Thoughts from a Management Lawyer

Organ Donor Leave in Ontario

The Legislature has passed Bill 154 (Employment Standards Amendment Act (Organ Donor Leave), 2009).  The Bill will provide unpaid job-protected leave for employees who donate certain organs to another individual.  There is a short News Release discussing the Bill.  The Ontario Government has also developed an Organ Donation Strategy.

Bonus Calculation on Termination in a Recession

An issue that has arisen of late if how you calculate "bonus" on termination in a recession.

Assuming that a bonus is non-discretionary or has become non-discretionary in one way or another, Courts will often include some component of bonus through the period of reasonable notice.  They are generally called upon to assess what the employee likely would have received as a bonus had he or she remained at work through the period of reasonable notice. 

There is no science to this.  One common method is for the court to take an average of the bonus that the employee received in a number of years (say 3) preceding the termination and use that average as a basis for calculating the bonus through the period of reasonable notice.  On that theory, the past is an indicator of the future ("if you received an average bonus of $10,000 over the past 3 years, then we should expect that you will receive a bonus of $10,000 this year").

However, it seems that this analysis yields (potentially yields may be the better way of putting it) an inflated bonus calculation during a recession.  In a recession, the past may not be an indication of the future and, indeed may overcompensate an employee through an overestimation of the bonus that he or she likely would likely have received through the notice period.

If the purpose (or one of them) of the reasonable notice period is to put the employee in the position he or she would have been in had he or she remained at work through the period of reasonable notice (rather than being terminated immediately), then maybe a better indicator or predictor of future performance relative to bonus is what's happening at the time of the termination or in the more recent past rather than by taking an average which includes significant bonus income earned and paid when economic and business times were very different than they are today. 

Just a thought. 

CAW Reaches Tentative Deal with GM

After what was a long complicated and intense negotiation, the CAW and GM have reached a tentative agreement.  Ratification meetings will be held on May 24 and 25.  This follows the tentative agreement entered into between the United Auto Workers Union and GM late last week. 

Affidavits on Judicial Review

Parties will sometimes seek to have a decision of a labour arbitrator overturned through judicial review.  In Ontario, the application is heard by the Divisional Court.  The application is supported by a "record" that includes, for example, the decision, exhibits that were admitted before the arbitrator.  Affidavits are used.   

But how far can the affidavits go?  The issue was recently considered by the Ontario Divisional court in 142445 Ontario Limited (Utilities Kingston) v. International Brotherhood of Electrical Workers, Local 636. 

The leading case on the admissibility of affidavit evidence is Keeprite Workers’ Independent Union v. Keeprite Products Ltd. (1980), 29 O.R. (2d) 513 (Ont. C.A.).  The employer argued that there was no evidence before the arbitrator to support a finding that the grievor had admitted throwing coffee in the face of another employee.  Affidavit evidence was filed to show that there was no evidence to support that finding. The Court allowed the affidavits to come before it in order to show that there was "no evidence" before the arbitrator.

The evidence could also be admitted to show that the arbitrator, in rendering his/her decision, acted without jurisdiction.

The Court of Appeal was quick to dissuade parties from thinking that affidavits to supplement the record was the norm rather than the exception.  The Court held that such instances were "exceptional" and "rare".

In 142445 Ontario Limited (Utilities Kingston) v. International Brotherhood of Electrical Workers, Local 636 the employer brought a judicial review application and, in its materials filed in support of the application, was included an affidavit of an associate of the Employer’s counsel at the hearing.  The Court described the affidavit: 

Her affidavit appended some documents which had not been before the arbitrator.  More importantly, it included, as Exhibits A through H, typewritten copies of notes made during five days of the hearing, either by Ms. Seal or by Employer’s counsel or a law clerk.  The notes were redacted to remove privileged material.

