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Posts tagged: toronto employment lawyer

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 d[email protected]

Supreme Court: Increased Potential Liability for Harassment

By , February 9, 2018 12:35 pm

Recently, the Supreme Court issued a significant decision expanding the nature of possible harassment and discrimination claims.  

The Case

In British Columbia Human Rights Tribunal v. Schrenk, 2017 SCC 62, Mohammadreza Sheikhzadeh-Mashgoul worked as a civil engineer consultant on a job site where he supervised workers who were not employed by his engineering firm. One of these workers, Edward Schrenk, repeatedly made discriminatory comments to Mr. Sheikhzadeh-Mashgoul about his religion, sexual orientation, and birthplace. Eventually, he brought a human rights complaint against Schrenk and Schrenk’s employer.

Schrenk and his employer argued that they had no relationship to Mr. Sheikhzadeh-Mashgoul and that since they were not his employer or colleague he could not bring a claim against them.

The Supreme Court disagreed. It held that the BC Human Rights Code prohibits discrimination in the employment context. The Court said that the Code “protects individuals from discriminatory conduct regarding their employment no matter the identity of the perpetrator.”  The Court continued that an individual may bring a human rights complaint if the:

  1. perpetrator was integral to the complainant’s workplace;
  2. the discrimination occurred in the complainant’s workplace; and
  3. the individual’s work performance or work environment was negatively affected.

Lessons

Of importance, the Ontario Human Rights Code is worded in a similar manner to that of BC. So, if you are an employer in Ontario, you could now be required to defend against employment-based human rights claims from individuals who are not even your employees.

If you are facing a discrimination or harassment claim and are considering your legal options, you should consult a lawyer or contact us at [email protected] or 647-204-8107 and one of our lawyers would be happy to assist you.

“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.”

Due Diligence and Why It’s Important

By , January 15, 2018 11:44 am

Employers have various obligations under the Occupational Health and Safety Act (“the OHSA”), including the very broad, catch-all duty to take every reasonable precaution in the circumstances to protect workers.

When there is a workplace accident, the Ministry of Labour will often charge the employer with violating this general duty. Violations of the OHSA are “strict liability” offences, which means that the Ministry of Labour does not need to prove that the employer intended to violate the OHSA.

An employer’s sole defence is the “due diligence” defence, which is available in two circumstances:

  1. If the accused reasonably believed in a mistaken set of facts which if true, would render the act or omission innocent; or
  2. If the accused took all reasonable steps to avoid the particular event.

In Ontario (Ministry of Labour) v Cobra Float Service Inc., an Ontario court dismissed an OHSA charge by finding that the employer had established the due diligence defence.

Facts

The circumstances around this case arose from a tragic fatality at a construction site, where a curb machine overturned while being off-loaded from a float trailer, crushing a worker who later died from his injuries. The charge against the company alleged that the curb machine was moved in a manner that endangered the worker.

Decision

The court found that the worker had deviated from the standard practice that he and other workers had followed on previous occasions. Although there were no training courses available for the task in question, the worker had previously demonstrated his ability to perform the task. The court found that the employer was entitled to rely on the worker’s experience.

The court noted that the employer could have established a more formalised training protocol within the company but the lack of this formalised protocol did not necessarily mean that the employer was exposing workers to foreseeable risks and dangers. The court cautioned against measuring the practices of smaller companies against those of larger companies, which typically have more resources to devote to formalised training.

With respect to the due diligence defence, the court found that:

  • The company had held regular safety meetings;
  • There were no formal education courses that workers could take on the loading and unloading task;
  • The worker knew or should have known that what he was doing was unsafe;
  • The company encouraged workers to discuss any safety concerns and provided a form for those discussions at regularly scheduled meetings;
  • The worker had successfully moved the curb machine 27 times; and
  • There was no evidence that this was an industry-wide safety issue.

Lessons to be Learned

  1. Because violations of the OHSA are “strict liability” offences, the Ministry of Labour does not need to prove that the employer intended to violate the OHSA.
  2. Evidence regarding a company’s safety practices go a long way to proving that the employer took all reasonable steps to avoid the particular workplace accident (i.e. to make out the due diligence defence).
  3. All employers should prioritize safety, but it is worth noting that what is appropriate for a small to medium size employer may differ than what is appropriate for a larger employer.

“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.”

Marijuana legalization – How Employers Should Navigate the Hazy Legal Landscape

By , January 11, 2018 10:45 am

The legalization of marijuana is expected to change Ontario’s employment law landscape in 2018. Legislation is expected to be implemented by July 2018.

It is not too early for employers to take proactive steps to address these changes.

Expected changes

Bill C-45, An Act respecting Cannabis and to amend the Controlled Drugs and Substances Act, the Criminal Code and other Acts (the “Bill”) passed its second reading on November 27, 2017. Although the bill will legalize cannabis across Canada, the provinces and territories will generally determine how marijuana can be sold and used. The Bill allows the Minister of Labour to make regulations relating to smoking in the workplace.

What employers should do

Employers should review their current workplace policies and if a drug and alcohol policy does not exist, then the employer should consider  adding one before the new cannabis laws take effect. Among other things, the policy should recognise that recreational use of marijuana will be legalized under the Bill requires a different approach than medical use of marijuana which has been legal since 1999.

Although the legalization of marijuana is a big change, employers often forget that just because something is legal, does not mean it is permissible at the workplace. For example, alcohol is legal, however, employers are entitled to expect that their employees report to work sober and refrain from drinking alcohol at the workplace. Similarly, simply because recreational marijuana is being legalized does not mean that it is permissible to smoke marijuana at the workplace, or attend the workplace impaired. Employers can set out their expectations regarding impairment and safety at the workplace in workplace policies and procedures.

With respect to medical use of marijuana, employers need to be mindful of their obligations under Ontario’s Human Rights Code, namely, the duty to accommodate employees to the point of  undue hardship, which may include permitting an employee to work while under the influence of marijuana. The duty to accommodate does not eliminate an employer’s right to seek medical proof of prescription and medical documentation supporting the fact that the employee is required to ingest marijuana during working hours, nor does it eliminate an employer’s duty to ensure that the workplace is safe for all employees. Thus, employers must remain prepared to deal with marijuana-related accommodation requests on a case by case basis, taking into consideration the employee’s medical needs and their obligations under health and safety laws.

Lessons to Be Learned

The legalization of marijuana is changing the legal landscape. Due to these changes, we recommend that new policies be drafted to address the anticipated increase in  marijuana use, or that existing policies be amended to ensure they are consistent with the upcoming changes. The MacLeod Law Firm offers a fixed fee service to prepare new drug & alcohol policies, or to revise existing policies.

If you have any questions regarding the effect of the Bill on your workplace, or would like to learn more about the fixed fee service mentioned above, feel free to contact 647-985-9894.

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