Equal Pay for Equal Work Now in Force

On April 1, 2018 Equal Pay for Equal Work, the new section 42 of the Employment Standards Act (ESA) came into force. This was a Bill 148 amendment. You can read more about the big changes Bill 148 has made to the Ontario employment landscape in our previous posts on this topic.

Equal Pay for Equal work expands pay equity from pay equity on the basis of sex, to pay equity on the basis of employment status.

Employers now have to pay employees performing substantially the same kind of work the same rate of pay, regardless of their employment status.

Substantially the same work is not necessarily identical work. Work will be considered “substantially the same” if it requires the same level of skill, ability and responsibility, and is performed in the same establishment and under the same working conditions.

Exceptions

Permitted exceptions to the rule are where a difference in the rate of pay exists on the basis of:

a seniority system;
a merit system; or
a system that measures earnings by quantity or quality of production.

Unionized Workplaces

Collective agreements commonly make distinctions to rates of pay on the basis of employment status, and may conflict with this new law. The transition provision at section 42.1(7) of the ESA allows for non-compliant collective agreement provisions to prevail over the legislation until the collective agreement expires, or until January 1, 2020, whichever is earlier.

Employee’s Right to Request a Review

If an employee suspects that they are being paid less than another employee performing substantially the same job, and that they are being paid less due to their employment status, they can request that their employer review their rate of pay.

The employer must then either adjust the employee’s pay (up not down), or, if the employer believes they are justified with respect to the difference in pay, they must respond to the employee setting out their reasons in writing.

Takeaways

Employers must now be in compliance with the law. Wages will need to be adjusted up to remedy any gaps in pay that exist on the basis of employment status. Wages cannot be adjusted down to bring them into line.

If you need help making sure your workplace is Bill 148 compliant contact us.

What a Year!

By Lisa Stam on April 4, 2018 Posted in News

cupcake with sparkler candle SpringLaw celebrates its one year anniversary this month. We kick off year 2 with our new monthly newsletter that we hope will be a useful, quick read to keep you updated on Canadian workplace law.

Our clients and colleagues have been such an important part of our journey. It’s been a year of thinking through our entire workflow to ensure client experience drives the entire process, implementing new software internally across the board to support our virtual infrastructure, and rethinking how we can bring value and efficiency to every client file. There is plenty of great legal information available online and clients come to us more informed than ever. Our job is not to cut and paste what is already online, but instead, to help you think through your legal strategy, what are best practices to consider, and to sort through the noise of our information-overloaded lives.

Year 1 was great, but year 2 is going to be even better. We have been piloting an innovative employer subscription program and will be rolling that out formally over the next month. We want employers big and small to have access to solid and reliably updated core employment law documents, budget certainty and access to legal services that make sense for your stage of growth. Stay tuned for more details over the next while!

Thank you to all of our clients, colleagues, friends and family for a year of support, wisdom and humour. We may be a virtual firm, but we never stop feeling connected to the broader HR and employment law community. Here’s to another year!

Employee Benefits: Government Health Insurance and Employer Benefit Plans

By Lisa Stam on March 28, 2018 Posted in Benefits

prescription pills on a pharmacy tray Benefits are always a hot topic in employment law. My 2012 post on benefits during the notice period remains my most read post.

On January 1, 2018 the Ontario Health Insurance Plan (OHIP) introduced Children and Youth Pharmacare, drug coverage for children and youth, who are otherwise covered by OHIP and aged 24 and under. In this post we will look at the intersection between government benefits and private drug plans and the impact of this change.

Our US readers may picture Canada as a free health care utopia with free medications, dentist visits and massages for everyone! While many health services are covered, many are not, which is where employee health benefits come in.

What does OHIP cover?

OHIP is the Ontario health insurer. Ontarians have health cards, which they present at the doctor, or x-ray clinic, or emergency room etc. as proof that they are insured by the Province. Similar systems exist in Canada’s other provinces and territories. Delivery of health services is the jurisdiction of the provinces and territories and not the federal government. Using Ontario as an example, visitors and some categories of immigrants may not be able to access Ontario’s health care, because they are not insured by the province.

