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.

5 Things That Make For a Hostile Work Environment

| December 12th, 2016 | No Comments »

Hostile Work EnvironmentA hostile work environment is created when an employer or colleague behaves in such a way that it is difficult or impossible for an employee to continue working. A hostile work environment is often considered a form of harassment.

Below are five actions that can accidentally, or on purpose, make for a hostile work environment, and how to resolve them:

  1. Verbal abuse or physical threats against an employee’s well-being. It goes without saying that yelling, swearing, or making verbal threats of physical harm towards an employee will create a hostile work environment. Violence itself is not necessary, the fear of harm may be enough.
  1. Insulting or degrading comments based on the personal characteristics set out in the Ontario Human Rights Code. Comments or actions that are unwelcome and based on personal traits like race, age, gender, religion or family status, to name a few, will create a hostile work environment.
  1. Unwelcome sexual remarks or contact, leering, unwelcome requests for dates, displays of sexually offensive pictures, or the spreading of sexual rumours. In addition to creating a hostile work environment, such behavior may also result in a claim of sexual harassment.
  1. Conduct that intimidates, humiliates or demeans an employee. Insults, name calling, or the spreading of rumours can amount to workplace bullying, and a hostile work environment.
  1. Targeting a particular employee by providing them with excessive and unjustified criticism, impossible goals and deadlines, or sabotaging the employee’s work. Such behavior is conducted in bad faith and is another form of bullying.

It is the employer’s responsibility to address and prevent conduct that has created a hostile work environment. An employee faced with a hostile work environment should report any harassing behavior to a superior. Once the employer is made aware of the allegations of harassment, there is an obligation on the employer to investigate and resolve the situation.

Employers are required to prevent hostile work environments from developing.  Under the Occupational Health and Safety Act, employers with five or more employees are required to prepare a workplace policy about workplace violence and harassment. Employers must also develop and maintain a written program to implement the policy, which must include measures and procedures as to how workers are to report workplace harassment, as well as setting out how incidents or complaints will be investigated and dealt with.

Finally, if an employee is subjected to behavior that is in violation of the Ontario Human Rights Code, the employer may be faced with a human rights claim if they allow the hostile work environment to continue or develop.  Employers should take allegations of a hostile work environments seriously, and also be pro-active in fostering a safe and healthy work environment.

Author: Whitney Manfro, Whitten & Lublin

Forgotten Employee Rights: Overtime Pay for the Salaried Employee

| December 7th, 2016 | No Comments »

employee rights to overtime payIt’s hard to understand your employee rights. Many salaried employees believe they are not entitled to overtime pay.  This is a surprisingly common myth. There are a large number of salaried professionals who receive an annual salary, who work extremely long hours and never receive a dollar in overtime pay.   Many employees may leave a lot of money on the table each year without ever realizing it.

The reality is that unless you fall into an exempt occupational category, you are entitled to overtime pay.   Most salaried employees are entitled to overtime pay.  Federal and provincial employment standards legislation mandate that employers must provide overtime pay, regardless of whether you earn commissions, a base salary or an hourly rate. The manner in which you are paid has nothing to do with your eligibility for overtime pay.  Overtime pay for salaried employees is generally calculated by converting your annual salary to an hourly rate and overtime is paid at 1 ½ times the regular hourly rate for each overtime hour worked.

Employees who exercise managerial or supervisory functions or belong to certain exempt occupational groups are not entitled to statutory overtime pay.  That said, employees who bear the title of ‘manager’ or ‘director’, but who do not exercise supervisory or managerial functions, are still entitled to overtime pay.  It is not a valid justification for an employer to rely on a job title alone to avoid its overtime obligations.

Being entitled to overtime pay is one thing, but the practical hurdle is often proving the overtime hours. Most salaried employees do not have a system of tracking their hours of work, so overtime hours are often overlooked or difficult to prove after the fact.  The reality is, that even if you are a salaried employee, your employer bears the onus of tracking your overtime hours.  Even though it is the employer’s responsibility, you should be doing the same. Maintaining a daily time sheet on your own can validate the actual number of overtime hours you work in support of your overtime entitlement.

