All About Overtime

By Lisa Stam on September 12, 2019 Posted in Employer Resources, Employment Standards

Our clients ask a lot of questions about overtime. Despite many workplaces that are trying hard to keep work hours reasonable and limit them to 40 hours per week, in busy workplaces, overtime is very often inevitable – at least once in awhile.

There is a lot to know about overtime, more than we can cover in this post, but here are some highlights and practical tips.

The Overtime Threshold

In Ontario, the overtime pay threshold is 44 hours per week. This is set out in the Ontario Employment Standards Act. In some provinces, the threshold is 40 hours, but we will focus on Ontario in this post. The 44-hour threshold means that any time an employee works beyond 44 hours in a week is overtime. Employees who work overtime receive extra pay (or time off — see below) for that time. The value of overtime is 1.5 times that of regular time. In other words, an employee who works 1 hour of overtime is entitled to 1.5 hours of their regular pay.

Exemptions: Who Gets Overtime Pay?

Not every type of employee is entitled to overtime pay. Some categories of workers are exempt from aspects of the Employment Standards Act, especially as it relates to hours of work and overtime. These exemptions are set out in a separate regulation, titled O. Reg. 285/01: WHEN WORK DEEMED TO BE PERFORMED, EXEMPTIONS AND SPECIAL RULES. Exemptions from overtime pay are set out in section 2 and 8. Broadly, most regulated professionals are not entitled to overtime pay. This includes workers such as architects, lawyers, doctors, engineers, veterinarians, dentists, massage therapists, physiotherapists, pharmacists etc. IT professionals, travelling salespeople, commercial fishermen, certain farming and landscaping jobs are also exempt. There are nuances to many of these exemptions and this list is not exhaustive, so we suggest you get legal advice before making any final determinations.

The most commonly used exemption is for managers. Many employers will use “manager” in a job title and pay the employee a salary, thinking that this will make the employee exempt. This is not always the case, as to meet the exemption criteria, the manager must actually be spending most of their time managing and only perform non-supervisory or non-managerial tasks on an irregular or exceptional basis (section 8.b) of O.Reg 285/01).

What About Employees On Salary?

Many employers believe that paying an employee a salary means that they do not have to be paid overtime. This is not the case. Salaried workers are entitled to overtime unless they fall under an exemption.

In order to determine the overtime rate of a salaried worker, divide their weekly salary by 44. This will give you their regular hourly rate. The overtime rate will be 1.5 times the regular rate.

Averaging: When Work Weeks Are Different

Employers whose employees only occasionally work over 44 hours per week, or whose workload fluctuates, can take advantage of averaging agreements. This allows the employer to average the employees hours of work over a period of up to four weeks. If the average number of hours per week is less than 44, then the employer will not have to pay the employee overtime pay.

Averaging requires the employee’s agreement. The employer cannot unilaterally decide that they will use averaging.

Lieu Time Instead of Pay

Lieu time is another way that employers commonly deal with overtime. Instead of paying out overtime, employees can take time off. The value of the time or pay is the same. One hour of overtime is 1.5 hours of time off or pay.

Lieu time requires the agreement of both the employer and the employee. The time off must be taken within three months of the time when it was earned, or if the employee agrees, within 12 months. If lieu time was earned more than 12 months ago, or more than 3 months ago and the employee does not consent to an extension to 12 months, it must be paid out as overtime pay.

Final Thoughts

Overtime with all its nuances and exemptions is tricky! If you’re unsure about how to classify workers in your workplace get in touch!

Workplace Sexual Harassment in Entertainment Industry

By Lisa Stam on September 4, 2019 Posted in Harassment

The recent trailer for the upcoming film Bombshell depicts a hauntingly quiet elevator ride between three women who, we will soon discover, have something awful in common. The film, which will be released in December, is based on the real-life sexual harassment case against the founder and former CEO of Fox News, Roger Ailes. The women who are at the heart of this film, were employed at Fox News and brought forward the allegations against Ailes.

Workplace Sexual Harassment in the Entertainment Industry

The topic of workplace sexual harassment is now at the center of most discussions around workplace safety and workplace culture, but it would be naive to presume that all workplaces are safer since the Me Too movement gained steam in 2017.

