header_people.jpg

Posts tagged: Employment Law Toronto

When Being Suspended Without Pay is Constructive Dismissal

By , July 25, 2018 12:24 pm

Sometimes your employer is allowed to suspend you without pay. Other times, this is a breach of your employment contract and can amount to a constructive dismissal. How can an employee know when a suspension without pay is justified?

The Ontario Court of Appeal looked at the appropriateness of an employer suspending an employee without pay in Filic v Complex Services Inc., 2018 ONCA 625

Facts

Mr. Filic worked as a Security Shift Supervisor for the appellant employer, who operated two Casinos (“the Casino”). All employees working in the Casino’s Security Department have to maintain a valid gaming registration issued by The Alcohol and Gaming Commission of Ontario (“AGCO”).

In December 2017, the AGCO informed the Casino’s Director of Security, Mr. Paris, that an audit of the Casino’s lost and found records raised some red flags. Police officers told Mr. Paris that Mr. Filic was under an ongoing investigation for theft in the workplace. In response, Mr. Paris immediately placed Mr. Filic on an investigative suspension without pay, citing Casino policies.

In January 2008, five charges were laid against Mr. Filic and the AGCO suspended his gaming registration. Accordingly, Mr. Filic could not perform his duties as a Security Shift Supervisor at the Casino. Unpredictably, all five of Mr. Filic’s charges were either withdrawn or dismissed and his criminal matter ended. His gaming registration remained suspended and Mr. Filic voluntarily surrendered this licence to the AGCO. Weeks later, Mr. Paris terminated Mr. Filic from his job because he lacked a valid gaming registration.

Mr. Filic launched an action against the appellant claiming constructive dismissal (among other things). The trial judge ruled in favour of Mr. Filic and the Court of Appeal upheld the trial judge’s conclusion that Mr. Filic was constructively dismissed.

The Test for Constructive Dismissal

The Supreme Court of Canada has outlined a test for constructive dismissal. Where there is a single act by the employer that could constitute a breach of the employment contract, the test requires a review of the specific terms of the contract of employment. This involves two steps:

  1. identify an express or implied contractual term that was breached;
  2. determine if the breach is sufficiently serious to constitute constructive dismissal.

Generally, the employee is responsible for establishing a constructive dismissal. However, the burden shifts to the employer when there is an administrative suspension. There are a lot of different factors courts consider to determine if a suspension is justified.

Mr. Filic’s Employment Contract

Mr. Filic’s employment contract (viewed as including the Casino’s policies and handbook) allowed the employer to suspend Mr. Filic as long as it continued to act reasonably. However, the contract did not have express language that stated suspension would be without pay. Although Mr. Filic’s suspension was justified, the appellant could not prove that suspension without pay was reasonable, especially at the early stages of the AGCO investigation. The court found that suspending Mr. Filic without pay in December of 2007 amounted to a constructive dismissal.

The Filic case outlines what courts will consider in deciding whether an unpaid suspension is justified. It also shows the importance of understanding your employment contract and workplace policies that affect you.

If you have been suspended without pay and would like more information on your rights, contact an employment lawyer at MacLeod Law Firm. You can reach us at [email protected] or 647-204-8107.

Lessons about Termination Clauses

By , February 14, 2018 1:29 pm

As we have written before, termination clauses may have a significant effect on how much money you receive if you are terminated.

Many termination clauses attempt to limit the termination and severance pay an employee will receive. Throughout 2017, we saw several decisions from Ontario judges which decided termination clauses were not enforceable. In these cases, the courts often ordered the employer to pay more to the employee because the termination clause was poorly drafted.

In a recent decision, the Ontario Court of Appeal, went the other way. The Appeal Court upheld a termination clause finding that is was enforceable.

The Case: Nemeth v. Hatch Ltd., 2018 ONCA 7

In this case, Nemeth was employed by Hatch for 19 years.  When his employment was terminated, Hatch provided only the bare minimum payments under the Employment Standards Act (ESA): 8 weeks’ notice of termination and 19.42 weeks’ severance pay.

