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.

My Boss Made Significant Changes to My Employment

| August 27th, 2015 | No Comments »

Drastic Changes to My Employment

The concept of an employer making a change to a workers employment is not odd. It’s possibly more common than we think. The issue employees take is the extent and significance of these changes, and this concern has legal merit. Take for instance employee A, who has independently worked in their department, earning commissions based on sales. Suddenly, the employer explains that a colleague (employee B) will be working with employee A, and based on his/her performance, employee A’s commission will be dependent on employee B’s sales as well. Readers of the Globe and Mail are interested in finding out, can an employer legally make such a significant change to their employment?

Claims for Constructive Dismissal

Daniel Lublin, Toronto employment lawyer provides his professional opinion by explaining that the answer lies in determining how significant the changes are to an employee’s work duties and their compensation. An employer must seek the employees consent to the changes or provide reasonable notice of the changes. When changes to an employees work duties and compensation are significant, an employee may claim constructive dismissal and sue for lost wages.

Claims for constructive dismissal are unique on a case-by-case basis. As such, retaining a lawyer to provide you with case specific advice is crucial. Consult with our team at Whitten and Lublin to book your appointment and read Daniel Lublin’s Globe and Mail column and full article Does my boss have the right to change my compensation and work load?

Q&A: Can an employer significantly reduce an employee’s pay?

| August 10th, 2015 | No Comments »

QUESTION

Employers are finding that under recent economic changes, the salary paid to employees may need to reflect this change by significantly reducing an employees pay to account for their budget. Employee’s on the other hand, are dissatisfied. Initially, an employer may consider changing the pay rate based on cost of living. But what happens when the cost of living significantly rises, and then drastically reduces? Readers of the Globe and Mail are asking, can an employer significantly reduce an employee’s pay? 

ANSWER

Circumstances Where an Employee’s Pay Decrease Will Be Considered Lawful

Daniel Lublin, Toronto Employment lawyer says that employers cannot drastically reduce an employee’s pay. All the same, an employee cannot pursue their employer for a minimal pay reduction. There are few circumstances where a pay decrease will be considered lawful and these need to be understood thoroughly.

Find out the answer by reading Daniel Lublin’s Globe and Mail column and full article I have to work through my severance. Is this legal?

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?

The ‘genius’ class action lawsuit by the Canadian Hockey League

| October 21st, 2014 | No Comments »

The lawsuit filed last week by the junior hockey players against the Canadian Hockey League (CHL) has been classified by Toronto employment lawyer, Daniel Lublin, as ‘genius’.  After all, it is the first case where junior hockey players have filed a lawsuit. The players are seeking up to $180 million in wages and other compensation from the CHL.

Mr. Lublin explains the definition of an employee as being someone who works for wages.  This particular relationship fits the category and as such, holds the responsibility of, at least paying the players the minimum wage and overtime. The junior hockey players claim in their lawsuit to have up to 65 hours of work per week.  Accordingly, an employee who works 40 or 44 hours of work each week should be paid according to the law.

For more on Daniel Lublin’s opinion, read his full article on CTV News at http://bit.ly/1vI4hZl

Employment terminations

| October 10th, 2014 | No Comments »

Employment terminations can be cruel, and finding a lawyer that suits your wallet, is intimidating.  All termination scenarios vary from employee to employee, and finding a lawyer to counsel you every step of the way is the best advice.  In the Globe and Mail’s Report on Business, Toronto employment lawyer, Daniel Lublin says dismissed employees should never sign termination documents, such as a release, without at least having them first reviewed by a lawyer.

Daniel Lublin explains this further and answers some questions from readers regarding constructive dismissals.  In particular, where an employer assigns a vastly different role in a different location, what are your legal rights? Daniel Lublin explains that an employer cannot force you to take on a vastly different role in a different location. You do not have to accept the change rather; you can protest this in writing. If your employer refuses, you may have the option to sue in court for constructive dismissal.

Read Daniel Lublin’s Globe and Mail column and full article Can my company force me to take a wildly different job?

Daniel Lublin on CTV News

| March 25th, 2013 | No Comments »

 Daniel Lublin appeared on CTV News on Friday, March 22, 2013 to comment on the Supreme Court’s recent decisions in two high-profile class-action lawsuits regarding the issue of unpaid overtime. In those cases, the Supreme Court upheld the lower court’s decision allowing these cases to go to trial.  The cases involve allegations of unpaid overtime for hundreds of non-managerial employees at Scotiabank and CIBC. Although these specific cases involve federally regulated employees, Mr. Lublin applauded the national press, which has been dedicated to the growing problem of unpaid overtime, commenting that the attention they have garnered has resonated with both employers and employees across the country.  However, he stressed that despite this increased awareness, it is still all too common for employees to work overtime hours without being paid for it. Mr. Lublin recommended that employees meticulously document the hours they work and inform their employers that they have a right to be paid for any overtime hours in accordance with the applicable legislation.

