1. Skip to navigation
  2. Skip to content
  3. Skip to sidebar

Ontario’s Changing Workplaces Review

In May, Ontario’s Ministry of Labour commenced what is being called the “Changing Workplaces Review”.  The review is intended to take a close look at the Employment Standards Act, 2000 (“ESA”) and the Labour Relations Act, 1995 (“LRA”), with the special advisors making recommendations to the Ontario government.  The review has been ordered both to address the significant period of time which has passed since both statutes were enacted, and the changes that have occurred in the workplace and society since then.   The special advisors appointed to conduct the review and issue recommendations are Michael Mitchell, a former Toronto partner from employee-side law firm Sack Goldblatt Mitchell, and the Honourable John Murray, a former judge and former a management-side lawyer.

It is anticipated that the advisors’ report to the government will touch on such things as: (a) the increase in non-standard working relationships (eg. involuntary part-time work, temporary jobs, and self-employment); (b) greater workplace diversity; (c) technological change; and (d) minimum standards under the ESA and LRA.  More specifically, and with reference to the questions posed in the government’s Guide to Consultations, it can be expected that the advisors may look at things like: (i) whether there should be more or less (or different) overtime exemptions for different groups of employees; (ii) whether additional types of leaves of absence are recommended; and (iii) whether the notice of termination provisions currently set out under the ESA are sufficient.

Public consultations are being held across the province from June through September, and written submissions can also be provided to the advisors by email, fax or regular mail prior to September 18th.  For further details on the dates and locations of public consultations, as well as where to direct written submissions, please click here.

 

,

Ontario’s Changing Workplaces Review

Another Ontario Termination Clause Decision in Favour of Employees…

The Ontario Divisional Court recently affirmed the lower court’s decision in the case of Miller v. A.B.M., an important case with respect to the interpretation of termination provisions in employment contracts. Regular readers of this blog may recall our earlier blog discussion about the lower court’s decision.

In Miller, the employee signed an employment agreement with the following termination clause: “Regular employees may be terminated at any time without cause upon being given the minimum period of notice prescribed by applicable legislation, or by being paid salary in lieu of such notice or as may otherwise be required by applicable legislation.” The termination provision did not expressly state that benefits would be continued during the statutory notice period under the Employment Standards Act, 2000 (the “ESA”). As a result, the court found that the termination provision contravened the ESA. In upholding the lower court’s decision that the termination provision was void and common law notice should instead be substituted, the Divisional Court made the following findings.

First, the court stated that the employment agreement in question distinguished salary, pensions and car allowance under the heading of ‘remuneration’, but that the termination provision specifically just referenced salary. As a result, it was clear that just salary was to be provided on termination.

Second, the court found that the employment agreement’s silence on providing benefits during the notice period did not lead to a presumption that benefits would be provided. At best, the court found that there was an ambiguity in the agreement with respect to the question of whether benefits would be continued, and ambiguities should be interpreted against the drafter (in this case, the employer).

This case confirms the law set out in earlier decisions such as Wright v. Young and Rubicam Group of Companies and Stevens v. Sifton Properties Ltd. In short, in order to ensure that the termination provision in an employment agreement is not set aside, it must be carefully drafted and it must not appear to undercut the minimum provisions of the ESA. If the termination provision does not expressly state that benefits will continue during the ESA notice period, then the employer risks having the termination provision set aside.

For employers who have not had the termination provisions in their employment agreement templates reviewed recently, now would be a good time to ensure that they are in order and to consider updating them if they are not.

,

Another Ontario Termination Clause Decision in Favour of Employees…

Required New ESA Poster for Ontario Workplaces

The Ontario Ministry of Labour has prepared and published a new Employment Standards Act, 2000 (“ESA”) poster entitled “Employment Standards in Ontario”. The poster is version 6.0 in a long line of ESA posters and Ontario employers were required to post it in the workplace effective as of May 1, 2015. The poster outlines for employees their rights under the ESA and the requirements of employers under the ESA.

