Firm Announcements

The Firm welcomes our new Associate, Marie-Michèle Pellerin-Auprix. Marie-Michèle recently completed her articles and has been called to the Bar.

 

We are proud to announce that our Partner, Annie G. Berthiaume, has been appointed as Vice-Chair to the Canadian Industrial Relations Board effective January 2015.

Words on Pregnancy and Parental Benefits from the Supreme Court

The case began in February 2011 when the British Columbia Teachers’ Federation filed a grievance against the Surrey School Board, which is represented at the bargaining table by British Columbia Public School Employers’ Association.

In the collective agreement, the Surrey School Board benefits plan provides birth mothers, birth fathers and adoptive parents with 95% of their salary for the two-week unpaid waiting period for Employment Insurance benefits, and 70% of the difference between EI benefits and their salary for an additional 15 weeks of Supplemental Employment Benefits (SEB).

The SEB plan had been interpreted and applied to disallow birth mothers to SEB during their parental leave if they had already been paid out the two-week unpaid waiting period and 15 weeks of SEB during the period of maternity leave.

The Federation argued that the SEB plan was discriminatory against mothers because it failed to provide supplemental employment benefits during their parental leave which was paid out to the birth fathers and adoptive parents.

In April 2011, Arbitrator Hall concluded that the SEB plan, as it applied to parents claiming benefits from the point of pregnancy, breached the substantive equality rights of birth mothers under s. 15(1) of the Charter of Rights and Freedoms and s. 13(1) of the British Columbia Human Rights Code, and could not be justified under s. 1 of the Charter or s.13(4) of the Code.

The Federation’s grievance was upheld and the parties were ordered to engage in a new round of bargaining to work towards remedying the unequal treatment of birth mothers.

The Employer appealed the decision to the B.C. Court of Appeal. In September 2013, the Court of Appeal ruled that the arbitrator had erred and dismissed the Federation’s grievance on the basis that there was no unequal treatment of birth mothers concerning SEBs because:

  • Both birth mothers on maternity leave and persons on parental leave were entitled to the same 15 weeks of SEB as well as payment for a two-week period before statutory benefits became available.
  • Both forms of leave relate to the occasion of an addition of a new member to a family unit.
  • Both types of leave are conducive to the societal purpose of the enhancement of family health and stability.

Accordingly, the Court of Appeal concluded that these leaves had the same common underlying purpose and were treated equally.

The Union appealed this decision to the Supreme Court of Canada. The main issue being whether failing to provide birth mothers with supplemental parental benefits above and beyond maternal leave was discriminatory.

On November 14, 2014 the Supreme Court issued a brief oral decision from the bench simply stating, in full:

“The Court of Appeal erred in failing to give deference to the Arbitrator’s interpretation of the collective agreement and in failing to recognize the different purposes of pregnancy benefits and parental benefits. The Arbitrator was entitled to reach the conclusions that he did and we see no reason to interfere with the remedy. The appeal is allowed with costs and the Arbitrator’s award is restored”.

This decision is worthy of note for employers in Ontario who have similar language in their collective agreements and benefits plans providing SEB. Employers should ensure that the right to SEB during parental leave is equally afforded to birth mothers, birth fathers and adoptive parents to avoid allegations of discrimination.

 

Non-Continuous Service and Reasonable Notice: Cautionary Tale for Employers

In Vist v. Best Theratronics Ltd., the Ontario Superior Court considered the impact of non-continuous service on the calculation of reasonable notice of termination in a non-unionized workplace. The Court held that when determining the appropriate amount of reasonable notice of termination, years of service earned prior to periods of service interruptions will be taken into account.

Margus Vist, a 54-year-old bio-physician brought an action for wrongful dismissal against his former employer, Best Theratronics Ltd. seeking damages for reasonable notice of termination.

The issue before the court was the amount of reasonable notice of termination to which Mr. Vist was entitled. The employment relationship was governed by the Canada Labour Code, Part III, R.S.C., 1985, c. L-.2.

