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Reinstatement Rights in Ontario

by Stacey R. Ball| | General

What is Reinstatement

Reinstatement can occur under certain circumstances where an employee who has been terminated is entitled to resume their previous employment. Generally, there are three ways for an employee in Ontario to achieve reinstatement. An employee can either claim human rights violation, retaliation, or right to reinstatement under the Canada Labour Code.

When an Employee is Eligible for Reinstatement

i. When termination constituted violation against the Human Rights Code

Human rights legislations protect employees from discrimination on the basis of age, race, religion, gender, sexual orientation, etc. If an employee’s termination was motivated by one of these grounds, a remedy of reinstatement may be applicable.

ii. When termination constituted retaliation for a workplace complaint

Both the Occupational Health and Safety Act and the Employment Standards Act contain provisions protecting employees from retaliation when they are exercising or enforcing their workplace rights. For example, if an employee is dismissed as a result of report unsafe work conditions or refuse to work under an unsafe work condition, the applicable remedy may include reinstatement.

iii. When the employment is federally regulated

Employees working in federally-regulated industries are governed under the Canada Labour Code and are more likely to be reinstated. These industries include telecommunications, banks, railways and trucking. In the Code, reinstatement is widely provided as a remedy to non-managerial workers who have been unjustly dismissed.

When Employment Reinstatement is Impossible

i. For a “manager” under section 167 (3) of the Canada Labour Code

Under the Canada Labour Code, reinstatement as a remedy to unjust dismissal is provided in its section 241.2(4), Division XIV, whereas its section 167 (3) stipulates that Division XIV in its entirety does not apply to “managers”. Generally, an individual must have independent decision-making authority in order to be considered a “manager” for the purpose of the Code.

ii. When reinstatement is not appropriate

More commonly, when an employee is statutorily entitled to reinstatement, the courts’ primary inquiry will be whether it is the appropriate remedy given the specific contexts. Notably, the Federal Court recently clarified in Kouridakis v Canadian Imperial Bank of Commerce, 2019 FC 1226 that reinstatement “is not the standard remedy” in all unjust dismissal cases. In general, the chances of an employee to be successfully reinstated is relatively low.

In Kouridakis, the Court found that it was reasonable not to reinstate the employee. The employee alleged bullying and harassment at workplace, and the Court upheld the arbitrator’s reasoning that since the relationship between the employer and employee was likely unamendable, reinstatement could cause the employee to face adverse consequences on a day-to-day basis.

In other words, courts will consider whether reinstatement is impractical or undesirable, especially given the frictions occurred in the employment relationship and the fact that the employee has commenced legal actions against the employer.

Things an Employee Should Know About Reinstatement

Reinstatement is a powerful remedy. It is important for employees to be aware of how to make an application or complaint, and the potential effects of claiming it.

  • First, there is a special limitation period of one year for employees who wish to claim reinstatement under the Human Rights Code to make an application to the Human Rights Tribunal after the discriminatory treatment occurred.
  • Second, for federally regulated employees under the Canada Labour Code, they only have 90 days from the date of their dismissal to file an unjust dismissal complaint.
  • Last but not least, even it is not the employee’s intention to be reinstated, it may still be claimed strategically. As employers tend to be unwilling to restore an employee that they have dismissed, if parties are seeking settlement, a claim for reinstatement can serve as an incentive for employers to offer or agree to more favourable terms for employees.

If you are seeking reinstatement as a legal remedy after being terminated from work, top Toronto employment lawyer, Stacey ball can help you determine your legal options. Please call us at 416-921-7997 extension 227.

Workplace Suspension in Ontario

by Stacey R. Ball| | General

What is Workplace Suspension

Work suspension occurs when an employer relieves an employee of their duties, but the employment relationship persists.. During a suspension, an employee can either be paid or unpaid. In 2018, after being suspended improperly by his employer, an employee was awarded $100,000 in punitive damages (Filice v Complex Services Inc., 2018 ONCA 625). This article gives an overview of what is workplace suspension on Ontario and legal rights of employees.

Reasons Why Employers Suspend Workers

Generally, an employer may suspend an employee either for administrative or disciplinary reasons. A typical reason for administrative suspension is that the employee is being investigated for workplace misconduct or under criminal proceeding. For example, Filice involves a casino employee suspected of theft. On the other hand, disciplinary suspension often occurs as a punitive measure for an employee’s misconduct, or as part of a progressive disciplinary process to address poor performance at work.

