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Posts tagged: toronto employment lawyer

The Benefits of Failsafe Provisions

By , July 17, 2018 8:53 pm

The Ontario Court of Appeal recently released a decision on the enforceability of termination clauses in employment agreements that contain failsafe provisions.

Background

A “failsafe provision” is a portion of a termination clause that provides that, regardless of what the termination clause provides, an employee who is terminated on a without cause basis will always receive at least the minimum notice of termination, benefit continuation and severance pay the employee is entitled to receive under employment standards legislation.

Amberber v IBM Canada Ltd.

Mr. Amberber’s employment contract contained a termination clause that entitled him to notice of termination equal to the greater of (a) one month’s salary, or (b) one week of your current annual base salary, for each completed six months worked since his start date, up to a maximum of 12 months’ salary. This amount expressly included all payments to which the employee might be entitled under employment standards legislation and at common law. This part of the clause, which the motion judge termed as the “options provision,” was followed by a failsafe provision.

After he was terminated, Mr. Amberber sued IBM Canada Ltd. (“IBM”) for wrongful dismissal and claimed he was entitled to pay in lieu of notice at common law. At the motion, Mr. Amberber advanced three arguments. The motion judge only gave effect to one of the arguments: the termination clause failed to rebut the presumption of common law reasonable notice of termination.

The motion judge found that although the termination clause was one paragraph, it broke down into two parts. The inclusive payment provision immediately followed the options provision, so the motion judge interpreted that the provision applied to the first part. Because the inclusive payment provision was not repeated at the end of the clause, it was not clear that the inclusive payment provision was meant to apply to the failsafe provision. The motion judge found that the inclusive payment provision could just as easily have been included at the end of the paragraph and could have just as easily been specified to apply to both scenarios.

On appeal, the motion judge’s decision was overturned. The Ontario Court of Appeal found that the motion judge made a fundamental error when she subdivided the termination clause into what she regarded as its constituent parts and interpreted them individually. Rather, the clause must be interpreted as a whole, and when read as a whole, there could be no doubt as to the clause’s meaning. To hold that the inclusive payment provision applies to only one part of the clause but not the other, gave the clause a strained and unreasonable interpretation. The Ontario Court of Appeal reminded judges that the court should not strain to create an ambiguity where none exists.

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.

Don’t Let Cannabis Laws Leave You Dazed and Confused

By , July 17, 2018 11:03 am

In October, smoking or ingesting cannabis will be legal in Canada. Does your business have policies and procedures in place to handle this transition?

The federal government has passed legislation that will make cannabis legal, giving the provinces power to control how it will be used and sold.

This historic change is likely to lead to a significant increase in cannabis consumption. Prudent employers should be ready to handle the presence of cannabis in the workplace.

Federally, The Cannabis Act

Bill C-45, An Act respecting cannabis and to amend the Controlled Drugs and Substances Act, the Criminal Code and other Acts (the “Cannabis Act”) is scheduled to take effect on October 17, 2018. It creates a legal framework for the sale and possession of cannabis in Canada.

The underlying purpose of legalizing cannabis is to deter criminal activity, prevent young persons from accessing cannabis, and to protect public health and safety.

The Cannabis Act will allow adults to possess up to 30 grams of cannabis.

Provincially, Ontario’s Regulations

The Ontario government will be responsible for regulating the distribution of cannabis. Most provinces plan to use their liquor agency as the main distributor of recreational cannabis. Ontario has passed laws about where, how, and who can consume recreational cannabis. The minimum age to possess or use cannabis in Ontario will be 19.

After province-wide consultation, Ontario passed Bill 174, Cannabis, Smoke-Free Ontario, and Road Safety Statute Law Amendment Act, 2017 (Bill 174). This omnibus legislation enacts

  • the Cannabis Act, 2017 (Schedule 1),
  • the Ontario Cannabis Retail Corporation Act, 2017 (Schedule 2), and
  • the Smoke-Free Ontario Act, 2017 (Schedule 3).

Bill 174  repeals the Smoke-Free Ontario Act and the Electronic Cigarettes Act, 2015, and makes amendments to the Highway Traffic Act including driving with drugs or alcohol present in the body (Schedule 4).

Bill 174 prohibits the use of tobacco or cannabis in many locations including

  • Any public places
  • Motorized vehicles
  • The workplace

How Bill 174 Affects Employers

Consuming recreational cannabis in the workplace remains illegal. The term “workplace” is given the same broad definition as in the Occupational Health and Safety Act (“OHSA”). This means that an employee cannot use cannabis at work, during lunch breaks, or at work events. However, it is not prohibited to bring cannabis into the workplace, absent an employer policy. It will remain the responsibility of employers to enforce these prohibitions.