The case revolves around Mr. Vist’s complex employment history:

  • beginning in 1988, Mr. Vist was employed by MDS Nordion and its predecessors on an on-and-off basis;
  • he started at AECL’s Isotope Division, later named Theratronics International Ltd., in 1988. Theratronics International was then succeeded by MDS Nordion;
  • from 1993-1994 he worked for an unrelated company;
  • in 1994, returned to MDS Nordion and worked there until the period of 2003-2007, during which he was a self-employed consultant to MDS Nordion;
  • in 2007, he was once again an employee of MDS Nordion;
  • in 2008, MDS Nordion was succeeded by Best Theratronics, where he worked until his termination.

In total, he had worked for these related companies for sixteen of the past twenty-one years.

In May 2008, Mr. Vist’s employment came to be governed by a written employment contract. The contract ensured his service with the former employer would be recognized and terms and conditions of his former employment would continue. The contract did not include a termination clause.

On May 19, 2009, Mr. Vist notified Best that he wished to leave his position as General Manager and return to his prior engineering role. He received no response to his request until June 17, 2009 when Mr. Vist was handed a notice of termination. Cause for termination was not alleged; accordingly, he was provided with two weeks’ pay in lieu of notice and three weeks of severance pay, which is the minimum pursuant to the Code.

In his wrongful dismissal suit, Mr. Vist claimed nine months of reasonable notice of termination. Best asserted that Mr. Vist’s accrued continuous service with MDS Nordion and Theratronics International was only 2.5 years, thus a lengthier notice period was unmerited. Furthermore, Best argued that Mr. Vist did not attempt to mitigate his damages in a role comparable to the General Manager.

The Court held that as the contract did not include a termination clause, there was an implied term in the contract which provided that in the absence of just cause for termination, he would be provided with reasonable notice of termination or compensation in lieu of notice.

The Court addressed the issue of Mr. Vist’s length of service. The Court found Mr. Vist’s service at Best was interrupted for a “brief” three and a half years. The Court also found that his employment contract with MDS Nordion, which expressly recognized his service date to be January 1, 1993, and his subsequent employment contract with Best, which expressly stated: “Best Theratronics Ltd. will recognize any accrued continuous service with MDS Nordion and its predecessors” were “ambiguous”.

The Court concluded that because his years of service were interrupted and the employment contract was ambiguous on the issue, the total years of service at these related employers could not be “cumulative”. Rather, “some weight” would be afforded to the previous employment period and Mr. Vist would be given “some credit for his past services”, and “treated as a long term employee having given sixteen years of service to the defendant and its predecessors.”

In light of the foregoing, the Court determined that six months is the appropriate reasonable notice for his dismissal.

This decision informs employers governed by the Canada Labour Code that an employee’s prior service can factor into the calculation of reasonable notice, potentially turning a short-term employee into a long-term employee. For the calculation of severance pay, however, twelve months of continuous service is required and multiple periods of employment with the same employer does not have to be considered.

Under the Ontario Employment Standards Act, 2000, when calculating severance pay, multiple periods of employment with the same employer must be considered regardless of the duration of interruption in service and the reasons for the interruption. For the calculation of notice of termination, however, the Courts have considered the length of service relative to the length of the interruption, representations made by the employer and any agreements on the issue.

Legislative Update: Leaves to Help Families Now in Force

In the Summer 2014 issue of EMPlawyers Update, we informed readers about Bill 21, the Employment Standards Amendment Act (Leaves to Help Families), 2013, which amends the Employment Standards Act, 2000 (ESA) to create family caregiver leave, critically ill child care leave and crime-related child death or disappearance leave.

 

Bill 21 came into force on October 29th, 2014. Accordingly, Ontario employers should promptly review their leave policies and procedures to ensure that they reflect these new, statutorily-protected leaves of absence.

