Update on notice periods – it’s good news for employers

We wrote about the Dawe v. Equitable Life Insurance Company, 2018 ONSC 3130 back in January. Check out that post here.  The Dawe case was notable because the judge in that case awarded Mr. Dawe a notice period of 30 months. The judge also made the comment that he would have awarded Mr. Dawe 36 months of notice, but stopped at 30 because that was what Mr. Dawe had asked for in his Statement of Claim. 

30 Months of Notice!!!!

This case caused a stir with employment lawyers because historically 24 months of notice has been the high-water mark. It has been very rare to see a former employee awarded more than 24 months of notice and this would only be the case in “exceptional circumstances.”

Here is that classic nugget verbatim for anyone who is truly curious:

“Although it is true that reasonable notice of employment termination must be determined on a case-specific basis and there is no absolute upper limit or ‘cap’ on what constitutes reasonable notice, generally only exceptional circumstances will support a base notice period in excess of 24 months” Lowndes v. Summit Ford Sales Ltd., 2006 CanLII 14 (ON CA), [2006] 

Dawe Overturned

The employer in Dawe, who had been ordered to pay Mr. Dawe an addition 30 months of his salary, appealed the decision. This gave the Ontario Court of Appeal a chance to weigh in. In June the Court of Appeal overturned the first judge’s award of 30 months, reducing it to 24. 

Justice Trotter, writing for the court, noted that: “There were no exceptional circumstances that warranted a longer notice period.” Bam!

Why Wasn’t Mr. Dawe’s Case Exceptional?

Mr. Dawe was the Senior Vice President of The Equitable Life Insurance Company of Canada. He worked for Equitable Life for 37 years. He was 62 years old when he was terminated. He had planned to work until age 65 – another 30 months. Equitable Life made Mr. Dawe an offer of 24 months notice, which he rejected. 

So why wasn’t Mr. Dawe exceptional?

The first judge made comments about Mr. Dawe’s intention to retire at age 65, and about society’s changing perceptions about retirement. He awarded Mr. Dawe 30 months because of Mr. Dawe’s stated intention to retire at 65. 30 months of reasonable notice put him in the same financial position as if he had worked until just past age 65. 

Justice Trotter, for the Court of Appeal, disagreed with the first judge’s emphasis on Mr. Dawe’s retirement plans, stating that Mr. Dawe’s retirement plans did not determine Equitable Life’s obligations to him. Further Justice Trotter found that it was Mr. Dawe who initially requested an “exit” from Equitable Life and therefore his departure could not properly be seen as a forced retirement or a situation of “exceptional circumstances.”

Takeaways

The Court of Appeal’s decision in Dawe affirms the cap of 24 months of notice for long-serving, high-earning employees who are nearing retirement. Equitable Life was right to offer Mr. Dawe 24 months of notice right off the bat. This decision also confirms that an employer does not have an obligation to employ anyone on a contract of indefinite duration until they choose to retire. An employer’s obligation, absent contractual terms dictating otherwise, is to provide reasonable notice of termination to employees which, in all but very rare cases, will be at most 24 months. 

If you are a long-serving employee who has been terminated or if you’re an employer looking at the potential liability of exiting a long-serving worker who is nearing 65, get in touch!

Thanks to our Readers! Announcing our win of the Lexology Legal Influencer Award for Q2 of 2019! #influencer

We are super excited to announce that once again, we have been named Legal Influencers for Employment Law in the Lexology Content Marketing Awards for Q2 of 2019! We won this award in Q4 of 2018 – check out our post on that here – and are stoked that our blogging success is having staying power. I mean it’s 2019, what’s cooler than being named a #influencer?! 

This particular award recognized our blog for consistently providing useful and insightful legal analysis. Aw, thanks! 

Lexology considers the number of reads and something called the LexScore (engagement with the blog) to determine winners – so it’s legit.  

We are a small but mighty firm and are thrilled to be competing with the big dogs! The only other employment law winner from Canada was Borden Ladner Gervais LLP. Congrats to our pals at BLG! 

Now to our thank you speech…

Our blog is a cornerstone of our practice and we have fun writing it each week. It allows us to be creative and talk about employment law issues in an approachable and, we hope, useful way. Employment law really does apply to most people at some point in their lives and we are delighted that one of the ways we can reach lots of people is working!

