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Posts tagged: employment lawyer Toronto

Wrongful Dismissal Update: Recent Case Law Increases Legal Uncertainty

By , January 8, 2019 10:04 am

Recently, it has become increasingly difficult for employment lawyers to assess an employer’s potential legal liability in connection with an employee termination. The law is pretty straightforward but predicting how a judge will apply the law to a specific termination is riddled with legal uncertainty.

A recent case involving a 54-year-old senior executive who earned about $275 000 a year who was terminated for just cause after 11 years service is a good case in point.

The Issues

The judge in this case decided three main issues; namely: (i) did Keddco Mfg. have just cause to terminate Scott Ruston’s employment; (ii) if not, how much notice of termination should he have received; and (iii) was Mr. Ruston entitled to any punitive damages or aggravated damages because of the way Keddco treated him?

The Law

When deciding whether an employer has just cause to terminate an employee and avoid paying termination pay, a trial judge is required to apply the test set out by the Supreme Court of Canada (the “SCC”) in a well-known 2001 case, as interpreted by the Ontario Court of Appeal in another well-known 2004 case.

If an employer cannot prove just cause, then the employee is entitled to receive reasonable notice of termination (or pay in lieu of this notice) unless the employee signed an employment contract with an enforceable termination clause. The test a judge applies to determine the appropriate reasonable notice period is set out in a 1960 court case.

Since the SCC clarified the law in 2008, trial judges have had jurisdiction to award employees punitive and aggravated damages.

The Decision

  1. Just cause: It is generally very difficult for an employer to prove just cause – especially for a long service employee with no prior discipline like Mr. Ruston. Alleging just cause and then leading very little, if any, evidence at trial really annoys judges. I believe unsubstantiated allegations of just cause results in longer reasonable notice periods, aggravated damages in some cases, and a higher cost award against the employer.
  2. Reasonable notice: Although the Ontario Court of Appeal has specifically directed trial judges not to apply the “one month notice per year of service” rule of thumb when determining the reasonable notice period, this rule of thumb has been a good place to start for employees like Mr. Ruston until the last couple of years. In this case, after an 11-day trial the judge concluded Keddco should have provided an 11-year employee with 19 months’ notice of termination or about 1.7 months per year of service.
  3. Punitive damages & aggravated damages: When the SCC issued its 2008 decision on punitive damages and aggravated damages, most employment lawyers believed it closed the door on these types of damages except in extraordinary cases. Now, however, there is much uncertainty as to whether a particular set of facts will attract punitive and/or aggravated damages. In this case, the judge awarded the employee $100 000 in punitive damages for a number of reasons including the fact that Keddco intimidated Mr. Ruston in the termination meeting,  threatened to sue Mr. Ruston for fraud, and led no evidence at trial to substantiate the fraud allegations. Keddco was also ordered to pay $25 000 in moral damages because, among other things, the employer failed to be candid in the termination interview as far as the reasons for his termination were concerned, made unsubstantiated allegations of fraud, and knew the fraud allegations would be very stressful for Mr. Ruston.

To my knowledge, this case has not been appealed.

Lessons to be Learned:

  1. Every employee should be required to sign an employment contract with a legally enforceable termination clause. In this case, the notice period could have been limited to 8 weeks in a contract, decreasing legal uncertainty. Mr. Ruston’s bonus accounted for about 41% of his total annual compensation. The termination clause can also restrict (or eliminate) the amount of bonus an employee is entitled to receive during the notice period, decreasing uncertainty. This kind of clause could have saved Keddco hundreds of thousands of dollars.
  2. An employer should not allege just cause unless it plans to lead credible evidence to substantiate the allegations. If just cause had not been alleged in this case, then the wrongful dismissal damages could probably have been decided by way of a summary judgment; not an 11 day trial. My guess is that if the parties cannot agree on legal costs, Keddco will be ordered to pay Mr. Ruston at least $100 000 in legal costs – although the cost order could be much larger.

  3. An employer should act in good faith when terminating a person’s employment. This should eliminate legal uncertainty and risk that a judge will order the employer to pay any punitive and/or aggravated damages, which totalled $125 000 in this case.  

