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Top Ten Employment Law Developments

Denyse Boulet & Jennifer Emmans

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10 – Tsakiris v. Deloitte & Touche, 2013 ONSC 4207

• Deloitte had business travel and expense reimbursement policy – expenses reported within 60 days; fraud cause for immediate dismissal.

• Senior manager routinely defaced receipts to obscure date or time of expense; charged personal expenses to client accounts

• Given warning and placed on probation• More receipts then submitted by manager

– Over a year old contrary to policy;– Attendees of meals not related to charged client file

The Decision

• Termination for just cause not upheld • Not repeat conduct – different issues with claims• Employer could have rejected dated receipts• Further, more specific warnings or instructions on use

of non-client mandate codes could have been undertaken– Not uncommon to charge business development to client

files in anticipation of transferring to new client file;– Such charges not generally charged to clients ultimately

anyway

• Did not show untrustworthiness or lack of probity sufficient to constitute just cause

Why it Matters?

• Another example of the risks associated with terminating employees for “just cause”

• Employer had to pay 10 months reasonable notice at common law

9 – Bernier v. Nygard International Partnership, 2013 ONCA 780

• Manager terminated, 54 years old, 13 years of service• Terminated and provided with minimum Employment

Standards Act (“ESA”) notice:– Original 1999 employment agreement provided for 30

days– “Amendment” to agreement in 2007 provided for

minimum ESA notice– Employer policy of ESA minimum notice

• Plaintiff brought summary judgment claiming 18 months reasonable notice

The Decision

• 18 months reasonable notice awarded– 1999 Employment Agreement invalid – violated ESA– 2007 Amendment never signed by manager– “Policy” not binding on manager

• Summary judgment allowed – no genuine issues for trial

• Since only 6 months had passed, remainder of 18 months notice to be paid into trust – plaintiff to account for any income earned

Why it Matters?

• Termination provisions must be valid – cannot provide less than ESA

• Amendments to employment agreements must be properly implemented

• Minimum ESA requirements are not positively regarded by courts

• Put best evidence forward on summary judgment – courts won’t give the benefit of the doubt and send to trial

8 – MacKinnon v. Celtech Plastics Ltd., 2012 HRTO 2372

• Machine operator worked for Celtech:– 35 years, 67 years of age, $60-$65,000 annually

• Laid off for 5.5 months, then called back to work

• Subjected to long hours, unreasonably high standards, heavy labour and harassment by supervisor – eventually quit

• Alleged that Celtech purposely drove him to quit in order to avoid having to pay him notice or severance

The Decision

• Discrimination found

• Treatment of Applicant had sufficient connection to age

• “Proxies” for age can include:– High number of years of service– Higher salary as related to experience

• $27,000 awarded for injury to dignity, feelings and self-respect

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Why it Matters?

• Age discrimination can occur where employees treated differentially based on years of experience; salary

• Employers should be aware of proxies for grounds of discrimination

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7 – General Motors of Canada v. Johnson,2013 ONCA 502

• Employee had refused to attend training by Johnson - Johnson felt refusal was racially motivated

• GM conducted investigations and found that conduct was not racially motivated

• Johnson came to view workplace as poisoned and took medical leave

• After 2 years, Johnson cleared to return to work but refused positions available, GM deemed him to have resigned.

The Decision

• Trial judge found Johnson was victim of racist behaviour, poisoned work environment, and constructive dismissal

• Court of Appeal overturned trial decision on all counts

• Johnson may have believed he was victim of racism, perception may have led to stress and mental anguish, but facts did not support claims

Why it Matters?

• Employers are often held responsible for employee stress and mental anguish in the workplace

• An important appellate level case showing that an employee’s subjective experience will not be enough to find discrimination where there is no objective evidence to support it

6 – Globe and Mail v. Communications, Energy and Paperworks Union of Canada (Jan Wong Grievance),

• Wong terminated by Globe and Mail and brought action

• Settlement reached between parties – subject to confidentiality clause

• Three years later, Jan Wong published a memoir which stated that:

– “I can’t disclose the amount of money I received.”– “I’d just been paid a pile of money to go away…”– “Two weeks later a big fat check landed in my account”– “Even with a vastly swollen bank account…”

The Decision

• These statements were found to breach confidentiality clause

• Pursuant to the terms of the settlement agreement, Jan Wong had to pay back the amount of the settlement to the Globe and Mail

Why it Matters?

• Confidentiality clauses in settlement agreements will be upheld where:– the agreement is entered into voluntarily, – the terms are clear and unambiguous; and– the agreement is not unconscionable

5 – Wilson v. Solis Mexican Foods Inc. 2013 ONSC 5766

• Action brought under the Ontario Superior Court of Justice for 1) wrongful dismissal, and 2) discrimination under Ontario Human Rights Code

• Employee had good performance until back issues required time off work

• Employer insisted employee must be capable of full time hours and duties upon return

• Not willing to accommodate sitting, walking, standing

• Employee stayed on medical leave, and was eventually terminated due to restructuring

The Decision

• Despite restructuring, judge found decision to terminate employee based in whole or in part on disability

• Back issues were “significant factor” in decision

• Restructuring was used as opportunity to terminate

• $20,000 awarded under Code

• 3 months reasonable notice for wrongful dismissal

Why it Matters?

