Author: Stacey R. Ball

In the recent Ontario decision Kraft v. Firepower Financial Corp., a dismissed employee was awarded a higher notice period due to his clear efforts to mitigate in light of the demonstrated difficulty of job searching in the midst of the COVID-19 pandemic.

Factual Overview

The Plaintiff, Mr. Kraft, was terminated from his job with the defendant without cause. He had worked with the defendant for 5.5 years, most recently as a specialized commissioned salesperson in investment banking with special focus on mergers and acquisitions. Mr. Kraft was mid-career and was well-qualified. His job required him to have specialized knowledge of the banking industry. He made a base salary of $70,000, and he also made bonus and commissions.

Of note, Mr. Kraft was involved in a major M&A deal with Arzon Limited (“Arzon”), a deal that closed six months after his termination of employment without cause.

Court Influenced by Employee Efforts, In Spite of Difficulties Arising From the COVID-19 Pandemic

In the circumstances, there was no doubt that Mr. Kraft made significant efforts to mitigate his losses as required by law. During the 13 months following his termination, he applied for over 70 different jobs. This certainly is not an insignificant effort.

Mr. Kraft was dismissed right at the outset of the COVID-19 pandemic. His job search coincided with the general closing of the economy due to COVID-19. Of central concern to the trial judge in this case was the job market at the time of Mr. Kraft’s dismissal and job search, as well as the impact of COVID-19 on that job market. Notably, and especially during the first half of the COVID-19 shutdown, there was much uncertainty in the economy and many employers had no interest in hiring workers in light of that uncertainty.

The employer attempted to argue that because Mr. Kraft was actually dismissed before the official COVID-19 shutdown, as implemented by the government, that this is not much of a consideration. However, regardless of when the government declares an emergency, the economy was already shutting down and remained closed during employee’s “inevitably prolonged search”. According to the trial judge:

“A global pandemic does not just emerge on the day of the government’s emergency decree.”

After reviewing comparable case law, the trial judge found that an employee like Mr. Kraft would, on average, receive around 9 months’ compensation. However, after considering the evidence related to the impact of COVID-19 on his job search, the trial judge felt he deserved slightly more: 10 months (i.e. one month more than if his termination were to occur in “non-pandemic” times).

Employee Awarded Commissions for Deal Closing After Termination

An interesting issue, in this case, is whether or not Mr. Kraft should be compensated for the commissions he would have earned from the Arzon deal had he remained with the employer. According to the Supreme Court of Canada, any commission that would have come due during the notice period is payable to the terminated employee. Furthermore, those commissions are considered wages under the Employment Standards Act and are required to be paid during the notice period.

The Arzon deal closed during the notice period (i.e., 6 months into the 10 month notice period). Therefore, applying the above principles, Mr. Kraft was owed the commission on that deal (which amounted to $77,559).

Employer / Employee Takeaway

For employees, this case reiterates the absolute necessity of keeping track of your job search efforts in order to prove you’ve met your duty to mitigate.

Employers, on the other hand, should consider keeping their own records regarding what jobs are available within a dismissed employee’s skills and qualifications and holding that employee accountable for not applying to such jobs. This would appear to be a failure to mitigate.

Ideally, productive mediations lead to settlements. Unfortunately, mediations can sometimes take a very long time. It isn’t surprising that after a long day of mediating, the wrongful dismissal lawyers might decide not to draft the formal minutes of settlement until the next day. While understandable, this decision could be a mistake.

In one recent case, choosing to delay drafting the materials had a serious consequence: the defendant employer decided they no longer liked the “agreement” that had been reached, but for which no formal document had yet been drafted. They took the position that no settlement had been reached at all.

The Mediation and Settlement

The plaintiff, Mr. Peres, was terminated from his position as President and CFO of the defendant employer. Mr. Peres commenced an action on December 2, 2020, which was the subject of a mediation that occurred on February 23, 2021. Present at the meeting was the plaintiff and his counsel as well as three representatives of the defendant and their counsel. Those representatives included the CEO and the Chair of the Board.

