Workplace Wire - Connecting Employers to Developments in Labour, Employment & Pension Law

Trillium Lakelands District School Board v Elementary Teachers’ Federation of Ontario is a labour arbitration award of interest for employers, notably those in the education sector, who face the “headache” of dubious sick leave claims. It is a decision that is not insensitive to the realities facing employees who suffer disabling conditions. But it is also a case that is steeped in common sense and reminds us of the need for personal responsibility in certain situations.

A teacher suffered a migraine headache on her last day of vacation (in Rome, Italy) and as a result missed her flight home, which in turn caused her to miss her first scheduled day of work following her vacation.

After investigation the Employer decided not to treat the absence as a disciplinary matter. However it denied the teacher a paid sick day. A grievance ensued, which went to arbitration.

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I had the pleasure of attending a lunch with the Honourable Vic Toews, Federal Minister of Public Safety, this weekend in Kelowna, British Columbia.  The speech addressed various cross-border issues, including the future of labour mobility between Canada and its major trading partners. 

During the speech Minister Toews discussed the current free trade negotiations between Canada and the European Union.  The two economic partners have been involved in a prolonged negotiation process over the past few years known as the Canada-European Comprehensive Economic and Trade Agreement ("CETA").  The CETA talks have however accelerated over the past year and the Federal Government has indicated that they hope to have a final framework agreement in place by the end of 2012.  

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Employee-driven class action claims continue to be a hot topic in Ontario.  Typically, the critical issue for class action certification in the employment-context is the “common issue” requirement – is there a common issue among the plaintiffs capable of being determined on a class wide basis that would sufficiently advance the litigation to justify certification.

Recently, in Kafka v. Allstate Insurance Company of Canada (“Kafka”), the Ontario Divisional Court confirmed that the common issue requirement will not be met in claims of constructive dismissal.  These types of claims are not appropriate for class action certification as they require an individualized inquiry to determine whether the employer has made a unilateral and fundamental change to the terms of each employment relationship.  What is a fundamental to one employee may be minor to another; consequently, individual circumstances and individual reactions must be considered before a determination of constructive dismissal can be made.

In Kafka, Allstate provided its employees with two years’ advance notice of a significant change to its business model which altered its agents’ compensation structures as well as their responsibilities. Approximately 100 Allstate employees were impacted by these changes, but the employees’ reaction to the changes varied.

Some employees accepted the changes, others negotiated further changes, and others resigned.  These varying reactions highlight the need for an individualized assessment.  If Allstate’s employees had unanimously responded to the changes by walking off the job and claiming constructive dismissal, the court may have reached a different conclusion regarding commonality.

The Kafka decision also comments on an employer’s ability to avoid a constructive dismissal claim by providing sufficient advance notice of a fundamental change to the terms of employment.  The plaintiffs in Kafka argued that an employer could never effect a unilateral and/or fundamental change with any amount of advance notice, but, instead, an employer is obligated to terminate the employees and then offer to rehire them on the amended terms of employment.  As support for this position, the plaintiffs cited the Ontario Court of Appeal’s decision in Wronko v. Western Inventory Service (“Wronko”). 

The circumstances of Wronko, however, were very different from those in Kafka.  In Wronko, the employee specifically objected to the employer’s unilateral change, but there was ambiguity regarding the employer’s response to this objection.  On the basis of this ambiguity, the court found that the period of time between the announcement of the change and the employee’s resignation could not be characterized as a working notice period.

The court confirmed in Kafka that the circumstances of Wronko were unique and the decision very fact specific.  While notification of termination is required in circumstances where an employee objects to a fundamental change, no such requirement exists where an employee either specifically accepts the change or is silent following notification of the change.   When announcing a fundamental change to the terms of employment, a clear and unambiguous announcement that provides ample notice of the change will serve an employer well.  But employers should also take note that an equally clear and unambiguous response must be made when faced with an employee’s objection to the change.

While perhaps one needs to give them credit for chutzpah, the CAW's recent proposal for protecting the automotive sector from foreign competition seems motivated by a desire to return to the past, or at least to postpone the future.

No doubt, the economy is undergoing wrenching structural change, and institutions that grew and prospered under the old economic rules are having a difficult time adapting.  The CAW – and private sector unions in general – are one of those institutions. 

Outside the public sector, and especially in manufacturing, union membership has fallen, and is not being replaced with new blood.  New union applications for certification in the Ontario manufacturing sector have fallen by about 85% since 2000-1.

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Employers have reason to worry about a recent decision from the Court of Appeal for Ontario which allowed an employer to sue an employee in Ontario even though the employee had few connections with the province.

Employees will likely be allowed to sue their employer in Ontario even though they are employed abroad and have very few ties with the province. The Court of Appeal in Dundee Precious Metals Inc et al v Marsland et al, 2011 ONCA 594 determined that coming to Ontario for meetings a few times a year was enough to expose an employee to lawsuits in the province.

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With the media covering the suspension of the manager of the Florida Marlins for his ill-advised praise of Fidel Castro, and employers asking for their employees' Facebook passwords, the question of freedom of speech at work is once again in the news.

Canadians enjoy a constitutional right to freedom of expression.  Does this mean that we have an unfettered right to say what we want at work, or about work? 

No.  There are countless examples of employees being disciplined or fired for saying things that are offensive to the employer or inappropriate in the workplace.  Obvious examples would be the utterance of sexist or racist epithets, abusive language, or public criticism of the employer or its management (except when that criticism is protected by "whistleblower" laws, intended to allow employees to report illegal activities). 

