Ontario Employment Law Monitor

No Such Thing as an Indefinite, Temporary Lay-Off

Posted on April 17, 2012 by Pinto Wray James LLP

The Ontario Court of Appeal recently decided an interesting case in which counsel for the employer/appellant raised a novel argument regarding the interESAion of the Ontario Employment Standards Act, 2000 (“ESA”) and the common law as they relate to lay-offs and termination. In Elsegood v. Cambridge Spring Service, 2011 ONCA 831, the employee/respondent had worked for the employer for seven years and was laid off twice in 2009, the total of which surpassed the allowable limit under the ESA.

Section 56(2) of the ESA defines a “temporary lay-off” as 13 weeks or less within a period of 20 consecutive weeks, or more than 13 weeks within a period of 20 consecutive weeks so long as it is not more than 35 weeks within a year, plus a variety of other conditions as described in the ESA. The upshot of this is that an employee will be considered terminated by an employer if a lay-off lasts longer than 35 weeks within a given year.

In Elsegood v. Cambridge Spring Service, the employer raised the argument that regardless of the ESA, at common law the employee is still considered employed despite being laid off for more than 35 weeks within the given year and, therefore, the employer is not required to pay notice and severance. In essence, the employer argued that the common law and the ESA operate independently of one another.

Justice Juriansz, writing on behalf of a unanimous Court of Appeal, disagreed. He decided that a termination under the ESA is the same as a termination under the common law. Further, the Court of Appeal found that the ESA ousts the operation of the common law unless it provides specifically for its continued operation, as the ESA does in some cases. For example, the ESA makes specific exception for such things as reasonable notice period, where the ESA stipulates minimum standards but allows for lengthier notice periods at common law. In the case of lay-offs and termination, however, this is not the case. There is no such thing as an indefinite, temporary lay-off. Rather, according to the ESA, once a lay-off has reached 35 weeks within a given year, an employee is considered terminated and notice and severance obligations are triggered. Even if the common law were to continue to operate, Justice Juriansz reasoned that the employee could claim he was constructively dismissed and sue for damages.

This interesting case clarifies how the ESA and the common law co-exist. It is definitely a recommended read for both employers and employees, and their legal counsel.

Posted in Wrongful Dismissal | Tagged Elsegood v. Cambridge Spring Service | Comments Off

Damages for Wrongful Dismissal are Calculated on an Employee’s “Global Compensation”

Posted on April 10, 2012 by Pinto Wray James LLP

The recent case of Olivares v. Canac Kitchens, 2012 ONSC 284 provides a useful reminder of what to include in a damages calculation for a wrongful dismissal case. In this case, the Plaintiff had worked for Canac Kitchens for 24 years when his employment was terminated along with many others as a result of the company closing its manufacturing operations in Canada. The Plaintiff was earning an annual salary of $93,000 including pay for overtime and insurance benefits. One issue on this motion for summary judgment was how to properly calculate damages with respect to overtime pay and insurance benefits.

Justice Lederman confirmed that overtime pay is to be included in the calculation of the Plaintiff’s damages:

[17] Overtime pay had become an integral part of the anticipated income of the terminated employee and should be considered as compensable damages. If overtime has been paid in years immediately preceding the termination, it is appropriate to take that overtime into account when assessing damages for wrongful dismissal (see Guitierriz v. Canac Kitchens Ltd. 2009 CanLII 593 (ON SC), 2009 CanLII 593 (Ont. S.C.J.) at paragraphs 12-14;Munoz v. Canac Kitchens, 2008 CanLII 63151 (ON SC), 2008 CanLII 63151 (Ont. S.C.J.) at page 23).

In addition to any regular overtime that makes up an employee’s compensation, a damage award will also include the value of lost benefits over the span of the reasonable notice period.

Justice Lederman held that the calculation of damages in a wrongful dismissal action is based on the “global compensation” that an employee was making. This is an important reminder for both employees and employers, and their legal counsel, when calculating damages for the purposes of a legal action or for negotiating a settlement.

