On June 14, 2013, the Supreme Court of Canada released its highly anticipated decision in Communications, Energy and Paperworkers Union of Canada, Local 30, v. Irving Pulp & Paper, Ltd., 2013 SCC 34 (http://www.canlii.org/en/ca/scc/doc/2013/2013scc34/2013scc34.pdf). In its decision, the Supreme Court of Canada signaled for the first time that employers in safety-sensitive work environments may be justified in implementing random alcohol testing when there is a safety risk in the workplace due to alcohol, such as evidence of a general problem with substance abuse in the workplace.

Facts:

In 2006, Irving Pulp and Paper (“Irving”) adopted a new policy on alcohol and drug use at its kraft paper mill in Saint John, New Brunswick. The mill is acknowledged to be a dangerous workplace with malfunctions carrying the potential for “catastrophic failures”. As part of the new workplace policy, Irving instituted a random alcohol testing program whereby 10% of the employees in safety sensitive positions were to be randomly selected for unannounced breathalyzer testing over the course of a year. In the 15 years which preceded the introduction of this policy, there were only eight documented incidents of alcohol consumption or impairment at the mill. Moreover, there were no accidents, injuries or near misses connected to alcohol.

On March 13, 2006, mill employee Perley Day, was randomly selected to submit to a breathalyzer test. As Mr. Day does not consume alcohol, his test returned a blood alcohol level of zero. Shortly thereafter, the Union filed a policy grievance alleging that the random alcohol testing component of the new alcohol and drug policy was unreasonable; the Union did not challenge the other aspects of the policy.

The arbitration board found that although random alcohol testing may be reasonable in some circumstances, there was not sufficient evidence in this case of an existing problem with alcohol use in the workplace. On judicial review, the Court of Queen’s Bench of New Brunswick set aside the arbitration decision. The New Brunswick Court of Appeal dismissed the appeal.

The SCC’s Decision:

While there was no debate about the safety-sensitive nature of the workplace, the majority held that the dangerousness of a workplace is only the beginning of the inquiry, “[w]hat has been additionally required is evidence of enhanced safety risks, such as evidence of a general problem with substance abuse in the workplace.” That said, Justice Abella, on behalf of the majority, went on to say that “[t]his is not to say that an employer can never impose random testing in a dangerous workplace. If it represents a proportionate response in light of both legitimate safety concerns and privacy interests, it may well be justified.” Considering the particular facts before them in this case, the Court found that random alcohol testing was not justified in the context of the Irving paper mill in Saint John, New Brunswick.

The three judges in dissent noted that an employer should not be required to wait for a serious incident of loss to take proactive steps to mitigate risk.

Barbara B. Johnston and April Kosten represented the Construction Owners Association of Alberta, Construction Labour Relations – An Alberta Association and Enform at the Supreme Court of Canada. Please feel free to contact Barbara or April directly if you would like to discuss the implications of this decision.

In a March 2013 decision that is likely to be challenged in the courts, the Ontario Human Rights Tribunal has ordered the reinstatement of an employee a decade after she went on disability leave, together with loss of wages from June 2003 until the date of reinstatement.

In a 2012 decision in  Fair v. Hamilton-Wentworth District School Board, adjudicator Joachim found that the respondent school board had discriminated against the employee by failing to accommodate her disability.  In particular, in 2001 she developed an anxiety disorder as a result of the highly stressful nature of her job, and went on long-term disability.  She was subsequently assessed as capable of gainful employment in 2004.  From mid 2003 onwards however, the school board failed to take any steps to offer her available alternative work, even though similar jobs were advertised and the employee underwent job hardening in positions for which the employer was seeking employees.

In March 2013, adjudicator Joachim rendered her decision in relation to the remedy for this case of discrimination.  She found that because: (i) the employee had commenced her initial complaint with the Ontario Human Rights Commission only 4 months after her employment was terminated; (ii) the delay was largely at the hands of the Commission; and (iii) the employee had confirmed that she was seeking reinstatement when her application was subsequently filed with the Tribunal, there was no good reason to not order reinstatement due to the passage of time.

As a result, the employer was ordered to reinstate the employee despite her absence from work for almost a decade.  In addition, the employer was ordered to pay the employee’s lost wages, benefits, expenses and pension contributions over that period of time, which amounted to over $400,000 (subject to any employment insurance and related deductions).  Finally, adjudicator Joachim awarded the Applicant $30,000 as compensation for the injury to her dignity, feelings and self-respect.

