Dealing with Off-Duty Driving Offences

While it’s easy to say that what an employee does on his or her time off is none of the employer’s business, this is not always true.  When an employee’s off-duty conduct has an impact on the employer’s operations or reputation, or interferes significantly with the employee’s ability to perform the job, the employer has a legitimate interest in addressing that behaviour.  As discussed in an earlier post on the Ghomeshi fiasco, employees can incur employment-related repercussions for actions they take in their personal capacity.

But what about driving infractions?  Can offences behind the wheel have employment ramifications?  What about an employee who suffers from alcoholism?  Can they rely on their disability to excuse charges under the Highway Traffic Act or the Criminal Code?  As seems to generally be the case in matters like this, the answer to these questions is “it depends”.

As the Court said in Pearce v. Foster et al. (a “master-servant” case from the late 19^th Century):

If a servant conducts himself in a way inconsistent with the faithful discharge of his duty in the service, it is misconduct which justifies immediate dismissal. That misconduct, according to my view, need not be misconduct in the carrying on of the service of the business. It is sufficient if it is conduct which is prejudicial or is likely to be prejudicial to the interests or to the reputation of the master, and the master will be justified, not only if he discovers it at the time, but also if he discovers it afterwards, in dismissing that servant.

Of course, the determination of whether particular actions amount to cause for dismissal is a much less black-and-white affair than it was 130 years ago.  However, the principle is still observed:  an employee’s behaviour outside of work may have repercussions for the employment relationship (up to and including dismissal) where the behaviour is prejudicial to the employer’s interests.

Typically, whether or not off-duty driving offences or license suspensions (or other off-duty conduct) can be treated as ‘misconduct’ will turn on the nature and scope of the employee’s duties, the amount of notoriety their actions have attracted, the seriousness of the charges, the duration of the license restrictions or suspension, and the availability of other work or roles that don’t require driving. 

Before considering how to respond, an employer must make the necessary enquiries to determine what has occurred and how significant an event it is.  Obviously, the employee should be interviewed and any other available information gathered.  In some cases, this process may be hampered if the employee has received legal advice from a criminal lawyer and decides to exercise his or her ‘right to remain silent’.  At very least, however, the employer should require the employee to provide a copy of the information or ticket that was issued, and/or any documentation that may have been provided by the Ministry of Transportation (for example, where the licensing issue results from administrative reasons or an accumulation of lesser driving offences) to establish what charges and/or driving conditions apply.

Perhaps most crucial to the employer’s decision-making will be the nature of the employee’s role and responsibilities.  Is possession of a valid driver’s license a requirement of the position?  Is driving the primary or an essential duty of the employee’s job?  If not, how often is the employee expected to drive in the course of performing the job?  Does the employee operate an employer vehicle or his/her own car?  Does the employer maintain fleet insurance and what are its terms?  The more central that driving is to the employee’s duties, the more stringent the employer can be in its scrutiny of the circumstances of the loss of license.  However, it is also essential for the employer to understand the duration of the license suspension or conditions.  The shorter the suspension, the more carefully the employer should consider other options short of termination, such as an administrative suspension or reassignment to other duties (if they are available), to keep the individual employed until they regain the ability to drive.

The seriousness of the infraction and the employee’s explanation and display of remorse (if any) are also important factors to consider.  If the employee’s license was suspended administratively or for reasons unrelated to behaviour behind the wheel (for example, due to a failure to renew on time, failure to provide required medical information, or due to arrears in spousal or child support), the employer should consider options short of significant discipline or discharge.  On the other hand, conduct that suggests poor judgment or risk-taking (e.g., drunk driving, over 80 mg, or so-called ‘stunt-driving’), may attract more significant sanctions (and , therefore, less empathy).  Likewise, the attitude of the employee and any explanation they may provide must be weighed.  An absence of contrition or insight into the seriousness of the situation are poor indicators of likely good behaviour when driving for work in the future.  Of course, the employer must also consider the employee’s general history in terms of performance and behaviour – an employee with long, good service will obviously expect to receive more leniency than a short-term employee or one with a chequered past.

In some cases, the nature of the employer’s business and/or the notoriety of the employee’s behaviour may also be an aggravating factor.  Where charges against the individual have been reported in the media, the employer’s reputation may be at stake, particularly in a smaller community.  In some cases, the extreme safety sensitivity of the work may dictate that the employee be pulled off the road immediately (e.g., a truck driver who works for a company that hauls fuel oil or other dangerous goods on public roadways).  If there’s a risk that the employee’s behaviour may impact public confidence in the services provided by the employer (such as would be the case in policing), this will also be relevant to how seriously the misconduct is treated.

In any event, it cannot be assumed that the loss or suspension of an employee’s driver’s license will necessarily result in termination, even where driving is a significant component of their job.  As Arbitrator Owen Shime observed in one of the seminal arbitration cases on the subject (Re Bell Canada and C.W.C. (Shime), 24 L.A.C. (4th) 116):

An employee who loses his or her driving licence for violation of the Highway Traffic Act, [citation omitted], or a similar statute need not suffer a loss of employment, even where the employee is required to have a driving licence in order to perform his or her duties.  An employer is required to act reasonably and must balance its interests in maintaining production with the grievor’s interest in retaining his or her employment.  Also some care should be taken to ensure that the employee is not penalized twice for off-duty conduct but rather that there is a legitimate and significant employer interest that is being protected.  And finally, in the loss of licence cases there is a presumption that an employee should be suspended until other work is available or the employee’s driving privileges are restored.

Alternatively, a number of adjudicators have also held that an employer should consider the possibility of offering other, non-driving duties to an employee pending reinstatement of their driver’s license.  However, this option should only be considered in cases where the period of suspension or driving conditions is known and relatively short.  And of course, this alternative should never be considered where it would result in displacing another employee.  Only available work should be offered to accommodate the employee who has lost his/her driving privileges.

But what about the employee whose license is suspended due to charges related to impairment by alcohol or drugs, but who suffers from a known addiction?  What weight should the employer give the employee’s disability?  Is it an excuse or a mitigating factor?

In English v. Treasury Board (Solicitor GeneralCanada - Correctional Service), 2003 PSSRB 72, Board Member Guindon was dealing with the case of a correctional officer who was terminated for failing to disclose off-duty conduct (i.e., criminal charges related to drunk driving) that compromised his ability to perform his duties.  The officer had not told the employer that he had been convicted or that his license had been suspended for two (2) years.  In addition, he continued to operate employer vehicles (performing inmate transfers) after he lost his license.  Prior to the arbitration hearing, the employee expressed remorse and took steps to address his acknowledged problems with alcohol abuse.  The Board Member observed that the employee’s alcoholism had to be considered in assessing the appropriate penalty for his wrongful behaviour.  Citing an earlier decision, the Board Member wrote:

What emerges from these cases and the other material cited to the board is a recurring set of considerations and principles arbitrators take into account when dealing with discipline as it is applied to the alcohol and/or drug-addicted employee. These principles and considerations include the following:

1.            Alcoholism is recognized as an illness albeit one with an element of volition, that can attract varying levels of justifiable disciplinary response from the employer up to and including discharge;

2.            An adjudication board is entitled to look at the rehabilitative progress made by an employee subsequent to the employer's decision to discipline and is likely to modify that discipline if the employee can demonstrate that he has been successful in his recovery;

3.            The discipline imposed by an employer should only be modified in "exceptional circumstances" and those circumstances exist where an employee has shown genuine prospects for recovery and the restoration of a productive employer-employee relationship;

4.            The employer is entitled to insist that the employee perform the work for which he is paid and is not obliged to bear all the costs and consequences associated with an employee's inability to perform his duties as a result of his alcoholism;

5.            An adjudication board should consider the extent to which and the duration for which an employee is unable to perform his employment obligations;

6.            That where reinstatement occurs in substitution for discharge arbitrators are prepared to attach conditions to such reinstatement. Recognizing that alcoholism and drug addiction are not curable and can only be arrested by total abstinence, one such condition often attached to reinstatement is the requirement that the employee remain drug and alcohol-free.

In short, where it is established that an employee’s misconduct (in this case, off-duty driving offences) are related to a proven medical condition (i.e., alcoholism), the focus of the analysis will be on whether the employee acknowledges and seeks treatment for his/her problem, as well as the likelihood for recovery.  Evidence that the employee has sought treatment even after termination may be relevant.  However, the employer can in these cases impose conditions on the employee to ensure that the employee completes any rehabilitation program and complies with prescribed after-care (including abstinence from alcohol).