Posted in Wrongful Dismissal | Tagged Guitierriz v. Canac Kitchens Ltd, Munoz v. Canac Kitchens, Olivares v. Canac Kitchens | Comments Off

Legislation Restricting Right to Strike Deemed Unconstitutional: Saskatchewan Court

Posted on April 3, 2012 by Pinto Wray James LLP

The Court of Queen’s Bench for Saskatchewan has ruled that the right to strike is protected by the freedom of association provisions of Charter of Rights and Freedoms.

In a decision released in February 2012, the Saskatchewan Court held that that province’s Public Service Essential Services Act (“PSES Act") substantially infringes on the right of employees to engage in collective bargaining and collective strike action, rights which are protected by the Charter’s section 2(d) freedom of association provision.

The intent of the PSES Act is to allow the Saskatchewan government to designate certain public sector employees as providing “essential services,” thereby requiring these employees to remain at work, even while their representative union is engaged in lawful strike activities.

The Saskatchewan Court found that the PSES effectively allows the government, as a public sector employer, to unilaterally designate certain employees as essential, and does not provide a dispute resolution mechanism whereby an affected union can challenge the “essential service” designation.

The Court held that the right to strike is a fundamental freedom protected by section 2(d) of the Charter, along with the interdependent rights to organize and to bargain collectively. According to the Court, the PSES Act is unconstitutional as it substantially interferes with this constitutionally protected right to engage in meaningful strike activities, as an essential aspect of collective bargaining.

The Court went on to find this substantial interference with the right to strike could not be justified under section 1 of the Charter. This was so, in part, because the government had adopted an overly restrictive approach to the essential service designation process, which did not allow an affected union to challenge an employer’s decision on which employees must remain at work during a strike.

According to the Saskatchewan Court, no other essential services legislation in Canada comes close to prohibiting the right to strike as broadly and significantly as the PSES Act. And, no other essential services legislation in Canada was “devoid of access to independent, effective dispute resolution processes to address employer designations of essential services workers.”

The Saskatchewan Court’s holding that the right to engage in meaningful strike action is protected by the Charter is an issue which could make its way to the Supreme Court. The Saskatchewan Court has given the government a twelve month window in which to remedy the Charter deficiencies contained in the PSES Act.

Posted in Employment Standards | Tagged PSES Act, Public Service Essential Services Act | Comments Off

Ontario Court of Appeal Approves of Tort of Invasion of Privacy

Posted on March 27, 2012 by Pinto Wray James LLP

In a landmark ruling released in January 2012, this province's highest court, the Ontario Court of Appeal, has recognized the tort of invasion of privacy.

In its decision in Jones v. Tsige, 2012 ONCA 32, the Court of Appeal paves the way for individuals to bring a cause of action in circumstances when their informational privacy rights have been breached. While Courts have historically been more approving of legal claims for breaches of privacy that intrude against the person or personal property, this is the first time that a Canadian appellate court has recognized and clarified the tort of intrusion against informational privacy.

This case involved a claim brought by Sandra Jones, a Bank of Montreal (“BMO”) Employee, whose personal banking records at BMO were accessed on at least 174 occasions by Winnie Tsige, another employee. Ms. Tsige did not know Ms. Jones personally, although they both worked for BMO and Ms. Tsige had formed a common-law relationship with Ms. Jones’ former husband. Although she accessed Ms. Jones’ banking records on numerous occasions, Ms. Tsige did not publish, distribute or record Ms. Jones’ personal information.

The Court of Appeal allowed Ms. Jones’ suit for invasion of privacy against Ms. Tsige, holding that the workplace discipline administered by Tsige’s employer did not address the wrong that had been done to Ms. Jones. Ms. Jones was awarded modest damages of $10,000 for Ms. Tsige’s breach of her privacy.

In its decision, the Court reasoned that the common law should evolve to respond to the problem posed by the routine collection and aggregation of highly personal information that is readily accessible in electronic form.

Individuals will now be able to claim for invasion of privacy if they can establish 1) that the defendant’s conduct was intentional or reckless; 2) that the defendant intruded into their private affairs or concerns without lawful justification; and 3) that a reasonable person would regard the invasion of privacy as highly offensive. The Court of Appeal also held that there will be no proof of harm required in order to establish the tort, and that a successful claimant will usually only be entitled to modest damages if he or she can prove the defendant engaged in a deliberate and significant invasion of personal privacy.