The Union brought a motion to strike the notes and the documents that were not before the arbitrator. The judge hearing that motion struck out the portions of the affidavit dealing with the documents, but not the notes stating as follows:

For the reasons that follow, I find that the affidavit evidence is essential to the Applicant’s argument that a jurisdictional error has occurred and in the absence of a transcript, it is reasonable to put the affidavit containing notes of the evidence submitted at the hearing before the reviewing court.

The Union brought a motion to vary the motion judge's order.

Though the employer argued before the Divisional Court that Keeprite should not be followed, the court rejected that argument and held that the employer had not brought itself into the "rare" case that justified supplementing the record through the inclusion of hearing notes.  The Court noted the practicalities:

 One of the purposes of administrative tribunals is to provide an expeditious and inexpensive method of settling disputes.  Often, these proceedings are much less formal than judicial proceedings.  In keeping with this objective, a number of tribunals do not transcribe their proceedings – for example, the Ontario Labour Relations Board, the Human Rights Tribunal of Ontario and labour arbitrators under the Labour Relations Act.

If extensive affidavits can be filed on applications for judicial review in order to permit parties to challenge findings of fact before such tribunals, there would be a significant incentive for parties to seek judicial review since they could then attempt to reframe the evidence that was before the arbitrator.  As a result, the process of judicial review is likely to be more prolonged and more costly.

Moreover, there may be real difficulties in trying to recreate the evidence before the tribunal, where the parties have conflicting views as to what has been said.  Where there is a dispute about the evidence, the reviewing court will be put in the unfortunate position of trying to determine what the evidence was before the tribunal in order that it can then decide whether the decision was unreasonable.   Such a process is unfair to the administrative tribunal and undermines its role as a fact finder in a specialized area of expertise.    

The Court found that the motions judge had misapplied Keeprite which remains the law in Ontario.

What is the Scope of a Grievance?

The Newfoundland and Labrador Court of Appeal considered this in Newfoundland and Labrador Association of Public and Private Employees v. Canada.  In this case the arbitrator decided that a grievance that stated that it related to “suspension” of an employee,  could, nonetheless, be interpreted to include the termination of the employee.  The arbitrator decided that, in the event that he was wrong, the employer had, in any event, waived its right to object to the defect in the statement of the grievance.

Grievances are often drafted on the fly by lay people and a certain amount of latitude has generally been given to unions when they file their grievances.  That being said, the latitude is not unlimited.  In this case, the grievance simply provided that "Article 13.01 ‘B’.  ‘Suspension With-out Just Cause’".

The Trial Division concluded that the arbitration award be set aside " insofar as it refers to termination of the Grievor’s employment". 

The Court of Appeal held that the "standard of review that should have been applied to the arbitrator’s decision is reasonableness regarding the scope of the arbitration and correctness regarding waiver."  With respect to the scope of the grievance, the Court concluded:

1. Labour relations problems will be exacerbated if arbitrations are won or lost on the technicality of form.  As such, it is important to look for the “real as opposed to the ostensible grievance.”
2. To the greatest extent possible, a grievance should not be won or lost on the technicality of form, but on its merits.
3. Sometimes a "liberal" interpretation of the grievance form is required to get at the substance of the dispute.

The Court of Appeal disagreed with the Trial Division and held that the arbitrator had acted reasonably in defining the scope of the grievance as he did and in the approach he had taken (looking at the context and the surrounding circumstances) in doing so. 

Although the court agreed with the trial judge to the effect that the arbitrator had applied the wrong test regarding waiver, it was unnecessary for the court to consider that and its effect given its conclusion that the trial judge had properly defined the scope of the grievance.

What does this mean?  I suppose that an employer should not leave the matter to chance.  If it has concerns regarding the scope of the grievance it should raise its question at the earliest opportunity.  The case is an affirmation of the general belied that substance will override the form. 

Social Networking Sites and the Courts

An interesting post over at Workplace Privacy Counsel about the ethical obligation of counsel where a witness maintains a social networking site such as Facebook where they have limited access to "friends".  According to the post:

An attorney who is not on the user’s “friends list,” in theory, could effectively circumvent the user’s gatekeeping by asking a third party to send a friend request to the user. Many social networking users are not particularly selective when it comes to making “friends.”

