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Posts tagged: Reasonable Notice

Working Notice: When working more than 9 to 5 makes it hard to find a way to make a living

By , November 19, 2018 10:00 am

Sometimes, rather than receiving a severance package, employees are provided “working notice” that their employment is coming to an end. In other words, your termination date is set to a fixed date in the future and you are expected to work throughout this period.

While there is nothing inherently wrong with providing working notice, there are some circumstances where a court may find the employer should not get credit for this notice period, and therefore should provide pay in lieu of notice instead. The Ontario Court of Appeal has recently decided that there is a qualitative component to reasonable notice. In other words, that the quality of the reasonable notice is important in addition to the quantity of notice an employee receives.

Wood v CTS of Canada Co.

On April 17, 2014, CTS of Canada Co. (“CTS”) gave written notice to employees that it was closing its Streetsville plant and that their employment would terminate on March 27, 2015. It subsequently extended the termination date for most employees to June 26, 2015. A class action was brought on behalf of 74 former employees against CTS of Canada Company. On issue was the adequacy of the notice of termination given by CTS.

The motion judge concluded that CTS was not entitled to credit for working notice for any week in which an employee worked overtime contrary to the ESA, or in which the employee was forced to work overtime that had a significant adverse effect on the employee’s ability to look for new employment.

The motion judge noted that according to the Employment Standards Act, no employer shall require or permit an employee to work more than 48 hours in a work week (unless the employee has agreed in writing and the employer has obtained the approval of the Director of Employment Standards). There was evidence that a group of hourly paid production employees worked approximately 55 hours a week during the notice period, contrary to the Employment Standards Act. The evidence also showed that the employees were not pressured to work and actually wanted to make more money. However, there was also evidence that 18 key employees were forced to work up to 60 hours per week.

The motion judge found that an employer that had employees work 16 hours a day during their notice period could not claim credit for working notice. To do so would be tantamount to saying “You had 8 hours a day to look for new employment and if you frittered it away sleeping, that was your choice.”

CTS had the onus to prove that it provided reasonable advance notice of termination. The motion judge concluded that there is both a quantitative and a qualitative component as to what is reasonable. If the primary objective of reasonable notice is to provide the dismissed employee with an opportunity to obtain alternate employment, to look for work, an employee needs both a reasonable aggregate notice period and a reasonable amount of time in the week.

On appeal, the employer argued that the “quality of the opportunity” is not a relevant factor in the determination of reasonable notice. The Ontario Court of Appeal upheld the motion judge’s determination that credit for working notice is dependent on the quality of the opportunity given to the employee to find new employment. The appellate court noted that the mere fact that the employee is required to work during the notice period does not automatically lead to denying the employer credit for a portion of the working notice period. Although an employee provided working notice period may have less time to look for alternate work, in some circumstances the fact that an employee is employed while job searching can improve the employee’s position when approaching prospective employers.

However, exceptional workplace demands on the employee during the notice period that negatively affect the employee’s ability to seek alternate work may warrant disentitling an employer from credit for some or all of the working notice period provided.

Takeaway for Employees

If you have been terminated and provided working notice and you are not sure whether what is being required of you during the notice period is fair, you should speak to a lawyer. Even if you are not being forced to work overtime, similar considerations with respect to quality could apply if you are not provided with time to attend job interviews. We can be contacted at [email protected] or 647-204-8107.

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.

What to do when you receive a release from your employer?

By , September 26, 2018 10:00 am

When an employee is terminated and offered a severance package, they are almost always asked to sign a release agreement in exchange. A release agreement, as the name suggests, releases the employer from liabilities for employment-related claims. Thus, after an employee has signed a release agreement, if they attempt to sue their employer later on, the release agreement is typically raised as a bar for the employee to proceed with litigation.

There are certain circumstances in which a court will not enforce a release. The Ontario Superior Court of Justice recently allowed an employee to proceed with claims against his former employer regarding long-term disability (“LTD”) insurance, even though he had signed a release in exchange for the severance package when his employment ended.