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.

Workplace Investigations under the Occupational Health and Safety Act

By , December 11, 2018 10:17 am

The Occupational Health and Safety Act (OHSA) imposes several obligations on employers to investigate complaints of workplace harassment.  

When there is an incident or complaint of workplace harassment, OHSA requires the employer to conduct an investigation that is appropriate in the circumstances. An employer has a legal obligation to make the workplace safe so if there is any indication of behaviour that would make the workplace unsafe, the employer must address it. The investigation must be conducted by someone who has received information and instructions on how to conduct an investigation.

The OHSA requires that complaints of workplace violence or harassment, whether formal or informal, must be investigated. To reduce legal exposure and save costs, employers should ensure that at least one employee receives workplace investigation training.

When should an employer conduct an investigation?

Workplace harassment occurs when a person engages in a course of vexatious comment or conduct against a worker in a workplace which is known or ought reasonably to be known to be unwelcome. The definition of workplace harassment also includes sexual harassment.

Examples of workplace harassment include spreading malicious rumours or gossip, excluding or isolating someone socially, physically abusing or threatening abuse, making offensive comments or jokes, yelling or using profanity, constantly criticising a person, belittling a person’s opinions or displaying or circulating offensive pictures or materials.

Two of the most common examples of workplace harassment are bullying and sexual harassment.

Example 1: Bullying

A group of employees deliberately spread malicious rumours about a colleague’s personal life and make belittling comments about her physical disability. The employee does not file a formal complaint but her supervisor witnesses her colleagues engaging in this conduct.

Example 2: Sexual Harassment

An employee is subject to repeated jokes and comments about his sexual orientation. He files a complaint with his human resources representative.

What are an employer’s obligations in these circumstances?

Under OHSA, the duty to investigate will be triggered by “incidents” of workplace harassment, even if there is no formal complaint. The Code of Practice produced by the Ministry of Labour suggests that the obligation arises whenever a supervisor becomes aware of an incident, even if the supervisor fails to pass that information on to the employer.  When the employer becomes aware of an incident of harassment, a trained investigator must complete an investigation and provide the employer with a written report of the results of the investigation.

Consequences of a failure to investigate?

Failure to investigate or appointing an untrained investigator could result in the Ministry of Labour ordering the employer to hire an external investigator at the employer’s expense. External investigators are typically very costly. Further, despite their high fees, there is currently a shortage of workplace investigators.

Failing to conduct a proper internal investigation could not only have consequences under OHSA, but could also lead to costly consequences at both the Human Rights Tribunal of Ontario and the Courts.

If an employer does not have an internal investigation procedure then an employee is much more likely to file a complaint with the Ontario Human Rights Tribunal where an employer can be ordered to pay damages for failing to conduct an adequate investigation. Courts have also ordered employers to pay punitive damages for conducting faulty investigations.

Workplace investigations training

On Thursday February 14, 2019 we will be hosting a Workplace Investigation Training Session. This session will be moderated by  Monica Jeffrey of JMJ Workplace Investigation Law LLP. The cost is $399 plus H.S.T. for the day. Registration is limited. If you are interested in attending please contact us at 647) 204-8107 or at [email protected]

Employer Update: Police Record Checks

By , November 14, 2018 4:03 pm

Employers who actively use police record checks as a part of the hiring process need to be aware of recent changes. Starting November 1, 2018 changes made under the Ontario’s Police Record Checks Reform Act will be in force. Previously, police record checks were not regulated in Ontario. With the new Reform Act in force, the police record checks process becomes standardized across Ontario for all employers.

This Reform Act covers:

  • Criminal records check,
  • Criminal Record and Judicial matters checks; and
  • vulnerable sector checks.

The Reform Act now requires consent at two stages of police record checks. The first stage includes consent from the employee to conduct the particular type of check and the second stage requires consent to the police record check provider to provide a copy of this results to the employer.