Where dismissal is not the appropriate course of action, an employer can consider withholding assignments that involve driving, transferring the employee to another position or other duties that don’t require a license, suspending the employee (where no other suitable work is available) or demoting the employee to a role where driving is not required.

While driving offences can have a significant impact in the workplace – hindering efficient operations or drawing unwanted scrutiny on an organization – employers need to be aware that not every loss of a driver’s license should attract the same penalty.  A careful, fact-specific assessment is required in each and every case.

Do you have questions how to deal with an employee who has lost their driving privileges?  Need guidance on whether or not to discipline for off-duty conduct?  Contact Lance Ceaser for expert advice.

Summary Judgment - The Way of the Future for (Some) Wrongful Dismissal Cases

When the Supreme Court of Canada issued its decision in Hryniak v. Mauldin last year, it was not clear whether the Court's guidance on the use of summary judgment motions (under Rule 20 of the Rules of Civil Procedure) would be applicable to wrongful dismissal actions.  The Supreme Court made clear that unnecessarily protracted proceedings were not necessary in all cases, and in some cases the delays and expense of a prolonged trial could result in a denial of justice.  So what about your average allegation of wrongful dismissal?

In its recent decision in Arnone v. Theratronics Ltd., the Ontario Court of Appeal has suggested that some wrongful dismissal cases may be ideal candidates for summary judgment, in keeping with the Supreme Court's decision, particularly those where the only issue is the quantum of reasonable notice that the employee ought to have received.  In Arnone, the employer had not asserted cause for termination or any other form of justification, so the only outstanding question to be decided was the period of reasonable notice.  The plaintiff brought a motion for summary judgment under Rule 20, claiming that the matter could be disposed of in a summary fashion because there was no 'genuine issue' requiring a trial.  The motion judge agreed, and granted summary judgment to the plaintiff.

On appeal, the employer argued that the motion judge had erred as there was disagreement between the parties as to whether the plaintiff was a supervisor or a manager, a factor going to the analysis of appropriate notice under Bardal v. The Globe & Mail Ltd.  The Court of Appeal rejected this argument, finding that the judge had sufficient material before him, including documentary evidence submitted by the employer, that would allow him to make a determination without conducting a trial.  Moreover, the employee had conceded, for purposes of the motion, that he may have been supervisory rather than managerial.  The Court observed that this objection did not necessitate a full trial, particularly as the nature of the employment was only one Bardal factor to be considered in determining reasonable notice.  The Court then stated:

Finally, while the appropriateness of bringing a summary judgment motion must be assessed in the particular circumstances of each case, a straight-forward claim for wrongful dismissal without cause, such as the present one, strikes me as the type of case usually amenable to a Rule 20 summary judgment motion.

The Court of Appeal concluded that the motion judge had not erred, as there was no genuine issue for trial (although other aspects of the judge's decision were altered on the appeal).

Provided parties to a wrongful dismissal case marshal the necessary documentary and affidavit evidence, it is likely that the courts will be prepared to entertain summary judgment motions in most 'notice period' cases. Hearing a motion is much more timely and cost-effective, and preserves judicial resources that would otherwise be expended hearing a trial.  If there are factual issues that require a more thorough analysis, employers will have to persuade a motion judge that documentary evidence and affidavits are insufficient to resolve the dispute.  It will therefore be imperative that employers ensure that they prepare for a summary judgment motion as if it may be determinative.  In many cases, it could be. 

Do you have questions about wrongful dismissals?  Need guidance to make sure that the notice provided is "reasonable"?  Contact Lance Ceaser for expert advice.

Termination One Day After Employee Disclosed Pregnancy Deemed Discriminatory

Once an employee discloses that she is pregnant and/or intends to take pregnancy or parental leave, an employer must tread carefully.  But what about the situation where the employee discloses her pregnancy to a co-worker?  Should the employer be deemed to be aware of her condition?  In a recent case before the Human Rights Tribunal of Ontario (the "HRTO"), an employer was found to have discriminated against a pregnant employee, despite denying any knowledge of her pregnancy.

In Lugonia v. Arista Homes, the Applicant was hired by the company on a one-year contract to cover for the absence of the receptionist, who was about to commence a pregnancy and parental leave.  Between the time of hiring, and her start date, the Applicant learned that she was pregnant, but did not disclose this information to the company's CFO or its Office Manager (who had hired her).  She commenced working two shifts a week for the first month, shadowing the regular receptionist to learn the role, before taking over her duties on a full-time basis.  In the Applicant's view, nothing remarkable occurred on the first two days that she worked for the company.  However, on the third day, she disclosed to the regular receptionist that she was also pregnant.  According to the Applicant, the receptionist suggested that she not disclose her pregnancy for 3 to 4 months, because it was not clear how the employer would react.  The Applicant did not say anything to the employer, and was given an employment contract to sign that day.  Despite the fact that the Applicant knew that she could not fulfill the one-year term of the contract, she signed the document.  When she attended the office for her fourth shift, she was called to a meeting at which her employment was terminated. 

The Applicant argued that the receptionist must have told the employer about her pregnancy, and that the employer then decided to terminate her employment.  The company denied any awareness that she was pregnant, and claimed that it had received troubling reports about the Applicant's attitude and demeanour.  The employer had previously struggled with at least one employee who exhibited similar behaviour, and so it decided to dismiss the Applicant early in the relationship as she was not a good "fit" with the organization or the culture they were trying to foster.  The company argued that its actions were not motivated or influenced by discriminatory considerations, as the decision-makers were not aware that the Applicant was pregnant at the time.  The receptionist had testified that she did not tell anyone about her conversation with the Applicant, although she had reported some concerns with the Applicant's attitude to the Office Manager on one occasion. 

In its decision, the HRTO observed that the Applicant bore the onus of establishing that it was more likely than not that the employer had discriminated against her on the basis of gender.  As in most cases before the Tribunal, any evidence of discriminatory conduct would be circumstantial, as most parties do not openly engage in such behaviour.  Given that the employer's defence depended on a finding that the company was unaware of the Applicant's pregnancy, the outcome was a function of the credibility of the various witnesses.  After reviewing the testimony and the parties' arguments, the Tribunal concluded that the three witnesses for the company were not credible.  First, the timing of the dismissal supported an inference that the CFO and Office Manager were aware.  Prior to her disclosure to the receptionist, there had been no criticism of the Applicant's performance or conduct. In light of this questionable timing, the HRTO considered the employer's reasons for terminating the Applicant's employment, and found them to be rather thin.  Despite the 'probation' clause in the Applicant's employment contract, it was not credible that the company would engage in a lengthy job competition, hire the Applicant, and then terminate her after her 3rd day of work based solely on one or two comments that the receptionist made to the Office Manager "in passing".  Given these concerns with the evidence of the employer, the HRTO concluded that it was more likely than not that the Applicant had been terminated due to her pregnancy.  In the result, the company was ordered to pay $15,000 in damages for injury to the Applicant's dignity, feelings and self-respect.  The employer was also ordered to hire an expert to assist it in the development of a human rights policy.

Aside from confirming that "honesty is the best policy", this decision highlights the importance of carefully documenting discussions that may have human resources impact, and to avoid taking action precipitously.  When dealing with any employee, including a worker on probation, it is imperative to ensure that any concerns regarding performance or conduct are documented and addressed with the employee.  While it may be tempting to 'pull the trigger' early in the relationship if it is determined that a new employee is not going to work out, the purpose of a probationary period is to afford the worker an opportunity to show what they are capable of.  Three days is simply not enough to form an opinion, particularly if the employee is only shadowing another staff member.  In this case, the employer may have had an opportunity to deal with the issue appropriately (i.e., by confronting the employee with its awareness of her pregnancy and the fact that she had signed a one-year contract knowing that she could not fulfill her side of the bargain).  Having failed to do so, it fell back on "fit", one of the weakest and most suspicious reasons for dismissal an employer can offer.

If you need guidance on navigating a challenging employment issue, do not hesitate to contact Lance Ceaser for expert, practical advice.

