Category: Employment Law

Categories
Wrongful Dismissal/Termination

Employee Barred from Pursuing Lawsuit for Chronic Mental Stress Caused by Harassment and Bullying

A recent Ontario Workplace Safety and Insurance Appeals Tribunal decision took away an employee’s right to sue for constructive dismissal because the fundamental nature of her action was a claim for injury resulting from harassment and bullying in the workplace.

What Happened?

The employee began working for the employer in its housekeeping department in May 2015. In May 2016, she was promoted to the position of supervisor. 

The employee resigned her position with the employer in February 2018 claiming constructive dismissal as a result of harassment and bullying in the workplace. In consultation with her doctors, she claimed she was unable to return to work due to the harassment, and her fragile mental state resulting from the harassment and bullying to which she was subjected in the workplace. 

She filed a Statement of Claim in the Ontario Superior Court of Justice on April 2, 2018 claiming damages for constructive dismissal, bullying, harassment and/or a poisoned work environment pursuant to the Occupational Health and Safety Act (the “OHSA”), the tort of harassment, as well as punitive, aggravated and/or moral damages. 

In particular, the employee claimed that she “was forced to resign from her position with [the employer] due to the harassment, bullying and abuse she endured during the course of her employment and the resulting mental distress she experienced and continues to experience.” She pled further that the claim “relates to the harassment and bullying that [she] experienced as a result of a toxic work environment created by [the employer’s] employees and management and her subsequent constructive dismissal.”

The employer filed an application seeking a declaration that the employee’s right of action against it was barred by the Workplace Safety and Insurance Act (the “WSIA”).

Issue

The issue was whether the employee’s right of action was taken away pursuant to the WSIA. 

Parties’ Positions

The employer submitted that the employee’s Statement of Claim was effectively a claim for chronic mental stress under the WSIA and thus her right of action was removed in relation to her action for constructive dismissal, and for damages for mental stress, aggravated, moral and punitive damages, and for breach of the OHSA for bullying, harassment, the creation of a poisoned work environment and/or the tort of harassment. 

The employee submitted that a worker’s right to claim for damages in a civil action is taken away by the WSIA only in respect of the damages that are compensable under the WSIA and one must look at the three causes of action to determine whether they are inextricably linked to a work accident. 

The Decision

The tribunal explained that it was not being asked to make a determination as to whether the employee was subjected to harassment and bullying in the manner she claimed or whether she was injured as a result. It was only to determine whether the circumstances she alleged brought her claim within the scope of the WSIA and thereby removed her right to bring a civil action against the employer.

The tribunal stated that it has generally found that the right to bring an action for wrongful dismissal has not been removed by the WSIA. Rather, it is only in the exceptional case that this is not so, where the circumstances of the wrongful dismissal claim are inextricably linked to the work injury. 

In this case, the tribunal found that the exception applied. It found that the employee’s action against the employer was not for wrongful dismissal in the usual sense, but rather was for constructive dismissal, meaning her employment was effectively terminated by the harassing and bullying conduct of co-workers and management which caused her mental distress to such a degree that she was forced to take sick leave and ultimately to resign. It found that such facts were inextricably linked to a claim for injury governed by the terms of section 13(4) of the WSIA. 

In other words, it found that the employee’s Statement of Claim was, in essence, a claim for injury resulting from alleged workplace harassment and bullying and thus fell within the scope of section 13(4) to provide for entitlement for chronic mental stress arising out of, and in the course of, the employee’s employment. Additionally, the tribunal found that the other remedies sought by the employee were also claimed on the same facts of harassment and bullying in the workplace. 

As a result, the tribunal found the employee’s right of action was taken away by the WSIA. However, pursuant to section 31(4) of the WSIA, the employee could file a claim for benefits within six months of the decision.

Get Advice

At Campbell Bader LLP, our Mississauga employment lawyers have been representing non-unionized employees in workplace disputes since 1999. We know that such disputes can be very stressful and can get emotional quickly. We seek to simplify the law so that you understand your options and make informed decisions. We leverage our extensive experience advising employers to provide insightful guidance to employees who are facing challenging circumstances at work. We work hard to protect you.

If you have questions about unfair practices in the workplace, wrongful dismissal, or any other employment matter, contact the Mississauga employment lawyers at Campbell Bader LLP. Our knowledgeable employment lawyers can counsel you on your rights, advise you on your options, and help you create a plan for moving forward. We represent employees in Mississauga and areas west of Toronto. Contact us online or at 905-828-2247 to learn how we can help.

Categories
Wrongful Dismissal/Termination

Employer’s Sole Director Found Personally Liable to Employee for $75,000 in Aggravated Damages for Wrongful Dismissal

In a recent Ontario case, an employer’s sole director was found personally liable for $75,000 in aggravated damages for the manner in which he treated and dismissed an employee under the oppression remedy.

What Happened?

The employee was employed by the employer corporation (the “employer”) from July 2009 until her termination on March 12, 2016. She earned a salary of $90,000 until her salary was reduced to $60,000 in 2015 as a temporary measure to help the employer through the off-season.

The employer was a company that specialized in conducting vehicle and heavy equipment auction sales. The employer corporation had one sole director (the “director”), who also acted as its president. 

From 2009 until November 26, 2015, the employee and the director were in a common law relationship and have three children together. 

The employee alleged that on March 9, 2016, the director wrongfully terminated her employment and withheld her wages. She claimed that the termination was unrelated to her work, but directly related to their separation. The employee alleged that she was not paid the wages owing to her and, as a result, she became a creditor of the employer. 

The employer ceased operation in 2017, and all of its assets were transferred to a related company. 

The employee brought a motion for an order of default judgment and an order imposing personal liability against the director as an oppression remedy pursuant to s. 248 of the Ontario Business Corporations Act(the “OBCA”). Her statement of claim asked for $256,355 for unpaid wages, unpaid vacation pay, damages for wrongful dismissal and aggravated and punitive damages. 

