Stronger Workplaces for a Stronger Economy Act reintroduced

In March, Ceaser Work Counsel reported on the second reading of the Stronger Workplaces for a Stronger Economy Act, 2013.  The legislation died on the order paper when the provincial election was called, but on July 16, 2014, the Liberal government reintroduced the bill (former Bill 146).  Here's a summary of the key amendments that (current) Bill 18 would make:

Stronger Workplaces for a Stronger Economy Act, 2014 (Bill 18)

The Stronger Workplaces for a Stronger Economy Act, 2014 (Bill 18) would make substantial changes to a number of employment-related statutes.

·         The Act extends protection to live-in caregivers under the Employment Protection for Foreign Nationals Act.

 

·         It extends the definition of “worker” under the Occupational Health and Safety Act (the “OHSA”) to include those who perform work for no pay, such as ‘unpaid interns’.  All of the protections afforded by the OHSA, including the right to refuse unsafe work, now apply to unpaid workers.

·         The Act reduces the “open period” under the Labour Relations Act, permitting decertification applications or union “raids” to occur within only the final two (2) months of construction industry collective agreements (instead of the current 3- month window). 

·         The Workplace Safety and Insurance Act (the “WSIA”) would be amended to attribute the costs of workplace injuries to temporary agency workers to the “client” employer, rather than the agency.  Lost wages for temporary agency workers would be assessed on the basis of their income earned from the agency.

Most significant, however, are the changes the legislation would make to the Employment Standards Act (the “ESA”). 

First, it would extend the time limit for recovery of unpaid wages to two (2) years, instead of the current 6-month limit.  The cap on recovery of wages of $10,000 would be eliminated, meaning that employers could be liable to the full amount of unpaid wages over a 2-year period.

Second, the amendments would create new responsibilities for temporary help agencies and the employers who utilize their services.  Agencies will now be responsible for tracking and maintaining records of all hours worked by agency workers for a period of three (3) years.  More importantly, the revisions to the ESA introduce “joint and several liability” for both the agency and the client employer with respect to the payment of wages.  This means that if the agency does not satisfy a claim for wages filed by a temporary worker, the client employer may be held responsible for any shortfall.

Third, the ESA is amended to create informational obligations for employers and the concept of the “self-audit”.  Employers would be required to provide all employees with a poster prepared by the Ministry of Labour setting out employee entitlements under the Act.  Employment Standards Officers (“ESOs”) are also now empowered to order an employer to conduct a self-audit of its records in order to determine whether it is compliant with the Act, and to provide the ESO with a report of its findings.  In its self-audit report, the employer must explain how it has determined that it is in compliance.

It should be observed that the amendments appear to focus on two vulnerable groups of workers:  temporary agency workers (so-called “temps”) and unpaid interns.  With respect to the former group, employers who rely on contingent labour will want to carefully review their contracts with the help agencies to ensure that the obligation to pay wages or other costs of the placement remain the responsibility of the agency.  Provisions that address responsibility for taxes and other statutory amounts will need to be reviewed and revised to ensure that the agency can be charged back for any amounts found due and owing by regulatory bodies, including any WSIB claims costs that are attributed to the “client” employer under the amendments to the WSIA.

By adding unpaid workers to the definition of “worker” in the OHSA, it appears that the Government is responding (at least in part) to claims that unpaid interns are becoming much more common and are prone to exploitation.  It may also be that the new “self-audit” mechanism in the ESA is intended to provide another enforcement tool to address those employers who inappropriately utilize unpaid interns, although the Government has not expressly called out this intention.

Do you have questions about Ontario's labour and employment statutes?  Have concerns about compliance?  Contact Lance Ceaser for assistance.

 

Have you reviewed your termination provisions lately? Failure to provide statutory benefit continuation could render them unenforceable.

While parties to an employment agreement can always agree to terms limiting an employee's entitlements upon cessation of the relationship, it is established law that they cannot contract out of the minimum standards and entitlements provided in the Employment Standards Act, 2000 (the "ESA").  Accordingly, unless a termination provision provides equal or greater entitlements than the Act, it will be found to be void and the employee will be entitled to "reasonable notice" at common law (i.e., the notice established by precedent cases in the courts). 

