Thoughts from an Employment Lawyer

Unfettered Right to Terminate a Fixed Term Contract Requires Good Faith and No Mitigation

There's a new blog post Unfettered Right to Terminate a Fixed Term Contract Requires Good Faith and No Mitigation at Fitzgibbon Workplace Law Journal.

Another Termination Clause Bites the Dust

My new blog post is up at the Fitzgibbon Workplace Law Journal dealing with another contractual termination clause.  This time, the clause was found to be unenforceable.  The post is Another Termination Clause Bites the Dust.  

Request for List of Employees - Application Dismissed

My new post Request for List of Employees - Application Dismissed is up at the Fitzgibbon Workplace Law blog.  Over the coming weeks/months, I'll be posting less here (as you've seen if you follow this blog) and more there.

Just Cause, Proving Your Case and Marijuana

My new article is up at Fitzgibbon Workplace Law entitled Just Cause, Proving Your Case and Marijuana.  

Obtaining a Stay of an OLRB Decision at the Divisional Court - What's the Test?

My new post Obtaining a Stay of an OLRB Decision at the Divisional Court – What’s the Test? is up at Fitzgibbon Workplace Law.   

New “Equal Pay" Sections of Bill 148 Come into Force on April 1, 2018

Most of the amendments to the Employment Standards Act, 2000 introduced by Bill 148, Fair Workplaces, Better Jobs Act, 2017 came into force on January 1, 2018 or earlier.  However, a significant and controversial amendment dealing with “equal pay for equal work” come into force on April 1, 2018, and employers are nervous both about the implications of this amendment and how to deal with it.

For decades, the ESA has provided that men and women performing “equal work” had to receive “equal pay”.  The Pay Equity Act was enacted to broaden this protection by, among other things, introducing the concept of “value” into the mix.

Bill 148 (and the ESA) will provide (effective April 1, 2018) that casual, part-time, temporary and seasonal employees the same wages as full-time employees when:

(a)  they perform substantially the same kind of work in the same establishment;
(b)  their performance requires substantially the same skill, effort and responsibility; and
(c)  their work is performed under similar working conditions

This will not apply when the difference in the rate of pay is made on the basis of,

• a seniority system;
• a merit system;
• a system that measures earnings by quantity or quality of production; or
• any other factor other than sex or employment status.

As you can see, similar but not-identical positions may still trigger the requirement for equal pay under Bill 148.

The Ministry of Labour puts it this way:

It will be mandatory for employers to pay:

(a)  casual, part-time, temporary and seasonal employees, who are doing substantially the same work as full-time/permanent employees, the same rate of pay as full-time/permanent employees

(b)  temporary help agency employees (also known as assignment employees), who are doing substantially the same work as employees of the client, the same rate of pay as employees of the client

In terms of process, an employee who believes that their rate of pay does not comply with the ESA may request a review of their rate of pay from their employer , and the employer will,

• adjust the employee’s pay accordingly;
• if the employer disagrees with the employee’s belief, provide a written response to the employee setting out the reasons for the disagreement.
• not reduce the rate of pay of an employee in order to comply with this obligation.

The employer is required to respond to the employee who requests a review of their rate of pay in writing.  There is no direction on what this response must entail, however, where the employer determines that a wage adjustment is not required, the response would, presumably, tie into the exceptions found in the ESA.  If the employee is not satisfied with the employers’ response, a complaint would lie under the ESA.  Employers should ensure that they are able to justify differences in pay between employees in various classifications, doing substantially the same work at the establishment, and be prepared to explain these differences, in writing, in accordance with the new ESA requirements.

The Scope of Documentary Production at Arbitration

An arbitrator in the fairly recent case of ALPA Pre-engineered Panels Inc v Liuna, Local 183, 2017 CanLII 66945 (ON LA) considered the scope or breath of documentary production in an arbitration hearing under a collective agreement. There is some debate in the case law.

In the civil process, the Rules of Civil Procedure require pleadings, the discovery of documents, and oral and written discovery of the opposite party. This is not the case in arbitration proceedings under a collective agreement, although the grievance form does, to some degree, set out the scope dispute and the grievance procedure should further clarify the positions.

It is generally accepted that the test for production of documents in an arbitration hearing is arguable relevance, meaning that a party is required to produce, upon request, any arguably relevant documents in its possession save and except for privileged documents. In saying this, in West Park Hospital v. O.N.A., [1993] O.L.A.A. No. 12 (Knopf) applied a narrow approach and stated:

However, where the disclosure is contested the following factors should be taken into consideration. First, the information requested must be arguably relevant. Second, the requested information must be particularized so there is no dispute as to what is desired. Third, the Board of Arbitration should be satisfied that the information is not being requested as a "fishing expedition". Fourth, there must be a clear nexus between the information being requested and the positions in dispute at the hearing. Further, the Board should be satisfied that the disclosure will not cause undue prejudice.