Suspended Employee Rights

Right to Appeal

After receiving the decision of suspension, if the employee is deprived of an opportunity to appeal this decision, courts will likely find that this suspension has constituted a constructive dismissal. An employee will thus be entitled to a notice for termination, and will be able to claim entitlements and benefits when the notice is not given properly. If you are a victim of such dismissal contact our wrongful dismissal lawyer Stacey R. Ball today at 416-921-7997

Right to Payment

Regarding an administrative suspension, the employee will generally be entitled to payment if the employee is available and willing to work, unless the employee has waived this right in their employment contract. The Supreme Court in Cabiakman v Industrial Alliance Life Insurance Co., 2004 SCC 55 stated that an administrative suspension can only be carried out when it is necessary to protect the legitimate business interest, is for a relatively short time period for a fixed term, and that the employer must be acting in good faith. In Filice, the employer suspended the employee without pay under no justification. Therefore, the court held that it constituted constructive dismissal, and the employee was awarded damages.

Likewise, during a disciplinary suspension, an employee is likely also entitled to be paid unless they expressly waived this right in their employment contract.

Express vs. Implied Suspension

In general, an employer does not have the right to resort to either administrative or disciplinary suspension unless the employment contract provides them with such a right. An employer’s authority to suspend an employee can either be express or implied in the employment contract.

An employment contract may expressly contain a clause suggesting that employees may be subject to suspension under applicable circumstances, or referring to a policy book which include such provisions.  Alternatively, an employer may possess an implied authority to suspend an employee. The Supreme Court case Potter v. New Brunswick Legal Aid Services Commission, 2015 SCC 10 demonstrated that the threshold is lower for an employer to establish that there are implied grounds for suspension for administrative reasons than that for disciplinary reasons. However, there shall be a business justification. In Potter, the criteria in Cabiakman for business justification was upheld, namely legitimate business reasons, the employer’s good faith, the suspension’s duration and that the suspension shall generally be with pay.

In conclusion, it is important for employees to understand their rights regarding suspension, and that an unlawful suspension can constitute constructive dismissal. If you are an employee who has been improperly suspended and would like to file a constructive claim, top Toronto employment lawyer, Stacey ball can help you determine your legal options. Please call us at 416-921-7997 extension 227.

Termination Lawyer Toronto

by Stacey R. Ball| | Employment Contracts| | Severance Packages & Pay Lawyer

What is Termination of Employment?

If an employer stops employing or discharges an employee from his duties this is called termination of employment. It is also referred to as dismissal or permanent lay-off. Employee can be dismissed on his own free will or that decision can be made be the employer itself. If you have been a victim of wrongful dismissal and looking for a termination lawyer in Toronto, call Stacey Ball now at (416) 921 7997

An employer does not need a good reason, or any reason at all, to terminate an employment relationship.  However, the obligations of the employer and what is owed to the employee after termination depends on whether an employee was terminated “with cause” or “without cause.”  There is important information for both employers and employees to know about both terminations with and without cause This article gives an overview of what is termination of employment along with summary if termination is just or without cause . 

Termination with Cause

This is also known as termination for “just cause.”  If an employer terminates an employee for “just cause,” than they do not have to give notice of the termination or payment in lieu of notice (i.e., severance).  “Just cause” means that there has been a breach of the terms of employment through serious misconduct, disobedience, or incompetence.  However, in Canadian employment law, it is important that the “punishment fits the crime.”  In other words, a court will consider it a wrongful dismissal if the behaviour that an employer asserts is “just cause” for termination falls short of what the court considers grounds for a “just cause” termination.

Grounds for “just cause” termination could include, but are not limited to: neglecting to perform the duties of employment; dishonesty and lying to the employer; theft and fraud; serious misconduct (such as sexual harassment); and incompetence.  If asserting incompetence as the “just cause,” the employer will have to prove that the employee was warned that they were failing to meet performance standards and that even after clear warnings and reasonably opportunity to improve, the employee continued to not meet performance standards. 

