Fixed Term Contracts as a Form of Reasonable Notice

by Stacey R. Ball| March 1, 2022August 13, 2023 | Employment Contracts| | General

When considering the duration of an employment relationship, there are two primary options: either the employment period is for a fixed term, meaning the parties agree that the relationship lasts only until a specified date, or the employment period is indefinite, meaning it continues until it is terminated, for example, by the employee resigning or being fired.

The distinction is quite important. The termination of a fixed-term employment contract is treated quite differently than the termination of an indefinite employment relationship. This is sometimes good for the employee. Sometimes, it is not. In Makela v Horizon School Division No 67, the employee Mr. Makela likely wished he had agreed to an indefinite employment agreement.

The Facts

Mr. Makela worked for his employer, Horizon School, for approximately 9 years. His employment contract was a fixed-term contract which specified May 31, 2016 as the end of the employment relationship. Unfortunately, Mr. Makela did not make it this far. He was terminated from his position in March of 2016. Being a longstanding employee, Mr. Makela likely expected to receive a somewhat substantial severance package – maybe even several months’ pay. What he ultimately received was disappointing: he was paid only until May 31, 2016, the end of the fixed-term contract.

Upset, Mr. Makela commenced an action for wrongful dismissal damages arguing that he was not provided sufficient reasonable notice at common law.

Fixed-Term Contracts and Reasonable Notice

The trial judge did not agree with Mr. Makela. At common law, the contract of employment remained a five-year fixed-term contract, and Mr. Makela was paid for all five years. Where contracts provide a specified end date, such as Mr. Makela’s contract did, then the contract itself is said to serve as a form of reasonable notice. For that reason, the trial judge dismissed Mr. Makela’s claim for termination without reasonable notice or pay in lieu thereof.

This appears to be the right result. It is well understood that the common law principle of termination on reasonable notice does not apply to fixed-term employment contracts. The Ontario Court of Appeal has said as much. Where an employee working pursuant to a fixed-term employment contract is terminated prior to the specified end date, they are entitled only to the income they would have earned for the remainder of the specified contractual period, unless they were terminated for cause or the contract provided a specific notice period that is less than the reminder of the term. Mr. Makela was terminated prior to the completion of the five year term, but he was paid the balance. His employer, therefore, had already met their obligations to him and he was entitled to no more.

Had Mr. Makela been working pursuant to an indefinite employment agreement, he likely would have received much more upon termination. Interestingly, if Mr. Makela had made it to the end of the fixed-term contract and continued working without entering into a new agreement with his employer setting out a new end date, his contract would have become an indefinite contract subject to termination on reasonable notice. In that scenario, his case likely would have succeeded. Unfortunately, that was not the case, and Mr. Makela was stuck with the terms of the agreement he signed.

Duty of Fair Representation in Unions Opposing Mandatory COVID-19 Vaccines

by Stacey R. Ball| February 28, 2022August 13, 2023 | General

As mandatory vaccine policies continue to be implemented in workplaces across Ontario, many unionized employees are under the impression that their unions have a duty to stand up for them and oppose such mandates. Those employees who face termination of employment without cause or another discipline as a consequence of their inability or failure to comply with vaccine mandates often expect their unions to grieve such discipline. To their surprise, not all unions are willing to do so.

We have started to see many unionized employees alleging that unions who fail to oppose mandatory vaccine policies are in breach of their duty of fair representation. The “duty of fair representation” says that a union shall not act in a manner that is arbitrary, discriminatory or in bad faith in representing employees.

Unfortunately for these employees, a recent decision of the Ontario Labour Relations Board might signal that unions are not in breach of their duty of fair representation where they are unsuccessful in defending employees from mandatory vaccine policies.

The Facts: Tiffany Bloomfield v Service Employees International Union

Each of the employees in this case were Personal Support Workers who worked for an employer who provides home healthcare services. That employer, like so many other employers, introduced a COVID-19 vaccination policy. The union advised employees that a grievance could be filed regarding the vaccine policy, but that such grievances were unlikely to succeed and that employees who refused to be vaccinated without some valid exemption risked discipline or dismissal.

On November 30, 2021, the employees were placed on unpaid leave in accordance with the policy. That same day, the union filed a group grievance which, as of the date of this decision, was still ongoing.

The Decision: No Breach of Duty of Fair Representation

The Labour Relations Board, after reviewing all the facts, concluded that the employees had “no reasonable chance of success in establishing a violation of the duty of fair representation.” In the Board’s view, their application boiled down to a complaint about the employer’s vaccine policy and their belief that the union should support their decision to remain unvaccinated “without qualification or question”. Ultimately, this was not an application about the union’s conduct being arbitrary, discriminatory or in bad faith.

