This is another wrongful dismissal case with a lot of interesting issues.   The case of Olivares v. Canac Kitchens  one of many reported wrongful dismissal cases against Canac Kitchens (There must be ten at this point…) since it shut the doors of its manufacturing department in 2008. The plaintiff, Mr. Olivares was terminated after 24 years of service with the Defendant Canac. He was paid 32 weeks as his basic termination pay and severance entitlement under the Employment Standards Act. They continued his benefits for 8 weeks.  When he was terminated he was 48 years old, a shipping supervisor and oversaw a team of loaders and coordinators in the shipping department making $93,000.00 a year.

The interesting part of the case is that Mr. Olivares communicated almost exclusively in Spanish over his 24 years of employment.  It was his first job upon his arrival from Chile 24 years ago. Counsel submits that these factors significantly disadvantaged the plaintiff in attempting to re-enter the job market.

The plaintiff referred to other decisions involving Canada, in particular Brito v. Canac Kitchens 2011 ONSC 1011 (CanLII), 2011 ONSC 1011 (S.C.J.) where the court found the appropriate notice to be 22 months for an employee who held the position of Team Leader which is acknowledged to be a position less than supervisor, with 23 years of experience and was 60 years old at the time of termination.

He also referred to Cardenas et al v. Canac Kitchens 2009 CanLII 17976 (ON SC), 2009, CanLII 17976 (Ont. S.C.J.) wherein one of the plaintiffs, Mr. Silva, who also held the position of Team Leader, was 43 years old, had 24 years of service, was awarded compensation based on 26 months’ notice.

The defendant submitted that that an employee holding a non-managerial position should generally be entitled to less notice than a senior manager or specialized employee holding a high rank in the organization.  Counsel for the defendant proposed that 18 to 24 months notice was generally reserved for very senior employees or executives. While on the one hand he proposed that 32 weeks for which the plaintiff received notice and severance constituted adequate pay in lieu of notice in the circumstances of this case.  In the alternative – if that was not suitable, the appropriate scope of reasonable notice should be 12-15 months.

Other Issues

In addition to the severance there were a lot of interesting issues in this case that we often get asked as lawyers:

1. Are damages should be calculated based on the plaintiff’s annual base pay, without reference to any overtime pay that he may have earned in past years?
2. Should damages should include the cost of lost employee benefits? and;
3. Should money earned during during the statutory notice period under the ESA should be deducted from damages awarded to the plaintiff above and beyond his ESA minimums?

How was reasonable notice determined? 

Based on the circumstances of the case, and comparable caselaw, Judge Lederman found that the appropriate notice period in the circumstances was 20 months.

Important to note was Justice Lederman’s statement referring to the Court of Appeal case of DiTomaso and Crown Metals.  Lederman J noted that:

 “It is clear from DiTomaso v. Crown Metal Packaging Canada LP 2011 ONCA 469 (CanLII), 2011 ONCA 469 at paras. 22-23 that there is no upper limit cap in respect of the notice period for non-managerial employees.”

 He decided reasonable notice in reference to all of the case’s particular facts and having regard to the factors set out in Bardal, in particular, the character of the employment in issue, the length of service of the employee, the age of the employee, and the availability of similar employment having regard to the experience, training and qualifications of the employee.

Lederman J. chose not to tinker with the Bardal factors and chose not to emphasize any importance of the character of the Mr. Olivares’ employment that would minimize the reasonable notice to which he was entitled to.

What do we take from this?

Since Keays more and more caselaw is obviously veering away from individualizing the specifics of the Bardal test. In Di Tomasso, the Court of Appeal referred to Keays case and noted that “[n]o one Bardal factor should be given disproportionate weight” – this is particularly in a case like ours, being that if an employer attempts to use character of employment to say that low level unskilled employees deserve less notice because they have an easier time finding alternative employment.

In the case of Bramble, Judge Drapeau J.A. put it this way, “The proposition that junior employees have an easier time finding suitable alternate employment is no longer, if it ever was, a matter of common knowledge. Indeed, it is an empirically challenged proposition that cannot be confirmed by resort to sources of indisputable accuracy”.