Termination without Cause

When an employee is terminated without cause, the employer must provide them with proper notice of termination, or payment in lieu of notice.  The proper amount of notice, or the amount of pay in lieu of notice, depends on the terms of the employment contract, the position held, the years of service, the applicable legislation, common law principles, and more.  If an employee is terminated and not provided with a sufficient notice period or with adequate pay in lieu of notice, than there is a wrongful dismissal.

When an employer fires someone without cause and provides either the proper notice period or sufficient pay in lieu of notice, they do not need to provide a reason for the firing.  It is safer for the employer not to give reasons for the termination in this situation.  This is because the employer cannot fire someone for discriminatory reasons (i.e., anything to do with an employee’s sex, race, sexual orientation, age, disability, or anything else related to human rights legislation).  They also cannot fire someone for raising a health or safety issue at work.  Not providing a reason for termination prevents the employer from saying something that could imply that an employee was fired for a reason contrary to the law.

Summary

An employer can terminate an employee without cause and provide notice, or pay in lieu of notice.  An employer can terminate an employee with just cause and not provide notice or pay in lieu of notice, however only certain things are considered “just cause” by the legal system. If you have been wrongfully terminated and looking for a lawyer in Toronto, call Stacay Ball – Toronto employment lawyer today at (416) 921 7997

HOW TO RESTRICT A DEPARTING EMPLOYEE FROM TAKING CLIENTS FROM BUSINESS

by Stacey R. Ball| | Employment Law

Taking Clients From Former Employers

A common issue when employees leave a company for a competitor or start their own business is whether they can take clients with them. Soliciting clients from one’s former organization can be highly irritating to the employer.

Fortunately for former employers, provisions in the employment contract can prohibit the solicitation of clients should the employee move on to another company at a later time. If there is no contractual provision in the agreement regarding the solicitation of clients, the employer can be at risk of losing its prized assets. However, the non-solicitation clauses should be as reasonable as possible, otherwise, they are vulnerable to be considered unenforceable by a court.

 Use Restrictive Covenants Clauses in the Employment Contract

While the courts seek to protect the employers right to its clients, departing employees are also protected in terms of maintaining their career. Employees holding non-managerial and who are not “key employees” crucial to your business are allowed to make their services available to former clients.

However, restrictive covenants could be drafted into the employment contract to show exactly what a departing employee can or cannot do. Our blog article, What You Should Know About Non-Solicitation and Non-Competition Clauses, fully discusses such restrictive covenants clauses in the employment context with their usage and enforceability.

Fiduciaries and Common Law Duty of Good Faith and Fidelity

Employees may be considered fiduciaries if they have considerable control and responsibility over the former employer. These types of employees have the ability to affect their former employer’s business because of the role they had with the former employer. They were likely entrusted with more important aspects of the organization that could be detrimental to the employer should the employee use the information or take the clients to another company. Simply, the departing employee has a responsibility to put the interests of the former employer of their own interests. This responsibility or strict obligation can last long after leaving their former employer due to the serious harm they could cause the organization.

Post-Employment Fiduciary Obligations

Fiduciaries obligations continue after employment has ended and do not cease merely because of resignation or dismissal by the employer. It is stated that fiduciary obligation was a larger more exacting duty than simply the duty to respect the former employer’s trade secrets and the confidentiality of its customer lists. While ordinary employees only have a duty to respect trade secrets and not property such as customer lists, the fiduciary has a duty not to direct solicit the former employer’s customers for a reasonable period of time. As a general rule, when it comes to former clients, a fiduciary must wait until they come to him or her of their own initiative. A breach of fiduciary obligation after termination of the employment relationship will be actionable even if the employer has not suffered damages

What is Considered a Misuse of Confidential Information?

Employees are prohibited from using confidential information from their employer, at their new place of work. A trade secret is an example of confidential information. For instance, an employee from soft drink company A cannot take the secret recipe to soft drink company B. This is stealing an employer’s confidential information. The recipe did not belong to the employee. It belonged to the employer.

Most employment contracts will have provisions regarding restrictions on using confidential information outside of the company. This restriction is considered to be indefinite.

How to Secure Your Business and Your Employee From the Legal Issue and Court

The first step an employer can take to secure their business is to ensure the relevant issues are dealt with in the employment contract. Employers will typically have provisions in the employment agreement that deals with the following:

  1. Employees competing with their employer;
  2. Soliciting clients from their employers; and
  3. Misusing the employers’ confidential information.

