Editor’s  Message

Spring Has Sprung! Here at L&E@BLG we have plenty of fresh articles to share with you.  From a recent decision on the accommodation of childcare responsibilities, to proposed

amendments to the Ontario Employment Standards Act, 2000, to the impact of Bill 168 on terminations for cause, our Newsletter contains information that is current and relevant to employers.

Don’t forget to check out our L&E@BLG Speaks column in case you are interested in attending any of the upcoming speaking engagements the lawyers in our group are participating in.

As always, if you have any ideas for an article, please let us know.

Jennifer Fantini
Toronto
416.367.6726
jfantini@blg.com

Naomi Calla
Toronto
416.367.6129
ncalla@blg.com

 

Hot Off The Press

Damages Resulting From Termination In An Asset Transaction

A recent case out of the Supreme Court of British Columbia, Kerfoot v Weyerhaeuser Company Limited, 2012 BCSC 640, awarded two former employees of Weyerhaeuser, who accepted employment with Domtar in the context of an asset transaction, damages under three heads of damages: base pension, flexible pension account and matched savings plans.

The Court found that the plaintiffs were not provided with prior notice of termination and were terminated on the same date as the completion of the transaction. The Court assessed common law notice periods for the two plaintiffs, and held that they were entitled to their pension and savings losses during that period.

The Court considered Weyerhaeuser’s argument that the plaintiffs had suffered no loss. The Court held that bonus and lump-sum payments could be set-off from the pension and savings losses but investment gains by one of the plaintiffs  could not be set off from that employee’s benefits because they were a collateral benefit, gained by that employee as a reward for his investment risk in investing his own money accumulated in the pension fund through his prior years of service.

After set-off, the total damages amounted to $81,244 for one plaintiff and $10,493 for the other plaintiff. The terms of the asset transaction are not quoted in the decision but it is nonetheless an interesting case to note for asset transactions.

Retiring Allowances Must Now be Reported on a T4 Slip

A retiring allowance is now to be reported on a T4 slip (not a T4A slip as was previously the case). The reporting requirements are prescribed in the Regulations to the Income Tax Act (Canada), but the rules are drafted in a way that is general enough that reporting on either a T4 or a T4A would meet the requirements. The Canada Revenue Agency’s position used to be that a retiring allowance was to be reported on a T4A, however, for 2012 and later years, such amounts are now to be reported on a T4. The amount is not to be included in employment income, but rather should be included at the bottom of the slip under “other information” and recorded as code 66 for eligible retiring allowances and code 67 for ineligible retiring allowances.

Proposed Amendments to Ontario Employment  Standards  Act Includes New Leaves of Absences

On March 5, 2013, the Government of Ontario introduced Bill 21, Employment Standards Amendment Act (Leaves to Help Families), 2013. If Bill 21 becomes law in its current form, companies with employees in Ontario will need to be aware of (and comply with) three new unpaid, job-protected leaves:

  • Family Caregiver Leave: up to 8 weeks of unpaid, job-protected leave, for employees to provide care or support to specified family members if a qualified health practitioner issues a certificate stating that the family member has a serious medical condition.
  • Critically Ill Child Care Leave: for eligible employees, up to 37 weeks of unpaid, job- protected leave, to provide care or support to a critically ill child of the employee if a qualified health practitioner issues a certificate with prescribed information.
  • Crime-Related Child Death and Disappearance Leave: for eligible employees, up to 52 weeks of unpaid, job-protected leave, if a child of the employee disappears and it is probable that the child disappeared as a result of a crime; for eligible employees, up to 104 weeks of unpaid, job-protected leave, if a child of the employee dies and it is probable that the child died as a result of a crime.

Bill 21 appears to build on initiatives from the federal government, such as the Helping Families In Need Act, which, among other things, amended the Employment Insurance Act to provide benefits to (employment insurance) claimants who are providing care or support to their critically ill child. We will continue to monitor developments on Bill 21 and inform you if it becomes law.

 

Impact of Bill 168 on Terminations for Cause

Bill 168, the 2010 amendments to the Occupational Health and Safety Act recognized  the importance of maintaining workplaces free from violence and harassment and required employers to develop and implement workplace violence and harassment policies. This article will explore how Bill 168 has influenced court and arbitral decisions where employees have been terminated without notice following an incident of workplace violence.

Shakur v. Mitchell Plastics, 2012 Ontario Superior Court1

The Plaintiff, Wazir Shakur, was a 35-year-old machine operator who had worked for Mitchell Plastics for six years. He had a clean disciplinary record. On August 17, 2007, Mr. Shakur was involved in a verbal altercation with another employee of the Company. Witnesses described it as “trash talk”. During the altercation, Mr. Shakur slapped the other employee across the face with his hand causing temporary redness. After an investigation, Mr. Shakur was dismissed without notice. He subsequently commenced an action  for wrongful dismissal.