• This is the first decision in Ontario where a court has awarded human rights damages in a wrongful dismissal action

4 – Communications, Energy and Paperworks Union, Local 707 v. SMS Equipment, 2013 CanLII 68986

• Grievor was single mother of two• Rotating schedule – seven days off, seven days

on – blocks rotated between day and night shifts• On weeks working nights, either stayed up during

day, or had to hire childcare for 24 hours so she could sleep:– Too expensive– Not comfortable with children in childcare that long

• Asked for accommodation based on so that she could work exclusively day shifts – employer refused

The Decision

• Family status includes childcare responsibilities

• Grievor adversely impacted by work scheduling rules - put in position of having to choose between family responsibilities and work

• Discrimination found by Arbitrator based on family status – employer could not show undue hardship in accommodating different schedule

• Accommodation ordered

Why it Matters?

• We are seeing more and more cases in this area in the last year or two

• Yet another case confirming that employers must accommodate real family responsibilities to the point of undue hardship

3 – Musoni v. Logitek Technology Ltd., 2013 ONCA 622

• Plaintiff was dismissed by employer • Paid 2 weeks notice in compliance with

employment agreement and ESA• Employment agreement stated simply that:

– 15 days notice provided by either party to terminate– No mention of benefits

• Plaintiff conceded that he had read, agreed to and signed agreement – it was valid and in force

• Plaintiff challenged only employer’s basis for termination

The Decision

• Court found that reasons for termination irrelevant since notice was provided

• Notice satisfied employment agreement and ESA

• Did not question validity of employment agreement

• Upheld by Court of Appeal

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Why it Matters?

• Recent decisions in this area have found that termination provisions must – A) provide for benefits– B) not be capable of interpretation contrary to ESA

REGARDLESS of what is actually paid to employee on termination:– Stevens v. Sifton Properties (2012 ONSC 5508)– Wright v. Wunderman (2011 ONSC 4720

• Unclear whether this case will result in changes to recent law

2 – Communications, Energy and Paperworks Union of Canada, Local 30 v. Irving Pulp and Paper Limited,

2013 SCC 34

• Irving developed random alcohol testing policy for employees in safety-sensitive positions

• One employee selected for testing grieved the policy – there was no serious problem of alcohol abuse in the workplace (8 incidents in 15 years)

The Decision

• Supreme Court found that employers are not allowed to conduct random alcohol tests in workplace unless:– Employer can demonstrate problem with use or abuse of

alcohol or drugs in workplace;

– There is reasonable cause to test an employee;

– An incident has occurred where alcohol may be a factor and testing is required as part of investigation ;

– Part of an agreed rehabilitative program, return to work conditions after disability related to alcohol;

– Negotiated testing as part of collective bargaining agreement

Why it Matters?

• Supreme Court has placed tight restrictions on circumstances that will justify alcohol testing

• Test will apply to both drug and alcohol testing

• Unclear how this will apply to non-unionized settings

1 - IBM Canada Ltd. V. Waterman, 2013 SCC 70

• Waterman was dismissed without cause, provided with 2 months notice:– 65 years old, 42 years of service

• Had vested interest in defined benefit pension plan

• Sued for wrongful dismissal – awarded 20 months with no deduction of pension payments during notice period

• Supreme Court considered whether pension payments should reduce the damages payable during period of reasonable notice

The Decision

• Supreme Court found that Waterman was entitled to both his full salary and benefits for 20 months, as well as his pension

• Found that pension was like private insurance, and not compensation, and therefore should not be deducted

• Waterman had earned pension during years of service, and therefore had rights in the pension akin to property rights

• Employers should not be incentivized to terminate pensioned employees over non-pensioned employees

Why it Matters?

• Binding decision: pension benefits are a form of deferred compensation – they have already been earned and therefore will not be deducted from pay in lieu of reasonable notice

• Employers may want to include clauses in employment agreements which prevent employees from “double dipping”, although it will remain to be seen if they will be upheld in court

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Denyse BouletGowling Lafleur Henderson LLPBarristers & Solicitors160 Elgin St. Suite 2600Ottawa, ON K1P 1C3Direct Tel: 613.783.8824Email:  denyse.boulet@gowlings.com

Jennifer EmmansGowling Lafleur Henderson LLPBarristers & Solicitors160 Elgin St. Suite 2600Ottawa, ON K1P 1C3Direct Tel: 613.786.0161Email:  jennifer.emmans@gowlings.com

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