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.

What age discrimination looks like in the workplace

| January 11th, 2017 | No Comments »

“We do not want to invest in someone who will retire so soon.”

“Perhaps you would benefit from working with people your own age.”

“We prefer to maintain our youthful culture.”

“We prefer to hire more mature employees.”

What do all of these statements have in common? In each one, the speaker is drawing a distinction between the recipient of the statement, and those of a different age group, which negatively affects the recipient.  In the workplace, this can amount to discrimination on the basis of age, or “ageism”.

Age discrimination in the workplace is illegal, and all employees over the age of 18 (with limited exceptions) benefit from the anti-discrimination provisions of federal and Ontario human rights legislation.

Age discrimination can occur anytime an employee is unfairly distinguished because of his or her age.  Ageism does not need to be overt, or plain and obvious, in order to constitute discrimination.  In fact, ageism is quite often subtle, and done without malice or realization that ageism is occurring.

For example, an employer may want to maintain a certain culture that is more prevalent amoung younger generations, thereby denying employment to a senior applicant in the process.  While the employer’s intent may have been innocent, the consequence is that an older job applicant has been unfairly denied employment for no reason other than his or her date of birth.

Similarly, an employer’s desire to maintain a more mature workplace may inadvertently hold younger employees to higher standards in order to obtain employment.  The employer’s intent may be sincere, but the way in which prospective employees are vetted may not be.

Here are some important things both employers and employees should remember in order to avoid age discrimination:

  • Employers cannot deny a benefit or opportunity (such as employment, promotions, raises, etc.) to an employee that is in anyway motivated by the employee’s age
  • Mandatory retirement after a certain age is illegal
  • Even though laws dealing with age discrimination only apply to employees over 18 years of age, employers are still bound by their duties of good faith and fair dealing in connection with their younger employees
  • Anti-age discrimination laws apply not only during employment, but during the application and screening process as well.

Author: Marc Kitay, Employment Lawyer

Important Internship Laws for Employers and Interns

| September 8th, 2016 | No Comments »

internshipsIn 2014, Ontario’s Ministry of Labour conducted an inspection blitz in connection with unpaid internships.  Of the 56 companies investigated, the Ministry issued 36 orders regarding non-compliance with the Employment Standards Act, 2000.  The inspection underscored the unlawful manner in which unpaid interns are being used across the province.

The default law in Ontario that applies to interns is that a person who conducts work is entitled to be compensated accordingly.  This principle encompasses laws regarding minimum wage, vacation, hours of work, public holidays, notice of termination, and so on.  As a general rule, this means that unpaid internships are illegal.

The Ministry of Labour has stated six rules that apply to unpaid internships, all of which must be satisfied in order to avoid reprimand:

  1. The intern must receive training that is similar to that which would be provided in a vocational school;
  2. The training is for the benefit of the intern, i.e. through acquiring knowledge and skill;
  3. The employer derives little benefit, if any, from the activity of the intern;
  4. The intern’s training does not take away someone else’s job;
  5. The employer does not promise the intern a job at the end of the internship; and
  6. The employer has told the intern that they will not be paid for their time.

Points 2 and 3 are particularly important.  The focus is not simply on what the intern is doing, but also on what they are receiving from the internship.  Similarly, point 6 requires the employer to confirm in advance of the internship that there will be no compensation, rather than remain silent on the point, or confirm at a later stage.

Employers who do not strictly abide by these rules may find themselves liable for an intern’s salary, overtime, vacation pay, public holiday pay, notice of termination, and other employment standards entitlements.

An exception to this rule applies to students enrolled in a program approved by a university or college of applied arts and technology.  When in doubt, the employer should compensate the intern as if they were an employee.

 

Author: Marc Kitay, Whitten & Lublin

Your Legal Rights in Disability Insurance Disputes

| June 9th, 2016 | No Comments »

disabilityAn employee who becomes disabled, or otherwise becomes incapable of performing the essential functions of their job, and may be entitled to income replacement through the employer’s short-term and long-term disability insurance policies.  The process is not always straightforward, making it important for both employees and employers to understand their rights:

For Employees

Employees have a basic right to dignity and fair treatment in having their disability insurance claims assessed.  While medical evidence will be required to substantiate a claim for disability insurance coverage, the employee will not be subject to the whim of the insurer’s medical team.

Similarly, the employee has the right to have their claim fairly treated, and on the presumption that their claim is legitimate.  An employer or provider that treats an employee with suspicion about the validity of the claim may find itself in hot water if the claim is rejected.

It is common to see an employee’s disability insurance coverage terminated before they are fit to return to work.  An employee may also find their initial application rejected, despite not being able to perform their duties.  Employees are entitled to challenge unfair or unsupported determinations about their coverage, which means that the employee should promptly retain legal counsel if this situation arises.

The result of this right is that the employee is entitled to retain their employment with the employer while receiving disability insurance benefits.  This right, however, is not absolute.

For Employers

In very limited circumstances, the employer may have the right to dismiss a disabled employee, where it appears that the employee will be unlikely to perform the essential functions of their job for the foreseeable future.  An employer should never dismiss a disabled employee without first obtaining sound legal advice.  Disability is a protected ground under both federal and provincial human rights legislation, which means that dismissing a disabled employee may constitute discrimination.

Employers also have the right to be appraised of the status of the employee’s insurance claim.  If disability insurance coverage is rejected or discontinued, the employer may be at liberty to require the employee to return to work, or to dismiss that employee.  These steps should not be taken without legal advice, as termination of disability insurance coverage does not circumvent an employer’s obligations under human rights legislation.

 

Author: Marc Kitay, Whitten & Lublin

6 Things to Know About Non-Competition Clause

| January 28th, 2016 | No Comments »

non-compete clauseThe non-competition clause, otherwise known as a ‘Non-Compete’, is typically an agreement between an employee and employer that prevents the employee from participating in a business that competes with the employer.

Not all Non-Competes are enforceable, and often courts will strike them out of employment contracts for constituting a ‘restraint on trade’. Whether you are being pressured to sign a Non-Compete, or have already agreed to one, make sure you know these six things:

  1. Non-Competes cannot be forced: A Non-Compete is an agreement between two parties.  In order for an agreement to be enforceable, each party to the agreement must receive something of value.  If you agreed to the Non-Compete after commencing employment, and did not receive an incentive for doing so, your Non-Compete may be unenforceable.
  2. Non-Competes are generally unenforceable against former employees: There is a public interest in allowing individuals to pursue their livelihood as they see fit. Where there is an imbalance in bargaining power (e.g. the employee had little or no say into the terms of their employment contract), the Non-Compete is less likely to be upheld.
  3. Non-Competes must be limited in scope: A Non-Compete that lasts for two years and applies to all of North America is less likely to be enforced than one that lasts for six months, and applies to a small geographic territory.
  4. NonCompetes will not be upheld where a non-solicitation clause will do: Employers utilize non-competes to protect their business interests. Often that interest takes the form of a client or customer list. Courts will refuse to enforce a Non-Compete where a non-solicitation clause protects the employer’s interest.
  5. The employer must prove actual harm: In order for a Non-Compete to be enforced, the employer is faced with the burden of proving that a specific harm will arise if it is not enforced. The burden cannot be discharged by speculation or prospective thinking.
  6. You have options: Agreeing to a Non-Compete does not mean it is set in stone. Similarly, a prospective employer may be agreeable to removing it from your employment contract. If you are faced with a current or future Non-Compete, it is imperative to speak with a competent employment lawyer to know your rights.

Author: Marc Kitay, Whitten & Lublin