However, employers (and employees) should be aware of the limitations of each of the contractual provisions.

Provisions in the employment contract that deals with an employee competing with their employer are known as non-competition clauses. An employer may include this type of clause in the employment agreement. That being said, non-competition agreements are pre-emptively unenforceable in court. They are seen as a restriction of trade which is contrary to public policy. A non-competition agreement may be found to be enforceable only if the employer would be extremely vulnerable to competition from the employee (ex., If they are a fiduciary) and if it is properly limited in scope. This refers to what specific activities, the time period they cannot compete for, and the geographic scope of the clause. It is impossible to indefinitely prevent a former employee from competing.

Non-solicitation provisions are also common in employment agreements. These are important to include in the contract from the outset, especially if the employee does not owe a fiduciary duty to the employer. Similar to non-competition clauses, non-solicitation provisions are presumed to be unenforceable. However, it is easier to enforce a non-solicitation agreement based on the reasonableness in comparison to non-competitions.

Lastly, employment agreements will also commonly touch on the misuse of confidential information. These provisions will restrict the employee from using confidential information, like trade secrets, outside of the company. Unlike non-competition provisions, restrictions on the use of confidential information is indefinite.

If an employee breaches the terms of the agreement on the above issues, employers do have legal recourse in the form of an injunction. An injunction will require the employee stops what they are doing until the employer’s lawsuit goes through the various stages of litigation.

A successful injunction must satisfy the test:

  1. There is a serious issue to be tried;
  2. There is a threat of irreparable harm to the former employer if the prohibited activity continues;
  3. The balance of convenience favours the employer — which party will suffer the most harm from either the granting or refusing of the injunction.

It is important for employers to understand the limitations they can put on their employees who may leave the company at a later date. If an employer is unsure of how to secure their business from potential legal issues, please contact Ball Professional Corporation to receive the quality advice you need.

A Case in Point

 In the case of Computer Enhancement v J.C. Options, 2016 ONSC 452, two former employees were ordered to pay their employer $132,581 in damages for breach of contract and fiduciary duties. In this case, the employees resigned and began soliciting clients of the employer. The court held that both employees, one who was a junior salesperson and the other who was a “key employee” with fiduciary responsibilities breached their common law duty to not solicit clients of the employer.

Unless the employee is found to be a key employee with a fiduciary duty, solicitation may occur if there is no contractual clause limiting such action.  Ultimately the case reveals the importance of requiring salespersons to sign employment agreements with enforceable non-solicitation or non-competition clauses and shows the importance of keeping track of lost revenue when former employees have solicited your clients.

In determining whether an employee is a fiduciary, the court will analyze the employee’s position and go beyond mere job titles. This is a complex matter. It is strongly suggested that you should seek legal advice in this aspect. If you come across any legal issue in connection to the solicitation of clients from previous employers, Top Toronto employment lawyer Stacey Ball can help you explore your legal options. Please contact our office at 416-921-7997 extension 227.

Termination for Poor Performance

by Stacey R. Ball| | Employment Law

Guide on How to Terminate an Employee for Poor Performance

Under the Canadian jurisprudence, the threshold of terminating an employee for just cause due to their poor performance is extremely high. This often results in an unfortunate position for some employers where they fail to establish just cause for termination. They not only have to pay severance packages to the terminated employee but also aggravated damages in some cases. In this blog, we would like to address the issue of terminating an employee for poor performance.

Employers will sometimes terminate their employees for poor performance. From the employers perspective, poor performance can constitute “just cause” dismissal. Despite just cause termination, the threshold to establish “just cause” for poor performance is high under both the Employment Standards Act and under the common law. In some cases, termination for just cause when none exists may allow a judge to order the employer to play aggravated damages in addition to termination pay.

To establish poor performance or incompetence, the employer must show that the employee fails to perform the essential conditions and duties of their job and that this has occurred on an ongoing basis. Isolated incidents of poor performance will not justify “just cause” dismissal.

Employers who want to establish just cause for poor performance must ensure that they have established objective standards of performance. Courts will also consider mitigating factors such as work volume, whether the employee hired was experienced in the job and whether or not training was provided.