Other Issues

Judge Lederman noted that overtime pay is an integral part of the anticipated income of the terminated employee and should be considered as compensable damages and ordered that payment in lieu of notice be calculated based on total earnings inclusive of overtime.   He foudnd that Mr. Olivarez was entitled to an amount of $250 per month during the notice period for quantified benefits, except for 8 weeks that were covered by the defendant during the minimum notice period.  The Defendant Canac was also not allowed to deduct mitigation income during that notice period from other damages relating to the notice period beyond the ESA time frame.

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The primary argument advanced by the employer was that that the Court was without jurisdiction to hear a claim for breach of a provision of the Ontario Human Rights Code.

This means that the employer argued that the issue of failure to accomodate should be left to the Human Rights Tribunal to decide – given that the failure to accommodate is discriminatory in nature.

The judge disagreed.

The judge noted that the Ontario Human Rights Code created the right under s. 46.1(1) to claim compensation in a civil proceeding for a breach of  the Code.

The only qualification to this is found in 46.1(2) which prohibited the commencement of an action based solely on an infringement of Part I.

n Honda v. Keays, , the Supreme Court of Canada stated that a plaintiff could advance a breach of the Code as a cause of action in connections with another wrong. This means any allegations of a breach of a Human Rights Code must tag along with another lawsuit – i.e. negligent misrepresentation + a breach of the code.  In this case the there were allegations of dismissal for cause and a failure to accommodate. The allegations of dismissal for cause stood for the “other wrong.”

In this case the Statement of Claim  (the initial papers that start a lawsuit) did not disclose a reasonable cause of action that did not arise solely from the alleged breach of the Code. The Judge was  of the view that the plaintiff had not failed to plead the necessary and material facts upon which to found his claims.

Remember that under the modernized Human Rights Code if you are terminated or if you have another properly plead claim against anyone – you can now include a claim for compensation under the human rights code for violation of your civil rights by discrimination.

Got a question? We would be happy to answer!

With non-unionized employees, suspending an employee without pay as a disciplinary measure can be a very harsh method of progressive discipline.  In the case of Carscallen vs. FRI Corp, an employee was suspended after materials didn’t arrive in time for a trade show.  The employee was suspended indefinitely and without pay.  The employee refused to accept this form of discipline and sued in constructive dismissal.  The employee alleged that the employer constructively dismissed her by imposing the disciplinary suspension.  The employer argued that it was in its legal rights to suspend her without pay as a disciplinary measure.

The Court rejected the argument of cause for dismissal.  The employer did not meet its burden of cause.  The employment contract did not expressly (meaning in writing) provide for such a right to suspend indefinitely without pay.  Because the employment contract did not allow for this right, nor was there any type of workplace policy part of the contract to provide this progressive discipline, the Court then asked “can suspension without pay be implied in an employment contract?”

There was a test put forth by the Court as to what can be implied in a contract of employment.

1.      For a term to be implied it must be reasonable and equitable

2.      It must be necessary to give business efficiency to the contract so that no term will be implied if the contract is affected without it.

3.      It must be so obvious that it goes without saying.

4.      It must be capable of clear expression.

5.      It must not contradict an express term of the contract

The court found that the employer’s policies regarding progressive discipline in fact precluded suspending an employee without paying her and therefore the suspension was in direct contradiction of the employer’s own procedures, therefore the Court concluded that suspending an employee without pay cannot be implied into the employment contract.  This case shows us that courts will be reluctant to imply such a term unless the employer has cause for dismissal or the employer and employee have come to the agreement to the employer’s right to suspend without pay.  What I would suggest is that you have a very clear and concise policy with respect to progressive discipline and in that policy you must show that you are able to suspend employees without pay in the event of “misconduct”.  That misconduct will be investigated and until an investigation is complete then that employee will continue to be suspended.  If you don’t have a clear and concise policy with respect to suspension without pay the risk is being sued in constructive dismissal.