Before the Court, the employer argued that because of the “serious societal concern with respect to workplace violence, as evidenced by recent amendments to the Occupational Health and Safety Act” the slap justified dismissal without notice.2 The Employer also relied on the Employee Handbook, which contained rules prohibiting “threatening, intimidating, or coercing fellow employees” as well as fighting.

The Court determined that although workplace violence is a serious issue, the slap was not sufficient to justify dismissal without notice and that it was not the type of misconduct which would give an employer just cause for dismissal. The Court also found that Mr. Shakur was provoked by something the other employee said, and that this fact helped explain the slap.

The Court further found that although the Employee Handbook contained prohibitions on violence, Mitchell Plastics had not trained its employees on the policy, or the consequences of violating the policy. As such, the Court found that progressive discipline would have been more appropriate
and awarded Mr. Shakur pay in lieu of notice of 4.5 months.

Threats in the Workplace

One of the important amendments introduced by Bill 168 is that workplace violence includes threats and threatening behaviour, in addition to the use  or attempted use of physical force.3 The following arbitral decisions involve employees terminated
without notice for making threats in the workplace.

In United Steelworkers Union v. Plastipak Industries Inc.4, an employee was terminated without notice after telling her plant manager: “the first element  to attack is water – the next is fire.” As the factory had been damaged by a flood earlier that year, the plant manager interpreted the comment as a threat to set fire to the factory.

The arbitrator determined that the statement constituted violence under the workplace violence definition and that the dismissal without notice was justified on the basis that the employee had  a disciplinary record and the statement was made after she had received a 5-day suspension.

In United Steel, Paper and Forestry, Rubber, Manufacturing, Energy, Allied Industrial and Service Workers International Union, Local 7135 v. National Steel Car Ltd.5 an employee was terminated without notice after he threatened to return to  work with “ammo”, in the course of a verbal confrontation with another employee.

In this case, the arbitrator found that the termination of the employee was an excessive penalty on the basis that the employee had
no disciplinary record and had only made the statement after the other employee offered to “take it outside”. The arbitrator, however, found that a six-month suspension without pay was an appropriate  penalty.

Conclusion

These recent decisions illustrate that both the provisions of Bill 168 and an employer’s policies in this area are important considerations in determining whether an employer has just cause for a dismissal. The result in each case however, depends on the specific factual circumstances which led to the violence or threats of violence.

The decisions indicate that an isolated incident  of violence between co-workers of the same level may not be sufficient to warrant termination without notice when:

  1. the action does not result in harm or injury;
  2. the employee has an unblemished disciplinary record;
  3. the action can be explained as a reaction to provocation; and/or
  4. the employee has not received training on the workplace violence and harassment policy and the consequences of breaching it.

On the other hand, incidents of violence which are unprovoked or where the policy specifies that immediate dismissal is the consequence, are
more likely to be considered sufficiently serious to destroy the employment relationship and warrant termination without notice.

It is important to note that under Bill 168, an employer must review workplace violence policies and ensure that employees are made aware of these policies on a regular basis.

Roberto Ghignone
Ottawa
613.369.4791
rghignone@blg.com


1 Shakur v. Mitchell Plastics, 2012 ONSC 1008

2 Ibid. at pr. 16.

3 Occupational Health and Safety Act, RSO 1990 c O.1 at s. 1

4 United Steelworkers Union v. Plastipak Industries Inc., June 7, 2012, Arbitrator Norman Jesin

5 United Steel, Paper and Forestry, Rubber, Manufacturing, Energy, Allied Industrial and Service Workers International Union, Local 7135 v. National Steel Car Ltd., November 29, 2011 Arbitrator Paul Craven

 

Collective Bargaining Practice Tips

Collective bargaining is a crucial process for many employers and employees. Planning and preparation are important to ensuring the process proceeds smoothly, efficiently and yields a satisfactory result. With just a little planning and preparation, the parties can avoid lengthy negotiations and focus the process on issues of key importance in the workplace. While it may not be possible to avoid disagreements in the bargaining process, planning and preparation may help to minimize the number of disagreements thereby reducing the risk of strike or lockout. With these goals in mind, here is a short checklist of points to review before you start collective bargaining:

  1. What are the Union’s demands? Try to cost each one. What is the monetary impact on the basis of cost, per employee, per hour.
  2. What are the Employer’s demands? Review these before your first meeting with the Union.
  3. Who is on your bargaining team? What expertise can they provide?
  4. Who will be the chief spokesperson for your team? What roles will other members of the team play?
  5. Who is on the Union’s bargaining committee? Are any of them your employees?
  6. Obtain collective agreements and comparative costing information from competitors in your industry.
  7. Know what your bottom line is, going into bargaining.
  8. Check Letters of Understanding and Appendices to the collective agreement and determine whether you want them to continue in the next collective agreement.
  9. Have a draft Memorandum of Agreement that sets out issues such as ratification requirements (by Employer and Union). Consider any retroactivity issues, eligibility for special payments such as lump sum payments, etc.