The employees continuously asserted their belief that the employer’s policy was unfair and contrary to the collective agreement. When advised that they must refer to the union’s conduct, they pointed to three perceived failings on the part of the union:

the union had not communicated sufficiently with them and/or had discouraged them from “taking action”;
the union should have taken steps to challenge the policy before November 30, 2021; and
the union was not taking enough action with respect to the already ongoing grievance.

In the Board’s view, none of the above complaints established a prima facie breach of the duty of fair representation. Regarding the union’s communications, the union had been very clear with their members on the legal advice they had received and what the union determined to do in response. The union did not fail to communicate with their members about the policy. Furthermore, regarding the timing of the grievance, the Board noted that unions are not even required to file grievances in order to meet their duty of fair representation. As long as the union does not conduct itself in a manner that is arbitrary, discriminatory or in bad faith, they do not need to file a grievance by a particular date or proces it in a particular manner. According to the Board in Harkin v. Canadian Union of Brewery and General Workers Component 325:

“… merely refusing to file a grievance does not constitute a breach of the duty of fair representation. Any breach of the duty of fair representation arises not from the fact that the union made a choice as to whether to file a grievance, but from the manner in which that choice was made: the facts stated in the application must allow the Board to conclude that the union has acted in a manner that was arbitrary, discriminatory or in bad faith.”

Obviously, this is bad news for unionized employees who believe their unions are obligated to file grievances on their behalf. A union who does not file a grievance, according to the Board, is not necessarily in breach of the duty of fair representation unless the manner in which they chose not to file a grievance was arbitrary, discriminatory or in bad faith.

In this case, there was nothing to suggest that the union acted in a way that was arbitrary, discriminatory or in bad faith. For that reason, the application was dismissed.

Not About the Merits

This is not the only case in which the Board found a duty of fair representation case to be more about the merits of the vaccine policy than the conduct of the union. In another, Tina Di Tommaso v Ontario Secondary School Teachers’ Federation, the Board said:

“A duty of fair representation complaint at the Ontario Labour Relations Board is about a union’s conduct in the representation of its members. The Board is not the forum for debating or complaining about vaccination in general, this vaccine in particular, scientific studies, the government’s directions, and/or a particular employer’s policy.”

Moving forward, employees who wish to oppose their employer’s vaccine policy must be more careful in choosing the means by which they pursue that complaint. Their personal views about a mandatory vaccine policy is not part of the analysis in a duty of fair representation case.

Abandonment or Termination: Wong v Polynova Industries Inc.

by Stacey R. Ball| February 6, 2022August 13, 2023 | General| | Wrongful Dismissal

Did the employee abandon their employment, or was their employment terminated by the employer? That was an essential question in the recent British Columbia Supreme Court decision, Wong v Polynova Industries Inc. We canvassed job abandonment in an earlier blog post, and revisit it today for the purpose of discussing this case.

Mr. Wong’s Absence

This case concerned Mr. Wong, a long-time employee of Polynova Industries Inc. He was 70 years old and had been working full-time with the employer for 15 years. In March of 2020, Mr. Wong informed a supervisor that he was not feeling well and that he would remain at home for a few days to rest. Evidently, those few days were not sufficient, as Mr. Wong later informed that supervisor that he would be isolating at home for an additional two weeks.

At this point, according to the trial judge, there was a “complete failure to communicate between the parties for over two months.” Mr. Wong did not attempt to communicate with his employer until his return to work in June, 2020. For their part, the employer had attempted to reach out to Mr. Wong, with no success, via two phone calls. However, when these phone calls failed, the employer made no further effort to reach him. They did not communicate with him in writing or in any other formal manner. They did not tell him that if he failed to return by a certain date, he could lose his job. While Mr. Wong was away, the employer actually hired somebody to perform Mr. Wong’s job. They considered this employee his replacement.

Mr. Wong’s Return to Work

To the employer’s surprise, Mr. Wong returned to work in June of 2020. He met with the President of his employer, the details of which were disputed between the parties. Mr. Wong suggested the employer was laying him off, while the employer suggested that Mr. Wong had abandoned his position. Notwithstanding the abandonment, they offered him a severance package allegedly as a goodwill gesture.

Ultimately, Mr. Wong was delivered a Record of Employment which indicated “Quit” as the reason for its issuance. Obviously, Mr. Wong disagreed. What, then, is the correct legal characterization of the termination of Mr. Wong’s employment? Had he abandoned his employment, or had the employer terminated him?

Job Abandonment or Termination?

In the employer’s opinion, Mr. Wong abandoned his employment by failing to come to work for over two months without ever telling the employer why. In their view, this amounted to a repudiation of the employment contract – a repudiation they clearly accepted when they hired a replacement worker. Mr. Wong, on the other hand, argued that he was on an extended leave of absence and that his employer was aware of this.

