Ensuring Employees are Given Adequate Time to Review Employment Contracts

| April 21st, 2017 | No Comments »

The law recognizes that there is an imbalance of power between employees and employers. Employers hold the advantage in contract negotiations because they are in a more favourable position to pressure or influence employees into agreeing or signing terms of contract. In the case of job offers, courts will examine the surrounding circumstances in assessing whether the employee was pressured into agreeing on the terms being challenged. Employers seeking to enforce minimal standards under law within their employment contracts are more at risk of being challenge. However, there are ways to avoid the terms of the contract being deemed unenforceable by the courts.

Adequate time to review the contract:

Foremost, the employer should grant adequate time for the employee to review and consider the terms within the employment contract being offered. This is especially the case for when the parties seek to limit the amount of notice or severance pay in the event the employee is dismissed from employment. This is usually done with the goal of offering the employee less than entitled under common law, but equal or more to the entitlements that are guaranteed under the minimal standards of employment law. Time should be given from the date of the employment offer so that the employee can understand and reflect upon their entitlements in the event the employment relation is ended by the employer. Employers should provide the employee with a copy of the contract and a few days to review the terms and conditions.

Ensuring legislative compliance:

Pitfalls to avoid for employers are ensuring that the employment contract offered legally complies to the minimal standards of employment guaranteed by law. If the employment contact is found to violate law, the courts will not just simply adjust the compensation owed to the employee to match minimal standards. Rather, the courts will enforce common law entitlements which can be much more that the minimal standards guaranteed by law.

Staying up-to-date on changes in employment legislation:

In addition, it is important to be up-to-date and aware of any changes under employment law that would render the past agreed upon employment contract legally incompliant. For instance, if changes to employment law raises the minimal severance packages employees are entitled to, then all contracts signed by employees prior to the change in law must adhere to the new changes. If not, courts will apply the common-law awards in damages to employees in the event of a termination.

Acceptable Scope of a Non-Solicitation Clause: A Real-Life Example

| April 17th, 2017 | No Comments »

For most employees, a non-solicitation clause should be all that is necessary if an employer is seeking to protect his/her business interests (clients) from employees who leave to a competitor. However, employers must be careful with the wording of such clauses because the clause must only go as far as necessary to protect the employer’s business interests. This is the ‘reasonableness’ standard with which the courts will review a non-solicitation clause. Any restrictions on the employee’s freedom to work must be necessary to protect the employer’s business or the clause will be unenforceable.

Non- Solicitation Clauses

There are a few things that a non-solicitation clause must contain to be enforceable. The clause must have a limited geographic scope and time in place that is reasonable. Further, a non-solicitation clause must be limited to the act of solicitation. If the wording of the solicitation clause goes beyond the solicitation of the employer’s client base, then it is likely to place unreasonable limits on the employee’s ability to freely compete and earn a living. Lastly, it is wise to limit the act of solicitation so that it is not too burdensome. This may entail only restricting the solicitation of the clients that the employee dealt with or the types of clients that the employee works with. To better understand the limits of a non-solicitation clause, the case of Donaldson Travel Inc. v. Murphy et al. 2016 is useful to review.

Donaldson v. Murphy, 2016 (Superior Court of Justice – Ontario)

In the case, Murphy was a former employee of Donaldson Travel that left to work for a competitor company named Goliger. One of Donaldson Travel’s claims was that Murphy solicited clients and therefore violated the non-solicitation clause that Murphy had signed. The clause reads:

Mary agrees that in the event of termination or resignation that she will not solicit or accept business from any corporate accounts or customers that are serviced by … Donaldson Travel, directly, or indirectly. (emphasis added)

The court deemed this clause unenforceable for several reasons. Firstly, there was no limit in time and geography. As it is worded, this clause would never expire and would apply anywhere in the country. This is unnecessary to protect Donaldson Travel’s business interests. Secondly, the phrase “or accept business from” goes beyond the act of solicitation. This places an unreasonable restriction on Murphy’s ability to earn a living because it is not necessary to protect Donaldson’s business interests. Lastly, the term “any corporate account” is also too broad. It would be reasonable to limit the solicitation of clients that Murphy dealt with; however, the wording here would prevent Murphy from conducting business with any clients of Donaldson, even the ones that Donaldson establishes after Murphy had left. This is not needed to protect Donaldson’s business interests by the departure of Murphy.