Certain workers, by nature of their professions, are in a particularly difficult position with regard to workplace sexual harassment. While the Me Too movement has made a very deliberate attempt to expand its outreach beyond the entertainment and media industry, often making the point that harassment occurs in all industries, individuals who work in entertainment and media do face particular vulnerabilities.

What Makes the Entertainment Industry Different?

While the Ontario Human Rights Code (OHRC) and the Occupational Health and Safety Act (OHSA) protect a variety of workers, including individuals in media, entertainers will fall under certain exceptions. For instance, section 25.1(3) of OHSA, prohibits employers from instituting policies requiring employees to work with high heeled shoes. However, this same provision exempts employers from the “entertainment and advertising industry.”

Also, working in the entertainment space may require individuals to behave in ways that would normally be considered unusual in the workplace, such as wearing sexy clothing or performing scenes with simulated sexual activity or intimacy. These circumstances can lead to potentially exploitative situations, particularly for those new to the industry.

Addressing These Gaps

Another challenge for individuals is that many in the industry work outside unions and as such do not benefit from uniform workplace harassment policies. To address this need, the Association of Canadian Cinema, Television and Radio Artists (ACTRA) created universal guidelines to prevent and respond to harassment, bullying and violence in the workplace. Signatories of the Code of Conduct agree to take appropriate and timely steps to address allegations of harassment, discrimination and violence in the workplace, including taking legal action when necessary. Major players in the entertainment industry, including TIFF and the CBC, have become signatories.

The Directors Guild of Canada (DGC), a labour union that represents various people who work behind the camera, in collaboration with ACTRA, has created HAVEN, a bilingual reporting hotline available to those in the industry experiencing harassment in the workplace. The hotline operates 24 hours a day, 7 days a week and is completely confidential – a necessary feature in an industry that is so relationship driven.

Final Thoughts

While workers should be able to depend on strong legislative frameworks to protect their interests in the workplace, it is promising to see industry leaders come together to address the gaps that make certain workers more vulnerable. Canada is quickly becoming an important player in the world of content creation and, with the eyes of the world on us, it is critical that the entertainment industry work to create safe and supportive working environments for all workers.

If you’d like to talk more about how to deal with harassment in your organization get in touch! We are passionate about this issue and eager to help.

Canada Labour Code Amendments Coming into Force

By Lisa Stam on August 28, 2019 Posted in Employer Resources, Employment Standards, News, Overtime, Workplace Policies

Calling all federal sector employers! Significant amendments to the Canada Labour Code come into force on September 1, 2019. That’s this coming Sunday.

Does this apply to you?

Employers are often confused by the various workplace laws and requirements. It’s tricky to know which apply and not every law applies to every workplace.

In Canada, the Constitution divides power between the federal and provincial governments. Here is a fun article if you want to delve more deeply into this topic.

The Canada Labour Code is a federal law which sets out minimum employment standards for sectors that fall under federal power. These are generally sectors that go between the provinces, for example, air travel, railways and road transportation. It also applies to the telecommunications sector, banks and federal Crown corporations.

For workplaces not involved in banking, telecommunications, air transport etc., minimum employment standards will be set by the provincial law. In Ontario, this is the Employment Standards Act.

What’s New?

So if you’re a federal sector employer, here is what’s new come September 1, 2019:

Breaks and Rest Periods

30 minutes breaks – employees are entitled to an unpaid break of 30 minutes during every 5 hour work period. If the employee is required to remain available during the break, then the break will be paid.
8 hours between shifts – employees are entitled to a minimum of 8 hours off between shifts.
Unpaid medical or nursing breaks – employees are entitled to breaks for medical reasons or, if nursing, to nurse or express breast milk.

Shift Scheduling and Overtime

96 hours of notice of scheduled shift – employers must provide employees with their schedule a minimum of 96 hours prior to the start of the first shift. Employees can refuse work if less notice is provided, except in emergencies.
24 hours notice of shift change – employers must provide employees with a minimum of 24 hours of notice that a shift will change, except in emergencies.
Lieu time instead of overtime – employees can elect to have time off at the rate of 1.5 hours per overtime hour instead of pay.
Right to refuse overtime – employees may refuse to work overtime hours because of family responsibilities, with certain limitations.

