Last fall the Ontario Employment Standards Act, 2000 was amended to index increases to the minimum wage to Ontario’s Consumer Price Index. Putting that into effect, Ontario is raising the general minimum wage from $11 to $11.25 per hour, effective October 1, 2015. The minimum wage rates in Ontario for jobs in special categories (liquor servers, homeworkers, students, etc.) are increasing at the same time, and those can be found here: Minimum wage rates.
The B.C. government has announced that it will also index increases in the general minimum hourly wage and the liquor server wage to B.C.’s Consumer Price Index. As a result, effective September 15, 2015, the BC general minimum wage will increase from $10.25 to $10.45 and the liquor server wage from $9.00 to $9.20 per hour. Also effective September 15, 2015, the daily rate for live-in home support workers and live-in camp leaders, as well as the monthly rates for resident caretakers and the farm worker piece rates (for harvesters of certain fruits and vegetables) will be increased proportionate to the 20-cent increase in the general minimum hourly wage.
On December 8, 2014, the Ontario government introduced Bill 56: An Act to require the establishment of the Ontario Retirement Pension Plan regarding the establishment of the new, mandatory Ontario Retirement Pension Plan (ORPP) effective January 1, 2017. Bill 56 provides information about additional ORPP legislation to come. It also provides details about the administrative entity that will need to be set up to administer the ORPP and the collection of information that’s necessary for the purpose of establishing the ORPP.
The ORPP was introduced in the 2014 Ontario budget as a new “made-in-Ontario” solution to the federal government’s decision to not expand the CPP. It will be similar to, and build on key features of, the CPP and will be publicly administered at arm’s length from the Ontario government. Employers and employees who are required to participate in the ORPP would be required to contribute up to 1.9% each (total of 3.8%) on the employee’s earnings, up to a maximum earnings threshold of $90,000. Additional details about proposed features of the ORPP can be found in our earlier blog posting here.
All Ontario employers should be aware of the ORPP and how it might impact their business.
The main concern for most Ontario employers is whether they will be exempt from mandatory participation in the ORPP. The only information released by the Ontario government so far is that employees who participate in a “comparable workplace pension plan” will be exempt. It’s unclear what “comparable” means. The legislation doesn’t tell us exactly what types of retirement savings plans will exempt employers from the ORPP.
We will continue to provide updates on the ORPP as information becomes available.
If you have questions about the ORPP or would like more information, please do not hesitate to contact one of the pensions and benefits experts at Dentons.
For more information from the Ontario government on the ORPP and Bill 56, click here.
An employer is paying the price for dismissing an employee who was recruited with an attractive job offer.
Bruce Rodgers had been the president of a transportation company for 11 years when CEVA Freight Canada Corporation approached him with a job opportunity. After being flown twice to Houston, attending 7 interviews, and meeting the CEO of the global parent company, Rodgers was offered a position as CEVA’s Country Manager. He turned it down, and was given a second offer with a higher salary and a signing bonus, which he accepted. Rodgers was also told that he was required to invest in the company to demonstrate his commitment, so he borrowed $102,000 to purchase CEVA’s shares.
A little less than 3 years later, Rodgers was dismissed by CEVA without cause. He was paid 2 weeks’ salary, along with severance of just under one additional week and outstanding vacation pay. His employment agreement had a termination provision that stated: “[y]our employment may also be terminated by our providing you notice, pay in lieu of notice, or a combination of both, at our option, based on your length of service and applicable legal requirements.” CEVA argued that while Rodgers was entitled to some damages, they should be limited by the fact that this provision highlighted length of service and Rodgers was there for less than 3 years.
The Court disagreed, finding that a reasonable notice period for Rodgers would have been 14 months. In the end, CEVA was ordered to pay Rodgers $345,985.
While the Court acknowledged that Rodgers’ short length of service was a relevant factor, it found that it did not deserve any particular weight because the employment agreement was not clear that his length of service would outweigh all other considerations. Instead, the Court turned its focus to the way Rodgers was recruited to the position.
The case serves as an important reminder that even where job security is not explicitly promised, or even discussed, the method of recruitment can be viewed by the Court as an implicit promise of job security. Here, the Court noted the “attractive” financial package Rodgers was offered, and that this was an improvement over the original offer that he declined. The Court was also persuaded by the fact that Rodgers was forced to make an investment in the company, giving him the impression that he could expect above average job security. As such, Rodgers was “induced” to join CEVA, and deserved a longer notice period.
