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.

Be Wary of the Employment Contract – Key Terms Affecting Employee Rights

| April 7th, 2017 | No Comments »

You just received that call, the one you have been sitting by the phone waiting for.  You have been offered the job of your dreams.  Everything is perfect. Shortly afterward, the company sends you a written offer letter or employment contract to formalize everything.  However, it contains many terms that were not specifically discussed during your pre-hire negotiations. While it is very tempting to cross your fingers and hope for the best when starting out this new and exciting relationship,  before signing on that dotted line, be wary of key terms that may impact your rights and obligations.

One of the major red flags to watch out for is the termination clause. While most individuals prefer not to think about  termination at the very beginning of a new and ideally long term employment relationship, this is one of the most contentious and litigated issues in employment law.   Typically, the termination clause is crafted by the employer specifically to protect the employer, not the employee.  In fact, you may be potentially giving up significant severance entitlements if the clause limits your rights to minimum employment standards legislation, or sets out a severance formula that slightly exceeds the minimum standard.  In fact, removing the termination clause altogether can in most instances be more favourable to the employee.

Another red flag is any restriction on incentive compensation or annual bonus payouts.  This is particularly critical if variable compensation forms a material part of your overall remuneration.  Many contracts indicate that bonus payouts will not be paid out at all, unless you are actively employed on the payout date, and will not paid out on termination.  This type of restriction can potentially result in forfeiture of your bonus entitlement, if you are laid off or terminated, before the annual bonus payout.  This can be true, even if you worked for the entire fiscal year and put in all that hard work to earn the bonus!   Similarly, if you are receiving restricted share units (RSUs), share grants or options, most often employers will include a similar restriction resulting in forfeiture of all unvested equity on termination. Verify the vesting schedule and any language that could impact your eligibility for ongoing vesting.

Additionally, there may be clauses, which could impact your rights and obligations, not only during the employment relationship but also afterward.  Many contracts contain post-employment non-solicitation or non-competition restrictions that purport to limit your ability to re-employ in your profession, or which might impact your ongoing relationship with clientele.   If enforceable, these can be extremely onerous obligations that you may owe your employer following your departure, and which may impact your re-employment prospects and marketability.

If you have any of these clauses in the written job offer, what should you do?   Get proper legal advice to determine how these provisions may impact your rights, if at all.   Secondly, negotiate!  Many employers present the contract as a ‘standard form’ document that “all” employees sign.  However, the reality is, anything is up for negotiation and there is really no downside to trying.   Before you negotiate, make sure you are adequately informed about your legal rights and have a negotiation strategy in place.

 

Author: Jonquille Pak, Employment Lawyer

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 | 2 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.

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.

Medical Marijuana Use in a Safety Sensitive Workplace: Can an Employer Deny an Employee Use?

| March 13th, 2017 | No Comments »

Medical marijuana may be prescribed for several medical reasons. Under human rights law in Ontario, workers have a right not to be discriminated against on the grounds of ‘disability’ which encompasses illness. The use of medicinal marijuana in the workplace must be treated the same as any other prescription drug that a worker uses for a medical condition. In order to use medicinal marijuana in the workplace, the employee must provide medical documentation stating the nature of the disability (reason for use), and whether he/she is able to safely work while using medicinal marijuana while requesting accommodation.

Under human rights law, employers must accommodate an employee with a disability up to the point of ‘undue hardship’. In safety sensitive workplaces, accommodation may present increased challenges for employers. Under occupational health and safety law, workers cannot be a threat to their own safety or the safety of others within the workplace. An employer must, therefore, balance the duty to accommodate and the need to maintain a safe working environment.

There is no blanket standard that can be applied with regards to accommodation of medicinal marijuana use in safety sensitive workplaces. Each case must be examined in relation to the worker’s needs, the work duties and organization of work, and other factors that may have an effect on accommodation. For instance, the interconnectedness of work roles on an assembly line may present greater difficulties in terms of granting a worker the time needed to take prescribed usage of marijuana. If usage requires inhalation, then the worker must be relieved by another available worker that can perform the same role. This is because inhalation must be done in a designated smoking area. Accommodation efforts in this hypothetical may raise question such as: can other workers that can perform the same role be made available at all times? Can the marijuana be taken by ingestion with food while on the assembly line? Does being under the influence raise a health and safety concern? Can this worker be retrained for other similar roles that would alleviate potential health and safety and/or accommodation issues? With regards to the worker’s ability to perform the job duties without any concern for health and safety while under the influence, the worker’s physician must provide documentation showing that there are no issues.

The above was only one of many different scenarios that may arise. Employers are advised to have sufficient workplace policies with regards to prescription medication and workplace safety. This includes having procedures for reporting the use of medicinal marijuana and requesting accommodation, proper procedures for using medicinal marijuana when needed, and defining what is considered impairment with regards to health and safety matters. This is by no means a comprehensive guide. The consultation of an employment law expert should be sought so that unnecessary and costly future litigation is avoided for failing to accommodate up to ‘undue hardship’.

Are your Employment Contracts Illegal?

| March 8th, 2017 | No Comments »

Employers often require their employees to sign employment contracts that limit the amount of notice of dismissal they are required to provide.  In most cases, the employer attempts to limit its obligation to the bare minimums under the Employment Standards Act, as opposed to the more onerous obligation of providing reasonable notice.

Many of these contracts, however, violate one or more minimum standards under the Act, which renders the entire termination provision illegal.  Many judges in the last several years have granted leniency to employers, rather than overrule the illegal clause.

Recently, Whitten & Lublin was successful in convincing Ontario’s highest court to put an end to this practice, in the case of Wood v. Fred Deeley Imports Ltd., 2017 ONCA 158 The law on this point is now clear: a termination provision that can reasonably be interpreted as contravening the Act will fail, and the employer will be required to provide reasonable notice of dismissal.

Determining whether an employment contract violates the Act is a difficult task that requires a competent employment lawyer to assess.   Nonetheless, the following are a few guidelines for determining whether a contract is illegal:

  • Are benefits mentioned? The Act allows employers to provide payment instead of formal notice of dismissal, provided that the employee’s benefits are continued for the minimum notice period. Since benefits are not a form of “pay”, they must be separately referenced
  • Can severance be worked? Severance pay under the Act must be paid. If the contract permits an employer to satisfy all obligations with working notice, or a combination of pay in lieu of notice without separately referencing severance pay, then the contract is illegal
  • How is pay in lieu of notice calculated? Pay in lieu of notice must be calculated based on what the employee would have received, had they been given working notice of dismissal. Limiting pay in lieu of notice to just base salary may violate the Act
  • Does the contract exclude a minimum standard, or is it just silent? A contract that states that the employee will receive no further entitlement is more likely to be illegal than one that is silent on the point.

Illegal termination clauses come in all shapes and forms, and are used by large corporations, all the way down to small businesses.  Contact our lawyers to determine your rights on dismissal.

For further reading, the judgment in Wood v. Fred Deeley Imports Ltd. can be viewed here.