Entitlement to Flexible Work Arrangements

Right to Request Changes – employees with at least 6 months of consecutive service to an employer can request changes to their hours of work, work schedule, location of work or terms and conditions of work. The employer can refuse the request only on certain grounds.

Time Off – Vacation and Holidays

Vacation minimums – employees are entitled to 2 weeks of vacation (4% vacation pay) after one completed year of employment, 3 weeks of vacation (6% vacation pay) after 5 consecutive years of employment and 4 weeks of vacation (8% vacation pay) after 10 years of completed employment.
General holiday pay for holidays that fall within the employee’s first 30 days of employment – holidays within the employees first 30 days were previously not paid.

Leaves

Personal Leave – 3 paid days and 2 unpaid days per year for employees who have completed 3 consecutive months of employment. The leave is for personal illness, injury or caring for family members. The employer can request documentation to support the reason for the leave. NOTE: The Personal Leave entitlement is already in effect.
Victims of Family Violence – 10 days of leave, the first 5 of which are paid if the employee has completed at least 3 consecutive months with the employer. This leave is for victims of family violence or for parents with children who are victims of family violence.
Traditional Aboriginal Practices – available to employees who identify as Aboriginal, this leave is 5 unpaid days per year to engage in traditional Aboriginal practices.
Court or Jury Duty – Employees are entitled to an unpaid leave of an unspecified length to attend court as a witness, juror or for jury duty.
Bereavement – up to 5 days, the first 3 of which will be paid for the death of an immediate family member, if the employee has completed at least 3 consecutive months of service.
Removal of the Minimum Service Requirement for the following existing leaves: maternity, parental, critical illness, or death or disappearance of a child.

The above list covers the highlights and for the most part, brings federal workplaces more in line with entitlements that already exist in provincially regulated workplaces. More changes are to come, with implementation dates not yet set in most cases, so stay tuned.

If you have specific questions about the impact of one of these changes on your workplace, please get in touch!

Standard versus Snowflake Workplace Legal Issues

By Lisa Stam on August 21, 2019 Posted in Employer Resources, Workplace Policies

Yes your business’ legal issues are full of many special and unique snowflakes to litigate. And then sometimes they are not and you just need a standard contract that is relevant and applicable to your workplace. When is which?

In the modern age of the democratization of knowledge, where online software can provide some pretty decent options to help resolve workplace issues and where legal subscription options can make legal documents and services more cost-effective, when should a business bother to hire a lawyer?

Not always, to be frank.

Inform Thyself

First, there are many great blogs out there (like ours!!), as well as good and helpful free legal information produced by the government, human rights tribunals, law societies, advocacy groups, education groups and so on. At SpringLaw, we find it quite useful when a client comes to us with that head start of basic information. We can all start the conversation a few steps ahead.

Clearing up the facts

Secondly, not every problem should be litigated. Not even every legal problem should be litigated. We love to get our elbows up and battle it out when required (who doesn’t love to end a stern letter with “Please govern yourself accordingly”?), but an aggressive litigious approach is rarely the most practical or effective approach.

In the workplace, so many problems are more Broken Telephone than Legal. Have all facts been gathered? Are the parties involved fully informed of the applicable policies or procedures? Is everyone on the same page about which employment contract provision applies? Have the parties just, well, um, TALKED to each other first?

Our clients are comprised of both employers (big and small) and employees (execs and frontline). It actually doesn’t matter how far up the corporate ladder a person is, there still is the reality that most employees/executives do not have the full picture of how decisions were made behind the scenes. And most employers/management do not fully understand how their actions or words are being interpreted and/or misconstrued.

So do you hire a lawyer to solve your Broken Telephone problem? Yes, sometimes. But we would say always start with a careful look at whether common sense and due process have been followed. Has everyone’s side of the story been heard? Are assumptions being made about what documents or facts we’re each relying on?

