Unwritten Terms of Employment Contracts

| May 23rd, 2017 | No Comments »

Contracts- Implied Terms:

It is not uncommon for terms of employment between workers and employers to be unwritten. Disputes between an employee and employer may arise over past verbally-agreed-upon terms, established unwritten practices, and more. This can result in litigation and unseen costs resulting from workplace conflict. In general, the courts will attempt to determine what terms would have been agreed to between the parties if they were to produce a written contract. This is done by examining the common practices within the workplace, interactions between the employee and superiors, and so forth. Employees and employers also have duties that the courts established through common law, whether or not it is in writing.

Common Law Employer Duties:

Employers have a duty to pay their employees. There must be a regular pay period set by the employer, and this means that employees are not to be paid in arrears. The law recognizes the inherent power imbalance between employees and employers, and paying in arrears would subject employees to too much control. There are fines and penalties associated with failing to establish a regular method of pay – weekly or biweekly is most common.
Employers also have a duty to provide employees with a safe workplace and equipment. If an employee suspects they are being put in harm’s way, then they have the right to refuse any work they believe is unsafe. There are protocols for this under the Ontario Health and Safety Act. This includes the employee first notifying a supervisor, the supervisor then eliminating the hazard to the employee’s satisfaction, and, if no resolution is agreed upon, an inspection by the Ministry of Labour to determine if there is a hazard.

Employers are also obligated to provide notice or pay in lieu in the event an employer wishes to terminate an employee. This pay or notice is based upon an estimate of how long an employee would need to find comparable employment.

Common Law Employee Duties:

Employees have a duty to obey. This is fundamental to the employment relationship, as workers are providing their service in exchange for pay. Willful disobedience can lead to a summary dismissal, which means that the employer can terminated the employee without severance pay or a notice. The exception to the duty to obey is when an employee is asked to do something illegal or perform work that is unsafe. Employees also have a duty to exercise skill and care while doing their job. This includes using the skills required and also not being negligent while performing job duties.

Employers also cannot intentionally cause an employer harm, which falls under an employee’s duty of good faith and fidelity. This includes protecting trade secrets of the employer even after employment has ended, not pursuing or completing other work during hours of work, work for a competitor and so on.

Conclusion:

The above duties are a part of every employment relationship within Canada. For oral agreements that go beyond theses duties, drafting a carefully written agreement may avoid future disputes over misunderstandings within the workplace and also avoid costly litigation. For complex scenarios and terms of employment, it is best to seek an employment law professional. For any related issues, Whitten and Lublin Employment Lawyers have a team of professionals dedicated to providing great service.

A Case of Employee Dishonesty Resulting in Termination

| April 4th, 2017 | No Comments »

Where there is ‘just cause’ for termination an employer is not obligated provide an employee notice of termination or pay in lieu.  ‘Just cause’ means that the employee has done something wrong that deserves termination as a disciplinary measure. This can either be one act that strikes a fundamental aspect of the employment relation or a final step in the progressive disciplinary process. Overall, the punishment must be proportional to the misconduct of the employee. For a single act to trigger a just cause termination, it must be fundamentally incompatible with the duties of employment or significantly breach the employer’s trust of an employee. There are two aspects that must be considered when determining whether termination is warranted (i.e. proportionate to the employee’s misconduct). This includes the nature and extent of the misconduct, and the surrounding circumstances.

Fernandes v. Peel Educational and Tutorial Services Limited:

Fernandes v. Peel Educational and Tutorial Services Limited (Peel Educational Ltd.) is a case which deals with employee dishonesty and termination. Fernandes was a teacher of 10 years (1999 – 2009) with a good employment record. Fernandes was also involved with extracurricular activities, including coaching and after-school events. In the 2008 – 2009 school year, Mr. Fernandes was found to have falsified various grades for the students in his classes. This was an attempt to meet the deadline for report cards, for which he had been given 3 extensions. After an investigation and 3 meetings, the school terminated Mr. Fernandes’ employment without notice or severance, calling this a case of ‘academic fraud’. Upon analysis, the Ontario Court of Appeals ruled that there was just cause for termination. In reviewing Mr. Fernandes’ misconduct of dishonesty, the court considered the nature and extend of the misconduct, and the surrounding circumstances.