Facts

In Swampillai v Royal & Sun Alliance Insurance Company of Canada, Mr. Swampillai worked for the employer for several years before he became disabled from working and began receiving LTD benefits. After two years, the insurance company advised he was no longer qualified for benefits. Mr. Swampillai retained a law firm to appeal the LTD denial, and while that appeal was ongoing, the employer advised him that his employment was being terminated. His employer offered him an amount that exceeded his minimum entitlements under the Employment Standards Act, 2000 (“the ESA”) for pay in lieu of notice, and an additional lump sum amount for loss of benefits. Mr. Swampillai was told that if he did not accept the offer and sign the release, the offer would be revoked and he would only receive his ESA entitlements. After some negotiation regarding the amount for pay in lieu of notice, Mr. Swampillai signed the release, which purported to release the employer and insurance company from claims regarding his LTD benefits.

As a result, both the employer and the insurance company brought a motion for summary judgment asserting that the employee was not entitled to make any claim against the employer for disability benefits, or against the insurance company for the administration of those benefits.

Decision

The court found that the release was unconscionable as it related to Mr. Swampillai’s LTD claim, and that Mr. Swampillai was allowed to proceed with the LTD claim despite the language in the release that precluded him from doing so. In other words, although the court found the release was legally binding with respect to the pay in lieu of notice, the court declined to enforce the benefits aspect of the release because it was too unfair to Mr. Swampillai, a vulnerable employee.

The test for unconscionability has four elements:

  1. A grossly unfair and improvident transaction;
  2. The victim’s lack of independent legal advice or other suitable advice;
  3. An overwhelming imbalance in bargaining power caused by the victim’s ignorance of business, illiteracy, ignorance of the language of the bargain, blindness, deafness, illness, senility, or other similar disability; and
  4. The other party’s knowingly taking advantage of this vulnerability.

The court noted that there had not been money specifically allocated towards releasing the LTD claim, that the employer knew Mr. Swampillai was in the process of appealing the denial, and neither the employer nor the insurance company drew Mr. Swampillai’s attention to the fact that the release would bar him continuing in that process.

Lessons to be Learned

Although this story had a happy ending for Mr. Swampillai, it is important to highlight that generally speaking, courts do not take it upon themselves to intervene when people have been handed a raw deal. Therefore, when presented with a release, it is always recommended that you speak to a lawyer so you understand the true nature of the deal you have struck.

However, as this case illustrates, there may be instances where a court does intervene, particularly when dealing with a vulnerable employee.

If you have received a release and want to review it with a lawyer, or if you have cold feet after signing a release and want to know if there is any way around it, you can contact an employment lawyer at MacLeod Law Firm at [email protected] or 647-204-8107.

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.

Independent Contractor Owed Notice of Termination

By , November 1, 2017 10:01 am

One common misconception is that, unlike employees, independent contractors are not owed notice of termination. In one recent case from Ontario, an employer was forced to pay an independent contractor for notice because of the way the termination clause was drafted in the contract. Although the facts of this case are somewhat unique, there are still important takeaway points for independent contractors to keep in mind, which I will discuss below.

Mohamed v Information Systems Architects Inc.

Facts

Mr. Mohamed was hired as an independent contractor for Information Systems Architects Inc. (ISA) to provide technological services for their client, Canadian Tire for a 2 month project. Prior to being hired, on November 1, 2015, Mr. Mohamed consented to a security check and disclosed that he had been convicted for assault with a weapon in 2000 on the consent form. The next day, Mr. Mohamed signed a consulting agreement which included the following termination clause:

This Agreement and its Term shall terminate upon the earlier occurrence of:

I. ISA, at their sole discretion, determines the Consultant’s work quality to be sub-standard.

II. ISA’s project with Customer gets cancelled, experiences reduced or altered scope and/or timeline.

III. ISA determines that it is in ISA’s best interest to replace the Consultant for any reason.

IV. Immediately, upon written notice from ISA, for any breach of this Agreement by the Consultant.

On November 4, 2015, Mr. Mohamed sent ISA a security disclosure form in which he once again disclosed his criminal record. The next day, he began to perform computer security services for Canadian Tire on site.

