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

The Ontario Human Rights Tribunal is in the midst of hearing a case involving a Jamaican citizen who died while working in Canada as a temporary agricultural worker.   

The worker died in August 2002 after a farm skid fell on him.  At the time of his death, he was working for a tobacco farm just outside of Brantford, Ontario.   

Although local police investigated the circumstances surrounding the worker's death, the family of the deceased worker believes that there remain many unanswered questions.  The family accordingly requested that a coroner’s inquest into his death be conducted.  This request was refused. 

The family claims that the refusal to conduct an inquest violates the Ontario Human Rights Code because it disproportionately discriminates against seasonal agricultural workers, a large number of whom are foreigners.  The family specifically argues that a coroner's inquest should be mandatory in deaths involving seasonsal agricultural workers.  Currently coroner inquests are only mandatory in cases involving deaths in construction, mining, or quarry work. 

The Toronto-based non-profit group Justice for Migrant Workers is representing the deceased worker’s family. They believe temporary foreign workers are not accorded the same protection as Canadians and permanent residents when it comes to employment standards and health and safety protection. They also claim that temporary foreign worker live in Canada in a precarious state with significantly less security than local workers.

According to Human Resources and Skills Development Canada 14 agricultural workers died at work between 1996 and 2002. 

We will provide updates to this case as the hearing continues and more information becomes available.

For further information please do not hesitate to contact the writer at ssultan@heenan.ca or 416-7774175.

A federal court this week will hear a challenge of the decision of Human Resources and Skills Development Canada (“HRSDC”) to allow 201 Chinese workers into Canada. 

The case involves HD Mining, a Vancouver-based mining company, which came under intense public scrutiny for its hiring of hundreds of Chinese nationals to work at its Murray River Coal project, a major coal mining project in northern British Columbia.  The company was initially granted approval by Human Resources and Skills Development Canada (“HRSDC”) to have over 200 Chinese workers enter Canada to work in developing the mine. 

Two prominent labour unions, the International Union of Operating Engineers (the “IUOE”) and the Construction and Specialized Workers' Union (the “CSWU”), charge that HD Mining did not follow the proper procedure in hiring foreigners.  The unions specifically argue that HD Mining did not make enough efforts to find Canadians for these jobs and that accordingly, the decision of HRSDC was improper. 

In securing permits for the Chinese workers, the company applied to HRSDC in British Columbia for positive Labour Market Opinions (“LMOs”). Approval from HRSDC is a necessary prerequisite to the entry of most foreign workers into Canada’s labour market. This process involves an assessment of the local labour market to determine whether allowing a foreigner to work in Canada is justifiable in the circumstances, such as where there is a shortage of skilled labour.

The unions argue that HD Mining was presented with several qualified Canadians who were more than capable of doing the jobs needed. The unions also accuse HD Mining of acting inappropriately in not interviewing or otherwise seriously considering local applicants. The unions specifically point to the fact that HD Mining received approximately 230 resumes from Canadians or Permanent Residents, but hired only 12 to support their claim that the company did not make sufficient efforts to hire locally.   

The federal court will now have an opportunity to weigh in on the matter.  The court’s decision will be closely followed as it will likely set an important precedent in the law applicable to the hiring of foreign workers.   

What does this mean for employers?

This case is important for any employer that has ever or may ever hire foreigners.  The number of temporary foreign workers has exploded in recent years, in part because of the prominent and growing skills labour shortage in Canada.  This decision could accordingly have serious implications for employers who are struggling to find practical strategies to secure the right skills for their labour force. 

We will continue to monitor this case and provide updates and analyses as more information becomes available.   

For more information please contact Sharaf Sultan (ssultan@heenan.ca) or at (+1)416-777-4175. 

Who wants to get fired?

This question is the tag line on the website FireMe! (Warning: language may be offensive to some readers).  FireMe! tracks, categorizes, and estimates the likelihood that a tweet (the 140 character micro-blogs that users publish on Twitter) could get the tweeter fired if his or her boss reads the tweet.  The tweets that are most likely to get a user fired are published on the leader board, which includes such bon mots as “I already hate my job” and “please fire me”.

FireMe! also allows users to enter their own Twitter username to check how likely they are to get fired based on their tweets.  I used that tool to check the Twitter accounts of John Craig (@JDRCLabour) and Kevin MacNeill (@kdmacneill), who are partners and tweeters in our Toronto labour and employment law group.  With a 0% likelihood, both have clearly mastered the art of the appropriate tweet.

According to the developer, the dangers of negative tweets remain abstract, and young and inexperienced users, in particular, could benefit from after-the-fact privacy warnings from websites like FireMe!  To test this theory, FireMe! sent out 4,304 warnings to users who tweeted something that could get them fired.  249 users deleted the offending tweet within two hours of receiving the warning.

Tweets like those featured on FireMe! raise questions about whether employers can and should monitor employee use of social media, and whether employees can be disciplined for the inappropriate use of social media at and away from work.  For answers to these and other questions about social media in the workplace, please watch Rhonda, Christina, Andrew, and me discuss social media in the workplace during last year’s Managing the Workplace seminar series.

The Canada Border Services Agency (the “CBSA”) recently stated that it caught more citizens of the United States working in Canada without authorization in 2012 than any other nationality.

After Americans, citizens of the Philippines and Israel were the most frequently apprehended for working illegally in Canada  Other nationalities with a high frequency of arrest for working illegally in Canada include India, Ireland and Mexico. 

While it may be surprising that United States citizens topped the list, it is important to keep in mind that they are subject to less enforcement.  Specifically, US citizens are not required to apply for a visa in advance of travel to Canada’s border.  The greater ease with which United States citizens can enter Canada means that there are fewer mechanisms in place to control and monitor their activities in Canada.  Israeli citizens are similarly exempt from the requirement to apply for a visa in advance of arrival in Canada.      

The CBSA stated the following in reviewing the incidences of illegal workers in Canada. 

Individuals working illegally in Canada undermine the integrity of our immigration system and hurt those foreign workers who abide by our laws

CBSA appears to have stepped up its enforcement of Canada’s immigration laws in recent years, with a particular focus on those working in Canada. 

