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Posts tagged: employment law toronto

Valuing Employee Pensions in Wrongful Dismissal Cases: A Boring but Important Issue

By , November 6, 2018 10:18 am

A long service, older worker is terminated. Under the terms of the individual’s pension plan, the employer is not permitted to continue his participation in the pension plan. So the question arises: when calculating wrongful dismissal damages, how do you calculate damages for pension benefits?

A recent case considered this question.

The Facts

Imperial Oil Ltd. terminated Donald Dussault’s employment after 39 years of service when he was 63 years old. Imperial Oil immediately discontinued Mr. Dussault’s participation in its pension plan and Mr. Dussault decided to start collecting his pension benefits.

A judge concluded that Mr. Dussault was entitled to compensation in lieu of 26 months’ notice of termination. One component of his compensation was his pension.

Commuted Value of Pension

Imperial Oil called an expert witness who concluded that Mr. Dussault’s pension was worth $189,117 more than if Imperial Oil had kept him in its pension plan for the 26-month period after his termination. Mr. Dussault did not call an expert witness of his own on this issue.

Employee Claim for Damages for the Employer’s Contributions to his Pension During Notice Period is Denied

Since Mr. Dussault would have been enrolled in the pension plan if Imperial Oil had provided him with 26 months’ notice of termination, and since Imperial Oil would have made contributions to his pension during this notice period, Mr. Dussault sought damages equal to these contributions. The court concluded that the value of his pension was higher than if Imperial Oil had continued paying into his pension plan until the end of the 26-month notice period. However, the court refused to order the requested damages because Mr. Dussault could not prove any damages.

Employer Claim to Reduce Employee Damage Award by the Value of the Pension Benefits he Received During the Notice Period is Denied

Mr. Dussault collected pension benefits during the 26-month notice period. Imperial Oil asked the judge to deduct this amount from Mr. Dussault’s wrongful dismissal damages. However, the judge refused to do, concluding that pension benefits are a benefit employees have earned for their years of service and are not meant to be an indemnity for the loss of employment.

Lessons to Be Learned

  1. Every employer should require all employees to sign an employment contract with a legally enforceable termination clause. In this case, Imperial Oil could have reduced a 26-month common law reasonable notice period to as little as 8 weeks’  termination pay and 26 weeks’ severance pay. This is another case where a judge concluded that the common law notice period was more than 24 months.
  2. For long-service employees who are entitled to a lengthy common law reasonable notice period, damages for a reduced or an enhanced pension can be significant. I have represented clients who have not taken pension benefits during the notice period and the value of lost pension value (as opposed to an enhanced pension value in this case) has been significant.
  3. When valuating pension benefits, it is important to retain an expert. A slight change in actuarial assumptions can result in significant differences in a pension’s valuation.

For almost 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.

Bill 148 (aka Wynne government changes to the Employment Standards Act) Bites the Dust

By , October 25, 2018 9:31 am

On Tuesday afternoon, the Ford government tabled legislation Bill 47 – Making Ontario Open for Business Act, 2018 which will repeal some of the recent changes to Ontario’s Employment Standards Act, 2000 and eliminate new statutory obligations that are scheduled to be imposed on employers on January 1, 2019.

Although Bill 47 must go through the legislative process, the Ford government has a majority of seats in the Ontario legislature so I expect the changes will take effect on January 1, 2019 when many of the Bill 148 changes are scheduled to become law.

Roll backs

The two paid personal emergency leave days that were introduced by the Wynne government in the past year will be eliminated.

The public holiday pay calculation for part-time employees that was in effect before Bill 148 will become law again.

Equal pay for equal work for substantially the same work regardless of employment status will be repealed. So there will generally be no obligation to pay part-time employees the same rate as full-time employees for performing substantially the same work.

The prohibition for asking an employee for a doctor’s note to prove sickness will be repealed.

The presumption that a person is an employee as opposed to an independent contractor if an individual claims he or she is an employee will be eliminated.