Thank you to Lexology and thank you to our readers! It’s all your reads and shares that won us this award! We will keep it up if you will!

Accommodating Addictions

A labour arbitration decision out of Nova Scotia has got us thinking about what will qualify as addiction and justify accommodation in the work setting.  In Unifor, Local 2215 v IMP Group Ltd (Aerospace Division) (AB Grievance), [2019] NSLAA No 4, Arbitrator Richardson determined that an employee’s on the job masturbation was not justified by his reported sex addiction and upheld the employer’s decision to terminate.  

Sex Addiction

The employee in question carried out his offending behaviour in a four-stall bathroom, and though he was courteous to the extent that he did not engage in the behaviour if someone was in the stall directly beside him, he was commonly overheard by his co-workers. 

The employer’s anti-harassment policy prohibited offensive, embarrassing or humiliating behaviour and the employer had spoken to the employee about his bathroom activities two years prior to terminating his employment. 

The union argued, on behalf of the employee, that his behaviour was a result of his sex addiction (a disability) and therefore he should not be subject to discipline for his disability-related behaviour. The employee stated that his addiction did not impact or interfere with his work and the employer agreed that there was no issue with the employee’s work. 

It was notable in this case that sex addiction is not a condition recognized by the Diagnostic and Statistical Manual (“DSM”). The employee also did not present any evidence that his behaviour was uncontrollable or that it was interfering with his work or home life – the way that we might expect an addiction would.  The sex addiction, if the employee truly did have one, was not “disabling.”

Phone Addiction

While there is currently no reported case law on accommodating “phone addiction” in the workplace, we think it’s coming. Phone addiction, a fun chronicle of which was reported by the New York Times this February, is also not in the DSM but probably feels pretty real to most of us! 

We foresee a time when an employee, prohibited from gazing at their personal device all day, claims phone addiction and brings in a doctor’s note. Maybe it’s already happening! 

What’s an employer to do? Accommodate up to the point of undue hardship – this standard will most likely apply even if the addiction seems slightly off the beaten path.

General Tips for Accommodating Addictions 

Employers need to accommodate their employees with disabilities up to the point of undue hardship. The frequent bathroom visitor’s case failed, in part, because he could not establish that his sex addiction was a disability. Had he been able to do so, he might have gotten his job back. 

Once an employer is wise to a disability or addiction issue they need to take proactive steps to help rehabilitate the employee. This could include paying for counselling or time off for rehab. And yes, you can definitely go to rehab for phone addiction! 

The threshold of undue hardship does not mean that an employer can fulfil their duty to accommodate without hardship. There will be a hardship! Larger employers will be expected to tolerate more of that hardship than smaller employers. 

The Ontario Human Rights Tribunal provides plenty for free guidance on the employer’s duty to accommodate addictions – check it out here

Dealing with an addiction or disability issue in the workplace is very tricky. Surprise surprise, we suggest you get legal advice.  If you need some guidance in this area, our team would be happy to help.

Employment Law Issues for Chiropractors and Physiotherapists

As our population becomes more technology dependent and urbanized, we are increasingly adopting more sedentary lifestyles than our ancestors.  One of the consequences of using our bodies less and our brains more is a host of negative health outcomes, including musculoskeletal issues from being hunched over screens for most of our waking lives. 

Thankfully, a new generation of entrepreneurial chiropractors and physiotherapists have sprung up across our cities to help teach us to sit up straight and activate our glutes. But as with most small businesses in Ontario, there are unique employment law issues facing chiropractors and physiotherapists which they should be aware of.

Contractors or Employees?

For clinic owners, how do you want to organize your staff, including other practitioners?  If they are employees, you have full control over how they perform their tasks, and you can compel them to attend staff meetings, wear uniforms and generally treat patients in line with your specific protocols.  But the corollary is that employees have a host of entitlements under employment law legislation and at common law, especially when you want to end the relationship.  

If your practitioners are contractors however, they don’t have access to any of the statutory entitlements afforded to employees, such as vacation pay, overtime and termination pay.  All of your respective obligations to each other will be that which you negotiate in a contract. On the other hand, you will have minimal authority to control how your contractors perform their job when they perform it, and they will be free to treat other patients outside of the clinic.  