The situation involving the Florida Marlins manager takes it a step further – he has been punished for uttering sentiments that are offensive to the community, but not necessarily to anyone in the workplace or even the employer.

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The federal government's budget last week announced an increase to the retirement age for Old Age Security benefits, from 65 to 67.  It also proposed to modestly scale back public service pensions, including an increase to the retirement age from 60 to 65 for those who join the federal public service after 2012.  The changes introduce a degree of imbalance to the Canadian retirement system.  The three pillars of our system will no longer be integrated.  Read more about the pension and benefit aspects of the federal budget in our latest Pension Pulse.

We strive to bring you the most recent and significant updates in labour, employment, and pension law, but sometimes (particularly on a Friday) we like to bring you something a bit more light-hearted.  Rhonda’s poem about the tort of intrusion upon seclusion was a great example.

This one is from the creative discipline file. According to a UK newspaper, the Milan flagship store of a fashion retailer—equally well known for the physical appearance of its staff and its racy advertising as its clothing—has instituted a novel disciplinary measure.  Male staff members who fail to properly greet customers or to follow supervisors’ instructions are required to do 10 push-ups.  Female staff members are required to do 10 squats.

It is an interesting approach to discipline and perhaps it helps to maintain the renowned/reviled physique of the company’s staff, but it is not one we would recommend here in Ontario.  If you are looking for some legal (if less creative) information about progressive discipline, consider registering for our Managing the Workplace seminar on discipline.

The Government of Ontario has taken another step towards the implementation of Bill 160, the Occupational Health and Safety Statute Law Amendment Act, 2011 by beginning the process of appointing members to the Prevention Council. 

The Prevention Council was created by Bill 160 to advise the Minister of Labour on the appointment of the Chief Prevention Officer and thereafter, to advise the Chief Prevention Officer on the exercise of his duties under the Occupational Health and Safety Act. These duties include, among other things, the prevention of workplace injuries and occupational diseases, the development of a provincial occupational health and safety strategy, and other matters assigned by the Minister of Labour.

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The BC Court of Appeal says: Quit when given inadequate working notice of termination and still sue for wrongful dismissal;

Facts:

Part time bus driver employed for 5 years is provided written notice of termination of 5 weeks.   

Bus driver leaves the day he was provided working notice and refused to work out his notice.   

Bus driver sues for wrongful dismissal. 

Company says bus driver quit and has no cause of action.

The BC Court of Appeal says:

The bus driver can still sue because the insufficient notice constituted a breach of contract by the employer creating a cause of action for wrongful dismissal.   Even though the bus driver's failure to work the notice itself constituted repudiation bringing employment to an end, the bus driver's repudiation did not take away his cause of action for damages for being provided insufficient notice.   The driver was entitled to damages for the difference between the working notice period that the employer had offered and what the Court determined was his reasonable notice period. 

Its noteworthy that the Court's theory is not based on inadequate notice constituting constructive dismissal. In fact, the Court found that the employer had not constructively dismissed the bus driver by providing inadequate notice.  Rather, the Court reasoned:  "although [the bus driver's] repudiation ends the ongoing rights and obligations of parties under a contract, it does not affect rights and obligations that have accrued.  In the present case, the [bus driver's] right to damages in lieu of reasonable notice had accrued when he was given inadequate notice.  His repudiation did not take away that right and it did not take away the right of the [employer] to the [bus driver's] services during the period of notice given."  Consequently, the driver was entitled to damages for the difference between the working notice period that the employer had offered and what the Court determined was his reasonable notice period.

 Concerns:

Previous caselaw in B.C. had established that when an employer gives working notice of termination, the employer has the right to the services of the employee, meaning that the employee must remain ready and willing to carry out the contract of services until the end of the notice period. The BC Court of Appeal has departed from that view and said that although the employee's early departure was improper, it only reduced the amount of damages they could recover rather than depriving them of the right to sue the employer at all.

Determining an employee's reasonable notice period is not an exact science.   Judges exercise discretion in assessing a notice period and their assessment is often influenced by the job market and other factors that an employer cannot predict with any great certainty at the time of termination. The employer knows the range in which the employee's notice period is likely to fall, but the exact notice period will be determined many months - sometimes years - later by the court. According to the B.C. Court of Appeal's approach, if an employer is off on notice by a week, the employer can be deprived of the benefits of working notice.  It's a bit of a game of chicken.  This places employers in a difficult position in the event that they need the employee to work through all or part of their notice period. 

While most employees will choose not to give up the financial benefit of notice, termination is an emotional event and decisions are not always made rationally.  This can place an employer in a tough spot.  Imagine a situation where an employer terminates the employment of a highly skilled long term employee and provides a combination of one month's working notice and a lump sum payment in lieu of the remaining notice period.  From the employer's perspective, the month of working notice is critical to structure a transition period prior to the employee's departure.  An angry employee might be all too willing to give up 1 month of a lengthy notice entitlement by quiting immediately out of anger, frustration or embarrassment.  The employer, as a result, is deprived of the ability to effectively transition the terminated employee's work. 

I wonder if this case will bring back a discussion of "ball park" notice periods?  Certainly the doctrine creates one more incentive to avoid giving working notice. 

Read the case at:  http://canlii.org/en/bc/bcca/doc/2012/2012bcca18/2012bcca18.html