If the employer finds there are further issues of performance despite training being given, progressive discipline and warnings must be given prior to termination. Warnings should be in writing and should include concerns related to performance and/or consequences that may occur if performance issues are not rectified. Support for improving should also be provided to the employee with a reasonable time limit for improvement. This will allow for an objective standard to be created and will show the court that the employer took active steps to help the employee rectify their performance issues. If the employer finds that the employee has failed to correct their issues within the required time frame, courts will look positively to the objective performance standards created by the employer in justifying termination.

In Cottrill v. Utopia Day Spas and Salons Ltd. 2019 BCCA 26, the plaintiff was a skincare specialist. The defendant began a review of the plaintiff’s work and found out that she was underperforming. The defendant took active steps to warn the plaintiff about her performance issues and gave her three months to improve. If she did not improve, she would be terminated. The plaintiff over the course of three months significantly increased sales and established a new client base. Despite her improvement, the defendant terminated her “for cause” because she had not met all performance standards and because the defendant felt she had attitude problems.

The defendant argued that the plaintiff failed to meet all performance standards despite the warning while the plaintiff argued that the standards set to determine her performance were not a reasonable opportunity for her to improve. The court stated that failing to meet all performance standards does not justify “just cause” dismissal in all circumstances. Ultimately, the court held there was no just cause and that it was unreasonable of the employer to establish new performance standards it had not previously required of the plaintiff.

The court also noted that the defendant failed to provide a reasonable and fair assessment of the plaintiff’s performance and that the employer could not rely on vague statements of bad attitude to dismiss the plaintiff. Objectively, the plaintiff met her performance criteria and increased sales and this entitled her to damages in lieu of notice as well as aggravated damages for the defendant’s failure to consider her enhanced performance during the three months and for the defendant’s breach of the duty of good faith.

Progressive Discipline and Warnings Needed Prior to Termination

When it comes to terminating an employee who has failed to achieve their performance goals, immediate dismissal of the employee is often unwarranted. Before finding termination for cause, courts often require employers to show that they have taken extra steps to notify employees of their shortcomings and give them reasonable amount of time to rectify them. Therefore, progressive discipline and warnings directed at these employees are needed prior to termination. It is advisable for employers to follow the following steps before terminating an employee for poor performance so that they could avoid liability issues in wrongful dismissal claims.

Few Steps to Follow Before Termination:

a. Performance Standards Created and Expectations Clearly Communicated

Employers must formulate a clear performance policy at the workplace. When an employee is found to have an ongoing work performance issues, employers should clearly communicate this issue to the employee and notice them of workplace performance expectations.

It should be pointed out to these employees that a progressive discipline policy has been established and corrective actions are expected of them. If they continue to fail to achieve these goals, termination will take place. However, employers should bear in mind these improvement goals should be reasonably attainable when they put the employee on a Performance Improvement Plan (PIP).

b. Documentation is the Key

Employers should document any feedbacks or coaching that have been offered to the employee. Any written warnings issued to the employee should be put on the employee’s record. These carefully documents can be instrumental in defending a wrongful dismissal claims when the terminated employee brings the issue to the court.

c. Be Consistent in Applying Performance Standards and Providing Feedbacks

Employers should be consistent in applying performance standards to employees so that it will not be considered as arbitrary by the court. It is the same case when it comes to providing feedbacks to the employees who are on the PIP.

If an employee’s performance is consistently substandard even when they are on the PIP, make this clear to the employee. If the employer fails to warn the employee of their substandard performance, this could be construed as condonation by the court, which can bar the employer from any attempt to terminate this employee for cause in the future.

d. Allowing the Employee to Have Reasonable Amount of Time to Improve

Employers should not jump at the opportunity to terminate an employee for cause if their performance remains substandard. They should give the employee reasonable amount of time to improve their work performance.

Employers should issue further warnings and document them if the employee fails to improve after a certain amount of time. Employers should alert the employee of the danger associated with consistent substandard performance that could lead to termination of their employment. There is no fixed number as to reasonable amount of time. It is case specific.