The decision will undoubtedly have significant workplace consequences, as both current and prospective employers – and fellow employees – can now be found liable for unreasonable and intentional invasions of employee privacy.

Posted in Uncategorized | Tagged Jones v. Tsige | Comments Off

Pension-plan case heads to Supreme Court

Posted on March 20, 2012 by Pinto Wray James LLP

On December 1, 2011, the Supreme Court of Canada granted leave to appeal of a decision of the Ontario Court of Appeal regarding the right of pension-plan members to claim priority over the assets of their bankrupt company to cover a shortfall in their pension plan: Sun Indalex Finance, LLC v. United Steal Workers, [2011] SCCA No. 274.

The major issue that the Ontario Court of Appeal had to decide was who had a priority claim to money held in a Reserve Fund: was it the members of the two registered pension plans or the parent company that guaranteed the loans?

Indalex was a Canadian company that became insolvent and its U.S. parent company had filed for bankruptcy. Indalex obtained protection from its creditors under the Companies’ Creditors Arrangement Act, R.S.C. 1985, c. C-36. Indalex also received a court order enabling it to borrow funds under a debtor-in-possession (DIP) credit agreement, and the U.S. parent company guaranteed this loan. The court further approved the sale of Indalex, but the proceeds did not cover the loans made to it by the DIP creditors and the parent company covered the difference. A portion of the sale proceeds was put into a reserve fund that was controlled by the CCAA monitor.

Justice Gillese decided in this case that Indalex, as the administrator of the pension plans, breached its fiduciary duty to the plan members. Specifically, the Court decided that both a deemed trust and constructive trust arose which gave priority to the plan members to the funds in the Reserve Fund.

This case raises a similar issue to that in the recent Nortel bankruptcy, which left hundreds of employees on long-term disability without money in the reserve fund to cover their benefits.

The Indalex case will likely be the first case of its kind to be decided by our Supreme Court and may have far-reaching ramifications for both companies and pension plan members. Stay tuned….

Posted in Employment Contracts | Tagged Sun Indalex Finance LLC v. United Steal Workers | Comments Off

Human Rights Tribunal to hear Challenge to WSIB’s Traumatic Mental Stress Policy

Posted on March 13, 2012 by Pinto Wray James LLP

The Human Rights Tribunal recently convened a rare three-member panel to consider the issue of whether the Human Rights Tribunal has jurisdiction to decide if the WSIB’s Traumatic Mental Stress (“TMS”) policy and the related provisions of the Workplace Safety and Insurance Act (“WSIA”) constitute a breach of the Human Rights Code in the provision of services.

The WSIB has implemented a policy whereby it will only allow TMS claims where there is some element of violence involved in the worker’s development of a psychiatric injury. For example, the WSIB would potentially allow a TMS claim where a worker witnessed the violent injury of a co-worker, but would not allow a claim where a worker was subjected to sustained verbal abuse over a period of time.

The WSIB draws support for its policy from the wording of the WSIA which provides in s. 13(5) that traumatic mental stress benefits are only to be awarded in the case of “an acute reaction to a sudden and unexpected traumatic event arising out of and in the course of his or her employment.”

In practice, the wording of the WSIA and the WSIB’s internal policy have been interpreted to routinely deny mental stress claims where the mental stress arose as the result of a long-period of harassment or stress. Workers who have developed post-traumatic stress disorder or other serious psychological injuries as a result of a sustained level of harassment over a prolonged period are not eligible for WSIB benefits under the current policy. Workers who have gradually developed serious psychological injuries as the result of overzealous supervisory scrutiny have similarly been denied benefits on a routine basis.

In Seberras v. Workplace Safety and Insurance Board, 2012 HRTO 115 (CanLII), a three-member panel of the Human Rights Tribunal considered whether it could hear an Application brought by Mr. Seberras. Mr. Seberras is a worker who alleges that he developed a gradual onset psychological injury at work. The WSIB denied his claim pursuant to the TMS policy.