If you have any questions with respect to suspending employees for alleged misconduct or with respect to workplace investigations please don’t hesitate to contact Matt Lalande Haber and Associates.

This is not legal advice. This is a case comment.

In this case the plaintiff was employed with the company for 18.5 years.  He did not have true management responsibilities.  He was 50 years old. He was terminated without cause.  He was provided with 6.75 months on notice.  He worked overtime, enjoyed a benefit package and matching RRSP contributions.  After he was terminated he applied to approximately 100 comparable jobs and had dozens of interviews.  He simply could not find a job.  He did however make approximately $1,000 on the side making boat covers and he sold insurance part-time while he worked and thereafter to a total of approximately $36,000.00.

The plaintiff moved before a judge to end his case on the basis that there was no reason that a trial was required.  He suggested 16 months in lieu of notice while the defendant suggested between 12 and 14 months.

Judge Whitaker stated that he had no difficulty in finding that 16 months was appropriate for this gentleman.  He also valuated the benefit package and RRSP matching contributions at 10% of his base salary.  The record was clear on mitigation.  The damages were reduced by the money he made in 2009.  The total payable amount that the Judge awarded was $57,253.59.

Summary judgment motions like the one above play a very important role within the administration of justice because they provide a pragmatic means for disposing of a legal issue without going through a full-fledged trial.

There have been recent changes as of the start of this year as a part of civil justice reform that was aimed at increasing the accessibility of the justice system by reducing the costs of litigation in expediting the resolutions of disputes.  It is very important to be aware of the practical implications of summary judgment motions when you terminate an employee with a significant period of notice.  This is simply another reason why it is vital to speak to an employment lawyer before terminating a senior employee.  There are potential land mines all over a termination that should be dealt with at the outset of the termination.  Things should be properly planned in anticipation of what that employee will ultimately do.

The above is a case comment on the case of Camaganacan v. St. Joseph’s Printing Limited, 2010 ONSC 5184 CanLii and it is not to be construed as legal advice.  If you need legal advice, please contact me directly at Haber & Associates and I will be pleased to speak with you and assist you with concerns that you may have.

1. When a purchaser acquires a business there is an implied term in the contract of employment between it and those employees continuing in the service of business, that the employees will be given credit for years of past service with the vendor for purposes of such incidents of employment as salaries, bonuses and notices of termination.

1. The implied term may be negated by expressed term to the contrary.  In other words the purchasing employer may, at his/her option, advise employees that he/she does not intend to give employees credit for past services to the vendor.  If this is done, employees have the option of entering into a new contract of employment with the purchaser of the business on these terms or of declining to work for the purchasing company and then suing the vendor for wrongful dismissal and damages in lieu of notice.

1. If the new employer does not advise the employees that he is unwilling to contract on the basis that the employees have credit for past years of service, the employer is deemed to have contracted with the employees on the basis that the employees will be given such credit.

In circumstances where your place of employment is sold to a purchaser and nothing is done with the contract of employment or the employer does not advise you that he/she is unwilling to contract on the basis of your past years of service, the he/she is deemed to have contracted with you on that basis and credit for your past years of service should be given.  If a contract with expressed terms is made advising you that the company does not wish to give you credit for past services, then liability is slim against the purchaser with respect to wrongful dismissal.

There are other factors that come into play such as the change in legal identity of the business, mitigation and conduct of the parties.  However For the purposes of common law, the sale of a business triggers a termination of employment and by law you must look to the vendor for satisfaction of any reasonable notice or severance pay entitlements that you may be entitled to.  From a purchaser’s standpoint, if you want to avoid any legal responsibility for recognizing an employee’s past years of service or seniority, you must make it clear to the employee that you will not recognize so.  I doubt that you will be able to avoid any liability outside of recognition under the Employment Standards Act.

The above is not intended as legal advice. It does not create a solicitor client relationship. It is an article based on public caselaw.

