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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.

 

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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.

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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.

 

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Required New ESA Poster for Ontario Workplaces

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.

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

The OHRC’s Christmas Present – A New Statement on Sexual Harassment in the Workplace

Ontario’s Human Rights Commission issued a statement on November 25, 2014 in relation to sexual harassment and the Ontario Human Rights Code. The statement reminds employers as to what constitutes sexual harassment as well as how to prevent it or deal with it in the workplace. The statement also links the Commission’s Policy on Preventing Sexual and Gender-Based Harassment.

The primary recommendations of the Commission are as follows: (i) employers should have a clear and comprehensive policy in place; (ii) employers should ensure that all employees have access to the policy and are aware of their rights and responsibilities; and (iii) employers should ensure that all employees in positions of responsibility have been trained in relation to the policy.

While the statements and policies of the Commission do not have the force of law and instead simply set out the Commission’s interpretation of the law as of the date of posting, they are a good reminder of what the Ontario Human Rights Tribunal looks to when determining a sexual harassment complaint.

For more information, the Commission’s recent statement can be reviewed at the following link: http://www.ohrc.on.ca/en/news_centre/sexual-harassment-and-ontario-human-rights-code.

 

The OHRC’s Christmas Present – A New Statement on Sexual Harassment in the Workplace

The Dangers of Unpaid Employment in a Start-Up Company

Unpaid internships were discussed in an April 8th posting in this blog and it is clear that most Ontario interns have to be paid.  But what about employees in start-up companies?  Can employers provide them with stock options, shareholdings or the promise of future payment in lieu of current payment of wages?  The short answer is that except in certain defined circumstances, employees must be paid wages, and they must be paid on a regular basis from the time that they begin working for a company.

The Employment Standards Act, 2000 (Ontario) (the “ESA”) defines an employee as “someone who performs work for an employer for wages”.  In turn,  the term “wages” is defined as “monetary remuneration”.  Section IX of the ESA requires employees to be provided with “at least the prescribed minimum wage”.

The Regulations under the ESA have some exemptions in relation to Section IX, but they are limited and generally only apply to certain defined professionals (eg. doctors, lawyers, engineers, architects, teachers), commissioned salespeople, and other specified groups of employees (certain student employees such as camp counselors, and janitors/superintendents who reside in the building that they are responsible for).  It is particularly important for start-up companies to note that there is no wages exemption under Section IX of the ESA for information technology professionals, managers, supervisors or executives.

In addition, because the ESA expressly prohibits employers and employees from entering into an agreement to circumvent the provisions of the ESA, it is not possible for a company founder or similarly-placed employee to agree to forego wages during the start-up period.  The potential risk to a company which permits employees to work without receiving at least minimum wage, is that the employee can make an unpaid wages claim, which in turn can also be a liability to the directors and officers of the company.  In addition, a failure to pay wages as earned can lead Canada Revenue Agency to have a claim for unpaid tax and other withholdings which should have been made.

While there are risks with entering into independent contractor agreements, particularly if the contractors are actually employees under various legal tests, sometimes the safest path for a financially strapped start-up is to consider short-term contractor arrangements until the company is on its feet and generating revenue which can be used to cover payroll for employees.  This can be a tricky area to navigate and should never be done without legal advice, but done properly, it is a better and safer option than failing to pay employees during the initial start-up period.

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The Dangers of Unpaid Employment in a Start-Up Company

Compliance Reminder – New Statutory Leaves in Ontario

Employers should be aware that effective as of October 29, 2014, statutory leaves of absence in Ontario under the Employment Standards Act, 2000 (the “ESA”) will be expanded to include the new “family caregiver leave”, “critically ill child care leave” and “crime-related death and child disappearance leave”.  These leaves of absence are in addition to the current Ontario “organ donor leave”, “family medical leave”, “personal emergency leave”, “pregnancy leave”, “parental leave”, “reservist leave” and “emergency leave – declared emergencies”.  Details of the new leaves of absence are as follows:

1.  Family caregiver leave – Up to 8 weeks per year can be taken in order to take care of a family member with a serious medical condition.

2.  Critically ill child care leave – Up to 37 weeks per year can be taken in order to care for a critically ill child under the age of 18.