Much of workplace disputes are credibility and human relationship based. Hearing each other out and clarifying facts is more than half the battle. We don’t naively think everyone will get along – they won’t and some people really shouldn’t work together -but we are always amazed at how much could have and should have been cleared up WAY before the parties dug into their polarized, distrusting positions.

Unlike a B2B or third party type of transaction, most workplace disputes are between people who see each other more than their family, so it is not a matter of lack of relationship or information. It’s about assumptions, misinformation, fact-finding and clearing the air.

If after all that you still are not seeing eye to eye then yes, of course, seek out a lawyer. And while there is a place for automated, DIY, online legal software and programs, other times you need the human touch (e.g. a real life experienced lawyer). The modern and real value a workplace lawyer can bring to the table is to identify the factual gaps and the assumptions being made that sometimes a business owner can’t see when she is in the trenches just trying to run a business.

Being Pro-Active about Messy Humanity

The modern workplace is just so much more complex and sophisticated than a binary right-wrong conclusion. It’s messy and full of human relationships. While law continues to be that crucial line between order and chaos, how we all apply the law to the modern workplace is evolving and full of more effective nuances to solve workplace problems.

Having core documents, policies, procedures and compliance systems in place will free up businesses to focus on the application of those systems to run the business. Businesses can then turn to pro-active solutions based on an effective existing infrastructure, and pull in professionals upfront to help set up the systems and documents, with the aim of avoiding all that messy and very expensive human conflict down the road.

Get in touch if you have a workplace snowflake to figure out. But even more useful, call us to help set up all that generic, standard, cost-effective stuff in your workplace so you can focus on running your business, instead of having to spend time putting out soul and money sucking legal fires.

Accessible Canada Act – The Act to Ensure a Barrier Free Canada

By Lisa Stam on August 14, 2019 Posted in Disability, Employer Resources, Uncategorized, Workplace Policies

Canada has just passed a new law to strengthen accessibility for people with a disability in federally regulated workplaces and organizations.

The Act to Ensure a Barrier Free Canada, also known as the Accessible Canada Act (the “Act”), came into force on July 11, 2019 and aims to create a “Canada without barriers” by the year 2040. A similar legislation – the Accessibility for Ontarian with Disabilities Act – exists in Ontario and aims to achieve this goal by the year 2025.

The new Act will require organizations under federal jurisdiction to develop accessibility plans that account for the various barriers people with disabilities face in their built environments, when accessing services in the public, and in their employment.

This Act will apply to the federally regulated private sector, the Government of Canada and Parliament. The Act’s primary mandate is to address accessibility issues in a proactive manner, by removing barriers before they create harm. This is significant given that a reactive response, through the human rights litigation process, has been the only impactful way to address these issues for over four decades.

The Act will introduce the following changes:

(a) Accessibility Standards

The federal government has established the Canadian Accessibility Standards Development Organization (CASDO), whose mandate is to develop and revise accessibility standards for federally regulated industries. CASDO will provide these standards to the Minister of Public Services and Procurement and Accessibility (the “Minister”), who will create regulations that federal organizations must follow.

In addition to the standards set out by CASDO, federally regulated groupings will be subject to industry-specific regulations, as per Part 4 of the Act:

Regulated entities that carry on broadcasting undertakings;
Regulated entities that are Canadian carriers or telecommunications service providers;
Regulated entities in the transportation network; and
Other regulated entities.

These industry-specific accessibility regulations will be detailed in each industry’s governing legislation acts, as follows:.

Industry Grouping	Acts in which the Accessibility Regulations Will be Found	Entity Responsible for Establishing and Enforcing Industry-Specific Accessibility Regulations
(1) Regulated entities that carry on broadcasting undertakings	The Broadcasting Act	The Canadian Radio-television and Telecommunications (CRTC)
(2) Regulated entities that are Canadian carriers or telecommunications service providers	The Telecommunications Act	The Canadian Radio-television and Telecommunications (CRTC)
(3) Regulated entities in the transportation network	The Canada Transportation Act	The Canadian Transportation Agency
(4) Other regulated entities	The Accessible Canada Act	The Governor in Council

Organizations in these defined industries must refer to their industry’s governing legislation to find information regarding industry-specific regulations. The CRTC and the Canadian Transportation Agency will be charged with crafting the accessibility regulations these federally regulated organizations will rely on to ensure they are providing a barrier free environment. The Governor in Council will make regulations for other regulated entities.