Collective bargaining is a collaborative process in which labour and management must work to achieve a common goal. At the same time, the process is also adversarial in nature. Planning and preparation will help the parties to narrow the issues, streamline the process, minimize conflict, and hopefully, achieve a satisfactory result. This in turn can help to strengthen the labour management relationship, building a climate of trust and respect for future negotiations.

 

Family Status Update: Federal Court Upholds the Canadian Human Rights Tribunal’s Decision in Johnstone, Requiring Childcare Accommodation

In the recent decision of Attorney General of Canada v Johnston et al.,1 the Federal Court upheld the decision of the Canadian Human Rights Tribunal (“Tribunal”), which confirms that employers have a duty to accommodate their employees’ childcare responsibilities, as they fall within the definition of “family status” under the Canadian Human Rights Act.

Tribunal  Decision

The applicant, Ms. Johnstone, worked as a full time border services officer with the Canadian Border Services Agency (“CBSA”) on rotating shifts. She requested full time employment working fixed day shifts that would allow her to arrange childcare for her young children. CBSA policy limited fixed day shifts as requested by Ms. Johnstone to part time employees, however part time employees were not eligible for the same benefits as full time employees. The Tribunal held that Ms. Johnstone had established a prima facie case of discrimination on the basis of family status, and that the CBSA had not proven hardship such that they would be exempt from their duty to accommodate Ms. Johnstone’s request.

At the hearing before the Tribunal, evidence was adduced that within her family, Ms. Johnstone  had primary childcare responsibility. Following the birth of her second child in 2005, she could not find childcare that would allow her to resume her full time rotating shifts. Ms. Johnstone requested that she work full time in static 13 hour shifts over three days. Full time status required a minimum of 37.5 hours per week. CBSA denied this request and instead offered Ms. Johnstone part time   work on a fixed schedule. Ms. Johnstone asked if she could remain on full time status and have the additional hours not worked characterized  as a leave without pay, so that her income would remain pensionable. This request was denied.

An expert provided evidence regarding the lack of available childcare for parents working non- standard, rotating, unpredictable hours. There was also evidence at the hearing that the CBSA was able to accommodate employees seeking relief from rotating shift schedules for medical reasons by providing them with full time work on fixed shifts.

The Tribunal awarded the following remedies: that the CBSA cease its discriminatory practices against employees seeking accommodation based on family status for the purpose of childcare responsibilities; that the CBSA develop a plan to prevent further incidents of such discrimination; that the CBSA establish written policies and processes for individualized assessments for family status accommodation; compensation for Ms. Johnstone for lost wages, benefits (including pension contributions) and overtime that she would have earned had she been working full time for the material period; $15,000 in general damages for pain and suffering; and $20,000 as special compensation because it was found that the CBSA had deliberately denied protection to its employees by ignoring efforts to bring about change to their policies on family status accommodation.

Judicial  Review

The central issue on judicial review, was whether the term “family status” went beyond the question of mere “relationship” (i.e. we are not hiring you because we do not like your husband, we are not allowing you in this restaurant because you have children), and includes a secondary level of protection for issues around childcare. The Federal Court judge on judicial review accepted the conclusion of the Tribunal that the definition of family status includes childcare, stating that it falls “within the range of reasonable possibilities”.

The Federal Court reviewed the efforts made by Ms. Johnstone to secure childcare in light of the CBSA’s particular scheduling model, and the fact that her inability to find childcare in her situation was confirmed by expert testimony. The CBSA made no attempt to accommodate Ms. Johnstone or inquire into her individual circumstances, and instead chose to rely on their unwritten blanket policy. There was no evidence that it would have caused undue hardship to CBSA to accommodate Ms. Johnstone’s request.

However, the Federal Court did go on to recognize that the duty to accommodate childcare is not unrestricted, and some of the onus will fall on a parent claiming accommodation: “In my view the childcare obligations arising in discrimination claimed based on family status must be one of substance and the complainant must have tried to reconcile family obligations with work obligations.”2 A prima facie case of discrimination based on family status will be made out in the context of childcare where “an employment rule or condition interferes with an employee’s ability to meet a substantial parental obligation in any realistic way”.3

Impact on Employers

The Johnstone decision will have a significant impact on employers. First, it reminds us that when an accommodation request pursuant to any  of the grounds enumerated under either federal or provincial human rights legislation is received, an employer cannot rely on a blanket policy. Rather, the employer must consider the needs of the individual employee in each case, and carefully assess them against their operational capacity. Secondly, employers will have to accommodate their employees’ childcare responsibilities where that responsibility is one of substance and the employee has made an attempt to reconcile family obligations with work obligations. Smaller organizations may be able to rely on the defence of undue hardship, however, this is a very high threshold to meet.

