Employment law enjoyed a high profile in 2014, with some of the year’s biggest news stories revolving around legal issues in the workplace. The Cassels Brock Employment & Labour Group has put together a list of our top cases and trends from 2014.
- Family Status Claims Present Challenges for Employers - 2014 saw two Federal Court decisions (Canada (Attorney General) v. Johnstone, 2014 FCA 110 (CanLII) and Canadian National Railway Company v. Seeley, 2014 FCA 111 (CanLII)) rule that child care is included in the protected ground of “family status” resulting in a new test for federal employers. We expect that we will also see it applied at a provincial level. The new test is as follows: 1. the child is under the employee’s care or supervision; 2. the childcare obligations engage the employees “legal responsibility for that child” (as opposed to a personal choice); 3. the employee made reasonable efforts to meet that childcare obligation through reasonable alternative solutions, and no such alternative solution is reasonably accessible; and 4. the workplace rule interferes in a manner that is more than trivial or insubstantial with fulfilment of the childcare obligation. The Federal Court also ruled that in the accommodation process, a complainant must show “that neither they nor their spouse can meet their enforceable childcare obligations while continuing to work, and that an available childcare service or an alternative arrangement is not reasonably accessible to them so as to meet their work needs.” The test, which puts obligations on the employee to seek other arrangements as part of the duty to accommodate, is a welcome clarification of this highly litigated protected ground.
- Protecting Interns and Other Vulnerable Workers - We have observed a significant increase in scrutiny of unpaid internships, both in the media and by the Ontario Ministry of Labour (“MOL”). Between April and June of this year, the MOL carried out inspection “blitzes” targeting employers in industries known to operate unpaid internship programs. The result: 13 of the 31 inspected businesses that had unpaid internship programs were found to be doing so in contravention of the Employment Standards Act, 2000 (the “ESA”) and had orders issued against them. This past year has also seen high profile companies such as Bell cancel their unpaid internship programs amidst pressures and a legislative push in Ontario for greater protections for unpaid interns and other vulnerable workers. The real legal issue here lies with the fact there is a presumption in Ontario that workers are entitled to minimum wage and other basic employment rights, regardless of the title of their position. While there are exceptions that allow for unpaid workers, these exceptions are very limited and are exclusively associated with accredited educational programs or positions that closely mirror educational programs. Unfortunately, the restrictive statutory requirements often go unnoticed by businesses that operate unpaid internship programs. For more on this issue, our most recent elert on the topic of unpaid interns is available here. You can also view our recent seminar presentation on the subject of unpaid interns, independent contractors and short-term employees by clicking here.
- Compliance Concerns are Paramount - 2014 was the year of new regulation and training. New obligations under the ESA, the Accessibility for Ontarians with Disabilities Act and the Occupational Health and Safety Act had some employers scrambling to implement new standards, update policies and posters, and ensure that their employees received appropriate training. We’ve kept our clients up-to-date and have an archive of elerts if you need a refresher. (Please see our recent e-lerts on compliance requirements for the Accessibility for Ontarians Act, 2005, the update to mandatory posting requirements for employers, and getting your workplace ready for new health and safety training requirements.)
- Evolving Arguments on Termination Clauses in Employment Agreements - It is common practice for employees and employers to enter into employment agreements intended to contract out of the common law and limit entitlements on termination to the minimum provided for under the ESA or some other notice period. However, there is no shortage of arguments that have been used by terminated employees to get around these contractual provisions in order to obtain a more favourable common law notice period. Somewhat surprisingly, the case law on contractual termination provisions has continued to evolve in recent years, requiring employers to regularly revisit their standard termination clauses and ensure that they are drafted with precision. For example, in the last few years we have seen the courts take the view that termination provisions that do not explicitly reference a continuation of benefits during the notice period will not be implied to have such meaning, and thus will be set aside for failing to comply with the ESA (as the ESA requires a continuation of salary and benefits during the minimum statutory notice period).
Another troublesome area has been the use of static termination provisions. As the ESA minimums increase depending on the length of an employee’s service, the traditional view has been that - in order to be enforceable - a contractual termination provision must satisfy an employee’s ESA entitlement to notice of termination and severance at any theoretical point in the employment relationship, not just the point in time that the employee is actually terminated. A recent decision of the Ontario Superior Court of Justice, however, suggests some reprieve for employers. In John A. Ford & Associates Inc. v. Keegan, 2014 ONSC 4989, the Court held that a contractual termination provision need only satisfy the employee’s ESA entitlement at the actual time of termination. Accordingly, the common law should only kick in when an employee outgrows the contractual provision through length of service. Further, at that point, an employer and employee are free to enter into a fresh employment agreement to impose a new termination clause, assuming appropriate consideration is exchanged. The John A. Ford decision may be a saving grace for employers with current employees subject to similar termination provisions who are terminated relatively early in the relationship. More broadly, the decision is a positive example of a court giving effect to the mutual intent of a contractual termination provision even though it was not necessarily ideally drafted.