Around this time, Canadian Tire retained ISA for a second project which required a security engineer to temporarily fill a position for six months. ISA offered to project to Mr. Mohamed, which he accepted by signing a second consulting agreement.

On December 4, 2015, ISA received the security report for Mr. Mohamed, which indicated his conviction. The report was forwarded to Canadian Tire, which asked ISA to replace Mr. Mohamed. Mr. Mohamed was advised that he was being terminated by Canadian Tire and had to leave the premises. Mr. Mohamed sent an email to ISA detailing the steps he had taken to obtain a pardon for his conviction. ISA terminated Mr. Mohamed, relying on the termination clauses found in the consulting agreement.

Decision

The court found that the termination clauses were vague and unclear, and therefore, unenforceable. The termination clauses gave ISA the unfettered right to terminate Mr. Mohamed’s contract. The judge found this to be inconsistent with the doctrine of good faith in the performance of contracts. The judge also commented on how the clauses made no sense in operation as they provided for notice if Mr. Mohamed breached the agreement (without specifying the amount of notice), and yet no notice was required if Mr. Mohamed’s work quality was sub-standard (which is a breach of contract). The judge found it to be illogical for the termination clause to require notice where he breaches the contract, but no notice if he had done nothing wrong.

The court moved on to note that nothing turned on whether Mr. Mohamed was an independent or dependent contractor: as the contract was for a fixed term, Mr. Mohamed was entitled to the balance of contract owing, with no obligation to mitigate his damages. Therefore, Mr. Mohamed was entitled to 5 months and 3 weeks of the contract. In my next blog, I will delve more into how the judge arrived at this decision.

Lessons to be Learned

  1. Although independent contractors don’t enjoy protections under the Employment Standards Act, notice of termination may still be required. If you were characterised as an independent contractor and were terminated without notice, it is still advisable to speak to an employment lawyer to ensure you are not owed notice of termination.
  2. The way damages are calculated for breach of an indefinite contract versus a fixed term contract is very different. I will be exploring this concept further in my next blog.
  3. As an interesting side note, a private member’s bill has recently been introduced which, if passed into law, would extend protections under the Human Rights Code to people with police records (currently, Mr. Mohamed would only enjoy protection under the Code if he had obtained a pardon for his conviction). To read more about my thoughts on this proposed addition to the Code, click here.

“The material and information in this post are for general information only. They should not be relied on as legal advice or opinion. The author makes no claims, promises, or guarantees about the accuracy, completeness, or adequacy of any information referred to in this post or its links. No person should act or refrain from acting in reliance on any information found in this post. 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 the author or the MacLeod Law Firm.”

Being Terminated Before You Get Your Foot In The Door

By , September 22, 2017 9:48 am

From time to time, we get a call from a person who has accepted a job offer, quit their existing job, and then been told that the job offer has been revoked before the person starts work.

The person wants to know, “Can the offer be revoked” and if so, “Am I entitled to any damages?”

In a recent case, a judge ordered an employer to pay damages to an individual in this kind of situation.

Buchanan v Introjunction Ltd.

On October 16, 2016, Mr. Buchanan accepted an offer of employment from Introjunction and signed an employment contract. As he was expected to commence work on November 1, 2016, Mr. Buchanan quit his existing job. After he quit, on October 29, 2016, Introjunction revoked his offer of employment. Mr. Buchanan initiated a wrongful dismissal action, seeking four months’ pay in lieu of notice of termination of his employment.

Introjunction attempted to argue that Mr. Buchanan was not entitled to reasonable notice of termination because his employment contract contained a three-month probationary period which allowed Introjunction to terminate him without notice within the first three months of his employment.

The Decision

The court disagreed with Introjunction’s position. The court found that even if the probationary clause applied, such a clause required that the employer assess Mr. Buchanan’s suitability for the role. Because Introjunction had revoked Mr. Buchanan’s employment offer before he began work, suitability could not have been a factor in the decision to terminate his employment. The court also found that by retracting the job offer, Introjunction demonstrated a clear intention to not honour the employment contract. Having repudiated the contract, Introjunction could not rely on any provision in the contract. Therefore, it was liable to provide reasonable notice of termination of the employment contract, in this case six weeks’ pay.