 

Unpaid Overtime Legislation

In Ontario, the Ontario Employment Standards Act governs the terms and conditions of employees who are provincially-regulated.  This legislation requires that eligible employees be paid for all working time over and above 44 hours per week, which must be paid at 1.5 times their regular wages.  It carves out exceptions for managerial employees and various professionals exempt from the mandatory payment of overtime. As one might expect, the Act also prohibits employers from penalizing employees who seek to enforce their right to collect overtime pay.  Federally regulated employees – like those who work in the banking industry – are subject to the overtime provisions of the Canada Labour Code, which requires the payment of overtime after eight hours in a day and 40 hours in a work week.

 

For a detailed review of the decision, catch Daniel Lublin on CTV News here.

 

 

“Ask the Lawyer” with Daniel Lublin

| February 27th, 2013 | 3 Comments »

Daniel Lublin was interviewed for CTV’s Canada AM program “Ask the Lawyer” where he answered questions regarding the legal issues in the workplace. Daniel’s interview can be seen on CTV’s website

Can anyone be a lawyer today?

| July 30th, 2012 | No Comments »

People often believe that doing some online research on workplace law will make them perfectly equipped to challenge their employers and take matters into their own hands.  In most cases; they are wrong!  Here are only few of the examples of when and why:

  • If you have been treated differently, it does not mean you have been discriminated against unless that treatment is based on a defined set of personal characteristics, such as age, race and religion that forms the basis of a legal claim.
  • If you are going to sue your employer, there is always a possibility that you may lose the case and if you do, a judge’s decision becomes public, for everyone to read and comment.
  • If you have received a poor performance appraisal or disciplinary letter, it becomes enforceable as soon as it has been given to you even if you disagree with its contents.
  • If you are going to challenge your employer’s decision, instead of spending your time on the internet searching for free advice, you should consider consulting with a real employment lawyer before taking any drastic measures.

Daniel Lublin’s latest article More questions and answers from the workplace law trenches can be read in Metro.

 

 

How to prove workplace bullying and what to do about it

| July 19th, 2012 | 1 Comment »

Bullying is repeated emotional, verbal and physical mistreatment that jeopardizes your health, your career, your job. It is behaviour that is intended to intimidate, offend, degrade or humiliate a particular person or group and therefore should not be tolerated.

It is important not to be afraid to complain to the company or even to take legal action. A person needs to stand up for him/herself, and must do it immediately. The very first thing that one can do in all of these cases is to meet with an employment lawyer who can counsel you through your options and what steps you may wish to take to protect your legal rights.

In his recent article published in the Globe and Mail, Toronto Employment Lawyer, Daniel Lublin answers the question about what can be done to prove workplace bullying and which steps should be taken if one occurs.

  • Document everything in as much detail as possible in a journal with dates, times and places and the specific statements and comments. You should document your previous and future complaints to your boss and what his exact responses were.
  • If your company has a policy addressing harassment and bullying, which includes specific details on how to file a complaint and what will occur once it is filed, read the policy carefully and follow it exactly. Once a complaint under a formal policy is filed, the company has a legal obligation to investigate your concerns and determine if you are being bullied or harassed and it must take steps to stop it. On the other hand, if your company does not have such a policy, it still has a legal obligation to investigate your concerns and attempt to remedy any inappropriate behaviour, but it can only do so if it is made aware of your situation. What you can do in such a situation is draft a memo to human resources or a senior officer of the company summarizing what is occurring at work and requesting that the company intervene to prevent it.  If they fail to act, it will form an additional basis for future legal action against the company.
  • Your physician may even order you to stay away from work if the situation is causing you stress and anxiety, which may have developed an illness that requires medical attention or justifies some time off from work in order to recover.
  • If you have been bullied or harassed based on any of the protected human rights grounds in Canada, such as age, race, religion or disability, among other personal characteristics, then you are specifically protected under human rights laws, which means you can take legal action against the bullies for the harassment and the company for not taking action to prevent it.
  • If harassment and bullying are unrelated to any human rights grounds, you may also be able to take legal action in the courts for constructive dismissal and the infliction of mental distress. In these situations, you must show that the behaviour is intolerable and that you should not be expected to persevere in the workplace environment. You can the resign and demand that the company pay you compensation for lost wages as if it effectively terminated your employment, and even damages for mental distress and possibly punitive damages, or damages for negligence if the company, once made aware of the conduct, permitted it to continue.