These regulations will detail how organizations should assemble their accessibility plans, how to solicit feedback from the public regarding existing barriers in their organization, and how to produce meaningful progress reports. Once the regulations are drafted, regulated organizations will be required to produce their accessibility plan one year after the day fixed by their respective regulations.

(b) Enforcement

The Act will also create the new role of the Accessibility Commissioner. The Accessibility Commissioner will have the power to conduct investigations into organizations that have received complaints under the Act. The CRTC and the Canadian Transport Agency will also enforce the Act for their respective industries.

The Act will create a formal complaint process for individuals who have suffered physical or psychological harm due to an organization’s failure to abide by the applicable regulations. The Commissioner has the authority to issue warnings and/or fines of up to $250,000 per violation for contravention of the regulations.

Organizations may be inspected regardless of whether they received complaints. This is known as a “proactive inspection” and is one of the ways the Act is attempting to remove the burden from individuals with disabilities who have long been tasked with demanding accessibility on their own.

Final Thoughts

The Accessible Canada Act will create new standards for federally regulated industries in the hopes that more people are able to access and fully participate in the spaces they work and regularly utilize. Now that the legislation is in force, federally regulated employers should begin to educate themselves about the Act and start to consider the implications this Act may have on their built environment, their hiring practices, and how their employees’ interact with members of the public – specific to-dos and deadlines are still coming. We will provide updates on the Accessible Canada Act as they become available.

If you have questions about accessibility in your workplace, get in touch!

Workplace data theft – Protect your company with best practices

By Lisa Stam on August 9, 2019 Posted in Employer Resources, Privacy, Workplace Policies

The Capital One Data Breach has been big news lately, and for good reason. It’s a big deal. This breach compromised the data of over 100 million Capital One customers. Instead of a shadowy overseas hacker or a creepy crawler from the dark web, the hacker was a former employee of the cloud hosting company through which Capital One stored their data (unconfirmed, but likely Amazon Web Services). She hacked through Capital One’s firewall to access information stored on the Amazon cloud. See women can be hackers too! This particular woman is now in US federal custody.

Allegedly, Capital One configured a web app incorrectly, which created the vulnerability through which the hacker was able to access the server and the data.

This situation is a nightmare for all involved – the customers, Capital One, and perhaps Amazon – and serves as a good opportunity for us to remind users about data security and workplace privacy.

Data Governance in Ontario

Every modern workplace should have a data governance policy, especially now as it is becoming more common for employers to digitally store an employee’s entire work life that the employer may or may not be diligently protecting. The data governance policy may differ depending on your workplace and jurisdiction. The majority of Ontario workplaces are provincially regulated and employee information is not subject to any specific privacy or data governance law, with the exception of those that deal with private health information. Workplaces that deal with private health information – generally these are just bodies in the medical field – are governed by the Personal Health Information Protection Act. Even where no specific law applies, employees are entitled to a reasonable expectation of privacy in the workplace.

The federal privacy legislation, Personal Information Protection and Electronic Documents Act (“PIPEDA”) applies to federally regulated private sector business (banks, telecommunication, interprovincial transportation etc.) It governs personal information generally, and not just personal health information.

While PIPEDA only applies to employers in federal works, undertakings and businesses, adopting a PIPEDA-inspired standard in the workplace can benefit employers looking to strike a balance between their employee’s right to preserve their privacy and their right to collect and retain information critical to the functioning of their business.

Data Governance Policies

Schedule 1 of PIPEDA includes a list of 10 basic principles that businesses should use in order to ensure their use and storage of private data is reasonable. These rules are also reflected in various provincial private sector privacy laws and are frequently cited in privacy caselaw and arbitral decisions in Ontario. This list should provide employers in Ontario with the tools required to properly manage their employees’ private information, which provides the employer with added protection in the event that their data finds its way into the hands of a hacker.

