By: Cédric P. Lamarche

The upcoming G20 has spurred much talk about the large sums of money that the Canadian government is spending on the event.  Reports indicate that the Harper government plans on spending almost 1-billion for the summit.

Securing Toronto’s downtown core during the short meeting “requires the largest deployment of security personnel for a major event in Canadian history.”  According to the RCMP, the deployment of police, military and private security personnel will cost an estimated $321 million.

Due to the sudden need for security personnel and the hefty amounts invested, many government subsidized security positions have become available.  These positions are very appealing for many who currently work in the private security industry and earn meager wages.  According to newspaper advertisements by a company awarded a federal government contract, security guards hired for the event will earn approximately $20-$24 per hour.  This represents about double the average hourly wage earned by security guards in Ontario.

Some private security firms have expressed concerns regarding the retention of their staff during the summit.  As mass hiring begins, many private security firms are concerned that the attractive salaries will result in a high attrition rate, which may lead to staff shortages.

As attractive as the highly paid work opportunities may appear, security personnel should be very careful before bailing on their current employers.  Employment contracts often contain restrictive covenants (such as non-competition clauses) limiting one’s activities while employed, or following the termination of employment.  The breach of an enforceable restrictive covenant may give rise to legal liability.

The simple fact that an employment contract contains a non-competition clause does not automatically mean that it is enforceable.  Canadian courts will scrutinize these types of clauses very carefully to determine whether or not they should apply.  Restrictive clauses will be enforced if the courts conclude that the restrictions are reasonable to protect the proprietary interests of an employer as well as the interests of an employee to pursue his/her skills and earn a livelihood in a free and open market.  The question is whether a restrictive covenant does more than what is necessary to protect legally recognized interests of employers.

Whether or not a restrictive covenant is enforceable will depend on the circumstances of every case.  Before crossing the street to work for the competition, employees are encouraged to be diligent and have their employment contracts reviewed by employment law experts.

Cédric Lamarche is an employment lawyer with Whitten & Lublin LLP, which is a team of legal experts who provide practical advice and advocacy for workplace issues.

Employers often take a kitchen sink approach to drafting employment contracts. They bargain for excessive protection, no matter how junior or administrative the employee. However, in seeking such protection, they sometimes get none at all.

The key to drafting enforceable contracts is simplicity and consistency with the law.  For example, a severance clause that permits termination upon payment of 30 days would be considered illegal because the legislation in Ontario (and most other provinces) requires up to 8 weeks notice to terminate an employee without cause.

Similarly, there is no “right” to probation periods unless this is something that was agreed to and even then the clause will be only work if it precludes payment in excess of the statutory minimum.

Click here to read Daniel A. Lublin’s Metro article where he reviews probationary periods, severance provisions, constructive dismissal, policy manuals, resignations and restrictive covenants.

Daniel A. Lublin is a partner with Whitten & Lublin LLP, which is a team of legal experts who provide practice advice and advocacy for workplace issues.  Dan can be reached at dan@toronto-employmentlawyer.com.

A true resignation is a voluntary action.  Plain and simple.

Although there may be an intention to leave, courts will not construe that intention as a “resignation” unless it is acted upon and is unmistakable.

Another recent example is found in an Ontario case called Carmichael and Mantis Racing Inc, which can be read in full here.

Stan Carmichael and Ernie Jakubowski were friends with a common interest – both were Porsche aficionados. When Carmichael found himself without work, Jakubowski, the owner of Mantis Racing Inc., a high-end automotive shop involved in racing events throughout North-America, saw the potential to grow his business.

Over beers and a handshake, the two friends agreed that Carmichael would become Mantis’ new general manager.  However, their relationship would soon sour, resulting in a lawsuit for wrongful dismissal and an allegation that Carmichael resigned.

Carmichael won the case.  The Judge was not impressed with Mantis, its lawyer, or its defence.

Often, employees find themselves in the “twilight zone,” somewhere between wanting to leave and having been fired.  For employees that want to avoid being characterized as resigning, they should follow these guidelines:

• Resist taking any steps that can be construed as voluntarily withdrawing from the workplace, as difficult as that may be.
• Immediately protest a characterization that there has been a resignation, if it wasn’t the intended result.
• If unclear, request that your options be outlined in writing and seek specialized advice before taking any action.

– Daniel A. Lublin is a partner with the the employment law firm Whitten & Lublin LLP. Reach him at dan@toronto-employmentlawyer.com.

It’s possibly the biggest mistake an employee can make: requesting a written employment contract or worse, agreeing to one without understanding its terms. 

How do these contracts affect employees?

When Morris Wernicke agreed to join Altrom Canada Group in 1997, he also agreed to a written employment contract. Wernicke, a chartered accountant, carefully read the contract and even sought the advice of his lawyer before agreeing to its terms. 