The trial judge believed that the evidence supported Mr. Wong’s position that he did not intend to resign his position. At the same time, it was objectively reasonable for the employer to conclude he had abandoned his job. There was, therefore, a repudiation. The result ultimately depended on whether or not the employer actually accepted Mr. Wong’s repudiation of the contract. They argued they had, but according to the trial judge, they did not. The trial judge relied on a number of reasons in support of this finding:

a) The employer failed to make formal inquiries of Mr. Wong;
b) The employer made only modest efforts to contact him at all;
c) The employer failed to terminate his health benefits;
d) The employer failed to put Mr. Wong on notice that his job was at risk; and,
e) The employer failed to issue a Record of Employment to Mr. Wong until June 10, 2020, which happened to be two months after the date the employer alleged to have accepted the repudiation.

The trial judge believed the reason the employer did not issue a Record of Employment to Mr. Wong earlier was because they had not, in fact, accepted his repudiation of the employment contract. For that reason, there was no job abandonment nor resignation. Mr. Wong, therefore, had been terminated without notice.

In deciding the appropriate period of reasonable notice, the trial judge concluded that Mr. Wong was entitled to 15 months’ notice. He was awarded $52,500 for breach of the employment contract.

Vaccine Policy Upheld, Despite Privacy Concerns

by Stacey R. Ball| February 4, 2022August 13, 2023 | General

On January 4th, only four days into the New Year 2022, Arbitrator Robert J. Herman released a decision regarding a COVID-19 vaccine policy put in place by the employer Bunge Hamilton Canada, Hamilton, Ontario (“Bunge”). This decision is among the first of many vaccine-related labour decisions we are sure to encounter as 2022 progresses. At issue was whether the COVID-19 vaccine policy violated employee privacy rights.

The vaccine policy in question contained the following requirement: “all employees … are required to be fully vaccinated by January 24, 2022. Attestation of vaccination must be provided by each employee …”

The stated purpose of the vaccine policy was, among other things, to “provide for a safe work environment during the COVID-19 pandemic and safeguard the health and safety of employees or dependent contractors, visitors and vendors.” Employees who did not comply with the policy, either by not being fully vaccinated or by not disclosing their vaccination status, would be prohibited from entering the worksite and would be placed on unpaid leave until a decision was made about whether they would be terminated or not.

Confidentiality and Disclosure Under the Policy

According to the vaccine policy, the employer would take all steps necessary to protect the confidentiality of all information submitted due to the policy. It did not require that employees provide any other medical information in addition to their vaccination status. Employee vaccination status could be shared where required or permitted by law, for instance, to governmental or regulatory authorities. Internally, the information would only be shared on a “need to know” basis.

The Union’s Position

In challenging the vaccine policy, the Union asserted that the policy was an unreasonable exercise of management rights by forcing employees to disclose personal health information. Further. the Union argued it is unreasonable to place unvaccinated employees on unpaid leaves of absence or to otherwise discipline them for a failure to become vaccination. On the issue of privacy, the Union argued the policy infringed employees’ rights to keep their confidential medical information private, which they believed to be a breach of the Personal Health Information Protection Act, 2004. Additionally, in their view, there was no reason to believe that the potentially small number of unvaccinated employees could not be accommodated. For these reason, the Union requested that their employees not be required to disclose their vaccine status, that mandatory testing be introduced as an alternative option to mandatory vaccination, and that discipline such as unpaid leave or termination not be permitted under the vaccine policy.

Arbitrator’s Decision

Arbitrator Herman began with the following comment on COVID-19:

“The continued presence of COVID-19 presents a serious risk and danger to the health and welfare of the public, to the economy and the education system, and to everyone’s ability to fully enjoy life. Public health and safety measures have not as yet been able to fully control the spread of the virus or its potentially terrible ramifications, and while data about the recently discovered Omicron variant remains limited at this point, the emergence of Omicron may increase the challenges COVID-19 presents for us all.”

It is clear from the beginning that the arbitrator considered the COVID-19 pandemic to be a matter of great important and seriousness.

Ultimately, the arbitrator believed the requirement to disclose vaccination status was reasonable. He based this conclusion on a number of reasons:

1) It was not clear that the Personal Health Information Protection Act, 2004 would have prevented the disclosure of an employee’s vaccination status;
2) Management is generally permitted to establish rules that require the production of employees’ medical information if necessary to protect the health and welfare of other employees;
3) The intrusion upon an employee’s privacy with respect to the disclosure of personal health information is fairly minimal due to the policy’s terms, which requires only that employees disclose their vaccination status and no other personal health information;
4) Employees are given a reasonable period of time to attest to their status; and
5) The arbitrator would ultimately find the vaccine policy as a whole to be reasonable, and therefore it would inevitably become obvious who was and who was not vaccinated in any event by their mere presence or absence from the worksite.