OHIP covers most basic medical and emergency services. This includes visits to the family doctor, visits to the ER, walk-in clinic visits, necessary tests and surgeries. If you have to stay in the hospital OHIP will cover the cost of the stay and any medications administered to you in the hospital.

What does my employee need private health insurance for?

You might be thinking, that sounds pretty good and why would my Ontario employees need health benefits at all? The big categories of things that OHIP does not cover are prescription drugs once you are out of the hospital (though now just for those over 24), dental services and eyeglasses. In most cases, Ontarians who require an ambulance will also be required to pay a portion of the cost of the trip. Many depend on employer-provided health benefits to subsidize the costs of necessities that OHIP does not cover, which as our US readers well know, can be substantial.

Take Aways

Health and Dental Benefits are valuable to employees, even in the land of free health care. This is especially true for those employees who have dependants, as benefit plans will typically insure the employee’s family. Now that most medications will be covered for OHIP insureds 24 and under, the necessity of private benefits for kids has gone down. However, employees will still depend on private benefits for dental care and eyeglasses for themselves and their children.

If you have questions about benefits in the workplace we at SpringLaw would be happy to help.

Note: On March 20, 2018, after we published a version of this blog on First Reference, the Ontario government made an election promise to extend drug coverage to people over 65 by August 1, 2019. Stay tuned!

Bill 148 Client Questions: Personal Emergency Leave for Short Term Workers

By Lisa Stam on March 21, 2018 Posted in Bill 148, Employer Resources

black and white image of a medical stethoscope Today we will address another in our series of Bill 148 client questions. Over the last two weeks we have tackled a question related to the new vacation entitlements and one about the entitlements of salaried workers to the Three Hour Rule. This weeks’ question addresses one of the most talked about changes in the Employment Standards Act Personal Emergency Leave. For a more in depth look at Personal Emergency Leave check out our post from January.

We designed our Bill 148 webinar series to help our employer clients get acquainted with the significant changes introduced by the Bill 148 amendments. We will also be shortly issuing an Employer’s Guide to Bill 148, an ebook which will cover these changes in depth.

Q: Is a short term, seasonal employee (such as a summer student employee) entitled to all ten days of Personal Emergency Leave?

A: Yes. Ten days may seem like a lot if you have an employee, such as a student, who will only be working for eight weeks, but ANY employee is entitled to this leave.

Personal Emergency Leave, under s.50 of the Employment Standards Act entitles any employee to a ten day leave of absence (two paid days and eight unpaid days) for the following reasons:

A personal illness, injury or medical emergency.
The death, illness, injury or medical emergency of an individual described in subsection (2).
An urgent matter that concerns an individual described in subsection (2).

Subsection (2) details a list of individuals from the employee’s spouse to the step-grandparent of the employee’s spouse – basically the leave can be taken with respect to any of the employee’s or the employee’s spouse’s relatives.

There is no requirement that the leave be accrued over a year, as with vacation for example, and the leave is not pro-rated. Part-time and seasonal employees are all entitled to 10 days of Personal Emergency Leave per year.

The only limitation on this is that an employee must be employed for one week or longer before they are entitled to their two paid days of leave. However, an employee could theoretically get a job, take the first week as five days of unpaid Personal Emergency Leave, collect their two days of paid leave the following week and use the last of their three unpaid days to finish up the week.

Employers are restricted by s.50(13) from requiring that an employee making use of their Personal Emergency Leave time to provide a note from a doctor, nurse or psychologist.

This new entitlement, and the evidence restrictions, have the potential to cause some tricky workplace situations. If you need help understanding how to comply with the changes to the law, or navigating a leave situation in your workplace, we’d be pleased to assist.

