The Right to take Leaves of Absence

If you are a working parent and are struggling to balance workplace and childcare obligations, knowing about any entitlements you have can help alleviate some of that burden. There are many instances where child-care obligations conflict with work and limit your ability to satisfy the expectations of both your employer and your children. Ontario’s Employment Standards Act outlines when working parents can take a leave of absence from work to care for their children. In addition to sick leave, which totals only 3 days per year, pregnancy and parental leave are likely the most widely known and frequently used types of protected leave. For workers who have recently become parents, and have worked at least 13 weeks with their employer, both pregnancy and parental leave are available to care for newborns. Pregnancy leave can last up to 17 weeks, and parental leave can last up to 63 weeks (61 weeks if pregnancy leave is also taken). Other than pregnancy and parental leave, the ESA also protects several other types of leave, including:

  • Family Medical Leave,
  • Family Caregiver Leave,
  • Critical Illness Leave,
  • Child Death Leave,
  • Crime-related Child Disappearance Leave,
  • Domestic or Sexual Violence Leave,
  • Family Responsibility Leave, and
  • Bereavement Leave.  

Every type of leave requires different lengths of employment prior to being entitled to leave, ranging from 2 weeks to 6 months. While the maximum length of each leave varies, each of the listed types of leave are all provided to workers without pay. Furthermore, many of these other types of leave revolve around either serious medical conditions, death, or criminal circumstances. Consequently, despite these various types of leave, working parents still face significant limitations in securing time off work to care for their children except in emergencies. Beyond ESA protected leaves, working parents may find some other protections through anti-discrimination and accommodation legislation in the Ontario Human Rights Code.

Anti-Discrimination and The Right to Accommodation

Working parents might face discrimination at work because of, among other things, their family status. If this happens, working parents should be aware of their rights under the OHRC which protects workers from discrimination. Additionally, employers have a duty to accommodate workers based on their family status. The duty to accommodate is directly tied to the OHRC’s protections from discrimination. Working parents cannot be discriminated against in employment, and employers must take steps to accommodate workers based on their family status.

In British Columbia (Public Service Employee relations Commission) v BCGSEU (Meiorin), the Supreme Court acknowledged that discrimination can be permitted because of a bona fide occupational requirement (BFOR). A BFOR must be imposed honestly and in good faith and must be reasonably necessary to ensure the work is performed safely and efficiently without unreasonably burdening the workers to whom it applies. However, both Meiorin and the OHRC indicate that a BFOR is unacceptable unless the group affected cannot be accommodated without undue hardship for the employer. Undue hardship itself covers things like the financial cost of accommodation and potential interference with the rights of other employees. In other words, an employer has an obligation to accommodate members of equity-seeking groups, including working parents, unless such accommodation would be excessively expensive or get in the way of other workers’ rights. If there is no undue hardship, employers ought to accommodate working parents.

While employers certainly have a duty to accommodate working parents, this duty is not unlimited. In Peternel v Custom Granite & Marbel Ltd., the issue was raised about how a working parent’s start time might be discriminatory due to childcare obligations. The court did not reject this claim, but merely held that there was insufficient evidence to show she had been discriminated against because of the starting time. While the employer had been lenient about the starting time because of childcare obligations and maternity leave, the Court held that this supportive leniency could not then be transformed into a contractual obligation that bound the employer. Consequently, the contractually outlined starting time was maintained and the discrimination claim rejected.

Termination

Working parents should be aware of how termination operates in Ontario. A worker can either be terminated without cause by being given reasonable notice or pay in lieu thereof or with cause because of worker misconduct. If an employer attempts to terminate your employment for cause because of your childcare obligations, they could very well be engaging in discriminatory conduct, protected under the OHRC. Because family status is a protected ground, and because employers have a duty to accommodate, termination for cause based on a working parent’s childcare responsibilities could be grounds for a human rights-based employment complaint. If you have any questions or need further information, please don’t hesitate to contact us.

What should you do if you were recruited by another company in Ontario?