Closing Remarks

The burden is placed on the employer to carefully draft such clauses and to show that the clause is reasonable. The wording of the clause is important as the courts will not look beyond the wording of the clause, nor will they change the clause so that it is legally enforceable. For employees that are not in a managerial role, a non-solicitation will almost always suffice in protecting an employer’s business interests. It is important to seek the assistance of an employment lawyer when seeking to protect business interests through non-solicitation clauses.

Health and Safety: Can a Corporation be held Criminally Negligent for the Conduct of Supervisors?

| April 11th, 2017 | No Comments »

Upon other employer duties relevant to health and safety, the duty to provide competent supervisors may be the most important. An employer may have all the requirements of a safe workplace, however, having a supervisor that is negligent may result in criminal charges against the business resulting in sever fines. Criminal negligence charges are for extreme cases such as the one below.

R. v. Metron Construction Corporation

The case of R. v. Metron Construction Corporation (Metron) is an important case to be aware of and also a sad one. In this case, Metron was given a project of restructuring the balconies of several high-rise buildings. The president of the company hired a project manager, whom then hired a supervisor for the workers on site. Swing-stage scaffolding was needed for the workers to work on the buildings’ exterior balconies. Life lines were required to be worn by each worker and were attached to each swing-stage, ensuring any falls wouldn’t result in injury or death. The supervisor was responsible for insuring that safety procedures were followed.

The company ordered additional swing-stage scaffolding that did not have proper labels for maximum capacity as required under the Ontario Health and Safety Act (OHSA). On December 24th, 2009, 6 workers including the supervisor boarded onto a swing-stage to travel to the 14th floor. The normal practice is for only 2 individuals to be on a swing-stage at once. The combined weight led to the collapse of the swing-stage, leading to 4 deaths (including the supervisor). There were only 2 life lines available on the swing-stage, only one of which was used properly – the worker that properly used the lifeline was uninjured and the other that used it improperly was injured. The use of a lifeline is also a regulation required by the OHSA. A report concluded that the combined weight and the faulty design of the swing-stage was the reason for the collapse. Further, had all workers used lifelines, the deaths would be prevented. A toxicology report also revealed that workers were under the influence of marijuana, including the supervisor.

Decision:

Metron was found criminally negligent under the Criminal Code for the conduct of the supervisor. This was due to the degree of blameworthiness and severity of the accident. Specifically, the departure from the 2-person limit norm, the improper use of lifelines, workers being under the influence of marijuana, and the fact that the supervisor allowed all this to take place were all factors leading to this decision. The fine was set at $750 000, from the initial $200 000 in order to denunciate and deter such negligence that place workers in danger.

Takeaway:

Corporations can be found criminally negligent for the actions of anyone in a supervisory role. Specifically, the court maintained that the seriousness and the corresponding penalty is not to be diminished by the fact that the negligence was the fault of the supervisor rather than a more prominent figure of the company. It is therefore important for human resource and health and safety professionals to be aware of the importance of having competent and diligent supervisors responsible for the health and safety of workers. Employers must ensure that supervisors are properly trained and that all standards are followed so that unnecessary accidents are avoided. Training, inspections, workplace policy and proper lines of communication should all be used as a means of maintaining high standards of health and safety. In addition, any violations by supervisors should be dealt with in a serious manner with discipline imposed accordingly. If there are any concerns in your workplace regarding health and safety policy and compliance, please seek the advice of an employment lawyer.

Termination Clauses and Contracting Out: Clarity Given by Recent Ontario Appeals Court Ruling

| March 13th, 2017 | No Comments »

Employment Standards Act Review:

The Employment Standards Act (2000) grants employees minimal guarantees. In terms of termination, the Employment Standards Act (ESA) provides one week of notice or pay in lieu for every year of service, for a maximum of 8 weeks. Severance pay is a separate payment that employers must provide if their payroll exceeds 2.5 million or if the employee was one of 50 employees that has been terminated within a 6-month period. In addition, employers are to provide all benefits throughout the notice period or pay in lieu. Employers are legally prohibited from contracting out of the ESA, unless the clause offers a greater benefit to the employee. In the instance where an employment contract offers less than the minimum provided under the ESA, then the provision in the contract is void. In this instance, the courts will award the employee common law notice (damages), which are often considerably more than minimal standards. A recent case heard before the Court of Appeals for Ontario highlights the importance of unambiguous language in termination clauses, as any ambiguity will render the clause unenforceable.