The mediation lasted all day. When the mediation was finally over, counsel exchanged emails summarizing and generally agreeing to the terms of the agreement. There was a list of five numbered points that defined the agreement. However, one provision of the agreement in particular, point 2, was problematic. It read, per plaintiff counsel’s email:

“2.         700,000 options are being granted in reasonable short order at a current exercise price and with an expiry date of November 10, 2023.”

To which defendant’s counsel replied:

“AGREED, SUBJECT TO BOARD APPROVAL ACTING REASONABLY.”

It was expected that the defendant would send the plaintiff draft minutes of settlement the next day. They did not. Instead, the defendant informed the plaintiff that the settlement as provided in the email did not receive the necessary Board approval.

At issue now is whether these emails, absent formally drafted minutes of settlement, constituted an agreement and whether that agreement can or should be enforced.

Was There An Agreement?

According the plaintiff, an agreement had been reached via email. The defendant used the word “AGREED”. The defendant later confirmed this in a subsequent email by saying “sounds good.”

On the other hand, the defendant argued that the emails were, at most, an agreement to agree, which is no agreement at all. There was no unequivocal offer or acceptance. Further, the entire settlement was subject to and conditional on the Board’s approval. The Board did not approve the agreement, thus there was no agreement.

After considering the perspective of each side, the trial judge found that there had indeed been an agreement. Although some further work was required in writing up the details, the parties had agreed on the essential terms of the agreement. The essential terms were clear, and the only remaining task was to put those essential terms into formal legal language. It was not necessary, strictly speaking, for the agreement to be produced in formal writing in order to be an agreement.

Is the Agreement Enforceable?

Having found that there was an agreement, the next question to be addressed was whether it can or should be enforced. Predictably, the defendant argued that it cannot and should not because the Board never approved the settlement as required by the emails forming the agreement. Although approval was only needed for point 2 of the agreement, the defendant argued this provision was an “essential pillar” of the overall agreement. If the Board did not approve this provision, they did not approve the rest.

The trial judge found that the agreement should be enforced in any event. The agreement stated that the board, acting reasonably, could disapprove. The trial judge found that there was no reasonable basis for the Board to decline the provision. That being the only provision in dispute, the rest of the agreement is capable of enforcement and should be enforced.

As such, the agreement reached by email was enforceable, despite not having been formally drafted or signed by the parties.

Important Takeaways

This case is an important reminder that what you say by email matters. You do not need formally drafted and executed minutes of settlement and release to have an enforceable agreement. If the essential terms of the agreement are clear, that will likely be enough.

Nevertheless, this entire situation could be easily avoided. Parties should be willing and able to present a formal settlement agreement promptly after the mediation has concluded. An easy way to accomplish this would be by having draft minutes of settlement, even in template form, prepared in advance so that you need only fill in the details discussed during the mediation. This would ensure there is no confusion moving forward and would prevent the possibility that one party might feel free to repudiate the agreement they reached at mediation.

The legal process is complicated. When you aren’t familiar with it, it’s easy to make mistakes. Some of these mistakes can be very costly. Some mistakes can be fixed. Some cannot, and if you make one of these mistakes, you may see your entire case thrown out. It is absolutely essential, for instance, that you bring your proceeding to the correct forum and within the correct amount of time.

In the recent Ontario Superior Court decision Andrew Scott v. Community Living Temiskaming South (“Andrew Scott”), a plaintiff had his entire case dismissed because he mistakenly commenced the proceeding in the wrong forum and because he did so too late.

The Time for Bringing Proceedings

The Limitations Act, 2002 sets out the two-year limitation period that applies to employment law proceedings. If you bring your claim more than two years after the claim was discovered, the court will have no choice but to dismiss your claim. In Andrew Scott, the plaintiff originally brought a claim for wrongful dismissal before amending it to a claim for constructive dismissal. Where a constructive dismissal arises from a change of position, case law suggests that the limitation period starts to run from the date of the change in position. In Andrew Scott, that change of position occurred on March 27, 2017. The plaintiff, however, brought his first claim on April 4, 2019, and then amended it on January 13, 2020. These dates are 24 months and 33 months, respectively, after the date the limitation period began to run. As a result, both claims fell outside the limitation period and were therefore dismissed.