Despite the likelihood of an appeal, this is an important decision as it illustrates the potential liability associated with a failure to return an employee to work after his or her disability leave.

Hamilton-Wentworth District School Board, 2013 HRTO 440 (CanLII)

An employee of a drive test centre has been jailed for accepting a bribe from a driving instructor, who has also been jailed.

Harvey Aitchison worked as a driving examiner for DriveTest Centre, the agency that tests Ontario drivers, in Oakville. He accepted bribes from Cyril Julius Marques, who was the owner and driver instructor of a driving school, to guarantee that that Marques’ driving students passed their Ministry of Transportation road examination.

Marques would charge $450.00 to his driver students, $300.00 of which he would give to Aitchison.  Marques would keep the remaining $150.00.  The bribing came to light after Marques offered a DriveTest coordinator a pack of cigarettes if she assigned Aitchison to test his student.  The coordinator blew the whistle.  Aitchison resigned from his job.

Both Aitchison and Marques pleaded quilty to accepting a bribe, contrary to section 426(1)(a) of the Criminal Code. That section provides:

426 (1) Every one commits an offence who

(a) directly or indirectly, corruptly gives, offers or agrees to give or offer to an agent or to anyone for the benefit of the agent — or, being an agent, directly or indirectly, corruptly demands, accepts or offers or agrees to accept from any person, for themselves or another person — any reward, advantage or benefit of any kind as consideration for doing or not doing, or for having done or not done, any act relating to the affairs or business of the agent’s principal, or for showing or not showing favour or disfavour to any person with relation to the affairs or business of the agent’s principal

Aitchison claimed the he accepted the bribes out of frustration towards his employer; Marques said that his actions were caused by his financial problems and his wife’s health problems.

The court sentenced Aitchison, a 64-year-old man with no criminal record, to a jail term of 4 months to be followed by 2 years of probation. The court sentenced Marques, a 58-year-old man who also did not have a criminal record, to a jail term of 90 days, which he was permitted to serve intermittently given his employment status and his wife’s medical needs.  The court stated that their corrupt scheme was a breach of trust offence that put the public at real risk of harm: sending unqualified drivers onto the roads.  The court pointed out that, ”Public corruption is of significant concern to the citizens of Canada and general deterrents and denunciation must be the dominant sentencing factors.”

While there is no indication in this decision that the employer was charged or implicated in this case, employers that knowingly permit employees to accept bribes could also be subject to prosecution under the Criminal Code: subsection 426(2) of the Criminal Code provides that, “Every one commits an offence who is knowingly privy to the commission of an offence under subsection (1)”.

R. v. Aitchison, 2013 ONCJ 74 (CanLII)

On March 5, 2013, the Ontario government introduced new legislation which, if passed, would create three new job-protected leaves.

The Employment Standards Amendment Act (Leaves to Help Families), 2013, proposes new leaves that build on the existing Family Medical Leave under the ESA.  They are as follows:

Family Caregiver Leave - up to 8 weeks of unpaid leave for employees to provide care and support to a family member with a serious medical condition.

Critically Ill Child Care Leave – up to 37 weeks of upaid leave to provide care to a critically ill child.

Crime-Related Child Death and Disappearance Leave - up to 52 weeks of unpaid leave for parents of a missing child and up to 104 weeks of unpaid leave for parents of a child that has died as a result of a crime.

If passed, the leaves would allow parents and other family caregivers to provide care and support for loved ones without fear of losing their jobs.  These leaves are in addition to the current Family Medical Leave, which is available when a family member has a serious medical condition with a significant risk of death occurring within 26 weeks.  A doctor’s note would be required for the Family Caregiver Leave and the Critically Ill Child Care Leave.

Complementing the new federal Helping Families in Need Act, employees covered by the Critically Ill Child Care Leave and the Crime-Related Child Death and Disappearance Leave would be eligible to apply for federal Employment Insurance benefits.

The Ontario’s government’s news release and “backgrounder” may be accessed here.

Trish-Ann Tremblay had entered into a settlement agreement with her former employer, 1168531 Ontario Inc., on September 13, 2011, with respect to the Human Rights Application she had filed against 1168531 Ontario Inc.. The settlement agreement contained a standard confidentiality provision requiring parties to maintain the confidentiality of the terms of the Minutes of Settlement.