The recent decision of the Ontario Superior Court of Justice in Miller v. A.B.M. Canada Inc. has again highlighted the importance of a well-crafted termination provision.  Miller was hired by A.B.M. in September 2009, as its Director, Finance and Business Process Improvement.  He signed an employment agreement describing his compensation, benefits, and other terms and conditions of his employment.  Among those provisions was the following termination clause:

Regular employees may be terminated at any time without cause upon being given the minimum period of notice prescribed by applicable legislation, or by being paid salary in lieu of such notice or as may otherwise be required by applicable legislation.

Miller was offered four (4) weeks' pay in lieu of notice upon his termination in 2011, but the offer was subject to his signing a release of all claims against A.B.M.  The plaintiff declined the offer, and commenced an action for wrongful dismissal.  A.B.M. asserted that Miller was only entitled to two (2) weeks' pay upon his termination, pursuant to the ESA (the "applicable legislation"), but Miller argued that the provision was unenforceable and that he should receive common law notice of dismissal. 

The focus of the Court's analysis was on whether the provision should be enforced.  Justice Glithero reviewed the relevant provisions of the Act, including section 61(1), which provides:

61.  (1)  An employer may terminate the employment of an employee without notice or with less notice than is required under section 57 or 58 if the employer,

(a) pays to the employee termination pay in a lump sum equal to the amount the employee would have been entitled to receive under section 60 had notice been given in accordance with that section; and

(b) continues to make whatever benefit plan contributions would be required to be made in order to maintain the benefits to which the employee would have been entitled had he or she continued to be employed during the period of notice that he or she would otherwise have been entitled to receive.

While the termination provision directly addressed the plaintiff's entitlement to "salary" in lieu of the statutory notice, it did not provide for benefits continuation during the statutory notice period.  Both pension contributions and car allowance were not included within the meaning of "salary" in the contract.  Accordingly, the agreement did not provide for an entitlement equal to the ESA, as these elements of the compensation package were not included in the termination entitlement as they would have been under the Act.  Based on this deficiency, the Court concluded that the provision was unenforceable and did not "rebut the presumption" that the employee was entitled to reasonable notice. Based on the relevant factors, the Court awarded Miller pay in lieu of three months' reasonable notice (less the statutory amount the employer had already been paid).

Employers and employees alike should turn their minds to the termination language in the employment agreement before employment starts.  Unless the language of the agreement will provide the minimum entitlement (including benefits continuation), there is no advantage in incorporating a termination provision at all.  For employers, it is recommended that existing contracts should be reviewed periodically for compliance with the ESA to avoid any unpleasant surprises at the time of termination.

Need help drafting termination language for employment agreements, or advice on the enforceability of existing provisions?  Contact Lance Ceaser for assistance.

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UPDATE:  The decision in Paquette c. Quadraspec Inc. has just come to my attention in which reasonable notice was also found to apply where the termination clause did not provide for benefits continuation during the statutory notice period.  In addition this new decision (available here in French only) also found that an employer's total payroll, not just its Ontario payroll, should be considered in determining whether it meets the $2.5 million threshold for employee entitlement to statutory severance pay.  When the employer's total payroll, including its operations in Quebec, was assessed, it was determined that statutory severance was payable to the employee.

 

After-Acquired Cause - Can evidence of serious misconduct obtained post-termination really help the employer's case?

Two recent decisions from British Columbia highlight the importance of employers conducting thorough workplace investigations when misconduct is suspected, and the value of evidence that may be acquired even after the decision to dismiss an employee has been made.  While it is always best for an employer to gather all of the relevant facts before terminating an employee, it's sometimes difficult to get all the evidence until after the worker has left the workplace.  In particular, data on an employee's corporate cell phone or computer can often provide surprising details of misconduct the employer would otherwise not learn.  It's for this reason that the courts will, in some circumstances, permit an employer to adduce this "after-acquired" evidence of wrongdoing to establish that the employee was dismissed for cause.