The contract contained a clause that would permit Altrom to terminate Wernike with the greater of 30 days’ notice or the minimum amount he was supposed to receive under provincial legislation and a clause that the contract would continue to apply even if Wernike’s job later changed. 

Although Wernike’s job continued to evolve over time, a new employment contract was never prepared.   

When Wernike’s position was eliminated in 2009, he was offered six months’ severance.  However, after 12 years of employment in a very senior role, Wernike thought that he was entitled to much more.

At a recent trial in British Columbia, the company defended the case by arguing that Wernike’s original employment contract for the controller’s position applied when he was terminated from a more senior role almost 12 years later. The court agreed. Although the contract significantly limited Wernike’s entitlement to severance, the court was not prepared to set it aside.  Wernike knew what he had agreed to when he started work and his job did not change so dramatically that the contract did not apply when he was later let go.      

Without an employment contract, the law will imply a number of employee-friendly terms.  The right to termination only with reasonable notice, the right to ensure that fundamental terms, such as salary and position are not unilaterally changed, and a right to compete with ex-employers following departure are a few rights that simply exist even without a contract stating it is so. 

Employers and employees can agree that these “implied rights” will not apply by agreeing on other written terms. However, since employers regularly draft these contracts in their favour, employees should carefully consider what they are agreeing to or whether they should agree to a contract at all. 

Also see “Beware of employment contracts – most contain employer friendly terms”

– Daniel A. Lublin is an employment lawyer with the law firm Whitten & Lublin LLP.  Reach him at dan@toronto-employmentlawyer.com

By Cedric Lamarche

Many people in the workforce often wonder what reasonable consequences or “penalties” employers can impose on employees as a result of performance issues or misconduct.  The answer to this question will vary depending on the circumstances of every case.  That said, employees and employers alike should know that Canadian courts have consistently upheld the legal doctrine of progressive discipline.

Progressive discipline, as the name suggests, contemplates the gradual escalation of disciplinary action by an employer.  Pursuant to this concept, employers should avoid jumping the gun in handing down “penalties”.  For example, if an employee violates a safety policy in the workplace by failing to wear the proper safety gear, it would be unreasonable and unfair for the employer to immediately suspend or dismiss the employee for the infraction.  A court would likely view such consequences as being premature.

In instances where an employee’s performance or conduct is at issue, the employer should clearly provide the employee with the following:

• An explanation of the problem;
• The steps that should be taken by the employee to correct the problem;
• Offer assistance to the employee to help correct the problem;
• A timeframe within which the problem is expected to be remedied; and
• The further disciplinary actions that may be imposed if the problem persists.

If followed, this disciplinary model encourages the early detection by management of problems involving employees and the opportunity to address them before they escalate beyond the point of no return.  Further, it allows employees to understand any problems with respect to their conduct or performance and provides them with the opportunity to take the steps required to remedy the situation and maintain their employment.

Progressive discipline implements a process which helps to prevent the premature imposition of disciplinary action by management.  If respected, it decreases the chances of successful wrongful dismissal lawsuits against employers.  If not respected, it provides employees with recourse against their employers.

Cedric P. Lamarche is a lawyer with Whitten & Lublin LLP, an employment law office assisting both employers and employees on various workplace legal matters.

By: Cedric Lamarche

For many businesses, customers and clients are hot commodities. In an age where “googling” a few key words can generate an infinite list of hits, businesses attract and retain clients not only as a result of the good deals they offer, but also as a result of the relationships that exist between their clients and the business’ employees. Since employees frequently move from one employer to the other, it’s no surprise that many employers often try to protect their customer and client pools by including restrictive clauses in their employment contracts. Examples of restrictive clauses that have been included in employment contracts and that have been upheld by the courts include non-competition and non-solicitation provisions.

As one can imagine, when employees leave their employment to pursue other opportunities, legal issues often arise as a result of restrictive provisions. On the one hand, businesses want to protect their client base and their proprietary information and, on the other hand, employees want to continue working in the same industry and continue servicing those clients with whom they have cultivated relationships over time. The courts will generally deal with these types of disputes cautiously as a result of the various policy concerns, including the fact that restrictive clauses often limit an individual’s ability to work in their craft or in their field of expertise.

In a recent case before the Alberta Court of Queen’s Bench, the court considered how far an employer should be permitted to go in imposing restrictive clauses to an employee who was already working for the employer. In doing so, it confirmed many of the rules that employers should follow in order to ensure the existence of fair contractual terms between parties that are often on unequal footing.

Accordingly, employers who wish to protect themselves should consider playing by the following rules:

• Employment agreements should ideally be concluded before an employee starts work.