The next day after the mediation, Ms. Amy Lalonde, manager with the Respondent Company, was informed by a colleague that Ms. Tremblay had posted messages on Facebook about the mediation and settlement. In fact, the first message was posted during the mediation session itself:

“Sitting in court now and _______ is feeding them a bunch of bull shit. I don’t care but I’m not leaving here without my money…lol”.

After the Minutes of Settlement were signed, Ms. Tremblay posted the next message as follows:

“Well court is done didn’t get what I wanted but I still walked away with some…”

Shortly thereafter Ms. Tremblay posted the following message:

“Well my mother always said something is better than nothing…thank you so much saphir for coming today…”

While Ms. Tremblay argued that there was no proof that she was talking about the Respondents as she did not mention them by name, the Tribunal held that it was clear from the date of the postings and the comments made that she was referring to the mediation. The Tribunal found that Ms. Tremblay had breached the confidentiality provision of the Minutes of Settlement. However, the Tribunal found that the Respondent Company had also breached the Minutes of Settlement by not paying Ms. Tremblay the settlement amount.

The Tribunal ultimately ordered that the amount owing to Ms. Tremblay under the settlement agreement be reduced by $1,000. In determining the appropriate remedy, the Tribunal took into account that Ms. Tremblay did not disclose the amount of the monetary settlement in her Facebook posts. The Tribunal also considered the relatively public nature of Facebook, especially in the small community in which the applicant and respondent company resided.

When mediating issues of a sensitive nature, employers should consider including confidentiality provisions in settlement agreements that specifically prohibit disclosing terms of settlement on social media sites, including Facebook, Twitter, LinkedIn, etc.

Tremblay v. 1168531 Ontario Inc., 2012 HRTO 1939 (CanLII)

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.

The Supreme Court of Canada overturned the Ontario Court of Appeal today in what is one of the most highly-anticipated cases for the pension and insolvency bars pending before the courts. In Indalex (Re) 2013 SCC 6, the court provided clarity regarding some key questions relating to the governance of an employer-administered pension plan during a proceeding under the Companies’ Creditors Arrangement Act (CCAA). The judges split on some of the issues, but here is our brief round-up:

1. Priority. The full amount of a deficit in an Ontario pension plan will rank ahead of secured creditors (as a deemed trust), provided that the plan is wound up and the employer is not in bankruptcy. The SCC upheld the Court of Appeal on this issue.
2. DIP Facilities Can Come First. A judge may order that court-approved debtor-in-possession financing in a CCAA proceeding ranks ahead of pension deficit deemed trusts. The SCC upheld the Court of Appeal on this issue.
3. Fiduciary Duties Owed. Employers who administer pension plans owe a “fiduciary duty” to the members of the plans. This means that such employers must manage conflicts of interest. These conflicts will arise when there is a substantial risk that the employer-administrator’s representation of the plan members would be materially and adversely affected by the employer-administrator’s duties to the corporation. In these circumstances, separate representation (among other things) might be appropriate to protect plan members. The SCC narrowed the scope and content of the fiduciary duty that the Court of Appeal had imposed.
4. Remedies. Any remedy for a breach of fiduciary duty must be tailored to the nature of the breach. The remedy of a “constructive trust”, which provides the plan members with a proprietary interest in specific assets of the employer corporation, will only be available if there is a direct link between the breach of fiduciary duty and the specific assets. The breach must have resulted in the assets being in the corporation’s hands. The SCC overturned the Court of Appeal on this issue.

Lawyers will be picking through the lengthy judgments in this decision for months to come. It has significant implications for Canadian corporate lending, insolvencies and restructurings.

Look for FMC Law’s in-depth analysis of this case in the coming days.

This post was co-authored by Jane Dietrich and Timothy Banks.

The subject of what can and can’t be charged to a pension plan has always been an important one for employers because of the often high costs related to administering a pension plan.

On January 23, 2013, the Ontario pension regulator (the Financial Services Commission of Ontario), issued a new policy regarding administrative fees and expenses payable from a pension fund. The new policy, Policy A200-101, replaces four existing policies on the topic and is accessible at http://www.fsco.gov.on.ca/en/pensions/policies/active/Documents/A200-101.pdf.

Although clarification regarding expenses chargeable to pension funds was provided in late 2010 with the addition of a new section 22.1 in the Ontario Pension Benefits Act (“PBA”), Policy A200-101 provides additional guidance that is welcome.