 Duty to Accommodate

Before terminating an employee for poor performance, employers should also fully consider their duty to accommodate under relevant human rights legislation. If the employee’s performance issue is related to a prohibited ground of discrimination such as age or disability, it is essential for the employer to accommodate such an employee to the extent of hardship before it considers any termination of the employment.

If you are seeking to terminate an employee for poor performance, contact top Toronto employment lawyer, Stacey Ball, to ensure your organization has engaged in the requisite steps to establish an objective standard. If you are an employee who has been terminated on this basis, our office can help you challenge your employer’s decision. Call 416-921-7997 extension 225 to book a consultation.

Employment Insurance Entitlements after Termination

by Stacey R. Ball| | General

Employees are usually terminated with two classifications. Either the termination is with cause or without cause. The latter is usually due to a restructuring or lack of work.

EI was instituted for the purpose of ensuring that terminated employees are covered until their next job. If your termination of employment was without cause, ensure that you apply to collect employment insurance (“EI”) benefits through Service Canada’s online portal.

How Can I be Eligible for EI?

To be eligible for EI benefits, you need to meet the following criteria:
a. You were employed in insurable employment;
b. You lost your employment through no fault of your own;
c. You have been without work or pay for at least seven consecutive days in the last 52 weeks;
d. You have worked for the required number of insurable hours in the last 52 weeks or since the start of your last EI claim (whichever is shorter);
e. You are ready, willing and able to work each day;
f. You are actively looking for work.

When Should I Apply for EI?

You should apply for EI as soon as you stop working. If there is a delay beyond four weeks, you may lose EI benefits.

Should I Still Apply for EI if I am Terminated with Cause?

If you had a “with cause” termination, obtaining EI can be difficult. However, despite this, it is best to apply given the high threshold to establish a just cause termination. Under the Employment Standards Act, 2000 (“ESA”), the threshold to terminate for just cause must show that the employee engaged in “wilful misconduct”. This occurs where an employee has exhibited serious wrongdoing or has breached trust and loyalty with their employer.

After you apply for EI following a termination due to misconduct, a government agent will call the employer to gather information about the reasons for the termination. The employer will be obligated to justify why they terminated the employee which may require evidence of a breach of contract, employment condition or policy.

Can I Apply for EI if I Quit My Job?

If you resign from your employment, you are not entitled to receive EI benefits unless there was provable just cause for leaving your employment. These may constitute a constructive dismissal or incidences where there was harassment, discrimination or dangerous working conditions.

What is a Record of Employment (ROE)?

A ROE provides information on your employment history. The most common way to prove that you lost employment through no fault of your own is through your ROE.

Employers must issue an ROE each time an employee experiences an interruption in earnings. This is defined as the period of time when an employee has had or is anticipated to have seven days with no insurable earnings from their employer.

What are the Common Reasons for Issuing an ROE? What does Service Canada Do with the Information on the ROE?

Block 16 of the ROE allows the employer to state a reason for why they are issuing an ROE which will either be because they terminated your employment or laid you off.

If you lost your job due to a “Shortage of Work” or experienced a temporary lay-off, Code A will be used. If you were terminated, the employer will use Code M for a dismissal in Block 16.

In Block 18, your employer will specify if your termination was for cause or without cause. A description is not necessary. However, if your ROE is marked with Code M, Service Canada will likely require that you fill out a survey about your termination allowing you to provide reasons. Service Canada will then contact the employer to determine the correct code. If your application for benefits is denied, you should file a Request for Reconsideration within 30 days. This is another chance for you to give reasons why your termination does not amount to wilful misconduct.

What is the EI rate? How long can I receive EI Benefits?

The basic rate for calculating EI benefits is 55% of your average insurable weekly earnings for the previous year. As of January 1, 2021, the maximum annual insurable earnings for which you can obtain EI benefits is $56,300. This means the maximum benefit you can receive is $595 per week. You can receive benefits from 14 weeks to a maximum of 45 weeks depending on the unemployment rate in your region at the time you file your claim and the amount of insurable hours you have worked during the last 52 weeks or since your last claim, whichever is shorter.

If you are experiencing issues in connection to your EI entitlements after termination, Top Toronto employment lawyer, Stacey ball can help you determine your legal options. Please call us at 416-921-7997, extension 227.