• If an employer wishes to create a written employment contract or modify an existing contract midway through an employer/employee relationship, it should:

o provide something of value to the employee in exchange for signing the contract;

o advise the employee to consult legal counsel, and confirm this in writing;

o explain the restrictive clauses to the employee;

o inform how, if at all, the employment role will change if the employee refuses to sign the contract

o Ensure that the restrictive clauses are relevant to the employee’s position (i.e. not overly broad and too onerous with respect to the position).

Cedric Lamarche is a lawyer with Whitten & Lublin LLP, an employment law office assisting employers and employees on various workplace legal matters. .

By: Brian Norris

The recent and very public locker room gun-pulling incident between NBA players Gilbert Arenas and Javaris Crittenton has highlighted the importance for employers to create and enforce policy on workplace safety.

As many sports fans know, Arenas and Crittenton have now been suspended by the league for the remainder of the 2009-2010 season for brandishing guns in the Washington Wizard’s locker room. Some may interpret the NBA’s actions as “making an example” of the payers. Others, such as myself, see it as the league legitimizing and enforcing it’s policy outlined in the collective bargaining agreement; An agreement produced by the collective efforts of the NBA owners and the Players’ Union.

As previously mentioned by Daniel Lublin, if an employer wants to lean to it’s policies in support of a lawsuit, it is important for them to circulate and enforce clearly worded company policy.

With the introduction of Bill 168 in Canada, the issue of workplace safety regarding violence has been a hot topic as of late. The incident between Arenas and Crittenton and the manner in which the NBA dealt with it is a good example for all employers to take notice of.

Brian Norris is the Office Manger of Whitten & Lublin LLP, an employment law office providing counsel to both employers and employees.

Anything goes into employment contracts
– but not all written contracts are enforced

Daniel A. Lublin, Toronto Metro News
Published Wednesday June 27, 2007

Written employment contracts represent employment law’s most ambivalent feature.  Here are the top 5 ways to opt out of a signed deal:

• illegality
• ambiguity
• lack of consideration
• duress or unconscionability
• Changed Substratum

Click to read the entire article, "Employment Contracts Can be Broken".

Daniel A. Lublin is a Toronto Employment Lawyer, specializing in discipline and dismissal.  He can be reached at dan@toronto-employmentlawyer.com 

Armed with the knowledge that an employer can contract out of all but its minimum statutory obligations, I’m mystified why more businesses don’t follow the trend.  Nevertheless, for those proactive organizations concerned about the bottom line, the key is to draft contractual provisions that will withstand judicial scrutiny. 

Just as my Metro News Column provided the 5 tips for any employee about to begin a new job (read here), in my view, employers would be well advised to make the first move.  The roadmap to victory is the flipside of my recipe for employees.  Although, I can’t guarantee that my approach will be infallible, by introducing these measures, victory will occur more often than not.  And, as the saying goes, the best defence is always a good offence. 

For employers with the motivation to diminish the amount of severance paid, better yet, to a mediocre employee, I offer the following eight tips to ensure a valid and enforceable termination provision. 

1.      Make certain that prior to the point at which the employment offer is made, the prospective candidate has receipt of any offer letter, contract, agreement or otherwise that is being relied upon to comprise the terms of employment.  This will avoid any confusion, or worse, misrepresentation that goes to the terms of the offer. 

2.      The prospective candidate should always be encouraged to obtain independent legal advice or at the very least, be given ample time to consider the nature of the contract.  A clear case of duress is a recipe for disaster when it comes to a severance limiting provision. 

3.      Even if the employee has received appropriate counsel, care should be taken to point out the meaning of the more sophisticated terms, and draw the employee’s attention to the fact of a severance limiting provision.  The individual presenting the offer should document this conversation.   

4.      If re-negotiating the terms of an existing employee’s position, fresh consideration (some compensation or other benefit) must be provided to the employee.   

5.      Severance limiting language must be clear and unambiguous.  A small degree of uncertainty is a prescription for courts to interfere with the bargain an employer though it had made.   

6.      The termination provision must provide the employee with the minimum amount of severance provided by the governing legislation.  In Ontario, the Employment Standards Act, 2000 sets out a ladder of minimum severance payments for any dismissed employee.  The legislation should be specifically and clearly referenced in the contract itself.  In the contracts that I prepare for my employer clients, I actually provide slightly more than the minimum standards as an employee need to execute a release for what she was already entitled to under the legislation.     

7.      An otherwise valid contract can be struck down as unconscionable or unreasonable.  While the Employment Standard Act, 2000 is a great starting point, employers should renegotiate greater amounts of severance as employees gain tenure or increased value with the organization.   

8.      Contracts should include a severability provision ensuring that if one aspect of the contract is struck down as unenforceable, the remaining terms of the contract will survive. 

Daniel A. Lublin is a Toronto employment lawyer, specializing in discipline and dismissal.  He can be reached at www.toronto-employmentlawyer.com

For additional information on employment contracts, and specifically the law of consideration, see Michael Fitzgibbon’s article here