If there is ever a dispute about whether someone is an employee or contractor, our courts care more about what the relationship looks like in practice than what you actually call it.  

There is also an emerging category of dependent contractor which courts will recognize when a contractor is exclusive and financially dependent on your clinic. This characterization may arise if the practitioner does not do work outside of your clinic. If a contractor is characterized as a dependent contractor, they could have significant termination entitlements under the common law, even if they are not your employees.  It is important to address these factors at the outset of the relationship with well-written contracts. 

Restrictive Covenants

Whether a clinic has employees or contractors, often times your most valuable proprietary interests are your patients and referral partnerships.  No clinic wants to have a practitioner leave to a competitor with half of the clinic’s book of business and exclusive referral partners.

For the practitioner, however, they do generally have the right to earn a livelihood and patients ultimately can determine where to take their business in a free market.

There is a compromise to be drawn between protecting a clinic’s business and allowing a departing practitioner to earn a livelihood.  This should be negotiated up front with well-written contracts and Non-Solicitation or Non-Compete provisions.  

Whether you are a clinic owner deciding how to organize your workforce and protect your book of business, or a practitioner looking to join a new clinic, we would be delighted to assist you. 

New Contracts for Current Employees

While we like to help businesses set up their employment relationships from day one, more often than not we come in to help a little later. In many typical workplaces, some employees have written contracts or offer letters, of varying levels of quality, and some don’t have any sort of written contract at all. 

Why Have a Written Contract?

Employment relationships are governed by certain terms regardless of whether or not there is a written contract. When there is nothing in writing, the employer does not get to pick these terms, or make them explicit to the employee. They just come from the common law. 

The most litigated implicit term of employment is the employee’s right to reasonable notice of termination. Where there is no written contract the employee is entitled to reasonable notice of termination under the common law. This amount is roughly determined based on how long it would take the employee to find a comparable position considering their age, their length of service, the character of their employment and the availability of similar employment, taking into account the employee’s training and qualifications. When the contract is not in writing, there is uncertainty about what constitutes a “reasonable” amount of notice and it might be a lot, up to 24 months in extreme cases. 

A written contract allows an employer to set out how much notice the employee will be provided should they be terminated without cause. The amount of notice needs to be at least Employment Standards Act minimums and there are specific nuances that make the way this section of the contract is drafted important (get a lawyer!).  A written contract can limit the employer’s notice exposure and provide both parties with certainty. 

Transitioning Existing Employees to Written Contracts

Transitioning existing employees to new contracts, whether they be in writing for the first time or new written contracts with proper drafting, is tricky. In order for a contract to be valid, “consideration” must be given to the employee in exchange for their agreement to the terms. At the start of the employment relationship consideration is the job itself. This is why is it SUPER IMPORTANT to make sure new employees sign their contract BEFORE they start work.  

Justice Goodman of the Ontario Superior Court of Justice considered the issue of transitioning an existing employee to a new contract in Lancia v. Park Dentistry, 2018 ONSC 751. In this case, the employer, Park Dentistry, gave the employee in question a new contract. Here’s what they did right:

  • Provided the employee with 18 months of working notice, if she chose not to sign the contract – This means that they let her know about the new terms of her employment, but if she didn’t want to accept them, then the old terms of her employment would continue for 18 months and then her job would end. This was sufficient reasonable notice. 
  • Provided the employee with $2,000 as “consideration” for signing the new employment agreement – Even though the new terms of the employment reduced the employee’s annual income by $4,000, $2,000 was sufficient consideration for the new terms of the contract. On this subject, Justice Goodman said, “Indeed, it is trite law that courts will not inquire into the adequacy of consideration – a “peppercorn” will do.” 
  • Provided the employee with ample time to seek legal advice – The employee could have decided to sign the contract at any point during the 18-month working notice period. This gave her lots of time to seek legal advice if she chose to.
  • Ensured the employee signed the contract – While this may seem hardly worth mentioning, lots of employers fail to follow through on this crucial step. 

If you’re an employer thinking that maybe it’s time to check out your employment contracts situation, get in touch. It’s important that your contracts are properly drafted and that you take the right steps in rolling them out to existing employees to ensure that they will be enforceable down the line. 

Unauthorized Absences – When your employees are crazy sports fans!