This has occurred in lockstep with the exponential growth in the number of temporary foreign workers entering Canada on an annual basis, which has increased from approximately 60,000 to roughly 250,000.  CBSA enforcement includes not only checks at Canada’s borders but also raids against organizations suspected of illegally employing foreign workers. 

The concern is that as the number of foreign workers increases, so will the incidence of abuse of the immigration system.  This is a particularly sensitive issue given the recent public criticism of the Temporary Foreign Worker Program (the “TFWP”) - the system of rules and regulations governing the entry of foreigners to Canada. 

Specifically, prominent labour groups across Canada have criticized the TFWP as undermining the Canadian labour market by allowing foreigners to take away jobs that would otherwise have been available to Canadians and as being responsible for driving down Canadian workers’ wage rates and working conditions.

What does this mean for employers?

The latest statistics from the CBSA make it clear that the agency is vigorously enforcing Canada’s immigration laws, regardless of nationality.  Employers should accordingly take the necessary steps to understand the rules and regulations governing the entry of foreigners into Canada’s labour market.   This can help to reduce the risk not only that individuals will be found to be violating Canada’s immigration laws but also that employers will be found to be operating in contravention of the TFWP. 

Employers that do not adhere to Canada’s immigration laws can be subject to harsh sanction, including a revocation of their right to hire foreigners, fines, as well as the imprisonment of those responsible for facilitating the illegal entry of individuals to Canada’s labour market.    

For more information, please contact the writer at 416-777-4175 or ssultan@heenan.ca

Preventing former employees from competing with your business or from soliciting your clients or employees can be a challenge.  The courts in Canada have consistently demonstrated a dislike for restrictions on departed employees.  This can likely be explained by a pervasive belief that Canada is a free society which not only allows but promotes commercial competition.  Courts are also generally speaking loath to restrict a former employee’s ability to earn a livelihood.

These concerns and deep seeded beliefs mean that courts are generally speaking only willing to enforce restrictive covenants both where such agreements are clear and unequivocal and where they are deemed necessary to protect a legitimate business interest. 

Given this, courts have the habit of putting any restrictive covenant language in dispute under a legal microscope.  The recent Ontario Court of Appeal decision in Martin v. ConCreate 2013 ONCA 72 (CanLII) carried out such an analysis.  The decision is helpful in that it provides an up to date assessment as to the elements necessary in order for a restrictive covenant to be found to be enforceable. 

The Court of Appeal’s assessment

The case involved a 20 year employee and partner of a construction firm.  The employee had signed an employment agreement which included restrictive covenants that described limits on the employee’s ability to compete or solicit business from the employer's clients in the event that his employment was terminated.

The company subsequently terminated the employee’s employment.  He then started another company and was sued by his former employer.  The court then assessed the enforceability of the restrictive covenants.  The Court of Appeal specifically overturned the Ontario Superior Court’s finding that the non-competition and non-solicitation clauses were enforceable.

With respect to the non-competition clause, the contract described a 24 month “prohibited period” which stated that the employee could not compete for 24 months following the sale of the former employee’s interest in the business. The court found that this language was unenforceable, primarily because it was not possible to ascertain when such a sale may occur.  The court accordingly held that the non-competition clause was unreasonable as it did not have any fixed time limit. 

With respect to restrictions from solicitation, the agreement stated that the employee was barred from communicating or otherwise dealing with any persons who were customers, dealers, agents or distributors, whether at the time of the sale of the former employee’s interests in the business or afterwards.  The covenant further referred to any products or services that compete with those offered by the employer, whether or not offered, or planned to be offered at the time of the sale of the employee’s business interest.  The court found that the language was unreasonable in that it restricted the employee from soliciting in relation to matters which the employee may not know about.  The court specifically remarked that there was no way the employee would be aware of all parties that his former employer was associated with or all the products or services the company offered or planned to offer following his departure from the company.   

What does this mean for employers?

The case makes clear the importance of conducting a careful review of any and all restrictive covenants provided to employees and to ensure that they are both clear and reasonable for the specific circumstances, including the employee in question. 

An employer will specifically need to be able to demonstrate that a deal was made, that the deal was clear, and that it was reasonable in terms of several factors, including the activities that were restricted, the length of time of the restriction, as well as the geographic area to which the restriction applied.

For further inquiries, please contact the writer at ssultan@heenan.ca or (+1)416-777-4175

For years the Canadian public has been warned about the coming retirement of the so-called Baby Boomers.  The concern has been that the supply of young people entering the labour market has been dropping precipitously just as the wave of Baby Boomer retirees quickly approaches.

It appears that the day of reckoning is upon us.  As the Globe and Mail reports today, at some point this year the number of young workers entering the labour market is set to no longer outnumber the number of individuals exiting the market (i.e. retiring).  Specifically, the Globe reports that in 2013 the number of 15- to 24-year-olds will begin to drop below the number of 55 to 64 year olds for the first time ever.

A record to celebrate? Not so much

Rather than congratulating Canada’s Baby Boomers for reducing Canada’s baby production to record low levels, the country must instead grapple with what is quickly becoming a serious demographic problem.  Less young people entering the labour market threatens Canada’s tax base, meaning that there may not be enough money to support a rapidly aging population.  Employers will also have an increasingly difficult time finding the skills necessary in order to drive their businesses forward, potentially hurting Canada’s competitiveness and, by extension, its economic growth rate.    

Various studies point to potential home grown solutions to this demographic problem.

A common one is that we should not be concerned because people are not retiring until much later in life today.  While it is true that increasing numbers of workers are putting off retirement, this presents at best a temporary solution.  The fact is that the Baby Boomers will retire, they will retire in large numbers, and it will begin shortly. 

Others point to the potential of activating idle labour across the country, through initiatives such as job retraining programs and improving labour mobility so that people move to areas of the country where skilled labour is required.  There is however only so much slack in Canada’s economy and certainly not enough idle labour to fully address what is a major shift in Canada’s demographics. 

The fact is that, the various solutions suggested will at best act as stop-gap measures that only partially address what is an enormous and historically remarkable demographic shift. 