Inducement and Misrepresentation

Inducement occurs when employers actively try to recruit workers away from pre-existing employment. Workers being induced should always keep a record of any communications to deal with the risk of misrepresentations. Induced workers should be aware of three types of misrepresentation: negligent, fraudulent, and innocent. Each type of misrepresentation can warrant compensation for workers induced to switch jobs. In Queen v Cognos, the Supreme Court held that employers must be diligent in making representations regarding the sort of employment being offered, especially when inducing workers. Failure to represent the employment opportunity appropriately can be negligent misrepresentation, even before any employment contract is signed. If this happens, and the worker detrimentally relies on those misrepresentations, legal remedies may be available. In Bruno Appliance and Furniture, Inc. v Hryniak, the Supreme court also established the test for fraudulent misrepresentation, requiring:

  • A false representation by the defendant,
  • Some knowledge of the falsehood of the representation by the defendant,
  • The false representation caused the plaintiff to act; and,
  • The plaintiff’s action resulted in a loss.

If an employer misrepresents the job opportunity to the worker and violates these elements of fraudulent misrepresentation, remedies would likewise be available. Even innocent misrepresentations can result in restitution, recission of contract, or other monetary awards, as outlined in Canaccord Genuity Corp. v Pilot. Workers should be aware of the threat of misrepresentations when employers attempt to induce them to change their work, as misrepresentations could result in the employment opportunity being very different than expected.

Concerns about Non-compete Clauses in Previous Employment Contracts

When being induced, workers should also be cognizant of any non-compete clauses in their previous employment contracts. If a previous employment contract with a non-compete clause covers the field where the worker is being induced to work, there may be a breach of contract. While the Employment Standards Act was amended in 2021 prohibiting non-compete clauses within employment contracts, this provision applies to employment contracts made on or after the amendment date. In other words, non-compete clauses that form part of an employment contract signed before the amendment date may still apply.

If an employment contract signed before the ESA amendment has a non-compete clause, the clause itself may still be unreasonable. In H. L. Staebler Company Limited v Allan, the Court held that non-compete clauses are presumptively unenforceable. Enforcing a non-compete clause requires both a proprietary interest entitled to protection, and reasonable temporal and spatial limits. However, even if a non-compete clause meets both requirements, it may still be unenforceable if a non-solicitation clause would instead adequately protect the employer’s interests. Furthermore, in Shafron v KRG Insurance Brokers, the Supreme Court indicated that ambiguity in the temporal and spatial limits of a non-compete clause can also result in the unenforceability. Nevertheless, in Payette v Guay Inc., the Supreme Court did uphold a non-compete clause, indicating that despite non-compete clauses being generally unenforceable, on occasion the court will give them effect. Consequently, workers being induced should always be wary of any non-compete clauses they may have in previous employment contracts, to avoid any potential legal issues arising from breach of contract.

Effects of Inducement on Reasonable Notice Period

Workers should also keep in mind the effects of inducement on any potential notice period owed if their employment is terminated. Workers are entitled to reasonable notice or pay in lieu thereof when they are terminated without cause. As it stands, Bardal v. The Globe & Mail Ltd. (Bardal) provides some idea of what sort of factors should be considered in determining a worker’s reasonable notice period. These factors include:

  • Type of Employment,
  • Age,
  • Length of service, and
  • Availability of similar employment.

Still, the factors outlined in Bardal are non-exhaustive, and other factors besides those listed above can and should be considered if they might reasonably influence the reasonable notice period. In Wallace v United Grain Growers Ltd., the Supreme Court held that certain inducements tend to increase a worker’s reasonable notice period. Specifically, inducements that promise career advancement, along with greater responsibility, security, and compensation with the new organization will typically be seen as increasing a worker’s reasonable notice period. Sometimes, as in Alcatel Canada Inc. v Egan, workers who are induced may be terminated shortly after their employment begins. When this happens, inducement can cause time spent at a previous company to be used in calculating the worker’s reasonable notice period. Consequently, an employer who induces a worker and subsequently terminates them without cause may be compelled to provide a greater notice period or pay in lieu thereof. If you have any questions or need further information, please don’t hesitate to contact us.

Can Artificial Intelligence Programs be used to Terminate Workers?

