Why Bother with Employment Contracts?

I had a client recently ask why he would bother going through the cost and efforts of doing up an employment contract, if he was going to have to fight with ex-employees’ lawyers and pay out a package in a without cause situation anyway.  Good question.

Without Cause Termination Entitlements

It remains very difficult to meet the “just cause” termination threshold in Canada, and in the vast majority of cases, the employee will be entitled to notice or pay in lieu of notice if the employer wants to end the relationship for any reason, other than just cause.  Reasons such as a decline in business or moving a division of the company off shore are not just cause, even if they may be a legitimate reason to terminate an employee’s employment.

All employees must get at least the minimum amount of notice or pay set out in the applicable employment standards legislation.  If there is no written employment contract that clearly sets out the entitlements upon termination (either capping the amount to the statutory amount or providing a bit more on top of the statutory minimums), the employee will be entitled to the common law amount.

The common law amount includes the statutory amount, is typically much more than the statutory minimums, and is an unpredictable range depending on the unique factors of the individual and how similar cases have been decided in the past.  The judge must look in her or his crystal ball and decide what sort of cushion this individual needs to find similar employment.  It can be a highly subjective exercise, although based on caselaw precedent.

Is Rolling the Dice Better?

Some employers prefer to roll the dice and see what sort of package they can negotiate on termination.  By promising a more generous amount in the contract, they worry that they are stuck with having to pay that generous amount at termination, even if the parties have degenerated into a fairly hostile relationship.

So why bother spending resources and effort on termination provisions?  Because it is usually more cost-effective to have the certainty of a known cap than to enter into extensive, heated negotiations with the employee regarding the common law amount.  It enables employers to plan and to think through budgets when deciding whether to terminate an employee.

Perhaps most importantly, it can help focus the parties on a winding up process already agreed upon, rather than diverting resources and time on the emotional arguments about what that employee is worth.  Courts award termination damages to cushion the employee to the next job, but most employees see the entire exercise as a commentary on whether their employer valued the loyalty, sweat and soul they gave to the organization over the years.

Rarely is it just a business decision to the employee, even if they intellectually can accept that.  The raw emotion of being fired will never go away, but a contract with a valid termination clause can help lower the temperature, facilitate a faster resolution and focus the parties on agreed upon terms.

WPC 2016 and the Global Tech Community

Yesterday was Day 1 of the annual Microsoft World Partners Conference here in Toronto.  As the news continues to highlight the distressing conflicts south of the border and around the world, a conference like WPC is a welcomed reminder that we all have far more in common than not.

There are 16,000 attendees that have descended on Toronto in the last day or so.  In the two hours our firm’s booth was open last night, we had visitors to our booth from Latvia, Frankfurt, Dortmund, the UK, California, Delaware, Oklahoma, Texas, Montreal and local Toronto partners.  And that’s not to mention the very kind attendee from Northern Ireland who carried one of my heavy booth prep bags to the convention centre in the hot summer sun with me (thanks Gary!).

Yes, this a conference for a specific industry, but the array of tech businesses, entrepreneurs, and projects on the go were enriched by the array of cultural backgrounds, not hindered.

Today will no doubt be a busy day full of conversations about expanding workforces into Canada, topped by a Women in Tech reception at the Community Hub.  I look forward to meeting so many people around the globe here in Toronto.

We’re at Booth 1737, by the coffee shop/bar – if you’re at WPC, come and say hello!

Top 3 Uniquely Canadian Workplace Issues

Toronto is a great place to be a tech employer. It’s a cool city with exciting innovation and talent. If you’re a US company considering getting in on the action in Toronto, there are few things you should know about the True North.

Canada strives to have workplaces that are tolerant and inclusive and employees have some serious protections and benefits. In Ontario, our Human Rights Code expects employers to play a big role in preventing all forms of discrimination at worflagk against a number of protected groups.

Here are a few things employers should be aware of:

1) We do not have at will termination

In Canada, unless the employer has a really good reason, it cannot terminate an employee without providing reasonable notice or pay in lieu of notice. Without at will termination, and with a high threshold for just cause to terminate, terminations are typically accompanied by pay to the terminated employee. If there is no employment agreement, the amount can be substantial.

2) Our employees have privacy rights at work

Employees have an expectation of privacy, even on work devices, and increasingly Canadian courts are recognizing this. While many Canadian employers monitor their employees’ use of technology, there is a fine line to tread between invading privacy and managing the workplace. While some of this can be managed through effective workplace policies, employers should proceed with caution when viewing potentially private digital information.