Policy A200-101 reiterates that fees and expenses payable from a pension fund must:

1. be reasonable;
2. relate to the administration of the pension plan or the administration and investment of the pension fund; and
3. not be prohibited or otherwise provided for under the documents that create and support the plan or the fund, or under the PBA or related regulations.

It is the plan administrator’s responsibility to determine whether or not an expense fits the criteria to be properly charged to a pension fund. So it is up to the plan administrator to decide whether amounts are appropriate and reasonable, and to find out whether there are provisions in the pension plan documentation that restrict the charging of expenses.

Since each pension plan is unique, the PBA and regulations do not set out the specific nature or type of administrative expenses that can be paid from a pension fund. However, Policy A200-101 provides examples of the types of expenses that would usually be considered appropriate administrative expenses, such as certain actuarial fees, trustee and custodial fees, and investment management fees. It also provides examples of expenses incurred that would not usually be properly chargeable to a pension fund. These typically include fees incurred by a person acting in the role of plan sponsor, collective bargaining agent or employer.

Many types of fees and expenses incurred by a plan sponsor or administrator can be complex and difficult to categorize. FMC can help you identify proper fees and expenses that can be charged to your pension fund. Please feel free to contact one of our Pension & Benefit experts and we would be pleased to assist.

In a cautionary tale for employers, a jury in Windsor, Ontario awarded $1.4 million in damages to a former Wal-Mart employee who alleged that she had been constructively dismissed after being subjected to intentional infliction of mental suffering by her former manager.

The jury award included $1.2 million in punitive damages and damages for mental distress against the employer, and an additional $250,000.00 in punitive damages and damages for mental distress against the manager. The former employee established that the manager had punched her on the arm on two occasions, and had subjected her to profane and insulting mental abuse. Those allegations were that the manager had called the employee “a [expletive] idiot” in front of her co-workers, and that the manager had made the former employee count skids in front of co-workers in order to prove to him that she could accurately count.

A link to the Windsor Star article on the court decision is attached: http://blogs.windsorstar.com/2012/10/10/walmart-must-pay-1-4-million-for-mistreating-employee/

The employer has already appealed the jury’s verdict to the Ontario Court of Appeal, calling the award “…wholly disproportionate and/or shockingly unreasonable.” This is not surprising, given that this award would set a new high-water mark for punitive damages in a wrongful dismissal case. (It appears that the jury may have based its award roughly on the amount that the former employee, who is currently 42 years of age, would have earned had she remained employed in her position until age 65. This figure had been raised by the former employee’s counsel in his closing submissions, although the trial judge had specifically instructed the jury not to consider that figure.)

Although, in our view, it is likely that the jury award will be set aside or reduced on appeal, this decision does underscore how important it is for employers to have a clear policy against incidents of workplace violence and harassment and to take prompt action to address such incidents when potential allegations of this nature come to light.

A director of six Ontario companies has been sentenced to 90 days in jail after those companies systematically ignored orders to pay wages issued by the Ontario Ministry of Labour. The Ontario Employment Standards Act, 2000 does allow individuals to be fined up to $50,000.00 and/or to be imprisoned for up to 12 months if convicted of an offence, although the imposition of jail time for employment standards violations has been exceedingly rare.

However, the facts involved in this situation were particularly egregious. Sixty-one complaints had been filed by employees of the six companies for unpaid wages, all of which were substantiated. Over a period of approximately two years, 113 separate orders to pay had been issued against the six companies and the director to pay some $125,000.00 in unpaid wages. The six companies and the director failed to comply with any of these orders to pay. In addition to imposing the jail time, the Ontario Court of Justice imposed fines of $280,000.00 plus the required 25% Victim Fine Surcharge, for a total fine of $350,000.00. Although company directors that are convicted of employment standards offences are still most likely to be fined if convicted of offences under the Act, Ministry of Labour prosecutors will certainly use this decision as a strong deterrent against employers – and directors – that systematically flout their obligations.

See the Ontario Ministry of Labour press release – http://news.ontario.ca/mol/en/2012/11/director-jailed-and-companies-fined-after-failing-to-pay-employees.html

The Ontario Ministry of Labour has announced that it will focus its proactive  inspections for 2012-2013 on workplaces where there is a history of employment standards violations, where young and/or vulnerable workers are employed, and/or where large or increasing portions of the Ontario workplace are employed.