The Decision

After reviewing the relevant legal principles, the court found that it was appropriate to pierce the corporate veil under s. 248 of the OBCA and impose personal liability on the director. 

It found that the employee became a creditor of the employer in March 2016 when the director withheld her wages from the employer’s payroll. The employee brought an action to recover this debt, and the director caused the employer to cease operations and transfer all of its assets to a related company in order to leave it without assets to respond to a possible judgment in this action. The court found that these actions qualified as oppressive conduct under s. 248 of the OBCA.

The court stated that, as the sole director of the employer, the director can be held personally liable for oppressive action. It found that the facts demonstrated that the director acted for reasons of personal animus against the employee and that the reasons were unrelated to her employment or to her entitlement to wages and benefits. 

Ultimately, the court found that the director acted in bad faith, using his control of the employer corporation to advance his personal financial interest, and to punish the employee and gain leverage in their family law dispute. It found such conduct directly attributable to the director and, as the sole director, it found him personally liable.

Damages

At the outset, the court found that the employee was owed basic wages, statutory holiday pay, vacation pay and pay in lieu of notice. It awarded her $2,582 for unpaid past wages, $13,776 for accrued vacation benefits and $90,000 for pay in lieu of reasonable notice.

The court then turned to the employee’s claim for $75,000 for aggravated damages for the manner in which the director terminated her employment.

The court found that the director’s handling of the employee’s termination was unfair and in bad faith. The director had made a false allegation that the employee was “considered having quit” to avoid having to pay her severance for dismissing her without reasonable notice. The court described the director’s conduct as unfair and appeared to be retaliation for the issues raised in the family law dispute. 

The court concluded that it was a proper case for aggravated damages and made an order for $75,000 for aggravated damages against the director.

The court dismissed the employee’s claim for punitive damages, finding that the imposition of personal liability on the director was a sufficient penalty for the oppressive conduct complained of. 

Get Advice

At Campbell Bader LLP, our Mississauga employment lawyers have been representing non-unionized employees in workplace disputes since 1999. We know that such disputes can be very stressful and can get emotional quickly. We seek to simplify the law so that you understand your options and make informed decisions. We leverage our extensive experience advising employers to provide insightful guidance to employees who are facing challenging circumstances at work. We work hard to protect you.

If you have questions about unfair practices in the workplace, wrongful dismissal, or any other employment matter, contact the Mississauga employment lawyers at Campbell Bader LLP. Our knowledgeable employment lawyers can counsel you on your rights, advise you on your options, and help you create a plan for moving forward. We represent employees in Mississauga and areas west of Toronto. Contact us online or at 905-828-2247 to learn how we can help.

Categories
Wrongful Dismissal/Termination

The Enforceability of Arbitration Agreements in Employment Law

In a recent Ontario case, a Canadian employer attempted to stay an employee’s action on the basis of arbitration agreements the employee had signed with its U.S. counterpart.

What Happened?

The employeeis a U.S. citizen who began to work with the employer (the “U.S. employer”) in 2012. The U.S. employer is a company incorporated in the U.S. and operating in California.

The employee entered into four employment agreements with the U.S. employer in the thirteen-month period from then until December 2013 and continued to work with the U.S. employer in California until December 2016.

Each of the employment contracts that the employee entered into contained a term requiring that all disputes arising from his employment be determined by arbitration conducted in California. The employee also executed two separate arbitration agreements to this effect during his employment with the U.S. employer.

In December 2016, the U.S. employer offered the employee the opportunity to move to Ontario, Canada, to work with one of its related entities (the “Canadian employer”), which the employee accepted. On January 2, 2017, the employer began working with the Canadian employer in Ontario.

However, the employee did not, at any time, execute any written employment contract with the Canadian employer. Additionally, the employee did not enter into any written agreement with the Canadian employer requiring that any dispute arising from his employment in Canada would be determined by arbitration.

The employee was terminated from his employment with the Canadian employer on February 6, 2018, effective March 30, 2018. He brought an action against the Canadian employer seeking damages for his dismissal. 

The employee also sued the U.S. employer for the U.S. employer’s role in causing or contributing to the damages that he alleged to have sustained by the termination of his employment in Ontario with the Canadian employer. He claimed that the U.S. employer made misrepresentations to him that caused him to re-locate to Canada, and that he relied on these misrepresentations to his detriment. He also sued two directors of the Canadian employer.

In response, both the U.S. employer and the Canadian employer brought a motion to stay or to dismiss the action as against them on the basis of the arbitration provision contained in the agreements that were executed by the employee with the U.S. employer during the period of his employment in California. The employers relied on section 7(1) of the Arbitration Act, 1991, which states:

If a party to an arbitration agreement commences a proceeding in respect of a matter to be submitted to arbitration under the agreement, the court in which the proceeding is commenced shall, on the motion of another party to the arbitration agreement, stay the proceeding. 

In response to both employers’ motion, the employee submitted that his action should not be stayed as against both or either of the employers because he did not enter into an arbitration agreement with the Canadian employer, and because his agreement to arbitrate with the U.S. employer was in relation to his employment in California. Further, he submitted that even if the employers could establish an applicable arbitration agreement, it should not to be enforced on the basis that it was invalid because it was an attempt by the employers to contract out of the provisions of the Employment Standards Act, 2000.

Issue

The sole issue was whether the employee’s action should to be stayed as against both employers, or either of them, on the basis of an arbitration agreement.

The Decision

Citing previous case law, the court began by setting out a five-part analytical framework for conducting its analysis on whether to stay proceedings due to an arbitration agreement:

(a)    Is there an arbitration agreement?

