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Posts tagged: Nadia Halum

How to Spot a Resignation

By , July 31, 2017 10:16 am

Contrary to popular belief, it is not always easy to know when someone has resigned. Even if an employee uses words such as “I quit,” a court may still find that the employee has not truly resigned. An employer in Alberta learned this lesson the hard way. 

Carroll v Purcee Industrial Controls Ltd. (“PIC”) 

Mr. Carroll worked for the defendant first in Calgary, Alberta. He then moved with his family to Madagascar, where he continued to work for PIC. In 2012, business was in decline and the relationship between Mr. Carroll began to deteriorate. In August 2012, Mr. Carroll tendered his written resignation and requested a fair severance package. PIC rejected his resignation and urged Mr. Carroll to take his planned holiday. Mr. Carroll continued to work for PIC after he returned from his holiday. 

The relationship between Mr. Carroll and PIC became increasingly strained. In May 2013, Mr. Carroll again suggested they should terminate his employment “on professional terms”, and outlined his proposed terms of severance. One of the owners told Mr. Carroll that he would be ready to discuss the matter in a few days. Mr. Carroll responded that he planned to move back to Canada with his family in July. 

Mr. Carroll’s employment ended on June 7, 2013, when PIC purported to accept his resignation. 

The Decision 

At trial, Mr. Carroll argued his employment was terminated without cause and he was entitled to pay in lieu of notice. PIC claimed Mr. Carroll voluntarily resigned from his employment, in which case he was not entitled to any damages. 

A resignation must be clear and unequivocal, which involves both a subjective and objective component. Subjectively, did the employee intend to resign? Objectively, viewing all the circumstances, would a reasonable employer have understood that the employee had resigned? The court looks at the employee’s words, acts and the surrounding circumstances. 

Despite the fact that all indications of severing the employment relationship were initiated by Mr. Carroll, the court found that he did not intend to resign from his employment. The court found that Mr. Carroll’s words, when viewed contextually, were “an emotional reaction.” Mr. Carroll’s resignations came from a place of frustration, even though they were not said in the heat of the moment. Furthermore, the fact that that the owner indicated he would be ready to discuss the matter in a few days was consistent with someone who was contemplating the proposal outlined by Mr. Carroll (i.e. he could not have considered Mr. Carroll to have resigned). 

More importantly, the court found it difficult to accept the resignation was clear and unequivocal when it was tied to a proposal for terms of severance. In the circumstances, the burden was on the employer to confirm with Mr. Carroll that he truly intended to resign. The court concluded that Mr Carroll was dismissed, and therefore entitled to seven months’ pay in lieu of notice. 

Lessons to be Learned 

The onus is on the employer to confirm an employee’s true intentions behind a purported resignation. Otherwise, the employer risks having to respond to a wrongful dismissal claim in the future. Therefore, even in situations where employees utter words typically associated with a resignation (such as “I quit”), it is important not to take such words at face value. In these circumstances, or any time an employee brings up the matter of a severance package, it is important to consult a lawyer. 

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.

Can my organization implement a drug testing policy at the workplace?

By , July 24, 2017 10:24 am

If you’ve been following the news over the last few months, you know that the Ontario Superior Court of Justice refused to allow the union’s injunction against the TTC’s random drug and alcohol testing policy. More recently, the Supreme Court of Canada upheld the termination of an employee who was terminated for violating his employer’s drug testing policy. These developments have led to us answering many questions from employers (and news publications) about whether they can also test their employees for drugs and alcohol.

Despite the TTC’s success at court, employers should proceed with caution when instituting drug and alcohol testing at the workplace. Firstly, the issue before the court was not whether such a policy was discriminatory. Secondly, the court refused the union’s injunction because of both the safety-sensitive industry and the wide area in which the TTC operates. Furthermore, the caselaw preceding the TTC decision shows that there is a high evidentiary burden an employer must satisfy to justify random drug testing its employees.

Because addictions to drugs or alcohol are considered “disabilities” under the Ontario Human Rights Code, drug and alcohol testing has human rights implications for people with addictions. For example, a human rights issue may arise where a positive test leads to automatic negative consequences for a person based on an addiction.