Among the specific sectors identified for targeted proactive workplace inspections in the coming year, are the following:

• auto mechanics
• building services, including security, parking, cleaning and food services
• car dealerships
• fast food restaurant franchises
• gas stations
• hotel/hospitality
• private schools
• temporary help agencies

As always, it is a good practice to be prepared for any surprise workplace inspections which may come the way of your business.  For further information on how best to prepare, please contact FMC Law’s employment and labour group.

Employers are often concerned about whether terminated employees can claim entitlement to accumulated sick leave credits. This case shows how important it is to scrutinize every word in termination agreements; unclear language can come back to haunt the employer.

The employee had been employed for 29 years with the County of Haldimand and its predecessor municipalities. He was presented with and accepted a severance package. He signed a Release and in essence retired.

The severance agreement was incorporated into the Release and allowed for a claim for “usual retiree benefits.” The employee relied on that language to claim payment of accumulated sick leave pursuant to a section of the employer’s Policy Manual which stated:

“An employee hired prior March 12, 1981 and who has a minimum of five (5) years of continuous service will be entitled to a payment equal to the value of one-half (.5) of the balance of the employee’s accumulated sick leave credits to a maximum of one hundred thirty (130) days pay at current salary, upon termination of employment for any reason.”

At trial, judgment was awarded to the plaintiff for payment of accumulated sick leave credits. The employer appealed and argued that the severance agreement did not specifically give entitlement to sick leave credits, and the Release barred the employee’s lawsuit.

The court decided that the only “retiree benefit” that the employee had was the payment of accumulated sick leave pursuant to the Policy Manual. As such, the severance agreement’s reference to “retiree benefits” must mean the accumulated sick leave credits.

The court also held that the Release did not bar the claim because the severance agreement was incorporated into the Release.

Lastly, the court rejected the employer’s argument that the two-year limitation period started when the employee signed the severance agreement. Instead, because sick leave credits are part of retiree benefits, the court decided that the limitation period should begin May 31, 2008, the day when he “retired”.

Daniel John Burgener v. Corporation of Haldimand County, 2012 ONSC 5230

The author gratefully acknowledges the assistance of Simmy Yu in the writing of this article.

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)

A police officer who “suffered from bad temper and anger management problems” but said he was able to perform his job duties, was not disabled under the Ontario Human Rights Code, an Ontario court has decided.

Because the employee had failed a “use of force test”, he was required to surrender his weapon.  His “temper erupted”.  Four police officers were called to a domestic incident later that day at his home.  He assaulted all four officers and threatened to kill two of them.  He was subdued with a taser.  He had abused alcohol and disclosed a twelve-year history of binge drinking.  A psychologist stated that the employee had work-induced post-traumatic stress disorder.

The court stated that is was “not aware of any jurisprudence which established that anger management issues will support a finding of disability.”

The court went on to say:

“Addiction arising from alcoholism and/or drug abuse or post traumatic stress disorder may amount to a disability within the meaning of the Code.  However, the onus on a person claiming a disability is to prove it. There was some evidence that the applicant was addicted to alcohol and some medically prescribed drugs. There was also some evidence that the applicant was suffering from post traumatic stress disorder.  However, there was no evidence that any of those conditions rendered him unable to perform any aspect of his job description.  Indeed, quite the opposite was claimed.  In submitting through his counsel that the appropriate penalty was simply a demotion, the applicant took the position that he was able to perform and carry out his essential employment duties.”

Because the employee was not disabled, the police service had no duty to accommodate him.

This case demonstrates that employees who request accommodation of a disability must prove the disability.  This employee, who claimed to be able to carry out his police duties, was not disabled and therefore was not entitled to accommodation under human rights legislation.

Gulick v. Ottawa Police Service, 2012 ONSC 5536 (CanLII)

The Ontario pension regulator recently posted new questions and answers on its website regarding the “small benefit” payout rules for Ontario-registered pension plans (accessible at: http://www.fsco.gov.on.ca/en/pensions/legislative/Pages/Smallamount.aspx).

The following is a description of the new Ontario rules about cashing out small pension benefits, which we wrote about in our blog dated July 9, 2012.  You can view that blog entry at http://www.employmentandlabour.com/cashing-out-of-small-pension-benefits-the-rules-have-changed.