The Ministry’s rules regarding the new ESA poster are as follows:

  • The poster must be in English but if the majority workplace language is other than English and if the Ministry has version 6.0 available in that language, then both posters must be posted side by side.
  • Version 5.0 should be removed at the time that version 6.0 is posted.
  • In addition to posting the poster in the workplace, employers are also required to give a copy of the poster to each employee by June 19, 2015.
  • New employees hired after May 20, 2015 must be given a copy of the poster within 30 days of hire.
  • The poster may be given to employees in hard copy form, as an email attachment, or as a link to an internet database (but then only if the employer ensures that the employee has reasonable access to the database, a computer and a printer).
  • The poster is available in English, French, Arabic, Chinese, Hindi, Portuguese, Punjabi, Spanish, Tagalog, Thai and Urdu.

An English copy of the poster can be obtained at http://www.labour.gov.on.ca/english/es/pdf/poster.pdf and a French copy of the poster can be obtained at http://www.labour.gov.on.ca/french/es/pdf/poster.pdf. For copies of the poster in other languages, please go to the following link: http://www.labour.gov.on.ca/english/es/pubs/poster.php.

 

,

Required New ESA Poster for Ontario Workplaces

Hidden Camera Leads to Dismissal

An arbitrator recently upheld the termination of a “reliable and capable” Personal Support Worker (a “PSW”) with no prior disciplinary record, because of significant mistreatment of an individual she was responsible for, and because she did not show the kind of insight required.

The Grievor had 6 years of service as a PSW in a licensed long-term care home (the “Home”). Her most recent performance appraisal showed perfect attendance and an overall rating of 41 out of 48 for the relevant review period.  She was nominated for the “2013 Face of Safety Award”, but by May 2013 she had become the face of the villain in a video that was widely circulated in the media.

The Home served vulnerable residents living with significant physical, psychological and/or behavioural impairments. The Grievor’s role as a PSW involved assisting residents with their activities of daily living (ADL), often alone and unsupervised. The resident at the centre of this grievance was an 85-year old woman living with Alzheimer’s (the “Resident”).

The Grievor claimed that on the day of the incident that culminated in her termination, smells emanating from the Resident’s room alerted her to the fact that the Resident needed to be cleaned and changed. She testified that although the Resident resisted care, she persisted out of concern for the Resident’s comfort and her fear that the Resident might develop sores if left unattended in the “pool of urine and feces”. The Grievor also testified that because the Resident was resisting care, she showed the Resident the soiled washcloth to prove to her that she needed care.

The 7-minute montage from a hidden camera that the Resident’s son had placed in the room, and later shared with the media, told a different story. The Resident was seen lying contentedly on her bed until the Grievor attempted to get her out of bed. As the Resident resisted, the Grievor pulled the Resident, grabbed her by her neck and tried to lift her out of bed. The next few minutes were not captured by the camera, as the Grievor and the Resident moved to the bathroom. After they returned the Resident lay on the bed without protest, rolled onto her side without protest and appeared totally compliant. The Grievor then waved the feces-covered cloth in the Resident’s face. As a result the Resident became agitated and began to refuse care. The Grievor persisted in delivering care and roughly pushed the Resident and rolled her around. At no point in the video did the arbitrator see any soiled bedding or any “pool of urine and feces”.

The Home alleged that the Grievor’s conduct constituted abuse, breached the Resident’s Bill of Rights under the Long-Term Care Homes Act, 2007 and breached several organizational and generally accepted protocols.‎

The Home led evidence that given the Resident’s frailty and the manifestations of Alzheimer’s, it was critical that the Grievor comply with the protocols the Home had developed for dealing with resistance. Instead, the Grievor began by ignoring the two-person lifting and transferring protocol. She also ignored the universally accepted “leave and reapproach” method. When the Resident refused care, instead of persisting, the Grievor should have left, waited a few minutes and then reapproached with the assistance of another employee. The Home maintained that the Grievor’s conduct was a significant breach of trust requiring not just discipline, but termination.

The arbitrator agreed. He said the Grievor demonstrated a “fundamental lack of judgement”, falling within the definition of abuse and going to the heart of the employment relationship. He also acknowledged that long-term care employees like the Grievor held positions of public trust and public interest, which demanded a very high standard of conduct.

