Are you entitled to bonus pay that would have been earned during your notice period in the case of wrongful dismissal?

| March 6th, 2017 | No Comments »

A notice period is required by an employer seeking to terminate an employee. Employers can either provide the employee with notice or pay that would have been earned had the employee worked throughout the notice period. When an employee is terminated without a notice or pay in lieu, this is a wrongful termination and a breach of the employment contract. The remedy is damages paid by the employer in the amount equal to the compensation that would have been earned by the employee during the reasonable notice period that is owed.

What about bonuses that would have been owed to the employee, but require the employee to be “actively employed” at the time the bonus is to be paid? A clause that requires ‘active employment’ during the time of payment does not apply in the case of wrongful dismissal. This was affirmed in the case of Paquette vs. TeraGo Networks Inc. (2016). Employees are generally entitled to bonuses that would have been paid during the notice period, regardless of whether or not the employee was actively working during the time. This is especially the case when bonus pay is essential to overall compensation (i.e. a significant proportion).

To gain a better understanding, it helps to review the Paquette (employee) vs. TeraGo Inc. case. Paquette was under an employment contract that required him to be “actively employed” at the time the bonus was to be paid. The bonus here was set to be paid every February for the previous year’s work. The judgement by the Superior Court of Justice awarded Paquette 17 months of damages for only base-salary and benefits. Paquette appealed this decision, arguing that he is also entitled to bonuses that would have been received had he actually worked for the duration of the notice time (17 months). The Court of Appeals (Ontario) awarded Paquette the bonus pay as well. Simply put, the notice pay is meant to place an employee in a similar position had there been no breach in the employment contract. Here, if Paquette was not wrongful dismissed, he would have collected his bonus at each payment date (February 2015 and 2016). In other words, Paquette had the right to work but was prevented from doing so as a result of the employer’s breach. For the year that Paquette did not work (2016), the bonus was calculated by taking the average of the previous years’ bonus payment.

If you are an employee that receives bonuses as an essential part of compensations (ie. a significant portion), then a clause requiring you to be employed at the time of bonus pay may leave you vulnerable if wrongfully dismissed. Employees in this situation are encouraged to seek legal advice to ensure you are fairly compensated for damages and are fully aware of your workplace rights.

The consequences of avoiding to pay a dismissed employee with a severance package

| November 16th, 2015 | No Comments »

Employers should be careful when fabricating an allegation of cause for termination in order to avoid paying a dismissed employee with a severance package.  A recent decision confirms that these allegations can expose employers to increased cost consequences.

The ordinary rule is that an unsuccessful party to a lawsuit pays around 60% of the successful litigant’s legal costs.  However, in Tetra Consulting and Lewis Cassar v. Continental Bank of Canada and Continental Currency Exchange Canada Inc., 2015 ONSC 6546 – a case that we recently argued on behalf of the plaintiff employees – the court ordered Continental Bank of Canada (“CBC”) pay the plaintiffs not only a proper severance package, but nearly all of their legal costs.

The court found that CBC’s unfounded allegation of cause for terminating the plaintiffs made their case more difficult than it should have been, thereby increasing their legal costs.  The principles of justice favoured providing the plaintiffs with nearly complete indemnification for having to litigate the unfounded allegation.  They were awarded costs in the amount of $42,394.26.

Knowing which strategies to use, and not use, can be difficult in wrongful dismissal cases.  Employers, and employees alike, are encouraged to consult with an employment lawyer to minimize their potential liability and avoid a humiliating loss at trial.

Author: Ozlem Yucel, Whitten & Lublin

Everything you need to know when it comes to termination

| September 2nd, 2014 | No Comments »

An employee’s right to protect themselves from termination of employment is reasonable. Daniel Lublin, Toronto Employment Lawyer offers some insight on this topic in his most recent Globe and Mail column.