The Human Rights Tribunal considered several arguments for and against its jurisdiction to decide the matter. What ultimately tipped the balance in favour of confirming jurisdiction to hear the challenge, is that the Applicant was not challenging the specific decision made in his own case. That decision would be the subject of judicial immunity and would only be properly challenged by an appeal to the Workplace Safety and Insurance Appeals Tribunal. The Human Rights Tribunal was clear in stating that it was not prepared to hear appeals or collateral attacks on specific claims benefit decisions made by the WSIB.

Instead, Mr. Seberra’s Application is framed as a challenge to the overall statutory scheme that the WSIB has implemented for dealing with TMS claims. His case is essentially alleging that the scheme itself is discriminatory in that it places an arbitrary restriction on psychological injuries which does not exist for physical injuries. In other words, the WSIB treats psychological injuries differently from physical injuries, and this differential treatment is discriminatory against people with psychological injuries.

In allowing this challenge to proceed, the Human Rights Tribunal has ruled that the provision of statutory benefits such as WSIB benefits constitutes a “service” within the meaning of the Human Rights Code. This is qualified by the caveat that statutory benefits are only a “service” on a systemic level. Individual rulings to allow or deny such benefits are “decisions” not “services” and cannot be reviewed by the Human Rights Tribunal.

We will be monitoring this matter as it progresses and providing further updates in this blog. This proceeding may have a significant impact on the availability of WSIB benefits for victims of workplace harassment.

Posted in Human Rights | Tagged Seberras v. Workplace Safety and Insurance Board | Comments Off

For Employers – Take the Time to Conduct Thorough and Thoughtful Performance Reviews

Posted on March 6, 2012 by Pinto Wray James LLP

Does your company conduct pro forma performance reviews? Do your non-unionized employees sometimes receive group salary raises in the standard course when their individual performance does not merit a raise?

Performance reviews are important human resources management tools. Unfortunately, performance reviews are also one of the many administrative tasks that do not directly produce any revenue. As a result, it is all too often the case that performance reviews are rushed and superficial – often to the detriment of the employer.

For example, although it may take only 5 minutes to check off “satisfactory” in every job evaluation category, it could take significantly longer to critically reflect on an employee’s true performance. We routinely see performance reviews completed by managers who were effectively guessing what comment to make on the review form. Wherever a manager completing a performance review does not have the best information available, it is advisable to go and speak with other supervisors and managers who could provide better information. A thorough performance review takes work, but the work will be appreciated if the employee who is the subject of the review is dismissed at a later time and the performance review becomes evidence in a legal proceeding.

We also see performance reviews where the reviewer has checked off the required boxes, but has not taken the time to provide written comments expanding on the employee’s performance. Even worse, we see examples where the written comments do not correlate with the check boxes. For example, the check boxes are all marked “satisfactory” or “good,” but the written comments are overwhelmingly negative. A performance review that contradicts itself will not be good evidence for the employer.

 The following passage from Lambe v. Irving Oil Ltd., 2002 CanLII 22789 (NL SCTD) makes the point that careless performance reviews and standard course raises can effectively undermine a case for cause dismissal:

[109] As well, the company, by waiting 27 months to act on policy breaches is estopped from relying on these alleged breaches. When Smith told MacDonald to ignore these alleged breaches of policy, Irving cannot now come to court and allege these as grounds for dismissal. I refer to the case of Tracey v. Swansea Construction Co. Ltd., [1965] 1 O.R. 203 and Holloway v. The Town Council of Marystown (1986) 58 Nfld. & P.E.I.R. 214, page 231-232. See also The Law of Dismissal in Canada, supra, Chapter 6 at page 129 where the author quotes as follows:

“Similar to providing the employee with a raise, providing an employee with a positive performance review or a letter of praise will have the general effect of condoning performance.”

[110] In this case Mr. Lambe was given a performance review as late as 1996 between February and May, just four months prior to being fired.

This was a case where the employer was not satisfied with the employee’s performance, yet proceeded to not pay sufficient attention to their performance review process and was left with a series of positive or satisfactory reviews which contradicted their allegations in support of termination for cause.