 

Court reminds: "a message does not become privileged merely by sending a copy of it to a lawyer"

A recent decision of the Superior Court of Justice should serve as a good reminder to HR professionals that one must be careful in how information is shared if privilege will be claimed.

In Jacobson v. Atlas Copco Canada Inc., the plaintiff was a former employee of the defendant.  Following a workplace altercation involving the plaintiff and a co-worker, human resources investigated.  However, the plaintiff took the position that the local HR representative was biased.  Accordingly, the HR representative sought the opinion of another HR employee from a different location to ensure impartiality.  Copies of the investigation notes were exchanged among the HR representatives, with a copy to an external employment lawyer.  However, it was not clear that all of the employees on the email chain were aware of the identity of the lawyer, nor did anyone expressly seek the advice of the lawyer with respect to the outcome of the investigation.  In one particular email message, one of the HR reps offered his views on the application of the employer's progressive discipline policy and a proposed course of action vis-à-vis the plaintiff's employment.  A couple of hours later the lawyer provided his legal advice on the situation, although his opinion had not been solicited.  The employee was ultimately terminated, and sued for wrongful dismissal. 

In the course of the action, the plaintiff brought a motion seeking production of the email from the second HR representative of the company (but not the responding email from the lawyer, which clearly contained legal advice).  The employer resisted the motion on the basis that the email communication was protected by solicitor-client privilege and should not be produced.  In support of its position, the employer provided an affidavit from the company's General Manager, who advised that the company had retained the external lawyer to provide advice on the investigation, and his belief that the HR representative had been seeking advice when he copied his email to the lawyer.  However, the company did not provide an affidavit from the HR representative himself.

Justice Ellies looked at the surrounding circumstances to determine whether it was clear that the HR representative had intended to seek the lawyer's advice when he sent his email.  Unfortunately, because the company had not provided the "best evidence" (i.e., a statement from the individual who actually sent the email), the Judge concluded that the hearsay evidence of the General Manager did not establish that this was the intention of the communication in question. As the party claiming privilege, the onus of proving the communication was privileged rested with the company.  The evidence it put forward failed to prove that point on a balance of probabilities.  At paragraph 25, the Judge very succinctly summarized his conclusion:

Atlas Copco relies on [the General Manager]`s evidence that [the lawyer] was retained to provide legal advice prior to the [HR representative's] message and provided an opinion via e-mail a few hours after the message was sent. There is no doubt that [the lawyer]’s role was to provide legal advice with respect to this particular situation and that he did provide that advice after receiving [the HR representative's] message. However, that is not enough, in my view, to establish that [the HR representative] sent the message for the purpose of obtaining that legal advice in light of the other circumstantial evidence surrounding the communication. In the same way that sending a message to both a fellow employee and a lawyer does not prevent a communication from being privileged, a message does not become privileged merely by sending a copy of it to a lawyer.

While the decision turned largely on the  importance of producing the "best evidence" in all circumstances, it also lays bare a common assumption or misunderstanding about legal privilege.  In order to claim solicitor-client privilege, the client (in this context, the employer) must establish that the communication in question was sent to a lawyer with the intention of getting the lawyer's legal advice.  Copying a lawyer without soliciting an opinion may not suffice to protect the message from disclosure later, particularly if there is no discussion amongst the parties about the role of counsel on the email chain. Likewise, if the advice in question is not "legal" per se, privilege will also not apply.  Legal privilege can be a very valuable tool, particularly in the context of an investigation into wrongdoing.  However, if the role of the lawyer is not observed, privilege may be elusive.

Do you have questions about how and when solicitor-client privilege can be claimed?  Need assistance in conducting investigations?  Contact Lance Ceaser for expert guidance.




 

Employee Unable to Establish Entitlement Based on Purported 5-Year Contract

Where an employee is retained for a fixed-term and is dismissed prior to the expiry of the contract, the employer may be liable for any compensation and benefits that the employee would have been entitled to for the remaining term (subject to a provision setting describing the parties' rights and obligations in the event of an early termination).  However, what happens when there is disagreement between the parties about the existence of a fixed-term contract?  The Ontario Superior Court of Justice recently wrestled with this very issue.

In Tossonian v. Cynphany Diamonds Inc., the plaintiff alleged that the employer had 'guaranteed' him employment for 5 years as part of their contractual arrangement.  The plaintiff was working for a jewellery store in British Columbia, but was interested in a position in the Toronto area.  He had discussions with the owner of Cynphany Diamonds (which operated as Symphony Diamonds) about a position managing two of the company's stores.  The parties had two conversations on the terms and conditions under which the plaintiff would be employed.  Following the second conversation, the plaintiff wrote to his potential employer, setting out what he expected in his contract.  His email message included reference to a fixed, 5-year term, as well as compensation, bonus and moving expenses in line with their earlier conversation.  When the owner of Symphony Diamonds replied to the plaintiff a few days later, his email made no reference to a 'guarantee' or a fixed-term.  The plaintiff did not object, although he alleged that the parties had a subsequent conversation during which he claimed that the employer told him that it was "not a problem.  I will guarantee you."

The plaintiff commenced working for the defendant company, and a couple of months later the contract was reduced to writing.  The initial "Employment Contract" set out the terms of employment, but did not make mention of a fixed term.  Subsequently, the employer did sign two letters that the plaintiff provided, which included a 5-year term, but the owner explained that both of these documents were provided solely to assist the plaintiff in obtaining a mortgage for a property in the Toronto area.  There was also evidence that the employer confirmed this information on a call with a representative of the bank that offered the plaintiff a mortgage.

Only a few months later, there was a dispute between the parties surrounding the plaintiff's decision to take employment with a competitor.  While the employer alleged that the plaintiff had resigned his employment with Symphony, the plaintiff claimed that he was dismissed when the employer learned that he had been negotiating with the competitor, and suspected that the plaintiff was also encouraging other employees to leave the employer. 

The Court concluded that the owner had, in fact, terminated the employment of the plaintiff, after only 8 months, so the primary issue was whether or not the plaintiff was working on a 5-year contract, or had been hired indefinitely (and was entitled to "reasonable notice" at common law).  The Court considered the case law that analyzed when a contract was formed.  In the Court's opinion, the plaintiff's contract of employment came into existence when the owner emailed the plaintiff with the terms of their agreement, excluding the fixed term.  The plaintiff had failed to ensure that the 5-year 'guarantee' was incorporated into that agreement, and the evidence did not establish that Symphony had subsequently to make such a promise.  The parties' agreement was evidenced in the formal "Employment Contract" that they signed after the commencement of employment.  The Court also accepted the employer's evidence that the other documentation that was signed by the parties was solely for the purpose of helping the plaintiff to obtain a mortgage, and did not amend their agreement.  Given that the plaintiff had not established the parties' mutual intention that he would be employed for a 5-year term, the plaintiff's entitlement was to be determined in accordance with the common law factors applicable to "reasonable notice". In light of his short service, the fact that he relocated to take the job, and the availability of other similar work, the Court concluded that he was entitled to pay in lieu of two (2) months' notice (not the outstanding 52 months remaining on the purported contract claimed by the plaintiff).

The decision in Tossonian highlights the importance of clear communication and documentation.  The parties' agreement on the fundamental terms and conditions of employment should be reduced to writing, and signed by both parties prior to the commencement of employment.  If a party feels that the written agreement omits some important detail, their objection should also be put in writing and addressed in the contract (assuming they agree on its inclusion).  Where the contract consists of an exchange of correspondence or email, the parties would still be wise to create a formal document to memorialize their agreement prior to the employee starting work.  Doing so avoids confusion or misunderstandings that may arise later (when memories are not as clear and valuable evidence of negotiations may be gone).

Do you have questions about how to structure an employment agreement?  Need guidance on whether a fixed-term or indefinite contract is right for you?  Contact Lance Ceaser for expert assistance with your labour and employment law issues.

Claiming Privilege Over Workplace Investigation Records

Often employers will retain the services of an independent investigator (typically a lawyer) to investigate issues in the workplace, either expecting or assuming that the investigator's work product (such as notes and the written report) will be privileged and not subject to disclosure and production obligations.  However, if the work of the investigator is to be protected from later disclosure in the course of litigation, the employer must carefully consider the law of privilege prior to retaining a third-party investigator.  The recent decision of Master Short of the Ontario Superior Court of Justice in Howard v. London (City) illustrates the challenges.