Overtime rules vary slightly by province. In Ontario, employees are entitled to overtime pay at time and a half, for hours worked in excess of 44 hours in a week.   In some provinces, employees are entitled to daily and weekly overtime.    You should check with the employment standards office in the province where you work to determine the overtime rules that apply to you.  Some employers may have overtime policies that are more generous than employment standards.  You should also review your employer’s overtime policy, if one exists, to determine if you may have additional rights or benefits under the policy.

 

Author: Jonquille Pak, Employment Lawyer

Holiday Party & Corporate Liability

| November 29th, 2016 | No Comments »

holiday party at workA staff holiday party is a great way of celebrating the holiday season.  It can also be an effective way of showing appreciation to employees.  These events can be lots of fun, but what many employers often forget is that they can attract unwanted liability. 

The most common types of legal issues employers face as a result of staff parties are related to harassment and alcohol consumption.  The following are brief guidelines that employers should carefully consider in order to create a fun-filled holiday celebration, while avoiding legal liability.

Harassment

An employer can be held liable for harassment, including sexual harassment, even if it occurs after hours at a staff social event.  The following are simple things that employers can do to not only help reduce the risk of harassment, but also the risk of liability if harassment does occur: 

  • Develop and circulate an anti-harassment policy that clearly states that it applies to all work functions, including all social events;
  • Members of management should be reminded that they are expected to set an example for other employees during workplace functions;
  • Invitations for a holiday party should include a reminder that the anti-harassment policy extends to the event;
  • Consider inviting non-employees to the event.  The presence of customers, suppliers, or significant others can help reduce the occurrence of harassment or offensive behaviour;
  • Take steps to limit the consumption of alcohol;
  • Anti-harassment training should have fact scenarios that include work social events; and
  • Have an action plan ready in the event of an incident of harassment, and be prepared to implement it. 

Realistically, employers may not be able to fully control how guests behave at social events.  However, they can certainly avoid being held responsible for another guest’s conduct if they take proactive steps to help prevent the conduct, and if they take appropriate and swift action in response to inappropriate conduct.

Alcohol Consumption

The consumption of alcohol at a work function can lead to undesirable conduct by guests.  One of the main concerns employers should have is being held liable for injuries or damages caused by an intoxicated guest.

A social host is not typically liable for injuries/damages resulting from a guest who has consumed alcohol at the host’s residence.  However, employers are not ordinary social hosts.  The case law in Canada suggests that employers who host staff holiday party owe a duty of care to their employees which is closer to that of a commercial host.  Consequently, an employer who hosts a party has a greater duty to protect intoxicated individuals and the public than a social host. 

To help reduce the risk of liability arising from an intoxicated guest’s actions, employers should be following these simple tips:

  • Only serve a reasonable amount of alcohol to every guest.   Effective methods include the issuance of a set amount of drink tickets per guest, and limiting the period during which alcohol is served;
  • Do not provide open access to alcohol; 
  • Hire certified, licensed and insured professionals to look after the distribution of alcohol;
  • Serve food at the event;
  • Prevent “binge drinking” by discouraging/prohibiting drinking games;
  • Offer a selection of non-alcoholic beverages;
  • Hold the event off-site at a licensed and insured establishment;
  • Appoint members of management to monitor alcohol intake by guests, warn people against driving intoxicated, and to arrange taxis for intoxicated guests;
  • Provide paid transportation to and from the event for all guests; Invitations to the event should include a statement discouraging drinking and driving and excessive alcohol consumption.  Similar announcements should be made regularly throughout the event;
  • Do not conduct any business at the event; and
  • Avoid drinking with employees at other sites after the conclusion of the social event.

If an employer wishes to throw a staff party without having to worry about liability, it should refrain from cutting corners at the organizational stage.  Careful and thoughtful preparation is the key to a successful and liability-free event.

Is an Employee Obligated to Provide an Employer ‘Reasonable Notice’ of Resignation?

| November 23rd, 2016 | No Comments »

notice of resignationIt is well known that employers must give an employee ‘reasonable notice’ or pay in lieu upon termination when there is no just cause (i.e. the employee has not done anything wrong to be fired). Conversely, although rarely pursued, an employer has the right to receive ‘reasonable notice’ from an employee planning to resign. Below, the factors for determining ‘reasonable notice’ time for employees will be reviewed with reference to a relatively recent case by the Ontario Supreme Court case [Gagnon v. Jesso ONSC] (referred to as “Jesso”).