Facts from Wood vs. Deeley (OCA 2017):

 In the case, Wood served 8 years as a Sales and Event Planner, earning about $100 000 annually including benefits. Wood’s termination clause provided 2 weeks of notice for each year served (or pay in lieu) and stated that Wood is only entitled to the terms set within the termination clause of the employment agreement. Deeley ended up paying Wood 21 weeks worth of salary, which was more than the minimum Wood would have received under the ESA. Deeley argued that the extra payment provided after termination covered Wood’s benefits. Wood argued that the termination clause was unenforceable, however, because it excluded benefit pay and severance pay as per the wording of the clause. The Appeals Court of Ontario agreed, ruling that the clause was void because it contracted out of the ESA. Only the cause itself was to be considered in terms of enforceability, which means remedies implemented afterwards are irrelevant. Wood was awarded 39 weeks of notice pay (9 months), Wood’s common law entitlement.

Main Issues in the Termination Clause:

All-inclusive clause:

The language used in the termination clause effectively limited Wood’s entitlements to those provided in the clause. This meant that anything not covered in the clause but guaranteed under the ESA to not apply. The ESA entitles employees to their benefits during the notice period. The clause did not mention anything about Wood’s benefits and therefore was found to contract out of the ESA.

Ambiguous use of ‘notice pay’:

The termination clause Wood was subject to provided more than the minimum required notice pay under the ESA. However, notice and severance pay are two separate entitlements under the ESA, and combining both under “pay” here created ambiguity. For example, the termination clause entitled Wood to 2 weeks notice for every year of employment, or pay in lieu. If 10 weeks were given as notice, then the remaining 6 weeks were not enough to cover the minimum amount of severance pay that Wood was entitled to under the ESA. Rather, the termination clause should have allotted the necessary amount to each, severance and notice, rather than combining both under “pay”.

 

This case shows that employers are held to a rigorous standard in terms of drafting employment contracts. This reflects the purpose and intentions of the ESA. The ESA aims to protect employees that are unaware of their employment rights and the court seeks to interpret these clauses in ways that encourage employers to draft clauses that comply with minimal standards. As such, when determining the legal compliance of a termination clause, only the clause itself is considered and any remedies the employer seeks to implement at the time of termination will be irrelevant to the enforceability of the clause. It is important to seek legal advice from an employment law expert to ensure termination clauses are properly drafted. Any ambiguity will either be interpreted by the courts in the most favourable way for the employee or be deemed unenforceable, which entitles the employee to common law notice (damages). Again, common law notice (damages) is usually far more than minimal standards.

How To Choose the Best Wrongful Termination Lawyers

| January 18th, 2017 | No Comments »

wrongful terminationYou have questions about your wrongful termination, but how can you find a wrongful termination lawyer you can trust?

Do your research.  Like all service-based industries, it pays to spend some time and effort researching potential wrongful termination lawyers.

What to look for? Look for a wrongful termination lawyer who practices exclusively in employment, human rights and/or labour law, and licensed to practice in the jurisdiction in which you work or reside.  You probably do not want to entrust your case to a general practitioner as employment law is nuanced and changes frequently.

Look for someone who is regularly interviewed, published, and does speaking engagements with reputable organizations.  That way you are sure to find a wrongful termination lawyer who is up to date on the state of the law.

You may also wish to speak with someone certified by the Law Society of Upper Canada as an expert in the field.

Ask around.  Talk to friends, relatives, anyone who has experience with a wrongful termination lawyer. Get their impressions of the lawyer, the firm, their fees, and what their overall experience was like.

Beware of wrongful termination lawyers who want to meet with you for free.  Often you get what you pay for and these wrongful termination lawyers may just be fishing for lucrative cases.

Feel free to get a second opinion or meet with a few lawyers at different firms until you find the right wrongful termination lawyer for you and you case.