Bill 203: Introducing Pay Transparency

By Lisa Stam on March 14, 2018 Posted in Bill 148, Bill 203, Employment Standards, HR

woman sitting in front of laptop On March 6, 2018, Ontario Minister of Labour Kevin Flynn introduced Bill 203 the Pay Transparency Act, 2018. It has passed first reading and is in the process of making its way through the legislative process. While the Bill is not law yet, it would introduce several measures aimed at further closing the wage gap between male and female workers.

Increasing Pay Transparency

The Bill is all about pay transparency, which would be increased by:

Prohibiting employers from seeking compensation history information from applicants;
Requiring that publicly advertised job postings include an expected salary range;
Requiring large employers (initially, those with more than 500 employees) to prepare “pay transparency reports.” These reports would be submitted to the Ministry, and track and report compensation gaps based on gender and other prescribed characteristics. There would also be a requirement that they be conspicuously posted in the workplace;
Prohibiting reprisals against employees who disclose or ask about compensation, or ask the employer to comply with the Act.
Enforcement of the Act by:
- Allowing compliance officers to conduct workplace audits; and
- Imposing financial penalties on employers who contravene the Act.

Existing Pay Equity Measures in Ontario

The new pay transparency measures would dovetail with the Equal Pay for Equal Work requirement in the Employment Standards Act. This requirement dictates that employees performing substantially the same kind of work, in the same establishment, requiring the same skill, effort and responsibility and working under similar conditions cannot be paid differently based on their sex. When the Bill 148 amendment to this section comes into force on April 1, 2018, these Equal Pay for Equal Work provisions will extend protection from sex to differences in employment status. To read more about these changes check out our Bill 148 posts.

Ontario also has the Pay Equity Act which address systemic issues with lower pay for women in female dominant industries. The Pay Equity Act attempts to ensure that women receive equitable pay to men for performing different jobs of equal value.

Finally, if you’re looking for a great example of pay inequity that reduces the issue down to the basics and from the perspective of kids, here’s a 2:36 minute video worth watching: Norway Child Experiment about Gender Equality. The baffled, free-from-politics look on the kids’ faces when they do the same job but the girls get less candy than the boys is classic.

We will keep an eye on Bill 203 as it moves through parliament and post updates as the Bill progresses towards becoming law. If you have any questions about pay equity in your workplace get in touch. We would be pleased to assist.

Bill 148 Client Questions: The Three Hour Rule

By Lisa Stam on March 7, 2018 Posted in Bill 148, Employer Resources, HR

black and white image of an analogue clock face This week we bring you another in our Bill 148 client questions series. Today we will tackle the three hour rule.” This change comes into effect on January 1, 2019, in the category of Employment Standards Act scheduling changes.

Q: Does the three hour rule apply to salaried employees?

A: It’s easy to see how to calculate three hours of pay for an employee who is paid by the hour. This client question asks if salaried employees are entitled to the three hours of pay. They are! Our answer to this question will also address how to calculate the entitlement when a worker is paid a salary.

The three hour rule, which again does not come into force until January 1, 2019, reads:

Three hour rule

21.3 (1) If an employee who regularly works more than three hours a day is required to present himself or herself for work but works less than three hours, despite being available to work longer, the employer shall pay the employee wages for three hours, equal to the greater of the following:

The sum of,

the amount the employee earned for the time worked, and

wages equal to the employee’s regular rate for the remainder of the time.

Wages equal to the employee’s regular rate for three hours of work. 2017, c. 22, Sched. 1, s. 12.

Exception

(2) Subsection (1) does not apply if the employer is unable to provide work for the employee because of fire, lightning, power failure, storms or similar causes beyond the employer’s control that result in the stopping of work. 2017, c. 22, Sched. 1, s. 12.

The three hour rule entitles employees to be paid for three hours of work, even where they did not actually work for three hours. This covers situations such as being sent home early from a shift. Other sections of this amendment specify that employees will be entitled to be paid for three hours when their shift is canceled on less than 48 hours notice and when they are required to be on-call, regardless of whether or not they are called into work, or called in for less than three hours.