(b)   What is the subject matter of the dispute?

(c)    What is the scope of the arbitration agreement?

(d)   Does the dispute arguably fall within the scope of the arbitration agreement?

(e)    Are there grounds on which the court should refuse to stay the action?

After analyzing each element of the five-part test, the court concluded that neither employer had established an entitlement to a stay on the basis of a valid, applicable arbitration agreement.

The court stated that, while case law is clear that a court must, on motion, stay the court proceeding in favour of arbitration where there is a valid arbitration agreement, there must be proof of a valid and binding arbitration agreement.

In this case, the court determined that not one of the arbitration agreements submitted by the employers were executed with the Canadian employer, and that the applicable arbitration agreement executed between the U.S. employer and the employee did not pertain to the claim brought in Ontario for the termination of the employee’s employment with the Canadian employer in Ontario. 

As a result, the court dismissed the employers’ motion to stay the employee’s actions against them.

Get Advice

At Campbell Bader LLP, our Mississauga employment lawyers have been representing non-unionized employees in workplace disputes since 1999. We know that such disputes can be very stressful and can get emotional quickly. We seek to simplify the law so that you understand your options and make informed decisions. We leverage our extensive experience advising employers to provide insightful guidance to employees who are facing challenging circumstances at work. We work hard to protect you.

If you have questions about unfair practices in the workplace, wrongful dismissal, or any other employment matter, contact the Mississauga employment lawyers at Campbell Bader LLP. Our knowledgeable employment lawyers can counsel you on your rights, advise you on your options, and help you create a plan for moving forward. We represent employees in Mississauga and areas west of Toronto. Contact us online or at 905-828-2247 to learn how we can help.

Categories
Wrongful Dismissal/Termination

Employee Awarded Over $1 Million in Damages for Constructive Dismissal Under Fixed-Term Agreement

In a recent Ontario case, an employee who was constructively dismissed under a fixed-term agreement was awarded over a million dollars in damages.

What Happened?

The employee was a third generation owner of a funeral home when, in 2012, he agreed to sell his shares to the employer corporation, a company controlled by two brothers. 

It was a term of the share purchase agreement that the employee would enter into a transitional consulting services agreement (the “agreement”) by which he would continue in the employ of the funeral home for a fixed-term of ten years. The agreement provided that the employee would work as general manager of the funeral home and be paid $100,000 per year with a salary review on an annual basis to reflect cost of living increases, as well as sales commissions.

However, not long after the transfer of ownership, unhappy differences arose between the employee and the brothers. Within 11 months, the employee had gone on medical leave due to workplace stress he said was induced largely by the actions of one of the brothers. 

Among the main issues, were, firstly, the hours the employee was expected to be spending on funeral-related work as opposed to customer relations. Secondly, was the use of the company vehicle and gas card for personal purposes. The third issue was the length of time over which the employee would be paid the commission of 5% on pre-paid funerals. Fourthly, at issue was whether the commission of 65% of the marketing allowance was only for in-house pre-arranged funeral packages specifically arranged by the employee or for all in-house packages, regardless of who arranged them.

After his leave, he was unable to return to work and claimed to have been constructively dismissed. He sought damages for breach of the agreement, intentional infliction of mental suffering and discrimination prohibited by the Ontario Human Rights Code. Essentially, the employee claimed that the brothers’ conduct was designed to cause him to leave his employment, and that much of the conduct took place when he was on leave for stress-related illness that the brothers knew would be exacerbated by their conduct.

The brothers claimed that none of their conduct was the cause of the employee leaving his employment. They stated that the employee found himself ill-suited to the role of employee and suffered from seller’s remorse. They argued that the employee orchestrated much of the discord in an effort to induce them to breach the agreement and fire him in hopes that he would reap the benefits of the contract without having to work.

The Decision

After reviewing the behaviour of both parties, the court concluded that neither the brothers nor the employee were blameless for the falling out that occurred. However, the court found that over the course of several months before the employee’s leave, one of the brothers:

(1) Improperly terminated the employee’s use of the company vehicle; 

(2) Without notice to the employee, recruited an employee who was subordinate to him to track his time at the funeral home; 

(3) Did not pay the employee commissions to which he was rightfully entitled; 

(4) Removed the employee’s photograph from the funeral home; and 

(5) Without notice to the employee and without seeking any explanation from him, changed the locks to the funeral home. 

The court found that all these actions amounted to a course of conduct which, in light of all the circumstances, would lead a reasonable person in the employee’s position to conclude that the brothers no longer intended to be bound by the terms of the agreement. As a result, the court found that the employee had been constructively dismissed.

The court, however, dismissed the employee’s claim of intentional infliction of mental suffering and discrimination prohibited by the OntarioHuman Rights Code.

Damages 

When assessing damages, the court stated:

“In the absence of an enforceable contractual provision stipulating a fixed term of notice, or any other provision to the contrary, a fixed term employment contract obligates an employer to pay an employee to the end of the term, and that obligation will not be subject to mitigation […]. Accordingly, the [employee] is entitled to the compensation and benefits he would have received had the contract been honoured. […] It is appropriate to […] simply calculate the loss per year and multiply it by the 9 years remaining on the contract when the [employee] ceased work.”

After reviewing the loss of salary, which came to $100,000 per year for nine years, or $900,000, and other lost benefits over the course of nine years under the agreement, the court awarded damages to the employee in the amount of just over $1,274,000.

Get Advice

At Campbell Bader LLP, our Mississauga employment lawyers have been representing non-unionized employees in workplace disputes since 1999. We know that such disputes can be very stressful and can get emotional quickly. We seek to simplify the law so that you understand your options and make informed decisions. We leverage our extensive experience advising employers to provide insightful guidance to employees who are facing challenging circumstances at work. We work hard to protect you.