These changes also limit the information given to employers upon conducting a police record check to what is necessary and relevant. Information such as mental health detentions and non-conviction information will not be disclosed unless deemed necessary. Unless the check reveals information that meets the criteria for “exceptional disclosure” it will not be disclosed. The criteria for an exceptional disclosure are as follows: 1) the offence is listed in the Regulations 2) the alleged victim was a child or a vulnerable person 3) the police record check provider has reasonable grounds to believe the individual presents a risk of harm to a child or vulnerable person.  

Lessons for Employers

  • If employers are directly engaged in conducting police record check, they must ensure consent is received at both stages in the process.
  • The record check process will likely take longer given that the individual must approve the release after reviewing the result.
  • Not being aware of these policies will be costly to employers, note that any employer or person that willfully contravenes certain sections of the Reform Act can be liable for a fine of up to $5,000.

If you have any questions about employee hiring or police record checks, you can contact MacLeod Law Firm at 647-204-8107 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.

“We’re Getting Rid of Bill 148”, says Premier Ford

By , October 3, 2018 10:34 am

After two years of public consultations, the Liberal government introduced many changes to the Employment Standards Act in November 2017 but delayed implementing several of these changes until 2019. The changes were contained in Bill 148.

During the election campaign, Premier Ford said he would stop the $ 1 an hour increase in the minimum wage that is currently scheduled to take place on January 1, 2019. But based on statements he made in the legislature yesterday, it looks like he may be rolling back other Bill 148 changes.

This is yet another example of a government changing the legal landscape at Ontario’s workplaces. Judges and administrative tribunals also impose new obligations on employers each year.

Every two weeks I blog about a recent employment law development but every year I pick three issues that I believe deserve special, in-depth attention.

Our Annual Employment Law Seminar

On October 23rd and October 24th, the MacLeod Law Firm will cover three important workplace issues at half-day seminars in Toronto and Barrie.

What Topics Are We Covering This Year?

(i) The Impact of Legal Recreational Cannabis in the workplace

In about two weeks, the federal government is legalizing the sale of recreational cannabis. Each province is going to decide how to sell cannabis and introduce laws that will prohibit a person from ingesting more than a prescribed amount of cannabis and driving. In the last week, Ontario has introduced such a law. We will discuss the components of a workplace policy that addresses recreational cannabis use.

(ii) Rolling Back Bill 148

Yesterday, Premier Ford signalled that legislation is coming that will roll back some parts of Bill 148. We will discuss the fate of the proposed increase in the minimum wage, recently introduced paid personal emergency leave days, and new scheduling, on call, and pay transparency laws that are scheduled to take effect on January 1, 2019.

(iii) Ontario’s Human Rights Minefield

The Human Rights Tribunal of Ontario has released a number of decisions this year which could significantly impact your employment practices. One decision may force employers to extend group extended medical benefits to employees who are over 65 years old. Another decision will force some employers to change the way they hire employees from different countries. We will discuss what these decisions mean to you.

Click here for more information on this seminar.

Who Should Attend Our Seminar

If you are responsible for HR issues at your workplace or you have to deal with employment issues as part of your job or you are ultimately responsible for paying monies to settle employee complaints, then you will benefit from attending this seminar.

The cost of this seminar is $199 plus H.S.T. 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.

Employment Law Update: Mid-Year Report

By , June 26, 2018 3:34 pm

In this blog, as we enter the dog days of summer, I will review five current trends and developments in Ontario’s employment laws.

1.  A New Sheriff is in Town: The PC party has replaced the Liberal party as Ontario’s governing party

I anticipate this change in government will result in less government regulation of Ontario’s workplaces. During the election campaign, Doug Ford promised not to increase the minimum wage from $ 14.00 to $ 15.00 on January 1, 2019. I will let you know in a future blog whether he keeps this promise.

In the meantime, two laws the Liberal government introduced are scheduled to take effect on July 1, 2018 and January 1, 2019.

One law changes the way public holiday is calculated. Bill 148 changed the way public holiday pay was calculated, however, effective July 1, 2018, public holiday pay will once again be calculated using the formula that applied prior to the coming into force of Bill 148. In other words, the employee’s public holiday pay for a given public holiday will be equal to the total amount of regular wages earned and vacation pay payable to the employee in the four work weeks before the work week in which the public holiday occurred, divided by 20.

