August 2023 - Stacey R. Ball

Are You Working in a Hostile Work Environment?

by Stacey R. Ball| August 11, 2023August 18, 2023 | General

Have you been singled out at work in a way that makes you feel uncomfortable? Let your employer know – The Law in Ontario will protect you.

What is a Hostile Work Environment?

A hostile work environment is created through any instances of harassment, workplace discrimination in Toronto, violence and/or threats of violence by either coworkers or employers. Hostile work environments threaten employee productivity by making it difficult for employees to focus on their work. A hostile work environment may constitute a violation of the Ontario Human Rights Code (OHRC).

Occupational Health and Safety Act (OHSA).

Hostile work environments can manifest in a variety of ways. For example:

Insults or derogatory comments based on race, religion, sex etc.
Unwarranted sexual remarks
Bullying/derogatory comments
Unjustified criticism
Work sabotage
Intimidation
Physical force

Workplace harassment, under the OHSA, is defined to include all forms of harassment, including psychological and personal harassment. Workplace harassment is a very serious offense and may constitute a cause for the dismissal of an employee. If an employee is terminated for cause, then he or she will not be entitled to receive severance. In certain cases, depending on the severity of the harassment, the individual being harassed may be entitled to damages. If the harassment is so severe that the employee is no longer able to continue at the workplace, then he or she may be able to terminate the employment and receive severance.

Filing a Workplace Harassment Claim

There are generally three options for an employee looking to file a harassment claim. The first is a claim for constructive dismissal. Constructive dismissal is when the employee has not directly been terminated but the terms of the employment contract have been breached so severely that the employee has no choice but to resign. If an employer has failed to provide a safe work environment, free of workplace harassment, this is a breach of the employment contract. Thus, in the case that an employee files a claim for constructive dismissal, the employer will be liable to pay severance and wrongful dismissal damages.

Alternatively, an employe can file a human rights complaint against an employer if the harassment falls under a prohibited ground in the Human Rights Code. Prohibited grounds include:

Sex
Disability
Race
Ethnicity
Age
Religion or Creed
Marital or Family Status
Sexual Orientation
Gender Identity or Expression

If the employer has condoned, failed to intervene or performed any of these actions in contravention with the OHRC, then the employer has committed a human rights violation. The human rights tribunal can order any remedy they see fit to compensate the wronged party, including monetary penalties, or specific performance of an action.

Under Section 32.0.2 of the OHSA, employers with five or more employees must have a written workplace policy that deals with workplace harassment. During training, employers are also required to educate their employees with regards to implementation of the policy, how to report instances of workplace harassment, and any consequences for violating the policy. Failure to implement this policy could result in severe consequences for the employer, including but not limited to an inspection of the workplace and suspension of further business activities.

It is an employer’s responsibility to ensure a safe and friendly work environment, free of harassment. In the that there is hostility in the workplace, employees should report the troubling conduct. Certain provisions in the Ontario Human Rights Code and the Occupational Health and Safety Act exist to promote physical and psychological safety in the workplace.

What are the Laws for Commission Employees in Ontario?

by Stacey R. Ball| August 7, 2023August 18, 2023 | Employment Law| | General

So, you’ve been hired in a commission-based role – What are your legal rights?

Commission as a form of Wage

Commission is a form of compensation that is based on job performance. The Employment Standards Act (ESA) deems commissions to be a form of wage. Employers will usually provide their employees with an employment contract, such as a commission agreement that stipulates how the commission will be calculated, how the employee will be paid, and specific targets the employee must meet. The commission agreement must coincide with the laws of the ESA, otherwise, the agreement will be deemed null and void.

Commission agreements are important reference documents in the event of a dispute between an employer and an employee. If an employer does not provide a commission agreement, they increase their risk of conflict with employees with regard to the calculation of their commission.

Termination with Unpaid Commission

If an employee is terminated, an employer must provide an employee with reasonable notice of their termination. All employment-related compensation, including commissions, must be accounted for.

Section 60(1) of the ESA stipulates that during a notice period the employer:

Shall not reduce the employee’s wage, rate or alter any other term or condition of employment;
Shall in each week pay the employee the wages the employee is entitled to receive, which in no case shall be less than his or her regular wages for a regular work week.
Shall continue to make whatever benefit plan contributions would be required to make in order to maintain the employee’s benefits under the plan until the end of the notice period.