Time to import the goods  

So how is Canada to ensure that it secures the skills necessary in order to drive its economy forward and improve living standards as its population ages? The answer will almost certainly lie in large part through immigration, both permanent and temporary. 

While permanent migration to Canada has remained relatively stable, the number of temporary foreign workers has increased in recent years at an exponential rate, from approximately 60,000 individuals in 2006 to over 250,000 today.  The massive growth of this largely employer-driven program demonstrates that companies are already looking abroad in order to secure the skills needed which they cannot find locally.  This trend will undoubtedly continue.

Already immigration represents almost all of Canada’s labour-force growth.  Employers which may not have considered hiring foreigners will take seriously this option in the future.  This will not be limited only to extractors of raw materials but will pervade across the entire economy from coast to coast. 

Employers would accordingly be wise to become familiar with the rules and regulations of the Temporary Foreign Worker Program in order that they are prepared to use this tool when required. 

For further inquiries, please contact the writer at ssultan@heenan.ca or (+1)416-777-4175

The final version of the National Standard for Psychological Health and Safety in the Workplace has been released by the Canadian Standards Association, the Bureau de normalisation du Québec, and the Mental Health Commission of Canada. The Standard is currently available online free of charge.

The Standard is intended to promote psychological health and safety in the workplace and may require, among other things, employers to implement new policies, procedures, hazard identification, incident investigation and monitoring activities, in addition to all of the existing steps required to develop and manage occupational health and safety (“OHS”) systems.

As we have previously written, the Standard presents challenges for implementation given its complexity; however, it also presents an opportunity for employers to develop policies and procedures beyond existing OHS and human rights requirements. This could assist employers in avoiding or minimizing civil, human rights, OHS and workers’ compensation claims, and grievances arising from psychological injuries or stress suffered in the workplace.

Interested readers are invited to register for our February 21, 2013 seminar on psychological health and safety in the workplace. During the complimentary seminar, part of our Managing the Workplace series, lawyers from our labour and employment law group will discuss the Standard as a part of the growing awareness of psychological health and safety issues in the workplace, and an increasing willingness to compensate workers for workplace psychological injuries.

For more information on the Standard and its implications for your workplace, please contact Shane Todd (stodd@heenan.ca), Cheryl A. Edwards (cedwards@heenan.ca), or Jeremy Warning (jwarning@heenan.ca).

The Federal Government recently announced cuts to special rules that provided pregnancy, parental and compassionate care Employment Insurance benefits to temporary foreign workers.  The cuts took effect on December 9^th, 2012 and are expected to immediately affect approximately 1,900 temporary foreign workers.

Temporary foreign workers are provided work permits which describe both the time period in which someone is able to work in Canada and any restrictions to the work, such as only being able to work with a specific employer or at some specific location within Canada or a province or territory.

The cuts affect a wide range of temporary foreign workers, including those with expired Social Insurance Numbers or, alternatively, those with expired work permits.  Under the old rules, such individuals were eligible to attain employment insurance benefits under certain circumstances. 

The changes are most likely to affect seasonal temporary workers who often work in Canada for several months before taking breaks in their country of citizenship.  Approximately 11,650 temporary foreign workers collected Employment Insurance benefits in 2011.  Such individuals would often collect Employment Insurance benefits while in their home country which would provide financial assistance during their absence from Canada. 

The Federal Government has stated that the cuts are aimed at maintaining the integrity of the Employment Insurance regime.  Specifically, government representatives pointed to the fact that under the normal Employment Insurance rules workers are not able to attain benefits when outside of Canada. 

The Federal Government further stated that providing individuals who are ineligible to work in Canada Employment Insurance is inconsistent with the underlying purpose of the program which is to provide assistance to individuals who are actively seeking employment. 

The Ontario government has announced that it will invest $3 million over two years to hire 18 additional Employment Standards Officers and staff.  This will enable the Ministry of Labour to conduct more proactive workplace inspections to ensure compliance with the Employment Standards Act, 2000.

The Ministry has identified the following industries that will be targeted for proactive inspections in 2012/2013:

• Auto mechanics
• Building services (e.g., security, parking, cleaning, and food services)
• Car dealerships
• Fast food restaurant franchises
• Gas stations
• Hotel and hospitality  
• Private schools  
• Temporary help agencies

All provincially-regulated employers should be aware of the possibility of increased workplace inspections because the Ministry of Labour has stated that proactive inspections are not limited to these targeted industries.

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Full and final releases executed by terminated employees are primarily viewed as a means for the former employer to be relieved of any liability related to termination of employment.  However, as the Ontario Court of Appeal’s decision in Zelsman v. Meridian Credit Union Limited, 2012 ONCA 358 (“Zelsman”) demonstrates, properly reviewing and understanding the language of a comprehensive employment release is critical for a terminated employee as the language of the release may act to bar the employee from claiming against third parties, such as long-term disability insurers, who are not parties to the employment relationship.

In Zelsman, the plaintiff, Ms. Francine Zelsman, an employee of the College of Family Physicians of Canada was eligible for Long Term Disability (“LTD”) benefits according to a Group Policy between the College and Great-West Life (“GWL”).  Following the termination of her employment in April 2008, Ms. Zelsman filed a complaint with the Human Rights Tribunal of Ontario (“HRTO”) against the College claiming her employment was terminated on the basis of disability and reprisal.  At the same time, she applied for LTD benefits within the period of coverage with GWL.

In November 2008, Ms. Zelsman’s claim for benefits with GWL was rejected. In August 2009, Ms. Zelsman entered into Minutes of Settlement with the College in relation to the HRTO proceedings, receiving a payment from the College of some $90,000 which appears to have been largely based on compensation for the denial of her LTD benefits claim.   Ms. Zelsman then retained other counsel and appealed the denial of her LTD benefits with GWL.  Her appeal was successful and GWL paid the claim retroactive to August 2008. Ms. Zelsman did not disclose to GWL at any time before the approval of her LTD benefits that she had filed a Human Rights complaint against the College or that she had entered into Minutes of Settlement and signed a comprehensive release in settlement of that claim.  When GWL learned of the settlement between the College and Ms. Zelsman, including her waiving of any right to pursue any claims with GWL, it took immediate steps to reverse the payment for LTD benefits by relying on and enforcing the release.