Such was the case in Van den Boogaard v. Vancouver Pile Driving Ltd., a decision recently released by the B.C. Court of Appeal.  The plaintiff, Kirk Van den Boogard, was a project manager for the employer, a marine general contractor which was involved in a dangerous and, therefore, safety-sensitive business.  In his role as project manager, the employee oversaw job sites and had particular responsibility for establishing and enforcing safety policies for the employer.  After just over one year of employment, the employee was terminated without cause and provided four weeks' pay in lieu of notice.  However, after he turned in his company cell phone, it was determined that he had used the device during working hours to solicit illegal drugs, including from one of his subordinates.  When Van den Boogard commenced an action for wrongful dismissal, the employer defended the claim on the basis of the after-acquired evidence of serious misconduct, which it asserted was just cause for dismissal.

At trial, the Judge agreed with Vancouver Pile Driving that the employee's conduct did amount to cause.  His actions were seriously incompatible with his duties and responsibilities for the employer, and in direct contravention of the core values statement of the employer, which he had helped to create.  In the result, the action was dismissed as the employer had cause for summary dismissal.

On appeal, the plaintiff argued that the trial judge failed to consider the context in which the conduct occurred, and that he made a palpable and overriding error in concluding that cause for dismissal existed in the circumstances where no actual safety issues had arisen because of his behaviour.  The Court of Appeal rejected these arguments, finding that the trial judge had considered all of the relevant circumstances, including the plaintiff's responsibility for workplace safety, and that the employer need not establish that any actual harm arose from the misconduct.  Moreover, the employer need not prove that it would have terminated the employee if it was aware of the conduct at the time; the test for cause is whether a reasonable employer would have objectively viewed the employee's actions as incompatible with continuing employment.  In the result, the appeal was dismissed.

The issue of after-acquired evidence of cause also arose in Campbell v. Harrigan Rentals and Equipment Ltd., a decision from the B.C. Supreme Court from late last year.  The plaintiff, Kenneth Campbell, was the financial controller for the company for over 14 years.  In the fall of 2011, he was given a company gas card to purchase fuel for his vehicle, which he used occasionally for company business.  Approximately one month later, the employer learned that the plaintiff had been using the gas card to buy gas for his wife's car, although the two were then separated.  When confronted, the plaintiff admitted he had done so, but argued that he had not received a raise in over 4 years by way of justification.  Shortly thereafter, the employer also learned that the plaintiff had made claims for health benefits on behalf of his wife.  The employer decided to terminate the plaintiff for cause, citing both issues.  After his termination, the employer also learned of serious accounting errors, an attempt to falsely inflate the company's inventory, and two unauthorized salary advances the plaintiff had taken prior to his dismissal.

At trial, the employer argued that the misuse of the gas card and health benefits, along with the after-acquired evidence, amounted to just cause for Campbell's termination. The trial judge was not satisfied that either the use of the gas card or the plaintiff's submission of his wife's health claims amounted to cause for termination, as there was some ambiguity surrounding both issues. However, with respect to those matters identified after he was dismissed, the Judge was of a different view.  The Judge weighted the evidence and determined that the plaintiff had taken the advances without approval, and that he had been involved in directing staff to inflate the company's inventory. The court found his behaviour to be abusive of his position and dishonest, and determined that these actions constituted just cause for dismissal, "notwithstanding that these were not the reasons given to the plaintiff at the time of his dismissal".  His wrongful dismissal claim was therefore dismissed.

Employers considering terminating an employee for cause should fully investigate the employee's behaviour, and closely scrutinize any matters that may reflect employee wrongdoing, even if they don't come to the employer's attention until after employment has already ended.  When the organization's property is returned, consider having it reviewed forensically as it may contain critical evidence.  Follow up with the terminated employee's successor to determine whether any other issues have come to light.  And as always, document any issues that are discovered after dismissal.  You never know when that evidence may come in handy.

Do you have questions about just cause or dismissal?  If you require assistance, don't hesitate to contact Lance Ceaser.

 

Refusal to Work Sunday Shift Protected by ESA. But is the Employer Obligated to Provide a "Make-up" Shift?

When an employee in the retail sector exercises his right to refuse work on a Sunday, is the employer obligated to keep him whole by providing additional shifts at other times in the week?  In the recent decision in Highland Farms Inc., the Ontario Labour Relations Board has determined that the answer is "no". 