  1. The nature and extent of the misconduct:

The court considered the fact that Mr. Fernandes assigned inaccurate and false grades for his students’ assignments, both initially and upon resubmission, and that Mr. Fernandes released these grades for the students’ interim report-cards. Further, Mr. Fernandes lying to the employer in an attempt to cover-up his actions was also considered in assessing the seriousness of this misconduct. The key here is to understand the seriousness of this misconduct as it related to his employment relation. Teachers hold the trust of the school, the students and the students’ parents to fairly evaluate the students’ progress and development. The dishonesty of this misconduct, therefore, was fundamentally incompatible with the duties required by a teacher, causing irreparable harm to the trust placed in Mr. Fernandes by all parties.

  1. The surrounding circumstances:

The courts consider both the employer and employee’s surrounding circumstances when further evaluating whether just cause is warranted. In this case, it is important to understand the harm that Mr. Fernandes’ misconduct could have done to the school as a business. Being a private school, Peel Educational Ltd.’s authority to grant credits and Ontario Secondary School Diplomas is dependent upon meeting the standards in place by the Ministry of Education. The severity of harm which could have resulted by Mr. Fernandes’ misconduct placed the school’s business in jeopardy. Further, Mr. Fernandes’ actions also violated his employment contract to fairly evaluate his students and the school’s trust in his professionalism, making continued employment a significant issue.

The court also considered Mr. Fernandes’ past behaviour, as he was employed with the school for 10 years with no prior performance issues. However, Mr. Fernandes did not have any explanation for his misconduct. He did face a deadline to submit his grades which was extended 3 times. However, Mr. Fernandes stated to his superiors that there were no life troubles that were preventing or hindering his teaching duties.

Was dismissal warranted?

In consideration of the above, it was determined that the seriousness of Mr. Fernandes’ misconduct did warrant just cause for dismissal and thus no severance package or notice was required. Mr. Fernandes’ actions displayed a complete disregard for his professional duties as a teacher, which were incompatible with the essential nature of the job. Given the harm done to the employment relation, the court agreed with the disciplinary action of the school.

If you are an employer and are faced with serious misconduct by an employee, it is important to be mindful of how the misconduct affects the employment relationship when considering termination without notice or severance pay. It is always advisable to seek the opinion of an employment lawyer to avoid unnecessary and costly future litigation. Each case presents its own unique set of issues, so a thorough assessment of whether just cause is warranted should be conducted.

An Impassioned Employee Storms Out of the Office: Is This Resignation?

| March 28th, 2017 | No Comments »

When an employee resigns there is usually clear actions that support their decision. This may include a written letter, a verbal statement, a notice period, information that the employee has found another position or is moving away, or so forth. The idea is that there are clear indicators that leave no doubt about the intentions of the employee to resign. However, suppose that an employee is extremely upset from an event or changes made in the workplace, and storms off and leaves suggestions that may point to a resignation. The key is to be mindful of the surrounding circumstances and following up with the employee when coming to a reasonable conclusion regarding their true intentions. To get a better sense of what this entails, a recent case of Rajinder Joha (plaintiff) vs. Simmons da Silva LLP (defendant) by the Ontario Superior Court will be reviewed below.

Rajinder Joha was a senior law clerk for Simmons da Silva LLP (Simmons). Mrs. Joha was 62 years of age and was with Simmons for 27 years.

Mrs. Jona was informed by Mr. Clark (the lawyer she worked under) of structural changes, which included Mrs. Joha being under the direction of another employee that she did not get along with, on June 3rd, 2015. The next day, Mrs. Joha claimed to have heard Mr. Clark tell another law clerk that this person was to work with Mr. Clark, which further upset Mrs. Joha. After claiming to have overhear this, Mrs. Joha removed her personal belongings from her desk and handed in her security pass to Mr. Clark. Mrs. Joha did not return to work or contact any human resource personnel from June 4th – June 8th 2015. On Tuesday June 9th, Mrs. Joha attempted to return to work after having time to think things through and obtain advice from a lawyer. However, the employer refused to allow her back, claiming she had resigned. Mrs. Joha then sought damages for wrongful dismissal.

