzer.

While Canada and the United States share very close bilateral ties, and there are many similarities in our governance and laws, there are also some very distinct and important differences that are relevant to cross-border business. One key difference exists in attracting, managing and retaining employees in Canada. Any company contemplating business north of the border should be made aware of these very significant considerations.

This article contains in-depth discussions on various topics including work permits, accompanying family members, overtime, and leaves of absence.

To read the full article, please click here.

,

Avoiding Frostbite: A Primer on Canadian Employment, Immigration and Labour Laws

What constitutes consideration to uphold an agreement?

In the recent decision of Downey v. Ecore International Inc., the Ontario Court of Appeal found that a confidentiality agreement signed by a consultant on his first day of work was not void for lack of consideration.

Paul Downey entered into discussions with Ecore in 1999 for employment with the company.  One of the key terms of his employment was to be the signing of a confidentiality agreement, due to the nature of Ecore’s business and Downey’s position.  He then asked whether he could instead provide services to Ecore as a consultant through his company CSR Industries Inc., as it would be more advantageous from a tax perspective, and a consulting agreement was subsequently executed between Ecore and CSR.  Although Downey was not a signatory to the consulting agreement, he was described within it as a “Key Person of the Consultant”.  A couple of weeks later, on the first day of work, Downey executed a confidentiality agreement in favour of Ecore, in his personal capacity.

In 2011 Downey commenced an action against Ecore on the basis that it allegedly owed him compensation for his assignment to the company of inventions he had created.  In response, the consulting agreement was terminated.  A central question in the resulting jurisdictional motion was whether or not the confidentiality agreement signed by Downey was invalid due to a lack of consideration.  The initial motions judge determined that it was indeed invalid, as it was CSR rather than Downey who was a party to the related consulting agreement and deriving compensation as a result of the arrangement.

The Court of Appeal had a different view of the matter.  Simply put, it found that the confidentiality agreement formed part of a single transaction between Ecore, Downey and CSR, constituted by both the consulting agreement and the confidentiality agreement.  It came to that conclusion upon a review of each agreement, as well as the evidence of initial employment discussions between Ecore and Downey.  When looking at the totality of the evidence of the intentions of the parties as well as an interpretation of the agreements, the court found that the true business reality of the relationship emerged.

Importantly, the court also decided that the company’s grant of permission to Downey to access Ecore’s proprietary information in order to perform services under the consulting agreement, had been independent consideration for signing the agreement. In that respect, the court noted that the “Background” preamble to the agreement stated:

“Employee will be granted access to confidential and proprietary information of the Company as part of his employment.  Employee is entering into this Agreement to grant to the Company protections regarding the Company’s proprietary information.  The parties of [sic] this Agreement agree and intend to be legally bound by the covenants as set forth in this Agreement.”

The court stated that,” The mutual promises contained in this provision constitute a quid pro quo that formed the basis for the Confidentiality Agreement: Downey would be granted access to Ecore’s Proprietary Information, which was necessary to allow him to perform the Services under the Consulting Agreement, and the information so disclosed would be subject to confidentiality protections in favour of Ecore.”

Downey v. Ecore International Inc., http://canlii.ca/t/frz4j

,

What constitutes consideration to uphold an agreement?

L’importance de la disposition de cessation d’emploi

La décision qu’a rendue la Cour supérieure de justice de l’Ontario (CSJO) dans l’affaire Wright v. The Young and Rubicam Group of Companies a confirmé que les dispositions de cessation d’emploi qui figurent dans les contrats de travail ne seront pas reconnues valides si le texte de celles-ci est ambigu.

En 2005, Wright a été embauché à titre de cadre par la société défenderesse. Avant son premier jour de travail, il avait déjà signé un contrat prévoyant des droits en cas de cessation d’emploi, lesquels allaient d’une semaine de préavis à 34 semaines de salaire de base, selon le nombre d’années de service. Lorsqu’il a été congédié en 2010, Wright a reçu 13 semaines de salaire en guise de préavis, conformément au contrat en question. Insatisfait du montant reçu, il a intenté une action et présenté une requête en jugement sommaire.

Lors de l’audience, la juge Low a invalidé le contrat de travail, car elle estimait, comme Wright, que ce dernier aurait dû recevoir le préavis de licenciement prévu sous le régime de la common law. Le contrat a été invalidé pour deux raisons. Premièrement, le contrat ne respectait pas les normes minimales fixées par la Loi de 2000 sur les normes d’emploi de l’Ontario (la « LNE ») et, par conséquent, M. Wright aurait pu toucher une indemnité plus élevée, pour quelques-unes des années visées, en vertu du délai de préavis prescrit et de la prestation de départ prévue par la LNE qu’en vertu des clauses de son contrat. Cela n’est pas permis, même dans les cas où il n’existe qu’une faible possibilité que le contrat soit moins généreux que la LNE. La deuxième raison, mais la plus importante, c’est que la disposition sur la cessation d’emploi ne contenait aucune mention relative au traitement des avantages sociaux durant la période vidée par le préavis. La juge Low n’a pas jugé pertinent le fait que les avantages sociaux aient été fournis à Wright durant la période visée par son préavis statutaire et a déclaré que la disposition sur la cessation d’emploi aurait dû énoncer clairement les droits aux avantages sociaux, de même que les droits en matière de préavis et d’indemnité de départ.

Peu importe la fréquence à laquelle votre société examine et révise ses contrats de travail, un examen approfondi est toujours recommandé. De plus, à la lumière du jugement de la CSJO, les employeurs devraient envisager d’inclure, dans leurs contrats de travail, le traitement des avantages sociaux en cas de cessation d’emploi.

