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Posts tagged: Toronto Employment Lawyer

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.

Can an Employer Refuse to Hire You Because You Are Not a Permanent Resident or Citizenship of Canada?

By , September 25, 2018 1:04 pm

Have you ever been denied a job interview or a position based on your citizenship status? Some employers have attempted to develop pre-employment requirements and policies to deal with the tension between devoting time and resources to new employees and hiring someone who may be temporary.

A recent decision from the Human Rights Tribunal of Ontario makes it clear that you cannot be discriminated against when applying for a job position based on your citizenship status. This is provided that you are eligible to work in Canada and that the position you are applying for does not require citizenship as a legal requirement.

Citizenship Status: Permanent, Temporary or Citizen?

In this precedent-setting decision, the Tribunal ruled in favour of an employee alleging discrimination in employment because of the pre-employment requirement that job applicants be able to work in Canada on a “permanent basis”, meaning either being citizen or a permanent resident of Canada.

Permanent residency is provided to individuals who are immigrating to Canada but are not Canadian citizens. Those with permanent residence status in Canada are citizens of other countries. Permanent resident status must be maintained or it can be lost.

A person who is in Canada temporarily is not a permanent resident. This includes foreign workers and international students, as was the situation in the decision below.

After meeting certain residency requirements, permanent residents can apply to become Canadian citizens.

Haseeb v. Imperial Oil Limited, 2018 HRTO 957

Facts

Mr. Haseeb was an international student who graduated with an engineering degree from McGill University. He applied to work for Imperial Oil Ltd during his final semester, while he was on a student visa. Upon graduation, he would become eligible for a postgraduate work permit for a fixed term of 3 years. This permit would allow Mr. Haseeb to work with any employer anywhere in Canada.

When Mr. Haseeb applied to Imperial Oil, he was aware of their policy which required graduate engineers to have either permanent residency or citizenship to be eligible for a permanent and full-time position as a Project Engineer. Mr. Haseeb repeatedly misinformed Imperial Oil throughout the recruitment process that he was eligible to work on a permanent basis in Canada.

He expected to attain permanent residency status within 3 years, after which he could settle and work in Canada indefinitely. However, at the time of recruitment, he lied and stated he met Imperial Oil’s “permanency requirement” when he knew that he did not.

Mr. Haseeb received a conditional offer of employment, with one condition being that he provide proof of his eligibility to work in Canada on a permanent basis. Imperial Oil required proof in the form of a Canadian birth certificate, Canadian citizenship certificate, or a Canadian certificate of permanent residence. Since Mr. Haseeb could not provide such proof, the job offer was revoked.

Decision

Imperial Oil unsuccessfully argued that it was Mr. Haseeb’s misrepresentations during recruitment that led to the job offer being revoked. The Tribunal found that Mr. Haseeb’s dishonesty was not relevant in assessing whether the Code was breached. The Tribunal stated that “…“but for” IO’s permanence requirement, the applicant would have no need for a ruse to circumvent the requirement.”

The adjudicator concluded that Imperial Oil’s policy of asking job applicants about their citizenship and immigration status was discriminatory based on the ground of citizenship. The eligibility of job applicants was based on their response to the question about their eligibility to work in Canada on a permanent basis, a requirement that was not necessary and linked to the essential duties of the position. For instance, Imperial Oil had occasionally hired experienced engineers in the past who did not meet their permanency requirement policy but did possess a skill set in high demand.

Further, Imperial Oil was unable to convince the adjudicator that their policy was an employment strategy that directed at grooming the best recruits.

Importance

This decision is significant because it clarifies that employers cannot exclude a job applicant based on his or her citizenship status. An employer can ask about your legal ability to work in Canada but the inquiry should stop there. This important clarification can have a positive impact if you have temporary status in Canada because gaining work experience after graduation is an important step on the path to obtaining permanent residency. However, it remains to be seen whether Imperial Oil will appeal this decision.

If you would like more information on discrimination based on your citizenship status and/or your rights in the workplace, you can contact an employment 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.

Do I Have to Accept a Job Offer from the Purchaser of my Employer’s Business?

By , September 20, 2018 8:50 am

Ontario courts have mentioned time and time again that a terminated employee has a duty look for and accept comparable employment.

What happens when your employer is sold and the purchaser offers you employment?

A recent decision from the Ontario Superior Court of Justice provides some direction on when such an offer of employment can be rejected.

Dussault v. Imperial Oil Limited, 2018 ONSC 1168 

Mr. Dussault and Ms. Pugliese both worked in management positions for Imperial Oil Ltd. (“Imperial”). At the time of termination, Mr. Dussault had been employed for 39 years and Ms. Pugliese for 36 years.

In 2016, Imperial held a meeting where it shared plans to sell its retail business in Ontario to Mac’s Convenience Stores Inc. (“Mac’s”) and that many of its current employees would be offered jobs with Mac’s.