If you have questions about unfair practices in the workplace, wrongful dismissal, or any other employment matter, contact the Mississauga employment lawyers at Campbell Bader LLP. Our knowledgeable employment lawyers can counsel you on your rights, advise you on your options, and help you create a plan for moving forward. We represent employees in Mississauga and areas west of Toronto. Contact us online or at 905-828-2247 to learn how we can help.

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Employment Law

The Role of Economic Dependency and Exclusivity in Determining Who is a Dependent Contractor

Last week, the Ontario Court of Appeal released a decision in which it reiterated the legal principles used to distinguish a worker’s status as an independent contractor from that of a dependent contractor.

What Happened?

The worker at issue was a sole practitioner lawyer who provided legal services to the Office of the Children’s Lawyer (the “OCL”) pursuant to a series of agreements over a period of 13 years, the last of which expired on March 31, 2015.

The worker was a member of the OCL Personal Rights Panel, one of approximately 380 lawyers retained by the OCL to provide legal services in regard to custody, access, and child protection matters. She was first appointed to the OCL panel of lawyers in 2002, for a two-year period.

She remained a member of the OCL panel for the next 13 years pursuant to a series of fixed-term contracts, each of which required her to apply for reappointment as each contract expired. There was no automatic right of renewal for the contracts. However, on each occasion she was reappointed to the panel, initially for two-year terms and then from 2012 on an annual basis.

During the time she was a member of the OCL panel, she also maintained an independent legal practice and that practice formed a majority of her billings. Her OCL work accounted for anywhere from a low of 14.8% to a high of 62.6% of her annual total billings. Over the 13-year period that she was on the OCL panel, OCL billings accounted for an average of 39.9% of her annual billings.

The worker’s last retainer agreement expired in 2015. On March 31, 2015, the expiry date of that agreement, the OCL informed the worker that her retainer was not going to be renewed. The worker was given one year to wind down her existing OCL files and was not subsequently appointed to the OCL panel.

As a result, the worker brought a claim alleging that she was a dependent contractor and was therefore entitled to 20 months’ notice of termination. 

The OCL brought a motion for summary judgment dismissing her claim.

That motion was dismissed by the motion judge, who found that there were sufficient factors to militate in favour of a finding of dependent contractor status. 

The OCL appealed.

Ontario Court of Appeal Decision

The Court of Appeal began by explaining that a dependent contractor status is a non-employment relationship in which there is “a certain minimum economic dependency, which may be demonstrated by complete or near-complete exclusivity”. Deciding whether there is “minimum economic dependency” is highly context-specific.

In distinguishing dependent from independent contractors, exclusivity of service provision, and therefore of income, is key: 

“[E]xclusivity is determinative, as it demonstrates economic dependence.”

However, in cases in which a dependent contractor relationship was found to exist but exclusivity was not absolute, substantially more than a majority of the dependent contractor’s income was earned from the contracting party.

In this case, the worker did not work exclusively for the OCL as she was expected to maintain a private legal practice throughout the entire time that she was retained, and she did so.

The court stated that the fact that an average 39.9% of her annual billings came from the OCL indicated a significant percentage of the worker’s billing. The court acknowledged that the loss of the OCL retainer would have had a substantial impact on the worker’s legal practice and her income. 

However, the court found that was not determinative of her status as a dependent contractor, stating:

“On no account can 39.9% of billings be said to constitute exclusivity or “near-complete exclusivity”, such that economic dependence on the OCL is established.”

Exclusivity is a categorical concept – it poses an either/or question, and “near-complete exclusivity” must be understood with this in mind. “Near-complete exclusivity” cannot be reduced to a specific number that determines dependent contractor status; additional factors may be relevant in determining economic dependency. But “near-exclusivity” necessarily requires substantially more than 50% of billings. If it were otherwise, exclusivity – the “hallmark” of dependent contractor status – would be rendered meaningless.”

Ultimately, the court found that while the OCL was one of the worker’s clients, a very important client, it remained only one of her clients. It concluded:

“In this case, the [worker]’s loss of the OCL retainer results in a 39.9% reduction in the billings generated by her legal practice. That is a significant loss, but it is insufficient to establish the requisite economic dependency.”

In addition, it found that the longevity of the worker’s retainer with the OCL did not transform it into a relationship of “enduring dependency”.

As a result, the court allowed the appeal and dismissed the worker’s claim.

Get Advice

At Campbell Bader LLP, our Mississauga employment lawyers have been representing non-unionized employees in workplace disputes since 1999. We know that such disputes can be very stressful and can get emotional quickly. We seek to simplify the law so that you understand your options and make informed decisions. We leverage our extensive experience advising employers to provide insightful guidance to employees who are facing challenging circumstances at work. We work hard to protect you.

If you have questions about unfair practices in the workplace, wrongful dismissal, or any other employment matter, contact the Mississauga employment lawyers at Campbell Bader LLP. Our knowledgeable employment lawyers can counsel you on your rights, advise you on your options, and help you create a plan for moving forward. We represent employees in Mississauga and areas west of Toronto. Contact us online or at 905-828-2247 to learn how we can help.

Categories
Employment Law

Employee Terminated for Cause for Not Disclosing Acceptance of Job with Competitor

The Ontario Labour Relations Board recently issued a decision finding an employee was in a conflict of interest when he accepted a job offer from a competitor that led to a termination for cause. 

What Happened?

The employee had been employed for 5 years and 3 days at the employer, a bank, and at the time of his departure held a vice-president position. The employee ran a number of project teams and did not directly interact with clients, with minimal exception. He did have access to confidential information and was involved in strategic planning, which could potentially be valuable to competitor banks or employers.

The employee planned to leave his employment and accepted a new job at a main competitor employer, another bank, in a position similar to the one he held with the employer. Unbeknownst to the employer, he had been in discussions with the competitor employer regarding new employment for a number of months prior to accepting the offer.