Ms. Zelsman brought a motion seeking an order declaring the release did not have the effect of releasing any claims against GWL. She also sought a declaration that GWL could not enforce or rely on any of the terms of the Minutes against her.

Usually the doctrine of privity provides that a contact cannot confer rights or obligation on a third party. There are, however a few exceptions. These exceptions were argued by GWL in this case. The two factors the motions judge analyzed were:

a) Did the parties to the contract intent to extend the benefit in question to the third party seeking to rely on the contractual provision?

b) Were the activities performed by the third party the very activities contemplated as coming within the scope of the contract in general as determined by the intentions of the parties?

The motions judge held that the clear and unambiguous meaning and intention of the parties was to resolve all matters arising out of Ms. Zelsman’s employment with the College including the claims for benefits under the Group Policy. The intention to fully and finally release and discharge the College and GWL from all and any actions and claims relating to benefits, including short-term and long-term disability benefits, was also expressly stated in the Minutes.

Therefore, the motions judge held that GWL, a third-party insurer, satisfying the exceptions to the doctrine of privity of contract, was entitled to rely on and enforce the Minutes between the Group Policy holder and the employee and the Minutes therefore had the effect of releasing any claims of Ms. Zelsman against GWL under the Group Policy.

On appeal, Ms. Zelsman argued that the release clause should not be held enforceable as it violated sections of the Ontario Employment Standards Act, 2000 (the “ESA”), was ambiguous and that the motions judge erred in interpreting the clause.

The Court of Appeal dismissed the appeal. The Court noted that the motions judge had engaged in a very thorough and well-reasoned analysis in holding that GWL, a third-party insurer, was entitled to rely on and enforce the Minutes between the College and Ms. Zelsman. The Minutes therefore had the effect of releasing any claims of Ms. Zelsman against GWL under the Group Policy.

With respect to Ms. Zelsman’s argument regarding the ESA, the Court confirmed that the legislation provides that when an employee is terminated, the employer must provide either the minimum notice or payment in lieu thereof and must continue to make whatever benefit plan contributions are required to maintain the employee’s benefits during the notice period.

However, the Court dismissed Ms. Zelsman’s argument that by including a release of claims for benefits in the Minutes, the employer was requiring the employee to waive her right to receive benefits coverage during the notice period, contrary to the ESA. The Court commented that “[t]he ESA is minimum standards legislation. It is not benefits legislation. Once the appellant was entitled to benefits she could compromise the amount, if any, she was entitled to.”

The ESA provides that benefit coverage must continue, however, it does not require claims to be paid where there has been a contractual settlement of such claims. 

The implications of this decision are notable for employees, employers and third party insurers. 

During the notice period, the ESA provides that dismissed employees remain eligible to benefits pursuant to the Group Policy coverage; they are not entitled to a payment of benefits as a right.

The Court of Appeal upheld the parties’ right to freely contract out of such benefits or any other amounts paid above the ESA minimum standards.

For employers, it is important to continue coverage throughout the ESA notice period and to respect minimum standards legislation. For third party insurers, what is important is to work with your Group Policy holder to be kept abreast of any Minutes of Settlement reached with terminated employees, particularly the inclusion of any release clauses that may relieve the insurer of the responsibility of paying benefits.

Brian Barrett was a “team lead” for Sims Group Recycling Solutions Canada Ltd. (“Sims”).  As part of his duties, Mr. Barrett was required to operate a forklift.  He was trained and certified to do so and was a member of Sims’ joint health and safety committee.

On February 3, 2011, just before the end of his shift, Mr. Barrett took his forklift and drove at an elevated speed into a puddle on the warehouse floor, turning the wheel of the forklift as he hit the water and spinning out of control (colloquially, “performing a doughnut”).  The forklift hit a large concrete block and was visibly damaged.  Mr. Barrett wiped down the point of impact and left work for the day without reporting the accident. 

The next morning, two other employees reported the matter to their supervisor.  Sims conducted a full investigation in which Mr. Barrett was interviewed and given an opportunity to “come clean”.   However, Mr. Barrett claimed that he had spun out of control by accident when he hit the puddle and denied being involved in a collision.  Sims proceeded to terminate Mr. Barrett’s employment without notice or pay in lieu of notice on the basis that he had engaged in horseplay, he had failed to report an accident as required, and he had deliberately attempted to conceal the accident.   

Mr. Barrett filed a complaint with the Ministry of Labour for termination pay and severance pay.  The Ontario Labour Relations Board overturned an initial decision in favour of Mr. Barrett and noted that Sims had clear policies that prohibited horseplay in the workplace and required the reporting of all accidents.  The policies also made it clear that engaging in horseplay could lead to the termination of an employee’s employment without compensation.  The Board found that Mr. Barrett was aware of these policies and had intentionally contravened them, creating a significant safety hazard, which he then tried to cover up.  As a result, the Board concluded that Mr. Barrett had engaged in wilful misconduct or wilful neglect of duty that was not trivial and was not condoned by the employer and was therefore not entitled to termination and severance pay under the Employment Standards Act, 2000.

This case illustrates that where employers have clear and well-communicated safety and disciplinary policies, a violation of these policies can support the termination of an employee without notice or pay in lieu of notice.

Sims Group Recycling Solutions Canada Ltd. v. Barrett, 2012 CanLII 60662 (ON LRB)

The most recent example of an employee who exercised questionable judgment (to say the least) online is the individual who posted crude and offensive comments about the death of Amanda Todd, the teenager who recently committed suicide after suffering years of bullying. 

Although the online comments were not made in his capacity as an employee, it is reported that the posting resulted in a complaint to his employer, which fired him.

This reminded me of another case, which dealt with a crane operator who made offensive remarks about the 9/11 attacks. On September 11, 2011, after hearing about the terrorist attacks on the World Trade Center, this employee said to a group of people at his worksite that "The Americans got what they deserved".  There were some dispute over whether he also said that he "wished they had taken more of them out".  The listeners were employed by the company's customer, which was a US-owned business.

