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12:58:00 am, by admin   ,

OFF THE CLOCK OR NOT? TERMINATION AND OFF-DUTY CONDUCT

The recent termination of a Hydro One employee following an incident at a Toronto FC soccer match earlier this month has been the subject of extensive public debate. The employee, Shawn Simoes, was part of a group of men who made obscene comments to a City TV reporter, Shauna Hunt. Following the video of this exchange going viral, Hydro One announced that it had terminated Mr. Simoes for a breach of their employee Code of Conduct.

The issue of whether you can be fired for off-duty conduct is not a new one. See our previous blog on this topic here

The key legal issue is whether the off-duty conduct adversely effects the employer’s workplace or its brand. The factors for an employer to consider include, among others: whether the employee is unionized; the position occupied by the employee(i.e. whether he or she is in a position of leadership); the nature of the conduct (i.e. whether it is illegal); and the extent to which it relates back to the employer or the employee’s duties.

A non-unionized employee can be terminated without cause, assuming the appropriate notice is given or severance is paid.A unionized employee, on the other hand, can generally only be terminated for cause. Because unionized employees have the right to grieve a termination decision through the union, the employer would have to establish ‘just cause’ for its decision to terminate an employee. In exceptional circumstances where the conduct speaks for itself, for example, it is possiblethat even a unionized employee would not receive any assistance from his or her union, in which case, the employee may be left without a remedy depending on the provisions of the collective agreement.

In the case of Hydro One’s termination of Simoes, popular opinion suggests that Hydro One made the right decision. Legally however,there is not much precedent for when such appalling comments rise to a level that justifies termination of an employee (see our previous blog for some examples of conduct that a court has found to justify termination).

Some of the criteria Hydro One should have considered in making its decision to terminate Mr. Simoes include (but are not limited to) the fact that Hydro One is funded with taxpayer dollars; the extent to which the public would have been expected to know that Mr. Simoes was employed by Hydro One (i.e. the genuine impact on Hydro One’s ‘brand’); whether Mr. Simoes is in a leadership role; whether Mr. Simoes has women who report to him;and whether or not he has any relevant disciplinary history.

Since the public does not have access to all of those details, and unless Mr. Simoes challenges the decision, we will never know whether Mr. Simoes’ termination for cause is ultimatelylegally justified. With the foregoing in mind, in the age of social media, employees should remain increasingly cautious about managing their off-duty conduct, as the lines between on-duty and off-duty are increasingly blurred and such disreputable conduct may place their employment at risk. 

10:00:00 am, by admin   ,

ORDINARY VS KEY EMPLOYEES

Distinguishing at law between an ordinary employee and a key employee who owes an employer fiduciary dutiescan be challenging at the best of times. In his decision in Optilinx Systems Inc v Fiberco Solutions Inc, 2014 ONSC 6944 Justice Perrell provided some additional guidance in making this important distinction.

In this case, the plaintiff, Optilinx, brought a motion seeking to restrain two former employees from working with its clients for a period of one year following their resignation from the company. Optilinx conceded that one of the two employees was not a key employee but assisted the other employee, Mr. Foresta, in breaching his alleged fiduciary duties.

Justice Perrell dismissed Optilinx’s motion on the basis that there was no prima facie case that Mr. Foresta was a key employee who breached his fiduciary duties.

Justice Perrell’s decision in Optilinx reaffirms the factors relevant to determining whether an employee owes a fiduciary duty to their employer. Justice Perrell states that just because Mr. Foresta was a very productive employee, or even the “lynchpin to Optilinx’s success” (see paragraph 33) does not mean he was a fiduciary. Specifically, Justice Perrell highlights that Mr. Foresta did not have any hiring authority, he did not carry out any management or administrative functions like business or financial planning, and he was not a director, officer or owner of Optilinx. Without a non-competition clause in the employment agreement, Justice Perrell confirmed that fiduciaries, like ordinary employees, are not prevented from accepting work from former clients. On the facts in Optilinx, there was no evidence that Mr. Foresta directly solicited any of Optilinx’s customers.

Though Justice Perrell did not make a final determination on whether Mr. Foresta was a fiduciary, his observation that Optilinx failed to show a strong prima facie case that Mr. Foresta was a key employee is important to employment law.

Many employers have employees who are a significant asset to their bottom line. Justice Perrell’s observations reaffirm the reluctance courts have in restraining persons from carrying on in their fields of expertise after parting with an employer. Employers that have serious concerns about competition from former employeesshould have non-competition and non-solicitation clauses included in their employment agreements. Without such contractual protection, employers gamble on the narrowly construed protections afforded by the common law.

12:00:00 pm, by admin   ,

MATERNITY LEAVE AND EMPLOYERS’ LIABILITY

We previously wrote about the Small Claims Court decision Bray v Canadian College of Massage and Hydrotherapy, 2015 CanLii 3452 here. In addition to the lesson for plaintiffs in choosing the right forum, the Bray decision is also a cautionary tale for employers/respondents. Let us start by reviewing the facts.