The Federal government has announced that they will be appealing this decision. We will keep you apprised of any developments regarding the appeal.

Naomi E. Calla
Toronto
416.367.6129
ncalla@blg.com


1 2013 FC 113

2 Ibid., at para. 120

3 Ibid., at para. 125

 

Québec Law Limits Personal Liability for Administrators & Officers in Wrongful Dismissal Actions

In Québec, actions for dismissal without just and sufficient cause against administrators and officers of a corporation can be set aside, provided that it can be demonstrated that the plaintiff’s motion alleges insufficient facts to lead the court to conclude that administrators and officers should be held personally liable. Courts should not pierce the corporate veil and search blindly and indiscriminately for any cause of action that might work against administrators or officers where the plaintiff’s action is clearly unfounded in law.

In Ronald Stark v. F & D Plastics Inc.1, the plaintiff was a former employee of the defendant F & D Plastics, of which the defendants Darren and Roger Rosbury were administrators and officers. At trial, it was acknowledged that the plaintiff was dismissed without just and sufficient cause and that a release had been signed, but the plaintiff alleged that that release did not provide for sufficient notice. Therefore, he filed a motion to institute proceedings against F & D, but also against the Rosburys personally, in their capacity as administrators and directors, for an indemnity in lieu of a longer notice period. The Rosburys filed a motion to dismiss the plaintiff’s action. Justice Danielle Turcotte of the Québec Superior Court granted the Rosburys’ motion and dismissed the plaintiff’s action against them personally.

The plaintiff alleged that there was cause to pierce the corporate veil because the Rosburys used a legal person to violate rules of public order. The plaintiff further alleged that they had acted in bad faith in not giving him sufficient payment in lieu of notice and thereby committed a fault. According to the plaintiff, he had a right to pursue all parties at fault as co-defendants and the Rosburys could not invoke the corporate veil to deflect their personal responsibility for violations of rules of public order, such as those requiring notice or payment in lieu thereof.

The Rosburys requested the dismissal of the case against them personally since in his motion, the plaintiff alleged insufficient facts to lead the Court to conclude that they should be held personally liable. Furthermore, since at all relevant times the Rosburys acted as agents of F & D, and since the plaintiff’s motion identified no distinct fault on their part, the action was unfounded in law. As such,  the plaintiff’s action constituted an improper use  of procedure and the Rosburys argued, should
be dismissed.

The Court first examined whether the action against the Rosburys was unfounded in law. The Court found that while the plaintiff explicitly mentioned in his motion that all defendants had acted in bad faith, he provided no facts whatsoever describing the nature of the Rosburys’ personal actions.

As for the issue of improper use of procedure, the Court reviewed legal commentary which clearly stated that directors were not personally liable so as long as they acted within the confines of the powers conferred on them, and that generally, in matters of dismissal, only the employer could be held liable. For an individual to be held personally liable, a distinct fault on his part had to be proven. No such fault was alleged in the plaintiff’s motion.

The dismissal, in and of itself, was not a fault or an abuse of right, and none of the facts alleged in the plaintiff’s motion could lead the Court to conclude that the Rosburys had committed any fault of their own. Their actions in carrying out the dismissal and signing the release were performed as agents of the company and therefore could not be considered grounds for their personal liability.

Since an unfounded suit may constitute procedural impropriety, section 54.2 of the Code of Civil Procedure provides for a reverse onus where a defendant summarily establishes that an action or pleading may constitute such an impropriety. In this case, the Court found that the plaintiff was unable to satisfy this reverse onus to establish that his action against the Rosburys was  founded in law.

Furthermore, the Court found that no intention to harm on the part of the plaintiff was needed in order to dismiss the action; the fact that he instituted an action that was unfounded in law constituted a “culpable” action in and of itself. Quoting legal commentary on the subject, the Court stated that where no reasonable cause of action existed, one should not search blindly and indiscriminately for any cause of action that might work.

In the Court’s opinion, the action against the Rosburys had no reasonable chance of success. Therefore, it dismissed the action against them, with costs against the plaintiff.

Alexis Renaud
Montréal
514.954.3109
arenaud@blg.com


1 Ronald Stark v. F & D Plastics Inc., FD Plastiques Canada Corporation, Darren Rosbury, Roger Rosbury, Québec Superior Court, February 12, 2013.
 

Authors

Jennifer M. Fantini 
JFantini@blg.com
604.640.4247

Naomi Calla 
NCalla@blg.com
416.367.6129

Roberto Ghignone 
RGhignone@blg.com
613.369.4791

Alexis Renaud 
ARenaud@blg.com
514.954.3109

Expertise

Labour and Employment
Labour and Employment Law