In summary, Arbitrator Herman stated:

“Any privacy rights in this context are considerably outweighed by the minimal intrusion on such rights and the enormous public health and safety interests at issue. In the result, I am satisfied that the attestation requirement in the Vaccine Policy is reasonable.”

Arbitrator Herman’s decision in this case should not be considered the final word on the issue of COVID-19 vaccine policies. As we have seen, some arbitrators have found certain vaccine policies to be unreasonable. Note, however, that Arbitrator Herman found reason to distinguish the current case from earlier decisions which found vaccine policies unreasonable. The ultimate answer to each challenge of a vaccine policy will likely vary on the facts of each particular case.

“Saving Clause” Does Not Save Illegal Contract

by Stacey R. Ball| February 2, 2022August 13, 2023 | Employment Law| | General

A recent decision of the Ontario Superior Court, Campbell-Givons v. Humber River Hospital, like many others over the past year, involved an employee who had been fired pursuant to a “just cause” termination provision. As we have seen, employment contracts that allow for the termination of employees for “just cause” have frequently been found unenforceable (although not always) for violating the Employment Standards Act, which requires a higher standard of misconduct on behalf of an employee than the “just cause” standard implies.

Notably, this case considers the effect of a saving clause on the enforceability of “just cause” termination provisions, and provides further comment on whether or not courts should consider the sophistication of the parties in determining if an otherwise invalid termination provision should be enforced nonetheless.

Basic Facts

The employee in this case was 61 years old at the time of her termination. She worked as a Senior Labour Relations Specialist at a Toronto public hospital – a position she held for only 19 months. Upon termination, the employer paid the employee three weeks’ pay in lieu of notice, which was all they owed under the employment contract. However, there was one major problem for the employer: the termination provision they relied on addressed both termination “for cause” and termination “without cause.”

“Just Cause” Termination Provision

In the employee’s view, the “for cause” portion of the termination provision violated the Employment Standards Act. The case law is clear that the circumstances in which employers are able to terminate employees without notice under the ESA are much narrower than the common law standard of just cause would permit. Under the common law standard, a wide range of employee misconduct may disentitle them from reasonable notice under common law, but the same conduct would not be sufficient to deprive them of their entitlements under the ESA. That is essentially what makes “just cause” termination provisions contrary to law.

The Ontario Court of Appeal has also held that where termination provisions are found to be illegal, for example because they permit summary dismissal for “just cause”, such an illegal provision cannot be excised from the overall termination clause. For that reason, if the “with cause” provision is illegal, so is the “without cause” provision. In effect, the entire termination clause becomes unenforceable.

Ultimately, the Court found that the employee was right: the termination provision did indeed violate the ESA.

The “Saving” Provision?

In this case, the employer attempted to save their termination clause from being found unenforceable by pointing to the following language contained within:

“At all times the Employee will receive all employment standards entitlements owing to her in accordance with the Ontario Employment Standards Act, 2000.”

In the employer’s view, the above represented a “guarantee” in the termination clause that the employee would always and inevitably receive their ESA entitlements. Therefore, even if the termination provision violated the ESA when viewed in isolation, the employee would not be prejudiced because of this guarantee.

The Court was not persuaded. In their view, saving clauses such as this present a worrisome danger: that employers may draft termination provisions they know to be unenforceable, expecting that dismissed employees will accept them as so, and then protecting themselves with a saving clause in the event an employee actually challenges the termination provision. Courts do not want to allow employers to mislead employees, and that appears to be the practical effect of saving clauses. Ultimately, the Court found the termination provision unenforceable, and held that the “saving” clause had no effect on that determination.

Employee Sophistication

Recent jurisprudence has considered whether or not the sophistication of employees should be taken into account when determining the enforceability of termination provisions. We have discussed this in an earlier blog post. On this point, the Court here commented:

“It is also problematic, in my opinion, to engage in a detailed analysis about the level of sophistication of an employee and whether or not they had time and opportunity to obtain legal advice. A termination clause cannot comply with the ESA for some employees but violate the ESA for others. It either violates the ESA or does not, and is either enforceable or not. It is a straightforward matter for an employer to incorporate clauses in an employment agreement that comply with ESA standards, and when that is not done the court should not be asked to rewrite the language of the termination provisions to achieve compliance.”

Given the current jurisprudential disagreement currently existing on this point, it will be interesting to see how the courts determine this issue moving forward.