A broader approach was adopted in Toronto District School Board and C.U.P.E. 4400, (2002) 109 L.A.C. (4th) 20 (Shime) where the arbitrator considered and compared the judicial approach to production in civil and criminal proceedings to that of arbitration, and held that:

All documents which are arguably or seemingly relevant or have a semblance of relevance must be produced. The test for relevance for the purposes of pre-hearing is a much broader and looser test than the test of relevance at the hearing stage. A board of arbitration, at the pre-hearing stage, is simply not in a position, and ought not to lay down precise rules as to what may be relevant during the course of the hearing.

The issue of production of documents at arbitration was most recently considered in ALPA Pre-Engineered Panels Inc. where the West Park approach was found to be most appropriate. In coming to this conclusion, Arbitrator Gee relied on the following comments from Arbitrator Stout in Amalgamated Transit Union and Toronto Transit Commission, 2016 CanLII 87623 (ON LA) where the arbitrator considered the reduced scope of production under amendments to the Rules of Procedure and their impact on production in labour arbitrations:

While I feel that the TDSB, supra, liberal approach is no longer appropriate, I am also not convinced that a test based strictly on relevance is the answer. I am of the view that some component of discovery must be recognized and arbitrators must exercise their discretion in a balanced and reasonable manner to ensure that the parties receive a fair but expedited hearing. I also appreciate that the production of documents can sometimes lead to discussions to resolve the matter. However, document production should not be a license for a party to engage in a fishing expedition to determine if they have a case. Rather, document production, should assist the parties in organizing their case so that it may be heard in the most expedited manner.

I am of the opinion that the West Park, supra, approach of Arbitrator Knopf is a more balanced, practical and pragmatic approach to the issue of production. This approach recognizes an element of discovery, but also places limits on broad requests that can cause delay and unnecessary costs.

I agree and adopt the approach of Arbitrator Knopf in West Park, supra, with the added element of proportionality, which I believe is essential to providing the parties with a fair and efficient hearing.

The case is important when dealing with requests for production of documents in arbitration proceedings. Production of documents should assist in “organizing their case” not in determining if they have one. While arbitration is a less formal process than courts, it is nonetheless critical to the sanctity of the process to ensure that rules are in place that recognize the unique features of arbitration while ensuring fairness to all concerned.

Anticipatory Termination of Employment Proves Costly

Please have a read of my new blog post on the Fitzgibbon Workplace Law blog.  The post is entitled Anticipatory Termination of Employment Proves Costly and discusses a unique claim for wrongful dismissal (along with some other employment issues).

Fired For Social Media Activity? It Happens

Reading a recent BBC article entitled I lost my job over a Facebook post - was that fair? I was reminded of two things.

1. How misunderstood social media continues to be as it relates to the workplace; and
2. That terminations and litigation takes a personal toll on those involved.

The case that is the subject of the article comes to us from the U.K. and although in the circumstances of that case, the termination was set aside, the fact is that there is a growing body of Canadian cases dealing with terminations for social media posting (whether on Twitter, Facebook, blogs or other platforms).  I've spoken on this topic a few times over the years including as a Facilitator at the Law Society of Upper Canada's Advanced Roundtable in Employment Law and at the Lancaster House, Labour Arbitration Conference.  I also deal with it in my employment law class at the University of Toronto.  It always fascinates me to hear the varying points of view on the topic, not the least of which is "what I do and say in my personal life is my own business".  To a point that's true, of course, but only to a point.

It is clear that an employee’s off-duty conduct can be cause for dismissal where it adversely impacts on the workplace or prejudices the employer's business interests or reputation.  The first direct Facebook firing case in Canada is Lougheed Imports Ltd. (West Coast Mazda) 2010 CanLII 62482 (BC LRB) which was an unfair labour practice complaint under the British Columbia Labour Relations Code. The Board noted, that while employees have a right to express their opinions “about work related issues” those expressions may have consequences within the employment relationship.”

In Canada Post Corp. (Discharge for Facebook Postings Grievance) [2012] C.L.A.D. No. 116 (A. Ponak) the Arbitrator observed:

There is ample case law that supports the principle that what employees write in their Facebook postings, blogs, and emails, if publicly disseminated and destructive of workplace relationships, can result in discipline…

The Arbitrator upheld the penalty of termination imposed by the employer.  In doing so, the arbitrator commented:

The current case is unprecedented in the repeated mockery, the threatening language, the vile insults, and the debasement of an identifiable manager. Nor are the postings a momentary lapse, perhaps carried out in a short-lived fit of rage. They take place over more than a month on multiple days.