Since inducement tends to be considered alongside other factors, it is difficult to gauge how it will affect the Court’s assessment of the notice period. In this case, there were other issues at play, including the employee’s age, his high level of responsibility, and the difficulty in finding a replacement position. However, the Court was clear that CEVA’s recruitment of Rodgers from a secure position of employment contributed to the long notice period awarded.
Employers should be aware of the unspoken commitments they make when recruiting employees who are already employed in secure positions. An employer’s efforts to convince someone to leave employment to join its organization may commit that employer to more than it had ever intended on termination. In these cases, it is particularly important to consider termination at the point of hiring, and to give serious thought to whether an appropriately drafted termination provision should be included as part of the employment contract, to avoid disputes as to entitlements on termination of employment.
Rodgers v. CEVA, 2014 ONSC 6583 (CanLII)
Unpaid internships were discussed in an April 8th posting in this blog and it is clear that most Ontario interns have to be paid. But what about employees in start-up companies? Can employers provide them with stock options, shareholdings or the promise of future payment in lieu of current payment of wages? The short answer is that except in certain defined circumstances, employees must be paid wages, and they must be paid on a regular basis from the time that they begin working for a company.
The Employment Standards Act, 2000 (Ontario) (the “ESA”) defines an employee as “someone who performs work for an employer for wages”. In turn, the term “wages” is defined as “monetary remuneration”. Section IX of the ESA requires employees to be provided with “at least the prescribed minimum wage”.
The Regulations under the ESA have some exemptions in relation to Section IX, but they are limited and generally only apply to certain defined professionals (eg. doctors, lawyers, engineers, architects, teachers), commissioned salespeople, and other specified groups of employees (certain student employees such as camp counselors, and janitors/superintendents who reside in the building that they are responsible for). It is particularly important for start-up companies to note that there is no wages exemption under Section IX of the ESA for information technology professionals, managers, supervisors or executives.
In addition, because the ESA expressly prohibits employers and employees from entering into an agreement to circumvent the provisions of the ESA, it is not possible for a company founder or similarly-placed employee to agree to forego wages during the start-up period. The potential risk to a company which permits employees to work without receiving at least minimum wage, is that the employee can make an unpaid wages claim, which in turn can also be a liability to the directors and officers of the company. In addition, a failure to pay wages as earned can lead Canada Revenue Agency to have a claim for unpaid tax and other withholdings which should have been made.
While there are risks with entering into independent contractor agreements, particularly if the contractors are actually employees under various legal tests, sometimes the safest path for a financially strapped start-up is to consider short-term contractor arrangements until the company is on its feet and generating revenue which can be used to cover payroll for employees. This can be a tricky area to navigate and should never be done without legal advice, but done properly, it is a better and safer option than failing to pay employees during the initial start-up period.
As if employers needed one, we now have yet another decision invalidating a termination provision for failure to comply with the Employment Standards Act, 2000 (the “ESA”): Miller v. A.B.M. Canada Inc., 2014 ONSC 4062 (CanLII).
Mr. Miller applied for and obtained the position of “Director, Finance and Business Process Improvement”. Prior to commencing employment, he had signed an employment contract, which contained the following elements of “remuneration”:
- A base salary of $135,000 per year;
- Pension contributions up to a maximum of 6% of base salary; and
- A car allowance of $680 per month.
The employment contract contained the following provision in respect of termination without cause:
“Regular employees may be terminated at any time without cause upon being given the minimum period of notice prescribed by applicable legislation, or by being paid salary in lieu of such notice or as may otherwise be required by applicable legislation.”
Mr. Miller commenced employment on September 1, 2009 and was dismissed on a without cause basis on January 26, 2011. The primary issue was whether the termination provision limited Mr. Miller’s entitlement to the ESA minimum (two weeks), or whether he was entitled to common law pay in lieu of notice.
After examining the clause and considering case law (including Wright v. Young and Rubicam Group of Companies and Stevens v. Sifton Properties Ltd.), the Court came to the following conclusions:
- the length of the notice period in the contract, being “the minimum period of notice prescribed by applicable legislation”, was effective to rebut the presumption of reasonable notice according to common law, and as such (provided the remainder of the contract was valid), the amount of notice was legitimately established in the contract as being the ESA minimum; but
- the contract breached the ESA requirement that if pay in lieu of notice is provided, all benefits must be continued. The contract only required the payment of “salary” in lieu of notice. The failure of the contract to require payment of the 6% pension contribution and the car allowance rendered the clause contrary to the ESA, and void for all purposes, such that Mr. Miller was entitled to common law pay in lieu of notice.