Accurate performance reviews are not only useful for alleging cause, but are also very important in defending human rights claims. Performance reviews can become a major issue in human rights cases where an applicant is alleging that he or she was dismissed for a discriminatory reason. Where the applicant can show a prima facie case that the dismissal was discriminatory, the burden shifts to the respondent to prove that it had a non-discriminatory reason (short of cause) to dismiss the person. If the performance reviews are inconsistent or largely positive, it will be that much harder for the respondent to prove its non-discriminatory reason for dismissal.

When completing a performance review, it is important to keep in mind that a positive performance review or a salary increase effectively confirms the employee’s good performance for the period in question.

Posted in Employment Standards | Tagged Lambe v. Irving Oil Ltd. | Comments Off

Class Action Lawsuit for Unpaid “Interns”

Posted on February 28, 2012 by Pinto Wray James LLP

Unpaid internships are becoming more common in the labour market and are replacing entry level positions in various industries. Typically, unpaid internships have been the means of gaining experience in the television, film, and print media industries. Unpaid internships are supposed to be educational opportunities that lead to gainful employment, but many unpaid interns find that this is the new norm for work, going from one unpaid internship to the next. Click here for an article by CTV exploring this issue.

In the United States, a class action lawsuit has recently been filed by Alex Footman and Eric Glatt against Fox Searchlight Pictures, alleging that their unpaid internships on the film Black Swan were really entry level positions, illegally misclassified as internships, for which they should have been paid. An interview with Eric Glatt and lawyer Elizabeth Wagoner from Outten Golden LLP was rebroadcast on December 28, 2011 on the CBC radio show Q, with Jian Ghomeshi,

In Ontario, non-unionized employment is regulated by the Employment Standards Act, 2000 (“ESA”). However, according to the Ministry of Labour, unpaid internships are not regulated in the province. The question that arises is whether an “intern” is really an “employee” as defined as follows under the ESA:

(a) a person, including an officer of a corporation, who performs work for an employer for wages,

(b) a person who supplies services to an employer for wages,

(d) a person who is a homeworker,

and includes a person who was an employee;

Subsection (2) states that “an individual receiving training from a person who is an employer is an employee of that person if the skill in which the individual is being trained is a skill used by the person’s employees, unless all of the following conditions are met:

1. The training is similar to that which is given in a vocational school.

2. The training is for the benefit of the individual.

3. The person providing the training derives little, if any, benefit from the activity of the individual while he or she is being trained.

4. The individual does not displace employees of the person providing the training.

5. The individual is not accorded a right to become an employee of the person providing the training.

6. The individual is advised that he or she will receive no remuneration for the time that he or she spends in training.

If an individual meets all of the six criteria, then they are not considered “employees” and are not entitled to the protections of the ESA.

It is important, therefore, for both employers and employees to be mindful of these statutory provisions. Depending on the nature of the work, an individual may be an employee entitled to all of the ESA minimum standards and protections, even though the position is officially considered an “internship.”

Posted in Employment Standards | Tagged Alex Footman and Eric Glatt against Fox Searchlight Pictures | Comments Off

BC Court Invalidates Resignation of Employee Who Quits Under Threat of Termination

Posted on January 9, 2012 by Pinto Wray James LLP

Philip Chan was a general manager for Denny’s restaurants and had been employed with Denny’s for 15 years when he resigned from his job after his supervisor criticized his performance and threatened him with dismissal.

Believing that his termination was imminent, Mr. Chan submitted a resignation letter to his employer, which provided the following explanation for his resignation: “After my vacation ended a week ago, I then realized that my wife needs my attention more than I anticipated as well as looking after my own health…[I was] advised by my family physician to slow down.”

In its decision following the trial of Mr. Chan’s wrongful dismissal suit, the British Columbia Supreme Court found that Mr. Chan’s resignation was no resignation at all. The Court found that Mr. Chan had submitted the letter of resignation in order to “save face,” and because he was under the reasonable belief that he would be terminated imminently if he did not resign.