It is against the law for an employer to withhold any residuary commissions earned by an employee upon termination. Because commissions are deemed wages, they are included in the reasonable notice period.

Case Law Precedence

In O’Reilly v. Imax Corporation, an Ontario Court of Appeal Case from 2019, the Court evaluated whether a wrongfully dismissed employee was entitled to receive employee stock options and restricted share units (RSUs) with a vesting date that was after the time of his termination. The employer argued that since the options had not yet been vested, the employee should not be entitled to them as part of his compensation package. The court, however, found that Mr. O’Reilly was entitled to receive all commissions that he would have been entitled to up until the date of his termination, including those with a vesting date after the time of his termination. This is based on the aforementioned principle that an employer cannot reduce an employee’s wage rate during the notice period (ESA, 2000, s. 60(1)).

In another case from the Ontario Court of Appeal, Andros v. Colliers Macaulay Nicolls Inc., the respondent was terminated from his position as Managing Director for a commercial real estate company. The respondent received a bonus for every year that he worked at the company, but he did not receive the bonus for the year that he worked up until his termination, as per his contract. The court found that the provision in the respondent’s contract, which disentitled him from receiving the bonus, conflicted with the ESA and the common law reasonable notice period and therefore was not enforceable. The judge affirmed that the respondent was entitled to the bonus earned while he was still employed and the bonus he would have earned during the notice period.

Unpaid Commission upon Resignation

When an employee resigns, the discretion of whether to pay the employee commission is left to the employer and the employment agreement. If the employment contract stipulates that the employee is not to be paid commission until the funds are received by the employer, then in the event that the employee resigns after funds are received, he or she will not be paid. Alternatively, if the employment contract states that the employee is to be paid when a deal is facilitated then the employee will be entitled to any commissions earned prior to resignation.

An employee’s legal rights for a commission-based role will vary according to the terms of the employment contract and the circumstances surrounding the cessation of employment. But in all cases, commissions are deemed as a form of wage and therefore employers cannot withhold from employees any commissions that they would otherwise be entitled to under the ESA or common law upon resignation or termination.

Can an Employer Rescind a Job Offer?

Have you been offered a job but now your employer wants to rescind that offer? – You may be entitled to financial compensation.

There are several reasons why an employer would want to rescind a job offer. For instance, an employee may have been hired before a period of economic downturn, and as a result the employer no longer has the budget to pay the employee. Another instance is if the job offer was conditional and the employee did not meet the conditional requirements or if the employer has just cause to fire the new employee. An employer who rescinds a job offer may be liable to pay damages to the employee. In this case, the employee would be considered wrongfully dismissed and would therefore be entitled to contractual damages or termination pay in lieu of reasonable notice. The law treats an employee whose job offer was rescinded the same as any employee who worked and was terminated from employment at the same company. This is to deter employers from breaching the employment contract at will.

Damages Based on a Fixed-Term Contract

The damages for the rescission of a job offer will vary based on the type of employment contract. If the employee is hired with a fixed-term contract, the damages they will be entitled to will be outlined in the employment contract. A fixed-term contract is when an employee is hired for a definite period of time or to carry out a specific task. If an employee is terminated before the expiration of the fixed-term, they will be awarded damages for the breach of that contract, as stipulated by the termination clause. In the event that there is no termination clause or severance provision, the employee will be awarded the balance of the fixed-term. Fixed-term contracts bring about a degree of certainty to the employee that the employee will be able to obtain a salary and benefits and will not have to search elsewhere for employment. When an employer rescinds that contract, they are taking away that certainty. Consequently, there is a general consensus among Canadian Courts that employers should have to pay the employee salary and benefits that the employee would have received, had the offer not been rescinded. The employee in this case does not have a duty to mitigate their losses by seeking alternative employment.

Damage for an Indefinite Contract

Conversely, if an employee is hired with an indefinite contract, and the employer rescinds the offer, then the employee is entitled to common law reasonable notice. The Court will assess the Bardal Factors to determine the employee’s reasonable notice period. These factors are the character of the employment, length of service, age and availability of similar employment, considering the experience, training and qualifications of the employee. When an indefinite job offer is rescinded, the employee has a duty to mitigate his or her losses by seeking alternative employment elsewhere. The Courts will take all of these factors into account when calculating the damages that the employee is entitled to for the breach of the employment contract. In some cases, the employee may be entitled to severance pay.