- Enforcing a Notice of Resignation Clause - In early 2014, the Ontario Superior Court of Justice released a helpful decision confirming that employees who wish to resign can be forced to work out their contractual notice periods. In Blackberry Limited v. Marineau-Mes, 2014 ONSC 1790 (CanLII), Justice T. McEwan considered an employment contract requiring Blackberry executive, Marineau-Mes, to provide six months notice of resignation. In December of 2013, in the midst of Blackberry’s well-known difficulties, Marineau-Mes resigned from Blackberry and indicated that he intended to join Apple two months later. Blackberry took the position that the notice was insufficient and applied for a declaration that Marineau-Mes was required to provide six months’ notice of resignation through June 23, 2014. Marineau-Mes took the position that Blackberry’s claim was confined to damages if he started his job with Apple prior to the expiry of the notice period. Damages, of course, would have been very difficult for Blackberry to prove as they aren’t easily quantified. Marineau-Mes also asserted that the resignation provision was contrary to the ESA (as it did not permit the continued accrual of vacation pay) and public policy (as it was effectively a non-competition covenant). The Court rejected Marineau-Mes' arguments in their totality and found the contract to be enforceable. Decisions regarding employees' resignation obligations are a rarity as the resignation period often expires before a court date can be secured. This case is a useful reminder that executives' obligations will be enforced, if employers can get to court in time to do so.
- The Divisional Court Approves an Unusual Remedy by the Human Rights Tribunal - In 2012, a report was published calling for increased financial awards in Human Rights decisions and it seems the Human Rights Tribunal of Ontario (HRTO) (“the Tribunal), may be taking that recommendation to heart. In Fair v. Hamilton-Wentworth District School Board, the Tribunal reinstated an employee to her position with full seniority almost a decade after she had left the workplace and awarded her, among other things, full back pay and $30,000 for compensation for the injury to her dignity, feelings and self-respect. The award, amounting to over $400,000, was far greater than anything typically seen from the Tribunal. The main reason for the quantum, of course, was the Tribunal’s rare exercise of its reinstatement power and the associated back pay award that had accumulated over the years. When this matter was appealed to the Divisional Court this year, it was anticipated that the Court might set out certain criteria applicable to the Tribunal’s exercise of its reinstatement power and overturn the dramatic result in this case. The Divisional Court, however, did just the opposite. In its September 2014, decision on the appeal, the Divisional Court held that the Tribunal has broad remedial authority and that, while reinstatement is unusual, there is no barrier or obstacle to the remedy at law. To read our elert on the decision of the Tribunal, click here. To read our elert on the Divisional Court appeal decision, click here.
- Punitive and Aggravated Damages Continue to Rise - A rare jury trial in an employment law matter resulted in an unusually high award of punitive and aggravated damages. The Court of Appeal later reduced the amount of punitive damages but upheld the overall damage award of over $400,000, finding that the company’s investigation of workplace harassment was inadequate.
- Gender Discrimination Gains a Higher Profile - Gender discrimination issues were in the news a number of times in 2014. Early in the year, York University came under fire after failing to support a professor’s refusal to let a male student be excused from group work with female students on the basis that it would violate the student’s religious practice. In overruling the professor’s decision, York reasoned that since the accommodation would not have a “substantial impact” on the other students, they were required to accommodate the request. A few weeks later, the University of Toronto encountered a similar issue when a student filed a human rights complaint accusing his professor of discrimination after he failed a Women Studies course for not attending classes. The student argued that attending class in person caused him discomfort because it included only female students. The HRTO dismissed the complaint on the basis that that the student’s discomfort was based on his own “personal preference” and did not require accommodation under the Human Rights Code. In other high profile cases involving gender issues, a group of women soccer players have filed a lawsuit against FIFA and the Canadian Soccer Association alleging that the associations are discriminating against women by requiring the 2015 Women’s World Cup to be played on artificial turf, as opposed to the real grass used for men’s tournaments. Similarly, in New Brunswick, a human rights complaint alleging that the University of New Brunswick discriminated against women by eliminating women’s varsity hockey was allowed to proceed after the Board of Inquiry rejected an attempt by the university to have the case dismissed.
- Confidentiality Clauses in Settlements Must be Respected - Employers breathed a sigh at relief when the Divisional Court upheld a labour arbitration award ordering a former employee with 21 years of service to repay an entire settlement amount as a consequence of breaching the confidentiality of the settlement. The case enjoyed a much higher profile than one typically sees with employment disputes because of the parties involved, Jan Wong and her former employer, The Globe and Mail. (Jan Wong v. The Globe and Mail Inc., 2014 ONSC 6372 (CanLII)) The keys to this decision were: 1. that the settlement agreement specifically stated that the employee would be required to repay the settlement if she breached her obligation “not to disclose the terms of this settlement”; and 2. the former employee had independent legal advice throughout the negotiations. The Divisional Court agreed that the former employee’s statements about her termination contained in her book, namely: “I can’t disclose the amount of money I received,”; “I’d just been paid a pile of money to go away,”; “Two weeks later a big fat check landed in my account,”; and “Even with a vastly swollen bank account...” were a complete breach of the settlement agreement and Ms. Wong was required to repay over $200,000 in settlement costs. With the court’s support, these types of repayment provisions should now be included in settlement agreements where appropriate.
- Employees Behaving Badly - From Jian Ghomeshi to Ray Rice to Des Hague, the Vancouver C.E.O. who stepped down from his position after a media furor erupted when he was caught on camera kicking a puppy, the outside activities of high profile employees have been in the news in 2014. These incidents have raised questions about the extent to which employees who are integral to their employer’s brand can say that their bad behaviour is not “work-related.” The Ghomeshi matter in particular has sparked a very public dialogue in Canada about violence against women, harassment in the workplace and the ability of an employer to disassociate itself from an employee whose actions are antithetical to corporate values or to the company brand. As social media continues to bring the private lives of Canadians into the public sphere, we expect that 2015 will bring even more examples of employers making decisions about their employees based on events that take place outside of the work environment.