Employees who are paid a salary are still entitled to pay under the Three Hour Rule, even though they are not paid by the hour. Under the three hour rule, the employee is entitled to three hours at their regular rate. To arrive at the regular hourly rate of a salaried employee divide the amount earned by the employee in a given work week by the number of non-overtime hours the employee actually worked in that week.

Also note the exception to this rule, which provides that it will not apply, and the employer will not have to pay the employee for three hours, where they are unable to provide work because of “fire, lightning, power failure, storms or similar causes beyond the employer’s control that result in the stopping of work.”

Navigating the changes brought by Bill 148 presents a serious challenge for most employers. If you’re interested in reading more about Bill 148 check out our FAQ blog from last week on vacation entitlements as well as our previous blog posts on the subject. We are also in the process of rolling out a full Bill 148 compliance program, including webinars and an ebook, designed specifically for employers.

If you need help understanding how to comply with the new and upcoming law, we’d be pleased to assist.

Bill 148 Client Questions: Vacation Entitlements

By Lisa Stam on February 28, 2018 Posted in Bill 148, HR

pink plastic flamingo on a sandy beach Bill 148 has brought significant amendments to the Ontario Employment Standards Act. Over the past couple of months SpringLaw presented a series of Bill 148 webinars to our clients. We designed this series to help our employer clients get acquainted with all the changes introduced by the Bill 148 amendments.

We covered the following topics:

Overview and Wage Changes
Record Keeping and Policy Changes
Leaves, Scheduling and Vacation
Changes Affecting Unionized Workplaces

We will also be shortly issuing an Employer’s Guide to Bill 148, an ebook which will cover these changes in depth. Stay tuned!

My favourite part of any live presentation is the audience questions. Over the next few weeks I’ll be posting some common Bill 148 questions and our answers. To start us off here is one about vacations.

Q: What is the effect of lay-off periods when determining whether or not a seasonal employee is entitled to the vacation increase?

A: Under the Bill 148 amendments, employees with five or more years of service to the employer are entitled to three weeks of vacation annually, up from two weeks.

The new section 33 reads:

Right to vacation

33 (1) An employer shall give an employee a vacation of,

(a) at least two weeks after each vacation entitlement year that the employee completes, if the employee’s period of employment is less than five years; or

(b) at least three weeks after each vacation entitlement year that the employee completes, if the employee’s period of employment is five years or more. 2017, c. 22, Sched. 1, s. 21.

The changes make the length of employment relevant. How is the length of employment calculated when the employee does not work throughout the year?

Unless there is a break in the employment relationship, meaning the employee quit or was terminated, the employee will continue to accrue seniority regardless of whether or not he or she is on a leave of absence (parental leave, family caregiver leave, etc.) or a temporary lay-off. Therefore, employees who have been consistently employed for five or more years are entitled to the vacation increase, even if there have been periods of lay-off in those five years.

Under the Ontario Employment Standards Act both active and inactive periods of employment are included when calculating entitlement to vacation. There are no industry exemptions for entitlement to vacation.

Many employers may now find themselves with contracts that are unenforceable due to the changes to vacation and other new entitlements. If you need help making sure that your documents are compliant, we’d be pleased to assist.

Is my Employee’s Non-Compete Agreement Enforceable?

By Lisa Stam on February 21, 2018 Posted in Restrictive Covenants, Termination of Employment

Are non-competes, non-solicitations and confidentiality agreements enforceable in Canada? Aside from termination provisions, restrictive covenants are probably the clauses that give us employment lawyers the most to think about. A restrictive covenant is a contractual clause, typically in an employment agreement, that seeks to limit a former employee’s ability to solicit the employer’s clients and/or to compete for those same clients in the same area.