Mitigation Efforts Irrelevant to Limitation Period

The plaintiff in Andrew Scott argued that the limitation period should have started later because he had remained with the employer in an effort to mitigate his losses in conformity with employment law principles. The Superior Court, however, did not believe this had any effect on when the limitation period began. Justice Koke found that mitigation cannot toll the limitation period as there is no reason a plaintiff could not mitigate his losses and commence an action at the same time.  Mitigation efforts, Justice Koke found, are wholly irrelevant to when a plaintiff discovers their losses and when the limitation period begins to run.

The Forum to Bring Proceedings

In the context of employment law, the proper forum will often depend on whether or not the employee bringing the proceeding is unionized. In Andrew Scott, the plaintiff was a member of a union when bringing his complaint. Notably, he commenced an action in the Ontario Superior Court. As it turns out, this was a significant error on his part. According to the Ontario Labour Relations Act, the resolution of disputes arising under a collective agreement should be provided through arbitration, not the courts.  Courts are not able to hear claims arising under collective agreements. Rather, a unionized employee with a claim against their employer must rely on the grievance process under the collective agreement and cannot turn to the courts for help.

The plaintiff in Andrew Scott, as a unionized employee, should not have turned to the courts for help. His answer lied in arbitration. As a result, Justice Koke found that he had no jurisdiction to hear the plaintiff’s claim, and the claim was dismissed.

The plaintiff may have had a case had he brought his complaint to the correct forum in the correct amount of time. He lost all chances of proving that case, however, when he brought it too late and to the wrong forum.  This case should serve as an important lesson not to delay in bringing a claim, and to ensure you bring it where it must be brought.

As of September 22, 2021, the Ontario government is requiring individuals to prove they are fully vaccinated in order to access certain businesses and public settings. These public settings include concert venues, movie theatres, convention centers, restaurants, nightclubs and casinos, among others. However, not everyone in Ontario has received the vaccination, and for a number of reasons. Some cannot receive the vaccination due to medical or religious reasons. Some simply do not want to take the vaccine and do not believe the government has the right to force them to do so.

Many who have not received the vaccine believe these mandatory vaccination policies are discriminatory or contrary to their human rights. However, they may be out of luck. According to the recent policy statement of the Ontario Human Rights Commission, such policies may not be discriminatory at all.

Generally Permissible: Reasonable Accommodations

According to the Commission, vaccine policies that are implemented to protect people at work or when receiving services are generally permissible as long as those who cannot receive the vaccine for Human Rights Code-related purposes are reasonably accommodated. By “Code-related purposes”, the Commission refers specifically to people who cannot be vaccinated due to medical or disability-related reasons.

The Ontario government has permitted exemptions to those who provide a written document supplied by a physician, registered nurse extended class or nurse practitioner explaining that the individual is exempt for a medical reason. According to the Commission, this is a reasonable accommodation.

Personal Preferences Not Protected

Significantly, according to the Commission, those who have refused the vaccine based only on personal preference do not have a right to accommodation under the Code. This is notwithstanding the fact the vaccine remains voluntary. Although the Code prohibits discrimination based on “Creed”, no tribunal or court decision has yet found a singular belief against vaccination or masks to amount to a creed. Even if it did, that would not necessarily grant these people exemptions from vaccine mandates. “The duty to accommodate”, says the Commission, “can be limited if it would significantly compromise health and safety amounting to undue hardship – such as during a pandemic.”

What Could this Mean for Employees?