There are unfortunate incidents when an employee finds that it is necessary to file a complaint against a co-worker.  What happens when the employer does not address the situation properly or at all?  Mr. Lublin explains that formal or informal complaints need to be addressed.  An employer has a legal duty to investigate the complaint and take the necessary measures to prevent the issue at hand from occurring in the workplace. If your employer does not take proper action, an employee has alternatives.  He offers this piece of advice, it is a good idea to document in writing that you are making a complaint, although oral complaints still require the employer to act. If the complaint is based on bullying or harassment, there are other factors that can come into play.

In the event that an employee gives an employer notice of resignation in the long unforeseen future and the employer deems this an immediate resignation, what should an employee do?  Daniel Lublin states that you need to write to the employer immediately and repeat that you are not resigning and that you intend to keep working.  Since this was not a resignation of immediate effect, you can be entitled to more.

To find out more about these issues read Daniel Lublin’s Globe and Mail column and full article, How can I ensure I won’t be fired at a new job?

Go Back to Your Job After Being Fired from Your Job? Your Duty to Mitigate May Require It

| November 19th, 2013 | No Comments »

Failing to Mitigate His Loss

An employee who refused to return to work after mistakenly being fired from his job was awarded no damages because he failed to mitigate his loss. The Court further ordered the employee pay his employer legal costs of $50,000 (2012 ONSC 4309 (CanLII)).  On September 11th, 2013, the employee lost his appeal to the Ontario Court of Appeal. The ONCA upheld the trial court’s decision and ordered the employee pay an additional $7,500 in costs (2013 ONCA 548 (CanLII)).

Wrongful Dismissal Litigation

Earl Chevalier was a 33-year old employee of an automotive service centre and had held a managerial position at one of the service centre locations for approximately 18 years. Active Tire took over the operation of the service station managed by Mr. Chevalier. After Active Tire’s acquisition, Mr. Chevalier continued his employment at the original service station as well as at three other locations.

During this time, Mr. Chevalier felt mistreated and felt as though his job duties were demeaning. Active Tire fired Mr. Chevalier on the basis of poor performance. Mr. Chevalier immediately filed a wrongful dismissal lawsuit. A few days after Mr. Chevalier commenced the lawsuit, Active Tire sought to recall him to his job, stating that it had acted under false assumptions that it had the right to fire him and issued a sincere apology for its mistake. Mr. Chevalier refused the offered position and declared he would continue with the wrongful dismissal litigation. After 17 months, Mr. Chevalier found a job as a service manager at a competing service industry.

At Court, Mr. Chevalier argued that he had been constructively dismissed and asked for 24 months’ notice and asked for moral damages. Active Tire agreed that Mr. Chevalier had been constructively dismissed, but argued that he was not entitled to the damages he sought because in refusing the employer’s offer to return to work, he had failed to mitigate his damages.

Going Back to Your Job After Being Fired to Minimize Any Losses

The Court agreed with the employer, upholding the longstanding principle of mitigation. The doctrine of mitigation requires that an employee who has been terminated from his or her position take all reasonable steps to minimize any losses he or she has suffered. This means you would go back to your job after being fired and accept an offer of re-employment.  The only exception to this requirement to mitigate is where it would be unreasonable to do so because a return to work would oblige the employee to “work in an atmosphere of hostility, embarrassment or humiliation”.

Mr. Chevalier appealed the Superior Court decision. The Court of Appeal agreed with the trial judge’s decision that Mr. Chevalier should have returned to work when offered re-employment and that in not so doing; he had failed to mitigate his damages. The Appeal Court also found similarly to the trial judge that Mr. Chevalier would not have been subjected to a hostile atmosphere in accepting the re-employment.

In the end, Mr. Chevalier was entitled to nothing and, in fact, had costs ordered against him in the amount of $57,500. This decision clarifies and strengthens an employee’s requirement and duty to mitigate his or her damages.

All situations are different, and the above is not to be taken in whole or in part as legal advice. If you have questions about your particular situation, feel free to contact  Whitten & Lublin, employment lawyers.

Ex-CEO with Breast Cancer Alleges Discrimination

| August 13th, 2012 | No Comments »

Is it possible for a woman undergoing treatment for breast cancer to successfully manage a multinational corporation?  Apparently, for the Tuesday Morning Board of Directors, the answer was no.