Background

In 2012, a resident of the Dearness Home (a nursing home operated by the City of London) packed up his belongings and left the facility, unbeknownst to staff.  The resident had recently been moved from a secure part of the facility to an area that did not have the same access controls.  The resident managed to wander some distance up a very heavily travelled road before he stepped into traffic, was struck, and subsequently died from his injuries.  The death of the resident was widely reported in local media, which raised questions about how such a tragedy could have occurred.  The administrator of the Home was away on vacation at the time, but commenced an investigation immediately upon her return.  However, after only a few days, she was instructed to cease her inquiries, as the City had decided (on advice from external counsel) to conduct an independent investigation, using the services of a local lawyer.  At the same time, the Ministry of Health and Long-Term Care was also conducting its own investigation. Ultimately, the investigator was retained by the Interim City Manager to conduct an investigation into the City's policies, procedures and actions, oversight by the City Council, the City's procedures for investigating critical incidents, and whether City employees and representatives had complied with applicable standards, and to provide legal advice on same.

Before and during the investigation, there was evidence of several "Strictly Privileged and Confidential" email messages among a number of City staff, including the administrator of the Home, regarding the scope of the investigation.  The administrator was interviewed twice and provided some documentation requested by the investigator.  She was repeatedly reassured that she need not be concerned about the outcome of the investigation for her employment, and was specifically told that she could not have her lawyer present during the interviews.  At the end of the investigation, the administrator was advised that she could resign, failing which her employment would be terminated for cause.  She did not receive a copy of any interview notes or the investigator's report, and was given no opportunity to respond to its findings before she was terminated.  She commenced a wrongful dismissal claim and sought production of the investigator's file, including any notes and the report.  The City resisted the motion, claiming solicitor-client privilege and litigation privilege.

The Production Motion

In his decision, Master Short reviewed the evidence that was presented, including a number of the email messages among senior City staff that debated whether the investigation was for human resources purposes or to establish due diligence vis-a-vis resident care (in anticipation that the resident's family would likely bring an action against the City). In one email, the City Solicitor suggested that he would be prepared to seek Council's approval to retain "independent legal counsel... to provide advice and an independent privileged legal opinion" concerning the issues that were ultimately referred to the investigator.  The Master observed that this email was focused on obtaining advice in relation to potential civil liability regarding the death of the resident and made no mention of legal advice on potentially terminating an employee. It was also clear from the email that the City was retaining the lawyer to conduct a fact-finding investigation, not seeking a legal opinion (as suggested by the City Solicitor). Despite the reassurances allegedly given to the administrator, it was also clear that the investigation did have a HR focus, and was intended to determine outcomes for staff who may have had involvement in the incident.

The Master also considered the fact that the City had relied on the investigation in determining that the administrator should be terminated, and had disclosed this reliance to the media on more than one occasion.  The London Free Press reported extensively on the story, and quoted the Mayor tying the termination of the administrator to the report prepared by the investigator.

Under the Rules of Civil Procedure, all relevant documents are to be disclosed to the opposing party, "whether or not privilege is claimed in respect of the document".  Where a party claims privilege over a document, it must set out the basis for its privilege claim, and bears the onus of establishing that privilege applies.  The City claimed both that the investigation documents were covered by solicitor-client privilege, as the investigator was a lawyer whose retainer included the provision of legal advice, and litigation privilege, which applies to documents created by a party when litigation is occurring or is contemplated.  Master Short conducted an extensive review of the law applicable to both types of privilege and made several very helpful findings:

• Although solicitor-client privilege is designed to ensure justice and fairness, by allowing the free exchange of information necessary to a lawyer's representation of a client, it has its limits. For example, the exchange of communication between a client and a lawyer who has been retained only to address a specific legal matter will not be protected if the communication is unrelated to the retainer. Likewise, if the lawyer has been retained in some other capacity unrelated to providing legal advice or exercising the skills of a lawyer (i.e., acting as a fact-finder where legal skills are not required), no privilege will attach.
• In those cases where privileged applied to the findings of a lawyer-acting-as-an-investigator, the retainer was clear that the lawyer was to provide legal advice on the specific subject matter of the investigation or was using the specific skills of a lawyer (such as where a lawyer was investigating whether a member of the judiciary had acted inappropriately during a trial).
• When considering whether solicitor-client privilege attaches to records, the understanding of the parties is a factor.  Where the lawyer is presented solely as a fact-finder, and explains that his/her assignment is limited to certain factual matters, it is unlikely that privilege will attach or that it will be limited to those legal issues within the investigator's mandate.
• Unless the retainer specifies that the lawyer-investigator is to provide "legal advice" (rather than just "advice"), a court is less likely to find that solicitor-client privilege applies.
• One party to a privileged communication cannot assert privilege against someone else who also received the advice from the same lawyer, on the basis that the parties have "joint interests".
• In order for litigation privilege to apply, it must be contemplated that a specific claim will be made by or against a particular party.  Where communications involve an incident that may give rise to one particular type of claim (e.g., liability due to negligence), they will not be privileged in relation to a different type of claim (e.g., wrongful dismissal of the person who is found to be negligent).

In the result, Master Short concluded that the investigation file was not privileged, and ordered the City to produce it to the plaintiff (with any personal information of third parties redacted in accordance with the Municipal Freedom of Information and Protection of Privacy Act).  The investigator had been retained not as a lawyer (i.e., to provide legal advice or representation), but to find certain facts.  While the investigation may have been conducted in the contemplation of litigation by the family of the deceased resident, it was not related to a potential wrongful dismissal claim by the plaintiff.  Moreover, the City could not assert privilege against the administrator when she had been part of the communication with respect to the conduct of the investigation.

What Does It Mean?

For employers, this case provides some important guidance:

• Determine whether the employer wishes to maintain privilege over the investigation file.  If it is unlikely to be crucial, it may be advisable to retain a non-lawyer or hire a lawyer to act solely as a fact-finder to contain the costs of the investigation.  It is advisable to obtain legal advice before deciding whether privilege ought to be claimed.
• If a claim of solicitor-client privilege will be made, ensure that the retainer letter is clear that the lawyer-investigator is to make findings of fact and to provide legal advice or opinion on the basis of those findings.  Also ensure that the scope of the retainer is broad enough to cover the personal conduct or blameworthiness of individual employees, and that the advice sought includes labour and employment law advice and recommendations.
• If it's likely that some form of labour or employment litigation may arise from the matter under investigation, such as a civil action, grievance or human rights complaint, then there may be a basis for litigation privilege.  In that case, the investigator need not be retained to provide legal advice.  However, if the investigator will be only a fact-finder in this scenario, he/she should be retained by counsel for the employer (whether external or in-house), rather than by some other representative of the employer, and it should be clear that the investigator's findings are necessary for counsel to advise and represent the "client" (i.e., the employer) in relation to all potential forms of litigation.
• Communication with an investigator or in regards to the investigation must be handled delicately.  It is preferable for communication with the investigator to be with only one or two representatives of the employer, or with counsel for the employer (if possible).  Anyone who may fall within the scope of the investigation should not be included on any 'privileged' communication.  Erect a 'cone of silence' and carefully maintain it, or privilege may be "waived".

Unfortunately, the law of legal privilege is a very complicated area.  While the foregoing recommendations may prove helpful, they cannot be construed as legal advice, in the absence of a very fact-specific analysis of a particular situation.  If you are uncertain about how to undertake an investigation or whether you can assert privilege over the findings of an investigator, obtain legal advice.  Feel free to contact Lance Ceaser for guidance or to ask about investigation services.

Failure to Prove Cause Leaves Employer Responsible for LTD Payments to Dismissed Employee

When an employee is terminated without cause, the employer is obligated to continue all benefits to which the employee is entitled for the entirety of the reasonable notice period (unless some lesser entitlement is clearly spelled out in the contract of employment).  In a recent decision, where a teacher was dismissed, purportedly for cause, but became totally disabled during the reasonable notice period, the employer was found to not have had cause for termination and was ordered to pay the employee disability benefits to age 65, along with 12 months' pay in lieu of reasonable notice.