Finding a lawyer and a firm that you are comfortable with is key as a successful case depends on trust and communication between lawyer and client.

 

Author: Ellen Low, Whitten & Lublin

Establishing Whether an Employment Relationship Exists

| December 13th, 2016 | No Comments »

employment relationship agreementBoth parties have an interest in determining if there is in fact an employment relationship between the employer and individual providing service. If there is no employment relationship, then the Employment Standards Act (ESA) does not apply. For employers, this means that they are not liable for wrongful dismissal or other obligations that otherwise would apply under the ESA. Conversely, individuals providing service have an interest in establishing the existence of an employment relationship to make a wrongful dismissal claim in the appropriate situation.

How to Establish Whether There is an Employment Relationship

The relation between an individual providing service for an organization may be ambiguous at times – an example includes long-term contracted employees. The tests developed by the courts were established overtime and are used to analyze the fundamental nature of the employment relationship, and ultimately whether there can be a wrongful dismissal claim. The four tests below are not used in isolation by the courts; the courts will apply all relevant factors. As such, the question of whether there is an employment relationship can be complex and warrant the expertise of a legal expert. The tests below are not comprehensive and are meant to serve as a general guide.

The Control Test

The control test views the essence of the employment relationship being a question of control over the work performed. The most important aspects of this test include the discretion over payment, the control over the timing, type and manner of work, and disciplinary power. If the individual is subject to a high degree of control over the duties being performed, terms of payment and discipline imposed by those receiving the service, this is indicative of an employment relationship.

The Fourfold Test

In the case of professional or highly skilled individuals, the control test may not truly capture the essence of the employment relations as skilled employees tend to have more autonomy and control over their work. The fourfold test seeks to determine the owner of the business. Likewise, the test analyses the degree of control the employer has over the work, the ownership of tools, who stands to make a profit, and conversely, who is at risk of a loss. Generally, if the employer owns the tool and equipment and bears most of the risk for a loss, then this is indicative of an employment relationship.

The Organization Test

This test is usually a last resort used in conjunction with some of the factors in the control or fourfold test when no clear answer is rendered. This test seeks to establish whether the individual’s services are fundamental to the business or if the individual is dependent upon the organization as their main source of income. It is used as a broad overview in determining whether an employment relationship exists.

The Permanency Test

This test is most appropriate for contract employees and seeks to establish the overall stability of the relationship. Indicators of an employment relationship include the employer providing training, selecting the individual for employment rather than having a staffing agency make the placement, and continued supervision. In such instances, a long-term contracted individual may be seen as an employee rather than a contract worker.

The Danger of Social Media in the Workplace

| September 16th, 2016 | No Comments »

social mediaSocial media has become the driving force of most workplaces.  Just a short time ago, it was barely on a company’s radar as a means of driving production or sales; it was commonly viewed as a nuisance to be avoided in the workplace, dismissed as a means for depraved millennials to get the company into trouble.

Today, social media is seen in a much different, far more positive light by most forward-thinking organizations.  Now companies use LinkedIn to track new recruits; salespeople pump their Facebook contacts to find leads; Twitter has become an effective (and free!) advertising tool.  Even formerly fringy operations like Instagram and Snapchat have found in a legitimate home in offices around Canada.

Despite the power of social media to disseminate and promote, it can still expose companies to potential workplace transgressions – often in the blink of an eye.  Employees have an easy means of speaking without authority on behalf of their employer, posting unfortunate work-related photos of themselves, using social media to of publicly vent about their boss, and so on.

For these reasons, it’s become imperative for workplaces to have a well-drafted social media policy emphasizing the Do’s and Don’ts for employees and contractors who work with their company.  By doing so, companies can ensure employees understand how to communicate effectively using social media – both within and outside the workplace – and what the consequences could be if they don’t use it properly.

 

Author: Daniel Chodos, Whitten & Lublin

What You Need To Know About Medical Marijuana in the Workplace

| March 3rd, 2016 | No Comments »

What You Need To Know About Medical Marijuana in the WorkplaceMany people are prescribed marijuana to cope with health conditions, such as chronic pain, cancer, and sleeping disorders.  As the number of prescribed users increases, more employees may be requesting to use it at work.  Below is a list of things employers and employees need to know when navigating the issue of medical marijuana in the workplace.