Fiduciary Employees: Impact Security Group Inc. v. Brown

by Stacey R. Ball| January 31, 2022August 13, 2023 | Employment Law| | General

In Canadian employment law, not all employees or dependent contractors are alike. Some, by virtue of their high position with the employer’s organizational hierarchy, are a type of employee that owe greater obligations to their employer than other employees. These are fiduciary employees, and they owe fiduciary obligations to their employers that go above and beyond what is typically owed in the employee-employer relationship (i.e., the implied duty of fidelity that all regular employees owe).

A relatively recent decision of the Saskatchewan Court of Queen’s Bench, Impact Security Group Inc. v Brown, provides a useful summarization of the law surrounding fiduciary employees.

The Employees

This case concerned two former employees of Impact Security: Mr. Brown and Mr. Zanger. Mr. Brown was once Impact Security’s Regional Manager for Saskatchewan, whereas Mr. Zanger was their Regina Branch Manager. Evidently, both former employees held senior positions within the employer’s organization.

Both employees left the company in April, 2021 to set up a competing company called Executive. According to Impact Security, the two employees had used the company’s confidential information while still employed to solicit future customers to Executive. In doing so, Impact Security argued they breached their fiduciary obligations to Impact.

Distinguishing Fiduciary Employees from Regular Employees

In order for the employees to breach their fiduciary obligations to the employer, they must first be found to have been fiduciaries. In addressing this issue, the Court provides a helpful summary of the principle.

At common law, all employees owe a duty of fidelity to their employers. However, employees in a fiduciary relationship with their employer owe higher duties, including duties of loyalty, good faith, and avoidance of conflicts of interest. Fiduciary employees cannot solicit their former employer’s customers, nor use the employer’s confidential information to the employee’s own advantage for a reasonable time following the end of their employment.

Determining whether or not an employee is a fiduciary requires a contextual analysis. A fiduciary relationship will arise where:

(a) the fiduciary has the authority to exercise power or discretion;
(b) the power or discretion is exercised unilaterally over the beneficiary (i.e., the employer), thereby affecting the beneficiary’s legal or practical interests;
(c) the beneficiary is peculiarly vulnerable to, or at the mercy of, the fiduciary; and
(d) the fiduciary has undertaken to act in the best interests of the beneficiary and to forsake the interest of all others in favour of the beneficiary with regard to the specific legal or practical interest at stake.

These four indicia of fiduciary relationships are often found to exist in employment relationships. In applying these indicia to the employment context, courts often consider a number of other factors, including:

1) level of responsibility;
2) ability to unilaterally exercise delegated authority to effect the employer’s legal and economic interests;
3) degree of contact with customers and/or suppliers;
4) knowledge of customer lists;
5) pricing information and other information key to the employer’s business, and
6) the employer’s vulnerability to actions taken by the employee.

It is ultimately a question of fact whether or not an employee is a fiduciary. Courts have been warned, however, to not be too quick to conclude that an employee is a fiduciary where the employee’s job is less than that of a senior managerial or directorial status.

Were Mr. Brown and Mr. Zanger Fiduciary Employees?

Mr. Brown held a very senior position within the company – he was, effectively, the face of the business. He possessed significant discretion when it came to hiring and supervising employees. His familiarity and relationship with many of Impact Security’s clientele leaves Impact in a potentially vulnerable position, especially given that many of those clients may move away from Impact Security and towards Mr. Brown’s new business. In considering all of this, the Court held that Mr. Brown was a key employee who did owe fiduciary obligation to his former employer, Impact Security, even following his departure. Furthermore, the Court found that Mr. Brown did indeed breach his fiduciary obligations by enticing some of Impact Security’s clients to leave and join his business instead.

On the other hand, Mr. Zanger did not hold a senior management position within the company. Mr. Zanger supervised employees but had no responsibility or control over finances or budgets or strategic planning whatsoever. For this reason, Mr. Zanger was found not to be a fiduciary.

Dismissed Employee Turns to UBER Job for Support: Income Held Not to be Deductible from Damages Award

by Stacey R. Ball| January 29, 2022August 13, 2023 | General

Generally speaking, a wrongfully dismissed employee has a duty to mitigate their damages by seeking alternative employment. If they are successful in finding new employment, the income they receive from that new employment will typically result in a deduction to the amount of wrongful dismissal damages they might be awarded in connection to their original termination. While this is generally true, a recent decision of the Federal Court seems to suggest that it is not necessarily always true.

The Dismissed Employee

This case concerned Mr. Dengedza, who had been unjustly dismissed from his employment with the Canadian Imperial Bank of Commerce (CIBC). At the time of his termination, Mr. Dengedza was 66 years old and held the position of Senior Investigator, Anti-Money Laundering Investigations Group. He had been with the bank for 9.5 years. He was earning an annual base salary of $60,400.