Pending laws that will not take effect

The minimum wage will not increase to $ 15 per hour on January 1, 2019, as scheduled, and there will be no cost of living increase in the minimum wage until October 2020.

The new scheduling rules will not take effect.

The new on call pay rules will not take effect.

An employee’s right to request changes in work hours or work location will not take effect.

An employee’s right to refuse scheduling changes with less than 4 days notice will not take effect.

The requirement to provide an employee with 3 hours pay if a shift is cancelled with less than 48 hours will not take effect.

Changes to the Employment Standards Act

The ten days personal emergency leave will be eliminated under Bill 47 and replaced with three days Sick Leave, three days Family Responsibility Leave, and two days Bereavement Leave for a total of eight days. These eight days are unpaid.

Bill 47 also includes changes to the Labour Relations Act, and the Ontario College of Trades and Apprenticeship Act.

A bill is often sent to a committee after Second Reading and Bill 47 could change after that process, but I doubt there will be any changes to this bill. But stay tuned; I will provide updates on this proposed employment law as we get closer to January 1, 2019.

For almost 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.

Does an Unpaid Suspension Constitute a Constructive Dismissal? Sometimes

By , September 11, 2018 10:06 am

Employers are increasingly suspending employees when allegations of misconduct are made against an employee. This includes allegations of sexual or workplace harassment and allegations of financial improprieties. If such a suspension constitutes a wrongful dismissal then these suspensions can expose employers to significant legal liability.

General Rule

According to Ontario’s Court of Appeal, an unpaid administrative suspension generally triggers a constructive dismissal “unless it (is) an express or implied term of the contract that the employer (can) suspend an employee without pay.”

A Case Study

A recent court case considered the suspension of a security supervisor at a casino. The employee needed to maintain a valid gaming registration from a government agency as a condition of employment. The casino’s Security Department was responsible for managing the casino’s lost and found processes, which include the collection of property and money from the casino’s facilities. The government agency that issues the required gaming registrations told the security supervisor that he was under investigation for theft in relation to the lost and found department but noted that no criminal charges had been laid.

One of the policies in the casino’s handbook stated:

Investigative Suspension may be used as part of the coaching and counselling process to verify allegations of misconduct.  During an investigation, the Associate may be prohibited from working. If a decision is made to separate the Associate’s employment, he or she may not be reimbursed for time spent on Investigative Suspension.

The casino immediately suspended the employee without pay.

The employee was subsequently charged criminally and the casino suspended its investigation into the allegations against the employee until the criminal charges were concluded. About 15 months later, the employee surrendered his gaming registration. Shortly thereafter, the casino wrote the employee and told him that in light of the requirement that he maintain a valid gaming registration, “his employment was at an end since he had surrendered his gaming registration.”

Is an Unpaid Suspension Legally Permitted? The Legal Test

The trial judge concluded that the employee’s suspension was clearly justified in the circumstances. The issue to decide was whether the casino could justify an unpaid suspension.

When considering this issue, the court applied the following test:

… absent express language in the employment contract stipulating that any suspension would be without pay, the burden rests on the appellant to establish that a suspension without pay was justified.  If the appellant cannot justify a suspension without pay, then taking that step amounts to a unilateral change in the employment relationship that constitutes a breach of the contract of employment.

Can a Paid Suspension be Converted into an Unpaid Suspension?

The court also discussed at what point a paid suspension can morph into an unpaid suspension.

While there might have been a point later in time when the suspension of the respondent without pay could have been justified, depending how matters unfolded, there was an insufficient foundation for a suspension without pay on December 19, when the respondent was told he was suspended and escorted out of the premises.  In my view, when the appellant suspended the respondent without pay on December 19, it made a unilateral change to the employment relationship and breached the implied term of the employment contract that the power to suspend without pay would not be exercised unreasonably.