The Ontario government is not the only one implementing vaccine policies. Many employers are requiring their employees be similarly vaccinated. Employees who refuse the vaccine face the risk of being terminated for their decision. Many of those employees had hoped to challenge such vaccine policies on human rights grounds. That avenue now looks rather gloomy. The Human Rights Commission has plainly said that vaccine mandates are generally permissible, so far as they provide reasonable accommodations to those who cannot get the vaccine for Code-related reasons. Those reasons do not include personal preference. It is likely that this approach, taken by the Commission in relation to the Ontario government’s vaccine policy, will be similarly applicable in the employment context. Simply not wanting to take the vaccine, as a personal choice, will probably be insufficient. Those who hope to challenge their employer’s vaccine policies will likely have to look elsewhere than personal preference. Not wanting to take the vaccine will likely be insufficient without some Code-related purpose, such as a disability, backing you up.

As of September 2021, our country is continuing to slowly reopen. As part of that slow reopening, we have seen a number of policies enacted that have sparked controversy and have been met with mixed reactions. Among those policies are mandatory mask policies. These policies often require that all people, employees and customers alike, wear face masks when inside the workplace.

At issue is whether or not these mandatory mask policies amount to a violation of human rights. For instance, many provinces including Ontario make it illegal to discriminate against a person on the basis of disability. If somebody were unable to wear a face mask on account of a disability, refusing to service that person due to their lack of a face mask would likely be discrimination contrary to the Ontario Human Rights Code.

This issue recently arose in an Albertan human rights complaint. The Human Rights Tribunal of Alberta held that a mandatory mask policy was not discriminatory and therefore did not violate the complainant’s human rights.

Factual Background: Szeles v Costco Wholesale Canada Ltd.

Mr. Szeles was a customer of Costco. He claimed to have a disability which prevented him from wearing a face mask as required by the company’s mandatory mask policy. An employee at Costco suggested he wear a face shield as opposed to the face mask, which Mr. Szeles refused on the grounds that the use of a face shield was stigmatizing and singled him out as a person with a disability. An altercation ensued and Mr. Szeles was escorted by police out of the store. He subsequently complained that Costco had discriminated against him in the area of goods, services and accommodation on the ground of physical disability.

In response, Costco argued that the mandatory mask policy was implemented to protect their employees and customers from COVID-19. According to Costco, they provided a number of reasonable accommodations for those who could not or would not wear face masks – the option of a face shield, or various online, home delivery or pick up options.

The Tribunal’s Decision

Ultimately, the Tribunal dismissed Mr. Szeles’ complaint. There was no doubt that Costco’s policy did have an adverse impact on persons who, by reason of disability, could not wear face masks. However, the Tribunal noted that there are limitations to the right to be free from discrimination, including where:

• a) the limitation or rule is instituted for valid reasons;
• b) it is instituted in the good faith belief that it is necessary; and
• c) it is impossible to accommodate persons who may be adversely affected, without incurring undue hardship.

There is no doubt that Costco’s mandatory mask policy was instituted for valid reasons. It was consistent with mandatory public health regulations both at the municipal and provincial levels. The accommodations offered, namely, the face shield was held to be reasonable. Various local and international health organizations have suggested that face shields are an alternative to face masks, albeit not as effective. The fact the face shield was not as effective as the face mask did not undermine the reasonableness of the mandatory mask policy. The same could be said for the other accommodations offered – online shopping, pick-up options, etc. In light of this, Mr. Szeles’ complaint was dismissed. The mandatory mask policy was not discriminatory on the grounds of disability.

A Contextual Analysis – Potential for Change

Interestingly, the Tribunal noted at the end of their decision that they reached their decision in light of the status of the pandemic at the time Costco implemented their policy. Public health guidance, they said, along with evidence about the pandemic will inevitably change over time. With that change, it is possible that a different decision could have been made. As such, their decision to dismiss the complaint here does not necessarily mean that no human rights complaint regarding mandatory mask policies will succeed. It may vary on a case-by-case basis.

However, for now, it seems employers can rest easy in implementing mask policies. Until the public health guidelines surrounding COVID-19 and preventative measures change, they likely will not get in trouble for having such policies. As the status of COVID-19 changes, so too should the employer’s policies. It is important to be flexible and continue to adapt to recent developments.