After the employee accepted the competitor employer’s job offer, he chose not to inform anyone immediately at his current employer and intended to wait until he gave his two weeks notice before starting his new job. 

However, a month and a half before beginning his new position, the employer received an email from the competitor employer requesting employment verification as part of a background check.   

The employer met with the employee to ask him if he had obtained alternate employment with a competitor. The employee was told he could not remain in his employment because he was going to a direct competitor. The employee retrieved his personal items from his office and was escorted out, as part of the employer’s “standard procedure”, where, if the employee is going to a competitor, the employee leaves immediately and is normally paid the notice period. The employee was offered the same arrangement but he declined and insisted he was not resigning. 

The employer stated that it was not a conflict of interest to interview for another position but accepting employment with a competitor is a conflict of interest and departure the same day is required. The employer stated that it had never encountered such a situation where the employee had not immediately disclosed acceptance of alternate employment.

The employee claimed that he did not think it was a conflict of interest to take a position with the competitor employer and that it was not a breach of the Code of Conduct (the “Code”) to accept a job at the competitor employer because he would never breach any trust. 

The employer alleged that the employee was terminated for wilful misconduct, disobedience or wilful neglect of duty that was not trivial or, in the alternative, he resigned his employment.

Code of Conduct

The employee, like all other employees, was bound by the corporate Code of Conduct (the “Code”) that provided “employees are expected to…follow this Code, including respecting both the letter and spirit of the Code.” 

The Code also stated that contravention of the Code may result in disciplinary action up to and including termination for cause. Parts of the Code stated that: 

•        “A conflict of interest is defined as a person or entity having two or more interests that are inconsistent. Employees should take special care to ensure they identify and avoid any situation of actual or perceived conflict of interest.

•        [E]mployees are not permitted to participate in any activity that creates a conflict or gives rise to a perceived conflict of interest. A perceived conflict of interest will occur when a reasonable person would believe a conflict could occur or has occurred.

•         When employees are unclear whether a conflict exists, they are required to discuss the situation with their manager.”

The Code also contained provisions with respect to “Outside Activities” which generally related to activities that were not obvious conflicts of interest. Before engaging in any such activity, the Code stated that “employees are expected to identify and avoid any outside interest or activity that will interfere with their duties at [the employer].” The Code also allowed employees to participate in outside business activities by taking another job, being self-employed or becoming an owner in some other business as long as they obtained prior approval by following a prescribed procedure in order to ensure that there was no conflict of interest.

Finally, the Code required that “all employees must act honestly and with integrity at all times.” 

The Decision

The Ontario Labour Relations Board (the “Board”) found that the employee was terminated by the employer for engaging in wilful misconduct; accordingly he was not entitled to either termination pay or severance pay under the Employment Standards Act. The Board stated:

“[The employee] accepted employment with [the competitor employer] and intentionally chose not to disclose his acceptance to [the employer] so that he could continue to work up to the last day prior to the start of his employment with [the competitor employer]. […]

Even without the evidence of the Code of Conduct and its content, the Board has no difficulty in finding that [the employee] intended to deceive [the employer] by withholding his acceptance of […] employment. He was at all material times in a fiduciary position as [a vice-president], a senior employee, a member of the leadership team and in possession of confidential and sensitive business information. He would have been well aware that [the employer] would expect him to disclose his new employment and leave immediately.”

The Board found that the Code was clear that potential or actual conflicts of interest were to be disclosed and that accepting employment with a major competitor was a conflict of interest, concluding:

“The Board finds that [the employee] put his own interests first and hoped to remain gainfully employed at [the employer] until he started at [the competitor employer], all without missing a pay cheque. It is somewhat ironic that his intentions were unwittingly defeated by his new employer sending what appeared to be a routine employment verification inquiry to [the employer].”

Therefore, the Board found that the employee was terminated for failure to disclose the conflict of interest in accepting the new employment and attempting to conceal it from his employer.  

As a result, the employee was not entitled to any payment by the employer. 

Get Advice

At Campbell Bader LLP, our Mississauga employment lawyers have been representing non-unionized employees in workplace disputes since 1999. We know that such disputes can be very stressful and can get emotional quickly. We seek to simplify the law so that you understand your options and make informed decisions. We leverage our extensive experience advising employers to provide insightful guidance to employees who are facing challenging circumstances at work. We work hard to protect you.

At Campbell Bader LLP our knowledgeable employment lawyers can counsel you on your rights, advise you on your options, and help you create a plan for moving forward. We represent employees in Mississauga and areas west of Toronto. Contact us online or at 905-828-2247 to learn how we can help.

Categories
Wrongful Dismissal/Termination

Employer Loses Human Rights Tribunal Case For Failing to Accommodate an Employee’s Childcare Needs

The Ontario Human Rights Tribunal recently decided a case in which the employee alleged that the employer had failed to accommodate her special needs related to childcare and her termination was discrimination based on her family status.

What Happened?

The employee worked as a personal support worker for the employer from at least 2013 until the date of her termination, May 23, 2017. The employee was married with two children. At the time of the termination, the children were two and five years old. The eldest has autism. It was essential that a caregiver meet the eldest at the employee’s home where the school bus delivered him each weekday. Because her other family members were unavailable, the employee wasthe only one in a position to meet the eldest child’s bus at her home, because her shift at work ended at 3:00 p.m. 

At all relevant times, the employer was aware of the employee’s children and her child’s special needs.

In March 2017, the administration began discussing moving the employee from her usual 7:00 a.m. – 3:00 p.m. day shift to the later afternoon shift: 3:00 p.m. – 11:00 p.m. The employee informed them that she was unable to work the later shift because of her children’s schedule and problems she was having finding more flexible daycare. The employer initially offered her a midnight shift to accommodate her childcare needs.