After his termination, Mr. Dengedza filed a complaint of unjust dismissal under the Canada Labour Code. He and the employer agreed that Mr. Dengedza would not be seeking reinstatement, and the employer would correspondingly not be asserting just cause for his termination. As a result, the only issue for the adjudicator to decide was the quantum of reasonable notice that should be awarded to Mr. Dengedza. Ultimately, the adjudicator decided that 14 months’ notice was appropriate.

The adjudicator was then tasked with deciding whether to deduct from this amount the income Mr. Dengedza was earning from his side job as an UBER driver.

The UBER Job

Prior to his dismissal, he was also working part-time as an UBER driver during non-business hours. CIBC gave him permission to do so. After his dismissal, Mr. Dengedza was understandably in need of cash and decided to increase his UBER hours. He began driving for UBER 60 hours each work. In doing so, Mr. Dengedza earned approximately $600 per week. According to Mr. Dengedza, the money he was making from UBER should not be deducted from his damages award because the work was “of a different character” than the work he had been performing at CIBC, and further because “his earnings were minimal and supplementary in nature.”

The adjudicator rejected his arguments. Before his dismissal, his UBER earnings were indeed minimal. However, after his dismissal and after he significantly increased his hours spent driving, his net earnings increased substantially. In the adjudicator’s opinion, his earnings did not represent a “minimal, trivial or inconsequential sum.” The adjudicator therefore considered the UBER earnings to be “amounts received in mitigations of loss” and had them deducted from the compensation payable by CIBC.

The UBER Job, According to the Federal Court

At the Federal Court, Mr. Dengedza argued the adjudicator erred in deducting his post-dismissal UBER earnings from the damages award because that income could not be properly characterized as mitigation earnings. On the other hand, CIBC argued that the UBER earnings were neither minimal nor supplemental, and were instead earned in substitution of his former income at CIBC.

The Federal Court agreed with Mr. Dengedza. They relied on the Ontario Court of Appeal’s reasoning in Brake v. PJ-M2R Restaurant Inc., where it was explained that:

“… if an employee has committed herself to full-time employment with one employer, but her employment contract permits for simultaneous employment with another employer, and the first employer terminates her without notice, any income from the second employer that she could have earned while continuing with the first is not deductible from her damages…”

Furthermore, Justice Feldman, in her minority concurring decision in the same Ontario Court of Appeal decision, argued that income earned from a substantially inferior position should not be deducted from damages:

“… if she can only find a position that is not comparable in either salary or responsibility, she is entitled to turn it down, and if she does, the amount she could have earned is not deducted from her damages. … It follows, in my view, that where a wrongfully dismissed employee is effectively forced to accept a much inferior position because no comparable position is available, the amount she earns in that position is not mitigation of damages and need not be deducted from the amount the employer must pay.”

The adjudicator in Mr. Dengedza’s case considered his post-dismissal UBER earnings sufficiently high to constitute replacement or substitute income. However, according to the Federal Court, this was a “somewhat arbitrary finding.” The adjudicator did not consider whether Mr. Dengedza, in earning his post-dismissal UBER income, had to work harder or longer than he would have needed to at CIBC in order to make the same “sufficiently high” figure. It is difficult, the Federal Court said, to see how working more hours in lesser paying positions can serve as a straight dollar for dollar substitute for the amount that would have been earned, in fewer hours, with the original employer.

As a result, the Federal Court held that the adjudicator’s failure to assess whether Mr. Dengedza’s post-employment UBER income was “fairly substituted and deducted as mitigation earnings, on a dollar for dollar basis with his CIBC earnings” rendered that part of the decision unreasonable. Therefore, Mr. Dengedza’s UBER income should not be deducted from his award of damages.

New CIRB Decision Comments on Manager Exception to Unjust Dismissal

by Stacey R. Ball| January 27, 2022August 13, 2023 | Employment Law| | General

The Canadian Industrial Relations Board has released new decisions concerning the “managerial exception” found in section 167(3) of the Canada Labour Code – a provision which excludes “Managers” from the Code’s unjust dismissal regime. This decision follows the Board’s decision in Saunders v WestJet, which was the focus of an earlier blog post concerning the managerial exception.

This blog post will discuss one of the Board’s recent decisions: Jerry Peter v Ditidaht First Nation.

Background Facts

Mr. Peter worked as a housing manager with the Ditidaht First Nation, his employer. He had been in this position since October, 2007, and was terminated on July 18, 2019. On October 7, 2019, Mr. Peter filed a complaint of unjust dismissal. In response, his employer raised a preliminary objection: Mr. Peter was a manager, and therefore was prohibited from making this unjust dismissal complaint.