Can Your Employer Reduce Your Salary?

by Stacey R. Ball| | Constructive Dismissal

Employers cannot alter a fundamental term of your employment without first letting you know. If they do, they put themselves at the risk of being faced with a constructive dismissal lawsuit. An employee’s salary is a fundamental term of the employment relationship. If your pay is reduced or significantly altered, you may choose to leave and claim that you have been constructively dismissed.

The remedies available to a constructively dismissed employee are common law notice. This is payment in lieu of income you would have received had you worked during the notice period. Several factors such as age, your credentials, position and continuity of service will be looked to by the courts when deciding how much damages they will award you.

In some rare circumstances, a unilateral reduction of an employee’s salary will not amount to a successful constructive dismissal lawsuit. Company’s that are facing financial hardship and who reduce the salaries of employee’s may be able to defend against these types of claims.

If your employer has significantly reduced your salary, contact top Toronto employment lawyer, Stacey Ball, to help you initiate your constructive dismissal claim. We can be reached at 416-921-7997 extension 227.

Can Employers Change Your Work Schedule?

by Stacey R. Ball| | Constructive Dismissal

Different workplaces have differing expectations of an employee’s schedule of work. An employee who has been with a company for longer may be well adjusted to their schedule after they are told by their employer that changes to the work schedule are about to come. Do employer’s have a legal right to change work schedules?

Employers are permitted to determine hours of work and to make some limited alterations to your schedule. Workplaces are not fixed and employers may require their employee’s to work beyond regular working hours. However, if your employer makes a major change to your schedule without your consent, a constructive dismissal lawsuit may be your remedy. This will occur in circumstances where your employer requires you to work evenings and weekends regularly and where such information was not previously disclosed to you at the start of your employment.

If you refuse to accept the altered changes to your work schedule, your employer may terminate you. If this occurs, you can get a severance package. Even if you are not terminated, you can resign from your position and demand a fair severance package, as if your employment was terminated.

It is ultimately the employee who has the onus of establishing that they were constructively dismissed from their employment. Each case has its own specific facts and court decisions are based on whether the employee had other obligations or faced circumstances where changes in hours of work were onerous.

If your employer has altered your hours of work or is now requiring you to work well into the evenings and on weekends contact top Toronto employment lawyer, Stacey Ball, to set up a consultation. We can be reached at 416-921-7997 extension 227.

Bringing Claims After An Executed Release

by Stacey R. Ball| | Severance Packages & Pay Lawyer

After a termination has occurred, employers are quick to offer their dismissed employees a full and final release to be signed whereby the terminated employees agrees to accept the terms of the release and withdraws the right to bring any further action against the employer. Employers after receiving these executed releases will remain content for approximately two years that they are safe. However, there are some instances whereby an employee can still bring a court action even if they signed a release.

One case in point is the Ontario decision of Swampillai v. Royal & Sun Alliance Insurance Company of Canada, 2018 ONSC 4023 whereby the Ontario Superior Court dismissed the employers motion for summary judgment for the Plaintiff’s claim for LTD benefits. The Plaintiff was employed by the Defendant and went on LTD. After some period of time, the Defendant terminated him and denied him his LTD benefits. The Plaintiff signed a termination package that had a full and final release that denied the Plaintiff any claim for LTD benefits. Just short of two years, the Plaintiff commenced an action.

Interestingly, the claim was not for wrongful dismissal but for LTD benefits. As any Defendant would do, a motion to dismiss the claim was brought on the basis that a full and final release had been signed. The motion commenced and the legal issue for the court was whether there was any equitable or legal basis on which the claim may proceed. In this case there was a doctrine of unconscionability. If the release was unconscionable, especially in regards to the LTD benefits, then the courts will void the release. To set aside the transaction the courts looked to the doctrine of consideration and whether consideration was given by the parties to uphold the agreement. If consideration was inadequate given the bargaining power of the parties, the agreement would be set aside.

To find unconscionability, four criteria must be present: a. there must be a grossly unfair and improvident transaction; b. the victim must have had a lack of independent legal advice or other suitable advice; c. there must be an overwhelming imbalance in bargaining power caused by the victim’s ignorance or illiteracy or disability and d. the other parties knowingly took advantage of that vulnerability.