The trial judge and the appeal court concluded the unpaid suspension constituted a constructive dismissal in this case and awarded the employee damages in lieu of reasonable notice of termination.

Lessons to Be Learned:

  1. An employer does not generally have an implied right to suspend an employee without pay during an investigation.
  2. An employer should therefore include a term in its employment contract giving it the right to suspend an employee with or without pay during an investigation.
  3. An employer should not impose an unpaid suspension unless there is evidence of employee misconduct. Accordingly, absent extraordinary circumstances, an employer should generally investigate the misconduct allegations that trigger the employee suspension promptly. If evidence of misconduct is found to exist, an employer may be able to quickly convert a short paid suspension into an unpaid suspension.

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 MacLeod Law Firm’s 2018 Employment Law Seminar: A ½-Day of Ford, Cannabis & Human Rights

By , August 28, 2018 9:52 am

Subscribers to this blog receive a brief description of a new employment law development every two weeks.

Some topics however deserve more than a cursory discussion. We have selected three such topics to cover in a ½ day seminar on October 23rd in Toronto and on October 24th in Barrie.

Here is a brief summary of the three topics we will be discussing at this seminar:

The legalization of the cannabis

On October 17, 2018, Canada is scheduled to become the second country on earth to legalize cannabis. The federal government could have simply decriminalized cannabis use but it went further and established a framework for the legal sale of cannabis. Each province will decide how to distribute cannabis, how to amend impaired driving laws, and set the price of cannabis.

It is important that each employer understand its rights and obligations under the new cannabis legislation and to set and enforce expectations with respect to cannabis use and impairment in the workplace including employees who have been prescribed medical marijuana.

We will discuss issues that should be addressed in a workplace drug policy.

The employment law landscape is changing under the new PC government

The Progressive Conservative government has stated that Ontario is open for business and we expect this will mean less regulation of Ontario workplaces and it may mean that certain legislation will not be implemented as expected. For example, during the provincial election campaign, leader Doug Ford stated that a $1 per hour increase in the minimum wage will not take effect on January 1, 2019 as planned. There are a number of planned amendments to the Employment Standards Act that are scheduled to take place in 2019 and we believe the PC government may delay or scrap some of these proposed changes.

We will discuss what laws the PC government has introduced as of mid-October and identify which laws will not be enacted in 2019 as originally planned.

The human rights landscape is changing

The Human Rights Tribunal of Ontario processes thousands of applications each year and issues decisions that affect all employers. These decisions can provide guidance to employers such as its decisions on what an employer must do to satisfy its duty to accommodate an employee with a disability. Did you know that an adjudicator recently concluded that a law which allows an employer to provide an employee over 65 years old with lesser health benefits than a younger worker was unconstitutional? Does your group health plan permit this kind of age discrimination?

We will discuss the most significant human rights decisions in the last year and what they mean to employers.

The cost of this seminar is $199 plus HST. To register, please email [email protected] or call 647-204-8107.

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.

Can An Employee’s Off-Duty Behaviour Constitute Just Cause for Termination?

By , August 8, 2018 12:34 pm

We receive calls from employers asking whether they can terminate an employee for off duty conduct. Unfortunately there is not an easy answer. This blog discusses two cases of similar off-duty conduct. A judge found the employer did not have just cause to terminate in one case whereas in the other case the judge concluded the employer did have just cause.

Case Where Off-duty Conduct Did Not Amount to Just Cause

In a 2018 decision, a judge concluded that driving a Company vehicle while impaired was not just cause for termination.

Mr. Klonteig worked with the City of West Kelowna (“the District”) as a firefighter and later as the Assistant Fire Chief. He had an unblemished employment record and it was undisputed that he was an exemplary and valued employee.