The claimant was a meat cutter at one of Highland Farms' stores.  When the company extended his regular 6-hour Sunday shift to 8 or 9 hours, the employee exercised his rights under section 73 of the Employment Standards Act, 2000 (the "ESA") to decline the Sunday shift.  As a result, the claimant was not disciplined, but his hours of work diminished by approximately 8 hours every two weeks.  A few months later, the claimant was placed on new medical restrictions that prevented him from doing certain aspects of his job.  The company offered him an accommodated position at another store, but he rejected that option and instead took a lower-paying position in the same store that met his restrictions.

The claimant argued that the reduction in his bi-weekly hours (from 88 to approximately 80) and the proposed transfer to another store constituted a reprisal for exercising rights under the Act.  The Board reviewed the relevant provisions of the Act and the evidence, and concluded that the reduction in his hours was not retaliatory; it was "simply because the cost the cost of exercising that right is one that he bears.  Employees may decline to work a Sunday shift, however, they will not be paid for not working and the Act does not oblige an employer to substitute another shift". The Board also accepted the employer's explanation for the proposed transfer.  In the result, the application was dismissed.

The case is a good reminder that not all of the consequences of an employee's exercise of rights under the ESA need to be borne by the employer.  Where an employee declines a shift, there is no positive obligation to provide a "make-up" shift at some other time.  Likewise, if an employee refuses consent to averaging of work hours (for overtime purposes), it is not unlawful for the employer to change the employee's schedule to avoid the necessity of paying overtime.  In some cases, employees just have to pay the "costs" of their decisions.

Do you have a question about the Employment Standards Act, 2000?  Need assistance with a claim?  Feel free to contact Lance Ceaser for assistance.
 

A Few Quick Bites

Is the “Character of Employment” still relevant to reasonable notice?

Just how important is the “character of [an employee’s] employment” when assessing reasonable notice?  Traditionally, higher reasonable notice periods had been reserved for terminated employees in more senior roles within an organization, with upper management and executives achieving the largest periods (maxing out around 24 months’ pay).  However, in Di Tomaso v. Crown Metal Packaging Canada LP, the Ontario Court of Appeal made the following observation back in 2011:

[The employer] would emphasize the importance of the character of the appellant’s employment to minimize the reasonable notice to which he is entitled. I do not agree with that approach. Indeed, there is recent jurisprudence suggesting that, if anything, it is today a factor of declining relative importance: … [citations omitted].

This is particularly so 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. The empirical validity of that proposition cannot simply be taken for granted, particularly in today’s world.

Di Tomaso was a very long-service (33 years), older worker (62 years old), and was deserving of a significant period of notice despite having held a semi-skilled position throughout his employment with Crown.  In the result, the Court of Appeal upheld 22 months’ notice.

If “character of employment” is still alive, it’s on life support.  In the recent decision in Kotecha v. Affinia Canada ULC, the terminated employee had worked for Affinia for over 20 years and was 70 years old at the time of trial in 2013.  At trial he was awarded 22 months’ notice (on top of 11 weeks’ working notice he’d been given by the employer).  The Court of Appeal recognized that the plaintiff employee had shorter service than Mr. Di Tomasso, and reduced his award of damages to 18 months’ pay, less the 11 weeks’ working notice that had been provided. While this may appear to be a loss for the employee, it still represents a significantly better outcome than one would have expected before the decision in Di Tomaso.  The moral of the story:  age and length of service continue to be the primary drivers in assessing reasonable notice, and the nature of the role is less important to the analysis.

Municipality May be Certified on Strength of Two Membership Cards

The recent decision of the Ontario Labour Relations Board in United Brotherhood of Carpenters and Joiners of America v Regional Municipality of Waterloo highlights the dangers for employers who operate in the construction industry and who have work performed by small numbers of workers outside normal working hours.  The Municipality had two workers building a shed on the Region’s property on a Saturday.  Both employees had signed cards with the Carpenters’ union.  The UBCJA filed its application on that day, and the Board determined that it had the requisite support among a bargaining unit of carpenters working for the Municipality to be certified.  {Ultimately, the Board still needs to determine whether the Union will be successful in displacing the Canadian Union of Public Employees, which currently represents these workers.]

