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Posts tagged: Barrie Employment lawyer

The Cost of Terminating Employees When a Business is Sold

By , April 17, 2018 8:29 am

When a business is sold the cost of terminating unwanted employees can significantly impact the sale price. The purchaser does not want to pay the cost of terminating long service employees, and the seller doesn’t want to incur termination costs which reduces the net sale price.

General Rules on Termination Pay Obligation when a Business is Sold

  1. Under the Employment Standards Act (the “ESA”)

A section in the ESA states that when a business is sold an employee’s service with the seller is deemed to be service with the buyer when the buyer subsequently terminates the employee. So if an employee worked five years with the seller and is terminated six months later by the buyer then the buyer owes the employee five weeks notice of termination; not one week notice.

  1. At Common law

Unless the buyer stipulates otherwise, an employee’s service with the seller is taken into account by the courts when determining common law reasonable notice of termination when the buyer subsequently terminates the employee.

How the Seller of a Business Can Reduce Termination Costs

If you are thinking of selling your business over the next 2 to 3 years then a great way to reduce termination costs is to make sure that all of your employees have signed an employment contract with an enforceable termination clause. This clause can significantly reduce your termination pay obligations for employees you are required to terminate as a condition of the sale.

Existing employees can sign an employment contract but managing this process can be very tricky. We help sellers navigate this legal and HR minefield.

How a Purchaser of a Business Can Reduce Termination Costs

If you are buying a business then a great way to limit liability for termination pay for the employees you inherit from the seller is to require them to sign an employment contract with an enforceable termination clause.

We help buyers prepare employment contracts for the seller’s employees that address employee benefits, vacation, termination pay and other terms of employment that are of interest to the seller’s employees. This is especially important for key employees who are critical to the continued success of the business.

Lessons to Be Learned:

1. The cost of terminating long-term employees can be significant. In fact, in some cases I have seen termination costs eat up most of the sale proceeds.

2. To avoid this situation, termination costs can be reduced by including a termination clause in an employment contract. These contracts can significantly benefit the seller.

3. Often one of the key challenges for the seller is convincing the buyer to take on all employees on substantially the same terms and conditions of employment. We help our clients with this issue.

4. On the other hand, one of the key success factors in a sale of a business for the buyer is retaining certain key employees. Negotiating a “fair” employment contract with these employees can be difficult because these employees have so much bargaining power. We help our clients with this negotiation.

5. Sellers and buyers can benefit from speaking with an employment lawyer well in advance of the sale of a business.

For over 30 years Doug MacLeod has been advising employers on all aspects of the employment relationship. You can contact Doug directly at 416 317-9894 or at [email protected]

The material and information in this blog and this website are for general information only. They should not be relied on as legal advice or opinion. The authors make no claims, promises, or guarantees about the accuracy, completeness, or adequacy of any information referred to in this blog or its links. No person should act or refrain from acting in reliance on any information found on this website or blog. Readers should obtain appropriate professional advice from a lawyer duly licensed in the relevant jurisdiction. These materials do not create a lawyer-client relationship between you and any of the authors or the MacLeod Law Firm.

 

Are All Employment & Labour Lawyers Created Equal?

By , April 4, 2018 8:47 am

Are there many employment & labour lawyers in Ontario?

There are many employment & labour lawyers working in Ontario – especially in large urban centers like Toronto. I go to a Christmas party each year that is attended by about 150 employment & labour lawyers and it is always sold out. Every employment and labour lawyer, however, is unique. Your challenge is to find the lawyer that best suits your needs.

What does an employment lawyer do?

Some lawyers practice a subspecialty within employment law like workers compensation or pay equity. The lawyers at the MacLeod Law Firm are not specialists; we are employment law generalists.

What kind of services does an employment law generalist provide?

Most employment law generalists draft employment contracts and employment related policies and can make sure employee handbooks comply with Ontario’s employment laws.

It will come as no surprise that most employment lawyers advise on employee terminations and draft severance packages. If necessary our lawyers appear in court or at administrative tribunals like the Ontario Human Rights Tribunal on behalf of our clients.

Helping employers comply with new employment laws has been increasingly important in recent years as the provincial government imposes more and more statutory obligations on employers. The MacLeod Law Firm has a fixed fee service to help employers comply with these new obligations.

Employee protection under the Ontario Human Rights Code and the Accessibility for Ontarians with Disabilities Act has been extended in recent years so most employment lawyers have a good understanding of the province’s human rights laws. We provide human rights advice to a myriad of clients each year – especially on an employer’s obligation to accommodate a disabled employee.

Employee protection under the Ontario Health & Safety Act has also been extended in recent years so most employment lawyers can advise on an employer’s obligations under this law. The MacLeod Law Firm  represents employers who have been charged under OHSA.

What is a labour lawyer?

A labour lawyer provides advice and representations to unionized employers.

What kind of services does a labour lawyer provide?

A labour lawyer can recommend that an employer adopt certain practices and policies that will make employees less inclined to want to join a union.