However, courts and tribunals recognise that it is a legitimate goal for employers to have a safe workplace, particularly in safety-sensitive industries. Therefore, there is caselaw that has recognised that a drug testing policy is justifiable if an employer can show that the policy is a bona fide (i.e. legitimate) requirement of the job. However, even if the policy is a legitimate requirement, employers should strive to minimise any potential discriminatory impact, and be prepared to accommodate employees with addictions who are negatively impacted by the policy.

Another requirement for a drug and alcohol testing policy to be found justifiable is that it must measure impairment, as opposed to drug or alcohol use. For example, while alcohol testing is able to measure a person’s impairment quite accurately, because drugs can remain in a person’s system for quite some time after their use, drug testing is less accurate at measuring impairment rather than drug use. For this reason, alcohol testing tends to be more permissible than drug testing. Similarly, testing after an accident or a “near-miss” is more justifiable than random testing.

Lessons to be Learned

As we get closer to marijuana being legal in Canada, questions around workplace safety and the permissibility of drug testing are bound to increase. We will continue to publish additional information as more relevant cases are released. In the meantime, if you are considering implementing a drug and alcohol testing policy at the workplace, you should consult an employment lawyer to find out whether such a policy would survive the scrutiny of a court or tribunal.

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.

Is An Employee Ever Required to Accept a Demotion?

By , May 19, 2017 11:58 am

Sometimes, as part of a restructuring, an employer will eliminate some positions and offer the displaced employees new positions. Are displaced employees required to accept a demotion or a pay cut? In a recent decision, the Ontario Court of Appeal tackled the question of whether an employee was required to mitigate his losses by accepting a new position.

In Fillmore v Hercules SLR Inc., Mr. Fillmore was 51 years old and had been employed as the company’s director of purchasing for approximately 19 years. As part of a restructuring, the company decided to terminate Mr. Fillmore, who was provided with a severance offer and a new employment offer. If he signed the severance offer, he would be provided with 8 weeks’ written notice (in accordance with the Employment Standards Act) and an additional 12 weeks’ pay. In addition, he was offered a supervisor position and a pay cut of more than 20 percent. Mr. Fillmore did not accept either offer and began a wrongful dismissal claim.

The company argued that in rejecting the new offer, Mr. Fillmore failed to mitigate his damages. Caselaw suggests that, in the absence of the employee facing a potential hostile atmosphere, embarrassment or humiliation, an employee may be required to mitigate their damages by accepting comparable employment with the employer.

The motion judge found that the new offer of employment was not an offer to work through the notice period: rather it was an offer to accept a demotion. The question the court must answer is whether a reasonable person would have accepted the new offer. The motion judge found that a reasonable person in Mr. Fillmore’s position was not obliged to accept a demotion which risked waiving a claim for wrongful dismissal. The Ontario Court of Appeal agreed.

Lessons to be Learned:

Although in some circumstances, an employee may be required to accept a comparable position with the same employer, reasonable people can disagree on whether the new position is comparable.  It is very important, particularly during a company restructuring, to consult a lawyer about your right to transfer, demote and terminate employees.

“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.”

 

An update on mitigation: What happens when a wrongful dismissal case gets to court while the employee is still unemployed?

By , April 3, 2017 8:42 am

The Basics

A wrongful dismissal occurs when an employer does not provide enough notice of termination. An employee can claim damages equal to the remuneration the employee would have earned during the applicable notice period. During the notice period, an employee is subject to the “duty to mitigate,” which means they must look for alternative employment. Notice periods can be as long as 24 months, and even longer in exceptional circumstances. Increasingly, wrongful dismissal cases are getting to court before the reasonable notice period has expired. In these cases, the employee is still subject to the duty to mitigate for the balance of the notice period. In a recent case, the Superior Court of Justice had to answer the question of how the issue of future mitigation should be recognised in the calculation of damages given the fact that the period of reasonable notice had not yet expired.

Patterson v IBM Canada Ltd, 2017 ONSC 1264

In Patterson v IBM Canada Ltd., the hearing took place in February 2017, just over eight months after the Mr. Patterson’s employment was terminated. The judge found that the reasonable notice period in Mr. Patterson’s case was 18 months.

Mr. Patterson claimed that, given his job search history thus far, his prospects of finding alternative employment were low, and he should therefore receive the full 18 months’ pay. IBM suggested the court should discount any award of damages by 10% to reflect the possibility of future mitigation, i.e. that Mr. Patterson may obtain employment during the remainder of the notice period.