The second law will require an employer to provide salary information to job applicants and prohibit employers from asking job applicants about their salary history. In particular, on April 26, 2018 the  Pay Transparency Act was passed. Unless Doug Ford repeals this law, on January 1, 2019 all employers will be prohibited from either directly/ indirectly asking candidates about past compensation, they will be required to post a compensation rate or range for all publicly advertised job postings, and they will be prohibited from reprising against employees who make inquiries about compensation practices.

Last year, the Liberal government announced it was hiring 175 employees to make sure Ontario employers are complying with the Employment Standards Act. Many of these people have now been hired, and trained and are conducting inspections of Ontario’s workplaces. The government has stated it intends to inspect 1 in 10 Ontario workplaces each year.

For more information on how we help employers comply with the Employment Standards Act, click here

2.Cannabis Use Will Be Legal On October 17, 2018

The federal government has announced that cannabis use will be legal on October 17, 2018. In the meantime, the Ontario government must decide how to regulate the sale of cannabis in Ontario. Employers need to decide whether or not to introduce or amend a drug and alcohol use policy. An employee who is impaired at work can be a health and safety problem particularly if the employee is working in a safety sensitive position. Drug testing to address this issue is, however, an extremely controversial and complex legal issue. In fact, a number of drug testing cases have been appealed to the Supreme Court of Canada.

To assist employers with this issue, we can draft a drug use policy for a fixed fee.

3. It Is Increasingly Difficult To Predict Whether The Courts Will Enforce A Termination Clause

I have been writing about this issue for a number of years. Despite numerous Ontario court cases including several Court of Appeal decisions I still cannot predict with any degree of certainty whether a termination clause will be enforced. In 2017, the Court of Appeal in North v. Metaswitch Networks Corp. basically overturned its 2016 decision in Oudin v. Centre Francophone de Toronto on the same issue. In the 2018 decision in Nemeth v Hatch Ltd, the Court of Appeal  found that the following clause was enforceable:The Company’s policy with respect to termination is that employment may be terminated by either party with notice in writing. The notice period shall amount to one week per year of service with a minimum of four weeks or the notice required by the applicable labour legislation. Most employment lawyers including myself were surprised by this decision.

We will review and draft needed changes to your employment contract including the termination clause for a fixed fee. For more information on our employment contract service, click here

4. Notice Period For Older Senior Managers May Be Trending Upwards

Since 1960, Ontario judges have been applying the Bardal factors when determining the appropriate reasonable notice period in wrongful dismissal cases. The age of an employee and the employee’s position are two factors that are taken into account.

A couple of 2018 decisions suggest that Ontario judges may be increasing the notice period for older, senior, relatively short service employees. In Chambers v. Global Traffic Technologies Canada Inc a 57 year old general manager with 2.5 years service was awarded 9 months pay in lieu of reasonable notice. In Hale v. Innova Medical Ophthalmics Inc. a  59 year old President with 6 years and 8 months of service was awarded 18 months termination pay. To reduce the litigation risk associated it is a good idea to require these kinds of employees to sign an employment contract with a termination clause – if you can figure out how to draft an enforceable termination clause!

5. The Cost Of Health & Safety Violations Is Likely Going Up

The Ministry of Labour investigates most “critical injuries” as that term is defined under Ontario’s Occupational Health & Safety Act (“OHSA”) and the Ministry often charges an employer for a violation of OHSA in connection with such an accident. Fines for relatively minor injuries often exceed $ 50 000. On December 17, 2017,  the maximum fine for a breach of OHSA increased from $ 500 000 to $ 1 500 000. The Ontario Court of Appeal has stated that deterrence and the size of an employer are two factors that trial judges should take into account when determining fines under OHSA. In the future, I therefore expect the Ministry of Labour will be looking for larger fines from large profitable employers when negotiating plea bargains.

We help employers comply with OHSA. For more information on our fixed fee service, click here

For 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.

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