Expert Advisory Panel on Occupational Health and Safety Releases 2013-2014 Report

The Expert Advisory Panel on Occupational Health and Safety was created in 2010, in order to conduct an extensive and comprehensive review of Ontario’s occupational health and safety (OHS) system and to recommend structural, operational and policy improvements to that system.

Since its inception, the Expert Advisory Panel has released annual reports to the Ontario Minister of Labour. Following a year-long review, this year’s Panel, which was led by George Gritziotis, Chief Prevention Officer, has now released its report for 2013-2014.

The report highlights accomplishments made by parties across the system, including the Ministry of Labour, health and safety associations, and the Workplace Safety and Insurance Board (WSIB).

As of March 31st, 2014, 18 of the 46 recommendations originally proposed by the Expert Advisory Panel in 2010 had been completed or were ongoing. Of the highest priority recommendations, the following have been completed:

  • the creation of the Prevention Office (being a Chief Prevention Officer and a multi-stakeholder Prevention Council);
  • the mandatory posting of a health and safety awareness posters in all Ontario workplaces;
  • the expedition of the resolution of reprisal complaints under the Occupational Health and Safety Act, as well as increased access to information and support for complainants;
  • the provision of mandatory, online health and safety training for all supervisors; and
  • the establishment of a vulnerable worker task group and a small business task group.

In addition, the Panel reports the entire OHS system is now focusing on addressing the hazards that result in the most occupational injuries, illnesses and fatalities.

The Panel’s report states that, from 2003 to 2013, 15 percent of all allowed traumatic workplace fatality claims arose due to falls to a lower level. In response, the Ministry of Labour has developed an integrated action plan to prevent falls from heights. Part of this plan includes the release of a proposed Working at Heights Training Program Standard, which contains rigorous standards for workers who work in this high-risk field. The Ministry is currently conducting consultations regarding the Program, as well as a proposed regulation that would make the Program mandatory in the construction sector.

The Panel’s annual report also states that, from 2011 to 2013, the WSIB reported 48 allowed traumatic and occupational disease fatality claims from Schedule 1 mining employers while, during the same period, the Ministry of Labour recorded 80 critical injuries in underground mines. The Ministry, along with mining stakeholders and an industry advisory group, has therefore undertaken a comprehensive review of emerging occupational health and safety issues that relate to mining. Following 12 public consultations, the receipt of over 60 written submissions, and the creation of a number of working groups, a final report is expected in early 2015.

Employers need to stay apprised of all occupational health and safety requirements, including those currently in place, as well as those likely to become law in the near future. Given the emphasis placed on occupational health and safety across the entire OHS system, employers must expect to be subject to harsh penalties for any instances of non-compliance.

Loose Lips Sink Ships – Repayment Obligation

The benefit of restrictive covenants, such as a non-disclosure provision in a settlement agreement, was recently underscored in the Ontario Superior Court decision of Wong v. Globe and Mail.

To briefly recount the facts, Jan Wong had been employed by the Globe and Mail for 21 years prior to her termination.  She was on and off work for months at a time due to depression. The employer ordered her return to work, despite Wong contending that she was unable to work.  When the applicant did not return to work as directed, her employment was terminated.

As a consequence of the termination, grievances were filed. The parties settled the grievances pursuant a Memorandum of Agreement (the “MOA”) whereby the Globe and Mail agreed to pay the applicant a lump sum representing sick leave entitlements and two years’ salary in the amount of $209,912.00.

The MOA also contained provisions regarding confidentiality and non-disparagement, and the related consequences of any breach of those provisions by Ms. Wong:

Should the Grievor breach the obligations set out in paragraphs 5 and 6 above, Arbitrator Davie shall remain seized to determine if there is a breach and, if she so finds, the Grievor will have an obligation to pay back to the Employer all payments paid to the Grievor…

Subsequent to the MOA, Ms. Wong wrote and published a book entitled “Out of the Blue” about her experience with depression in the workplace. In response, the employer sought a determination that twenty-three phrases of the book breached the MOA’s confidentiality provision and an order that the applicant forfeit and repay the settlement funds. The employer’s application was successful as Ms. Wong was found to have breached the confidentiality provision of the MOA. As a consequence of that breach, an arbitrator had ordered Ms. Wong to repay the settlement funds.