If a union tries to unionize a workforce then a labour lawyer can respond to the Union’s certification application at the Ontario Labour Relations Board on behalf of the employer.

If a union is certified to represent an employer’s workforce then a labour lawyer can negotiate a collective agreement with the Union on behalf of the employer.

If a union files a grievance under a collective agreement then a labour lawyer can represent the employer at an arbitration hearing.

The MacLeod Law Firm provides all of these services to our unionized clients.

The MacLeod Law Firm – Our Value Proposition

We give an employer confidence and peace of mind on employment law and labour law issues because we quickly and competently deal with workplace issues in a way that makes business sense.

We understand that every client has unique legal needs and each client has a different legal risk tolerance. We get to know our clients and their businesses so the advice we give makes business sense.

If you require the services of an employment and labour lawyer and want to see whether the MacLeod Law Firm is a good fit for your organization, please contact our Managing Partner, Doug MacLeod. For over 30 years he has been advising employers on all aspects of the employment relationship. You can contact Doug directly at 416 317-9894 or at [email protected]

The material and information in this blog and this website are for general information only. They should not be relied on as legal advice or opinion. The authors make no claims, promises, or guarantees about the accuracy, completeness, or adequacy of any information referred to in this blog or its links. No person should act or refrain from acting in reliance on any information found on this website or blog. Readers should obtain appropriate professional advice from a lawyer duly licensed in the relevant jurisdiction. These materials do not create a lawyer-client relationship between you and any of the authors or the MacLeod Law Firm.

 

Employer Alert: Payroll Costs in Ontario are Going Up (Again) on April 1, 2018.

By , March 20, 2018 9:10 am

Who Should Read this Blog

If you use a temporary help agency or hire casual or part-time employees then you should read this article. Because starting next month there is a change to the Employment Standards Act, 2000 (the “ESA”)  that could increase your payroll costs.

Equal pay for equal work takes effect on April 1, 2018

As of April 1, 2018 Ontario employers are required to pay temporary workers and casual & part-time employers the same rate of pay as full-time employers performing substantially the same work unless an exemption applies.

Wage rates can no longer be kept confidential.

Assignment employees from a temporary help agency can ask your non-assignment employees how much they are paid for doing substantially the same work.

A casual or part-time employee can ask you how much you pay a full-time employee doing substantially the same work. If you terminate or punish an employee for making this inquiry then you could be required to reinstate the employee to his or her job or compensate the employee for any wage loss.

What are the exemptions to this new law?!!!

It should be noted that there are certain exceptions to the provisions regarding equal pay for equal work. The provisions do not apply when the difference in rates of pay are made on the basis of  (a) a seniority system, (b) a merit system, (c) a system that measures earnings by quantity or quality of production, or (d) any other factor other than sex or employment status. Nevertheless, before you assume that this exemption applies to your organization, you should consult a lawyer.

Lessons to be Learned

1.The cost of temporary agency workers who perform substantially the same work as full-time employees is going up unless your organization can fall into one of the statutory exemptions.

2. Similarly, the wage rates of casual employees, and part-time employees is going up unless your organization can fall into one of the statutory exemptions.

3. Do not discipline a casual or part-time employee for asking how much your organization pays a full-time employee doing substantially the same work.

4. An employer generally has the right to establish an employee’s job duties and therefore determine whether temporary agency workers, casual employees and part-time workers are performing substantially the same work as full-time employees.

5. As long as an employer does not set different wage rates based on sex or employment status, an employer generally has the right to set wage rates based on seniority, merit and production quantity/quality.

For five other recent changes to the ESA that recently came into effect click here.

For 30 years, Doug MacLeod of the MacLeod Law Firm has been advising employers on all aspects of the employment relationship. If you have any questions, you can contact him directly at 416 317-9894 or at [email protected]

The material and information in this blog and this website are for general information only. They should not be relied on as legal advice or opinion. The authors make no claims, promises, or guarantees about the accuracy, completeness, or adequacy of any information referred to in this blog or its links. No person should act or refrain from acting in reliance on any information found on this website or blog. Readers should obtain appropriate professional advice from a lawyer duly licensed in the relevant jurisdiction. These materials do not create a lawyer-client relationship between you and any of the authors or the MacLeod Law Firm.

 

Terminating Senior Executives: The Nickels and Dimes Can Really Add Up

By , March 6, 2018 8:50 am

News Flash: An employer who does not specify in an employment contract how much an executive is entitled to receive when terminated can pay much more termination pay than expected.

The Case

UBS Securities Canada Inc. found out the hard way how the nickels and dimes can add up when it terminated the employment of David Bain who was the Managing Director and Head of Canadian Mergers & Acquisition.