In Fernandes v. Peel Educational, the plaintiff was a teacher who had been employed by the private school for over ten years.  Although he had generally received good or excellent reviews during his teaching career, some concerns were identified in his end-of-year review following the 2007-08 school year.  Despite these issues, he continued working for the school the next year.  However, in March 2009, matters came to a head when the plaintiff submitted incomplete and inaccurate marks that were to be included on students' interim report cards.  The plaintiff advised the school that he was awaiting some work from students and that he would correct calculation errors.  Over two weeks later, the issues had still not been resolved, and the school continued to coach the teacher on the importance of submitting accurate marks for his class.  A couple of days later, the teacher submitted the marks and report cards, but the administration was suspicious because of the sudden completeness of what was turned in.  After some investigation, the school determined that the teacher had in fact inputted marks on student assignments that had not yet been completed.  The teacher was asked to attend a series of meetings with administration, during which he did not provide an explanation. However, he did ultimately confess to fabricating marks for some students. He was dismissed for cause, on the basis of "academic fraud".  Shortly thereafter, he was diagnosed with a major depressive disorder, and was deemed totally disabled by his doctor and psychiatrist.  By then, his long-term disability coverage had already been terminated.

After a trial, the Judge reviewed the competing evidence.  Although he concluded that the teacher had not been forthright with the school, and had actually lied in his evidence before the court, the Judge decided that the school had not established that the plaintiff's dishonesty was cause for summary dismissal.  Applying the 'contextual approach' dictated by the Supreme Court of Canada's ruling in McKinley and BC Tel, the judge felt that the employer's claim of academic fraud was a "very dramatic way of describing a few students who were marked on presentations that they had not yet given", and did not amount to the kind of dishonesty which undermined the trust essential in the employment relationship.  Having found that the employer did not have cause for dismissal, the Judge went on to find that the teacher was entitled to 12 months' reasonable notice.  In addition, given that he would have been entitled to claim LTD benefits, due to a disability that arose during the notice period, his wrongful dismissal also made the employer liable for those LTD benefits that the teacher would have otherwise been eligible to receive.  Given the plaintiff's prognosis, the employer was responsible for all LTD payments he would have received until age 65 (when LTD coverage would cease under the terms of the plan). 

The decision in Fernandes may come as a surprise for a couple of reasons.  The Court's rejection of the employer's case for cause is concerning. If a teacher falsifying marks is not the kind of dishonest conduct that warrants dismissal, it is hard to imagine what behaviour would meet that standard.  That being said, the employer's investigation of the problem was found to be flawed, and the teacher had enjoyed a long, unblemished teaching career prior to the issue arising.  In that context, the decision is somewhat more understandable.  Even more concerning for employers, however, is the school's liability for LTD benefits for a period of approximately 9 years.  The decision is a reminder to employers of the dangers of alleging cause on the basis of a relatively slim record of misconduct (particularly in the case of a long-term employee), and the risks associated with not continuing benefits (or providing a cash equivalent) during the notice period.  Before doing so, it is sound practice to obtain legal advice.

Do you have questions about what amounts to cause for dismissal?  Need guidance on whether or not to continue benefits to a terminated employee?  Contact Lance Ceaser for expert assistance.

 

 

 

Year in Review: The Top 5 Labour & Employment Law Developments of 2014

Welcome to 2015!  With the coming of a new year, it's always a handy time to look back and see what we've learned and what's changed over the preceding 12 months.  In no particular order, here are the 5 biggest events of the year 2014 that all workplace parties should be aware of:

1.  Walmart gets punished for treatment of assistant manager - Although the Ontario Court of Appeal felt that the jury's award of aggravated and punitive damages (in the amount of $1.45 million against Walmart and its store manager) were excessive, even the reduced damages total was significant (in excess of $400,000).   In this case, the plaintiff's superior had asked her to complete reports which should have been done in her absence.  Feeling that completing the reports would be a form of falsification, she refused to do so.  Thereafter, the store manager targeted her for abusive and demeaning treatment, to the point that she ultimately became ill and quit her job.  At the end of the day, employers should take away that it's not enough to have positive workplace policies - complaints of harassment must be taken seriously and investigated, and frontline managers must also walk the walk, failing which the employer will be held to account. Managerial employees should also be aware that they may be held personally responsible for their actions if they go out of their way to create an unpleasant work environment for their reports.

2.  Total payroll, both within and outside Ontario, is included when determining whether an employer is subject to severance pay obligations under the Employment Standards Act - In Paquette c. Quadraspec Inc. (referenced in an earlier post here), the Ontario Superior Court of Justice had to assess whether an employee was entitled to severance pay.  While the employer's Ontario payroll did not exceed the $2.5 million threshold, the company had operations outside Ontario as well, and it's total payroll was greater than that figure.  Looking at the wording of the ESA, the Judge concluded that the Legislature had not intended to limit "payroll" to only the employer's Ontario payroll, and found severance to be applicable.  Previously, most employment lawyers and the Ministry of Labour had asserted that only Ontario payroll need be counted.  For employers with large workforces predominantly outside of Ontario, this development may be concerning.  It remains to be seen whether the decision will be appealed.

3.  Mental Stress claims at the WSIB no longer limited to “acute reaction to a sudden and unexpected traumatic event” - As discussed in an earlier blog post, the Workplace Safety Insurance Appeals Tribunal has struck down the WSIB's policy on 'traumatic stress' claims on the basis that it was discriminatory towards a sub-group of individuals who suffer work-related stress.  It can be expected that this decision will result in increased stress claims to the WSIB.

4.  New test for family status discrimination created by Federal Court of Appeal - As discussed in a blog post from May 2014, the Federal Court of Appeal has created a new test for when an employer must accommodate an employee's family status needs.  Since that decision came out, the approach of the Federal Court of Appeal has been approved and applied by the Alberta Human Rights Commission (discussed here).  So long as an employee has a child in his/her care and supervision, has legal responsibilities to that child, has made reasonable efforts to meet his/her childcare responsibilities without success, and a workplace rule interferes with the employee's ability to meet those obligations (in a manner that is not trivial or insubstantial), the employer has a duty to accommodate the employee to the point of undue hardship.  While this test does strike a balance between the duties of both employee and employer, it is not nearly as narrow as the test some adjudicators had previously applied.  Accordingly, employers will need to ensure that they thoroughly investigate requests for family status accommodation before asserting that they have no responsibility for doing so.

5.   An employee who breaches confidentiality can be ordered to repay a termination settlement - In a relatively rare 'good news' story for employers, an employee was ordered to repay almost the entirety of a termination settlement that was reached between her union and her former employer.  As discussed here, Jan Wong was fired by the Globe & Mail, but her discharge grievance was resolved by way of written minutes of settlement, which included a confidentiality provision.  When Wong later wrote about the event in a self-published book, including statements about the nature of the settlement, the Globe & Mail took the matter back before the arbitrator, who was satisfied that she had in fact violated the terms of the agreement.  In the result, the employee was ordered to repay over $200,000, as well as the employer's legal costs (of approximately $30,000).

Of course, these are not the only important developments over the past 12 months.  The Ontario Government has passed a number of changes to labour and employment statutes; the Ontario Human Rights Tribunal ordered the reinstatement of an employee who had been out of the workplace for over 10 years in Hamilton-Wentworth District School Board v. Fair; and the Supreme Court of Canada has issued a decision clarifying the test for summary judgment which should open the door to increased use of this procedure in wrongful dismissal cases. The Jian Ghomeshi firing turned the spotlight on how much an employer can punish an employee for his/her conduct outside the workplace.  That debacle, along with the harassment scandal on Parliament Hill, has brought the issue of workplace sexual harassment back into the spotlight again, as well. 

In short, it was an interesting year, and undoubtedly, we can expect more of the same in 2015.  Stay tuned to Ceaser Work Counsel's labour and employment law updates to stay on top of all that's new and interesting.

Inducement, Not Length of Service, Drives Long Notice Period

In a recent decision that ought to stand as a cautionary tale for employers when they hire senior employees, the Ontario Superior Court of Justice made clear that efforts to lure an employee away from secure employment elsewhere can prove costly. The case also highlights (once again) the importance of ensuring that termination provisions in employment contracts are carefully drafted.