Last week the Financial Post featured an article about ex-CEO Kathleen Mason allegedly having been fired for disclosing that she was being treated for breast cancer.  Mason was diagnosed in summer of 2011, had undergone 3 surgeries, and came into the office following early morning post-operative visits to maintain her workload.  According to her lawyer, by all accounts, she was operating at 100%.  When she began losing weight and hair as a result of treatment, she decided it was time to let the Board know.  According to Mason, their answer was an ultimatum – she could resign or be fired.

Accommodate:  Though your knee-jerk reaction might be, “how will this look to our shareholders?” remember that you are still dealing with a situation that might involve accommodation.  Before drawing any conclusions, check your stigma at the door, and open a line of communication with the employee.  Taking this first step can go a long way in refuting claims of discrimination.

Manage Timing:  If Tuesday Morning made the decision to release Mason independent of medical concerns, then they would have been wise to delay the transition.

Follow Procedures:  Mason had been the President and CEO for 12 years.  Months prior to her diagnosis, she had received an extended contract and $500,000 bonus.  Justifiably, she asks, “if there were problems with my performance, why give me a bonus?”  If the board had intentions of changing directions, they could have done so in a more delicate and procedural manner.  In an article in the Globe and Mail, Employment lawyer David Whitten stresses, the main objective for both management and the board should be damage control when you are going to change the captain on the ship.  And that is done by a concerted message that both parties agree with and a messaging strategy that both parties stick with.

All of the facts thus far point towards two scenarios – either Tuesday Morning fired Mason for a prohibited ground of discrimination, or they handled a very sensitive situation with poor judgment.  With Canada gearing up for CIBC’s annual Run for the Cure , a story like this could easily go viral, which could prove detrimental for Tuesday Morning, regardless of the verdict on their guilt.

 

Who owns the online you – discuss live with an expert

| June 7th, 2012 | No Comments »

Daniel Lublin, Employment Lawyer of Whitten & Lublin will be live taking readers questions on the Globe and Mail Careers section at 12:00 p.m. EST on Friday, June 8th.  You can join the discussion by logging on here.

 

 

 

 

Employee’s Vacation Leads to Termination

| July 22nd, 2011 | 1 Comment »

Many managers believe they have the power dismiss insubordinate employees, no matter how unreasonable the request.  The courts have consistently shown this not to be true.

Daniel Lublin illustrates this point in his weekly column in the Metro titled, “Employers shouldn’t mess with your vacation plans”.

On her way to a family reunion, Lerae Bigelow received a phone call from her boss demanding that she come in to work.  Believing this to be unreasonable, since she had booked the time off and explained that it was too late to reschedule, she refused and took her vacation as planned.  Upon her return, she was dismissed via text message and received no severance.

Below are some questions to consider regarding employer demands:

  • Job duties: How far outside of the scope of your regular duties is the task?
  • Safety: Do you consider the work to be unsafe? If so, the Ontario Health and Safety Act permits you to refuse without reprisal.
  • Reasonableness:  How reasonable is the request? How reasonable would your refusal be? 
  • Past behavior: How clean is your employment history?  Is this your first refusal or have you lost count?

All of these questions matter to the courts.  Bigelow was successful in her claim for wrongful dismissal, but employees should be careful when dealing with employer demands.  As unreasonable as a request may be, your reaction could determine whether or not you get severance.

Other vacation-related articles:

Retirement home employee fired for going on vacation with a resident

Employee fired after mistakenly booking the wrong day off

Stanley Cup Rioters May Face Dismissal

| June 30th, 2011 | No Comments »

Following Vancouver’s loss in Game 7 of the Stanley Cup final, Canucks fans took to the streets. Cars were overturned and set ablaze, store fronts were smashed and looted, and those who didn’t take part watched wide-eyed in disbelief.

An Acura car dealership employee was fired after being identified as a looter via Youtube – but not before the dealership received a flood of emails from customers threatening a boycott because of Acura’s “support for vandals and looters”.

The National Post website has a collection of high quality photos posted that have made identification of rioters an easy task.  So what do you do as an employer when you spot an employee looting or dancing on top of a police car?

