Employment

In cases of constructive dismissal:
the employer does not formally terminate the contract but may still have to pay notice and/or severance.
Changes to geographical location have to be significant in order to be considered constructive dismissal
Changes to the amount of hours worked or the shifts or days worked may also constitute constructive dismissal
An untenable or poisoned work environment may also be constructive dismissal if the employer has tolerated harassment or offensive behaviour or bullying in the workplace
Employers not covered by the ESA include:
all federally regulated sectors, co-op students, Ontario Works employees, police officers, embassy/consulate employees, inmates, political, judicial, religious, trade unions and persons participating in work simulation rehab programs
Employment Standards Act: Wages
Employers must establish a regular pay period (s. 11) and pay by cash, cheque or direct deposit
When employment ends all wages, pay and benefits owing must be paid within 7 days or on the next regular pay date at the latest
The only time an employer can withhold wages is for tax purposes, under a court order for garnishment or with specific instruction in writing from the employee
Deductions could be made for cash shortages and losses if it is clear the employee was the only one with total control and access to same
Employers can recover wage advances or unintentional overpayments
Employers must provide a wage statement (paystub) in writing for each pay period which details dates, and deductions, gross and net pay
Minimum wage sets the lowest standard hourly rate which can be paid and is applicable to all employment, whether temporary, part-time or casual
The current minimum wage is $11.40 per hour and is set to increase annually in accordance with inflation rates
Some occupations have a lower minimum wage under the Act including full time students under the age of 18, food and beverage servers, hunting and fishing guides, homeworkers
Employment Standards Act: Hours
Generally the maximum hours of work are 8 per day and 48 per week
The employer and employee can agree to vary this agreement if they do so in writing, the employee received an information pamphlet with their rights - approval must first be obtained from the Ministry of Labour - this is mandatory to work more than 8/48 hours
Approvals are given for a maximum of three years only, some are only on year
A 30 minute eating period is mandatory after working for 5 consecutive hours, there can be an agreement that this will be two separate 15 minute breaks instead
Meal breaks are unpaid and the employee must be free from work during this period - they do not count in calculating overtime
Coffee breaks are not covered under the Act but if they are provided the employee must stay on the premises
In an emergency an employer can require an employee to work in excess of the maximum hours - these circumstances include natural disasters, extreme weather, fires, floods, delivery of essential public services (fire, police, hospital, public transit), urgent repair work
Employment Standards Act: Overtime
Overtime pay is calculate at 1.5 times the employees regular pay (time and a half)
It is applicable for every hour after 44 which is worked
Overtime is generally calculated on a weekly basis
An employer cannot lower an employees regular wage in order to avoid paying overtime
Managers and supervisors do not qualify for overtime - to qualify as a manager the job duties should include hiring, firing, disciplining, policy and budget authority, it does not just mean salary employees they must have managerial duties and powers
Even if someone's job title classifies them as a manager, if they regularly perform non-managerial duties they will qualify for overtime
If a person works in more than one position they will qualify for overtime if at least 50% of the hours worked fall into the category that allows for overtime
An employer and employee can enter an agreement to average out overtime pay over a specific time period - this type of agreement requires approval from the Ministry of Labour
Employment Standards Act: Time off/ Vacation
An employee can agree to accept paid time off in lieu of overtime pay, it must be at the rate of 1.5 hours received per overtime hour worked
The time off must be taken within 3 months of the overtime worked, unless there is an agreement in writing extending this period up to 12 months
Vacation time is a minimum of two weeks per year AFTER having worked for an employer for 12 months
It can be taken in one week or two week intervals, for periods of less than a week the parties must agree in writing
The employee has the right to decide when the vacation is taken
The vacation has to be taken with 10 months after it is earned (the 12 month period)
Time off for illness or leave or layoff counts toward the 12 month period
Employment Standards Act: Working on Holidays
Some industries may require employees to work on public holidays - hotels, restaurants, hospitals, etc
In these situations the employee will be given an alternate day off or receive premium pay (1.5 times the regular pay)
There are 10 types of leave in the ESA -
Pregnancy, parental, personal emergency, family medical, declared emergency, reservist, organ donor, family caregiver, critically ill childcare and crime related child death or disappearance
Pregnancy leave
includes the right to take up to 17 weeks of unpaid time off work
To qualify the pregnant worker must have been hired at least 13 weeks prior to the due date
The employee gets to choose when pregnancy leave will start - the earliest date is 17 weeks before the due date and the latest start day is the birth of the baby
The employer is entitled to request a medical certificate with the due date, date of birth/stillbirth or miscarriage
The leave must be taken all at once
