When I retire, can I keep health care benefits?

| October 18th, 2017 | No Comments »

Question:  I have been employed by the same company for 22yrs and am 63 yrs old. Health care benefits are provided by the company and reduced benefits were available if you are over 60 when you retire. It was announced recently that no benefits will be provided for people that retire after Dec 31/17. I was planning to work for a few more years. I do not have a formal contact.  Is this legal?

Answer: This is most likely illegal. Retiree health care benefits, if offered by an employer, are extremely important to retirees and their families. They could be considered a fundamental part of your compensation package and a form of deferred compensation for contributions that you have made to the company over the course of your career (i.e. like a long-term incentive plan). Since the retiree benefits were available to you until now, when you are on the cusp of retirement, you reasonably expected that these benefits would be available on retirement and arguably planned your affairs taking these benefits into account.

As such, unless you signed an employment contract or the employer had a written policy that you knew about, which specifically and clearly provided that the company had a right to amend or cancel the retiree benefits at any time, the company cannot simply take away this benefit, without providing proper notice to you.
In this case, you did not have a written employment contract (and I assume there is no policy), so the employer could not have reserved the right to eliminate the retiree benefit plan at any time. This means that the only way the employer could take away the retiree benefits from you while you are still working is by giving you “reasonable notice” of the change. Here, the employer proposes to put the changes into effect within mere months – this is not proper notice. The employer should have given you 18-24 months of notice if it wanted to make a significant change to your contract. You, therefore, have grounds to challenge the elimination of the benefits in December 2017 and a potential claim for constructive dismissal.

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.

Tips for Legally Sound Termination Letter

| February 13th, 2017 | No Comments »

It is all too easy to write a termination letter that does not comply with the law.  Here are some common pitfalls and tips for ensuring that your termination letter is legally sound:

  • Tip #1 – Consider whether you may be using out-of-date precedent: This one is most common.  Sometimes employers use and reuse the same termination letter for years.  While the letter was drafted by a lawyer at one point in time, it has not been reviewed by a lawyer in years.  Employment laws have changed in the meantime, and the termination letter has become unlawful.  If your company uses a precedent termination letter, have your employment lawyer review it at least once a year.
  •  Tip #2 – Ensure that the letter states that the employee is being provided with at least the minimum requirements under the Employment Standards Act, 2000: If the employee’s employment is terminated without cause, they must be provided with a specific amount of notice of termination, and, if applicable, severance pay.  If the termination letter provides less termination and severance pay than what the Employment Standards Act, 2000 says the employee should get, it may be unlawful.  Be aware that even employees who are paid solely on the basis of commission are entitled to termination pay.  Similarly, if the termination letter does not provide for the employee’s benefits to continue during the time period that they receive termination pay, it may be illegal.
  •  Tip #3 – Provide Valid Consideration: If you are asking the employee to sign a legal release on or after termination, you must offer them something that more than just the termination and severance pay that they are otherwise entitled to under the Employment Standards Act, 2000.   You cannot offer an employee something that they already entitled under the law in exchange for their signature on a release.  You must offer something them something in addition to their existing legal entitlements.
  •  Tip #4 – Do not Attempt to Rely on an Employment Contract that is Invalid: Often, in a termination letter, an employer will reference an employment contract signed years ago, such as a termination provision limiting the employee’s entitlements on termination. For the same reason as Tip #1, above, you should ensure that the contract language that you want to repeat in your termination letter is still legally valid. Some common termination provisions found in older employment contracts have been deemed invalid and inapplicable in recent court decisions.
  •  Tip #5 – Be Careful when Alleging a Reason for the Termination: If the termination is without cause, there is no general requirement for an employer to provide a reason for the termination.  However, if the termination is with cause, you generally must provide a reason.  It is important to get the exact reason for a with-cause termination right.  If you terminate an employee’s employment for cause for a reason that turns out to be false or flimsy, they could sue for additional damages on that basis.

If you have questions about writing a legally sound termination letter, or if you think that your termination letter is unlawful, contact one of the lawyers at Whitten & Lublin for assistance.

 

Author: Simone Ostrowski, Whitten & Lublin