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About a year ago, we reported on Pate v. Galway-Cavendish (Township) in which the employer had terminated a building inspector for discrepancies in remitting permit fees that had been paid to the inspector. The employer pressed for criminal charges to be laid against the inspector and withheld exculpatory evidence from the police.

The employee was later acquitted of the criminal charges and sued for wrongful dismissal and malicious prosecution. The trial judge awarded, among other things, $25,000 in punitive damages. Pate then successfully appealed from that award, with the Court of Appeal for Ontario finding that a new trial on the issue of punitive damages was required because the trial judge had not sufficiently explained the award, especially in light of a finding of significant misconduct by the employer that lasted over a lengthy period and had a devastating impact on the inspector’s life.

Upon reconsideration of the issue, and review of the applicable case law, Justice Gonsolus of the Superior Court concluded:

Given my findings of significant misconduct on the part of the defendant municipality; the fact that such misconduct lasted over approximately a ten year period; the municipality’s actions in this case and in the criminal proceedings that had a devastating impact on the appellant’s life, including his employability, his marriage, and the fact that these were intentional and foreseeable actions undertaken by the municipality, I have reconsidered the case law with the guidance of the appeal court and now fix punitive damages in the amount of $550,000.

Punitive damages of this magnitude no doubt constitute an exceptional award, to reflect the most egregious of circumstances. However, they do stand as a reminder to employers to act with the utmost care in cases of dismissal, especially when considering pursuing criminal charges related to perceived misconduct by the employee.

For the full text of the decision on damages see: Pate Estate v. Galway-Cavendish and Harvey (Townships), 2011 ONSC 6620

The Ontario Court of Appeal has finally spoken in the three overtime class action lawsuits that we have been following over the last few years: Fresco v. Canadian  Imperial Bank of Commerce (“CIBC”), Fulawka v. Bank of Nova Scotia (“BNS”), and McCracken v. Canadian National Railway Company (“CNR”). In somewhat of an unexpected move, the Court of Appeal allowed certification in CIBC and BNS (overturning the CIBC decision in the lower court), but denied certification in CNR.  

The press has generally heralded the rulings as a victory for the plaintiffs. This is somewhat ironic, as many pundits suggested that CNR would be the easiest to certify. BNS and CIBC were both “off the clock” cases, in which the claimants are all obviously eligible for overtime and so the main issue is whether they worked overtime for which they were not paid. To certify “off the clock” cases, the plaintiffs must overcome the argument that whether or not someone has been paid properly is an individual issue, and therefore not suited to a class action that must have issues and questions that are common to all the potential claimants in the class. 

CNR, in contrast, was a “misclassification” case. In such cases, the question is whether a group of employees have been improperly classified as being within a job category that is overtime exempt.  In most misclassification cases, all of the plaintiffs usually do the same job and as such, typically will all either fall within or outside the exempt category at issue. This being the case, there is usually a clear common issue that assists in obtaining certification as a class action. In fact, the lower court judge who originally refused to certify the CIBC case had specifically commented that misclassification claims were more amenable to certification than off the clock cases.

While the certification of CIBC and BNS are not good news for employers, CNR gives rise to some hope. More importantly, one critical part of the CIBC and BNS decisions has the potential to turn both into Pyrrhic victories for the plaintiffs in those cases.

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As we detailed in our blog posting on June 15, 2012, Metron Construction Corporation and its President both entered guilty pleas to charges stemming from a December 24, 2009, accident that claimed the lives of four workers and seriously injured another.  Metron pleaded guilty to one count of criminal negligence causing death while its President pleaded guilty to four offences under the Occupational Health and Safety Act (OHSA).  A joint submission recommending a fine of $90,000 against the President was made to the court but Metron and the Crown made seperate submissions about the penalty to be imposed for the criminal negligence conviction.

Sentencing submissions by Metron and the Crown concluded on June 28, 2012.  Metron is arguing that the court should impose a fine of $100,000.  There is a vast gulf between that position and the position taken by the Crown which submitted that a $1,000,000 fine ought to be imposed on Metron.  The court did not immediately impose sentence on either Metron or its President.  The court reserved its decisions until July 13, 2012, meaning no penalties have been imposed as yet.

With respect to the President's OHSA convictions, the court is not bound by the joint submission that it has been asked to accept.  However, it is rare for a sentencing court to depart from a joint submission made as part of a negotiated resolution.  Indeed, the Ontario Court of Appeal recently reaffirmed that a sentencing court should deviate from a joint submission in narrow circumstances: where the joint submission is contrary to the public interest and would bring the administration of justice into disrepute.  Currently, a $70,000 fine is the highest monetary penalty imposed on an individual convicted under the OHSA.

Imposing a penalty on Metron will likely prove the more challgening decision for the court.  The Criminal Code does not set either a minimum or maximum penalty for a corporation convicted of criminal negligence causing death.  However, the Code does mandate that the court adhere to certain principles and consider certain factors.  When imposing sentence on a corporation, the court must consider a series of factors that are specific to a corporate defendant.  This includes, amonst other things, considering the impact of the fine on the economic viability of the corporation, any advantage to the corporation by the commission of the offence, and if there has been any concealment or conversion of assets to show that the corporation cannot pay a fine or restitution.  Additionally, the court is to be guided by the overarching principles of proportionality  (accounting for the seriousness of the offence and blameworthiness of the defendant) and parity (that similar cases and defendants receive similar sentences).  In sum, the court is expected to balance all of these factors in deciding on the sentence to be imposed. 

Deciding on sentence may prove challenging for the court because there are exceedingly few cases in which a corporation has been sentenced for criminal negligence - particularly in matters of workplace safety.  In fact, since 2004, when the Criminal Code was amended to include a specific duty relating to workplace health and safety and to broaden the means by which criminal negligence could be proven against a corporation, there has only been one corporation sentenced for a workplace fatality.  That decision was in 2008 when Transpavé Inc. was fined $100,000 after pleading guilty to criminal negligence causing death.  In argument, both Metron and the Crown referred to penalties imposed on corporations for violations of the OHSA that have resulted in fatal injuries to workers.  It will be interesting to see how much impact  sentences imposed in regulatory cases have on the imposition of a penalty for a criminal offence.