The judge noted that the courts have used several approaches in these cases, the two main ones being the “trust and accounting” approach (where the plaintiff is required to account to the defendant for future income if any is earned during the notice period) and the contingency approach (which is the approach IBM was suggesting).

In this case, the judge preferred the contingency approach, and reduced Mr. Patterson’s damages accordingly. The judge found that if the trust and accounting approach were to be applied, Mr. Patterson would have no incentive to continue in his job search. Furthermore, the contingency approach avoids the possibility of future legal entanglements between the parties.

Lessons to be Learned

There is no consensus on which approach an Ontario judge will follow when a wrongful dismissal case is decided before the end of the reasonable notice period. If you are planning on dismissing a long-term employee, it is important to consult with a lawyer to discuss whether a severance package with a built-in contingency approach can be offered, rather than leaving that decision to a judge after spending significant legal costs. The lawyer can also explain the extent of the employee’s obligation to mitigate (look for work) throughout the litigation process.

“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 terminated employees entitled to their unpaid bonuses?

By , January 30, 2017 4:18 pm

We have previously written about when employees have been found to be entitled to receive their bonus at the time of termination.

To recap, when an employee is terminated without cause, they are entitled to receive notice or pay in lieu of notice. Wrongful dismissal damages are intended to place the terminated employee in the same financial position they would have been in had such notice been given. When the court is calculating wrongful dismissal damages, it will typically include all of the compensation and benefits that the employee would have earned during the notice period. However, whether a bonus the employee would have received should be included in such an award is a complicated question that depends partly on whether it has become an integral part of the employee’s salary.

Bain v UBS Securities Canada Inc.

In this case, Mr. Bain, a 14-year employee, earned a base salary of $385,000 plus  bonus.

Although at the beginning of his employment his bonus was paid by cash, payment changed so that his bonus was paid partly by cash and partly by shares in UBS.

Mr. Bain lost his job when it became redundant. He was paid his entitlements under the Employment Standards Act but was not paid his bonus for 2012 or for the three months that he worked in 2013.

After concluding that Mr. Bain was entitled to receive 18 months’ reasonable notice, the judge turned to the question of whether Mr. Bain should receive his bonus for 2012 and the three months he worked in 2013. The judge decided that the bonus was an integral part of Mr. Bain’s remuneration: he received it, albeit in different amounts, every year; he had always been awarded a bonus in his 14 years of employment and it was a significant component of his income. In fact, Mr. Bain had negotiated a minimum bonus as a term of his employment contract when he decided to join UBS.

The judge noted that UBS had a detailed compensation scheme in place and had the stated goal of transparency and fairness in the granting of bonuses. The fact that the bonus was solely in the discretion of management did not relieve UBS from its obligation to follow a process that was fair and reasonable, using objective criteria applied consistently among employees. The judge also noted that Mr. Bain’s 2012 evaluation contained many “exceeded objectives” assessments, and that his numbers were higher for 2012 than for 2011. The judge looked at evidence from other managers and the bonuses they received, which ranged from $402,300 to over $2 million.

UBS attempted to argue that a new compensation plan was introduced in 2011 that stipulated employees had to be employed with UBS to be paid their bonus. The judge could not conclude that Mr. Bain had accepted this fundamental change to his entitlement to a bonus, or that the new limitations were brought to his attention. The judge concluded that to accept UBS’ argument would mean that Mr. Bain became disentitled to a bonus because of the unilateral actions of UBS, over which Mr. Bain had no control. The judge concluded that Mr. Bain should receive his bonus for 2012, the three months he worked in 2013 and the bonus he would have earned over his 18 month notice period.

Lessons to be learned:

  1. In some circumstances, an employee may be entitled to the bonus they would have earned had they not been dismissed, which includes the bonus they would have earned during their notice period.
  2. An employer may limit an employee’s right to receive bonus payments upon termination, in certain circumstances.
  3. An employer must ensure that this limit is brought to the attention of the employee and forms a part of the employment contract.

The material and information provided on this blog and this website are for general information only and should not, in any respect, 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 linked or referred to or contained herein. No person should act or refrain from acting in reliance on any information found on this website or blog, without first retaining counsel and obtaining appropriate professional advice from a lawyer duly licensed to practice law in the relevant jurisdiction. These materials do not constitute legal advice and do not create a lawyer-client relationship between you and any of the authors or the MacLeod Law Firm.

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