Nemeth’s contract included a termination clause stating that: “…employment may be terminated by either party with notice in writing. The notice period shall amount to one week per year of service with a minimum of four weeks or the notice required by the applicable labour legislation.”

Based on previous court decisions, this clause appeared to be missing important elements.  It did not include statements about the ESA requirements of severance pay and benefit continuation. It also did not say that Nemeth gave up his rights at common law.

Likely because of this, Nemeth brought a wrongful dismissal action which went up to the Court of Appeal. The Court held that the termination clause did not need to have specific language removing the employee’s common law rights.  The Court found that the “intention to displace an employee’s common law notice rights” was evident from the contract. It also held that while the termination clause did not mention severance pay or benefit continuation that did not make the clause unenforceable.

Lessons for Employees

This clause was surprising to many employment lawyers and was a different approach than the Court of Appeal and other courts in Ontario took throughout 2017. The case highlights how important it is for employees to have their employment contracts reviewed by a lawyer.  Employees should not wait until after termination to try and fight about their contract.  Making sure that you understand the terms and conditions of your employment contract or offer letter and negotiating to improve the language can have significant financial benefits at a later date.

If you have been given an employment contract to sign, or have recently been terminated, you should consult a lawyer.  You can 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.”

Keeping Tips in the Servers’ Pockets – New Protections Under the Employment Standards Act

By , April 12, 2016 11:19 am

For servers, tips generally form a significant part of their income. Pooling tips is a common practice in the restaurant industry whereby a server is required to contribute a certain portion of his or her tips into the “pool”. The tips are then redistributed to other employees. In some cases, the restaurant also takes a cut of those tips, which can seem unfair.

Under Bill 12, Protecting Employees’ Tips Act (“the Act”), which amends the Employment Standards Act (“ESA”), as of June 10, 2016, an employer is prohibited from withholding, making deductions from or causing an employee to return his or tips or other gratuities.

What are tips and gratuities?

Under the Act, “tip or other gratuity” means:

  • A voluntary payment left for an employee by a customer of the employee’s employer whereby a reasonable person would be likely to infer that the customer intended or assumed that the payment would be redistributed to an employee or employees
  • A voluntary payment made to an employer by a customer whereby a reasonable person would be likely to infer that the customer intended or assumed that the payment would be redistributed to an employee or employees
  • A payment of a service charge or similar charge imposed by an employer on a customer in such circumstances that a reasonable person would be likely to infer that the customer intended or assumed that the payment would be redistributed to an employee or employees

New Tip Pooling Rules

An employer is permitted to pool tips and redistribute the tips to other employees, but the employer is not allowed to share in those tips; meaning that the employer can no longer take a cut of a server’s tips or gratuities. There are exceptions for sole proprietors, partners, directors and shareholders if they regularly perform to a substantial degree the same work performed by:

  • some or all other employees who are part of the tip pooling;
  • employees of other employers in the same industry who commonly receive or share tips or other gratuities.

If servers are unionized employees and these new protections conflict with the current collective agreement, the collective agreement will prevail until the expiry of that collective agreement.

If you have any questions about what your employer can and cannot require you to do with your tips, please contact us at [email protected] or 647-204-8107 and one of our lawyers would be happy to assist you.

 

“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.”

No Vacation for a Year? Understanding your Right to Vacation Days

By , March 21, 2016 10:00 am

You were offered a new position.  You negotiated for a great salary and many vacation days. When you start working, your employer tells you that although your contract says that you are entitled to many vacation days, you cannot take any vacation for the first year. Is this legal?

Vacation Entitlement and the Employment Standards Act

The Employment Standards Act (ESA) is the legislation that creates employees’ rights to paid vacation. The ESA provides that an employee must receive at least two weeks’ paid vacation per year.  However, there is a waiting period.