It will also be interesting to see if a fine is the totality of the sentence imposed on Metron.  In addition to a fine, the Criminal Code empowers the court to place a corporation on probation and impose conditions.  Amongst other powers, the court has the power to require a corporation to:

• make restitution to a person for any loss or damage that they suffered as a result of the offence; and/or
• provide information to the public, in the manner directed by the court, setting out the offence committed, the sentence imposed and any measures the corporation is doing to reduce the chance of a subsequent offence; and/or
• comply with any other reasonable conditions to prevent the commission of subsequent offences or to remedy the harm caused by the offence.

The possiblity of a probation order was not addressed during sentencing submissions, which may make it less likely that one would be imposed.  However, it remains a sentencing option available to the court. 

As we indicated in our previous post, this is a historic case.  Consequently, whatever penalties are imposed on July 13, they are likely to be influential in future criminal negligence and OHSA proceedings.

Maureen Quinlan recently posted on an important Ontario decision, Kafka v. Allstate Insurance Company of Canada (“Kafka”), where the court refused to certify a class action on behalf of a number of employees alleging constructive dismissal.

The court refused to certify the class action in Kafka primarily because it found that the question of whether an employee has been constructively dismissed is a highly individualized exercise and not appropriate to a class action. Another decision of the Ontario court, Brown v. Canadian Imperial Bank of Commerce (“Brown”), has just been released, and like in Kafka, the court refused to certify it as a class action because the primary issues in the action were individual to each potential class member. In Brown the claim was for overtime pay on behalf of allegedly misclassified Investment Advisors and Analysts working for and previously employed by the Bank.

Brown was decided by Mr. Justice Strathy who several years ago certified an overtime class action by bank clerks against the Bank of Nova Scotia (at around the same time that another Ontario judge refused to certify a similar class action on behalf of non-management employees at the Canadian Imperial Bank of Commerce.

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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 recent decision of the Supreme Court of British Columbia in Lacey v. Weyerhaeuser Company Limited, 2012 BCSC 353 found that employers do not have the right to change the terms of promised retiree benefits once an employee retires.

The five plaintiffs in this case were retirees of Weyerhaeuser and its predecessor, MacMillan Bloedel.  The terms of their employment included the right to retiree health benefits and for it to be fully paid for by the company.  The plaintiffs all retired between 1991 and 2000.  The company later on January 1, 2010 stated that it was reducing its health benefit contributions from 100% to 50% and that retirees would be responsible for future cost increases.  The plaintiffs subsequently sued for breach of contract.

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A recent decision of the United Kingdom’s Supreme Court provides valuable insight into the issue of which laws apply to employees working in various jurisdictions. This is a phenomenon which is increasing exponentially as companies across the globe expand their operations and accordingly often send people to a variety of countries.

The case, Ravat v. Halliburton Manufacturing and Services Ltd., involved an employee who worked for Halliburton, a multi-national manufacturing company headquartered in Aberdeen, Scotland. He had worked for the company for approximately 16 years, from 1990 to 2006, at which point his employment was terminated.

During his time with Halliburton, the employee consistently alternated between living in the United Kingdom and working in Libya. Specifically, his normal regime included working in Libya for 28 days, followed by 28 days in back in Preston, United Kingdom during which time he had no obligation to do work. The work which he carried out in Libya was for the benefit of the German subsidiary of Halliburton.

Following the termination of his employment, the employee proceeded to bring forward a claim for wrongful dismissal. A preliminary question however was whether the Scottish employment tribunal had jurisdiction to deal with the matter, particularly given that the employee had spent so much of his time with Halliburton stationed in Libya. The employment tribunal ruled that it did in fact have jurisdiction to deal with the matter. This decision however was overturned by the appeal tribunal. The case subsequently made its way to the Supreme Court. 

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The recent decision of the Ontario Court of Appeal in Jones v. Tsige, 2012 ONCA 32, (on which Christian Paquette of our firm blogged on January 18th, 2012) has garnered much attention.  This is because it has formally recognized a tort for an invasion of privacy, labelled as Intrusion Upon Seclusion.  The question remains however how courts will interpret and apply this new tort. 

What is certain to be a long line of jurisprudence to mould and refine this concept has already begun to build. 

In the labour context, the concept was addressed in the recently released arbitral decision in Complex Services Inc. v. Ontario Public Service Employees Union. This case involved two separate grievances.  The first was a union grievance alleging discrimination against and harassment of an employee.  The second was an employer grievance which alleged that the Union and the grievor had not met their obligations with respect to the grievor’s disabilities and accommodation requirements.  In this second grievance, the employer argued that the grievor had unreasonably refused to provide further medical information that was requested and that in not doing so the grievor failed to fulfill her obligation to participate in the accommodation process.

The Ontario Court of Appeal had released its decision after the parties had submitted their written submissions.  Both parties subsequently made submissions on the matter in light of Jones v. Tsige.  The arbitrator accordingly commented on whether the Ontario Court of Appeal decision had any impact on the case.  Specifically, the arbitrator reviewed whether the tort of Intrusion Upon Seclusion had any impact on an employer’s ability to seek confidential medical information. 

The arbitrator’s answer? No.

The arbitrator specifically found that the tort of Inclusion Upon Seclusion did not go so far as to interfere with what were deemed to be reasonable requests on the part of the employer for medical information.  The arbitrator specifically stated the following:

 “It remains the case that an employer is entitled to request and receive an employee’s confidential medical or other information to the extent necessary to answer legitimate employment related concerns, or to fulfill its obligation under the collective agreement or legislation, including the human rights or health and safety legislation (for example).”

The arbitrator also stated the following:

“I agree with the Employer that nothing in Jones v. Tsige alters its right to manage its workplace(s), or to obtain confidential medical or other information as required or permitted by legislation or the collective agreement, or which it reasonably requires for a legitimate purpose.”