Organizations are accountable and responsible for the data they manage.
Organizations should inform individuals of the personal information it collects from, why it collects it, and what it does with it.
In most instances, an employee should be given an opportunity to consent to the collection, use or disclosure of their personal information.
The information collected by an employer should be necessary for the purpose identified and should be collected using fair and lawful methods.
An organization should only disclose personal information for the purpose it was originally collected and store information only for as long as originally specified unless the individual consents to other uses or there is a legal rationale for disclosing the information.
An individual’s personal information should be accurate, complete, and up-to-date.
Personal information should be protected using adequate safeguards.
Information about an organization’s privacy policy should be accessible and available upon request.
Individuals have the right to access their personal information and the right to have their information corrected.
Organizations are required to give employees the means to challenge an organization’s compliance with these principles.

Individual Remedies

While Ontario lacks privacy legislation and thus cannot require employers to implement PIPEDA compliant privacy policies in their workplaces, employers should be mindful that employees do have avenues of recourse if their personal information is accessed or disclosed without their consent. In the landmark privacy case in Ontario, Jones v. Tsige, the Court of Appeal recognized employment information as one of the categories of personal information that could be highly offensive to invade. Employees have successfully relied on this case when their employers have used their personal information inappropriately or required them to undergo invasive tests where highly personal information was collected.

Take-Away for Employers

With the stakes being what they are, it may be pragmatic for employers to simply limit data collection to information that is absolutely necessary for the functioning of their business rather than going on fishing expeditions under the guise of improving safety and security. Following the principles expressed in PIPEDA’s Schedule 1 seems like a small concession when you consider the potential havoc a privacy breach could create within an organization. In the event of a breach, having less will certainly provide more peace of mind.

Texting at work

By Lisa Stam on July 31, 2019 Posted in Discipline, Employer Resources, Social Media and Technology, Termination of Employment, Workplace Policies

Let’s face it, we are all addicted to our phones. Some of us have jobs where our phones are required to be locked up in a locker for the day and we only have access to them on breaks. As a desk worker – who does not have to lock up her phone – I can only imagine the agony!

Time spent on a personal device can interfere with work and productivity. Ever fall into an Instagram trance and next thing you know 2 hours have passed? Sure, you haven’t…

Personal devices and the persistent distractions of the digital era can be a problem for employers. In certain workplaces, distraction by a digital device can be dangerous or bad for customer relations. I’m sure we’ve all been kept waiting at some point by an employee who was giggling into their phone instead of helping us.

So, what can employers do?

Personal Device Policies

A policy is an employer’s friend. It will spell out expectations for employees and also give the employer something to rely on if the need to discipline an employee for breaching the policy arises. Employers should ensure that employees are aware of and agree to the policy. Get them to read and sign a declaration that they have read it and will abide by it.

The content of the policy should be reasonable and realistic. Would you like to be separated from your phone for up to eight hours before you could check it? Didn’t think so.

Some employees may feel that they need their phones, in case there are emergencies with their kids, for example. Being unduly harsh in your policy will likely only lead employees to not follow it and to general unhappiness.

If the job involves driving or working with machinery, likely it’s reasonable to require phones to be kept in a locker and only accessed on breaks.

When Employees Don’t Follow the Policy

Regardless of how reasonable your policy is, it’s likely that keeping personal device use to a reasonable level, that does not interfere with work, will be a struggle for some employees. This was the case for a BC dental assistant who was terminated with cause for excessive texting at work. A with cause termination is a typical “You’re fired!” situation where the employee walks away without any notice pay.

This particular dental assistant appealed her termination to the BC Director of Employment Standards, who determined that her texting did not constitute cause for termination. Her former employer appealed to the BC Employment Standards Tribunal, who affirmed the decision.

Cause for termination was not made out and the former employer had to pay the employee notice and a fine for breaching the Employment Standards Act.

How to Establish Cause for Termination

Cause for termination is a long and bumpy road. To make out cause, the employee’s conduct usually has to be pretty bad as in dishonest or dangerous. Stealing money from the employer or behaving in a dangerous way could constitute cause, but not necessarily. Employers generally have a duty to warn their misbehaving employees that they need to improve or they will be terminated for cause. This is why a policy is important. The policy sets the expectations, it also should warn the employee of the possible consequences of not complying.