After 13 years of employment with the District, Mr. Klonteig was terminated based on an off-duty incident of driving while impaired. Mr. Klonteig was driving home in the vehicle allocated to him as an Assistant Fire Chief. This vehicle was a pick-up truck and there were no policies restricting its personal use. The only indicator that it belonged to the District at all was a fleet number on its rear. Mr. Klonteig was pulled over for suspected impaired driving and failed two roadside breathalyzer tests. The District vehicle was impounded and Mr. Klonteig received a 90-day administrative driving prohibition.

That same day, Mr. Klonteig reported the incident to the District’s Chief and a human resources advisor. Mr. Klonteig was sent home and he believed he was simply suspended from work. However, once the District’s Chief Administrative Officer, Mr. Johnson, was informed of the incident, he exercised his discretion to terminate Mr. Klonteig’s employment. Mr. Johnson chose termination despite the advice of two senior managers because of his concern for potential liability and public safety.

Mr. Klonteig was provided with a cheque for his outstanding unpaid wages, a payout of his accrued vacation time, and a promise of a written reference letter.

The District alleged that the incident was serious enough to amount to just cause for termination, while Mr. Klonteig submitted that he was wrongfully terminated.

The BC Supreme Court agreed with Mr. Klonteig that his dismissal was wrongful and found that the District did not have just cause to terminate him.

Case Where Off-duty Conduct Amounted to Just Cause

The facts of the Klonteig case can be contrasted with a 2012 Ontario case we previously discussed  here.

In this case, Mr. Dziecielski was an employee of the Company for 13 years and had no history of misconduct or performance issues. Mr. Dziecielski borrowed a company vehicle without permission and crashed it while under the influence of alcohol. The vehicle was destroyed and the employee sustained life-threatening injuries. Based on the test that judges apply when deciding whether just cause for termination exists, the judge found the employer was justified in terminating the employee for just cause.

The Test for Determining Whether Just Cause Exists

A judge will adopt a contextual approach when determining the degree of misconduct that will justify summary dismissal. One must look at both the circumstances surrounding the misconduct and the nature of employment relationship. Further, the principle of proportionality is vital; balance must be struck between the severity of the employee’s misconduct and the sanction imposed.

Judges have found that in order for off-duty conduct to amount to cause, the conduct must be or be likely to be prejudicial to the interests or reputation of the employer.

Application of the Test in the Klonteig Case

Mr. Klonteig was found not to be representing his employer when he was stopped for impaired driving. The vehicle he was driving was essentially unmarked and his conduct was not considered to be of the same high moral reprehensibility as some of the cases cited by the District. Further, the court pointed out that Mr. Klonteig’s role was more administrative so he was not the public face of the Fire Department, nor was the public aware of his administrative suspension.

Based on the fact that Mr. Klonteig’s conduct did not cause his fellow firefighters to lose confidence in him, the court concluded the public would be unlikely to do so either. All in all, Mr. Klonteig’s off-duty conduct was not incompatible with faithful discharge of his duties, nor was it prejudicial to the interests or reputation of the District.

Application of the Test in the Dziecielski Case

The employee in the second case was charged with a number of criminal offences related to drunk driving. The judge stated that the employee was guilty of serious misconduct and discussed the problem of drunk driving in our society. He noted that the employee’s conduct was prejudicial to the employer’s business as the employer’s goodwill and reputation could have been significantly affected. Further, the employee had signed an Employee Handbook that made it clear consuming alcohol on the job could result in termination of employment because it is a violation of a serious workplace rule. Based on the context of this case, the judge concluded that this single act of drunk driving was enough to constitute just cause for dismissal.

What These Conflicting Cases Mean for Employers

The differing outcomes in these two cases show how important it is for employers to thoroughly assess the circumstances surrounding misconduct in its entirety before terminating an employee for just cause for off-duty conduct.

As can be seen from the cases discussed in this blog, although the test applied by the the courts is consistent, outcomes are determined on a case-by-case basis. Driving a company vehicle can amount to just case in some cases but not others.

If you are considering disciplining or terminating an employee for off-duty conduct, you can reach one of our lawyers 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.”

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