The arbitrator proceeded to review the type of confidential information generally permissible for accommodation purposes, including but not limited to information regarding the nature of the illness and whether a disability is permanent or temporary. 

It is still early to assess how this new privacy tort will be applied.  The first indication however, both from the Ontario Court of Appeal itself and the decision discussed above, is that there appears to be an appetite to limit the types of cases that will succeed at establishing the elements of this new tort. 

This is definitely an area of law we will be watching as we seek to understand its potential impact on our clients.

On December 8, 2011 we blogged about the Ontario Liberal Party’s plan to table amendments to the Employment Standards Act, 2000 (ESA) and introduce an eight week, unpaid “Family Caregiver Leave” to care for ill or injured family members. The proposed leave would be separate from (but could be combined with) the existing eight week Family Medical Leave to care for terminally ill family members.  These amendments (contained in Bill 30) have since passed first reading and the are now one step closer to becoming a reality for Ontario employers. 

Who would qualify for the proposed Family Caregiver Leave?

The proposed eight week, unpaid “Family Caregiver Leave” would be available to all employees (i.e. full-time, part-time, contract, etc.) who are covered by the ESA.  The leave would allow employees to leave their jobs for up to eight weeks per calendar year in order to care for, 

• the employee’s spouse
• a parent, step-parent or foster parent of the employee or the employee’s spouse
• a child, step-child or foster child of the employee or the employee’s spouse
• a grandparent, step-grandparent, grandchild or step-grandchild of the employee or the employee’s spouse
• the spouse of a child of the employee
• the employee’s brother or sister or
• a relative of the employee who is dependent on the employee for care or assistance. 

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More and more businesses in Canada are hiring foreign workers.  In fact, the number of temporary foreign workers has ballooned in recent years to the point where they now outnumber new permanent residents.  There are many reasons for this trend, including a rapidly aging labour force, skills shortages for specific sectors of the economy, as well as federal government policy which has increasingly prioritized temporary foreign workers over permanent residence applications. 

The greater emphasis on temporary foreign workers has led to recent regulatory changes to the rules surrounding the hiring of foreign workers.  The changes, in force since April 2011, has resulted in significant changes to the Temporary Foreign Worker Program. 

What does this mean? Employers are increasingly under scrutiny with respect to the process followed in hiring foreign workers.  Specifically, Citizenship and Immigration Canada is watching to ensure that employers act in a manner consistent with their applications with respect to factors such as the wages and working conditions.  Employers are also now subject to heightened inspection with respect to the genuineness of any job offer and the past compliance of an employer. 

Employers also face serious consequences for non-compliance and/or for any perceived misrepresentation to Citizenship and Immigration Canada, including denial of any further work permits, fines, imprisonment, and/or public listing for companies on the Citizenship and Immigration Canada website declaring an employer’s inability to hire foreign workers. 

So, how are employers to deal with this greater scrutiny? There are several practical steps which can be taken, including establishment of an internal audit process which keeps records of ongoing work permits, details of work conditions of all foreign workers, including expiry dates of all those working under work permits.  Employers should also consider taking steps to ensure ongoing compliance and drafting of clear policies relating to foreign workers. 

The European parliament has recently passed a directive providing greater rights to foreign workers and significantly streamlining the process for gaining entry to the EU as a foreign worker. 

The law specifically allows non-EU individuals who are working legally within the EU to benefit from a range of rights similar to those of EU citizens.  This means that foreign workers will now benefit from the same rights as EU members with respect to working conditions, government pensions, social security, and access to a wide range of public services.

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This list was put together and published by CareerBuilder.com, and we found it republished by Florida lawyer Mark Trank on his firm's blog.  Do you have anything more unusual?

1. Employee's 12-year-old daughter stole his car and he had no other way to work. Employee didn't want to report it to the police.

2. Employee said bats got in her hair.

3. Employee said a refrigerator fell on him.

4. Employee was in line at a coffee shop when a truck carrying flour backed up and dumped the flour into her convertible.

5. Employee said a deer bit him during hunting season.

6. Employee ate too much at a party.

7. Employee fell out of bed and broke his nose.

8. Employee got a cold from a puppy.

9. Employee's child stuck a mint up his nose and had to go to the ER to remove it.

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Sometimes employers wrongly assume that because Ontario employment standards legislation permits them to temporarily lay off employees before termination obligations arise, they also have a contractual right to impose temporary lay-offs.

As the Superior Court of Justice has just noted in McLean v. The Raywal Limited Partnership, 2011 ONSC 7330, unless an employer can show that it has such a contractual right, a lay-off, even a temporary one, will amount to a termination without cause at common law, with all the consequences that flow from that.

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The Ontario Divisional Court has recently taken some of the “frustration” out of frustration of employment contract cases. In Cowie v. Great Blue Heron Casino, the Divisional Court overturned a trial decision which found no frustration of contract where a security guard’s continued employment was made illegal by a change in the law. The Divisional Court clarified the test for frustration of employment contract cases, finding that where an employee is unable to perform his or her contractual obligations because a change in the law makes his or her continued employment illegal, the employment contracted is frustrated at the point when the law takes effect.

Most frustration of employment contract cases arise from situations involving a prolonged disability or illness where an employer can spend years accommodating the employee before the employment contract is frustrated. In illness or disability cases, frustration is assessed by asking whether the disability prevents the performance of the essential functions of the employee’s job for a period of time sufficient to say that the employment contract is no longer capable of being fulfilled. The difficulty in illness and disability cases is figuring out at what point is the employment contract frustrated. Usually this is a case-by-case assessment taking into account the severity of the illness or disability, when or if recovery is expected, and the length of service of the employee. This analysis does little to pinpoint the moment of contract frustration, leaving employers without guidance on when the employment relationship can be severed due to frustration.

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In the recent decision in McKinstry v. Stone, 2011 ONSC 5544, the Court dismissed the employer's motion for summary judgment on the issue of reasonable notice because the employment agreement referred a "policy booklet" and "standard code of ethics guide", and these were not produced at the motion.