However, in May 2017, the employer told the employee that it could not longer offer her the midnight shift because she had called in sick the month before without giving adequate notice. The employee then informed the employer she could not work the later afternoon shift because of her childcare needs.

Two days later, the employer informed the employee she had been terminated. The termination letter stated that the reasons for the termination were because of: attendance, failure to follow instructions, conduct, creating disturbance, performance and work quality.

The Issues

The employee alleged that the employer failed to accommodate her special needs related to childcare, and terminated her employment, at least in part, because she was unable to work more flexible hours given her duties as a mother. When it was filed, the application alleged discrimination with respect to employment because of family status and also reprisal contrary to the Human Rights Code (the “Code”).

The Law

The tribunal stated that the following Code provisions were relevant to the case:

5(1)Every person has a right to equal treatment with respect to employment without discrimination because of ….family status.

11(1)A right of a person under Part I is infringed where a requirement, qualification or factor exists that is not discrimination on a prohibited ground but that results in the exclusion, restriction or preference of a group of persons who are identified by a prohibited ground of discrimination and of whom the member is a member, except where,

(a)  the requirement, qualification or factor is reasonable and bona fide in the circumstances; or

(b)  it is declared in this Act, other than in section 17, that to discriminate because of such ground is not an infringement of a right.

(2)The Tribunal or a court shall not find that a requirement, qualification or factor is reasonable and bona fide in the circumstances unless it is satisfied that the needs of the group of which the person is a member cannot be accommodated without undue hardship on the person responsible for accommodating those needs, considering the cost, outside sources of funding, if any, and health and safety requirements, if any.

Additionally,in s. 10(1) of the Code, “family status” is defined as “the status of being in a parent and child relationship”.

The Human Rights Tribunal Decision

The tribunal began by setting out the test for establishing family status discrimination in the context of childcare, stating that a claimant must prove:

a.  The child is under his or her care and supervision;

b.  The childcare obligation at issue engages the individual’s legal responsibility for that child, as opposed to personal choice;

c.  The individual has made reasonable efforts to meet those childcare obligations through reasonable alternative solutions, and that no such alternative solution is reasonably accessible; and

d.  The impugned workplace rule interferes in a manner that is more than trivial or insubstantial with the fulfillment of the childcare obligation.

Applying the law and legal test to the facts of the case, the tribunal concluded:

“I find that the [employer]’s stated reasons for the termination were not based in fact. The [employee]’s performance was fine. The [employer]’s reasons were pretextual, and by inference, I find that at least one of the real reasons for the termination, if not the only reason, was the [employee]’s unavailability for certain shifts caused by her need to provide care to her children. Her request regarding her shifts was the only issue that arose during the time immediately prior to the termination, and the issue was unresolved between the [employer] and the [employee] at the time of the termination. 

I also find that the [employer] could easily have given the [employee] the midnight shift to accommodate her childcare schedule. The [employer]’s decision not to give the [employee] the midnight shift was based upon an unreasonable expectation that she should have provided 48 hours of notice that she would be ill, or that she should have found a replacement for herself even though she became ill the night before a morning shift. The withdrawal of its offer to provide the [employee] with the midnight shift was arbitrary, unreasonable and unfair. In conclusion, the [employer] made no allowance for the [employee]’s childcare responsibilities in their determination that her scheduling requirements justified termination.”

As a result, the tribunal awarded the employee $30,000 in compensation for injury to dignity, feelings and self-respect.

Get Advice

If you have questions about unfair practices in the workplace, wrongful dismissal, or any other employment matter, contact the Mississauga employment lawyersat Campbell Bader LLP. We regularly advise both employers and employees on a wide range of issues that arise at work. Contact us online or by phone at 905-828-2247 to schedule a consultation.

Categories
Wrongful Dismissal/Termination

Employer Loses Appeal After Court Finds Its Counter-Claim Was Intended to Intimidate Employee

A recent Ontario Court of Appeal upheld a wrongful dismissal claim in which the trial judge had awarded the employee punitive and moral damages and costs after the finding that the employer had counter-claimed in an attempt to intimidate the employee.

What Happened?

The employee was terminated from his employment in June 2015. At that time, the employee was 54 years old. He had been hired as a sales representative by the employer in 2004 and was promoted over time, eventually becoming president and division manager.

At the time of his termination, he was told that he was being terminated for cause and that he had committed fraud, but no specifics were given.

When he indicated that he would be hiring a lawyer, the employer told him that if he did, it would counter-claim and that it would be very expensive.

About a month later, the employee filed a statement of claim seeking damages for wrongful dismissal. The employer responded with a statement of defence and counter-claim which alleged cause and claimed damages of $1.7 million for unjust enrichment, breach of fiduciary duty and fraud, as well as $50,000 in punitive damages.

Lower Court Decision

After an 11 day trial, the trial judge found that the employer had failed to prove cause against the employee and had failed to prove any of its allegations against him.

The trial judge also found that the employer’s counter-claim for damages in the amount of $1.7 million had been a tactic to intimidate the employee and that it had breached its obligation of good faith and fair dealing in the manner of his dismissal.

As a result, the judge dismissed the employer’s counterclaim in its entirety and awarded the employee significant damages, including: damages in lieu of reasonable notice based on a 19 month notice period, including bonus and benefits; punitive damages in the amount of $100,000; and moral damages in the amount of $25,000.

In total, the employee’s award amounted to $604,627. In addition, the trial judge ordered costs against the employer in the amount of $546,684 to indemnify the employee for his costs in the action.

The employer appealed the trial judge’s trial awards, alleging reversible errors in law.

The Appeal Decision

The Court of Appeal rejected the employer’s arguments regarding the 19 month notice period award and the bonus award. On both issues, the court found that the trial judge had considered the evidence and the awards were appropriate.