With the huge response to the Raptors parade this week we thought it a good time to revisit the issue of unauthorized employee absences. Many employers allowed their employees the day off to go celebrate, but there were also reports showing some employees, who did not get the day off, wearing fake noses and disguises to the parade so that they would not be identified by employers should they happen to get on TV. We discussed this topic way back in 2015 when the Blue Jays and Blue-Flu were causing a bit of a dip in employee productivity. Be it baseball, the World Cup (go Canada’s Women’s Soccer team! #CANWNT) or Raptors fever, employers need to be prepared to manage their sport fan employees!

Managing Fandom in the Office

Sports are a unifying and community-building force. Where possible, it can really boost morale and give an employer popularity points if you can give employees the day off to attend a huge parade or organize a viewing party in the office for a special game. If this isn’t feasible from a business perspective then employees who truly cannot miss a game or celebration could be welcome to use their vacation days to attend. Leniency regarding last minute requests may or may not be appreciated, but denials due to a lack of compliance with the vacation policy requiring you ask for all your days at the start of the year, for example, will lead to bitter employees who may just call in sick anyway!

Providing employees with personal or flex days can be a good way to meet this type of last-minute day off need, without too much hand-wringing or disruption. It should be expected that employees have other things come up in their lives that occasionally require time away from work.

Employees Faking Sick

Employees have a duty of honesty to their employers and also a duty to come to work and do their job. If you have reason to suspect that your employee is not actually sick you can ask for a doctor’s note. While there may be some lingering confusion about whether or not you can ask for one of these, thanks to Premier Ford you now can! Catch up on all things Personal Emergency/Sick Leave here.

If the employee cannot produce a note, or if you happen to see them on TV looking quite well, then this may warrant discipline (in writing please!). If you have an employee who is frequently “sick” on Fridays or Mondays you’ll want to consistently require doctor’s notes and where they cannot justify their absence, counselling and discipline (again in writing) about the need to attend work etc.

Managing absenteeism, that is not sports related, can be tricky because attendance issues are often connected to human rights concerns.  

If you need help managing absent or sports-crazed employees get in touch!

“Avoid seductive styles” – Telling your employees how to dress

A news story caught our attention recently. The University of Quebec in the Outaouais (UQO) commissioned an instructional video for university employees instructing them on how to dress for work and then emailed it out to staff.

The four-minute video, hosted by a Gatineau based fashion stylist, provided such tips as don’t dress like you’re on vacation and “do not be in seduction style.” The stylist also advised that staff should not wear worn-out clothes or “cheap accessories.”

While we specialize in Ontario and not Quebec law, this piece certainly caused us to raise our eyebrows. Backlash from the professors at UQO has also seemingly caused the video to be taken down.  UQO says that the video was intended to provide “inspiration” and now say that “people are free to wear what they want.”

Can you tell your employees how to dress?

All this begs the question, can you tell your employees how to dress? Or provide them with helpful accessorizing tips? Obviously, some jobs come with uniforms or safety equipment that is crucial to doing the job. In these instances, the dress is a job requirement. The law is pretty clear that where a uniform is required, it is a human rights violation to require that male and female employees wear different uniforms.

The Ontario Human Rights Commission advises as follows with respect to gender-specific dress codes:

  • Female employees should not be expected to meet more difficult requirements than male employees;
  • Female employees should not be expected to dress in a sexual way in order to attract clients; and
  • Employers should be able to prove that any sex-based differences with respect to dress codes are legitimately linked to the requirements of the job – if they are not, they are likely discriminatory.

Many employers in the service industry require female employees to wear tiny skirts and plunging necklines. If the employer refuses to allow a female employee to wear the male uniform or vice versa, they would likely be found to be in violation of the Ontario Human Rights Code.

While the issues with the UQO video were different, something like this still has the potential to be discriminatory. While an employer can have a dress code, care needs to be taken that the dress code is justified and that it does not specifically target one gender. The UQO video seemed to speak to women and to place responsibility on women to control any sexual messages they may be sending out. This borders on the troubling and inappropriate “she was asking for it with that outfit” type of justification for sexual violence.

TakeawaysDress codes need to be reasonable and uniformly applied. If, as an employer, you’re going to list a bunch of things you don’t want to see in the workplace, they should not all target women. For example, in addition to strapless tops, open-toed shoes, and short skirts, maybe throw in cut-off shorts, muscle tanks and t-shirts with logos. In general, you want to treat your employees with respect and avoid being overly paternalistic or controlling about things that may not actually matter to your business.