The Board was therefore tasked with determining whether or not Mr. Peter was a manager under the Code. Ultimately, they decided he was not a manager within the meaning of section 167(3) of the Code. How did they reach this decision?

Managerial Status and Unjust Dismissal

Section 167(3) of the Code provides: “Division XIV does not apply to or in respect of employees who are managers.” Division XIV contains the provisions dealing with unjust dismissals, and therefore employees who are managers are excluded from the unjust dismissal regime and cannot bring such complaints. However, the issue is that the word “manager” is not defined by the Code. The Board must interpret the meaning of the word based on jurisprudence. Fortunately, the Board already has interpreted the word “manager”: they did so in their Saunders decision. In Saunders, the Board noted that a narrow interpretation of the managerial exclusion reflected Parliament’s intent and objective to exclude as few people as possible from the Code’s protection. They noted further that, generally speaking, the term “manager” is defined as an individual who is an administrator having the power of independent action, autonomy and discretion.

Was Mr. Peter a Manager?

With this interpretation in mind, the Board analyzed Mr. Peter’s role within his employer’s organization, looking specifically at the nature of the work and duties performed by Mr. Peter, rather than at his position title or rank. Although Mr. Peter worked as a housing “manager”, this is far from determinative.

Mr. Peter’s responsibilities and duties included, among other things:

assisting with manual labour;
working with the head contractor for maintenance and repairs;
providing contractors for maintenance and construction;
assessing and reporting on the conditions of the properties;
identifying and prioritizing maintenance and repair work; and
accounting and bookkeeping duties, such as authorizing purchase orders, monitoring accounts payable/receivable and replacing reserve funds.

The employer also argued that Mr. Peter had final decision-making authority regarding hiring, firing, disciplining and promoting employees. He had signing authority to enter into employment contracts. He was responsible for preparing budgets. It was therefore clear to the Board that Mr. Peter did have some administrative authority. However, the question is not whether there was an administrative component to his role, but whether or not he exercised the degree of independent action, autonomy and discretion necessary to be a manager under the Code.

In Saunders, the Board held that a manager under the Code must exercise a significant degree of autonomy and discretion in decision making regarding matters of policy and overall direction (i.e., not routine issues). This involves having the authority to do more than just make recommendations.

In deciding whether Mr. Peter was a manager, the Board must look at the totality of the evidence. Yes, Mr. Peter had employees reporting to him. He had the authority to hire and fire employees, to discipline and to approve leaves of absence. He prepared the budget for the housing department. Nevertheless, a “substantial proportion” of his duties were operational tasks related to the maintenance, repair and rentals of the employer’s housing. These tasks cannot be said to be administrative.

Although Mr. Peter clearly had some managerial duties, the Board did not believe he exercised the “significant authority, independence and discretion in his functions that is required in order to be considered a manager under section 167(3) of the Code.” Therefore, the employer’s preliminary objection to the Board’s jurisdiction was dismissed.

Just Cause for Dismissal, According to the Saskatchewan Court of Appeal

by Stacey R. Ball| January 25, 2022August 13, 2023 | Cause For Dismissal| | General

In a recently released decision, the Saskatchewan Court of Appeal was tasked with determining whether or not an employer, the Saskatchewan Indian Gaming Authority Inc., had just cause to terminate an employee by the name of Mr. Thomas. In answering this question, the Court of Appeal provided a helpful outline of the legal principles governing just cause terminations.

Why Was Mr. Thomas Fired?

In the summer of 2018, Mr. Thomas was one of three candidates for a promotion to a management position with the employer. By this time, he had already been with the employer for eight years. Unfortunately for Mr. Thomas, he was not selected for the promotion. It went to another candidate – a woman. Upon hearing this news, Mr. Thomas allegedly became “angry and aggressive.” He accused his superior of being a racist and argued that he would have had a better chance of being promoted if he had “cut his own balls off.” In his opinion, the employer’s explanations as to why he was not selected were “bullshit.” The entire ordeal left Mr. Thomas’ superior “quite shaken up” and fearful that Mr. Thomas would follow him to his home.

Mr. Thomas was ultimately fired from his employment on October 22, 2018 with cause, twelve days after his angry outburst.

Trial Judge: Just Cause for Termination

Mr. Thomas disagreed with the decision and filed a Statement of Claim with the Court of Queen’s Bench on November 19, 2021. His claim was dismissed. According to the trial judge, the employer had just cause to dismiss him as a result of the meeting he had with his superior. During that meeting, the trial judge found that Mr. Thomas had “engaged in misconduct that is incompatible with the fundamental terms of the employment relationship.” Mr. Thomas was found to have been insubordinate by threatening and belittling his superior. His conduct destroyed the capacity for he and his employer to trust one another and to work together, two aspects that are fundamental to continued employment. In the end, the employer had just cause to terminate Mr. Thomas without notice or severance pay.