In Canada, courts have generally been reluctant to uphold agreements that have the effect of restricting an individual’s ability to earn a living or pursue the job of their choice. Indeed, courts take the initial position that restrictive covenants in employment agreements are unenforceable, unless the employer can demonstrate otherwise. A restrictive covenant must jump through several hoops to be deemed enforceable.

Firstly, the employer must demonstrate that they have a proprietary interest in need of protection. Once a proprietary interest has been established the court will consider whether there may have been a less restrictive means to protect that interest.

Non-Competition Agreements

These clauses or agreements attempt to limit the former employee’s ability to work for a competitor, or open a competing business. These are generally only upheld in exceptional cases. The requirement that the restrictive covenant be as minimally restrictive as necessary often means that a non-solicitation clause is sufficient.

When considering whether or not a non-competition clause is truly necessary, the courts will look at the following factors:

Vulnerability of the employer to competition or solicitation – Is there a lot of opportunity or clientele not yet serviced by anyone?
How much confidential information the employee had access to during the course of their employment and how much confidential information they know about a key client
How close the employee was with key clients – For example, how much service did they provide and did they provide it exclusively?
How much damage could a competing or soliciting employee do in the same market as the employer
How long the employee has been with that employer
Whether the employee had influence over clients – For example, did the clients rely on the employee’s advice and trust the employee?
The nature of the business with respect to the strength of customer loyalty

Non-Solicitation Agreements

A non-solicitation agreement will allow a former employee to work for a competitor, but prevent them from soliciting the clients (and possibly the employees) of their former employer for a specific period of time. Former employees may have close relationships with clients. Allowing them to solicit these clients may give them an unfair advantage against the former employer in the marketplace. If the employee does not solicit the client, but the client leaves to follow them anyway, there is little an employer can do.

Once it has been established that a restrictive covenant is necessary to protect the proprietary interests of the employer it must also be established that the covenant is of a reasonable scope with respect to geography, time and prohibited activities.

If a court finds a restrictive covenant clause unreasonable, for example it restricts solicitation for 12 months when 6 would have been reasonable, they will not read it down to fix it. Canadian courts require the employer to get it right the first time and a flawed clause will therefore normally be unenforceable.

Case Example – Competition in the Eyewear Industry

Last year the British Columbia Court of Appeal considered the enforceability of a non-competition clause in IRIS The Visual Group Western Canada Inc. v. Park. IRIS delivered eye care services and sold eyewear products at outlets where they also employed optometrists to assess vision and write prescriptions. The respondent, Dr. Park, was one such optometrist, who was contracted to provide services to IRIS from 2007-2016. In 2016 Dr. Park left IRIS to set up her own optometry practice, 3.5 kms away from where she had worked for IRIS.

At the outset of their relationship, Dr. Park had signed a non-compete agreement which restricted her from competing with IRIS for a period of 3 years within 5 km of their location. The trial judge held that these temporal and geographic limitations were reasonable, but that the description of the prohibited activities was too broad. Activities prohibited were “carrying on, engaged in, interested in or concerned with a business that competes with” IRIS. The Court of Appeal upheld the trial judge’s ruling, also finding that the clause was ambiguous and overbroad.

Of note, the Court felt that nature of the connection deemed by the phrases “in conjunction with” and “concerned with” a competing business was ambiguous and not easy to understand. The clause also defined a competing business as including a business that dispensed non-prescription optical appliances. This could presumably mean a business such as a sunglasses store and include business or work that had nothing to do with the practice of optometry. This aspect of the clause was broader than necessary to protect IRIS’s proprietary interests. The court declined to read down the clause and remove the reference to “non-prescription”.

Employer Take-Aways

Employers concerned about protecting their client relationships and proprietary information should employees leave are advised to have solid restrictive covenant provisions in place. While these are typically contained in the employment agreement at hiring, employers can also take steps to have existing employees enter into enforceable agreements.

See our recent blog post for an example of how a very long non-compete clause will typically require a payment in lieu.