The court also rejected the employer’s submission that the trial judge erred in awarding aggravated and moral damages because the evidentiary record provided ample support for the trial judge’s finding that the manner of dismissal warranted an award of aggravated damages. The trial judge had found that the employer’s conduct in threatening the employee to not make a claim was calculated to cause the employee stress. The manner of dismissal was devastating and had caused him stress. The court therefore found no error of law or principle or palpable or overriding error of fact that would justify interfering with the trial judge’s award of $25,000 for aggravated damages.

The court then addressed the employer’s submission that the trial judge erred in making a punitive damages award against it in the amount of $100,000. The employer argued that the judge erred in failing to consider the punitive aspects of a substantial costs award and compensatory damages, and in awarding an amount exceeding what is rationally required to punish the misconduct and to achieve the accepted purposes of a punitive damages award.

The court rejected the employer’s argument. It found that the trial judge had carefully reviewed all of the appropriate factors, including the fact that a court “must consider the overall damages award when selecting an appropriate punitive quantum” and that it must be careful to avoid double compensation or double punishment.

The court stated that, in reaching her conclusion, the trial judge had referred to the threat by the employer during the termination meeting that if the employee sued, the employer would counter-claim – a threat which it carried out with its counter-claim alleging fraud. The trial judge had also referenced the fact that the employer had, on the seventh day of trial, reduced its damages claim from $1.7 million to $1 dollar, which led the trial judge to conclude that “it did not appear as though the [employer] had any intention of proving damages but rather was using the claim of $1,700,000 strategically to intimidate [the employee]”. These facts supported her finding of misconduct justifying a punitive damages award.

The court concluded by stating:

“There can be no question that the employer’s conduct […] rose to the level of conduct deserving of denunciation for all the reasons cited by the trial judge. The trial judge was alive to the concerns about double compensation, and to the need to consider the entire compensatory package as a whole.”

As a result, the court found that the employer has not shown any basis for this court to interfere with the punitive damages award.

Finally, the court rejected the employer’s leave to appeal the costs award of $546,684, which it argued was unfair and unreasonable. While the court recognized that the costs award was unusually high, it was not satisfied that it was unfair or unreasonable in the circumstances of this case.

The appeal was dismissed and the court awarded the employee costs of the appeal in the amount of $35,000.

Get Advice

If you have questions about unfair practices in the workplace, wrongful dismissal, or any other employment matter, contact the Mississauga employment lawyers at Campbell Bader LLP. We regularly advise both employers and employees on a wide range of issues that arise at work. Contact us online or by phone at 905-828-2247 to schedule a consultation.

 

Categories
Wrongful Dismissal/Termination

When Is a Temporary Lay-Off Actually Constructive Dismissal?

A recent Ontario case considered an employee’s claim that a temporary lay-off was in fact constructive dismissal, even after he refused a call back to work.

What Happened?

The employer was engaged in emergency restoration and remediation work for residential, commercial, industrial, and municipal clients. The employee, aged 53, began working for the employer in 1992 as a carpenter. He was later promoted and, at the time of the lay-off, his position was a health and safety training specialist.

In 2014, the employer experienced a significant decrease in its business. In January 2015, it permanently laid off 22 employees, with severance packages. The employer stated that it had decided which employees to temporarily lay off based on their years of service, skillsets and experience and it planned on recalling them. The employee knew about the permanent and temporary layoffs.

On October 15, 2015, the employer temporarily laid off the employee. On the same day, the employer’s vice-president of operations met with the employee and told him that because of the decrease in business, he would be temporarily laid off and recalled back to work as soon as possible when business improved.

The employee’s lay-off letter stated that the employer would pay 100% of the employee’s group benefits during the temporary layoff period and asked him to keep the employer informed about his ongoing availability and contact information so that it could recall him as soon as possible. The letter also asked him to return all of the company’s tools and equipment, including the company car which he would not use while on a temporary lay-off.

After the meeting, the employee emailed the vice-president, stating “I am available every day as always”. On October 19, 2015, the employee emailed again stating “I am available for work every day this week.”

On October 27, 2015, the employee, through his counsel, advised the employer that he considered his temporary lay-off to be a constructive dismissal. Counsel for the employer replied that there was a possibility that the employee would be recalled to work and that he would update him by November 9, 2015. The employee’s counsel immediately replied by email advising that the employee felt that the relationship had broken down and that he would not return to work but would start an action against the employer.

On November 10, 2015, the employer’s counsel sent a letter to counsel recalling the employee to “active employment”.

On November 12, 2015, the employer’s counsel emailed asking if the employee would return to work. Counsel replied that he would not. No inquiries with respect to the recall were made.

The employee alleges that the employer’s offer “was a sham made only in response to his litigation and not a bona fide attempt to return him to work.” He believed that it would have been embarrassing and degrading to return to work.

As a result, the employee brought a motion for summary judgment of his action for wrongful dismissal. He claimed he was constructively dismissed by reason of a lay-off after 23 years of employment. He argued that there was no employment term giving the employer the right to temporarily lay him off and that he did not consent to the lay-off. The employee also claimed that the employer failed to provide him with work and compensation in violation of the fundamental terms of employment.

The employer alleged that the employee agreed to his lay-off by providing his availability to work on October 15 and 19, 2015. The employer denied he was wrongfully dismissed and submitted in the alternative that if the employee was constructively dismissed, he failed to mitigate his damages by refusing a recall to his employment.

The Issues

The main issues were whether the employee was constructively dismissed when he was laid off and, if so, whether the employee made reasonable efforts to mitigate his damages.