In Rodgers v. CEVA, the plaintiff was hired by the defendant in 2009 to be its Country Manager, Canada.  At the time, Rodgers was the President of another company in the logistics business, and had been with his employer for over 10 years.  He was approached by a former colleague, who was then working for CEVA, about the possibility of a position with the company, and he expressed an interest in the role.  After 7 interviews, including two in Houston, Texas (the last of which was conducted by the CEO of CEVA), the company made the plaintiff an offer.  He declined it.  In turn, the company presented a more lucrative offer, including a $40,000 signing bonus, higher salary and a number of perks. As a condition of the offer, however, Rodgers was required to acquire a quantity of the company's equity (to ensure that he had "skin in the game"), which cost him approximately $100,000.  Less than three years later, following some difficult economic times for the company, the plaintiff was terminated and offered 2 weeks' termination pay and approximately $5,000 in severance pay.  At the time, he was 55 years old, and was earning an annual salary of $276,000.  He sued for wrongful dismissal.  The employer's only dispute with the plaintiff was on the actual amount of notice to which he should have been entitled.

The employer relied on the termination provision in the contract which provided:

Your employment may also be terminated by our providing you notice, pay in lieu of notice, or a combination of both, at our option, based on your length of service and applicable legal requirements.

The employer argued that the primary consideration in assessing appropriate notice was the plaintiff's length of service (less than 3 years).  However, the Court did not agree.  If the parties intended length of service to have primacy, they could have done so in clear language.  Instead, they had made the calculation dependent on both tenure and "applicable legal requirements".  After considering the fact that the plaintiff was induced (at least mildly) to join CEVA, and then led to believe that he would have long-term, secure employment (based on the requirement to purchase shares in CEVA at a cost equivalent to approximately 4 1/2 months' salary), the Court was of the opinion that the plaintiff should receive notice at the high end of the scale.  The plaintiff did not find another comparable role for almost 10 months, and even then he took a significant reduction in salary.  In the result, the Court awarded the plaintiff damages equivalent to fourteen (14) months' notice.  After a reduction for amounts already paid and the plaintiff's mitigation income, the defendant was ordered to pay the plaintiff $345,000.

The Court's decision illustrates that employers must be cautious when they recruit senior employees who are already gainfully employed.  Efforts must be made to ensure that an offer of employment is not designed to induce the individual to leave other employment, and this should also be acknowledged in the employment agreement. Ensure that recruiters do not make promises or representations about the likelihood of long-term employment, particularly during challenging economic times.  And if the intention is to minimize the organization's exposure in the event of a subsequent termination, care must be taken in crafting termination language that is clear and meets the requirements of the Employment Standards Act (see for example, this post on the topic).  The downside?  Significant liability.

Do you have questions about inducement?  Need help with your termination language?  Contact Lance Ceaser for expert advice.

Considerations on Ending the Employment of Senior Workers

With the elimination of mandatory retirement (through amendments to the Human Rights Code in 2006), many older workers have made the choice to remain in the workforce longer.  Obviously, the increase in tenure that this change permits will lead to increased termination costs, as employees with longer service are entitled to heftier periods of reasonable notice at common law.  However, employers also need to be aware of other issues that may arise from employees’ decision to defer retirement and continue working.  When it comes time to end the employment of an older, more senior employee, employers should be aware of some of the risks, as illustrated in three recent decisions from Canadian courts.

The Older Worker's Duty to Mitigate:  Dodge v. Signature Automotive Group Ltd.

The plaintiff was approaching 60 years old when his employment was terminated without cause or notice due to his declining sales of 'add-ons' to new car buyers.  He had worked for the employer car dealership for just over 20 years, and was offered a package equivalent to less than 6 months' pay.   The employer argued that the plaintiff had made inadequate mitigation efforts and that any damages for lack of reasonable notice should be reduced.  In the first six months following his termination, the plaintiff did not even prepare a resume and over the course of the first year post-termination, he only applied for seven (7) positions.  Despite the fact that there were numerous other car dealerships in the area, including some that had advertised job openings, the plaintiff made little effort to contact other potential employers seeking work. 

The Court agreed with the employer that the plaintiff's rather "passive attitude" toward his job search did not reflect a reasonable mitigation effort on his part.  The Court found that the plaintiff would be entitled to 17 months' reasonable notice based on his age, length of service, level of responsibility and the availability of other work in the industry.  However, considering his insufficient mitigation, the Court reduced that figure to 14 months' notice.  In most cases, the reduction for lack of mitigation would have likely been greater than 3 months' notice, but the Court made the following observation:

...  I spoke earlier about the Plaintiff's age. As Brenner J. said, at para. 39 in Carlysle-Smith, above, "[i]f an employee has not taken reasonable steps, but if the court is satisfied that even if such steps were taken that it is unlikely that such alternative employment would have been achieved, then presumably little or no reduction in the notice period would be appropriate." In my view, the fact that Mr. Dodge is 60 means that it was less likely that alternative employment would have been achieved. It is only for that reason that I have not reduced more substantially the applicable notice period.

This case arguably stands for the proposition that although an older worker still bears responsibility to look for other work, lack of mitigation will not have the same adverse consequences as it would for a younger worker because of the likelihood that the terminated employee would not find another position anyway because of his/her age.

Loss of an Unreduced Pension:  Arnone v. Best Theratronics Ltd.

The plaintiff was 53 and had 31 years of service when he was terminated by the employer.  At the date of his dismissal, the plaintiff was less than 17 months from having earned an unreduced pension.  As a result of his termination, and the employer's refusal to bridge his service, he received a reduced pension.  In addition, because the plaintiff was terminated prior to his retirement, he was denied a 'retiring allowance' of 30 weeks' salary that would have otherwise been payable.  The employer offered the plaintiff only the termination pay required under the Canada Labour Code (about 14 1/2 weeks' salary continuance).  The plaintiff brought a motion for summary judgment, seeking payment of 24 months' reasonable notice, the difference between a reduced pension and the unreduced amount (based on actuarial calculations), as well as the retiring allowance.  The employer argued that there was a "genuine issue for trial", including a determination of the nature of his position (supervisory vs. managerial) and whether his mitigation efforts were adequate.

The Court found that the trial record did contain sufficient evidence to permit a fair resolution of the outstanding issues.  With respect to the amount of reasonable notice that the plaintiff was entitled to, the Court stated:

Of particular importance in the circumstances of this case is the fact that the plaintiff was 16.8 months from achieving full pension entitlement. This doesn’t mean that the plaintiff had to retire in 16.8 months but rather that upon the expiration of that period of time he would be entitled to receive an unreduced pension. Time to retirement is an obvious consideration when long-term employees are dismissed due to restructuring. In such circumstances it is also common that the employer does not have an expectation of mitigation because the bridging period ... may be less than the notice period that would otherwise be applicable.

...

There is no reasonable doubt that the plaintiff would be entitled to at least seventeen months’ notice (subject to mitigation considerations) regardless of the subtle distinctions urged by the defendant respecting the character of the plaintiff’s employment.

In the result, the Court awarded the plaintiff pay in lieu of the bridging period of 16.8 months' pay, $65,000 for the value of an actuarially  unreduced pension, 30 weeks' pay as a retiring allowance, pre- and post-judgment interest, and legal costs of almost $53,000.

Where an employer terminates the employment of a long-service employee who would become eligible for an unreduced pension within the reasonable notice period, the employer should seriously consider bridging the employee to retirement age, or risk becoming liable for the loss that flows from providing a reduced pension.

Effect of Employee's Decision to Retire:  Kimball v. Windsor Raceway Inc.

The plaintiff employee had worked for the Raceway for 42 years (with some brief interruptions due to medical leave or layoff), and was 70 years old when his employment was terminated as part of the fall-out from the OLG's decision to remove slot operations from Ontario's horse racing facilities.  Prior to his termination, the plaintiff had expressed an intention to retire, but had extended his retirement date several times.  Most recently, the plaintiff had told the employer that he intended to retire at the end of 2012.  However, his employment was terminated effective August 31, 2012, several months before his retirement was to occur.  The plaintiff brought a motion for summary judgment on his wrongful dismissal claim, arguing that there was "no genuine issue for trial" since there was no argument that his employment was terminated without cause and the employer had conceded that the plaintiff was at least entitled to statutory severance pay under the Employment Standards Act, 2000.  The employer defended the motion, arguing that a trial was necessary to weigh evidence of the plaintiff's potential retirement and how that would affect the reasonable notice to which he might be entitled.