If you have questions about dress codes or a specific situation you’d like to discuss, get in touch!

Requiring Agility – How Much Can an Employer Change Job Duties?

At SpringLaw we work with a lot of tech companies and start-ups who are all about agility. These employers often include language in their contracts that speaks to being flexible with duties and rolling with the punches as the company scales. How flexible can employers expect their employees to be when it comes to having their roles and duties changed? And how important are these promises of agility in the employment contract? How much can an employer require an employee to change hats before risking a constructive dismissal claim? A case out of Nova Scotia sheds some light on these questions.

What is a Constructive Dismissal?

A constructive dismissal occurs when the employer alters the terms of the employee’s employment in a sufficiently drastic way that a reasonable person in the same situation would consider the contract to have been breached AND that a reasonable person would conclude that the employer no longer intends to be bound by the contract.

Classic examples of constructive dismissals include lowering an employee’s pay or changing their pay structure, requiring them to move to another city to keep their job, demoting an employee or creating or allowing a harassing or poisoned work environment.

The question of flexibility arises when an employer assigns an employee more or different duties.

Whalley v. Cape Breton Regional Municipality

Mr. Whalley held the position of Economic Development Manager for the Municipality of Cape Breton. His offer letter contained a general description of his job – “manages the implementation of economic plans, programs, and services for the municipality.” Once he was hired he was provided with an equally general job description, stating that he was responsible for the development of “an internal strategy that will enable the municipality to play a lead role in creating a self-sustaining, competitive economy in this region.”

For the majority of his career in this role – 15 years – Mr. Whalley ended up focusing his time on the development of the Port of Sydney. In 2015, after he began to voice concerns about ethical issues related to a leasing deal at the Port, Mr. Whalley was informed that the Port of Sydney project would be reassigned.

Mr. Whalley did something that few employees whose duties are changed actually do – he immediately resigned and sued the Municipality for constructive dismissal.

Job Descriptions are not Frozen in Time

Mr. Whalley was not successful in his claim. The court found that he was not constructively dismissed but left his job of his own accord.

Justice Murray commented that there was no express or implied term of Mr. Whalley’s employment that required him to work on a particular file and that it was not reasonable of him to refuse to continue to work once the Port file was reassigned.  Mr. Whalley’s duties were very broad and open to reasonable variation and not “frozen” at the time they were prepared.

Takeaways

Employers who expect their employees to be flexible should establish this expectation at the beginning of the employment relationship with language in the employment contract. While it is unlikely that a court will ever condone significant compensation changes as permissible based on language about agility, this decision suggests that employers should feel confident in changing up an employee’s duties where language is general and reflective of flexibility.    

Uber heading to the Supreme Court

The fate of the gig economy in Canada is in the hands of the Supreme Court. The saga of David Heller and Uber has been in the news for several months and raises important employment law questions relevant to those working in the gig economy.

History of the Case

This is a class action case brought by representative plaintiff David Heller, an Uber Eats driver. Heller argued, on behalf of Ontario Uber drivers, that they are employees of Uber and entitled to the benefits of the Employment Standards Act, 2000 (ESA).

Uber currently has its drivers enter into a Service Agreement. It characterizes itself as a “lead generation service” and drivers, via the Service Agreement, are able to use the Rider App to pick up those leads.

The litigation in this case so far has been around a clause in the Service Agreement that dictates that conflicts arising from the Agreement will be resolved by arbitration in Amsterdam under the Rules of Arbitration of the International Chamber of Commerce. Here is Article 15 of the Service Agreement, for those of you who are really interested:

Except as otherwise set forth in this Agreement, this Agreement shall be exclusively governed by and construed in accordance with the laws of the Netherlands, excluding its rules on the conflict of laws. The Vienna Convention on the International Sale of Goods 1980 (CISG) shall not apply. Any dispute, conflict or controversy, howsoever arising out of or broadly in connection with or relating to this Agreement, including relating to its validity, its construction or its enforceability, shall be first mandatorily submitted to mediation proceedings under the International Chamber of Commerce Mediation Rules (“ICC Mediation Rules”). If such a dispute has not been settled within sixty (60) days after a request for mediation has been submitted under such ICC Mediation Rules, such dispute can be referred to and shall be exclusively and finally resolved by arbitration under the Rules of Arbitration of the International Chamber of Commerce (“ICC Arbitration Rules”) …. The Place of the arbitration shall be Amsterdam, The Netherlands.  