For stillbirths and miscarriages leave may be longer than 17 weeks because there is an allowance of 6 weeks leave after such an event
Parental leave
is available for up to 37 weeks to any new parent who was hired at least 13 weeks prior to the start of the leave
This includes birth parents, adoptive parents and a person in a permanent relationship with a parent who will treat the child as their own
Leave must start within 52 weeks after the child is born or comes into their care/custody
EMPLOYEE RIGHTS WITH LEAVE
Reinstatement to the same position or one that is comparable if it no longer truly exists
The salary must be at least equal to pre-leave and duties the same or similar
If a job is terminated due to downsizing the onus is on the employer to show it was not related to the leave
When an employer is insolvent:
employee wages take precedent over any unsecured creditors up to $10,000
There is federal legislation to assist employees when an employer goes bankrupt up to $3700
Claims have to be filed with Service Canada within 56 days of the bankruptcy
Complaints about employment standards are filed with the Ministry of Labour, who will investigate
There is no maximum amount of back wages that can be claimed anymore
If a complaint is filed then you cannot also make a claim for damages in court - you pick one or the other
Most limitation periods are 2 years
Investigations and decisions:
made by employment standards officers
Decisions of the officer can be appealed by either party within 30 days
Orders that an officer can make include an order to pay wages, to comply with the Act, to reinstate an employee and fines can also be issued
Appeals are made to the Labour Relations Board
Termination Pay
Under the ESA employees are entitled to receive notice of termination or payment in lieu of that notice.
Employers do not need to provide notice for temporary lay-offs:
but the lay off can only be for a total of 13 weeks during a 20 week period
There are some exceptions for periods up to 35 of 52 weeks where employees are receiving EI, continued benefits or are part of a union
Layoff
means working less than half of the regular work week and can't mean a period of suspension, or a time when the employee is unavailable
If an employee has recall rights
Can choose between being recalled or receiving termination pay
Termination
Occurs when the employer dismisses or stops employing the person, lays someone off in excess of the weeks allowable under the Act or constructively dismisses someone who then resigns. Should always be done in writing and does not have to include reasons.
list of notice requirements by years of service
maximum under the Act is 8 weeks
Benefits must continue during the notice period, if a termination clause does not specify this it will be voided
- Less than 3 months: no notice
- Less than a year but more than 3 months: 1 week
- 1 to less than 3 years: 2 weeks
- 3 years less than four: 3 weeks
- etc 4-7 years: 4- 7 weeks
- 8 plus years: 8 weeks
If notice is given instead of a payment:
The wage must remain the same & benefits must continue
If an employer calls a terminated worker back for extra work:
they can work in the 13 week period following termination without the need to go through a further notice period - more than 13 weeks will trigger the requirement for statutory notice once again
Mass termination
is when 50 or more employees are laid off at the same time or within 4 weeks of one another this will increase the notice period dramatically - this will not apply if the total number laid off amounts to ten percent of the workforce at that location
In a mass termination the employer can stagger the lay-offs to avoid the extra notice requirements
If employees receive a notice of mass termination they can leave before the notice period but should give written notice
An employer may make a payment of pay in lieu of notice on a without prejudice basis
when there is some cause but it is not clear whether it will be considered serious enough - a payment of this type cannot be referred to as proof there was no just cause - it is made "without prejudice" in order to avoid litigation
Employees not entitled to notice:
If an employee refuses to take reasonable alternative employment which is offered they will not be entitled to notice
If an employee does not return to work after being recalled from lay-off then he will not be entitled to notice
Severance pay:
is separate from termination pay and is a one time lump payment intended to compensate long-term employees for loyalty, loss of seniority and benefits
To qualify for severance the employer must have over 2.5 million in annual payroll or have laid off more than 50 employees in a 6 month period
The employee has to have at least 5 years of service to qualify
Severance pay is one week of pay for each year of service to a maximum of 26 weeks
It is calculated to include payment for partial years of service as well - no rounding up or down
Severance will not be payable:
if there is willful misconduct (similar to just cause), the employee refuses reasonable alternative employment, the employee retires, the employee was on strike and the strike caused the business to close down in part or all together, frustration of contract due to unforeseen event, or for certain types of employment
Severance, like termination pay must be paid on the first pay period following the end of employment or within 7 days, unless there is an agreement for installments.
If a business is sold and the new buyer will continue the employment contract:
There is no notice or severance requirement
The employee will retain his seniority from the first owner over to the second owner unless there is a gap of at least 13 weeks
If an employee ceases to work for an employer and more than 13 weeks passes before he is hired back again, he is not entitled to combine the length of employment from both times for notice purposes.
