Employers often wonder how to handle requests for leaves of absence from employees.

This requires understanding the various options available depending on the terms of employment and benefit plans, but also obligations under employment standards legislation and human rights legislation. This balancing act can become burdensome and lead to liability for employers if mishandled. 

Continue Reading An Employee Has Requested a Leave of Absence, Now What?

In many industries right now, businesses are fighting not just for clients, customers, and market share but to attract and retain good talent.

If you’ve managed to recruit an employee from a competitor – congrats! But before you put together the onboarding package and schedule the welcome lunch, here are a few steps to take to avoid any potential legal headaches: 

Continue Reading What to know before you hire from a competitor?

Attention employers and job seekers! As a result of some incoming changes to the Employment Standards Act, job postings are about to look different!

Ontario’s Working For Workers Four Act received Royal Assent on March 21, 2024. And now, a brief interlude on Ontario’s law-making process in case you’ve forgotten: Royal Assent is the last step in the process that makes a Bill law.

Continue Reading Attention Employers: Legal Changes Coming to Job Posting Requirements 

Mitigation issues can save an employer months of termination pay and/or gut your termination case, depending on whether you are the employer or employee in a dispute.

But what exactly is mitigation? This post sets out the basics.

What is Mitigation?

In Canadian employment law, mitigation refers to the legal obligation of an employee who has been terminated or laid off to make reasonable efforts to find comparable employment. This principle of “mitigating damages” is used to reduce the potential compensation or termination package an employer may be required to pay.

For instance, if an employee is terminated and they find a new job within a short period, the courts will set off the new income from the amount that previous employer may be required to pay because the employee has mitigated their loss of income.

What Counts as Mitigation?

What constitutes “reasonable efforts” and “comparable employment” can vary greatly depending on the circumstances, such as the employee’s age, education, experience, and the availability of suitable jobs.

Mitigation includes:

1. Actively seeking new employment: This could involve applying for jobs, attending interviews, networking, etc.

2. Accepting a reasonable job offer: If a comparable job is offered, the employee is generally expected to accept it.

3. Undergoing retraining or upgrading skills: In some cases, the employee may be expected to take courses or undergo training to improve their employability.

4. Documenting job search efforts: The employee may need to provide evidence of their job search efforts, such as records of job applications or interviews.

5. Self-employment or freelance work: In some cases, efforts to start a business or work as a freelancer may count as mitigation.

If the employee fails to mitigate their losses, it may result in a reduction of their wrongful dismissal damages.

How does Mitigation Impact Your Employee’s Termination Package?

In Canada, when an employee is terminated without cause, they are generally entitled to a termination package. The impact of mitigation on an employee’s termination package can be significant. If the employee finds a new job quickly, the amount of their termination package may be reduced. This is because the purpose of the package is to compensate the employee for their loss of income during the period of unemployment. If the employee is able to mitigate their loss by finding new employment, their need for compensation is reduced.

For example, if an employee is entitled to a termination package that includes 6 months of pay, but they find a new job after 2 months, they may only receive 2 months of pay from their termination package. The remaining 4 months would be considered mitigated by the new employment.

However, it’s important to note that the duty to mitigate does not require the employee to accept any job that comes along. The new job must be comparable to the one they lost in terms of pay, location, hours, and other factors.

In some cases, the employment contract or the termination agreement may specify whether and how the termination package will be affected by mitigation. Also, it’s important to note that in all cases no employer can pay out less than what is required under their applicable employment standards legislation, regardless of any contractual or termination package terms.

When proceeding with a termination, employers will want to keep this important legal concept on their radar and include mitigation terms within the termination settlement documents.  Need a hand in contract drafting, reach out to our team today! 

Employers have another reason to worry about their termination clauses. 

Following the case of Waksdale v Swegon North America Inc., 2020 ONCA 391, Ontario courts have placed increased scrutiny on termination clauses with very few surviving.

Continue Reading Another Termination Clause Bites the Dust

The dust has settled post-pandemic and employees are out of sorts. Turnover is high across all industries as people regroup and sort through what they want out of their careers.

We regularly hear about employees resisting commuting, moving on quicker than ever when the job gets difficult, and when regular feedback gets uncomfortable.

Continue Reading Exiting Employees on a Disability Leave
Wage Deductions: Ontario Law Explained

Nobody wants to receive a paycheque that’s smaller than they were expecting, but sometimes, wage deductions are necessary. So, when can an employer make deductions from an employee’s wages? In Ontario, the Employment Standards Act, 2000 (ESA) provides guidelines regarding what deductions are permissible, in order to protect employees and their earnings. 

Employers are generally not allowed to withhold wages that an employee has earned, make a deduction from an employee’s wages, or cause an employee to return their wages to the employer. However, this general prohibition is subject to a few key exceptions. 

When can an employer make deductions from an employee’s wages?

Employers can generally make deductions from employees’ wages in three circumstances: 

  1. Deductions authorized by statute or court order 

The ESA permits certain deductions from employees’ wages, such as income tax, CPP and EI contributions, and court-ordered garnishments. Employers must ensure that deductions fall within the authorized categories stipulated by the ESA or other relevant legislation.