There have been cases in the past where employees have brought lawsuits against former employers for having caused the loss of a potentially newly acquired employment position.  In Miller v. Bank of Nova Scotia, former employee, Betsy Miller worked for the Bank of Nova Scotia for a short time before she submitted her resignation.  It was not her preference to work in the evenings so she looked for a new job.  She had applied to the CIBC Bank and when she resigned from Scotia it was in anticipation of an offer from CIBC which was contingent only on the verification of references.  CIBC retained a third party company to retrieve a reference from Betsy’s manager at the Scotiabank…who was not happy with her decision to quit.  So she did not give Betsy a positive reference and on the basis of a negative reference, CIBC terminated Ms. Miller’s employment.

What Did The Court Say?
The Court concluded that that reference company did not properly and accurately record the Bank of Nova Scotia’s supervisor’s comments.  Further, the report that was submitted from the reference company to CIBC was drafted around headings used in a standard reference form.  The Judge found that the Bank of Nova Scotia’s manager’s comments about Betsy’s performance were in fact not defamatory.  The Judge found that the supervisor had “honestly and reasonably believed that what she had said was true and necessary for records purposes”.

What Does This Case Tell Us?

Although reference lawsuits are possible, this case tells us that employers should simply be honest, precise, truthful and not disclose anything that would violate any potential privacy issues.  For example, an employer should not disclose personal information about the former employee.  A former employer should not answer any questions that deal with any personal information or the private life of that employee.

For the new employer checking references, I would advise to simply ask the potential employee if it is okay that references be checked.  Advise them who you’re going to call and provide them a framework of what you intend to ask them.  It is important that you verify professional qualifications and it is important that you verify whether or not that potential employee will be a good probable fit within your organization.

If you have any questions regarding the above, please do not hesitate to contact Matt Lalande at (905)-639-8894 or fill in the contact form on this website. Matt will get back you within 20 minutes.

The obvious issue with inducement is how long the employee was employed after he/she left the previously secured employment.  This unfortunately is determined on a case by case basis.  In the case of Hooker v. Audiomagnetics Corp. of Canada Ltd. the employee was terminated after 14 months of notice.  There was an inducement involved from a previously secured employment.  In Murphy v. Rolland Inc. an employee was induced from secure employment and was terminated after short service.  The Court however awarded him 8 months notice.  The question then is: how long did the induced employee remain in the position before termination?  Courts have said in the past that inducement will be given weight even after the new employment has existed for several years.

What if an employee was looking for employment? Can inducement then be contemplated?

Not really.  Case law tells us that if an employee was looking for employment the Court will be extremely hesitant to find any inducement which affects the length of the severance payment that will be payable.

Therefore as an employer you must be very careful how you speak to potential employees even if they are your friends or relatives.  If an employee has a secure job and you make promises to that person that are unattainable or if you fail to disclose important factors which would affect that employee’s new position you may be held liable for damages for inducement.  You must always be cautious when speaking to a potential employee if you have approached that employee and not vice versa.  Do not promise any secure employment until the time of “retirement”, do not promise secure seniority, any type of fast track promotion, any type of fast track salary increases or any sort of conditions that you cannot guarantee within the 4 corners of an employment contract or conditions that are simply not the policies of your business.

If there is a potential inducement issue involved, a Court will normally look at the position, the salary and security of that person’s previous employment.  They will also look at who contacted who first.  They will also look at any representations made by you and your company as to the salary, future security, advancement, fast track seniority, fast track promotion, fast track salary increases or any other promise made to that employee and obviously they will look at the length of service at the employee’s new place of employment.

There are numerous legal issues involved with inducement but there is also a commonsensical approach.  Don’t do it and let head hunters take care of this.  If you have any questions with respect to inducement please do not hesitate to contact Matt Lalande.

The above is not intended as legal advice. It does not create a solicitor client relationship. It is an article based on public caselaw.

The recruitment of an employee is normally started with the advertisement for employment. You need to be careful in drafting advertisements and avoid any vernacular which is discriminitory.  This is important at both the provincial and federal levels.  Without providing legal advice within the article, I can advise that you must absolutely avoid any discriminatory issues within the display of your advertisements no matter where you publish – on a headhunters website, on your website, in the paper or wherever you choose to advertise.  This means do not indicate a preference for any sort of group or limitation on any sort of applicants that can apply.