The arbitrator commented that reinstatement would have been very likely if he had found that the Grievor had accepted full responsibility and provided him with confidence that she would not repeat her conduct. Moreover, if he had accepted her explanation as being credible and consistent with the video he would have seriously considered reinstatement. Instead, the arbitrator concluded that the Grievor did not seem to grasp that in future she should use the “leave and reapproach” method. Although the Grievor apologized and declared her willingness to undergo counselling and do whatever was required to repair the employment relationship, this was, in the eyes of the arbitrator, not enough to give him the confidence that would make reinstatement appropriate.

The Grievor’s ideal response would have been one that satisfactorily explained her conduct, demonstrated insight, and above all, instilled confidence she would never repeat her conduct. An earnest response would not have “downplayed her culpability”.

On one level this case is a reminder that grievances can turn on the ability to adduce evidence or elicit testimony about the likelihood that an employee will re-offend. Beyond that, this is an important reminder of the value of effective recruitment and selection processes. Employers should design recruitment and selection processes to identify candidates who likely possess the insight to appreciate and apply the policies and training that are provided to help them deal with difficult situations.

St. Joseph’s at Fleming Long-Term Care Facility v Canadian Union of Public Employees, Local 2280, 2015 CanLII 2811 (ON LA) 

Hidden Camera Leads to Dismissal

Upcoming Employment Standards Blitz – Precarious Employment

Beginning in May 2015, the Ontario Ministry of Labour will begin a province-wide employment standards workplace inspection blitz targeting the janitorial, security, business services, fitness and recreation centres, amusement, and recreation sectors. The Ministry of Labour has labeled the blitz’s focus as “precarious employment”, likely due to the high occurrence of part-time and other atypical forms of employment in these sectors. This blitz follows the release of the Ministry of Labour’s results on its vulnerable and temporary foreign workers employment standards blitz last fall.  Those inspections found 171 non-compliant employers, recovering over $175,000 for 1,406 employees.  As is typical, the most common violations included non-compliance with the public holiday pay, vacation pay, and overtime pay requirements of the ESA.

Employers should keep in mind that part-time employees are protected under the ESA.  As such, they are entitled to minimum wages (currently at $11 per hour in Ontario, but soon to increase), vacation pay, public holiday pay, and overtime pay. These employees will also have rights upon termination, including under both the ESA and to sue for wrongful dismissal at common law.

Any employer found to be non-compliant with the ESA can face a compliance order, an order to pay, a ticket with a fine, a notice of contravention, or prosecution. These penalties can bring significant financial consequences. In 2012, a Mississauga operator of 25 fitness clubs was fined $100,000 for violating the wage provisions of the ESA.  In addition, with the amendments brought by Bill 18 now in effect, wage claims may grow, as there is no longer a monetary cap on the wage amount that the Ministry of Labour can order an employer to pay per employee.

In addition to the sectors targeted by this blitz, employers across the province may face stricter regulations and increased enforcement, as the Ontario government undertakes a formal review of both the ESA and the Ontario Labour Relations Act to address the rise of precarious employment.

Upcoming Employment Standards Blitz – Precarious Employment

Lessons on Work-Related Fraud and Abuse

The Association of Certified Fraud Examiners recently released its 2014 Report to the Nations on Occupational Fraud and Abuse (the “Report”), which provides interesting statistics and insights for HR professionals hoping to better understand and combat occupational fraud.

The Report is based on a global study of 1,483 cases of occupational fraud, which occurred in over 100 countries, including Canada. First published in 1996 and biennially since 2002, similar reports reveal fairly consistent patterns about how fraud is prevented, committed and detected – useful information for HR professionals and their lawyers.

At the front-line of fraud prevention efforts, HR professionals often create anti-fraud policies, investigate fraud allegations and discipline/terminate fraudsters. Labour and employment lawyers often assist with any wrongful termination or human rights claims that may ensue in the aftermath of investigations or terminations.

Useful and interesting statistics and insight from the Report include the following:

  • The impact of fraud is very significant: Estimates are that a typical organization loses as much as 5% its annual revenue to fraud. The Canadian companies in the study experienced a median loss of US $250,000. This is in addition to other losses, including reputational losses and damage to the morale of other employees.
  • A whistleblower policy is one of the most effective tools in combating fraud: Globally, “tips” continued to be the most common method of initially detecting fraud, accounting for 42.2% of frauds detected. Its relative effectiveness is evident in the fact that the second most common initial detection method was management review, which trailed at 16%. Over half of the tips were provided by employees and the tips were more effective in organizations with a hotline.