Electronic Monitoring Policies in the Workplace

Artificial intelligence programs are being used more and more to monitor worker performance both remotely and in person. As a worker, you should know what legal protections you have from the use of artificial intelligence in the workplace. In 2022, the Ontario government add new provisions on electronic monitoring to the Employment Standards Act. Consequently, an employer with 25 or more workers must provide their workers with a written policy on electronic monitoring in the workplace. Additionally, the written policy must include a description of both how and in what circumstances the employer monitors workers, while also detailing for what purpose the information obtained through the electronic monitoring will be used. In other words, the use of artificial intelligence to monitor workers in the workplace must be made clear to workers through the written policy. Whether artificial intelligence programs can be used to determine who should be fired depends on the specific details of the electronic monitoring policy.

The ESA limitations around electronic monitoring do little more than ensure that workers know they are being electronically monitored and for what reasons. While it may seem like employers have very little restrictions regarding what sort of policies they can make under the ESA’s electronic monitoring requirements, previous cases have established certain limitations for workplace policies. In Lumber & Sawmill Workers’ Union, Local 2537 v KVP Coal Ltd., (KVP), rules regarding acceptable workplace policies were established. In KVP, it was held that workplace policies must be:

  • Reasonable,
  • Clear and unequivocal,
  • Brought to the worker’s attention before the company acts on the policy,
  • Consistently enforced since it was introduced.

Additionally, workers must be informed that policy breaches can result in discharge if the rule is otherwise a foundation for discharge. In other words, workplace policies must be reasonable and clear, and employers must inform workers about these policies in addition to any consequences that may result from breaches before the policy can be used for discipline or termination. Unreasonable workplace policies are not acceptable, including unreasonable electronic monitoring policies. The issue then revolves around whether the established workplace policy is unreasonable.

Unreasonable Workplace Policies

Unreasonable workplace policies, especially concerning monitoring and termination, were addressed in Woodstock (City) and Woodstock Professional Firefighters’ Assn. (Video Surveillance), Re, (Woodstock). In Woodstock, it was determined that surveillance in the workplace must be balanced against the workers’ limited privacy rights. In other words, Woodstock indicates that an employer’s desire to monitor workers must be balanced against the workers’ interests to maintain their own privacy. If electronic monitoring is used to monitor workers, Woodstock holds that it must be done in proportion to the workers’ privacy interests and actual business concerns, including security risks. Surveillance with no connection to the business’ interests would be unreasonable, as would surveillance that infringes too much on workers’ privacy. Consequently, if artificial intelligence is used to monitor workers, it must be done in response to actual business concerns, and balanced against workers’ privacy interests otherwise it may not be reasonable.

In Canadian Union of Postal Workers v Foodora Inc. d.b.a. Foodora, (Foodora), artificial intelligence software used by Foodora to monitor worker performance was left unchallenged. Instead, taken as a given, such artificial intelligence was seen as a norm within the industry. In Foodora, the artificial intelligence program that electronically monitored the workers collected performance indicators and was used to discipline workers based on their recorded conduct. In some instances, Foodora workers were even terminated based on data collected by the artificial intelligence program. Consequently, so long as there is an established and reasonable workplace policy, the use of electronic monitoring to measure workers’ performance to discipline and even terminate them has currently been accepted in Ontario.

Can Artificial Intelligence be used to Terminate Workers?

Electronic monitoring can be used for a variety of things, like measuring worker performance and administering discipline, and can even be used to terminate workers. Worker dismissal is complex, and takes two main forms: Termination for cause, and Termination without cause. The ESA outlines basic entitlements for termination without cause, which can occur at any time in Ontario so long as workers are given reasonable notice or pay in lieu of notice. However, as outlined in R v Arthurs,if an employer terminates a worker for cause, they must demonstrate that the worker was:

  • Guilty of serious misconduct,
  • Habitually neglectful of their duty,
  • Incompetent,
  • Disobedient of the employer’s reasonable orders,
  • Engaged in conduct incompatible with the workers’ duties; or,
  • Engaged in conduct prejudicial to the employer’s business.