After her return from maternity leave in October 2013, the College reduced Ms. Bray’s hours and responsibilities. When she questioned the College about the decision to reduce her hours and responsibilities, Ms. Bray was told by the College’s Director of Education to “see how this term goes and see if you find it ok with even being in 4 classes and having to be a mother at the same time”.  Ms. Bray then filed a complaint with the Ministry of Labour, shortly after which she was effectively terminated when, in December 2013, she was informed that her hours were being reduced to zero commencing January 2014.

In his decision in Bray, Deputy Justice Winny makes a number of important findings, including:

  • As of December 2013, the College had effectively terminated Ms. Bray as it had decided that starting January 2014, and for an indefinite period of time, Ms. Bray would not be given any courses to teach, and would therefore not be paid.
  • The decision to reduce Ms. Bray’s hours did not constitute a form of progressive discipline, since Ms. Bray’s alleged misconduct had occurred over a year prior to her termination, and most importantly, she was never notified of the incident nor given an opportunity to respond to it.
  • The College failed to perform its obligations under the employment agreement in good faith by not properly investigating the workplace incident; by failing to inform Ms. Bray of the alleged misconduct; and by not giving her the opportunity to respond to it.
  • The College’s Employee Handbook, which was referenced in Ms. Bray’s employment agreement, did not effectively limit her rights on termination (or the College’s liability) to the minimum standards of the Employment Standards Act, 2000. Deputy Justice Winny found that although Ms. Bray’s employment agreement referenced the termination provisions found in the Employee Handbook, the Handbook was not provided to Ms. Bray when she signed the agreement, nor was there any evidence that she was provided with a copy of the Handbook, told to review it, or informed that it restricted her rights otherwise available under the common law. The fact that the Handbook was generally made available to employees was insufficient to displace employees’ rights upon termination under the common law. Further, Deputy Justice Winny notes that even if she had been made aware of the Handbook, its termination provisions were not “sufficiently clear to exclude the common law requirement for reasonable notice” (see paragraph 38). The handbook in question did not contain any language to suggest that employees were limited to the statutory minimums in the Employment Standards Act, 2000.

The Bray decision is a helpful reminder for employers that:

  1. Investigations into alleged employee misconduct can have serious financial implications for employers, particularly where such workplace investigations are mishandled.
  2. Employee handbooks will not automatically protect employers from attracting common law liability where the handbook is not clear in respect of an employee’s rights and obligations.
  3. Even where an employee handbook is clear as to its impact on the employee’s rights and obligations, the handbook does not protect the employer where the employee has not been provided with the handbook or in cases where the employer did not explicitly bring the relevant provisions to the attention of the employee. 
08:20:00 am, by admin   ,

THE DOWNSIDE OF WINNING IN SMALL CLAIMS COURT & OTHER LESSONS FROM BRAY V CANADIAN COLLEGE OF MASSAGE AND HYDROTHERAPY

The importance of issuing a claim for wrongful dismissal in the right forum became abundantly clear in the recent decision Bray v Canadian College of Massage and Hydrotherapy, 2015 Can Lii 3452.

The plaintiff, Kelly Bray, brought a wrongful dismissal and discrimination claim against her former employer, the Canadian College of Massage and Hydrotherapy, in Small Claims Court. The Small Claims Court is limited to a strict monetary jurisdiction of $25,000 in Ontario. In his decision, Deputy Justice Winny held that Ms. Bray, an instructor and employee at the College for 9 years, was wrongfully terminated and discriminated against as a new mother. Deputy Justice Winny awarded Ms. Bray $42,700 in damages, but due to the Court’s monetary jurisdiction, Ms. Bray had to forgo $17,700 when her award was reduced to $25,000.

The practical implications of this decision for plaintiffs are important.

First, though Ms. Bray was limited to the Small Claims Court’s monetary jurisdiction, she still had to prove each element of her claim in the same manneras she would have had to in the Ontario Superior Court of Justice. In this particular case, Ms. Bray had brought a claim for wrongful dismissal, discrimination damages, punitive damages, and aggravated damages. She was successful in proving, and was awarded (at least notionally) all but the aggravated damages. Had Ms. Bray brought her action under the Ontario Superior Court of Justice’s Simplified Procedure, these same facts could have resulted in an award for the full amount of damages she had proven. The Bray decision is a reminder that plaintiffs should carefully determinewhether damages relating totheir claim could reasonably be expected to exceed $25,000. If so,the action should be brought in the Ontario Superior Court of Justice and not in Small Claims Court.

Another important aspect of this decision is that Deputy Justice Winny does not particularize the breakdown of the final $25,000 award. From the reasons it is stated that Ms. Bray successfully established $20,000 in discrimination damages, $17,700 for compensation in lieu of reasonable notice, and $5,000 in punitive damages. How much of each of these heads of damages are included in the final award is unclear, but important, because human rights and other general damages (which amount to $25,000 in the Bray decision) can be treated in a tax-free manner, while the $17,700 awarded for lost income from employment would be subject to income tax. 

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