Despite the benefits of whistleblower policies and hotlines, according to the Report, of the organizations victimised by fraud, only 54% had a hotline mechanism and less than 11% provided rewards for whistleblowers. Based on the Report, employers should give careful consideration to implementing an effective whistleblower policy. Among other features, an effective whistleblower policy should include a hotline mechanism and should assure employees that they can speak up if something seems amiss without fear of reprisals.

  • It may be hard to see it coming: Only 5% of fraudsters in the study had been convicted of a previous fraud-related offence. 85.6% of all fraudsters in the study had never been criminally charged. Of the organizations that were able to provide data from past employment history, 81.7% of all fraudsters had never been previously punished or terminated because of a fraud. This means that the effectiveness of screening methods like criminal background checks and employment history screenings, while still useful best practices for many other reasons, may not be particularly effective for screening out fraudsters during the hiring process.
  • On the other hand, it may be easy to see it coming: Fraudsters in the study exhibited several behavioural clues which are “red flags” to the trained eye. Approximately 44% of fraudsters were living beyond their means while the fraud was ongoing, and 33% were experiencing known financial difficulties. The ability to identify these red flags may provide an early warning to victim organizations, and this in turn will limit the duration and impact of frauds.

This finding in particular indicates that there is solid business justification in HR strategies and training for promoting organizational cultures like “knowing one’s people” or “management by walking around”, because among other good reasons for these philosophies, they provide excellent opportunities to identify red flags.

  • Investigations and disciplinary procedures cannot be carried out in silos or in isolation: The Report seems to confirm what many experienced lawyers and HR professionals know anecdotally – one disciplinary issue is often the tip of the proverbial iceberg. If for example an employee has significant attendance issues, it is not uncommon to also find shoddy work and slippages in the employee’s record-keeping. The latter is often associated in one form or another with expense claim frauds or unintentional errors, for example. Where study participants were able to provide this type of data, 38% of fraudsters also engaged in at least one other type of misbehaviour, for example bullying, intimidation or excessive absenteeism – behaviours which are generally on HR’s radar. In addition, from the responses received, 25% of fraudsters had experienced one of several HR-related events immediately before or during the commission of fraud. The most common was a poor performance appraisal, which occurred in 11% of all cases.

The lesson for HR professionals and lawyers is that it is generally important that investigations be comprehensive, and this can be particularly important where fraud is alleged or suspected. A siloed approach to investigations can lead to late-in-the-game evidentiary surprises during investigations, disciplinary procedures or any ensuing legal proceedings.

Overall the Report provides insight which can help lawyers and HR professionals avoid some of the challenges associated with combatting occupational fraud and abuse.

Lessons on Work-Related Fraud and Abuse

SCC Says Suspension with Pay can Amount to Constructive Dismissal

A non-unionized employee on an indefinite suspension with pay successfully claimed that he was constructively dismissed by his employer and was entitled to damages for wrongful dismissal.

The case involved David Potter, an employee of the New Brunswick Legal Aid Services Commission.  When his relationship with the Commission started to deteriorate in the first half of a 7-year contract, Mr. Potter engaged in discussions with the Commission regarding a buyout of the remainder of his contract. Mr. Potter then took sick leave before the buyout negotiations were resolved and was advised during his sick leave not to return to work “until further direction”. Mr. Potter’s pay was continued during the suspension, but the Commission delegated Mr. Potter’s powers and duties to another person and, unbeknownst to Mr. Potter at the time, the Commission wrote to the Minister of Justice recommending the revocation of Mr. Potter’s appointment for cause.

Unlike an explicit termination of employment, constructive dismissal exists when the employer engages in an act or conduct that shows an intention to no longer be bound by the original employment contract. The Supreme Court acknowledged that the test for constructive dismissal has two branches.

The first branch consists of two “steps”, and requires a review of the express and implied terms of the contract. The first step requires that the employee establish that the employer’s unilateral change constituted a breach of either the implied or express terms of the employment contract and, if it does constitute such a breach, it must be found to substantially alter an essential term of the contract.  The second step of the first branch examines whether a reasonable person in the same situation as the employee would have felt that the essential terms of the employment contract were being substantially changed at the time the breach occurred based on the information known to the employee at the time of the breach.