Within the context of reasonable workplace policies, as established in KVP and Woodstock, it is possible that an electronic monitoring policy complies with the ESA requirements while being used to monitor workers’ job performance and general conduct on the job. While electronic monitoring policies may be challenged on the grounds of workers’ legitimate privacy interests at work, it is also possible for the workplace policy to adhere to legitimate business interests and address actual concerns regarding security risks or worker performance. As in Foodora, electronic monitoring can be used to collect information regarding worker performance, administer discipline, and even terminate workers. In short, if an employer uses artificial intelligence to dismiss workers, they must comply with the ESA requirements on electronic monitoring policies, the standards for reasonability outlined in KVP and Woodstock, and the circumstances outlined in R v Arthurs surrounding termination for cause. If you have any questions or need further information, please don’t hesitate to contact us.

Overtime Pay Rates for Workers on Commission

How can you determine Overtime pay rates in relation to regular pay rates?

Workers on commission generally lack certainty around what their pay rates are. Outlined below are the steps you can take to calculate your overtime rate.

Minimum overtime pay rates can be found in Ontario’s Employment Standards Act. S. 22 of the ESA mandates that overtime pay is owed at a rate of at least 1.5 times a worker’s regular pay rate. Calculating a worker’s regular pay rate varies depending on how a worker is paid. For hourly workers, the regular rate is the amount earned by the worker for working an hour, not counting overtime pay. For everyone else, including workers on commission, the regular rate is the amount earned in a work week divided by the number of non-overtime hours worked in that week. This second method of determining a worker’s regular pay rate was at issue in Ontario (Director of Employment Standards) v Sleep Country Canada Inc., (Sleep Country).

In Sleep Country, the second method for determining the regular rate of earnings was challenged. The Director of Employment Standards argued that the second method should be calculated by dividing all earnings for the week by the non-overtime hours. Instead, following a previous case on the issue, RBC Insurance Agency Ltd Agence D’Assurances RBC Ltee. v Shahzad Ali, the Court held that the second method is calculated by determining how much a worker earned during the first 44 hours of the week, thus excluding any earnings from overtime hours. The Court did not want to treat hourly workers and workers on commission differently, and this interpretation ensures that all workers are treated in the same manner, as their regular rate is simply the number of hours worked prior to any overtime hours. Furthermore, the Court noted that this interpretation maintains and clarifies the difference between the regular rate of earnings and overtime earnings.

For workers on commission, Sleep Country provides a sense of certainty regarding their regular pay rate. The regular rate for workers on commission is the amount they earned from the first 44 hours of work within a week, excluding all overtime amounts. After those 44 hours of work, overtime rates apply.

Minimum Overtime Rates and Overtime Rates Exceeding the Minimum

If a worker on commission works more than 44 hours in a week, overtime rates apply. But what happens when you are paid below or above the mandated overtime minimums in the ESA? In Sleep Country, the Court provided an answer for this problem. The ESA mandates that overtime pay is owed at a rate of at least 1.5 times the regular rate earned. This means that workers on commission, like those in Sleep Country, are entitled to at least 1.5 times the pay for every hour worked above 44 hours. But the Court also notes that the ESA entitlements around overtime only cover minimum overtime payments. The problem is that, in Sleep Country, overtime “overpayments” were balanced out with overtime underpayments. The Court in Sleep Country rejected this approach, holding instead that payments made below the minimum overtime rates must be increased to the minimum standard. This follows established case law, like Machtinger v HOJ Industries Inc., which indicate that minimum standards legislation, like the ESA, cannot be breached or contracted out of under normal circumstances. Thus, the Court held that Sleep Country had to pay overtime at the minimum rate for the hours it previously paid below that rate.