The way in which you proceed to gain access to the information on a Facebook or other social networking site could raise issues.  It's an interesting discussion without doubt particularly in light of recent case law dealing with the disclosure of an individuals social networking activities in the context of litigation. 

There's a more recent endorsement of Master Haberman on April 14, 2009 about whether a plaintiff should deliver a Supplementary Affidavit of Documents including relevant Facebook production.  The motion was brought less than a month before trial and the motion was dismissed in the circumstances.

Forced to Into Self-Employment?

I have previously written about the April 2009 Labour Force Survey.  According to the CLC, "many Canadian workers were forced to turn to self-employment in April 2009 as a means of surviving the economic crisis".  They have done so because they "can't find jobs or get Employment Insurance".  And there are renewed calls for EI reform, which I get.

Why use the word "forced"?  I don't want to get into semantics, but for some people (not all) the better word might be "chose".  Possibly a choice through circumstance, but choice nonetheless (Going it Alone in Recessionary Times?). Small businesses can become great success stories (again, not all, but some).  I suspect that out of this recession will come some really innovative companies, products and services that we might not have seen had the economy kept chugging along at the pre-recessionary pace.  Have a read of Why Small Companies Will Win in This Economy:

Small companies with low overhead, reliable owners, a small number of committed employees, personal client relationships, and sustainable business models that drive a reasonable profit are the great opportunity of our time.

(I get that the article speaks to "small companies" not necessarily "self-employed" but, who knows, today's self-employed is tomorrows small company and then, who knows?).

Expectation of Privacy and the Work Computer

Does an employee have a reasonable expectation of privacy in data stored on the work computer?  I recently touched on this in a presentation at the Osgoode Professional Development seminar Employment Law 2009 Proactively Managing Legal Risk in Challenging Times Employment Law where I spoke about Effectively Managing the Use of Technology and Company Property.

Dan Michaluk writes a Case Report – Ont. SCJ says no expectation of privacy in data stored on work computer where he reviews the recent case of R. v. Cole.  Head over to Dan's blog for a detailed discussion of the case.

A "Cone of Silence" in the Office

Do you remember Maxwell Smart of Get Smart fame?  The cone of silence?

There were no secret conversations. Times have changed and the New Scientist reports that now the 'Cone of silence' keeps conversations secret. According to the article:

"In increasingly common open-plan offices, the violation of employees' privacy can often become an issue, as third parties overhear their conversations intentionally or unintentionally," the inventors say in their patent.

Their aim is to relieve people of that concern. Instead of plastic domes, they use a sensor network to work out where potential eavesdroppers are, and speakers to generate a subtle masking sound at just the right level.

Going It Alone in Recessionary Times?

The April Labour Market Survey noted that "Employment grew by 36,000 in April, the result of an increase in self-employment" and I just saw in the Globe an article about how many terminated or laid-off employees have turned their backs on the corporate world in favour of taking their destinies into their own hands.  Here's a quote that's reflective of the sentiments of those interviewed for the article:

As new franchisee Michelle MacPhie said, she would rather jump out of bed to answer her home business phone at midnight than let someone else dictate whether she has a job.

Out of the changes brought about by the recession comes great opportunity for many.

Have a read of Scott Pennington's paper The Opportunity for Entrepreneurship in Ontario where he notes, in a similar vein, that:

No matter the sector, it is unlikely that an individual can rely on a single firm to provide stable employment for an extended period of his or her working life. We have developed inbuilt assumptions about work being tenuous and impermanent; and as a result we tend now to talk more about work experience and resume-building, rather than developing a singular career.

For many workers this lack of stability has had negative consequences. This is particularly the case for those who have relied on the same job for the same firm for many years, or even decades. In the new economic environment, such singular loyalty can be a liability rather than an asset if workers have not developed a broad set of applicable skills and competencies.