header_people.jpg

Posts tagged: Termination Pay

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.

Reviewing a Severance Package: What to Expect from an Employment Lawyer

By , March 7, 2018 12:26 pm

You have just been terminated. You have been given a week or so to accept a severance package but you don’t know if it is fair. That is where we come in.

We Tell You Whether Your Termination Package is Fair

We only do employment law and we review 100s of severance packages each year.

Before telling you whether we think your termination package is fair we will speak with you for about an hour to find out about the background to your termination so we can provide you with an informed opinion.

What Happens When You Meet with Us?

We ask you a lot of questions.

If you have been terminated without just cause then we will want to know all of the information a judge would take into account when deciding how much termination pay you are owed. If you were terminated with cause we need to discuss the alleged misconduct to assess whether the employer would likely prove just cause.

If you have signed an employment contract with a termination clause we will want to discuss the circumstances surrounding the contract. Recently judges have refused to enforce some termination clauses so we carefully review the termination clause to assess whether it is legally enforceable.

You Don’t Know What You Don’t Know

You may have additional legal claims against your former employer that you did not even consider. We understand you are not an employment lawyer and you don’t know what information is important. We do.

For example, your former employer may owe you more money as of your last day of employment than you thought possible.

Or you may be owed more money because the employer discriminated against you. Did you know that there are 16 personal characteristics that an employer cannot take into account when terminating your employment? Like your age, your gender or the fact you have a disability or a perceived disability.

If an employer treats you poorly during your employment, at the time of your termination, or after your termination then you may be entitled to additional compensation.

We Provide Peace of Mind

At the end of your consultation, we will tell you whether your severance package is fair and if not what we think would be fair. Some people find that going through this process gives them peace of mind and helps them move on with their lives.

For over 30 years, Doug MacLeod of the MacLeod Law Firm has been advising emploeers 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.

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.”

Five Reasons to Ask an Employment Lawyer to Review Your Severance Package

By , March 9, 2017 9:09 am

We have reviewed hundreds of severance packages on behalf of employees. Some of these packages are fair and some are really unfair. We can tell you whether we think your package is fair. And in many cases, we can help you negotiate a better severance package.

To determine whether your severance package is fair we spend an hour or so with you to discuss the circumstances surrounding your termination to then provide you with an informed legal assessment of your case.

Here are five reasons why you may be entitled to an enhanced severance package:

  1. You may be owed more monies up to the date of termination. For example, if you sometimes work more than 44 hours a week then you may be entitled to overtime pay. Similarly, if you receive a bonus each year then you may be owed a pro-rated share of your bonus up to your termination date.
  1. The termination clause in your employment contract may not be enforceable. You may have signed an employment contract which states you are only entitled to the minimum notice of termination required under the Employment Standards Act. If this clause is not enforceable then you could be entitled to considerably more termination pay. There are several ways to legally attack a termination clause.
  2. Even if the termination clause in your employment agreement is enforceable, you may be entitled to additional damages if you were discriminated against while employed. For example, if you were discriminated against because of a disability, or because of your gender or race.
  3. Even if the termination clause in your employment agreement is enforceable, you may be entitled to additional damages if you were harassed while employed. This can include bullying by your supervisor.
  4. Normally an employer has the right to terminate an employee by providing notice of termination or termination pay instead of this notice. There are, however, exceptions to this general rule and in these cases you may have the right to be reinstated or the employer may be prepared to provide you with extra pay if you agree to forego the right to seek reinstatement. If you have been terminated shortly after returning to work following a pregnancy leave you can file a statutory claim and seek reinstatement.

Many people never hire a lawyer. After being terminated, however, some people consult with an employment lawyer for peace of mind because they want to know if the severance package is fair. Getting an answer from an experienced employment lawyer helps them move on with their lives.

If you would like to speak to an employment lawyer at the 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.

 

 

 

Panorama Theme by Themocracy