This illustrates a common problem.  It is not unusual for employers to make reference to other documents in their employment agreements, whether it be policies, non-competition agreements, confidentiality agreements, etc.  The risk, from an employer's perspective, is that termination provisions that might seem clear in the employment agreement can be rendered ambiguous (and possibly even unenforceable) by these other documents.  In many cases, a better practice is not make specific reference to external documents at all, other than (perhaps) to state that the employee will comply with the employer's policies and procedures in effect from time to time. 

If the employer needs an employee to sign a confidentiality agreement, for example, provide the confidentiality agreement at the time of hiring and don't bother referring to it in the employment agreement. 

It is worth reading the decision of the court on this point, to drive it home: 

[15]           The Defendants have the burden of proving that Mr. McKinstry has been paid his full legal entitlement arising from his wrongful dismissal from employment without cause.  In order to do so, the Defendants must prove what that entitlement of Mr. McKinstry is.  They submit that it is the amount set out in the termination provision of the Agreement.  They must therefore prove what the specific terms of the Agreement are with respect to Mr. McKinstry’s entitlement.  Mr. McKinstry submits that in order to do so, the Defendants must produce the entire Agreement in its motion record.  This includes the documents referred to in the Agreement.  The Defendants have not produced the policy booklet and standard code of ethics guide which is referred to in the Agreement.  It is argued that it is therefore not possible to properly interpret the termination provision of the Agreement as this Court does not have access to the entire Agreement, which includes these documents.

[16]           I agree with this submission.  To succeed on this motion, the Defendants have a burden of proving that they are entitled to a dismissal of Mr. McKinstry’s claims for damages in wrongful dismissal arising from the failure to provide reasonable notice or pay in lieu thereof.  I agree that they cannot satisfy this burden of proof without establishing what the terms of employment were with respect to termination of employment.  This is a basic requirement that the Defendants must meet and they have not done so.  This is particularly so, in light of the conflicting evidence and submissions of the parties with respect to the effect that two employee manuals distributed after the date of the Agreement may have on the Agreement, as they contain what appear to be different termination of employment provisions.  The entire manuals were not produced by the Defendants.  Mr. McKinstry produced only excerpts of these manuals.  I find that the Defendants have not satisfied their burden of proof on this summary judgment motion with respect to wrongful dismissal claim regarding the failure to provide reasonable notice.  The motion for summary judgment on the wrongful dismissal claim is therefore denied.

The Ontario provincial election is scheduled for October 6, 2011.  While labour and employment law issues are unlikely to be the hot button election issue that “gravy” was in Toronto’s most recent municipal election, the major parties have all included labour and employment law issues in their party platforms.  We often consider how promises made during election campaigns will affect us at home, perhaps we should also consider how these proposed labour and employment law reforms will affect us at work.

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Employers must be both cautious and fair when pressing for criminal charges against a dismissed employee. The Court of Appeal clarified in Pate v. Galway-Cavendish (Township) that it is easier for a dismissed employee to prove malicious prosecution by an employer than by a Crown attorney and in particularly egregious cases, trial judges will need to provide sound reasons as to why substantial punitive damages awards for wrongful dismissal should not be ordered against the employer.

Trial Judge: No Malicious Prosecution and Modest Punitive Damages

In Pate, the employer terminated a building inspector for discrepancies in remitting permit fees that had been paid to the inspector. The employer pressed for criminal charges to be laid against the inspector and withheld exculpatory evidence from the police.

After a four day criminal trial, the inspector was acquitted and exonerated. The employer’s actions with respect to the dismissal and withholding of exculpatory evidence came out at the criminal trial. The inspector then sued the employer for wrongful dismissal and malicious prosecution. The trial judge dismissed the claim for malicious prosecution. There was no dispute in the civil trial that there was no cause for termination. The trial judge awarded a reasonable notice period of 12 months plus: 

• a four-month bump-up to the notice period for Wallace damages;
• $75,000 for general and aggravated damages for intentional infliction of mental distress and social and economic damages;
• $7,500 for special damages; and
• $25,000 for punitive damages.

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Heenan Blaikie’s Jeremy Warning recently spoke at the Construction Labour Relations Conference in Toronto, hosted by Insight Information. During the session “Preparing for the Worst: How to Respond to a High Risk Incident” Jeremy provided advice to managers on how to respond if government inspectors show up.

This is the first of a four-part video series from Jeremy’s presentation, recorded by Reed Construction Data Canada. We will continue to post video clips over the next three weeks.

In a recent case, the Ontario Superior Court ordered a defendant employer to pay over $300,000.00 to cover a terminated hourly employee’s lost earnings and STD/LTD benefits, as well as punitive damages, costs and interest.  This should serve as a reminder that employers who provide ESA minimums upon termination and roll the dice in litigation sometimes pay a heavy price.

The employee in this case had been terminated as a result of restructuring after nearly 24 years of service, when he was 55 years old. Although he managed to get a new job less than a month after his dismissal, the pay at his new job was much lower and it did not offer disability insurance coverage.

As sometimes happens, the defendant employer in this case had continued the employee's benefits coverage only for the minimum ESA notice period of 8 weeks, and presumably hoped for the best. Unfortunately for all concerned, after the 8 weeks had expired, but before the end of the "common law" notice period (fixed by the court at 22 months) the employee was diagnosed with laryngeal cancer and had to undergo treatment and miss work without pay or disability insurance.  He had worked for 15 months at a new corporation, in mitigation of his damages, before becoming disabled and undergoing medical treatment.

The employee sued his former employer for pay in lieu of common law notice termination, as well as lost STD and LTD benefits, and punitive damages.

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Effective January 1, 2012, most private sector businesses will need to comply with new customer service requirements under the Accessibility for Ontarians with Disabilities Act.

The new requirements, which are described in the Accessibility Standards for Customer Service, are intended to promote the accessibility of goods and services to people with disabilities. These requirements already apply to parts of the public sector.

As of January 1, 2012, the requirements will apply to all people, businesses and organizations that:

• Provide goods or services either to the public or to other businesses or organizations; and
• Have at least one employee in Ontario.

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