If this is a live issue in your workplace, or if you are an executive looking for a new job and wondering if that non-compete you signed five years ago will come back to haunt you, contact us at SpringLaw. We’re here to help.

Sexual Harassment and Valentine’s Day

By Lisa Stam on February 14, 2018 Posted in HR, Human Rights, Intimate Relations in the Workplace, Workplace Policies

By now everyone should know that sexual harassment is not permissible in the workplace, but even amidst the flurry of allegations we have seen in the #metoo era, exactly what constitutes sexual harassment might still be a little fuzzy. With love in the air today, workers across the land might be wondering, can I ask my co-worker to be my Valentine? In today’s post we will take a closer look at the law around sexual harassment and try to answer that burning question.

Section 10 of the Human Rights Code

The Ontario Human Rights Code defines harassment in section 10 as “engaging in a course of vexatious comment or conduct that is known or ought reasonably to be known to be unwelcome.”

This definition creates a hybrid subjective and objective test for what will constitute harassment. The harasser’s own knowledge is considered (subjective) as well as what would be reasonably known (objective). Harassment on the basis of the protected ground of sex would be considered sexual harassment.

What about Consenting Adult Relationships?

So if I think that my co-worker has been sending me green light signals and so would a reasonable person, I might be okay. However, the analysis does not stop there. While there is nothing illegal or objectively wrong with a workplace romance between two consenting adults, it’s rarely that simple.

Facebook and Google have both been in the news lately for their takes on the office romance issue. Both companies are reported to have office dating policies specifying that employees will only be permitted to ask a co-worker for a date ONE time. If the propositioning employee is turned down, they are not permitted to ask again. If the answer is ambiguous, they are to take it as a NO. These policies also have mandatory date reporting requirements and prohibitions on dating where there is a conflict of interest, for example dating a direct report.

Power Imbalances

Section 7(3)(a) of the Human Rights Code establishes an individual’s right to be free from unwelcome sexual advances or solicitations from a person in a position to grant or deny a benefit. This would generally be someone in a position of authority, but not necessarily. For example, even if my co-worker and I have the same level of position, if I have been in the position longer and my co-worker relies on me for information and guidance in the workplace, I may be seen as being in a position to grant or deny a benefit.

In situations where there is power imbalance, it is safe to say that one should never risk making a sexual advance, or asking a subordinate on a date. This is because the power imbalance makes it such that the less powerful individual cannot truly ever be seen to be giving consent freely, regardless of the genders involved.

Asking for a Date

So if my co-worker is objectively sending positive signs, such that a reasonable person would think a (very polite, respectful, mild and non-physical) advance would not be unwelcome, and I am not in any way in a position to grant or deny a workplace benefit, then it may be safe to ask them to be my Valentine.

The next question to consider will be the type of outing request itself. Asking them if they’d like to accompany you to the Vagina Monologues might be a nice idea but certainly a step further than a coffee after work. Those green light signals need to be pretty clear. Just because a person does not openly communicate their distaste for a comment or behaviour, does not mean the actor can interpret it as not unwanted.

Examples of Sexual Harassment

The Ontario Human Rights Commission provides us with a long list of what activities may be sexual harassment including:

Demanding hugs
Unnecessary physical contact
Sex-specific derogatory comments or language (towards men or women)
Displaying or circulating sexual images
Propositions of physical intimacy
Demanding dates
Sexual questions or discussion
Requiring an employee to dress in a sexualized or gender-specific way

The Employer’s Role

Employers too need to be aware of the sexual tensions at play in an office, or risk being held liable for failing to address a poisoned work environment. For example, if two co-workers had a relationship and then broke up, and one is now showing revealing photos of the other around the office, this likely creates a poisoned work environment for the depicted employee. Though a manager may be tempted to deem the matter personal, the employer has an obligation to protect the employee.