Ultimately the court found that not only did the Plaintiff waive his right to a wrongful dismissal lawsuit by accepting a severance package, he also waived his right to LTD benefits to which he received no valid consideration for that part of the release. The courts found the terms of the contract to be unfair such that they would overturn the release. Furthermore, the Plaintiff had not received legal advice and the court commented that the Defendant failed to bring to the Plaintiff’s attention that he would be giving up his right for LTD benefits if he signed the release. There was an extreme disadvantage and unfair bargaining power between the parties which the Defendant took deliberate advantage of.

The lesson here for employers is that if there are any suspicions of unconscionability rising to the legal threshold, your full and final release may not in fact protect your organization from future claims. Ensure that you bring such clauses to the attention of dismissed employees. If you are an employee, seek legal advice from your wrongful dismissal lawyer as to what you are signing. Top Toronto employment lawyer, Stacey Ball can help you ensure you are getting a fair package. Contact us or call at 416-921-7997 extension 227.

No Interruption in Employee’s Length of Service Despite “New” Corporate Structures

by Stacey R. Ball| | Employment Contracts

The Ontario Court of Appeal released its decision and confirmed that courts will overlook the differing corporate structures utilized by companies to skirt around an employee’s length of service and continuity in employment. Call Employment contracts lawyer for consultation.

Facts

In Theberge-Lindsay v. 3385022 Canada Inc. (Kutcher Dentistry Professional Corporation), 2019 ONCA 469, a dental hygienist was employed with the defendant for 19 years approximately until she was dismissed without cause. During the employment relationship, the plaintiff was asked to sign several different employment contracts with two separate corporate entities. All of the contracts limited the plaintiff’s rights on termination to statutory minimums under the Employment Standards Act, 2000 (the “Act”). The defendant altered the corporate structure of his practice in “various ways to minimize income taxes and split income”, which included using a management company and afterwards a professional corporation.

About 12 years into her employment, the plaintiff provided her notice of resignation to the defendant, which was to take affect three months later. However, about one month into her notice of resignation, she changed her mind and both parties agreed that she would continue working for the defendant. When the plaintiff’s employment was terminated in 2012, the defendant only gave her one week’s pay. This was consistent with the Act if the plaintiff was seen as an employee with one year of service working under the new professional corporation, which had an employment agreement, executed in 2011.

Trial Decision

The trial judge concluded that at all times and for the totality of the employment relationship, the plaintiff was employed by the defendant. She worked at the same location, performing the same job duties and was managed by the defendant for the entire 19 years that she was employed. The court also determined that neither of the employment contracts was enforceable, as fresh consideration did not exist when the contracts were given to the plaintiff. The court noted that the plaintiff was simply being given “continuing employment”. Lastly, the court noted that the plaintiff’s resignation did not impact her continuity of service, as there was no actual break in service. A 15-month notice period was awarded to the plaintiff.

Ontario Court of Appeal

The defendant appealed the decision and argued that the trial judge failed to take into account the plaintiffs resignation. The ONCA upheld the trial judge’s decision and the finding that the 2011 contract was not binding on the plaintiff. Despite this, the ONCA did agree with the defendant that the plaintiffs 2005 resignation was a break in service (even though there was no real gap in the plaintiff’s employment).

The Court determined that the plaintiff’s offer to continue being employed after she had initially resigned and the defendant’s acceptance was valid consideration for the new employment contract signed in 2005. As a result, the plaintiff’s service was to be calculated per the terms of the 2005 contract, which ultimately limited her notice entitlements to statutory minimums. The 15-month award was thus reduced to 7.5 weeks.

Takeaway

This case is a reminder for employer’s that the total length of service will be considered in calculating an employee’s notice period, unless there is an obvious break in service or a valid new contract (with fresh consideration) that limits common law notice. These principles apply even if the corporate structure has been altered, but job duties have remained substantially the same. It should be noted that even if an employee signs a new employment contract, the agreement could be void for lack of consideration. Employees should also be reminded that a resignation would be viewed as a break in service in the employment relationship, even if in actuality there were no break. It is best practice if you have a “new” employment relationship, to get confirmation in writing from your employer that prior service is recognized.

If you are concerned about breaks in service in your employment relationship, contact top Toronto employment lawyer, Stacey Ball to book a consultation. We can be reached at 416-921-7997 extension 227.