In the construction industry in Ontario, trade unions need only submit signed membership cards representing 55% of more of the employees who were working on the “Application Filing Date” in order to be certified as the bargaining agent for all of the employees in the applicable bargaining unit.  It matters not whether a majority of all the employees in that bargaining unit support unionization – there need only be two (2) or more employees who have signed cards at work on the day the Application for Certification is filed.

The Waterloo decision also raises the issue of when an employer is subject to the “construction industry” provisions of the Labour Relations Act.  The Municipality argued that it was a “non-construction employer”, but the Board heard evidence that the Municipality had its employees perform repairs or assist with construction work on premises that it rented to third-parties.  For employers who own premises, but rent portions to other organizations, it’s important to understand that any construction work performed for tenants and for which the “landlord” will receive compensation could put that employer in the “construction industry”, and make the organization subject to the card-based certification process.

 
Getting Tough on Workplace Harassment

In two recent arbitration decisions, labour arbitrators have considered the scope of their remedial authority when addressing harassing behaviour.  In Unimin Canada Ltd v. United Steelworkers, Local 5383, the grievor had been given a 15-day suspension for repeatedly harassing and bullying a female co-worker in front of her male counterparts.  Following the grievance procedure, the suspension was reduced to 10 days on the condition that the grievor provide a written apology to the complainants and the company.  The grievor’s letter of “apology” showed no remorse, and shortly after his return from suspension he engaged in a number of retaliatory actions.  The company discharged him.

On the arbitration of the discharge grievance, the Union sought to exclude any evidence related to the earlier suspension or the apology, relying on a version of “double-jeopardy” (i.e., those issues had already been considered in the settlement of the earlier grievance, and the employer had accepted the apology he provided, such as it was, without reinstating the 15-day suspension).  The Arbitrator found that the evidence of the grievor’s earlier behaviour, and the content of the apology were relevant to the discharge grievance, and that there were compelling reasons to consider this evidence.  The evidence reflected on the grievor’s credibility in continuing to deny all wrong-doing, there was a similarity of facts between the earlier matter and the reasons for discharge, and it reflected on his complete lack of remorse.   In the result, Arbitrator Randall concluded that the grievor had attempted to retaliate and intimidate the complainants, and that there were no persuasive reasons to alter the penalty imposed by the employer.  The grievance was dismissed.

In William Osler Health System v Ontario Nurses’ Association, the Union brought a grievance on behalf of a nurse who had been sexually harassed by a doctor.  While the Hospital agreed that the harassment had occurred, it felt that its removal of the doctor’s privileges at the hospital was adequate to address the issue.  The Union disagreed, and pressed the labour arbitrator to prohibit the doctor from returning to work at the hospital.  The Hospital took the position that a labour arbitrator does not have the jurisdiction to issue such a remedy.

Arbitrator Albertyn had to consider whether the doctor’s return to the workplace would “pose any reasonable risk of harm to the grievor”, and assess whether his authority under statute extended to effectively stripping the doctor’s medical privileges indefinitely.  The Hospital argued that under the Public Hospitals Act and regulations, there was a process for removing or declining to reappoint a doctor’s privileges, but that the procedure was subject to appeal to the Health Professionals Appeal and Review Board and was to be carried out pursuant to the rules of natural justice.  At the same time, freedom from harassment and the obligation to provide a safe, healthy workplace were subject to the Human Rights Code and the Occupational Health and Safety Act, both of which an arbitrator has jurisdiction to interpret and apply.

The arbitrator concluded that the process under the Public Hospitals Act was outside his jurisdiction, and that ultimately he could not decide whether the doctor’s privileges should be restored.  However, assuming that the HPARB determined that he would regain those privileges, the arbitrator’s jurisdiction would be to answer the “labour relations and workplace safety question arising directly from the collective agreement”:  how closely should the doctor be permitted to work with the grievor and under what, if any, conditions?  Arbitrator Albertyn indicated that he would have to consider what hours and locations of the Hospital the doctor could work at, and whether he could be in the workplace at all while the grievor was present, in order to provide the grievor with a safe, harassment-free work environment. 

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Do you have questions about employment and labour law issues?  Please don’t hesitate to contact Lance Ceaser for assistance.