The Court also made the observation (although technically this was not a required part of the decision and would be considered obiter), that the wording of the provision at issue will determine whether it is enforceable, rather than the actual actions of the parties. In other words, if a provision is unenforceable because it does not comply with the ESA in some respect, the fact that the employer does actually comply with the ESA will not render the provision at issue enforceable.
Interestingly, the Court held that although the termination provision was invalid, Mr. Miller “cannot escape bearing some responsibility for the fact that both parties entered into a contract which fell below ESA standards”, which seems to suggest that the Court still considered the contract when assessing the common law notice period. Ultimately, after considering Mr. Miller’s age (39), length of service (17 months) and position (Director, Finance and Business Process Improvement), the Court awarded three months of pay in lieu of notice at common law.
Mr. Miller thus received three months of pay in lieu of notice, rather than the minimum two weeks pursuant to the ESA. This case stands as yet another reminder that termination provisions must be carefully drafted to meet the ESA in every respect, or they will be subject to attack, resulting in the employee potentially being entitled to common law pay in lieu of notice.
Please join us on May 1st for a complimentary seminar /webinar on the following topics:
July 1st Deadline Looming: How to Comply with Ontario’s New Safety Awareness Training Regulation
An Update on Ontario’s Workplace Violence and Workplace Harassment Law
This program may be eligible for recertification points.
This 1.5 hour program can be applied toward 9 of the 12 educational hours for Continuing Professional Development required annually by the Law Society of Upper Canada. Please note that these CPD hours are not accredited for the Professionalism Requirement.
May 1, 2014
Registration & Breakfast
8:00 – 8:30 a.m. EDT
8:30 – 10:00 a.m. EDT
Dentons Canada LLP, 77 King St West, North Building, 5th Floor, Toronto
Or by webinar
RSVP to Carla Vasquez, Specialist, Marketing and Events at firstname.lastname@example.org.
As of December 2006, the Ontario Human Rights Code was amended to abolish mandatory retirement. However, the provincial government intentionally did not make corresponding revisions to the Employment Standards Act or the Workplace Safety and Insurance Act. As a result, the law prohibits employer-initiated termination of employment because an employee has reached the age of 65. Voluntary retirement remains acceptable and common. However, employees who work past age 65 are not covered for work-related injuries and need not be covered by group benefit plans. The maximum period for which loss of earnings benefits will be paid under the workers’ compensation system is two years after the date of injury if the employee was age 63 or older on the date of injury. While some employers have arranged for benefit plans to cover employees over age 65, given the increased premium costs, this can lead to a decrease in benefit coverage for all employees or other types of trade-offs. In addition, some unionized employers have been required to provide group health benefits to employees over age 65 due to the wording of a collective agreement – typically a benefits clause which describes the benefits for all members of the bargaining unit.
It was foreseeable that this hybrid status of a worker over age 65 – legally protected from mandatory retirement but not legally protected to receive continued benefits – would lead to litigation. Such an employee would face difficulty succeeding with a complaint under the Employment Standards Act, Human Rights Code or Workplace Safety and Insurance Act since these provincial laws all permit this differentiation.
The Human Rights Tribunal of Ontario (HRTO) is currently hearing such a case. The employee is a unionized teacher who is representing himself. His union cannot bring forward a grievance because it has reached an agreement with the school board in exchange for lump sum payments to teachers over age 65. Nor is the union appearing at the HRTO proceedings. So far, there have been a number of Interim Decisions and Case Assessment Directions issued in the case and the teacher has been unsuccessful in alleging unlawful age discrimination. The final argument, which continues to proceed through the HRTO process, is whether the Human Rights Code of Ontario contravenes the equality rights provisions of the Canadian Charter of Rights and Freedoms, a significant legal challenge for a lone, unrepresented employee.
We will be following this important case as it continues to unfold.
Not Quite an Eye for an Eye – Judge rules that Employee’s “Kick in the Butt” Excuses Co-Worker’s Punch in the Mouth
Does a “kick in the butt” excuse a punch in the mouth? That was the question facing the Court in the recent case of Li v Furguson, 2013 CanLII 91746 (Ont. Sm. Cl. Ct.).
Peng Li and Winston Furguson worked in the shipping and receiving department of a furniture company. Li and Furguson’s coexistence was initially uneventful; however, their relationship had begun to disintegrate following allegations by Li that Furguson was stealing from the company.