The Court found that the plaintiff had a clear entitlement to his statutory severance, and there was no compelling reason to make him wait until after a trial to receive this money.  The Court therefore granted partial summary judgment in the amount of 26 weeks' pay.  However, with respect to the plaintiff's claim for reasonable notice, the Court held that there was a genuine issue for trial and that further evidence would be necessary to properly adjudicate various aspects of the case, including mitigation and the impact of the plaintiff's likely retirement.  After considering the rationale behind the concept of reasonable notice (i.e., to give the employee a fair opportunity to find other work), the Court observed:

If the dismissed employee has no intention to look for work, but has instead decided to retire, the very purpose for which reasonable notice is required to be given is absent. That is a factor that may well be relevant in assessing what constitutes reasonable notice in this case.

Accordingly, the motion for summary judgment on the common law claim was dismissed.  It remains to be seen how much an employee's stated intention to retire may affect his/her entitlement to damages for reasonable notice.

* * *

Do you have questions about an employee's entitlements upon termination?  Need guidance on the challenges of dismissing an older, long-service employee?  Contact Lance Ceaser for assistance.

 

Avoiding Risk at All Stages of the Employment Life-Cycle

As 2014 nears its end, I thought I'd offer some general guidance for employers.

Like pretty much anything else, the employment relationship can be neatly packaged up into three parts: the beginning; the middle; and the end.  Each of these stages of the relationship can be characterized conceptually by a predominant theme.  For purposes of this post, I'll call them "Expectations", "Performance" and "Cessation".  What occurs at the Expectations stage will have the largest impact as it can significantly change how the contract is performed and what happens when it ends.  Likewise, the Performance phase will influence when and how the contract ends.  Once the relationship has reached the Cessation stage, there is little that can be done to alter the outcome, other than to manage risks that have already been created earlier in the employment life-cycle.

So, how do you significantly reduce the risks inherent in the employment relationship?  Let's look at each stage and the critical steps that employers should consider.

Expectations

Prior to and at the time of hiring, employers need to consider how "expectations" are communicated to prospective or new employees.  Clear expectations eliminate misunderstandings and lay the groundwork for a transparent and accountable workplace.  Setting expectations takes some work, but removing ambiguity at the outset of the employment relationship sets the stage for employees to perform their duties and helps manage the risks (and costs) associated with ending employment.

• Review job descriptions on a regular basis to ensure they accurately reflect the job as it is currently performed.  A role profile that does not align with the role may mislead a new employee as to the expectations for their performance.
• Where appropriate, develop policies that are clear and unambiguous. Ensure that policies align with actual practices and procedures in the workplace and set reasonable expectations for both parties.  If a policy is difficult to enforce, it is likely to go by the boards.
• Document variable pay programs, such as annual bonuses or incentives, and make sure that new hires are given an explanation of how they work.
• Develop a solid, enforceable employment agreement.  Use plain language to spell out the terms covering wages, variable compensation, vacation and benefits entitlements, and the parties' rights and obligations on cessation of the contract.  Carefully review termination language in particular to ensure compliance with employment standards.  Failure to do so could lead to claims for 'reasonable notice' in the courts.
• Ensure that all required documentation is reviewed with new employees and signed off before they commence employment.  If policies are referenced or incorporated into the employment agreement, ensure that new hires are provided with the policies and acknowledge having read and understood them.

Performance

Once the formalities of hiring are out of the way, the real hard work begins.  While there is much that can be said about how to get the best out of employees while they are working for the organization, I'd like to focus on just a handful of keys that are likely to improve productivity while reducing legal risks.

• Whenever in doubt, be guided by fairness and reasonableness in administering the relationship.  It's sometimes easy to lose sight of the issue and focus on the employee, but this can prove disastrous. Enforce rules consistently, but with a contextual approach that weighs the circumstances, the history of the particular employee, how past issues were dealt with, and any mitigating or aggravating factors. Be prepared to be flexible in appropriate situations. Failure to insist on fairness can lead to morale issues (such as claims of favoritism or discrimination) and can also undermine the effectiveness of your workplace policies.
• Provide good supervision. Sounds simple, but it isn't.  It starts with careful selection criteria when hiring or promoting supervisory and managerial staff. I would suggest that it's better to look for leaders rather than technical experts. Yes, experience in the field is important, but it's often hard to make an exceptional 'lone wolf' into a good manager, no matter how accomplished they are. Follow-up on supervisory hiring with training on the basics of managing people (including the basics of human resources and employee relations). Failing to provide solid supervision invariably leads to underperformance that is not managed (and cannot be relied on later as cause for termination) and a failure to keep an eye on the workplace (which often results in complaints of harassment or bullying).
• Document, document, document. It's trite, but true. Failing to keep notes of conversations and coaching sessions can be costly later when you need to establish a pattern of inappropriate conduct or poor performance that you have tried to address.  Get in the habit of making brief notes to file, showing the date and time of discussions with employees. Ensure that all notes ultimately make it into a file that others can find later. Otherwise, you risk losing evidence that you'll need later when an employee challenges unwelcome discipline. 
• Make sure that managers actually manage. This means bringing issues to employees' attention when they arise (not months later when patience has worn thin), documenting conversations about the issue, providing timelines for improvement, and following-up in a timely fashion.  Managing performance, behaviour and attendance are tedious and time-consuming processes, but they should be the primary expectation that is placed on supervisors and managers.

Cessation

If the employer has paid proper attention to the details in the first two phases of the employment relationship, the third stage, Cessation, will typically be less risky and costly, and much more manageable.  Still, there are a few things to bear in mind.

• If the employer will be terminating the employment relationship, be prepared to pay.  It can be very costly to allege 'just cause' for termination.  The courts and tribunals will only find cause in the clearest of cases and on very compelling evidence. If in doubt, terminate on a without cause basis (and move to the bullet point immediately below).
• If there is a contractual termination provision in the employee's contract, ensure that you understand the employer's obligations and abide by them carefully.  No termination provision?  You'll have to choose between the statutory minimum (which is typically quite meagre), the employee's common law entitlement (typically quite generous) or something in between.  If in doubt, obtain legal advice.
• Plan and prepare for the termination meeting to ensure that it is conducted in a professional and respectful manner.  Try to avoid ending employment on a Monday morning or a Friday afternoon (except in the most extreme cases), and be conscious of any occasions that could place the employer in a bad light (e.g., try not to terminate the employee on their birthday or in the weeks immediately preceding Christmas).  Hold the meeting somewhere that provides privacy and where other employees won't be alerted to what is going on. Ensure that you consider arrangements to get the employee home in the event that they carpool or won't be in any condition to drive. Avoid escorting the employee through areas where coworkers are present following the meeting.  Failure to abide by these relatively simple rules could lead to a claim for enhanced or added damages in the event the employee later alleges wrongful dismissal.
• If the employee is looking to end the employment relationship, try to get their resignation notice in writing and verify that they have provided appropriate notice.  Ensure that they are given time to reconsider, particularly if they resign under stressful conditions or following a heated exchange. Whenever possible, conduct an exit interview to assess whether the climate in the workplace may have influenced the decision to leave.  It is valuable to find out whether there are unidentified issues that could lead the departing employee or others to raise concerns with harassment or bullying before you receive a claim.
• Prior to any employee's departure, make sure that you recover company property.  In particular, smartphones, laptops, VPN tokens and system/application passwords should be obtained to avoid the potential for a disillusioned employee being tempted to take data or engage in other post-termination misdeeds.  Once the employee has departed, ensure that all access is removed and that passwords are changed, as necessary.

While the foregoing guidance is not exhaustive, and is no substitute for legal advice, it does provide an overview of some of the larger risk management issues that employers face.  Being proactive, setting clear expectations, and ensuring that those expectations are routinely met, will go a long way to avoiding or reducing many of those risks.

Does your organization need advice on how to reduce the HR risks it encounters?  Need guidance on a particularly thorny or complicated employment situation?  Contact Lance Ceaser for expert assistance.

How to Make the Holiday Season Happy (and not get sued or fired in the process)

With the festive season kicking into high gear, you can't avoid crowded mall parking lots, the frantic search for the "perfect" gift, nor those well-worn holiday tunes playing virtually everywhere.  And you also may not be able to avoid the office Christmas party.  Whether you're the host employer or an attendee, there are a number of rules that everyone ought to keep in mind.