I Need a Vacation! What Are My Rights?

Everybody needs a break once in a while. Maybe work is just getting to be too much, or maybe the weather is too great to pass up. Whatever your reason for having one, everybody wants to have a vacation eventually. Luckily, employees in Ontario have a right to vacation time, so we can all get the time in the sun we need.

Under the Ontario Employment Standards Act, non-unionized employees who have worked for at least one year have a right to a minimum of two weeks of vacation. For example, if you were hired on June 1, 2021, then you will be entitled to two weeks of vacation after May 31, 2022. You will continue to earn two weeks of vacation after each 12-month period. Your entitlements will increase, however, once you have worked more than five years. At that point you will be entitled to three weeks of vacation after each 12-month period. So, for example, if you are hired on June 1, 2021:

• June 1, 2021 to May 31, 2022 Two weeks’ vacation
• June 1, 2022 to May 31, 2023 Two weeks’ vacation
• June 1, 2023 to May 31, 2024 Two weeks’ vacation
• June 1, 2024 to May 31, 2025 Two weeks’ vacation
• June 1, 2025 to May 31, 2026 Three weeks’ vacation
• June 1, 2026 to May 31, 2027 Three weeks’ vacation
• Etc.

Vacation time continues to accrue even where employees are away from work due to sickness, injury, temporary lay-off, or any other leave of absence that does not result in a break of service.

In addition to this statutory right to vacation time, non-unionized employees in Ontario also have a statutory right to vacation pay. Under the Employment Standards Act, employees who have worked less than five years are entitled to at least 4% of the gross wages earned in the previous 12-month period. Employees who have worked five years or more are entitled to at least 6% of those wages. The employer has an obligation to provide the employee with their vacation pay as a lump sum prior to them taking the vacation, with a few exceptions.

It is important to note that these are your minimum entitlements. Therefore, your employment contract may provide greater benefits than those guaranteed by the Employment Standards Act. Your employment agreement cannot provide you with less than these minimum entitlements – that would be contracting out of the Employment Standards Act and would be illegal.

Cruising on a Deadline

Although you are legally entitled to vacation time and vacation pay, you cannot necessarily take those vacations whenever you want. There are actually deadlines concerning when you may make use of your vacation time. An employee who has earned their two or three weeks of vacation time must actually take that time within 10 months after completion of the 12-month period. Furthermore, employers have the right to schedule vacation as well as the obligation to ensure the vacation is taken before the end of that 10-month period.

So, rest assured, your employer must allow you some vacation days. Your beach visit doesn’t have to be cancelled, after all!

It is generally well understood that an employer ordinarily cannot fire you without providing you with either reasonable notice or severance pay. But, did you know the law applies a similar obligation on employees? As it turns out, there is a right way for an employee to resign from their job, and there is a wrong way.

In this blog post, we will discuss wrongful resignations – what they are, and what risk employees assume by making such wrongful resignations.

What are Wrongful Resignations?

Employees are required at common law, and often through their employment contracts, to give their employers reasonable notice of their intention to terminate employment. The rationale for this requirement is to provide the employer with a reasonable opportunity to find a replacement. In determining what makes notice of resignation “reasonable”, the courts will look to the responsibilities of the employee, their length of service, their salary, and the amount of time it could be expected for an employer to find a replacement or otherwise adapt to its loss. Where an employee does not provide their employer with this reasonable notice, the resignation is said to be “wrongful”.

However, employees do not have to give notice where they resign for cause. This is analogous to how employers can dismiss employees summarily for cause. Cause for resignation would include situations that would give rise to a constructive dismissal, such as a demotion or some other substantial and unilateral change to the terms of employment. An employment contract itself may contain a provision setting out what amounts to cause for resignation.

Employer Remedy for Wrongful Resignation

If there has been a wrongful resignation, the employer may sue their former employee. An action for wrongful resignation must have the following four components:

1. The employee has resigned voluntarily (i.e., the employer did not give them an ultimatum along the lines of “quit or be fired”);
2. No cause exists for the resignation;
3. The employee did not provide their employer with reasonable notice of their resignation; and
4. The employer suffered damages as a consequence of the wrongful resignation.