Just cause
is very serious employee misconduct or incompetence which are grounds for dismissal without notice
It is not "a good reason", the employee must have breached the contract in a fundamental way, rarely is one incident sufficient - such as assault, theft, breach of trust
Courts view of just cause
The onus of proof is on the employer to show, on a balance of probabilities that there was a fundamental breach by the employee
Courts use proportionality - the sanction by the employer must be in proportion to the employees conduct
Courts will also use a contextual approach - looking at the big picture such as history of discipline, length of service, personal factors, mitigating circumstances
Employers should follow rules of procedural fairness including giving the employee a chance to respond to allegations, investigating promptly & ensuring the sanction is appropriate
Employers can consider intent, context, the employee response (honesty)
The best course is for an employer to allege just cause when terminating the employee instead of after a lawsuit has started but they are not prevented from doing so at a later date
Dismissal for incompetence
will be successful if the employer is clear on job requirements, has provided adequate training and support, the performance is demonstrably below the average level, warnings have been issued, the employee is aware of the standard to meet, time is given for improvement and everything is well documented
Bardal factors
If there is no contract an employer will have to consider the minimum statute requirements, the common law and look at factors such as age, position, length of service and availability of similar employment, specialization.
-Unskilled workers usually will receive a maximum of one year pay, senior level employees usually get a maximum of 18-24 months
Dismissals for certain groups
Luring an employee from a previous job will attract a higher notice period
Dismissing a pregnant employee may sometimes attract a higher notice as it will become more difficult for them to find work
Employers have the choice to :
give notice of termination and allow the employee to work during the notice period or to have them leave and pay them for the notice period
If the employee continues to work the employer should be generous in allowing time off for interviews, getting phone calls, etc
duty to mitigate damages
means the employee has to take reasonable steps to find a comparable new job - this does not mean they start the next morning. This duty exists in all situations, including constructive dismissal
A comparable job will have a similar salary, location, position and set of skills
If an employer is claiming a failure to mitigate they have the onus of proving appropriate jobs were available and reasonable steps w
If a fundamental change to the contract occurs:
the employee has to resign in a reasonable amount of time or they will be deemed to accept the changes
Avoiding constructive dismissal claims:
the employer should try to get the consent of the employee or provide a common law notice period or have a clause in the contract regarding changes to duties, etc
Courts do not reinstate workers to their jobs when wrongfully dismissed, they award damages from the date of dismissal or the date of the fundamental change in the contract
The limitation date for wrongful dismissal claims is two years
Standard damages claimed include salary, benefits, use of company vehicle, insurance (life/disability), bonuses, stock options and pension
Special damages are claimed to compensate for the conduct of the employer during the termination process
Wallace damages
Are claimable where an employer does not act fairly or in good faith in the course of the dismissal.
Damages were refined, they are referred to as "moral damages" and are more in line with aggravated damages
There is a duty to prove the damages - an example would be showing an employee received some treatment for mental distress
Boucher v Walmart case
Supreme Court demonstrated the current application of Wallace (moral) damages. Even though they reduced the amounts awarded (which is not unusual in any circumstance), the amounts are still very high, reinforcing a growing trend in high awards.
- Assistant Manager sued for constructive dismissal
- Misconduct of company and manager warranted high punitive damages
The case law sends a message to employers:
to use termination clauses in contracts, to enforce their own workplace policies, to determine and pay proper notice and to handle terminations professionally.
-Employees should not be required to sign a release in order to receive minimum statutory payments but should sign releases for any excess.
-Employees should understand releases and sign them voluntarily, they should be given an opportunity to obtain legal advice
Reference letters are not required by law but will decrease damages by helping the employee get a new job
Bardal Case
- an advertising manager who was induced to leave his employment
- During negotiations, Bardal repeatedly made it clear that he required the new employment to be permanent due to his advanced age
- Bardal was terminated because the president of the company thought someone else could do a better job generating revenues.
- . A court will consider the character of the employment, the length of service of the employee, the age of the employee and the availability of similar employment given the experience, training and qualifications of the employee
Wallace Case
- Successful salesman who was dismissed after he was told his job was secure
- Employer stated "good cause" but later withdrew allegations
- Supreme Court found employers in the wrong and awarded damages, which it decided to confer by extending the reasonable notice period
Keays v Honda Case
- Worked for Honda for 14 years and enrolled in disability program
- Missed more work than Dr. expected
-Honda didn't believe he was disabled and wanted him to return to work or be terminated
- Keays sued for wrongful dismissal
- Judge sided with Keays
- Used Wallace damages