Employers

If you'll be hosting a gathering for employees, think about ways to reduce the risks commonly associated with the sometimes dangerous combination of people and alcohol.  Consider some or all of the following:

• In advance of the party, communicate to employees that drinking and driving and other inappropriate behaviour will not be permitted (albeit in a tactful way).  Encourage them to bring a designated driver and/or let them know that taxis will be made available, free of charge  (both to and from the party venue, if possible).
• Have your party hosted by a restaurant, hotel or convention centre that has its own trained staff to serve alcohol and monitor consumption.  They'll also have their own insurance.
• Limit the flow of free drinks.  Offer a limited number of drink tickets per person, and only offer a cash bar thereafter.  Try to watch for 'ticket-hoarding' or sharing of tickets.  If alcohol continues to be served after the meal, ensure that food is also being offered.
• Ensure that the bar has sufficient non-alcoholic alternatives on hand and that staff bring them to the attention of guests.
• Give an incentive for designated drivers - provide gift cards or other tokens of appreciation to those who identify as a "DD" upon arrival at the party.
• Provide taxi/limo chits to your guests - better yet if you can provide two-way transportation both to and from the party.  Once an employee shows up with a vehicle, it may be harder to convince them to go home in a cab.
• Be watchful - despite all of the steps above, stay on alert to identify any guest who may have over-consumed.  Take whatever measures you can to prevent anyone from driving under the influence.

Employees

Having a few drinks with colleagues can add to the seasonal celebration, but don't lose track of where you are:  an event sponsored by your employer.  Everyone is there to have fun, but make sure you don't have TOO MUCH fun.

• Plan ahead.  If you know that alcohol will be served and you're uncertain if transportation is being provided, ask the employer.  If all else fails, ensure that you plan a safe ride home for you (and your significant other, if they're invited).  Pre-book a taxi or car service , or find out if someone intends to be a DD and can give you a ride home.
• Even if the employer is providing an open bar, you are responsible to ensure that you don't become intoxicated.  Be your own liquor control board.  Alcohol may bring out behaviours that you will regret later.
• Remember that the company's policies regarding personal conduct still apply. Even if the party seems like the perfect opportunity to air your grievances from the preceding year, it's not.  This is a celebratory occasion. Avoid 'talking shop' if you can, and focus on your co-workers' plans for the holidays. 
• Tread carefully if you're thinking of pursuing an office romance at the company Christmas party.  Alcohol may lead you to misconstrue social cues turning flirtation into something more sinister.  The rules against sexual harassment still apply.
• Be careful what you post!  It's all-too-tempting to snap pictures of your colleagues after a few drinks and post them to social media, but think about the ramifications - for your co-workers and yourself. People's reputations may be damaged by inappropriate photos on Facebook, and your judgment could be called into question for posting them. Wait until the next day to post items about the party to ensure you don't hurt yourself or others. 

At the end of the day, exercising some common sense and good judgment will go a long way to avoiding what could be a very costly hang-over!

Do you have questions about the risks as an employer in being a 'social host'?  Need guidance on planning for party season?  Contact Lance Ceaser for expert advice.

Employer Condones 'Wilful Misconduct' by Failing to Take Effective Action

Under the Employment Standards Act, 2000 (the "ESA"), employees generally have an entitlement to notice of termination or payment in lieu of notice, unless they fall into one of a handful of exemptions.  One of the exceptions provided under the Regulations to the ESA covers "[a]n employee who has been guilty of wilful misconduct, disobedience or wilful neglect of duty that is not trivial and has not been condoned by the employer."  Because the ESA provides a statutory minimum entitlement, adjudicators apply the exemption from termination notice or pay very strictly.  Employers will often focus on the seriousness of the offence, and struggle to establish the "intent" (i.e., the wilfulness) necessary to bring a "just cause" dismissal within the exemption.

However, as the recent decision in Cancore Building Services Ltd v. Merlos illustrates, employers also need to be aware of the dangers of having condoned an employee's bad behaviour.  In Cancore, the claimant was the supervisor of a window washing crew employed by the janitorial company.  He started with Cancore in 1989, and was promoted to a supervisory position after years of good performance.  However, as early as 1999 or 2000, the company began to have concerns about the claimant's performance as a supervisor, including misstating the hours that his crew worked on time sheets that he submitted.  He was cautioned about this issue at the time, and received repeated notes and warnings from the company regarding deficiencies in his supervision of staff, his work attitude, and his lack of responsiveness to pages.  In 2009, the employer again advised him to only record actual hours worked by his crew on time sheets, and that "padding" time sheets amounted to theft from the company.  Even more openly critical letters were written and given to the claimant in 2009 and 2010, which again highlighted the inaccurate reporting of employee working hours. The 2010 letter to the claimant purported to be a 'final warning' that he had to improve in all areas, but only three (3) weeks later, the employer issued yet another warning about improperly completed time sheets.  No disciplinary measures were ever taken to address his shortcomings.

In July 2012, a student employed on the claimant's crew told the company that he had been paid 8-hours' pay on a day when he did not work 8 hours.  Rather than investigate, by reviewing the time sheet in question or asking the claimant about the allegation, the employer summarily dismissed the supervisor.  In the termination letter, the employer accused the claimant of "time theft", among a number of other things, and stated that his behaviour constituted "willful misconduct" and cause for termination.  The employee filed a claim with the Employment Standards Branch, and an Employment Standards Officer found that he was entitled to termination pay.  The employer sought review of the Order to Pay at the Ontario Labour Relations Board.

The Board started by observing that where an employer tries to rely on an exemption from an entitlement under the ESA, the employer bears the onus of proving that the exemption applies.  The Board found that the employer tried over a period of several years to improve the claimant's performance as a supervisor by "writing him letter after letter on the finer points of supervision", warning him about 'padding' time sheets.  While time theft of the nature alleged was "presumptively" wilful misconduct under the ESA, in the opinion of the Board, the employer did not have any evidence that the claimant had intentionally attempted to obtain wages for himself or his crew for work that they had not performed.  When an opportunity arose for the employer to establish that this was in fact the case, when the student came forward, the employer failed to investigate and just assumed that the allegation was true.  Moreover, despite numerous warnings over a period spanning about 12 years, the employer never imposed any sanctions on the employee.  In the words of the Board:  "That, quite simply, is condonation within the meaning of the Act."  In the result, the application for review was dismissed and the Order to Pay termination pay was upheld.

The decision in Cancore is illustrative of a number of principles and best practices that employers need to embrace.

• Managers need to be prepared to have difficult conversations with employees, about their performance, but they also have to be equipped to take meaningful action to address shortcomings and misbehaviour.  A written 'scolding' on a periodic basis, if not backed with progressively harsher forms of corrective action, will not suffice.
• Whenever feasible, investigate concerns about employees when they first arise.  Often where there's smoke there's fire, and it's best to stamp it out before it  becomes a blaze.  Remind senior management that putting in time and effort now could save a lot of aggravation and money down the road.  The longer the employee is allowed to stick around, the greater the risk that it will amount to condonation and the larger his/her entitlement to termination pay (and severance pay, if it applies to the employer).
• Enact policies and procedures to address the areas of concern.  Ensure that the policy is written in plain language and clear on what is permitted and what is not.  Educate employees on the content of the policy, and that there will be consequences for breaking the rules.
• Consider whether your existing policies and employment contracts provide the ability to impose disciplinary sanctions on employees, such as suspensions of varying lengths.  If the employer does not have the authority to suspend, doing so could amount to constructive dismissal.  If in doubt, speak to a labour & employment lawyer for guidance.
• If you find out that an employee has been engaged in a practice that is contrary to policy for an extended period of time without being addressed, set the stage to confront the issue going forward.  Bring the issue to the employee's attention, including the fact that the employer is aware of past violations, and put the employee on notice that the behaviour will be subject to discipline if repeated.  Follow-up and document any repetitions. (Check out the decision in Leon's Furniture Limited for an example of how an employer successfully addressed a pattern of bad behaviour that had persisted for some time.)

Employers need to be aware that their actions (or inaction) can be the biggest impediment to removing unsatisfactory employees.  By ensuring that dismissals for "just cause" also consider the more stringent requirements under the ESA (i.e., serious, intentional misconduct or neglect that has not been tolerated ), employers can avoid issues under the Act as well as at common law.

Do you have questions about the difference between "just cause" and "wilful misconduct"?  Need advice or guidance on an issue related to dismissal?  Contact Lance Ceaser for expert assistance.