Employers suing for wrongful resignation will only be awarded damages which they can actually show they suffered as a consequence of the employee leaving the company. The employer is required to show they suffered costs, expenses or damages in excess of what they saved by no longer having to pay the employee’s salary. Simply being inconvenienced by the employee’s departure is not enough – there must have been an actual loss. The employer cannot seek an order from the courts compelling the employee to return to work. In the jurisprudence, wrongful resignation damages have included the profits the employer would have received had the employee worked during the required notice period.

Takeaway for Departing Employees

If you are an employee who is considering resigning from your job, you likely will find it difficult to give notice. It can be awkward and uncomfortable. But, it is important. You do not want to find yourself on the wrong end of a wrongful resignation lawsuit. Always review your employment contract to see if it provides a specific reasonable notice period. Otherwise, play it safe. Give your employer notice of your resignation and you can be sure you will be protected from such lawsuits later on.

Age discrimination, otherwise referred to as ageism, can arise in a number of ways in the workplace. Ageism arises wherever an employee or potential employee is treated differently or unfairly because of their age. For younger persons, this may arise through an employer’s intention on hiring a more “mature” employee. For older persons, the same could arise through an employer’s intention to maintain a “youthful culture” in the workplace. These attitudes are grounded in negative stereotypical beliefs about aging – the young are inexperienced, immature, unreliable, while the old are slow, inefficient, and out of teach. This is discrimination. Notably, workplace discrimination against younger persons is just as objectionable as discrimination against older workers.

Thankfully, discrimination of this kind is actually illegal in Ontario pursuant to the Ontario Human Rights Code. No person over the age of 18 can be discriminated against in relation to their employment on the basis of their age.

The Human Rights Code

According to Section 5 of the Ontario Human Rights Code:

“Every person who is an employee has a right to freedom from harassment in the workplace by the employer … or by another employee because of race, ancestry, place of origin, colour, ethnic origin, citizenship, creed, sexual orientation, gender identity, gender expression, age, record of offences, marital status, family status or disability” (emphasis added).

This section provides a fairly comprehensive list of grounds upon which an employee cannot be discriminated against. Clearly, age is included. Under the Human Rights Code, an employer cannot, among other things:

• Refuse to hire, train or promote an employee because of their age;
• Target certain employees because of their age in making reorganizing decisions; or,
• Mandate retirement after a certain age.

Proving Age Discrimination

An employee who believes they have been discriminated against on the basis of their age must first start by establishing a prima facie case of discrimination. A prima facie case requires the employee to show that the employee’s case, if believed, and without additional evidence, would support the inference that it is more likely than not that the employer’s actions were discriminatory. In establishing such a case, age need only be a factor, not the only factor. Age discrimination is not an easy case to make. It is difficult to prove on a balance of probabilities, and results have been very mixed.

A Successful Age Discrimination Case: Perk v. Seel, 2004 BCHRT 277

In this case, Ms. Perk filed a representative complaint on behalf of her mother, Ms. Flemminks. Ms. Flemminks was fired from her job as a restaurant server when she was 56 years old. Notably, the restaurant had recently switched ownership and the new owner was hiring many employees much younger than Ms. Flemminks and was reducing the hours of the somewhat older employees who were already employed. Supposedly, the new ownership felt they needed to hire younger servers to increase business.

In reviewing Ms. Flemminks case, the British Columbia Human Rights Tribunal was satisfied that Ms. Flemminks’ age played a role in her termination. The new ownership was hiring younger servers and was preferential towards these younger servers in the allocation of hours. There was, therefore, a prima facie case of discrimination on these facts. Unfortunately for the employer, they provided no evidence at the hearing and were consequently unable to rebut the prima facie case against them. As a result, the employer was found to have breached the Human Rights Code by refusing to employ Ms. Flemminks on the basis of her age.