Arbitrator Laura Trachuk in Tenaris Algoma Tubes Inc, 2014 CanLII 26445 (ON LA), a case in a unionized workplace involving a termination over allegedly inappropriate Facebook post, noted:

It is well-established that inappropriate Facebook postings can result in discipline or discharge, depending upon the severity of the postings. The nature and frequency of the comments must be carefully considered to determine how insolent, insulting, insubordinate and/or damaging they were to the individual(s) or the company. In some cases, the issue is whether the comments were so damaging or have so poisoned the workplace that it would no longer be possible for the employee to work harmoniously and productively with the other employees or for the company.

A discharge was also upheld in Corner Brook Pulp and Paper Limited, 2013 CanLII 87573 (NL LA) for comments made on Facebook.  The Union in this case did not deny that the comments were made and that some discipline was warranted.  The Union argued that the discipline imposed by the employer (termination) was too severe in all of the circumstances.  The Arbitrator disagreed.

The employer was found not to have proven just cause for termination of two employees and the terminations were overturned in Air Canada, 2016 CanLII 80470 (ON LA).  In that case, the Union’s negotiation committee and Air Canada reached a ten-year tentative agreement and the agreement was put out for ratification by the membership which commenced on November 7, 2015 and closed on November 17, 2016.  The collective agreement was ratified by a small margin.

During the ratification process, one employee published a bulletin entitled New Horizons which he distributed, on request, to colleagues. Two of the New Horizons bulletins included commentary on labour relations matters and a proposed tentative collective agreement negotiated between the Union and the Air Canada. The employee was terminated for publishing this bulletin.

The other employee posted an essay he had written to Facebook and contributed it to New Horizons.  The essay included commentary on labour relations matters and a proposed tentative agreement negotiated between the Union and Air Canada.  This employee was terminated for publishing the essay.

The employer argued that the employees violated a number of policies, including its Code of Conduct and Social Media Guide.

However, at the first day of hearing, the employer "conceded that it did not have cause to terminate either grievors’ employment and agreed to reinstate both grievors with full back pay and without loss of seniority. In addition, it agreed to expunge the discipline from the grievors’ files."  That should have ended the matter, but both the Union and employer asked the arbitrator to decide the issue of "freedom of expression".  Specifically, communication with respect to collective bargaining and labour relations matters.

The Supreme Court of Canada in Pepsi-Cola Canada Beverages (West) Ltd., 2002 SCC 8 (CanLII),discussed freedom of expression in a unionized workplace:

[L]abour speech engages the core values of freedom of expression, and is fundamental not only to the identity and self-worth of individual workers and the strength of their collective effort, but also to the functioning of a democratic society. Restrictions on any form of expression, and particularly expression of this gravity, should not be lightly countenanced.

Arbitrator Davie then observed:

Union members are permitted to discuss labour relations matters. That discussion may even be critical of the Employer. Freedom of expression is a fundamentally important right in the context of industrial relations, and arbitrators must be concerned that it is not improperly confined by rules or by the imposition of discipline

The Arbitrator found that the essays would not bring "serious discredit to Air Canada or to be a violation of its social media guidelines or of its Code of Conduct."

Ultimately, the grievances were upheld as the employer did not have just cause to terminate the grievors’ employment.

These are just a sampling of the cases.  There are many others.

Social media sites are sometimes used by employees to publicly air their frustrations about their employer and/or co-workers.  Social media can also be used to disclose confidential or proprietary business information.  Employees can engage in harassment or bullying of co-workers or customers through their social media activities in breach of statutory and other obligations. Reputations and lives can be changed in an instant.  As such, employers should clearly communicate their expectations regarding proper social media behaviour and the consequences of failing to comply with these expectations, and remind employees that what they say can have a negative impact on their employment.

Rushing to Judgment Proves Costly in a Just Cause Termination

Another day another employment case where the Court awards exceptional damages (in this case aggravated damages). The case involved an employer who terminated an employee, ostensibly for just cause following an investigation. The employer withdrew the allegation of just cause on the opening day of trial.  The case is Lalonde v Sena Solid Waste Holdings Inc, 2017 ABQB 374 (CanLII).

In this case the plaintiff was a 62 year old Millwright with approximately 4 years service. Of note is that shortly after his dismissal the plaintiff obtained employment earning close to the hourly wage he was earning while working for the defendant. According to the court, the overall quality of the new employment was lower and he was required to drive long distances to different job sites and perform work that was more physically challenging.

The employer abandoned its allegation of just cause at the trial and, as such, the court turned to consider the issue of reasonable notice of termination which it determined to be in the range of between 4 and 8 months. The court held that 6 months was appropriate.