The second branch requires an examination of whether the employer’s conduct demonstrates an intention not to be bound by the contract, giving the employee the right to treat the contract as being at an end.  Under the second branch of the test for constructive dismissal, constructive dismissal can be found even where there is no breach of any term in the employment contract, or where the breach is not substantial; it focuses on the employer’s actions in relation to the contract more generally.  When examining this branch, it is the totality of the employer’s conduct, including conduct engaged in by the employer of which the employee was not aware at the time, that is taken into consideration in determining the employer’s intent.

If either branch is established, the employee has the choice of either accepting the act or conduct engaged in by the employer, or, if the act or conduct affects the employment contract in a “fundamental” way, the employee can treat the employer’s conduct as a repudiation of the contract and sue for wrongful dismissal.

Applying the test above to the facts of the case, a majority of the Court found that there were no express or implied terms of Mr. Potter’s contract that permitted the Commission to suspend him indefinitely without explanation:  the Commission had an obligation to provide Mr. Potter with work. The Court found that the Commission had a duty to be honest, reasonable, candid and forthright in its suspension of Mr. Potter, and concluded that the Commission had not established that the suspension was reasonable in the circumstances; rather, it was reasonable for Mr. Potter to perceive the indefinite, unexplained, unauthorized and unilateral suspension as a substantial change to his contract, and he did not acquiesce to the change. Thus the first branch of the test for constructive dismissal had been proven.

This case is a warning about the use of indefinite suspensions, even if the employee is paid during such a suspension. When contemplating a suspension, employers should be mindful that the overriding question is whether the suspension is reasonable and justified. Employers must demonstrate good faith, including being honest and forthright.  If suspending an employee (even with pay), an employer should advise the employee of both the reasons for and the anticipated duration of the suspension.  Employers should also review their employment contracts to determine whether suspensions are expressly permitted, and if not expressly permitted, give consideration to adding a suspension clause to future employment contracts, or carefully negotiating a suspension clause into existing contracts, to reduce the risk of constructive dismissal.  Alternatively, if an employer has a policy on suspensions, this can assist in arguing that the terms of the contract were not violated.

Potter v New Brunswick Legal Aid Services Commission, 2015 SCC 10

SCC Says Suspension with Pay can Amount to Constructive Dismissal

BC and Ontario Employers Take Note: Upcoming Minimum Wage Changes

Ontario
Last fall the Ontario Employment Standards Act, 2000 was amended to index increases to the minimum wage to Ontario’s Consumer Price Index.  Putting that into effect, Ontario is raising the general minimum wage from $11 to $11.25 per hour, effective October 1, 2015.  The minimum wage rates in Ontario for jobs in special categories (liquor servers, homeworkers, students, etc.) are increasing at the same time, and those can be found here:  Minimum wage rates.

BC
The B.C. government has announced that it will also index increases in the general minimum hourly wage and the liquor server wage to B.C.’s Consumer Price Index.  As a result, effective September 15, 2015, the BC general minimum wage will increase from $10.25 to $10.45 and the liquor server wage from $9.00 to $9.20 per hour.  Also effective September 15, 2015, the daily rate for live-in home support workers and live-in camp leaders, as well as the monthly rates for resident caretakers and the farm worker piece rates (for harvesters of certain fruits and vegetables) will be increased proportionate to the 20-cent increase in the general minimum hourly wage.

,

BC and Ontario Employers Take Note: Upcoming Minimum Wage Changes

A Definitive Ruling on the Issue of Without Cause Terminations under the Canada Labour Code

Federally regulated employers take note.  The Federal Court of Appeal has recently confirmed that without cause dismissals are not automatically deemed to be “unjust” under the provisions of the Canada Labour Code (the “Code”).

For decades, adjudicators have been at odds with one another regarding the question of whether the Code permits dismissals on a without cause basis.  As a matter of background, the Code applies only to federally regulated employers such as banks, railways and telecoms.  After years of uncertainty in this area, the Federal Court of Appeal recently decided to end the discord and definitively determine the legal point.

In the case of Wilson v. Atomic Energy of Canada Limited, Mr. Wilson was employed for 4.5 years before being terminated on a without cause basis and offered a common law package equal to about 6 months of pay.  Mr. Wilson chose not to sign a release in exchange for the offer and instead filed a complaint under the Code which alleged that he had been unjustly dismissed.