The BC Court confirmed the principle that when an employee is left with no choice but to resign or be fired, the resignation is not voluntary and a letter of resignation is tantamount to a dismissal.

As Mr. Chan’s resignation was deemed invalid and because his dismissal was without cause, the Court found that Mr. Chan was entitled to reasonable notice of his termination. In light of his age of 63, his 15 years of service, his position and other factors, the Court awarded Mr. Chan 18 months of pay in lieu of notice.

The Court declined to award damages for bad faith termination as a result of the manner in which Mr. Chan was dismissed. Although the Court was critical of the manner in which Mr. Chan’s supervisor had forced his resignation, the Court found that the employer’s conduct did not reach the level of malicious or outrageous conduct to give rise to an award of punitive damages.

The full text of the decision can be read here: Chan v Dencan Restaurants Inc., 2011 BCSC 1439.

Posted in Wrongful Dismissal | Tagged Chan v Dencan Restaurants Inc. | Comments Off

Pick Your Forum Wisely: the Supreme Court affirms that Human Rights Tribunals are not entitled to review human rights decisions of other administrative decision makers.

Posted on January 2, 2012 by Pinto Wray James LLP

In its 2006 decision Tranchemontagne v Ontario (Director, Disability Support Program), the Supreme Court of Canada affirmed that all administrative tribunals, and not just human rights tribunals, are entitled and required to apply human legislation, unless expressly prohibited from doing so by their enabling statute.

Practically speaking, from an employment law perspective, this has meant that employees with human rights grievances against their employer are usually required to raise their human rights concerns in a grievance arbitration proceeding, when such a forum is available to them. The same principle applies to parties before other administrative proceedings, such as the Employment Standards Branch of the Ministry of Labour, and the Workplace Safety and Insurance Appeals Tribunal, among others. This “concurrent jurisdiction” approach is based on the principle that human rights remedies must be accessible, and should be advanced in the most immediate and accessible forum.

By the same token, the Human Rights Tribunal of Ontario is empowered to dismiss an application, where the Tribunal is of the opinion that another proceeding has “appropriately dealt with the substance of the application.”

In a decision released in October 2011, British Columbia (Workers' Compensation Board) v Figliola, 2011 SCC 52, the Supreme Court has clarified the test for determining whether a matter has been “appropriately dealt with” in another proceeding.

In that case, Figliola and other injured workers brought an application to the British Columbia Human Rights Tribunal, arguing that BC’s Workers’ Compensation Board policy on chronic pain was contrary to the BC Human Rights Code. Figliola’s application to the BC Human Rights Tribunal was brought only after the same arguments were unsuccessfully raised by Figliola in appeals before the Workers’ Compensation Board’s Review Division and later the Workers’ Compensation Appeal Tribunal. Rather than challenge the Workers’ Compensation decisions in court through a judicial review, Figliola decided to raise the same arguments before the Human Rights Tribunal, on the grounds that the human rights issues were not appropriately dealt with in the previous Workers’ Compensation Board proceeding.

The Supreme Court dismissed Figliola’s application to the BC Human Rights Tribunal on the grounds that it was an improper collateral attack against the Workers’ Compensation Board proceeding. The Court stated that Figliola was obligated to judicially review the Workers’ Compensation proceeding, and that he was prohibited from “forum shopping” by advancing the same arguments before the Human Rights Tribunal that had been raised in the previous Workers’ Compensation proceeding.

In its decision, the Supreme Court emphasized the principle of finality, stating that the integrity of the administration of justice is undermined when parties are permitted to re-litigate the same issues in multiple forums. The Court also set out the test for determining whether a matter has been “appropriately dealt with.” Under this test, a matter will be found to have been “appropriately dealt with,” where 1) that prior proceeding or tribunal had concurrent jurisdiction to decide the legal issues; 2) when the previously decided legal issues are essentially the same as those being raised in the current proceeding before the Human Rights Tribunal; and, 3) where the parties had notice of the legal issues and the case to be met, including any human rights issues, and had an opportunity to respond.

Posted in Human Rights | Tagged British Columbia (Workers' Compensation Board) v Figliola, Tranchemontagne v Ontario | Comments Off