What employers need to know:

  • Employers must make efforts to accommodate employees using prescription marijuana.  Ontario’s Human Rights Code (“Code”) requires employers to accommodate their employees’ disabilities up to the point of undue hardship.  Since the medical condition underlying an employee’s use of marijuana will likely fall within the definition of “disability” under the Code, an employer’s obligation to accommodate extends to the use of licensed marijuana in the workplace.  Accommodation must be explored before the employer seeks to fire the employee – even if the employee is not able to perform the job in the same way as before.
  • Employers must consider how the use of medicinal marijuana will impact the safety of the workplace.  Ontario’s Occupational Health and Safety Act requires employers to take every precaution reasonable in the circumstances to protect their workers.  Employers should therefore making inquiries of the employee to ensure that he or she can safely perform the job.  If the employee cannot carry out his or her job safely, the employer is not necessarily required to accommodate the use of medical marijuana at work.  This is especially so where the employee’s position involves the use of safety sensitive equipment.  Even in such circumstances, however, employers should explore alternative methods to accommodate the employee – such as providing a leave of absence to undergo medical marijuana treatment, or moving the employee to a position that would not pose safety risks to the workplace.

What employees need to know:

  • Employees have a right to have their disabilities, which may require the use of medical marijuana, accommodated in the workplace.  Accordingly, employees are encouraged to disclose their use of medical marijuana to their employers and ask that it be accommodated.  This will trigger the employer’s accommodation obligations and ensure that the protections of the Code are engaged.
  • Employees do not have a right to endanger the health and safety of the workplace.  So, when seeking accommodation, employees should provide their employers with medical documentation addressing their abilities to perform their jobs safely.  This will address any questions the employer may have about how the use of medical marijuana will impact the health and safety of its workers.
  • Employees are required to cooperate with their employers’ accommodation process.  This means that, if the employer proposes accommodation that is reasonable, the employee is required to accept the proposal.

If you would like to know more about the use of medical marijuana in the workplace, contact one of our lawyers today.

Author: Ozlem Yucel, Whitten & Lublin

Q&A: Forced retirement – is this allowed?

| August 17th, 2015 | No Comments »

QUESTION

Forced retirement, to some employers is one viable way of making space for a new hire.  To other employers, insinuating and making comments about forced retirement can land them in a law suit.  It is not uncommon for an employer to want a ‘young’ hire for their business and even less common for the employer to come up with ways to dismiss their senior employee in an attempt to ‘make space’.  With this topic in mind, faithful readers of the Globe and Mail have asked whether or not it is legal to make comments insinuating that an employee should retire?

ANSWER

Toronto Employment lawyer, Daniel Lublin stresses the fact that a forced retirement is an illegal termination.  In cases where an employee is being hinted to retire, an employee may be entitled to a severance package and damages for age discrimination. In fact, senior employees who are considering receipt of a severance package can ask their employer. However, be forewarned that this can have consequences.  To know how to best handle retirement situations, you should consult with a lawyer at Whitten and Lublin Employment lawyers.

Read Daniel Lublin’s Globe and Mail column and full article Can I be forced into retirement?

Q&A: Can an employer significantly reduce an employee’s pay?

| August 10th, 2015 | No Comments »

QUESTION

Employers are finding that under recent economic changes, the salary paid to employees may need to reflect this change by significantly reducing an employees pay to account for their budget. Employee’s on the other hand, are dissatisfied. Initially, an employer may consider changing the pay rate based on cost of living. But what happens when the cost of living significantly rises, and then drastically reduces? Readers of the Globe and Mail are asking, can an employer significantly reduce an employee’s pay? 

ANSWER

Circumstances Where an Employee’s Pay Decrease Will Be Considered Lawful

Daniel Lublin, Toronto Employment lawyer says that employers cannot drastically reduce an employee’s pay. All the same, an employee cannot pursue their employer for a minimal pay reduction. There are few circumstances where a pay decrease will be considered lawful and these need to be understood thoroughly.

Find out the answer by reading Daniel Lublin’s Globe and Mail column and full article I have to work through my severance. Is this legal?