In Kim v. BT Express Freight Systems, a 2020 case from the Ontario Superior Court, Mr. Kim was offered a job by BT Express Freight Systems while he was still working at his previous company. Mr. Kim quit his job to commence employment at BT Express Freight Systems, but several days before he was to commence employment, BT rescinded the offer. Mr. Kim was no longer able to return to his previous job so he sued BT for damages. The Court determined that BT was liable to pay slightly less than three months of what would have been Mr. Kim’s salary and a portion of his legal costs. The court in Kim v. BT Express Freight Systems stated that: “A valid employment contract creates an employment relationship even before any work begins. An employer is entitled to reasonable notice for the breach of that contract and may sue for damages if the appropriate notice is not given”.

When an Employer Would Not Have to Pay Damages

There are a few instances where an employer would not have to pay damages to the employee for rescinding the employment offer. These are: if the employee did not meet the conditional job requirements, such as reference checks, the employee lied in his application, or the employer had just cause to fire the employee.

When an employee is offered a job, the employer is expressing an intention to be bound by that contract. Breaching that contractual obligation is a violation of the employee’s rights. Furthermore, this leaves the employee with uncertainty with regard to how he or she will earn income. The employee would not have been left with this uncertainty had the job offer not been rescinded. Because of these considerations, employees will be entitled to damages from the employer.

At-Will Employment in Canada

by Stacey R. Ball| August 2, 2023August 18, 2023 | Cause For Dismissal| | Employment Law

You’ve been hired under an at-will employment contract and you’re wondering if this is enforceable in Canada – the answer is no.

What is At-Will Employment?

At-will employment is a type of employment that can be terminated at any point in time without providing cause and without providing any reason or notice to the employee. At-will employment is at the will of both parties involved and can be terminated by either party without consequences. Employment, however, cannot be terminated if the reason for termination is unlawful, for example, termination on the basis of discrimination. The closest thing in Canada to this type of employment is a fixed-term job contract. This is when an employee is hired for a fixed period of time or to perform a specific task. If the employment is terminated before the end of the contract, then the employer will have to pay the employee damages. At-will employment is illegal in Canada. This is because employees in Canada are entitled to reasonable notice upon termination unless the employee has been fired for just cause. The law of reasonable notice was established in the famous decision from the former Ontario High Court, Bardal v. Globe and Mail.

At-Will Employment in the Unites States

At-will employment is common in the United States. In some instances, US based companies will employ Canadians under an at-will employment contract. If a Canadian employee signs an at-will contract and it is clear that the employee is in fact a Canadian employee, the law in Canada will permit the employee to sue for wrongful termination. Canadian courts will therefore void any at-will contract and replace it with an indefinite contract that can only be terminated by reasonable notice. If it is unclear whether the employee is an employee of a Canadian corporation, this could lead to a legal dispute regarding the jurisdiction of the employment contract.

Since the COVID-19 pandemic, it has become increasingly common for US companies to seek out employees from overseas to work remotely. Because at-will employment is so common in the US, this poses a problem for Canadians working remotely for US companies. Although these employees may be carrying out their work in Canada, the organization is based out of the US. These companies, therefore are not governed by the laws in Canada and are able to hire employees on an at-will basis. This leaves Canadians vulnerable to having their employment terminated freely with no cause of action to obtain damages.

Case Law on At-Will Contracts

In a case from the BC Court of Appeal, Stanley v. Advertising Directory Solutions, the plaintiff was terminated from her employment at Verizon and offered a severance package that was well below what she was entitled to under common law. Her employer argued that because Verizon was a subsidiary of an American parent company and because the plaintiff had signed an at-will contract, her employment could be terminated without providing reasonable notice. The BC Court of Appeal found that his term was unenforceable in Canada. The plaintiff carried out work in Canada for a Canadian subsidiary. As a result, the termination was found to be wrongful and the plaintiff was awarded 19 months in lieu of notice.

The bottom line, at-will employment is not legal in Canada. However, it stands to pose a problem for many Canadians, as remote US-based employment becomes increasingly common.