The judge ultimately decided that in consideration of the surrounding circumstances, Mrs. Joha did not resign from her position and was entitled to damages. The key takeaway from this case is that when an employee resigns or leaves during a time of heated emotions, the employer must consider the surrounding circumstances in determining if the employee did in fact resign. In this case, the judge considered Mrs. Joha’s tenure, senior position, her age, her lack of secured alternative employment, the fact that this was out of character for Mrs. Joha, and a lack of written notice by Mrs. Joha as circumstances that indicated Mrs. Johna did not resign. Further, the employer’s actions were also considered. There was no attempt by anyone at the firm to contact Mrs. Joha regarding her suspected resignation, no follow up meeting by her boss Mr. Clark, and no attempt to discuss the matter. The employer’s inaction was an important factor here in the judge’s decision. As a result, the employer was liable for damages of wrongful dismissal.

Employers that are faced with a similar situation should always make an attempt to follow up with the employee. This should include contacting the employee to discuss the matter, an attempt to make a follow-up meeting, or a written letter to confirm the employee’s intention to resign. Employers should be mindful that a cooling off period may be necessary so that emotions do not interfere with an employee’s judgement or decision. It is best to seek legal advice from an employment law expert when in doubt to avoid unnecessary litigation.

Some resignations are terminations in disguise

| March 22nd, 2017 | No Comments »
Daniel Lublin, Employment Lawyer

Daniel Lublin, Employment Lawyer

When is a resignation a termination in disguise?

Sometimes employers too easily confuse when an employee has voluntarily decided to leave. Whether through insincerity or neglect, this is one situation where employers may try to rid themselves of an undesirable employee, without paying any severance. But not so fast. Some resignations are actually terminations in disguise.

If an employee is faced with an ultimatum between resigning or dismissal, it will almost never be a valid resignation. Some employers feel that by offering the opportunity to resign instead of facing allegations of misconduct, they are doing their employee a favour. In some cases this may be true. But in many other there is an ulterior motive. Employers know that proving just cause for dismissal is a difficult task, so they will sometimes threaten misconduct as a means to provoke a resignation instead. However, courts often recognize that employees who submit hasty resignations when faced with unproven allegations of misconduct have not legally resigned. Rather these are resignations given under pressure or duress, which are almost never upheld. A true resignation is a voluntary act, not a camouflaged termination.

A resignation must also not be given on impulse. The law recognizes that spontaneously made statements or actions, such as walking off the job after an argument, usually do not constitute a valid resignation. Several court cases have held that employers must not seize upon an employee’s emotional outbursts. In one recent decision, the court even went as far as stating that employers have a duty to provide a cooling off period to an employee who proclaims “I quit” in the heat of the moment and then confirm whether this is truly his or her intention.

A resignation, to become effective, has less to do with an employee’s statements and much more to do with his or her actions. The real test is whether an employee’s actions are consistent with someone voluntarily wishing to leave and not return. I currently have such a case. In it, the employee emphatically denies that she told her employer that she was “done” although the employer certainly feels that she did. However, she still came to work the next day as if nothing unusual had happened. It was only then when her employer, not expecting her to show up, purported to accept her resignation allegedly given the night before. The problem with the employer’s case is that, if my client truly intended on leaving for good, she would not have come back to work the very next day. So when she was told to leave, it should be viewed as a termination, not the other way around.

Employees tendering their resignation are sometimes free to withdraw it and continue working as before, as long as the employer has not already accepted the resignation and taken steps to move on. For example, an employee who gives two weeks’ notice of his or her resignation is entitled to change his or her mind, but only if the employer has not already hired or promoted a replacement.