3.  Crime-related child death and disappearance leave – Up to 52 weeks can be taken if an employee’s child disappears and it is probable that the child disappeared as the result of a crime.  If a child dies as a result of the crime, the leave period is increased to up to 104 weeks.

Each of these leaves of absence are unpaid, and under each leave time off can be taken by the employee in bits and pieces rather than altogether.  Employees using the critically ill child care leave may be eligible for Employment Insurance benefits for a portion of the leave; however guidance should be sought from Service Canada, as the leave provisions do not match up precisely with EI benefit eligibility.

As a reminder, the current statutory personal leaves of absence which are already in place in Ontario are the following:

(i)  Personal emergency leave – Up to 10 days of leave per year to deal with a personal emergency, illness, injury or urgent matter for oneself or a specified family member.  Personal emergency leave is only required in workplaces with 50 or more employees in Ontario.

(ii)  Family Medical Leave – Up to 8 weeks of leave per year to provide care or support to certain family members for whom a qualified health practitioner has issued a certificate stating that the family member has a serious illness with a significant risk of death occurring within a period of 26 weeks.

(iii)  Organ Donor Leave – Up to 13 weeks of leave per year for those employees who have undergone surgery for the purpose of organ donation.

(iv)  Reservist Leave – Time off for reservists to assist with international and domestic emergencies, for the period of time required to assist with the operation.

In addition to the above leaves, all employers should be aware of their obligations to provide pregnancy and parental leave under the ESA.

Employers should review their employee handbooks prior to October 29th in order to determine how the new leaves fit with existing statutory and non-statutory leave entitlements.

Compliance Reminder – New Statutory Leaves in Ontario

The Ontario Human Rights Tribunal – Is There an Appetite For Costs Awards?

No client likes to have a human rights application brought against it before the Ontario Human Rights Tribunal.  And no client is happy to hear that even if it is successful and fully exonerated, there is no real scope for recovering legal costs incurred in defending the application.  What may just be an unhappy cost of doing business for organizations is even more problematic for individual Respondents however, as they may be saddled with large legal bills and have no real recourse against the Applicant.  This can be particularly problematic under the current human rights scheme in Ontario, where Applicants can bring forward complaints without incurring the cost of retaining legal counsel or paying any filing fees, and without any screening of the legitimacy of the complaint by the Tribunal.  In relation to the awarding of costs, however, the situation may be about to change.

Bill 147, Human Rights Code Amendment Act (Awarding of Costs), 2013 (“Bill 147″) is a Private Member’s bill brought forward by Randy Hillier, a Progressive Conservative MPP.   Bill 147 would amend the Ontario Human Rights Code to permit the Tribunal to order costs in favour of a successful party, either by way of fixing costs or assessing costs.  Given that Bill 147 is a Private Member’s bill brought by the a member of the Official Opposition, ordinarily it would stand little chance of being enacted into law.  That said, Bill 147 passed First Reading in the Ontario Legislature in December 2013, so there is clearly some appetite by the Government to consider this issue.

Even if Bill 147 is ultimately passed, the Tribunal may be hesitant to make adverse costs awards against individuals or those with limited means.  That said, there will at least be the prospect that a Respondent falsely accused of discrimination or harassment will have some degree of recourse.  Of course, it also means that a successful Applicant can seek to recover costs against a Respondent found in violation of the Code.

Bill 147 has not yet progressed beyond First Reading. Bill 147 can be reviewed at the following link.  

The Ontario Human Rights Tribunal – Is There an Appetite For Costs Awards?

Top Ten Tips for the Workplace

Every now and then, it’s worth it for even the most seasoned HR professional to receive a reminder about best practices in the workplace.  Ensuring compliance with our Top Ten Tips list below will help to keep your workplace running smoothly.

1.  Ensure that all  employees sign employment agreements that clarify potentially contentious issues up front, such as entitlements on termination.

2.  If your workplace has any concerns about protecting company confidential information or intellectual property, ensure that employees also sign some form of Confidential Information and Intellectual Property Agreement (“IP Agreement”).

3.  Remember that employment agreements and IP Agreements must be signed before an employee’s start date.  If that doesn’t happen, then the employee must be provided with some sort of “consideration” for signing (eg. a signing bonus; a promotion and salary increase), and the consideration should be specifically referenced in the agreement(s).