Reasonable Notice

For employees, ‘reasonable notice’ is the period of time an employee is required to give their employer before the date they wish to resign. The amount of ‘reasonable notice’ time required from an employee will vary with respect to the importance of the employee’s position and duties. The purpose of ‘reasonable notice’ is to grant the employer enough time to either replace the employee or to adjust in a way that would avoid substantial financial losses. In general, employees with managerial responsibilities are required to provide longer notice periods; however, employees in key non-managerial roles may also be require to provide comparable notice time. Jesso highlighted the relevant factors to consider, which include: the employee’s length of service and the difficulty the employer will face with replacing the employee’s skillset (i.e. the labour market conditions). If applicable, any unique circumstances that would result in the employer needing added time to adjust must also be factored into the notice time.

Jesso Example: 

To illustrate the factors considered in determining “reasonable notice”, consider the example of Jesso v. Gagnon. Gagnon is a heating and cooling company (owned by Pierre Gagnon), and Jesso was a salesperson for nearly 10 years with a mechanical engineering degree. Jesso and his sales partner were responsible for over 60% of the company’s sales, and ultimately, a significant source of Gagnon’s revenue. Jesso eventually resigned after strained relations with his employer. Further, Jesso knew that his sales partner was also planning to resign around the same time, since both were pursuing employment with the same competitor.

Initially, Jesso gave Gagnon 2 weeks of notice but the court ruled that reasonable notice in this case would be 2 months. This is not a trivial amount of notice time. Firstly, Jesso’s length of service with Gagnon did contribute to the 2-month required notice time. The most important factor, however, was his substantial skillset, which is indicated by Jesso’s sales performance. Gagnon could not quickly replace the performance gap that Jesso’s resignation would cause. This was due to Jesso’s skillset in itself, as well as the low availability of comparable employees within this industry – these factors contributed to the length of time Gagnon would need to replace or adjust to Jesso’s resignation. Lastly, there was the issue of Jesso knowing that his sales partner was also resigning near the same time. This was a special circumstance that would add to Gagnon’s difficulty in adjusting to this loss as Jesso and his sales partner contributed to over 60% of Gagnon’s sales.

It is important to understand that the above example is a simplified generalization used to apply the relevant factors for determining reasonable notice for employees. Each case will be influenced by the particulars of the employment relationship and surrounding circumstances. Jesso makes this point clear, as any unique circumstances that may create more difficult for the employer to adjust or replace the employee must be considered. Please seek the advice of an employment law professional if faced with a similar situation.

What to do about Bullying in the Workplace

| November 17th, 2016 | No Comments »

bullying in the workplaceBullying was unacceptable when you were a kid on the playground.  It is no different that you are adult in the workplace.  Whether it is your co-worker or your boss, it is not allowed.  If you experience bullying at work, you can confront the bully.  If you are not comfortable doing that (perhaps because your boss is the bully), consider contacting a human resources representative, a member of the company’s joint health and safety committee, or your boss’ boss.  It is also important to review any discrimination / harassment / bullying policies and complaint processes that applies in your workplace, as this will help guide your path.

Usually, the complaint should be handled by someone objective (not the person you complained about), and both you and the person you are complaining about will be given an opportunity to explain what happened.  Occupational health and safety legislation sets out certain basic requirements for harassment investigations.

Since bullying can often be difficult to prove, do your best to keep track of instances of bullying – keep emails where the bully’s tone was unreasonable, keep doctors notes regarding any impact the bullying has had on you, and create a journal listing the details of every time you felt bullied – details like where it happened, when it happened, who witnessed it, and what exactly what was said.  Try to describe the event in a fair and objective way.  These steps will help to ensure that your complaint is taken seriously.

If none of those private options work, consider contacting the Ministry of Labour.  If the company does not fulfill its basic obligations to investigate, an inspector from the Ministry can appoint an investigator, at the company’s expense, to ensure that your complaint is investigated and that it is done properly.

Of course, you can also seek legal advice at any time.  Depending on the nature of the bullying, the company could be liable for, among other things, constructively dismissing you, breaching your human rights, or intentionally inflicting mental distress on you.