What about an employee who is asked to leave after giving advance notice of their future resignation? Unless that employee engaged in misconduct and resigned before it came to light, employees who are asked to leave during their resignation notice period are entitled to payment for the remainder of the time frame they were prepared to work.

Even an employee who just does not show up for several days may not have resigned either. Courts often caution employers against snapping up the opportunity to claim an employee has resigned or abandoned their job and a number of cases have found that, in this situation, an employer has to take steps to reach out to the employee and try to confirm whether he or she no longer wants their job, before concluding there is a resignation.

The lessons for both employees and employers is clear. If either side finds itself in the “twilight zone” somewhere between a resignation and a termination, there are several practical steps to consider:

  • From an employee’s perspective, immediately protest any assertion that you resigned, if that was not what you intended to do. Further, if unclear, request that your options be outlined in writing and seek advice before taking any action, especially before leaving the workplace, as difficult as that may be.
  • From an employer’s perspective, the courts are increasingly requiring evidence that they were looking out for an employee’s best interests before accepting what appears to be a resignation. Therefore, if an employee’s behaviour or statements towards resigning are out of character or appear given impulsively, it is a good idea to ask them to first take some time to consider their actions and confirm their intentions in writing.

Published in the Globe and Mail.

Dismissal for Poor Performance: Does an Employer Need to Provide Severance?

| March 21st, 2017 | No Comments »

Only if there is just cause for termination, the employer may terminate the employee without severance pay. As an employer, it is very difficult to establish just cause for employee incompetence or poor performance. To do so, the employer must prove that the employee fails to perform essential duties or meet the required working standard, and that this has been ongoing; an isolated incident of poor performance will likely not be sufficient. To establish just cause for termination, there must be an established objective standard of performance, and proof that the employee’s poor performance is their own fault. Any mitigating factors can be considered by the courts. Among other, mitigating factors may include volume of work, whether the employee was hired as an experienced hire, and the training provided.

If an employer claims that there are ongoing issues of unacceptable performance, then the employer must provide a warning to the employee. The warning must include the employer’s performance related concerns and the consequences that may result. It is advisable that the warning be in writing and is clearly presented so that there is no possibility of confusion. An effective warning will identify what the employee is doing wrong, along with the preferred standard by the employee. Further, support for improvement such as supplemental training should be provided and stated in the warning, with a time limit for improvement and potential consequences for failure to meet the stated objective standard.

There are rare instances that may grant an employee just cause to terminate without a severance for isolated incidences. These cases usually involve gross negligence or incompetence that cause an employer significant harm, or a lack of skills that the employee claimed to have during the hiring process.

Whenever faced with an issue of poor performance by an employee, it is always best to seek the advice of an employment law expert. It is difficult to establish just cause for performance related issues, so any decisions to terminate without severance pay should be reviewed by an employment lawyer.

Important Additions in a Severance Package

| December 21st, 2016 | No Comments »

severance package calculateThe purpose of a severance package is to make a terminated employee “whole” over a reasonable period of time.  Very commonly, severance packages include only base salary, neglecting other elements of compensation – such as benefits, RRSP or pension contributions, bonuses, commissions, and so forth.  If a severance package excludes any of these elements, the employee ought to speak with an employment lawyer.

Sometimes, the missing elements of severance packages are subtle.  For example, many benefit schemes include more than just health and dental coverage – they also often include life insurance, long-term disability coverage, critical illness, a health spending account, and the like.  Each of these items has a dollar value – whether it’s the company’s cost or the replacement cost.  Where the severance package offers health and dental continuation and nothing further, the extra cost of these missing items needs to be accounted for in some other way in order to make you “whole”.

Bonuses are also a major bone of contention in severance package negotiations.  The Ontario courts have been very clear recently that bonuses which would have been earned during the severance period must be included in a severance arrangement, unless the company has communicated very clear language to the contrary through its bonus plans and/or employment contracts.  Employees ought to remember that in severance negotiations there are often two different bonus issues: 1) the bonus earned during the year of the termination; and 2) the bonus which would have been earned if not for the termination.  Both these elements are up for negotiation.