Ms. Wong applied for judicial review. The Court provided an analysis of the merits of the case even though it concluded that Ms. Wong did not have standing to bring the application for judicial review as she was a unionized employee. The Court applied the standard of reasonableness to the arbitrator’s decision on whether there was a breach of the MOA. It disagreed with Ms. Wong’s submission that she did not breach the MOA because she understood that she could speak about the terms of the settlement as long as she did not reveal the actual amounts paid on the following grounds:

  • Generally speaking, evidence of the subjective understanding of the parties as to the meaning of a contract is not admissible for purposes of interpreting the document.
  • The confidentiality provision was clear and unambiguous that the “terms of the settlement” could not be disclosed.

The judge dismissed the employee’s application for judicial review, and ordered her to pay costs of $15,000 to each of the union and the employer.

For employers, the disclosure of the terms of settlement has ample consequences in the case of future employee termination but also, exposure to the scrutiny of the public. This decision serves as a reminder that non-disclosure provisions in settlement agreements are important. Essentially, when the agreement is unambiguous and is executed with informed consent, without any apprehensions as to the capacity of the parties, a non-disclosure provision can serve to protect important business interests.

Quebec Employer Not Permitted to Waive Employee Notice of Resignation

The Supreme Court of Canada has ruled that an employer who receives notice of resignation from an employee cannot terminate the contract of employment before the notice period expires without providing notice of termination or pay in lieu thereof.

In a prior edition of EMPLAWYERS’ UPDATE, we informed our readers of the Quebec Court of Appeal’s decision in Quebec (Commission des normes du travail) v. Asphalte Desjardins Inc. This is the case of Daniel Guay, who on February 15, 2008, advised his employer, Asphalte Desjardins Inc., that he would be leaving its employ and moving to a competitor on March 7, 2008. Failing to dissuade him from resigning, the company terminated his employment on February 19, 2008.

The Quebec Labour Standards Commission successfully brought an action, on Mr. Guay’s behalf, claiming three weeks’ pay in lieu of notice of termination and vacation pay, pursuant to Quebec’s An Act Respecting Labour Standards (the “Act”), which corresponded to his notice of resignation. Shortly thereafter, the decision was overturned by the Quebec Court of Appeal.

On appeal to the Supreme Court of Canada, the Court allowed the appeal, restoring the prevailing jurisprudence which generally requires an employer to provide notice of termination when ending the employment relationship in advance of an employee’s declared resignation date, pursuant to section 82 of the Act. Also pursuant to the Civil Code of Québec (“the Code”), both the employer and employee must provide notice of termination. The Court’s decision was founded on the interplay between the Code and the Act, and the harmonious interpretation of both laws.

Asphalte Desjardins had argued that its termination of the employment relationship in advance of the resignation date was simply a renunciation of its right to notice of resignation. Justice Wagner, writing for the majority, rejected this argument on the basis that although, renunciation of contractual rights by one party relieves the other party from performance of its obligations, it would be unequivocally “inappropriate” and an “unacceptable fiction” to apply this construct in the present context.

The Court further noted that while the Code does not provide an employer with the right to obtain pay in lieu instead of working notice of resignation, in the manner that an employee may, it also does not provide the employer with the right to waive or renounce notice of resignation. If the employer no longer wishes to have the employee in the workplace subsequent to the employee’s provision of notice of resignation, the employer must provide pay in lieu of notice.

In addition, however, the Court noted that the provisions of the Act and the Code would not apply to instances where termination of contract flows from an agreement between the parties.

Employers in Quebec should take note that the Supreme Court of Canada has ruled that an employer is prohibited from terminating a departing employee during the notice of resignation period without providing notice of termination or pay in lieu thereof. In other words, an employer who terminates an existing employment contract is liable for notice of termination, regardless of whether the employee has announced a resignation date. The same law applies in Ontario.