Both Mr. Dussault and Ms. Pugliese were offered positions with Mac’s. These offers were conditional upon both employees signing releases in favour of Imperial. The new offer stated that Mr. Dussault’s and Ms. Pugliese’s respective base salaries would remain the same for 18 months but their salary after this time was not revealed. Further, there was an explicit term where Mac’s would not recognize the decades of experience with Imperial.

If these offers of employment were accepted, Mr. Dussault and Ms. Pugliese would receive a lump-sum payment to make up for the reduction in value of their benefit plans. Imperial stated that the amount of this lump-sum payment would only be disclosed after they resigned from Imperial, accepted Mac’s job offer, and signed a release in favour of Imperial.

Both employees rejected Mac’s offer of employment as their terms of employment with Mac’s would be less favourable. Mr. Dussault was 63 years old and Ms. Pugliese was 57 years old when Imperial terminated their employment in 2016.

Decision

Justice Favreau concluded that Mr. Dussault and Ms. Pugliese did not have an obligation to accept employment from Mac’s to mitigate their damages. In coming to this conclusion, Justice Favreau first focused on the fact that Mac’s offer of employment was presented before employment with Imperial was terminated. Next, he decided it was not reasonable for the employees to accept Mac’s offers as Imperial imposed a requirement that a release be signed in order for the employees to receive their lump-sum payment. Justice Favreau viewed the requirement for the employees to surrender their right to sue Imperial as fatal.

Justice Favreau also found the requirement for the employees to accept an offer of employment that did not recognize their years of service with Imperial to be unreasonable. Finally, he found sufficient differences in Mac’s offer of employment that it was reasonable for the employees to reject the offer. Notably, there were issues surrounding a reduction in both benefits and salary.

In addition, Justice Favreau found that both employees were entitled to a whopping 26 months’ notice based on the exceptional circumstances of their respective cases.

Takeaways for Employees

  1. A terminated employee’s duty to mitigate does not require the person to accept employment with a purchaser of the business where that offer would significantly and negatively affect them going forward
  2. A requirement for employees to accept an offer of employment that fails to recognize their years of service with the former employer is likely unreasonable
  3. The timing of when the new employer offers a job is relevant; it is unreasonable to expect employees to start looking for alternative employment before they have had the chance to consider the new offer of employment

If you are being offered a new job in the context of a sale of your employer’s business, it is important to contact an employment lawyer to understand your duties and rights.

If you have questions or would like more information, you can contact an employment 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.

How Does Returning to School Affect an Employee’s Duty to Mitigate Losses?

By , September 13, 2018 2:33 pm

A terminated employee has a duty to mitigate his or her damages by looking for alternative employment. We are often asked questions like: Can an employee start her own business? Can he or she return to school or a retraining program? This blog addresses these questions.

The General Principle Around Returning to School

Two scholars summarized an employee’s duty  to mitigate damages in their 2001 book where they stated, A return to school does not generally satisfy the duty to mitigate unless the student remains available for work and is actively pursuing alternative employment. The critical factor, in all cases of mitigation, is that the employee behaved reasonably in attempting to mitigate his or her loss.”  [emphasis added]. This passage has since been cited by Ontario courts.

The balance of this blog discusses the application of this legal principle to two fact situations.

Case 1: Mr. Benjamin Failed to Mitigate his Damages by Returning to School

In a recent blog post, we discussed a case where an unskilled labourer made the decision to enroll in a retraining program after he was dismissed without cause. Mr. Benjamin worked for the employer for about 28 years mostly as a line operator. After being terminated, Mr. Benjamin chose to attend a full-time program to retrain as a welder. He participated in this 6-month program from August 2016 to February 2017 in order to “brush up from unskilled labour to skilled labour”.

The employer paid Mr. Benjamin the equivalent of 8 months’ salary and argued that he failed to reasonably mitigate his damages after June 2016 because he decided to start a new career as a welder and chose not to seek comparable work after enrolling in the skills program.

The judge applied the test from a leading Supreme Court of Canada case to Mr. Benjamin’s situation. The ‘test’ on the duty to mitigate in wrongful dismissal cases places the onus on the employer to establish both of the following:

  1. the employee did not take reasonable steps to seek comparable employment, and
  2. if the employee had done so, he or she could have procured such comparable employment.

In applying this test, the judge concluded that the employer met its onus and established that Mr. Benjamin failed to reasonably mitigate his losses upon termination. Specifically, the employer provided significant post-employment job search assistance to Mr. Benjamin and other terminated employees. This assistance included outplacement counselling sessions, one-on-one coaching, and providing leads to employees about jobs.

Despite this assistance, Mr. Benjamin did not apply to the two comparable jobs that his former employer informed him about and instead chose the welding program. Accordingly, it was held that there were comparable jobs available to Mr. Benjamin that he “could have” procured but he unreasonably made the decision not to apply for such comparable jobs. Therefore, it was concluded that Mr. Benjamin’s entitlement to wrongful dismissal damages ended as of the date early June 2016 ( or the latest July 2016 when the first of the available positions was filled).