On April 19, 2011, things between Li and Furguson reached a boiling point. After searching for Furguson throughout the warehouse, Li finally found his target and confronted him. What happened next was a source of disagreement between the parties, although the judge adopted the following facts. Li began speaking very closely to Furguson; so close that spit was transferred to Furguson’s face, albeit unintentionally. As Furguson tried to break free, Li kicked Furguson in the “butt” with his steel-toe boots. Furguson then wheeled and punched Li twice – one blow was inconsequential, the other was not as it resulted in Li incurring over $7,000.00 in costs for restorative dental services.
At trial, Li argued that he was entitled to damages from Furguson for the tort of battery. However, in the judge’s view, Li’s actions amounted to implied consent to the battery:
In addition, the judge held that Li had provoked Furguson by kicking him. Although provocation was not a complete answer to Li’s claim of battery, it nonetheless operated to mitigate the damages that Li had in turn claimed.
In light of these facts, the judge dismissed Li’s claim in its entirety.
It is important to note that while Li had originally brought an action against his employer in which he made a number of claims, including one for “wrongful dismissal”, this action was discontinued before trial. Regardless, apart from the civil liability above, the altercation between Li and Furguson would certainly attract the attention of any employer’s workplace violence policy and potentially lead to discipline.
Employer avoids liability for harassing texts sent by rogue employee
In an interesting decision, the Human Rights Tribunal of Ontario has ruled that an employer is not liable for discriminatory and harassing texts sent by a rogue employee to another of its workers.
In Baker v. Twiggs Coffee Roaster, Tamra Baker commenced a human rights application against her former employer, Twiggs Coffee Roaster, alleging that her pregnancy was a factor in the decision to terminate her employment. In support of her application, Baker relied on a series of text messages that she received from her friend and coworker, Cara VanDerMark in which VanDerMark advised Baker that the owner of the coffee shop had found out that Baker was pregnant and didn’t believe that she could do her job as she became “bigger”. Of course, this was all news to the coffee shop’s owner, who had instructed VanDerMark to call Baker and let her know that she was not needed for her scheduled shift; the owner intended to terminate Baker’s employment later that day for performance reasons.
Following a two-day hearing, the Tribunal ruled that there was no evidence to suggest that the employer knew that Baker was pregnant at the time that her employment was terminated. As a result, there was no breach of the Human Rights Code. Based on the evidence, the Tribunal concluded that VanDerMark had mistakenly thought that it would be less upsetting to her friend to think that her employment was terminated because of her pregnancy instead of her job performance, so she lied.
However, because VanDerMark’s text message could arguably constitute sexual harassment, the Tribunal considered whether the employer should be held vicariously liable for her behaviour. Ultimately the Tribunal recognized that under the Human Rights Code, a corporation cannot be held vicariously liable for the acts of its employees, agents or officers when it comes to sexual harassment unless the employer was aware of the behaviour and failed to take reasonable steps to correct it. Given that the employer was unaware of the co-worker’s texts, it could not be vicariously liable for these actions.
This case is a good reminder for everyone – employers and employees – to think before they click send on any text or e-mail message. As this case demonstrates, trouble may be only one click away!
Ontario’s Ministry of Labour has announced several upcoming blitzes during which it will ensure that employers in specified industries are compliant with particular areas of concern under the Employment Standards Act, 2000 (“ESA”). Both provincial and regional blitzes have been announced.
A recent posting on this blog dealt with the issue of unpaid internships, in follow-up to the announcement by Toronto Life magazine and The Walrus magazine that they were ending their unpaid internships following recent government inspections. Those inspections were part of the announced blitz with a focus on interns, which began in April and will continue until June in the areas of marketing/public relations, software development, retail, media, film and entertainment industries.
Also on the horizon is a provincial blitz to focus on vulnerable and temporary foreign workers which has been announced for the period from September to November 2014 in the following industries: restaurants, building services, personal care services, business support services and agriculture.
Finally, that will be followed in early 2015 with a provinncial blitz on temporary help agencies, in order to ensure that they are compliant with the laws relating to temporary help workers.
On a regional level, Simcoe, Peel, Dufferin & York veterinary clinics and security service firms will undergo a general ESA blitz in June and July of 2014. At the same time, Toronto and Durham region car dealerships and supermarkets will also undergo a general ESA blitz. Ottawa, Kingston, Peterborough, Hamilton, Kitchener/Waterloo, London and Windsor seasonal businesses and tourism-related businesses will see their own general ESA blitz from June through August and finally, professional offices in Northern Ontario will see a similar blitz in June and July.
It is always good to have your house in order; however, for companies which may be targeted by one of the blitzes noted above, it is of particular importance that your business be compliant with the ESA.
For more information, the Ministry’s announcement can be found at the following link: https://www.labour.gov.on.ca/english/resources/blitzschedule.php.