Wright v. The Young and Rubicam Group of Companies :
http://www.canlii.org/en/on/onsc/doc/2011/2011onsc4720/2011onsc4720.html

,

L’importance de la disposition de cessation d’emploi

The “Wright” Way to Draft a Termination Provision

In the recently released Ontario Superior Court of Justice decision in Wright v. The Young and Rubicam Group of Companies, it was confirmed that a termination provision in an employment agreement will not be upheld if there are any ambiguities in the language of the provision.

Wright was hired in 2005 as an executive at the defendant company.  He signed an agreement prior to his start date, which provided for entitlements on termination ranging from 1 week of notice to 34 weeks of base salary, depending upon his length of service.  On being terminated in 2010, he was given 13 weeks of pay in lieu of notice pursuant to that agreement.  Unhappy with that amount, he commenced a claim and brought a motion for summary judgment.

At the hearing, Justice Low overturned the employment contract and agreed with Wright that he should have received common law notice of termination. The contract was overturned for two reasons.  First, because it did not track the language of the Employment Standards Act, 2000 (Ontario) (the “ESA”) carefully, there were a few years under which Wright might have earned more by way of statutory notice and statutory severance under the ESA than under his contract.  That is not permitted, even in cases where it is only a contingent possibility that a contract may undercut the ESA.  Secondly and more importantly, the termination provision did not mention the treatment of benefits during the notice period.  Justice Low found that it was irrelevant that benefits were in fact provided to Wright during his statutory notice period, and stated that the termination provision should have clearly set out the benefits entitlement as well as the notice and severance entitlement.

No matter how many times your company may review and revise its employment agreements, a further review is always recommended.  And in light of this decision, employers should consider dealing, in the employment agreement, with treatment of benefits on termination.

Wright v. The Young and Rubicam Group of Companieshttp://www.canlii.org/en/on/onsc/doc/2011/2011onsc4720/2011onsc4720.html

,

The “Wright” Way to Draft a Termination Provision

Les prestations de retraite devraient-elles être prises en compte dans l’évaluation des dommages-intérêts accordés pour congédiement injustifié?

La Cour suprême du Canada a accepté d’entendre l’affaire Richard Waterman c. IBM Canada Limitée, 2011 BCCA 337 portant sur la question à savoir si le montant des prestations de retraite d’un régime capitalisé par l’employeur qu’un employé a reçues après la cessation d’emploi aurait dû être déduit du montant des dommages-intérêts qu’il a obtenus pour congédiement injustifié. La Cour suprême et la Cour d’appel de la Colombie-Britannique ont toutes deux conclu que les prestations de retraite versées pendant la période de préavis ne devaient pas être déduites du montant des dommages-intérêts accordés par le tribunal.

,

Les prestations de retraite devraient-elles être prises en compte dans l’évaluation des dommages-intérêts accordés pour congédiement injustifié?

Are Pension Benefits Deductible from Damages for Wrongful Dismissal?

The Supreme Court of Canada has granted leave to hear the case of Richard Waterman v. IBM Canada Limited,2011 BCCA 337, on whether employer-funded pension benefits that were paid after an employee’s termination should have been deducted from damages resulting from a wrongful dismissal. Both the British Columbia Supreme Court and Court of Appeal held that pension benefits paid during the notice period were not to be deducted from the damages awarded by the Court.

, ,

Are Pension Benefits Deductible from Damages for Wrongful Dismissal?

Méfiez-vous des clauses restrictives ambiguës!

La Cour d’appel de l’Ontario a récemment rendu sa décision dans l’affaire Veolia ES Industrial Services Inc. v. Brulé et confirmé que le retrait de termes ambigus dans une clause de non-concurrence ou de non-sollicitation n’est permis qu’en de rares occasions. En 2009, dans l’affaire KRG Insurance Brokers (Western) Inc. c. Shafron, la Cour suprême du Canada a statué que la réécriture de clauses restrictives ambiguës peut prendre deux formes : (i) la divisibilité fictive – attribuer une interprétation atténuée à une disposition contractuelle de façon à la rendre légale et applicable et (ii) la technique du trait de crayon bleu – la suppression d’une partie d’une disposition contractuelle. La cour a confirmé qu’il est possible d’avoir recours à la technique du crayon bleu pour une clause restrictive ambiguë uniquement dans les cas où la partie retranchée peut clairement être séparée du reste de la clause, est dénuée d’importance et ne fait pas partie de l’objet principal de la clause restrictive.

Lorsqu’elle a rendu sa décision dans l’affaire Veolia v. Brulé, la Cour a déterminé que les parties à la clause de non-concurrence n’auraient pas accepté de retirer les mots jugés ambigus sans modifier d’autres dispositions de la clause. La juge Hoy, qui s’exprimait au nom de la Cour, a conclu que les termes ambigus n’étaient pas futiles, puisqu’ils concernaient la durée de la restriction (l’une des parties les plus importantes d’une clause de non-concurrence). La Cour a par conséquent infirmé la conclusion du juge de première instance selon laquelle la clause de non-concurrence avait été violée.

Cette affaire est la plus récente d’une longue liste de décisions canadiennes confirmant clairement que les clauses restrictives ne sont pas perçues de manière favorable par nos tribunaux et qu’elles seront généralement annulées, sauf dans des cas spéciaux. Si les clauses restrictives sont essentielles pour votre organisation, demandez l’avis d’un professionnel et veillez à ce que vos ententes soit claires, car les tribunaux ne déploieront pas d’efforts particuliers pour dissiper les ambiguïtés, le cas échéant.

 

,

Méfiez-vous des clauses restrictives ambiguës!