Case 2: Ms. Carpenter Mitigated Her Losses Before Returning to School

In a 2016 case, Ms. Carpenter was terminated due to financial difficulties of her employer. She was terminated at the end of May 2014 and was unemployed between July 2014 to January 2015. The judge found that during this approximately 7-month period of unemployment, she applied to over 50 positions, attended 3 jobs workshops, and three networking events. In January 2015, Ms. Carpenter chose to return to school.

The trial judge concluded that based on her 6 1/2 years of employment, the appropriate notice period was 8 months. Interestingly enough, this 8 months’ notice period took Ms. Carpenter all the way up to the time she began school, in January 2015.

This case is in contrast to the one above as the judge concluded that Ms. Carpenter had made reasonable efforts to mitigate her damages before deciding to return to school. The judge held that she was entitled to 8 months’ notice, which would take her from May 2014 to January 2015, when she stopped her job search.

Since Ms. Carpenter satisfactorily mitigated her losses, the judge concluded that she should not lose any credit for the sums due to her because of her decision to leave the workforce in late-January 2015.

Conclusion

What do these contrasting decisions mean for employees? Judges consider whether an employee acts reasonably when attempting to mitigate his or her loss. The question of when returning to school is reasonable depends on a variety of factors that range from the industry to the dismissed employee’s efforts at obtaining alternative employment to the length of time the employee looks for alternative work before enrolling in a re-training program. If you are deciding to enroll in a retraining program after a termination, it is important to consult an employment lawyer to ensure that you are complying with your duty to mitigate your damages.

If you have questions about your rights regarding termination clauses and would like more information, you can contact an employment 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.

A Change for Employees and Termination Packages: The IBM Example

By , September 7, 2018 3:48 pm

The Basics

Under the Employment Standards Act (ESA), employees who are terminated are entitled to appropriate notice of termination, which is generally a week’s worth of notice, or pay in lieu of notice, for each year worked up to a maximum of eight weeks. Not every employee is also entitled to severance.  Therefore, if you worked for a small company for twenty years, your employer might be required to give you only eight weeks of notice or pay in lieu of notice. Alternatively, the common law entitles employees to up to a month of notice, or pay in lieu of notice, for each year worked.

For this reason, many employment contracts contain a termination clause or a section that attempts to reduce the cost of terminating an employee by either introducing an alternative fixed amount or limiting what the employee can get to the bare minimums under the ESA. While termination clauses may provide you, as an employee, with security about what exactly you are entitled to should you be terminated, they are also dangerous as they can also slash the amount of money you to which you might otherwise be entitled.

Some termination clauses, however, are unenforceable: they may violate the ESA by not specifically mentioning severance pay, or be ambiguous. Because of this, many cases make their way to court.  

While the ESA outlines the minimum compensation for employees who are fired, the amount that an employee can be paid at the time of their termination can be significantly higher.  

Termination clauses have been a fiery area of employment law, and the courts have had mixed opinions on how to determine whether a termination clause is valid and lawful.  In 2017, many court decisions sided with employees because they are typically the weaker bargaining partner in an employer-employee relationship. However, in the recent case of Noah Amberber v. IBM Canada Ltd., however, the Ontario Court of Appeal ruled in favour of the employer.  This ruling sets an important precedent for judges presiding over cases where employees have taken their employer to court over potentially invalid termination clauses, and is relevant to any employee with a termination clause in their employment contract.  

Noah Amberber v. IBM Canada Ltd.

Former IBM-employee Noah Amberber argued that the termination clause in his written employment agreement, which granted him 18 weeks of salary instead of the 16 months he said he was entitled to, was unenforceable because it violated the ESA minimums, because among other things it was ambiguous.

At the first level of court, the judge agreed the termination clause was indeed ambiguously worded.  She decided it had been written unclearly, and therefore ruled in favour of Amberber.

That decision was successfully overturned in the Court of Appeal, where the judge sided with IBM that the termination clause was clear. The Appeal judge decided that, when read as a whole, the clause was decisively written. The Court of Appeal stated that the first judge “strained to find an ambiguity where none reasonably exists.”

What it All Means for You

This is an incredibly dynamic area of law that is continually changing based on the decisions of judges.  The best course of action is to try and change a termination clause before you sign it. That means seeing a lawyer once you have a new offer but before you start the job.  It also means getting advice if your employer gives you a new contract during your employment. When an employer does this, they have likely made changes to the contract try and make the termination clause better.  If you have already been terminated, with Noah Amberber v. IBM Canada Ltd. in mind, it is definitely in your best interest to figure out whether a termination clause is enforceable before signing off on a severance package by seeking advice.

While in the past, judges were more likely to rule in favour of employees because of their disadvantages in drafting the termination clause, it is likely that future rulings will be more critical of employees arguing against the validity of their contracts.  We at MacLeod Law Firm specialize in dealing with these types of situations. If you are an employee who has a termination clause in your employment contract, come and see us.

To read more about termination clauses, read on here:

If you have questions about your rights regarding termination clauses and would like more information, you can contact an employment 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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