The Decision

At the outset, the court concluded that the employee had been constructively dismissed. It did not find that, by providing his availability to work, the employee agreed to the lay-off or that it was a term of the employee’s employment that the employer could lay him off temporarily. The court stated:

“[The employee’]s advice to [the employer] on his availability for recall cannot be construed as evidence of his agreement to change such a significant term of employment. Similarly, neither does his knowledge and understanding of [the employer]’s business difficulties have the effect of altering such a significant term of employment.”

The court found that the employee was therefore constructively dismissed on October 15, 2015 and that he was consequently entitled to be paid damages for the employer’s failure to provide him with reasonable notice of his termination of employment, subject to his obligation to mitigate his damages.

The employer did not allege that the employee’s job search efforts were insufficient, but rather that he failed to mitigate his damages when he refused the employer’s offer to be recalled to work. The employee submitted that one reason for refusing the offer of re-employment was because it would be too embarrassing and degrading for him to return to work, but gave no further evidence in this regard.

After reviewing the evidence and testimony, the court stated:

“I must consider the factors set out in the Evan’s case and the inquiry about “whether a reasonably objective individual in his circumstances would not have concluded that returning to work would be too embarrassing, humiliating, and/or degrading”. I am of the view that a reasonably objective individual in his circumstances would not have concluded that returning to work would be too embarrassing, humiliating, and/or degrading. [The employee] has given no evidence as to how or why he would be “humiliated, embarrassed or degraded”. The evidence is that, regardless of any offer that would have been made by [the employer], [the employee] never had any intention of accepting work under any circumstances. He never considered or evaluated the offer to work at [the employer]. He commenced an action against [the employer].”

As a result, the court found that the employee’s refusal to consider the employer’s offer of work was a failure to mitigate his damages. He was therefore only entitled to damages of $4,846 for the period from the date of the layoff to the date of recall (calculated on the basis of his base salary of $72,000 per annum).

Get Advice

If you have questions about unfair practices in the workplace, wrongful dismissal, or any other employment matter, contact the Mississauga employment lawyers at Campbell Bader LLP. We regularly advise both employers and employees on a wide range of issues that arise at work. Contact us online or by phone at 905 828 2247 to schedule a consultation.

Categories
Wrongful Dismissal/Termination

Distinguishing Employment Status: Employee, Independent Contractor or Dependent Contractor?

A recent Ontario case set out the relevant criteria in determining a worker’s employment status in a wrongful dismissal case. While the worker claimed 23 years of employment, the employer argued that she had spent the first 10 years as an independent contractor and was only an employee for 13 years.

What Happened?

The employee was dismissed without cause and claimed over $136,000 in damages for wrongful dismissal. The claim was based on an almost 23-year workplace relationship and she submitted that she was entitled to 24 months of pay and benefits in lieu of reasonable notice.

The employer argued that she was not entitled to any damages for wrongful dismissal. It submitted that she had not been an employee for 23 years. It stated that she had worked as an independent contractor for the first 10 years and that she had only been an employee for 13 years. The employer relied on the termination clauses in the employee’s employment contracts as rebuttals to the common law presumption that she was entitled to pay in lieu of notice. In the alternative, the employer submitted that if she was entitled to pay in lieu of reasonable notice, the appropriate notice period should be 12 months, not 24 months.

Determining Employment Status

The court began by setting out the three types or classes of workplace relationships:

(1) employer-employee (master-servant);

(2) contractor-independent contractor, and

(3) contractor-dependent contractor, which is an intermediate classification where the relationship of master and servant does not exist but where an agreement to terminate the arrangement upon reasonable notice may be implied.

The court stated that the first step in the analysis must be to determine whether or not the worker is an employee or a contractor in accordance with the established methodology and criteria for differentiating an employee from an independent contractor. While there is no specific formula for making this determination, the court should consider:

(a) the intentions of the parties;

(b) how the parties themselves regarded the relationships;

(c) the behaviour of the parties toward each other; and

(d) the manner of conducting their business with one another.

Additional considerations include control of the work, ownership of tools, chance of profit, and risk of loss.

After it has been determined that the worker is a contractor, the court may use a variety of factors to differentiate dependent and independent contractors including:

(1) the extent to which the worker was economically dependent on the particular working relationship;

(2) the permanency of the working relationship;

(3) the exclusivity or high level of exclusivity of the worker’s relationship with the enterprise.

The Decision

After reviewing all the relevant factors to the case, the court concluded:

“While as the above account of the facts reveals, there are some indicia of a genuine independent contractor relationship, the issuance of invoices being one such indicia, and while it is arguable that during the very early years of the relationship there was more independence, nevertheless, within two years, if not earlier, [the employee] was a dependent contractor. She worked exclusively for [the employer] and, practically speaking, it was her boss. In the immediate case, having regard to the nature of her work as a Wardrobe Stylist the indicia of independence or dependency such as tools and control are not very helpful in defining the relationship, and it appears that not much changed in how she carried on work before or after June 3, 2004, when she changed from a Freelance Wardrobe Stylist to a Wardrobe Stylist under an employment contract. In other words, there is little to distinguish between her years as a dependent contractor and her years as an employee. What stands out is that [the employee] had a twenty-three [year] solid workplace relationship with [the employer].”

In essence, the court found that the employee had been a dependent contractor for the period prior to becoming an employee and was therefore entitled to severance based on 23 years of working for the employer, not just the 13 years she worked as an employee. Additionally, the court stated that it would have given the employee the same amount of severance had it found that she had worked as an independent contractor for the first 10 years.

As a result, the court awarded the employee over $112,000 in damages based on a reasonable notice period of twenty-one months.

Get Advice

If you have questions about unfair practices in the workplace, wrongful dismissal, or any other employment matter, contact the Mississauga employment lawyers at Campbell Bader LLP. We regularly advise both employers and employees on a wide range of issues that arise at work. Contact us online or by phone at 905 828 2247 to schedule a consultation.