Sleep Country also dealt with the issue of overtime “overpayment”, in other words, overtime paid at a rate above the ESA minimum of 1.5 times the regular rate. The Court held that the ESA merely outlines what is required as the minimum overtime payment, so any increase above and beyond the minimum overtime rate is completely permitted. However, the Court kept open the possibility that employers and employees can agree in the employment contract that overtime will be paid at the minimum overtime rate established in the ESA. When this happens, the Court suggests that such an agreement will be adhered to, meaning overtime payments greater than the agreed upon rate could be reduced to adhere to the terms of the agreement. Nevertheless, the Court held that paying an overtime rate greater than 1.5 times the regular rate after previously paying an overtime rate below the ESA minimum standards for overtime does not make up for the previous failure to adhere to the ESA minimum standards. Instead, the minimum overtime rate must be always complied with or exceeded. Consequently, Sleep Country establishes quite clearly that ESA overtime rates are merely minimums that must be adhered to, and any overtime paid over and above the minimum rate is entirely permissible. If you have any questions or need further assistance, please feel free to contact us.

Am I entitled to Stress Leave?

Many workers suffer from significant stressors in their day-to-day lives. For some, stress can become such a serious issue that it hampers their ability to work. In circumstances like these, it is crucial to be aware of your legal entitlements. Under Ontario’s Employment Standards Act, an employee who has worked for 2 consecutive weeks is entitled to leave without pay because of personal sickness, injury, or medical emergency. However, this entitlement is quite narrow, providing only 3 days’ leave. Furthermore, employers may require evidence confirming why the sick days were taken. Such evidence is limited to the duration of the expected absence, the date the worker was seen by a health care professional, and whether the worker was examined in person by the person issuing the note. Additionally, workers must give their employer notice that they intend to take any sick days. Unfortunately, for workers suffering from stress, 3 days’ leave over the entire year may be insufficient to cover all their health concerns. Outside of the ESA, workers may be entitled to extra sick leave if an increase above the mandatory amount is provided in their employment contract. If your employment contract does not provide more sick days, yet you need to take more time off work, you may still be protected under Ontario’s Human Rights code.

Anti-Discrimination protections

Workers in Ontario have a right to a discrimination-free workplace, including discrimination relating to disability. If you have a stress-related disability, your employer has a duty to accommodate your disability. However, there may be significant difficulty in getting your stress-related disability acknowledged in the first place. In Windsor (City) v. Windsor Professional Firefighters Association, chronic stress was raised as a disability that prevented a worker from attending work. Despite the employer being aware of the worker’s “severe and incapacitating stress”, the arbitrator found that there was improper reporting of the developing situation and held that the chronic stress experienced did not amount to a mental disorder. Instead of being seen as a mental disorder, and therefore a disability, chronic stress was treated merely as a standard reality of everyday life for most workers.

On the other hand, when workers can successfully demonstrate that they suffer from a mental condition, like post-traumatic stress disorder, disability status has been acknowledged. In Health Sciences North v. Ontario Nurses’ Association, the worker struggled to return to work after a significant leave due to her condition. The arbitrator found the employer had discriminated against her because of her mental disabilities, including her PTSD. Workers who suffer from mental health disorders such as PTSD can be assured that their condition entitles them to protection under the OHRC. Workers cannot be discriminated against because of their disability. Instead, employers have a duty to accommodate workers under such circumstances, and failure to accommodate may be a breach of your human rights.

Another aspect of anti-discrimination protections for workers is the duty to accommodate. Employers have a duty to accommodate workers on certain protected grounds outlined in the OHRC, including disability. However, in British Columbia (Public Service Employee relations Commission) v BCGSEU (Meiorin), the Supreme Court acknowledged that discrimination can be permitted because of a bona fide occupational requirement (BFOR). A BFOR must be imposed honestly and in good faith and must be reasonably necessary to ensure the work is performed safely and efficiently without unreasonably burdening the workers to whom it applies. Nevertheless, both Meiorin and the OHRC indicate that a BFOR is unacceptable unless the group affected cannot be accommodated without undue hardship for the employer. Since the test is for undue hardship, if the employer suffers some hardship, it is entirely acceptable. Undue hardship covers things like the financial cost of accommodation and potential interference with the rights of other employees. In other words, an employer has an obligation to accommodate members of equity-seeking groups, including workers suffering from stress-related disabilities, unless such accommodation would be excessively expensive or get in the way of other workers’ rights.