Further, Bill 174 has specific provisions affecting particular industries. For example, there are provisions protecting home healthcare workers from second-hand smoke and prohibiting the use of cannabis while operating a motor vehicle.

The Maze of Employer’s Obligations

With marijuana legalization around the corner, there are a minefield of issues facing employers. First and foremost, the law does not authorize employees to be impaired at work and employees do not have a right to smoke cannabis at the workplace. This is particularly important in safety sensitive workplaces, as employers must continue to meet their obligations under the OHSA.

A tricky issue facing employers is the detection of cannabis impairment in the workplace. A thorough drug and alcohol policy can assist employers in this regard. Introducing drug and alcohol testing however is very controversial and often leads to litigation.

The duty to maintain a safe work environment must be balanced with an employer’s obligation under human rights legislation to accommodate an employee with a disability. As most employers already know, medical use of marijuana has been legal in Canada since 1999. It is currently regulated under the Access to Cannabis for Medical Purposes Regulations.

It is important for employers to note:

  • employees who use medical marijuana have a right to be accommodated, to the point of undue hardship
  • an addiction to marijuana can fall under the definition of disability
  • an employer’s drug and alcohol policy should distinguish between recreational and medical marijuana. 

Employers will have the power to develop policies on the possession and use of recreational cannabis in the workplace. Policies can outline acceptable employee behavior while maintaining employee privacy.

Be Proactive! Steps Employers Can Take

To manage expectations in relation to cannabis use, an employer can create a drug and alcohol policy before Bill C-45 comes into force in October. If a drug and alcohol policy already exists, it can be updated to reflect the legislative changes regarding cannabis. This policy making process can take time. Further, employees need training to understand what is expected of them at work.

The intersection of issues surrounding cannabis at the workplace including health and safety considerations, the duty to accommodate, and the complex area of drug testing can result in the need for professional advice on how to create a reasonable and enforceable drug and alcohol policy. MacLeod Law Firm offers a fixed fee to prepare such a policy, taking into account the nature of the business to ensure the policy suits your needs.

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.

Not Preventing Sexual Assault and Harassment in the Workplace is Now More Expensive

By , June 22, 2018 11:16 am

On average, damages awarded to an employee for a breach of the Human Rights Code, remain relatively low, typically $10,000 to $15,000. However, the HRTO recently released two significant decisions that reflect a willingness to award higher amounts. Both decisions involve sexual assault and sexual harassment against women in vulnerable circumstances.

In both cases, the owners of the companies were found to be personally liable along with the corporations.

The Cases

In A.B. v. Joe Singer Shoes Limited et al, 2018 HRTO 107, the employee worked for Joe Singer for 28 years. The allegations made by A.B. were of atrocious conduct. She stated that she was forced to perform oral sex, intercourse, and degrading sexual conduct. She accused her employer of watching pornography in his office. Her employer also criticized her skin colour, accent, and body. Although she had issues with her memory in her testimony, the HRTO still preferred her evidence, and found company and the owner both responsible for the sexual assault and sexual harassment. The HRTO ordered the respondents to pay $200,000 as compensation for injury to dignity, feelings, and self-respect.

Following Joe Singer, the HRTO released G.M. v. X Tattoo Parlour, 2018 HRTO 201. In X Tattoo, the applicant was a 15-year-old woman whose employer engaged in unwanted sexual discussion and forced the applicant to engage in sex acts. Looking to the Joe Singer decision, the HRTO awarded $75,000 in general damages (the maximum that the applicant had requested).

Lessons

Most employers would hope and believe that their staff and management would not engage in the conduct seen in Joe Singer and X Tattoo. However, the bar for the maximum damage awards has increased. We can expect that the average award level will also increase.

Employers need to ensure:

  1. that they create a workplace culture of no tolerance for harassment and violence. This includes having the appropriate policies and training in place;
  2. that they respond promptly to every sexual harassment complaint and investigate all complaints as well as incidents; and
  3. that those who come forward do not face punishment or reprisal for doing so.

For over 30 years, MacLeod Law Firm has been advising employers on all aspects of the employment relationship. If you have any questions about dealing with sexual assault or sexual harassment complaints and allegations and would like to discuss them with a lawyer, please contact me at [email protected] or 647-633-9894.

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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