Overtime Class Action Settlement Approved

In previous editions of EMPLawyers’ Update, we chronicled the developments of multi-million dollar class actions for withheld or underpaid overtime hours filed against various national banks. For the Bank of Nova Scotia, this saga may be nearing its end, as on August 12, 2014 Justice Belobaba of the Ontario Superior Court of Justice approved a settlement proposed by the parties.

This all began in December 2007, when a class action lawsuit was commenced against the Bank on behalf of certain full‐time retail branch employees. The lawsuit claimed that the Bank had failed to pay overtime compensation to entitled employees, resulting in financial damages in the form of lost overtime wages.

The lawsuit was certified as a class proceeding in 2010, and the certification was upheld on appeal by the Ontario Divisional Court and the Court of Appeal, with leave to the Supreme Court of Canada being denied in 2013.

In Justice Belobaba’s written decision, he approved the settlement which includes the following terms and conditions:

  • employees claiming unpaid overtime must submit their claim to the Bank by October 15, 2014;
  • employees may claim unpaid overtime for the period of August 12, 2014 retroactive nine or thirteen years, depending on the province in which the employee worked;
  • the Bank will review the claim, decide to pay the claim or reject it, and will provide reasons for doing so;
  • employees who are dissatisfied with the Bank’s decision on a claim may appeal to an independent arbitrator as part of a streamlined arbitration process;
  • the Bank will ensure that no employees are subject to any reprisal; and,
  • the Bank’s managers and supervisors will not contact claimants nor discuss the claim.

The Court held that the proposed settlement is “fair and reasonable and in the best interests of the class”.

Mental Stress Legislation Deemed Unconstitutional

In a recent decision, the Workplace Safety and Insurance Appeals Tribunal determined that the Workplace Safety and Insurance Act, 1997 and Workplace Safety and Insurance Board (WSIB) policy eligibility requirement of “sudden traumatic onset” of mental stress is in violation of the Canadian Charter of Rights and Freedoms.

This controversial ruling arose from an Appellant nurse’s account of harassment and bullying which she suffered at the hands of a fellow employee for over twelve years. She also explained being re-victimized when she was effectively demoted after reporting the incidents to a team lead. As a result, the nurse explained that she was unable to continue working and was eventually diagnosed with an adjustment disorder with mixed features of anxiety and depression.

The Appellant filed a workers’ compensation claim for mental stress. The claim was denied on the basis that she did not have “an acute reaction to a sudden and unexpected traumatic event” as required by sections 13(4) and (5) of the Act and the WSIB’s Operational Policy Manual on Traumatic Mental Stress.

On appeal before the Tribunal, the Tribunal identified the issue to be decided as whether the Act and the Policy create a distinction based upon an enumerated or analogous ground in contravention of the equality guarantee in section 15 of the Charter.

Ultimately, the Tribunal granted the Appellant nurse entitlement for mental stress after finding that the requirements, instituted in 1998, treated applicants with psychological claims differently from applicants with physical claims in an unjustifiable contravention of the right to be treated equally.

The Tribunal’s decision addressed in great detail the purpose and effect of the sections dealing with mental stress and found a few distinctions. First, there was a distinction based on work-related gradual onset mental disability in comparison with work-related gradual onset physical disability. Secondly, there was a distinction between claimants for mental stress who had not experienced a “sudden traumatic event” in comparison with those who had experienced a “sudden traumatic event” and/or had experienced physical injuries.

The effect of these distinctions, the Tribunal concluded, was that workers who had not experienced a “sudden traumatic event” were treated differently and discriminatorily. Further, workers with a mental disability were prevented from accessing benefits through disablement which are available to workers with physical disability.