Lessons to be learned:

  1. Make sure you ask a potential new employer enough questions to satisfy yourself that there is very little chance that the job offer will be revoked. For example, is it a new position? Is the employer experiencing any financial problems?
  2. If you are leaving a secure position to accept a new job then try to negotiate a termination clause that provides for a minimum notice of termination.

An employment lawyer can assist you by reviewing each term of an employment contract and suggesting changes to the offer that benefit you, such as a change to the termination clause. If you have an employment contract that you would like reviewed, a lawyer at MacLeod Law Firm would be happy to assist you.  If you would like to speak to a lawyer at MacLeod Law Firm, you can reach us at [email protected] or 647-204-8107.

What kind of damages are you entitled to if your employer makes frivolous allegations about you?

By , August 22, 2017 9:12 pm

As we have written before, an employer may generally terminate an employee for any good business reason as long as it provides the employee with adequate notice of termination (or pay in lieu of this notice). Failure to provide adequate notice results in a wrongful dismissal. However, if an employer has ‘just cause’ for the termination, then the employer does not generally need to provide the employee with any notice of termination.

In addition to awarding damages for wrongful dismissal, courts have the authority to award “aggravated” or “moral” damages, and “punitive” damages, in certain circumstances (see here for some examples). A recent case from Alberta provides a good example of when these kind of damages may be awarded by the courts.

Lalonde v Sena Solid Waste Holdings Inc.

During Mr. Lalonde’s 4-year employment with Sena Solid Waste Holdings (“the Company”), he did not have a disciplinary history. One day, he was summoned for a meeting with his manager where he was accused of lying, being insubordinate, and “putting a life in danger” because a contract worker was working without a permit that day. Mr. Lalonde tried to respond to the allegations but was given little, if any, opportunity to do so. Mr. Lalonde was suspended and escorted out of the workplace by two other employees.

During Mr. Lalonde’s suspension, he attempted to contact his employer to communicate his side of the story. He did not hear anything from the employer for several weeks. The period of time during which he was suspended was difficult, and his doctor sent him on stress leave.

The employer did not respond to Mr. Lalonde’s request for more information, despite the fact that they were aware the Plaintiff was under stress. Approximately five weeks after he was suspended, Mr. Lalonde received a letter advising that his employment had been terminated for cause due to his failure to follow safety procedures and failure to follow his supervisor’s instructions.

As a last resort, Mr. Lalonde sent a letter to the employer providing his response to all of the allegations. In response, the Human Resources Manager sent Mr. Lalonde an email with a list of policy violations, which was copied to a number of senior employees.

Mr. Lalonde brought a wrongful dismissal action for pay in lieu of notice and aggravated damages. On the first day of trial, the employer withdrew the frivolous allegations of clause.

Decision

Taking account Mr. Lalonde’s age at dismissal (56), the nature of his employment (a tradesman doing fairly technical work) and the availability of similar employment, the judge awarded 6 months’ pay in lieu of notice.

The judge was very critical of the employer’s approach, which he described as “shoot first and ask questions later.” Although the employer tried to rely on the fact that it undertook an investigation to show that its actions were appropriate, the judge noted that Mr. Lalonde’s side of the story was never properly considered. The judge was satisfied that the employer’s actions amounted to a breach of the duty of good faith, which supported an award of $75,000 in aggravated damages in addition to pay in lieu of notice.

Lessons to be Learned

  1. An employer cannot simply claim it has just cause to terminate an employee and make frivolous allegations. It is the employer that has the burden of proving just cause.
  2. It is good practice for an employer to present an employee with, and allow them to respond to the alleged misconduct. Failure to do so could be found to be a breach of the duty of good faith.
  3. An employer’s breach of the duty of good faith in the manner of dismissal may lead to an award for aggravated damages in addition to damages for wrongful dismissal.

If you have been recently terminated, with or without cause, you should speak to an employment lawyer. If you would like to speak to a lawyer at MacLeod Law Firm, you can reach us at [email protected] or 647-204-8107.

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.

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