On Appeal: Termination Upheld

The Saskatchewan Court of Appeal was tasked with deciding whether or not the trial judge had erred in finding there had been just cause to terminate Mr. Thomas. In doing so, the Court provided a very useful summarization of the law surrounding just cause. They raised several points, which I will summarize here:

1) Determining whether an employee’s conduct amounts to just cause for dismissal involves a contextual analysis with an eye to proportionality;
2) The key question is whether, in the circumstances, the behavior of the employee was such that the employment relationship could no longer viably exist;
3) Dismissal is warranted when the misconduct is sufficiently serious that it strikes at the heart of the employment relationship;
4) Whether misconduct amounts to just cause for dismissal is a question of mixed fact and law;
5) The particular label attached to the category of misconduct (i.e., whether it be characterized as insubordination or insolence) does not govern the determination; and
6) The applicable standard of review is one of palpable and overriding error, unless an extricable error of law or principle is identified.

In applying these principles to Mr. Thomas’ termination, the Court of Appeal found that the trial judge had made no error in their determination, other than that they likely should have said Mr. Thomas was insolent rather than insubordinate. Nevertheless, the trial judge “kept his focus in the right place, namely, the seriousness of the misconduct and its effect on the continuing viability of the employment relationship.” Therefore, the Court dismissed Mr. Thomas’ appeal and upheld the trial judge’s determination that he had been dismissed for just cause.

Age Isn’t Everything: 61-Year-Old Gets 2 Months Notice

by Stacey R. Ball| January 23, 2022August 13, 2023 | Employment Law| | General

We often think of an employee’s old age as being a very commanding consideration in the determination of reasonable notice periods. After all, it is often more difficult for older employees to find new work, not to mention the stress of having to start over somewhere new late in one’s life. However, in Flack v. Whiteoak Ford Lincoln Sales Limited, a recent decision of the Ontario Superior Court, we see that old age does not always guarantee a lengthy period of notice.

Assessing Reasonable Notice

In determining the proper amount of reasonable notice, the Court turned to the typical test set out in Bardal v. The Globe & Mail. There, it was acknowledged that a determination of reasonable notice must always be decided with reference to each particular case, and considering a number of factors including not only an employee’s age but also their length of service, the character of employment, and the availability of similar employment. Although it is true that like cases should be treated alike, there are often good reasons for distinguishing between similar cases such as to arrive at different conclusions. The Bardal factors are not exhaustive, and the weight allocated to each may vary.

In this case, the employee at issue was an older employee, being 61 years’ old at the time of his termination. However, he had only been with the employer for 9 months, meaning his length of service was relatively short. He was working as a Finance Manager at the employer’s car dealership, but was responsible for selling financial products as opposed to the cars. His salary in this position was $156,000 per annum (although he worked less than a year). These are the factors the Court had to consider in determining reasonable notice, although his age and length of service were perhaps more central than any other factors.

Length of Service

The employee, aware that his 9 months of service was a rather short period of time, attempted to argue before the Court that short service employees have, in recent years, attracted lengthier notice periods. Unfortunately, the Court disagreed. In the Court’s view, an employee’s length of service indicated the degree of investment employer and employee have made to each other. The Court noted that the employee, prior to working with the defendant employer, had three other positions of a relatively short duration. This appeared to support the employer’s assertion that their industry is characterized by a fluid job market, where turnover occurs relatively frequently. In cases such as this, where the employee’s short length of service suggests low investment in the employer, the employer will have less of a responsibility to assist the employee while they search for alternative employment.

The Court noted that the employee was not enticed away from a long-term employer, or from a position where he enjoyed significant job security. If that had been the case, then the investment the employee had made would have been greater, and thus the employer would have owed the employee more. This was not the case here. His length of service, therefore, favoured a shorter period of notice.

Age of the Employee

Could the employee’s short length of service be offset by his more senior age? According to the Court:

“It cannot be said that older employees are for that reason alone entitled to a greater notice period than younger employees. Indeed, there are very strong policy reasons that would militate against such a principle. Such a principle would quickly become a self-fulfilling prophecy. If hiring older employees brings along greater risk and greater commitment to a potential employer, the rational employer will discount applications from older employees in favour of younger ones unless other advantages outweigh that additional risk.” (emphasis added).

Therefore, the simple fact that an employee is older will not guarantee them a longer notice period. Even when considering the age of the employee, you must evaluate the weight to be given to that factor on a case-by-case basis. Here, the employee’s age was not prohibitive of his reemployment. For that reason, his age did not automatically attract a greater notice period because it did not make it more difficult for him to secure alternative employment.