The Nickels & Dimes

The Ontario Court of Appeal recently considered four issues that were decided by the trial judge in this case, namely:

  1. Was Mr. Bain owed a deferred bonus by way of notional shares that vested after the expiry of an agreed upon 18 month notice period? This part of the bonus was worth $ 1,200,000.
  2. Was vacation pay owing calculated on base salary or salary and bonus? The difference was $ 81,772.
  3. Should prejudgment interest be based on the “lump sum” approach or the “instalment” approach? The difference was $44,585.81.
  4. Should legal costs be determined using the partial indemnity “grid” rates set out in the preamble to Rule 57, “Information for the Profession”, or by using 60% of the actual rates charged by the employee’s counsel? UBS was seeking a reduction of approximately $70,000 in the costs of the action.

The Decision

The trial judge and the Ontario Court of Appeal sided with the employee on all four issues.

Lessons to Be Learned

  1. A well drafted employment contract and well drafted variable compensation plans can eliminate legal uncertainty and save employers A LOT of money – especially for senior executives.
  2. Variable compensation plans including bonus plans can be drafted to clearly state how much compensation a terminated employee is owed and it can be significantly less than the person’s common law entitlement.
  3. Bonus plans can be drafted so that employees are not entitled to earn vacation pay on bonus income.
  4. Termination clauses can be drafted so it is more likely that pre-judgment interest damages will be awarded using the less expensive installment method.
  5. Litigating a wrongful dismissal case can be very expensive. UBS paid its own legal fees plus 60% of Mr. Bain’s fees or $225 000. If UBS’ legal fees were the same as Mr. Bain’s then UBS’ legal costs to go to trial were about $ 600 000.

For over 30 years, Doug MacLeod of the MacLeod Law Firm has been advising employers on all aspects of the employment relationship. If you have any questions, you can contact him directly at 416 317-9894 or at [email protected]

The material and information in this blog and this website are for general information only. They should not be relied on as legal advice or opinion. The authors make no claims, promises, or guarantees about the accuracy, completeness, or adequacy of any information referred to in this blog or its links. No person should act or refrain from acting in reliance on any information found on this website or blog. Readers should obtain appropriate professional advice from a lawyer duly licensed in the relevant jurisdiction. These materials do not create a lawyer-client relationship between you and any of the authors or the MacLeod Law Firm.

 

The Latest on the Legality of Random Drug & Alcohol Testing

By , February 20, 2018 9:18 am

In 2013, the issue of whether an employer can unilaterally implement random drug testing was addressed by the Supreme Court of CanadaBottom line: there are very few instances when random drug testing will be permitted.

This blog summarizes a recent arbitration award where a union challenged an employer’s random drug testing policy at a coal mine.

The Facts

The arbitrator found that anyone working in mine operations, the mine maintenance department, and in the coal plant was involved in a safety-sensitive job.

Further, he found  that the work and surroundings involved in all three of these operations required employees to maintain a continuing alertness so that they did not cause an accident that might injure themselves and/or another employee, or were not injured by someone else’s carelessness.

In 2012, the employer unilaterally implemented random drug and alcohol testing that required employees to, among other things,  provide breath or urine samples. If there was a positive result then the employee was required to meet with an additional specialist and disclose personal health information.

The Issue

The issue in random drug and alcohol cases is how to resolve the conflict between an employer’s interest in making their workplaces safe, and an employee’s interest in protecting their privacy.

The Test

  1. Have employees’ privacy rights been infringed and, if so, to what degree;
  2. If so, is there sufficient or adequate cause to justify the search and seizure and resulting privacy intrusions represented by random testing; and, if so,
  3. Is random testing a proportionate response to that “demonstrable workplace problem”?

The Decision

After a 39 day hearing, the arbitrator concluded:

  1. Random drug and/or alcohol testing is a prima facie privacy violation
  2. The fact that an employer’s workplace is dangerous does not, in and by itself, establish a legitimate need for random drug and alcohol testing. There was no evidence of a “demonstrated workplace problem” or “a general problem with substance abuse in the workplace.” In this regard, in the five years leading up to the random testing, the number of positive tests were relatively low for post-accident testing, averaging between one and two positive post-incident drug tests per year.
  3. Neither a positive breathalyzer test at .02% BAC nor a positive urinalysis test for the presence of cannabis or cocaine metabolites establishes that an employee was under the influence of, or impaired by, any of those substances.  Such positive tests only establish that the employee has used those substances in the past, not that he was impaired at the time of the test.

The arbitrator also noted that no evidence was led on whether or not there were any less intrusive means of measuring impairment that would be equally as effective such as “computer-assisted employee performance testing” which is more commonly known as “impairment testing.”

Lessons to Be Learned

  1. It is possible but extraordinarily difficult to justify a random drug and alcohol policy.
  2. Unionized employees will almost certainly grieve the policy under the applicable collective agreement, and non-unionized employees can file an application under human rights legislation.
  3. The onus is on the employer to justify the need for the policy.
  4. The employer must demonstrate an actual problem with substance abuse in the workplace; not a theoretical problem.
  5. The employer’s testing protocol needs to prove impairment; not use.

For over 30 years, Doug MacLeod of the MacLeod Law Firm has been advising employers on all aspects of the employment relationship. If you have any questions, you can contact him directly at 416 317-9894 or at [email protected]

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