The Ontario Occupational Health and Safety Act establishes standards for safe and healthy work environments. As under the Human Rights Code, under OHSA employers have obligations to prevent and address sexual harassment. Employers can protect themselves and their employees from sexual harassment with appropriate policies, training and complaint and investigation procedures.

No one ever said love would be easy.

If you need help establishing best practices, or navigating a tricky situation in your workplace, contact us at SpringLaw for help.

Huge Moral Damages Award

By Lisa Stam on January 31, 2018 Posted in HR, Termination of Employment

Stacks of Canadian currency Wal-Mart Canada has been hit with the largest award for moral damages in a Canadian employment case ever. In December, the Ontario Superior Court awarded punitive and moral damages of $750,000 to former Wal-Mart Canada employee Gail Galea. Read the full decision here (nearly 100 pages).

Ms. Galea was a senior management employee, hired by Wal-Mart in 2002. She quickly climbed the ranks, eventually earning nearly $500,000 in annual total compensation and the position of Vice-President, General Merchandise.

Pre-Termination Conduct

In January 2010 Wal-Mart restructured. Ms. Galea was removed from her position and told that she was “still valued,” but that that they “did not know what to do with her.” Ms. Galea remained employed by Wal-Mart, but largely without a role, for the next ten months. She was put in the position of taking temporary assignments, and of trying to find herself a new position within the company. With respect to the restructuring, the court found that the then-president and CEO of Wal-Mart Canada had removed Ms. Galea from her position with the hopes that she would resign. Regarding Wal-Mart’s conduct during this time Justice Emery stated:

Wal-Mart would make representations to Ms. Galea about her career prospects while making decisions that detracted from, or even defeated that purpose. It is not that Wal-Mart set Ms. Galea up to fail; it is that Wal-Mart built her up, only to let her down that much more. That corporate behaviour was not just unduly insensitive, it was mean.

He found that Wal-Mart knew Ms. Galea’s career with Wal-Mart was over in January 2010, and effectively strung her along for another 10 months. In November 2010 Ms. Galea was terminated, without cause.

Moral Damages

In making the moral damages award Justice Emery considered Wal-Mart’s conduct before and after the termination, as well as their conduct during litigation. The court awarded Ms. Galea damages for Wal-Mart’s conduct during the 10 month period during which Ms. Galea remained employed, but was effectively without a job. Holding that Wal-Mart had breached the employer’s implied duty of good faith, and that this breach had caused Ms. Galea mental distress.

The court determined that Ms. Galea was not required to provide expert medical evidence with respect to her claim for mental distress, holding that in the employment context, that the law in Ontario does not require that a plaintiff lead medical evidence to make out a case for this type of damages.

Wal-Mart’s litigation, and post termination, conduct was such that the court awarded $50,000 against them. As part of her employment Ms. Galea had signed a two year non-compete agreement, a term of which was that Wal-Mart continue to pay her her base salary during that time, if she was terminated without cause. Among its post-termination wrongs, Wal-Mart stopped paying Ms. Galea after 11.5 months. Wal-Mart also was found to have delayed litigation, causing “mental distress” and “prolonged anguish” to Ms. Galea.

In total Ms. Galea was awarded $250,000 in moral damages ($200,000 for Wal-Mart’s conduct during the 10 months and $50,000 for post termination conduct), including aggravated damages and damages for mental distress and $500,000 in punitive damages.

Takeaways

This is not the first time Wal-Mart Canada has been slapped with a large moral damages award. In Boucher they were successful on appeal of reducing a $1,000,000 punitive damages award to $100,000. We will have to wait to see if Wal-Mart will choose to appeal this case.

This case represents a trend of courts holding employers liable for bad behaviour towards employees. While the dollar amounts in this case are high, it should be kept in mind that one purpose of punitive damages is to deter the reprehensible behaviour. The bigger the company the bigger the award needs to be for it to have meaning.

If you are about to enter into a contentious termination in your workforce, contact us at SpringLaw to help you navigate what could otherwise be an expensive and high risk situation.