4.  Remember that the law is ever-changing:  a good employment agreement template one year will not necessarily be legally compliant the next year.  An annual legal review of your employment agreement templates will provide a significant cost savings to your business in the long run.

5.  If it is important to your business that restrictive covenants be entered into, ensure that non-competition covenants are not used where non-solicitation and confidentiality covenants would suffice to protect the company.  In addition, ensure that the covenants are sufficiently narrowly drafted in terms of scope, duration and jurisdiction so that they can be upheld by the courts.

6.  Provide employees with at least several days to consider any employment agreements that they are being asked to sign, so that they may obtain legal advice if they wish.

7.  Ensure that your workplace is up-to-date and compliant with all of its statutory obligations.  In Ontario for example, that includes ensuring that all employees have undertaken mandatory Workers and/or Supervisors Health & Safety Awareness Training, ensuring compliance with the Access to Ontarians with Disabilities Act (AODA), ensuring compliance with the Pay Equity Act if applicable, and ensuring that your workplace has posted all required Employment Standards Act (2000) posters and all required Occupational Health & Safety Act posters and policies.

8.  In the event of employee disability issues, consider obtaining legal advice to help you to properly assess and monitor the situation, so that both your workplace and the employee are protected and treated appropriately.

9.  In the event that an employee must be terminated, ensure that he/she is provided with reasonable notice in accordance with the applicable statute, any applicable employment agreement, or the common law (except in the case of a just cause termination).  Do not seek a release unless the employee has been offered something more than the minimum statutory entitlements, and if the employee refuses the offer, provide all minimum statutory amounts even in the absence of a release.  Ensure that benefits and vacation pay continue to accrue through the statutory notice period, and ensure that the Record of Employment is properly completed and submitted in a timely manner.

10.  Don’t hesitate to seek legal advice.  Oftentimes, the biggest problems can be made much smaller if legal counsel is contacted before action is taken.

 

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Top Ten Tips for the Workplace

Ontario’s New Human Rights Policy

In mid-June, the Ontario Human Rights Commission released a new policy entitled “The Policy on Preventing Discrimination Based on Mental Health Disabilities and Addictions” (the “Disability Policy”), which builds on the Commission’s prior Policy and Guidelines on Disability and the Duty to Accommodate.

The Disability Policy covers some of the following areas: recognizing mental health disabilities and addictions, establishing discrimination, forms of discrimination, reprisal, the duty to accommodate, undue hardship, and preventing and responding to discrimination (including the development of policies, education and training). Although the Disability Policy covers protection from discrimination in the course of employment, it also applies to protection from discrimination in relation to goods, services, accommodation and housing.

Particularly important for employers to note is the Commission’s statement that when employees request accommodation due to disability, the employer is not generally to “second guess” the health status of an employee. That presumption can be overruled in a situation where there is a legitimate reason to question the employee; however the general rule is for the employer to take the request in good faith without seeking additional medical documentation. In the words of the Commission, “Where more information about a person’s disability is needed, the information requested must be the least intrusive of the person’s privacy while still giving the accommodation provider enough information to make the accommodation”.

Similarly, an organization must not ask for more confidential medical information than necessary because it doubts the person’s disclosure of his/her disability based on its own impressionistic view of what a mental health disability or addiction disability should “look like”.

As also stated in the Disability Policy, “In the rare case where an accommodation provider can show that it legitimately needs more information about the person’s disability to make the accommodation, it could ask for the nature of the person’s illness, condition, or disability, as opposed to a medical diagnosis”.

While the Disability Policy does not set out new law, it is a helpful summary of the current state of the law with respect to discrimination due to disability and the duty to accommodate, and it should be reviewed by employers dealing with mental health disabilities (including addictions) in the workplace. One note of caution, however: this is an evolving area of law, and the Disability Policy, like all policies of the Commission, do not have the force of law; they merely set out the Commission’s interpretation of the law as of the date the Policy is posted.

The Disability Policy can be found at the following link:  http://www.ohrc.on.ca/sites/default/files/Policy%20on%20Preventing%20discrimination%20based%20on%20mental%20health%20disabilities%20and%20addictions_ENGLISH_accessible.pdf.

Ontario’s New Human Rights Policy