Finally, it is very common to negotiate non-monetary items into a severance package, such as a reference letter, employment transition counselling, and reeducation allowances.  Although companies generally do not have to offer these items, some companies include them anyway, if they feel it could provide value to the departing employee.

 

Author: Daniel Chodos, Employment Lawyer

Two Years of Severance Awarded to Dedicated Employee

| September 26th, 2016 | No Comments »

severanceDaniel Lublin was once again successful in obtaining one of the lengthiest severance awards for an employee in Ozorio v. Canadian Hearing Society.

The Court awarded our client 24 months payment of salary and benefits following her termination and entirely accepted our position that even with our client’s competence and experience she would have a difficult time obtaining a similar job.  The Court accepted our position that 30 years of service and a dismissal at age 60 ought to result in a significant severance payment and mentioned that our client was justified in declining a 1 year severance package which the employer ought to have known was insufficient.

With respect to our client’s dedicated service the Court concurred that her lengthy period of employment was likely to be a serious impediment in finding another job.  Specifically, having virtually no work experience outside of that obtained through her former employer placed our client at a competitive disadvantage in obtaining new employment.

Further, this was yet another Whitten & Lublin decision where the Court agreed with our view that an employee 60 years of age or older must be entitled to greater severance.  The Court cited our past cases of Hussain v. Suzuki Canada Ltd. and Leeming v. IBM Canada Ltd. to confirm that “age is an impediment” for older worker’s seeking new employment.  Simply, the job market is difficult for older workers competing with younger, more recently trained and likely less expensive talent.

If you have been dismissed consider consulting the experts at Whitten and Lublin for an informed assessment of your severance.

Author: Paul Macchione, Whitten & Lublin

The consequences of avoiding to pay a dismissed employee with a severance package

| November 16th, 2015 | No Comments »

Employers should be careful when fabricating an allegation of cause for termination in order to avoid paying a dismissed employee with a severance package.  A recent decision confirms that these allegations can expose employers to increased cost consequences.

The ordinary rule is that an unsuccessful party to a lawsuit pays around 60% of the successful litigant’s legal costs.  However, in Tetra Consulting and Lewis Cassar v. Continental Bank of Canada and Continental Currency Exchange Canada Inc., 2015 ONSC 6546 – a case that we recently argued on behalf of the plaintiff employees – the court ordered Continental Bank of Canada (“CBC”) pay the plaintiffs not only a proper severance package, but nearly all of their legal costs.

The court found that CBC’s unfounded allegation of cause for terminating the plaintiffs made their case more difficult than it should have been, thereby increasing their legal costs.  The principles of justice favoured providing the plaintiffs with nearly complete indemnification for having to litigate the unfounded allegation.  They were awarded costs in the amount of $42,394.26.

Knowing which strategies to use, and not use, can be difficult in wrongful dismissal cases.  Employers, and employees alike, are encouraged to consult with an employment lawyer to minimize their potential liability and avoid a humiliating loss at trial.

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: Working through your severance entitlement?

| July 20th, 2015 | No Comments »

QUESTION

An employee’s entitlement to severance is to say the least, at the discretion of the employer. But this is not a point blank answer, as there are many factors that play into effect. Where an employee is terminated and not offered severance, but asked to work until the end of employment, is an employer legally permitted to do this?

ANSWER

Entitlement to Severance

Toronto employment lawyer, Daniel Lublin most recently wrote his response in his latest Globe and Mail article. He states that this is in fact, legal. Employers have the right to choose between offering the employee payment in light of notice or providing working notice.  This concept is known as reasonable working notice of termination. In this circumstance, the employer is entitled, by law, to ask the employee to remain at work and carry out their job until the last date of employment.

Wrongful Dismissal

If your employer has specified an end date, and the working conditions and your pay remain the same, then it is legal to ask you to work until the last day of your employment. Although, if you believe that you were wrongfully dismissed, you should contact an employment lawyer immediately to help you with your case.

Read Daniel Lublin’s Globe and Mail column and full article I have to work through my severance. Is this legal?