If an employee is breaching the policy, they should be counselled on the fact that they are doing so, possibly disciplined and warned that continuing to breach the policy could result in cause for their termination. This should be done repeatedly to establish a pattern of misconduct. And for the love of all that is relevant in law, please do this in writing.

Takeaways

All employers have phone addicts on their hands. At least this is an issue they can probably relate to! Employers should establish reasonable policies and enforce them. Employees who refuse to comply with policies regarding texting and personal device use should be spoken to and potentially disciplined, but given an opportunity (or multiple opportunities) to improve.

If you’ve got a tricky texting situation on your hands – and no we don’t mean what to text to that guy/gal you went out with last night – get in touch!

The Duty to Mitigate and Why You Have to Look For a New Job

By Lisa Stam on July 24, 2019 Posted in Termination of Employment

If you’ve been terminated from your job and spoken to an employment lawyer you’ve probably heard the word “mitigation” thrown around. In this post, we will talk about mitigation, what it is and why it matters to you and your case.

The Duty to Mitigate

The duty to mitigate is a legal concept that basically means you’ve got to take reasonable steps to stop your own bleeding. What that bleeding looks like will depend on the type of legal case you’re involved in. If you are involved in a personal injury case, mitigation means following doctor’s orders and doing all that you can to recover from your injury. In the context of employment law, the duty to mitigate means trying to get a new job and replace your lost earnings and employment benefits.

What a Notice Period is Really

In most cases, employers can terminate the employment of any employee by providing notice of termination. The amount of notice can be set by the employment contract or it can be set by the common law. Common law is judge-made law, found in court cases, as opposed to legislature made law, which is found in statutes.

Most employment cases, where termination is involved, are about figuring out the appropriate amount of common law notice. Your common law notice period is representative of the amount of time a court thinks it ought to take you to find a new job, taking into account things such as your age, the character of the job you left (including your salary, level of seniority and the industry), how long you were at the job you left, and how long it might take you in your current geographic location and circumstances to find a new comparable job.

Even if you don’t look for a new job, a court will look at your particular circumstances and decide how long they think it should have taken you to find a new job.

Terminated employees cannot be too picky when looking for a new job. The job should be comparable – so this doesn’t mean that a CEO needs to go work at the gas station – but if reasonable offers of employment are made and turned down this will often be seen as a failure of the duty to mitigate. This could even be the case if offers of re-employment are made by the employer who terminated you.

Gent v. Strone Inc

What does failing to mitigate look like in real life? The Ontario Superior Court decision in Gent v. Strone Inc. gives us a glimpse. Mr. Gent was a 53-year-old employee with 23 years of service to Strone. An economic downturn caused Strone to put Mr. Gent on a temporary layoff. Mr. Gent treated the temporary layoff as a termination and sued Strone for wrongful dismissal. Meanwhile, 3.5 weeks after he had been laid off Strone recalled Mr. Gent to work, offering him re-employment. Treating himself as terminated, Mr. Gent did not go back.

The judge in this case decided that Mr. Gent’s temporary layoff did constitute a termination and that he was entitled to reasonable notice of termination. However, instead of awarding Mr. Gent 18 months of notice, which was the amount of reasonable notice that the judge deemed appropriate based on the common law factors discussed above, he reduced his award to 3.5 weeks. Mr. Gent could have mitigated his damages by accepting Strone’s offer to return to work after 3.5 weeks. His failure to do so disentitled him to his common law notice.

Takeaways

If you are an employee who has been terminated you have duty to mitigate your damages and look for a job. You should keep a record of your efforts, in case you ever need proof in court. Any reasonable job offer should be carefully considered, even if you don’t really want it or it’s from the employer who just terminated you. Not taking a job a court deems you should have taken could reduce your notice damages.

Employers should think about mitigation when terminating employees and include clauses in notice package offers that claw back a portion of the notice award if the individual re-employs.

If you’d like to know more about the duty to mitigate, get in touch!

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

By Lisa Stam on July 17, 2019 Posted in News, Termination of Employment

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!