Effective July 1, 2012, section 50(1) of the Ontario Pension Benefits Act was changed to increase the maximum amount that can be unlocked (i.e. paid in cash) from a pension plan as a “small benefit”.  The change allows a pension plan administrator to provide individuals with their pension benefit as a lump sum cash payment if the amount of the benefit is considered small.  This is good for plan administrators because it can assist in situations where a monthly pension benefit would be administratively burdensome to administer (e.g. an individual is entitled to only receive a few dollars each month).  Also, it could assist in situations where an annuity cannot be purchased for a former member because the amount of his or her benefit is too small.

Prior to the change and subject to the plan terms, a individual who terminated his or her membership in a pension plan was able to unlock his or her benefit if the annual benefit payable at normal retirement was not more than 2% of the YMPE in the year that he or she terminated employment.  The amended section now allows a former member of a pension plan to receive a lump sum equivalent of his or her benefit, provided the plan terms permit it, if:

a)      the annual benefit payable at normal retirement is not more than 4% of the YMPE in the year that he or she terminated employment; or

b)      the commuted value of the benefit is less than 20% of the YMPE in the year that he or she terminated employment.

For example, since the YMPE for 2012 is $50,100, if an individual terminates employment in 2012, he or she may be entitled to a cash payment of his or her pension benefit if the total annual benefit to be provided under the pension plan is not more than $2,004 per year, or the total value of the pension benefit is less than $10,200.

The questions and answers on FSCO’s website provide clarity to a number of issues and confirm the following:

• A pension plan administrator can only apply the new higher “small benefit” thresholds if the plan text provides for it.  If the plan text still refers to the old thresholds, the old thresholds must be applied unless the plan text is amended.  Note that a plan text does not need to provide for the unlocking of “small benefits” at all; it is up to the plan sponsor to decide whether to provide this additional benefit to plan members.
• It is fine for a pension plan text to use generic wording to allow the payment of small amounts, instead of referring to the exact percentages that are set out in the legislation.
• The new “small benefit” thresholds can apply to former members who terminated their employment prior to July 1, 2012.  However, the plan administrator must use the YMPE for the year in which the former member terminated employment.
• Only the YMPE in the year the member terminated employment is relevant for the purposes of determine whether a benefit is small.

As many changes to the Ontario Pension Benefits Act came into effect this summer, we will let you know if additional guidance is released by the Ontario pension regulator regarding these changes.

The Ontario Human Rights Commission (“OHRC”) is conducting a survey on “Canadian experience” requirements for jobs.

The OHRC has prepared two surveys – one for employers and one for job seekers who have faced “Canadian experience” requirements in job ads or in interviews.  You can fill out the survey without giving your name, or you may decide to give your contact information so the OHRC can ask you more questions if they are needed.

The OHRC intends to use what they learn from these surveys to assist job seekers to understand their rights and to help employers to understand their obligations under the Ontario Human Rights Code.

Requiring “Canadian experience” can hurt the chances of those who have not worked in Canada.  Concerns have been raised that “Canadian experience” requirements create barriers for newcomers and others who have only worked in other countries.

There are a variety of reasons why some employers believe they are justified in choosing only applicants who have worked in Canada.  Some use “Canadian experience” rules out of habit or because it is easier to track down references. Others use it because experience with and understanding of the Canadian context may be important to the job.  In any case, employers requiring “Canadian experience” should consider whether the requirement is justified, and should be aware of the risk of a human rights complaint.

For more information or to complete the OHRC survey, please see:
https://fluidsurveys.com/s/canadianexperience/

Employers often assert that a terminated employee is not entitled to a bonus for the termination year. A decision of an Ontario court may put a small qualification on that assertion. Employers should review their bonus policies in light of this decision.

The employer terminated the employee’s employment on May 25, 2010 on a without-cause basis. On June 18, 2010 – within the employee’s four-week Employment Standards Act notice period – the employer announced its profit sharing bonus for the recently-ended fiscal year and paid it out. The employer did not pay that bonus to the employee. The employee had been paid the bonus for her three previous years of employment. The bonus was a “very significant financial part of her overall compensation.”

Mr. Justice Ricchetti of the Ontario Superior Court of Justice held that section 61(1)(a) of the Employment Standards Act “permits the employer to terminate without notice but only if the employee receives what the employee would otherwise been entitled to receive from the employer under the terms and conditions of employment during the statutory notice.”

The judge held that under the employer’s bonus plan and practices, the decision as to whether to award profit sharing at all may have been discretionary, but once the bonus had been declared, the employer had no discretion to exclude a particular employee from entitlement. As such, all employees who were employed on June 18, 2010 were entitled to the profit sharing bonus. Because that date was within the employee’s four-week Employment Standards Act notice period, she was deemed to be “employed” at that time, and was thus entitled to the profit sharing bonus payment. An employer memo, issued a few months earlier, to the effect that only “active” employees were entitled to the bonus, did not override the statutory obligation to pay the bonus to the employee.