We advise about privacy and technology a lot! For more information about privacy in the workplace and issues specifically related to BYOD, cyberloafing and co-working, see my past posts on these topics: http://www.canadaemploymenthumanrightslaw.com/category/privacy/

3) Canadians like babies!

In Canada, parental leave is available for the birth or adoption of a child. A new mother can take up to 17 weeks of maternity leave and an additional 35 weeks of parental leave can be shared between both parents or taken by one. During this time off, employees get to continue on benefit plans and earn seniority. At the end of the leave employees must be given their old job back, or be placed in a comparable position.

New parents are entitled to employment insurance benefits while they are away from work, and many employers provide a “top up” to the employment insurance benefits, to ensure the employee does not suffer economically because of the leave.

If you want to make sure your company is compliant with Ontario employment laws, please feel free to send me your questions and I may address them in a future post.

The Perils of Working with Interns

Because of the recent controversy surrounding unpaid interns, we have been getting many calls from concerned employers about their obligation when working with interns and employers’ rights when interns do not work out.


As a general rule, unpaid internships are not permitted in Ontario. There are a few exceptions, the most common of which is where the intern is a “trainee”.

To qualify as a trainee, ALL of the conditions below must be met:

  1. The on-the-job training is similar to training at vocational school;
  2. The training is for the benefit of the intern and the intern receives a benefit, such as new knowledge or skills;
  3. The employer derives little, if any, benefit from the activity of the intern while he or she is being trained;
  4. The intern does not take an employee’s job;
  5. The employer is not promising the intern a paid position at the end of the training; and
  6. The intern has been advised that he or she will not be paid for his or her time.

If an employer provides an intern with training in skills that are used by the employer’s employees, the intern will generally not fall under the “trainee” exception.

Another situation where unpaid interns are permitted is where the intern performs work under a placement program approved by a university or college.

Simply agreeing to work without pay does not preclude an intern from later filing a claim against an employer for unpaid wages.

Terminatioffice 1on of Employment

If an intern is paid for work performed, the Employment Standards Act (ESA) applies. As a result, ending the internship must comply with the ESA. Employers should have interns sign contracts, setting out a clear (and lawful) termination provision. If the internship is for a fixed term, and if an employment contract with an appropriate termination provision was not signed, an employer may well be found to have to pay the intern what the intern would have earned during the term of the contract, even if the intern is asked to leave before the end of the term. If the term is not fixed and the internship ultimately lasts less than three months, notice will not be required.

Buyer beware – As simple as it may seem, it’s a good idea to call your lawyer before agreeing to let your employee’s niece hang out in the mail room for a few months.

WIT: The Impact of Job Automation on Women in Tech

Machines are taking our jobs. Researchers at Oxford have analyzed the skill sets required for more than 700 jobs to determine which of them will be most susceptible to automation. They concluded that in the next few decades, over 47% of the jobs we have today will likely be taken over by machines. we can take some comfort in the fact that growth is predicted in ways we cannot likely conWomen Telephone Operators at Workceive of today, another side of this story is the disproportionate effect job automation will have on women.

Our workforce continues to be divided along gendered lines. For example, according to the US Census Equal Employment Opportunity  Tabulation, 95% of the truck drivers in the US are men and 95% of secretaries and administrative assistants are women. Men hold 97 percent  of U.S. construction and carpentry jobs, and women hold 93 percent of the registered nurse positions. While traditional male job categories like transportation are expected to take a hit, sectors that employ the most women, such as customer service, office support, sales and administration, are expected to be hit harder.

Women are also expected to be disproportionately affected by the job growth in more male dominant sectors. Growth is expected in the STEM careers (science, technology, engineering and mathematics), as well as in fields such as architecture.  According to the World Economic Forum Future of Jobs report, women hold just 11% of worldwide jobs in architecture and engineering and just 23% of jobs in computing and mathematics. According to the World Economic Forum, “women stand to gain only one new STEM job for every 20 lost across other job families, whereas the ratio for men is one new job for every four lost elsewhere.”

The efforts to support and encourage women in tech are critical to address both the current and potential future trends.  Technology itself will otherwise undermine the number of jobs women hold in the STEM fields.  It is not enough to suggest merit will take care of the problem – the historical problem is much deeper and sophisticated than mere hiring quotas.  Creating communities and workplaces where women feel they genuinely belong and are able to contribute meaningfully will help keep women in tech once they get there.