All employers have a ‘vacation entitlement year’. This is the period of time over which employees accrue vacation that they can take in the next year.  The idea is that an employee must earn the vacation by working – accruing the vacation days.

The majority of employers use a calendar year as the vacation entitlement year. Some chose another timeline.  Either way, if an employee starts working before the vacation entitlement year begins, she accrues/earns vacation for the partial year.  This is called the stub period. These vacation days may be taken after the stub period ends. The remainder of the employee’s vacation days cannot be taken until after the end of the vacation entitlement year.

An Example

Bob’s employer uses the vacation entitlement year of January 1st to December 31st. Bob is hired on December 2nd and his contract says his is entitled to three weeks’ vacation.  Technically, Bob accrues vacation at .25 days per month. His ‘stub period’ is from December 2nd to December 31st.  So, in Bob’s first year of employment, he can only take .25 days of vacation – even though his contract says he should receive three weeks’ vacation.

How to avoid this Situation 

Some employers will allow employees to take vacation right away, despite what the ESA says.  Other employers, will amend a contract to allow an employee to take vacation in the first year.

It is important to understand your contract, and to understand that law prior to signing an employment contract. Spending an hour with an employment lawyer reviewing each term of a contract or offer letter will ensure that you know the legal implications of each clause in the document and may lead to changes to the offer that benefit you. If you have an employment contract that you would like reviewed, a lawyer at MacLeod Law Firm would be happy to assist you. Please contact us at [email protected] or 647-204-8107.

“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.”

What’s in a name – Employee or Independent Contractor?

By , March 21, 2016 10:00 am

Have you been recently terminated and the company did not provide notice or pay-in-lieu of notice because you are an “independent contractor”?

Sometimes organizations believe that it is more advantageous to categorize the working relationship as one of independent contractor in order to avoid making payroll remittances and to permit termination of the relationship without notice or pay-in-lieu of notice.

However, whether you are truly an independent contractor depends on a variety of factors. The Courts have established a category between employee and independent contractor called dependent contractor. Dependent contractors are entitled to reasonable notice, similar to an employee, upon termination.

Keenan v. Canac Kitchens

In a Keenan v. Canac Kitchens, 2015 ONSC 1055,  two dependant contractors were awarded 26 months’ reasonable notice each.

Canac Kitchens manufactured and sold kitchen cabinets. At the time Canac terminated Mr. and Mrs. Keenan, they had worked there 32 years 25 years respectively as delivery and installation supervisors. They were originally hired as full-time employees, but in or about 1987, Canac told them that they would become contractors and they were given an agreement to sign reflecting this arrangement.

The Keenans continued working under this agreement until their termination in 2009. Canac did not provide them with any notice or pay-in-lieu of notice as they were considered contractors and thus not entitled to such notice. The Keenans brought wrongful dismissal claims alleging that they were in fact employees and as such entitled to reasonable notice of termination. The Court concluded that they were dependent contractors and awarded them 26 months’ notice each.

This decision was recently upheld by the Ontario Court of Appeal. See Keenan v. Canac Kitchens Ltd., 2016 ONCA 79.

Factors Considered by the Court

  • Exclusivity of Services
  • Control
  • Ownership of Tools
  • Participation in risk and opportunity for profit
  • An assessment of the question – who business is it?

These factors are rarely black and white. The Courts will consider each factor contextually when making a decision. If the company exerts considerable control over the terms of how you provide services or if a majority of your income is derived from that one company, it’s possible that you are a dependent contractor.

If you have been terminated and the company has not provided reasonable notice or pay-in-lieu of notice because it considers you an independent contractor, you may be entitled to notice if you are a dependent contractor. One of our lawyers would be happy to meet with you to discuss your situation to see if you’re likely to be considered a dependent contractor. Please contact us at 647-204-8107 or by email at [email protected]

“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.”

Panorama Theme by Themocracy