After both an adjudication and a Federal Court hearing, the matter proceeded to the Federal Court of Appeal, which found that a dismissal without cause is not automatically “unjust” under the Code and that adjudicators must examine the circumstances of each particular case in order to decide whether or not a dismissal is unjust.  In its analysis, the court determined that Part III of the Code (which contains exceptional remedies such as reinstatement of employment) is merely intended to offer employees more remedies than exist under the common law, but only if the dismissal is unjust.  The extra remedies granted under Part III do not, however, mean that all without cause dismissals under the Code are automatically unjust.

As a result, federally regulated employees who are terminated without cause must prove that they have been terminated unjustly if they want that conclusion to be drawn.  In practical terms, this means that where there is no finding of unjust dismissal, a federally regulated employee can be terminated without cause and simply provided with a notice or severance package.  In order to gain the benefit of Code remedies which do not exist under the common law, such as the right to reinstatement, the employee must go the extra step and establish that the without cause termination was “unjust”.

The decision in Wilson v. Atomic Energy of Canada Limited can be found here: http://decisions.fct-cf.gc.ca/fca-caf/decisions/en/item/100689/index.do.

,

A Definitive Ruling on the Issue of Without Cause Terminations under the Canada Labour Code

Employers Be Aware: OSC Proposes Incentive-Based Whistleblower Program

The Ontario Securities Commission (the OSC) recently published “OSC Staff Consultation Paper 15-401” which sets out a proposed framework for an incentive-based whistleblower program. This program aims at incentivising whistleblowers to report Securities Act violations by offering a share of any monetary sanction or settlement resulting from the disclosure. With this publication, the OSC has also opened a 90 day comment period which ends on May 4, 2015.

Under the proposed framework, the OSC has discretion to grant eligible whistleblowers a financial award of up to 15% of monetary sanctions or settlements, to a maximum award of $1,500,000.00. Unlike similar regimes in other jurisdictions, the proposed framework grants awards based on the quantum of the final disposition, rather than on monies collected. The OSC hopes to encourage greater reporting by providing whistleblowers greater assurance that they will receive their reward.

In addition to the proposed whistleblower incentive payment, the OSC has also indicated it intends to request the Ontario government amend the Securities Act to provide specific whistleblower protection. This protection would include three new provisions providing:

  1. that whistleblower retaliation would violate the Securities Act, allowing OSC staff to commence a proceeding under section 127;
  2. that the whistleblower would have a civil right of action against a retaliatory employer; and,
  3. that contractual provisions designed to silence whistleblowers are unenforceable.

If enacted, these provisions would grant the OSC broad enforcement powers. On a finding of guilt under a section 127 proceeding, the OSC’s powers would include ordering the offender amend their workplace policies and practices, and pay a penalty up to $1,000,000.00. The civil right to action would allow a whistleblower to bypass the Ontario Labour Relations Board and seek punitive and restorative damages. The third provision could potentially make many confidentiality or non-disparagement clauses in employment contracts unenforceable. The OSC has further indicated a desire to extend these protections to whistleblowers who solely use internal reporting mechanisms.

In its current form, the framework penalizes companies which have ineffective internal whistleblower programs. The consultation paper proposes that a company’s failure to adequately address an internal complaint may eliminate credit they may otherwise get for cooperating with the OSC, and be used as an aggravating factor when recommending sanctions. The OSC is also specifically inviting comments on whether to require that whistleblowers must exhaust internal mechanisms before reporting to the OSC.

Despite no other Canadian securities regulator having published a comparable framework, the size of Ontario’s market means this initiative will have broad-reaching effects. Any company listed on the TSX, or which makes filings to the OSC, may be subject to this initiative when it comes into force. A similar regime by the Securities Exchange Commission in the United States launched in 2011 has already generated over 10,000 tips. If this is any indication, it is likely that once finalized this initiative will generate a significant number of new investigations for the OSC.

Please feel free to contact Jordan Deering of our Fraud, Corruption & Asset Recovery Group or Correna Jones of our Employment & Labour Group if you would like to discuss the application of this proposed framework to your particular circumstances.

Employers Be Aware: OSC Proposes Incentive-Based Whistleblower Program