The Service Agreement also states that it is governed by the law of the Netherlands.

The judge in the Superior Court decision decided that the action should not be heard by the court and that the arbitration clause applies.

Ontario Court of Appeal Decision

Mr. Heller appealed this decision to the Ontario Court of Appeal, who decided that the arbitration clause was “unconscionable at common law,” an illegal contracting out of the ESA and therefore invalid. Check out the Court of Appeal decision here or check out Hilary’s comments on this decision in this TVO interview.

The gist of the Court of Appeal’s decision was that there was huge inequality of bargaining power between Uber and the drivers and that it would be practically impossible for an individual driver to exercise their rights under the arbitration provision, which heavily favours the interests of Uber.

The Supreme Court

Where there are larger issues in the Uber case around the status of Uber drivers – namely are they employees and subject to the protections of the ESA or not? – the litigation is not at the stage of answering that question, but instead determining jurisdiction and the enforceability of the arbitration clause.

The Supreme Court of Canada – the highest court in our country – has granted leave to hear Uber’s appeal. This means that they will decide if the Ontario Court of Appeal was correct about the invalidity of the arbitration clause. As with all Supreme Court decisions, their holding will likely have wide implications for contractual alternative dispute clauses, such as this one, and could have broader implications for those working in other areas of the gig economy.  

Employer Pays for Failing to Investigate Harassment

Readers of our blog will know that employers have a legal obligation to take workplace harassment seriously. These obligations are set out in Ontario’s Occupational Health and Safety Act (OHSA) and require that employers with more than five employees have a policy and procedure dealing with workplace violence and harassment. Employers are required to take the safety of their employees seriously and adequately respond to incidents of violence and harassment, but, not every employer does. A recent case sheds light on the consequences of looking the other way when it comes to violence and harassment.

Bassanese v. German Canadian News Company Limited et al.

In Bassanese v. German Canadian News Company et al. Justice Sossin of the Ontario Superior Court of Justice awarded the plaintiff, Ms. Bassanese, $50,000 in aggravated damages for the bad faith actions of her former employer, German Canadian News Company (GCNC).

At the time of her termination from GCNC Ms. Bassanese was 73 years old and had worked at GCNC for 19 years. In the final period of her employment, Ms. Bassanese was harassed by a co-worker. This co-worker yelled and screamed at her, called her an idiot and told her she should be fired. Ms. Bassanese complained to GCNC about the treatment and no actions were taken. On her final day of employment, Ms. Bassanese alleged that the abusive co-worker slapped her in the face three times. GCNC’s response to this situation was to fire Ms. Bassanese. They provided her with no notice.

Ms. Bassanese’s Claim

In response to her termination, Ms. Bassanese filed a lawsuit against GCNC including a claim for aggravated damages. She submitted that the following actions were taken by GCNC in bad faith and justified aggravated damages:

  • Terminating her employment without notice;
  • Failing to investigate her harassment complaint;
  • Terminating her employment in response to her complaint about being slapped – constituting a reprisal under s.50 of OSHA;
  • Failing to provide her with a reference or assistance in finding a new job; and
  • Failing to provide a subsidy for relocation or retaining counselling.

Justice Sossin awarded Ms. Bassanese $50,000 citing that GCNA ignored her complaint and neglected to investigate the complaint or take steps to address the harasser’s inappropriate conduct. Ms. Bassanese was also awarded 19 months of notice pay plus an additional 10% for the loss of employment benefits during the notice period and $15,000 for the slap, for which GCNA was found vicariously liable.

Lessons for Employers

This decision should reinforce that employers need to take the complaints of their employees seriously. Had GCNA conducted a proper investigation and taken appropriate steps to deal with the harassing co-worker, it is likely that they could have avoided the aggravated damages award and perhaps Ms. Bassanese would never have been slapped and terminated.

If you have questions about workplace harassment and the risks of failing to comply with employer obligations get in touch or check out our past posts on workplace harassment.

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