If you suffer from stress-related conditions like PTSD, it is important to consider accessing disability leave and any disability benefits you may be entitled to under the Workplace Safety and Insurance Act. Certain workers, primarily first-responders, are also entitled to insurance benefits arising from the WSIA if they develop PTSD arising out of and during their employment.

Termination

Employers have a duty to accommodate workers for their disabilities and cannot discriminate against a worker because of their disability outside of a bona fide occupation requirement. If your employer terminates you because of your stress-related disability, like PTSD, this may constitute a wrongful dismissal. In Ontario, termination takes two forms: for-cause dismissal which alleges worker misconduct leading to a breach of the employment agreement, or without-cause dismissal which requires reasonable notice of pay-in-lieu thereof. If your employer attempts to terminate your employment, it may stem from discrimination because of your stress-related disability. Termination on these grounds would violate your human rights and breach the OHRC. In those circumstances, you may well have been wrongfully dismissed, despite being entitled to a discrimination-free workplace. If you have any questions or concerns, please feel free to contact us.

Are You Working in a Hostile Work Environment?

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?

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

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.

Can You Get Fired for Calling In Sick?

Employees may often worry whether they can be fired for taking time off from work due to illness. The short answer is – no.

Sick Leave and Statutory Provisions

According to our wrongful dismissal lawyer in Toronto, An employer cannot fire an employee for taking legitimate sick days or a medical leave of absence. According to the Employment Standards Act, employees in Ontario are entitled to at least three sick days each year.  Employers are also bound by the Ontario Human Rights Code (OHRC).  Section 13 of the OHRC imposes the duty to accommodate the needs of people with psychosocial disabilities on employers. Consequently, employers must provide sufficient medical leave to employees, unless doing so would bring undue hardship to the employer. The difficulty, however, is that it is extremely difficult for an employer to prove undue hardship. Here, the employer must prove they have done everything in their power to support the employee and that any additional support would create an undue hardship for the employer. In turn, employers leave themselves vulnerable to human rights claims if they fire an employee for taking sick leave.

The View of Canadian Courts

It is generally held across Canadian courts, that an employer is entitled to discharge an employee who fraudulently claims sick leave. Courts have generally imposed such a high penalty for this offense due to the breach of trust incurred to the employer and because of their difficulty to detect. In an Ontario case, an employee was terminated from his position at Ineos Nova Ltd. when he left a voicemail to his employer claiming to be sick but admitted to lying about it when he forgot to hang up the phone. In this case, the arbitrator found that the level of trust had been breached beyond repair and because of that the termination was justifiable.

In a similar case from Alberta, a Telus employee by the name of Jarrod Underwood, was fired from his position of five years for calling in sick under false pretenses. Mr. Underwood had requested the day off to compete in a softball tournament. When his request was denied, Mr. Underwood called in on the morning of the tournament and stated that he couldn’t come in to work due to ‘unforeseen circumstances’. His employer was suspicious and decided to go to the tournament to see if Mr. Underwood was there. He saw Underwood playing in the tournament and upon being questioned about the incident, Mr. Underwood insisted that he was sick but that his symptoms could be better managed at the ballpark. Mr. Underwood was fired but claimed wrongful termination. The arbitrator argued for a one-month suspension instead of termination, but the Court of Queen’s Bench upheld Telus’ decision to fire Mr. Underwood, arguing that his dishonesty had irreparably damaged the employment relationship.

The Role of Technology

With the digitalization of society, it is becoming increasingly common for employers to catch their employees taking false sick days though their social media use. In 2014, a TTC bus driver was fired from his position when he posted pictures on his Facebook page that showed him partying in Vegas after claiming to be sick. Another Canadian employee was fired from her job at the Insurance Corporation of British Columbia for ‘dishonesty and sick leave fraud’ when she posted to social media that she was celebrating out of town with her husband after calling in sick to work that day.

Remember, under the Ontario Human Rights Code, employees are entitled to take legitimate sick leave and cannot be fired for taking too many sick days. If an employer denies sick leave to an employee, this is a serious human rights violation, and the employee is entitled to take legal action against the employer. If the employee, however, takes sick leave and lies about it, the employer is generally entitled to terminate his or her employment.