You need to avoid anything to do with race, place of origin, colour, ethnic origin, citizenship of applicants, sex, religion, sexual orientation, disability, family status and age.  Therefore you should never limit any sort of applicant within the context of your advertisement for employment.  Do not indicate any limit or preference based on a prohibited ground of decrimation within the Human Rights Code.  I advise employers to use the “come one come all approach” and then filter out the applications that you are not interested in. Use unconditional deference within all of your posted advertisements and the whole system should be sequacious and trouble free.   Remember – the public world outside your business is full of sensitive people and if you cause offence – you may run into a world of economic misfortune.

I often get asked about whether or not job requirements should be placed in advertisements.  There have been cases where job requirements have violated the Human Rights Code inadvertently when it was not the employer’s intention to do so.  It is best that you speak with an employment lawyer with respect to any job related requirements that you wish to insert into your advertisement. Normally the job related requirements are only to unsure that the candidate understand the requirements for the position. The requirements should never deal with job performance issues or prohibited ground or limit issues. Be careful. Please.

With respect to employment application forms, you should never request any personal information from the applicant besides his or her contact information and any information missing on a standard CV such as past places of employment and what “relevant” experience a candidate has. You should never ask about age, sex, citizenship, race, social insurance number, or anything that directly or indirectly relates to any of the prohibited grounds listed under the Human Rights Code. It is simple to go to the Human Rights website and see the prohibited grounds of discrimination under the Human Rights Legislation and tailor your application to never even flirt with the parameters of these grounds. This may sound like common sense – and it is. Anything discriminatory is prohibitive,  any personal information is none of your business, and anything other than basic experience, education and references is a non-issue.

Often you would see within a job application form the “duty to complete one honestly”. This is a fairly good idea in that you are listing out immediately that falsification or misrepresentation of any information may constitute grounds for dismissal. Misrepresentation should never be tolerated within the work place. This however is a different issue that could be addressed in a completely separate article. The misrepresentation needs to be within a specific set of circumstances in order to satisfy dismissal for cause, which this article will not get into.

This article does not constitute a solicitor client relationship. It is simply practical advice with reference to the Human Rights Code which you can find at www.ohrc.on.ca If you are an employer that needs assistance with respect to the hiring process, please do not hesitate to contact Haber & Associates.

What is common law and how do we deal with it?

In the past, all law was based on legal principles decided by judges in Curts.  In deciding cases, judges would draw conclusions and decisions from past cases that were before the courts.  These decisions and conclusions eventually developed into legal principles and other principles and general applications called “common law”.  Common law is to be distinguished from other types of law such as civil law or statute law.  In today’s day and age, an entire segment and body of common law is developed through our courts that has dealt and still deals specifically within your area of employment law and a number of important principles have obviously evolved which guide such areas as employment contracts and the expressed and implied terms within them.  As new cases are rendered by our courts, lawyers apply or modify employment law to coincide with the guiding principle’s set by our courts.  We keep moving forward to an extend, based on the past.

Statute law on the other hand is obviously rendered and codified by legislation.  The government has been trying to assist the relationship between employers and employees for many years.  Some aspects of employment law, set out by statute will take precedence over the common law or in the alternative, statute laws apply where there is no common law guiding principles.

Contract law is also a large portion of employment law.  Contracts deal with expressed terms, which are terms openly discussed and agreed to between the employer and employee.  This differs from implied terms which are terms implied by the contract such as the employee is presumed to understand the contract, or the employee is presumed to be employed by the employer into the indefinite future.  Our courts will obviously enforce both implied and expressed terms.  Any good counsel would advise that in order to avoid having a contract hauled into court and disputed, is to make that contract unambiguous and ensure there is no mistake to the parties’ intentions.  For example, there have been cases in the past that deal with probationary periods.  If the employer doesn’t specifically point out that probationary period or specifically how the probationary period applies in the contract without ambiguity, that employee may be entitled to reasonable notice and not what is offered in the contract.