Sandhu v. Solutions 2 go Inc., 2012 ONSC 2073 (CanLII)

What is an employer to do with an employee who demands changes to a job, without ever having done the job? A recent arbitration decision, Child Development Institute and the Canadian Union of Public Employees, local 2132 (June 21, 2012), unrep. (Charney), considered this issue.

The grievor succeeded in her application for a full-time family violence clinician position. Prior to being awarding the job, the grievor had worked for the employer in a part-time capacity. She expressed great enthusiasm and no reservations when she accepted the job. Almost immediately thereafter though, she requested changes to the job’s design. These changes initially were expressed as a preference and were not supported by medical documentation. The grievor seemed to think her changes would be a better way to run the program. The employer disagreed.

Shortly before commencing the job, the grievor raised a concern as to trauma and then provided documentation that she was suffering from serious depression. Her psychiatrist recommended that the employer implement all of the job design changes identified by the grievor.

Although the arbitrator queried, “why one would apply for a job and then without ever trying to do it, decide that it needs to be accommodated”, given the psychiatric evidence that doing the work, as constituted, would either continue or worsen the grievor’s depression, the arbitrator found that she required accommodation. After a few months – which the arbitrator excused as a reasonable period of time – the employer offered the grievor her choice of two possible reintegration plans. The grievor refused both on the basis they did not exactly fit with the accommodation she required. The employer’s third offer of accommodation also was refused.

The arbitrator was critical of the grievor’s intransigence finding that she had a duty to explore the possibilities of the accommodation offered by the employer. According to the arbitrator, “What works and what doesn’t work is an inexact science and to be able to forecast that nothing will work except the exact accommodation that the grievor has sought is a difficult proposition …. It would be more understandable to me that if she attempted the work hardening process and then if it didn’t work she continued to be unable to function, that could be dealt with.”

Given the employer’s limited funding and the funding required to achieve the grievor’s preferred accommodation, the arbitrator found ”a classic example of undue hardship”. He also concluded that the employment relationship had completely broken down and it was inconceivable she could return to work. Accordingly, the arbitrator dismissed the grievance.

This decision is a good reminder that there, in fact, are limits to the duty to accommodate and that employees must work with their employers as part of the accommodation process, not simply make unreasonable demands.

The Ontario Employment Standards Act excludes from its protection holders of a “religious office”. The Ontario Labour Relations Board has issued a decision interpreting this rarely-litigated provision.

The organization, the Kashruth Council, is a not-for-profit organization the main objective of which is to ensure the availability of Kosher food products through Kashruth (Jewish dietary laws) certification and supervision of food service production and manufacturing businesses.

To do this, the Kashruth Council engages Kosher food inspectors, referred to as “Mashgiachim”, to supervise hundreds of industrial food establishments. Rand was one such inspector.

A series of events resulted in the Kashruth Council issuing a letter to Rand advising that his “employment . . . is terminated effective immediately for just cause”. Rand filed a claim for amounts owing to him as an “employee” under the Employment Standards Act.

The OLRB found that the Mashgiach was a “religious position” which has “no duties which do not serve a religious purpose”. However, Rand did not hold a “religious office”.

The OLRB held that, “The essential feature of the holder of a political or religious office is independence. A person is elected or appointed to the office and then acts in that capacity with minimal oversight”. Also, the functions or work that the person performs must be significant or important to fulfill religious obligation or ritual. According to the OLRB, Rand was not independent. The council exercised employment control over him. Also, the manner in which the Kashruth Council carried out the termination suggested that Rand was subject to the Kashruth Council’s control, which pointed to an employment relationship. The Council even referred to him, in the termination letter, as an “employee”.

One wonders whether the OLRB’s “independence” test is correct. It would seem that the test should be whether the person holds an “office” that is “religious”; independence does not seem to be a hallmark of either of those two factors.  The exemption would appear to have been intended to exclude, from the protection provided to “employees”, people who are not seen, and do not see themselves, as employees, but rather as in a spiritual or religious position. It remains to be seen whether future panels of the OLRB will apply the same test.

Kashruth Council of Canada v. Rand, 2011 CanLII 71786 (OLRB)