Author: Stephen Wolpert, Whitten & Lublin

Can an Employee seek damages for promises made before the employment relationship commenced?

| November 14th, 2016 | No Comments »

employmentA company has a duty of care with respect to information conveyed to potential employees during the course of an interview. This extends to hiring managers, human resource representatives and/or any employees chosen to conduct interviews or represent the company during the hiring process. As such, any significant information that the interviewee relied upon in making their decision to accept an employment offer may be subject to future tort claims of negligent misrepresentation. A long-standing precedent of Queen vs. Cognos Inc. [SCC] (1993) illustrates the relevant principles well.

Cognos Inc. was a computer software company located in Ottawa that was seeking an employee for the development of accounting software. Queen was the candidate that accepted this job offer. Queen was a chartered accountant and previously held a secure managerial role in Calgary. During the interview, the manager of Cognos Inc. maintained that the company was developing new accounting software and that the position would be needed to develop the product over the course of two years, with ongoing improvements and maintenance needed afterwards. However, Queen was not told that funding for this project had not yet been approved and that the position was contingent upon budgetary approval. Queen accepted the employment offer and was terminated in less than a year and a half due to a lack of funding committed to the project. Queen was awarded damages for the tort claim of negligent misrepresentation (over $67 000: $50 000 for lost income, $11 972 for losses of the purchase and sale of his new home in Ottawa, and $5000 for emotional stress).

What did the Hiring Manager do Wrong?

First and foremost, the hiring manager was in a “special relationship” with the employer, obligating the hiring manager to a duty of care to interviewees. This means the manager must fairly represent the position to the interviewee on behalf of the company. The issue was not whether the hiring manager was untruthful – the manager may or may not have known about the budgetary contingencies regarding the existence or security of the position.  However, it is reasonable for the manager in this instance to enquire about the project funding in order to convey accurate information to Queen regarding the existence of the position. This was therefore negligent misrepresentation as Queen was given misleading information which he relied upon in making his decision to accept the employment offer. In particular, it was the nature and existence of the position that was misrepresented as Queen was led to believe that there would be ongoing work. This was not the case as the funding required was never approved.

Employers must therefore make sure hiring managers are made aware of significant information pertaining to the nature of the employment being offered. Further, it is important that hiring managers are made aware of their duty to fairly represent positions to potential employees on the company’s behalf. If you feel you are an employee that was unfairly misled in accepting an employment offer, and now face undeserving consequences as a result, please schedule a legal consultation.

What You Can Do About A Hostile Work Environment

| October 14th, 2016 | No Comments »

Hostile Work EnvironmentA hostile work environment is distressing for employees and costly for employers. Fortunately, the law provides many ways to combat and prevent hostile work environments.

An employee who is subject to a hostile work environment because of his or her race, sex, age, disability, family status, or any other trait listed in Ontario’s Human Rights Code, may be able to file a claim at the Human Rights Tribunal of Ontario. The Tribunal hears claims related to hostile work environments that are rooted in employee’s protected traits.

An employee who is punished because they reported a hostile work environment to their employer can file a complaint to the Ministry of Labour under Ontario’s Occupational Health and Safety Act. Health and safety law also says that employers must protect employees from workplace harassment which can lead to a hostile work environment. Employees must also have a way to report allegations of harassment, and employers must investigate each employee’s allegation of harassment.

If a hostile work environment makes it intolerable for the employee to report to work, the employee may be able to quit their job and claim constructive dismissal. A constructive dismissal occurs where an employee has been treated so poorly that they are forced out of their job as if they had been fired. The employee quits, but then claims the payments that they would have been entitled to from the employer if the employee had been fired. A constructive dismissal can take place where an employer takes part in creating the hostile work environment, or where an employer does not prevent a hostile work environment.

Employees should not be too quick to quit and claim constructive dismissal, though. Constructive dismissal is very difficult to prove. Where an employee claims to have quit because of the employer’s actions, or lack of action, related to a hostile work environment, the employee must prove that it was intolerable for them to continue working, and would have been intolerable for any reasonable person in their position.

If your employer is simply upholding a reasonable workplace rule or policy, this will usually not be considered a hostile work environment. For example, if you are suspended because you were continuously late to work in violation of your employer’s lateness policy, your suspension would probably not be unlawful.

If you feel that you have been subject to a hostile work environment, you should speak with an employment lawyer before taking any action.

 

Author: Simone Ostrowski, Whitten & Lublin

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 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