If you have any questions with respect to common law or contract law or if you wish to have the writer explain more detail, please do not hesitate to contact Matt Lalande at (905)-639-8894.

In this case, the plaintiff was an in-house sales agent for Reid’s Heritage Homes. Reid’s is a new home builder that originally retained the services of McKee to sell new homes in the Guelph area. McKee would conduct the sales of the new homes within model homes supplied by Reid. She began her work with Reid in around 1987 and she was paid through her own registered corporation. Over the years she became very busy with her work through Reid and over time, she hired, trained and managed her own sub-agents with whom she split her commissions on their sales without any intervention, direction or interference from Reid.

In 2004, a corporate sales manager was hired by Heritage Homes to restructure their entire sales force, inclusive of their relationship with McKee. In 2005, Heritage Homes told McKee that she and her sub-agents would have to work for Heritage as direct employees. McKee, (who was 64 years old at the time) decided that she would agree on the terms as well as a 100-lot assurance to McKee for the following 2 years. After this, Heritage pulled back the refusal to agree to 100 lots per year and from that point forward, the relationship between McKee and Reid Heritage fell apart. McKee sued Reid for wrongful dismissal. After a 4 day trial in Guelph, the Judge released a 51 page Judgment that noted that an original agreement that was made between McKee and Reid in 1987 was “spent” after the sale of the initial 69 homes which she was retained for to sell.

The main issue in the trial was whether or not McKee was an employee or an independent contractor, or even a dependent contractor. The trial Judge found that the plaintiff was an employee and as such she was entitled to pay in lieu of reasonable notice which was assessed at 18 months or about $400,000.00. The Judgment was appealed to the Court of Appeal, and the major analysis, important to this article, is the Ontario Court of Appeal’s analysis of employee vs. dependent contractor.

The court revisited many cases leading up to the “intermediate” category of a dependent contractor. The basic test set up by the Court of Appeal was to determine whether or not a worker is a contractor or an employee. The next step is required only if the first step results in the contractor conclusion – and it determines whether that contractor is independent or dependent, for which a worker’s exclusivity is determinative as it demonstrates economic independence. The Court explained that if a contractor is in a position of economic vulnerability, then it would make sense to carve out a dependent contractor category out of a broader existing contractor category and leave the definition of employee intact.

The trial Judge’s determination that McKee was an employee is in fact determinative under the law. They noted that McKee worked exclusively for the defendant’s company. They also found that McKee’s work was subject to the defendant’s control, as to where she sold, her promotional methods, what she was to sell and how much she was to sell it for. Thirdly the Court found that McKee performed her sales function in model homes provided to her by Reid’s Heritage Homes and they were in control of these tools. Fourthly, McKee was financially dependent on Reid’s Heritage Homes and fifthly, the sales force of which McKee was a member of was a crucial element of Reid’s business organization. The fact that she operated her own corporation within her work for Reid was not determinative of her work status. The Court also found that it did not matter that she had her own sub-agents. Technically, and employee can act as a conductor between higher management and staff within their divisions. The Court also addressed her first agreement with Heritage Homes from 1987. That agreement held that either party could terminate the agreement by giving each other 30 days notice. The Court found that if McKee was an employee at Heritage Homes from 1987 to 2005 then that 30 day notice period in the 1987 agreement contravenes the Employment Standards Act.

The Court, in conclusion did not interfere with the 18-month notice order. It is important for employers to be aware that because their employees remain within their own corporations to control their own taxes, it simply does not mean that they are going to be labelled as dependent contractors. The Court of Appeal in this case confirmed that this intermediate category of a dependent contractor does in fact exist and because of this, employers that engage contractors into contracting relationships will have to be careful because if it is found that the relationship creates one of economic dependency it may give rise to reasonable notice.

If you need to discuss the issues of independent, dependent contract status vs that of an employee please feel free to give our Burlington Ontario Employment Lawyers a call at Haber & Associates. at 905.639.8894

Matt Lalande