Examples such as the Women in Tech meetup at WPC in July are opportunities to send your women employees to important career and company growth initiatives.  I’ll be there, and look forward to connecting with women entrepreneurs and tech experts.

Microsoft Acquiring LinkedIn: What is the Employee Impact in a Share Transaction?

shoesMicrosoft Corp. and LinkedIn recently announced that Microsoft will soon acquire LinkedIn in a transaction valued at $26.2 billion – click here for the company’s announcement.

Under the deal, Microsoft will purchase LinkedIn’s shares at $196 each. If a share sale like this happened in Ontario, the identity of LinkedIn would not change – Microsoft would simply step in to the shoes of LinkedIn. Microsoft would inherit all employees and employment-related liabilities and obligations of LinkedIn after the deal closed.

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Koldorf Stam at WPC 2016 in July

Toronto skyline - red

WPC in Toronto

This summer, our firm will be hosting a booth at the 2016 Microsoft World Partner Conference (WPC).  We’re excited to connect with many of the 15,000 MS partners from around the globe who will be coming to Toronto July 10-14.  Come and visit us at Booth 1737, near the coffee shop.

Canada has a deep and highly skilled tech talent pool, and our dollar makes scaling out into Canada an attractive option for growing companies.  Our team looks forward to meeting up with business owners who are navigating the complex Canadian workplace law landscape.

We’re a tech-savvy, virtual law firm that speaks the same language as the WPC community.  We love the entrepreneurial passionate that drives so many of the business that will be coming to the annual conference in Toronto this summer.  There are a ton of great speakers and events, and we can’t wait to be surrounded by that energy and the smarts that drives so much of our modern economy.

Feel free to connect with us @koldorfstamlaw or @lisastam if you’re going to be there and would like to meet up!


Manager Ordered Prison Time for Employee Fatalities

photo cretit: Matthew Wiebe via UnsplashOn January 11, 2016, Vadim Kazenelson, a former project manager with Metron Construction, received a three and a half year prison sentence as a result of employee fatalities and injury that occurred under his watch. While Kazelnelson’s sentence is the first of its kind in Canada, it will likely be the first of many prison sentences for managers who do not take reasonable action to prevent injury to employees.

Kazenelson’s sentence stemmed from his failure as project manager to take any action that may have prevented the deaths of four employees and serious injury to another employee that resulted when a swing stage scaffold snapped in half on December 24, 2009. The employees had been standing on the swing stage thirteen stories above ground to repair balconies on a high rise apartment building in Toronto. Only two workers on the swing stage were actually were secured by lifelines, as required by law. While Kazelnelson had known about the lack of sufficient lifelines, he did nothing about it after being told not to worry by Fayzullo Fazilov, the site supervisor. Fasilov also died when the swing stage snapped.

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Tweeting Your Way to Termination

fire hydrantA blog post just in time for some downtime over the holiday – when can personal tweets become grounds for termination?  Some of you may remember when in August of 2013 Canadian news outlets were a-buzz with the termination of two Toronto Firefighters for sexist comments made on Twitter. For a media report on the details of the tweets and reactions, click here.

While the tweets were made off-duty, and not in reference to anything work related, management got involved partly because the Firefighters in question identified themselves as such on their Twitter profiles. The conduct was deemed to be in violation of employer policies, including their Social Media Policy, damaging to the reputation of Toronto Fire and ultimately worthy of termination.

Both individuals grieved their terminations, asking for their jobs back. These two cases are a good example of when tweets can amount to grounds for termination and when reinstatement may be ordered. Continue Reading

Holiday Party Tips for the Young Boss

lampshadeWe all have an office party horror story.  The partner who got too sloppy and friendly with the summer student, the awkward aversion of eye contact the next day, or the overly honest comments from the disgruntled employee.

While holiday parties can be an important employee morale booster, for the employer they can present a minefield of potential liability and complaints. For start-ups and entrepreneurs, the informal culture can particularly be an invitation to indulge and live it up in the name of hipster, relaxed office counter-culture.

Employer host liability, however, applies to all workplaces.  Even if it’s a Saturday night and you’re at a fancy bar, the employee’s right to harassment free work environment extends to off-site employer sponsored events. If your company’s New Year’s resolutions have something to do with avoiding human rights complaints, harassment allegations or claims for social host negligence here are our top tips to get you started on the right path. Continue Reading