  1. Deductions for overpayments

When an employee is overpaid because of a true administrative error, i.e. the payroll department accidentally pays them twice for the same pay period etc. then these are amounts that an employee was not entitled to in the first place, and therefore are not considered “wages” under the ESA and are not subject to the same strict rules regarding deductions from wages. 

However, employers should not apply this principle too broadly. For an amount to be considered an overpayment, it must have been truly made in error. For instance, if an employer decides to pay an employee for a leave of absence when they are not required to do so by contract or statute, and then the employer later changes their mind and wants to deduct this amount from an employee’s wages, this would not be permitted as it is not a true overpayment. If an employer voluntarily provides an employee with a greater right or benefit, they cannot later characterize it as an “overpayment” in an attempt to get it back from an employee. 

  1. Deductions with written authorization 

Employers can make deductions from an employee’s wages when the employee provides a written statement authorizing the deduction. The written authorization must either specify the amount of money to be deducted or, provide a method of calculating the specific amount of money to be deducted. 

An oral authorization or a general statement or “blanket authorization”, for example in an employment contract, that purports to allow an employer to make deductions from an employee’s wages, will not be sufficient to permit a deduction from wages. 

When can an employer not make deductions from an employee’s wages?

Even where an employee provides written authorization, there are certain instances where employers are prohibited from making deductions from an employee’s wages. 

Employers are not allowed to make deductions from an employee’s wages for “faulty work” i.e. an employee’s mistake in processing a cash transaction or an employee accidentally damaging a piece of equipment. 

Employers cannot make a deduction from wages if the employer has a cash shortage or has had property lost or stolen when an employee did not have sole access and total control over the cash or property that was lost or stolen. 

Employers also cannot make deductions that would bring an employee’s wages below the minimum wage rate.

Employers should tread carefully when considering deductions from employee wages. Even when technically allowed, deductions can significantly impact morale and strain employee relations. Deductions, particularly if unexpected or unusual, are very unlikely to be well received by employees. Compliance with the ESA is crucial to avoid employment standards complaints and ensure fairness to employees. Clear communication, detailed record-keeping, and understanding of the rules are essential. Employers should prioritize transparency and fairness to cultivate a positive work environment. 

Contact us today to ensure compliance with the law while fostering a harmonious workplace environment.

As lawyers who practice for both employers and employees, we know that terminations are rarely pleasant for anyone involved.

After all, as the Courts have acknowledged, employment is an essential component of identity, self-worth and emotional well-being. More recent Court rulings have reminded us that the manner in which employment can be terminated is equally important and impactful to the employee as the employment once was.

With the importance of employment and the impact of termination well established, what can employers do to ensure the termination process is as smooth as possible? One step that may come as a surprise to some employers is the importance of issuing a termination letter that is clearly written and easy to understand. This will help your employee grasp what happens next. Additionally, if they decide to retain a lawyer, a clear letter will likely help reduce the number of back and forths (and therefore fees) your legal counsel incurs merely addressing the details of the termination. 

Here are some key tips and takeaways to consider when drafting a termination letter:

  1. Understand the moment: The chances that the employee will remember the details of the termination delivered during the termination meeting are slim to none. For most employees, this news is shocking, difficult to digest and very overwhelming. Those emotions are typically not conducive to understanding, accepting and remembering the details of what will follow. This makes the termination letter all that more important. 
  2. Understand who is reading the letter: When drafting the letter, keep your audience in mind. You’re speaking to your recently terminated employee, not a lawyer. Writing a dense letter or one littered with legal jargon will add further confusion and overwhelm an already very stressed-out individual. Write in plain language and short sentences, don’t be afraid to use spaces, new paragraphs or numbers/bullet points to make it easier to read and understand. In case it wasn’t already obvious, don’t include latin terms in your letter that even lawyers will have to look up. 
  3. Be detailed: At the very least, address each of the employee’s entitlements upon termination, even if the best information you can provide is a promise that the applicable plan provider will follow up. For example, you may not be able to tell your employee what will happen with their pension following termination but you should explain who will be in touch to provide those details. 
  4. Ensure those details comply with applicable legislation: Before drafting your termination letter, make sure you understand what your employee is legally entitled to. For example, ensure you understand the basic entitlements owed to employees under minimum standards legislation like the Employment Standards Act. These entitlements range from monetary entitlements, ongoing vacation pay entitlements post-termination and timelines for payment. 
  5. Post-termination obligations: The termination letter may be your last opportunity to remind the employee of their post-termination obligations. These sorts of obligations can range from requirements regarding confidentiality to promises made in the original employment contract regarding solicitation. Don’t forget to remind the employee to return all company property. 
  6. When in doubt, consult a lawyer: beyond knowing what legal points should be addressed in the termination letter, striking the right tone, and addressing the right points in the termination letter can truly be an art. Termination letters are just some of the bread and butter of our work; chances are getting in touch and chatting will help you set things off on the right foot. Need some assistance? Find us here

Important update for all federal employers! Amendments to the Canada Labour Code are now in force as of February 1, 2024. Do you fall into this category? And if so, what does this mean for you? 

Federal Employers

As we’ve discussed in a previous blog, the Canada Labour Code is a federal law which sets out minimum employment standards for sectors that fall under federal power.

Continue Reading Update for Federal Employers: Canada Labour Code Amendments – Now in Force, as of February 1, 2024