It’s important to understand that these circumstances create a Catch-22:

  1. If employers knowingly keep an employee that has been identified, they potentially face boycotts;
  2. If they appease the public by terminating employment, they potentially face lawsuits for wrongful dismissal.

Because of the time-sensitive nature of these decisions, it can be difficult to gauge the best course of action.  Before dismissing employees for suspicious behavior outside of the workplace, consider the following:

  • Avoid relying solely on photographic evidence – misconstruing an employee as having been involved could end in a costly lawsuit;
  • Have a conversation with the employee before drawing any conclusions;
  • Evaluate the nature of the supposed crime.  For example, the decision to fire a looter might be made easier if their role in the organization is one that necessitates trust, i.e. a treasurer or inventory manager.

The importance of how employees conduct themselves outside of the workplace is an area that continues to develop as the use of social media becomes more prevalent.  Rather than risk potential lawsuits, contact an employment lawyer to find out if your gut reaction can be cause for dismissal.

Employee Refuses to Perform “Unrelated” Job Duties

| June 26th, 2011 | No Comments »

In an article titled, “Employers can’t impose major changes” Daniel Lublin discusses the repercussions employees often face when they refuse to perform tasks outside of their job description.

Donald Duguay worked as Cubex driller in mine production. He was asked by his employer to perform bolting work, despite having stated in his interview that he did not want to. He shadowed a bolter for a few hours, before he was asked to step in. When he refused, he was immediately fired for insubordination.

Duguay successfully sued for wrongful dismissal and was awarded severance. The court agreed that bolting was outside of his job description and that such a duty should have been made clear to him at the time he was hired.

The Ontario Health and Safety Act gives all employees in Ontario the right to refuse work they believe is unsafe. Daniel Lublin explains that Duguay’s success “came against the backdrop of a request to perform dangerous work with little training.” This decision should not serve as an indication that employees can refuse undesirable work. Lublin cautions employees that “Mistakenly interpreting a change in their job as being major will rebound poorly on them, not their employer”.

Employee Refuses to Perform “Unrelated” Job Duties

Starbucks Addresses Homophobia Allegation

| June 22nd, 2011 | No Comments »

Missy Alison and her daughter were sitting down at a Starbucks when she overheard a conversation taking place at a nearby table.   An employee named Jeffrey was losing his job, and for some reason his sexual orientation was a topic of discussion.  According to Alison, when Jeffrey expressed concerns about a hostile work environment he was told that “if he was not, ‘Part of the solution, he was the problem,’ and his two weeks notice would not be needed.”  When Jeffrey left, Alison allegedly heard the three women make homophobic remarks such as, “It’s not like he turned gay last week”.

What can a person do when they witness something so emotionally gut-wrenching?  It seems more and more, they are turning to social media.  In recent years, there have been many negative outcomes stemming from emotionally-driven blog posts, tweets and status updates, but it may turn out that social media outlets can also be a source of accountability for corporations.  This has already been illustrated over the past year through the response seen after TTC commuters began documenting the activities of bus drivers with smart phones.   This raises an interesting question: How much of an impact can an informed, action-oriented public have on a company’s policies and procedures?

Missy Alison wrote Starbucks a letter of complaint and “tweeted” about the experience to spread the word.  The Toronto Star reports that her blog readership went from 300 to over 100,000 in just a few days.

Starbucks replied via twitter saying, “Your blog post is very concerning. It doesn’t correspond with our values or who we are as a company” and later followed up with a phone call.  They also gained a lot of attention with the following Facebook status update that has over 4000 “likes” so far:

“We pride ourselves on being a great place to work and have zero tolerance for discrimination of any kind. Please see this blog post regarding a report of a recent incident.”

Alison succeeded in drawing attention to her account of a discriminatory incident.  Starbucks responded by addressing the issue head-on in a timely manner through various social media platforms, and has impressed a lot of people, including Alison.  A proactive approach to social media can provide many benefits to employers.  In this example, Starbucks was able to make use of negative publicity to raise awareness on their company mandate for inclusive hiring practices.