In rejecting all arguments made in defence of the Act and the Policy, the Tribunal held that the lack of evidence regarding the work-relatedness of mental disorders and the lack of clinical methods for assessing the work-relatedness of chronic mental stress claims is not distinguishable from physical injury claims to the extent that it warrants treatment which is different from physical injuries and diseases. Furthermore, this distinction creates a disadvantage by perpetuating prejudice or stereotypes.

The Tribunal applied section 1 of the Charter of Rights and Freedoms to determine whether, regardless of the Act and Policy’s violation of section 15 of the Charter, the violation may be demonstrably justified in a free and democratic society. Once again, the Tribunal found in the Appellant’s favour, concluding that provisions dealing with mental stress do not represent a reasonable or equitable approach to the identified purpose of establishing the work-relatedness of mental disorders.

As a remedy, the Tribunal allowed the appeal and declined to apply the sections of the Act and the Policy which deal with mental stress.

The Ministry of the Attorney General of Ontario, who participated in the hearing, has not yet announced whether it will judicially review the decision.

Although this decision does not have general application to all psychological injury claims, employers need to be aware of this ruling, as it may result in a greater influx of mental disability and addiction claims by virtue of the Tribunal’s lowering of the threshold for eligibility. Many provincial jurisdictions have similar limitations on psychological injury claims, and similar applications will likely be brought in those jurisdictions.

 

Update on Cruden: Procedural Duty of Accommodation

The winter edition of EMPLAWYERS’ UPDATE informed our readers about the Federal Court decision that determined the Canadian Human Rights Act (the “Act”) does not impose procedural duties on employers in the course of fulfilling the duty of accommodation.

On May 20, 2014, dismissing an appeal by the Canadian Human Rights Commission (“the Commission”), the Federal Court of Appeal agreed that the Act does not impose stand-alone procedural duties.

Ms. Cruden was an employee of the Canadian International Development Agency (CIDA, “the Agency”) with type 1 diabetes. She applied for a posting in Afghanistan to gain field experience, in order to become a development officer within the Agency. During her second posting in Afghanistan, she experienced a hypoglycemic incident and was returned to Canada. Following this incident, CIDA mandated medical assessments, as well as adherence to newly developed Medical Evaluation Guidelines for Posting, Temporary Duty or Travel to Afghanistan (“the Guidelines”), applicable to all postings in Afghanistan. That Cruden was not posted in Afghanistan due to the application of the medical assessments and the Guidelines was undisputed.

Cruden complained to the Canadian Human Rights Tribunal (“the Tribunal”) which determined that while CIDA’s practices were discriminatory, it would constitute an undue hardship on the Agency to accommodate Cruden in Afghanistan. However, the Tribunal also ruled that the Agency had not met its procedural duty to accommodate Cruden, and awarded certain monetary and administrative remedies on this basis.

At the Federal Court, the Commission was unsuccessful in arguing that while CIDA had not breached Cruden’s substantive rights, procedural duties in the accommodation process constitute a separate source of liability.

On appeal, the Federal Court of Appeal held that the Federal Court was correct in interpreting the Act as providing a bona fide occupational requirement, and that the undue hardship to the employer was a complete defense to the allegations of discrimination. Accordingly, the Tribunal had not erred in holding that the Act had not been violated. Further, the Court held that it was reasonable for the Federal Court to interpret the Act as requiring the Tribunal to dismiss the complaint as soon as it found that it would be an undue hardship on the employer to accommodate the employee. The Court concluded that there is no statutory nor jurisprudential support for a separate, procedural duty to accommodate.

In Ontario, the Human Rights Tribunal and reviewing courts have repeatedly found that, even where undue hardship has been substantively established, damages may be awarded if a separate, procedural duty of accommodation has been breached. For example, procedural deficiencies such as failure to conduct a thorough investigation, or a detailed search of alternative suitable employment have given rise to awards of damages in Ontario. Accordingly, this issue may be treated differently in other jurisdictions. Nevertheless, for federal employers, this decision maintains that there is no right to procedural accommodation independent of the substantive rights provided for under the Act.