The court then turned its attention to the damages principles in employment law as set out in the relatively new (and now leading) case of Paquette v TeraGo Networks Inc., 2016 ONCA 618 (CanLII) where the Court of Appeal stated:

The basic principle in awarding damages for wrongful dismissal is that the terminated employee is entitled to compensation for all losses arising from the employer’s breach of contract in failing to give proper notice. The damages award should place the employee in the same financial position he or she would have been in had such notice been given… In other words, in determining damages for wrongful dismissal, the court will typically include all of the compensation and benefits that the employee would have earned during the notice period.…

Damages for wrongful dismissal may include an amount for a bonus the employee would have received had he continued in his employment during the notice period, or damages for the lost opportunity to earn a bonus. This is generally the case where the bonus is an integral part of the employee’s compensation package… This can be the case even where a bonus is described as “discretionary”…. [References Omitted]

I set this quote out at length because it encapsulates the applicable legal principles succinctly and clarifies some misconceptions that some employers have with respect to bonus payments and the default position of courts to include them in damages. The court awarded a bonus component in Lalonde through the reasonable notice period despite the fact that the bonus program included the following:

“employees who are released without cause will be compensated on a pro-rated basis under the Short Term Initiative and under the Long Term Initiative. Any pro-rated payments will be based on the number of months worked in the calendar year with one day worked in a month being considered working in that month.”

The court then considered whether to award aggravated damages and punitive damages. The leading case on these issues comes from the Supreme Court of Canada in Keays v Honda Canada Inc, 2008 SCC 39 (CanLII).

In short, the court can award “damages resulting from the manner of dismissal …. where the employer engages in conduct during the course of dismissal that is “unfair or is in bad faith by being, for example, untruthful, misleading or unduly insensitive.” It is the manner of dismissal, rather than the mere fact of dismissal that can result in damages.

In Lalonde the court considered the fact that the employer had made up its mind to terminate the employee for just cause without consideration of his explanation or request for further information. The Court put it this way:

An internal memo from the Maintenance Manager …. to the HR Manager… ,shows a decision had been made to terminate the Plaintiff; this despite not having any response from the Plaintiff as to the alleged breaches of conduct. The Defendant ignored a letter from an employee … which supported the Plaintiff’s contention that he had done nothing wrong in relation to the alleged lack of supervision of a contract employee. The evidence supports the conclusion that the internal investigation was essentially a sham. [emphasis added]

The decision was a fait accompli and the investigation was simply window dressing. Furthermore, the employer made and maintained its allegation that Lalonde had been terminated for just cause until the first day of trial. Among other things, this resulted in a delay of Lalonde’s Employment Insurance Act benefits.

The Court concluded that:

I am satisfied that the Defendant’s conduct during the course of dismissal was unfair, breached the requirement of good faith and the expectation that both parties to the contract had that the employer would act in good faith in the manner of dismissal.

The Plaintiff has proven that the manner of dismissal caused mental distress, particularly by the Defendant’s actions in attacking the Plaintiff’s reputation at the time of dismissal and representing that there was sufficient cause for dismissal for an extended period of time.

In the circumstances, and following a review of the case law, the court awarded Lalonde $75,000 as aggravated damages. The court did so without the usual requirement of the plaintiff providing expert medical evidence supporting mental distress flowing from the proven conduct of the employer. It refused to award punitive damages because, although the employers’ “actions were clearly insensitive, inappropriate and caused mental distress for the Plaintiff” they were not malicious.

Even more recently, an Adjudicator reminds us of the dangers that flow out of an investigation that is wanting. The case is Thomas v. Shamattawa First Nation [2017] C.L.A.D. No. 203 where the employee had been employed as a Building Healthy Community Coordinator by Shamattawa First Nation. She was terminated on July 24, 2015 for just cause after 20 years of service. At the time of her termination she was 58 years of age.

The problem for the employer was that the “investigation”, such as it was, was found to be a “sham” by the Adjudicator. The Adjudicator put it this way:

…. no one in a position of authority took any steps whatever to investigate the matter further by interviewing the participants, specifically the alleged perpetrator. To the contrary, she was deliberately and systematically shunned and excluded, as was her workplace supervisor. I find that the investigation was a sham, plain and simple, so that no genuine effort was made to get to the bottom of what had actually happened, and as to how seriously it ought to be treated.

Further, in the termination letter there were “no details, no dates, and not even a whiff of a suggestion that any investigation has been conducted”. The employer was unwilling to hear what the plaintiff had to say in reply to the allegations against her, it acted precipitously and hastily. The Adjudicator awarded the employee 40 weeks pay for the unjust dismissal, $10,000 as punitive damages for the embarrassment and suffering which she sustained due to the manner of the handling of the dismissal and the high-handed behaviour of the employer and $9,000 in legal fees.

These cases provide a clear reminder that just cause for termination is tough to prove and should only be alleged in the clearest of cases (at least where there is evidence to objectively support the finding in the individual circumstances). Further, where it becomes clear that just cause for termination is unlikely to succeed, it is better to “eat crow while it is young and tender” rather than pursue the defence until the steps of the courthouse and then withdraw it.