Employment and Labour Lawyers for Management

Our own Allison Taylor, along with Peter Wilson, have co-authored the 3rd edition of their book, “The Corporate Counsel Guide to Employment Law.”

This resource provides a focused and disciplined overview and guide with respect to employment law. This practical text addresses the material legal constraints, issues and requirements of employment law, helping you with everything from hiring to termination.

For more information or to order your copy, visit Canada Law Book here.

Kelly McDermott and Jeremy Schwartz

Effective July 1, 2010, the Human Rights Tribunal of Ontario has made significant changes to its rules of procedure, and corresponding forms and practice directions. 

The changes may fundamentally alter the way applications are handled at the Tribunal.  Employers and other respondents in particular will be happy to learn that the new rules will likely increase efficiency and fairness in their favour.

To learn more, view our UPDATE.

The U.S. Labour Department has recently commenced an initiative to require employers to prepare and adopt compliance plans to ensure they do not violate wage, job safety and equal employment laws.  The announcement was accompanied by an expression of the desire by Labour Secretary Seth Harris that his department foster a “culture of compliance” amoung employers, as opposed to a complaint-driven system in which the employers are “caught” not complying.  The intent is for employers to prepare written plans designed to prevent violations of workplace laws, including plans to address safety hazards in the workplace. 

The plan is focused in particular on recent wage violations in restaurants and discount retailing, as well as safety violations in coal mining and construction.  Another focus is on the widespread use of independent contractors to avoid paying Social Security taxes and to avoid wage laws.  In future, employers will have to provide a written explanation to the Labour Department to explain their use of contractors, and to provide a similar explanation to those workers. 

Not surprisingly, employers have reacted negatively, alleging micromanagement of their businesses.  Pro-labour commentators have also expressed concerns regarding the potential superficiality of such plans.

 Since trends in the United States frequently precede similar trends in Canada, it remains to be seen whether Canadian provinces eventually follow suit to ensure compliance with labour laws.  A greater culture of compliance exists in Canada than in the United States, but recessions typically lead to some avoidance of labour standards and it is to be expected that any slackening of compliance during the recession may be met with a similar initiative down the road.

Learn the Latest!

Join us at the 11th Annual,  Ontario Employment Law Conference, on June 2, 2010 at the Pearson Convention Center, Brampton.  This event is hosted by First Reference, with presentations by the lawyers at Stringer Brisbin Humphrey.

Follow this link for more information or to register: http://www.firstreference.com/conference/index.asp

The Ontario Superior Court of Justice has ruled that representative plaintiff Cindy Fulakwa can proceed with her class action against Scotiabank on behalf of a class of more than 5,000 sales staff who worked in retail branches of Scotiabank from 2000 to the present. 

Before a claim can proceed as a class action (instead of by individual claims by each plaintiff) the court has to “certify” that there is sufficient commonality of material issues to be determined among the members of the class (group of plaintiffs).  If there is insufficient commonality the court will refuse to certify the class, which means that although individual plaintiffs can choose to bring individual actions, the plaintiffs cannot proceed with their claim as a class action.

In this case, the court distinguished the claim against Scotiabank from an earlier, similar class action initiated by CIBC employees.  In the proposed class action against CIBC the court refused to certify the class because it found that there was insufficient commonality of the material issues to be determined among the class members.  By contrast, the court held in the class action against Scotiabank that there was sufficient commonality and so proceeding as a class action was appropriate.

The only real distinction appears to be that in the CIBC case the employees did not allege that the bank’s overtime policy was illegal, only that CIBC applied it in an illegal manner.  By contrast, in the Scotiabank case the employees alleged that the policy/practice was illegal because it was deficient - i.e. the bank failed to establish a system for recording overtime worked and because the policy and practice contained a “catch-22″ because employees were often required to work overtime without the ability to obtain prior approval. 

A closer review of the two cases makes this distinction appear somewhat hollow:  in both cases the employees alleged that they worked overtime for which they were not paid; in both cases the banks had overtime policies and practices that applied throughout the organization; in both cases the policies required employees to seek prior approval for overtime; in both cases the Canada Labour Code obliged the banks to pay employees overtime pay for any overtime hours the employer “required or permitted” them to work in excess of standard hours of work; and in both cases the employees argued that the policy and/or its implementation was to blame.

In my respectful view, either the CIBC decision was correct and the Scotiabank decision is wrong, or vice-versa.  This appears to be a fundamental disagreement between the judges who presided over each case.  Given the importance and potential multi-million dollar liability facing Scotiabank, I expect the Scotiabank decision will be appealed to the Court of Appeal and possibly to the Supreme Court of Canada, where hopefully we will receive guidance on the distinctions drawn between the two decisions. 

I encourage those interested to read the two decisions and try to spot the differences for themselves.

Jeremy Schwartz: jschwartz@sbhlawyers.com

The CIBC case:

www.canlii.org/en/on/onsc/doc/2009/2009canlii31177/2009canlii31177.html

The Scotiabank case:

www.canlii.org/en/on/onsc/doc/2010/2010onsc1148/2010onsc1148.html

The Supreme Court of Canada (”SCC”) recently weighed in on an interesting point of law: to what extent can the courts force a business to stay open? 

The business in this case was the famous Wal-Mart store located in Jonquiere, Quebec that was the first Wal-Mart to unionize in North America.  Five months after certification, the company decided to shut down its store and terminate the employment of 190 workers on the same day the parties’ first collective agreement dispute was referred to arbitration by Quebec’s labour minister.

The workers complained that the company’s decision amounted to union busting and sought reinstatement under provisions of the Quebec Labour Code (the “Code”).

In two concurrent judgments (Plourde v. Wal-Mart Canada Corp., [2009] S.C.J. No. 54 and Desbiens v. Wal-Mart Canada Corp., [2009] S.C.J. 55), the SCC found in the company’s favour, mainly on a technicality. 

The dismissed employees argued that their right to freedom of association in the Charter of Rights and Freedoms (”Charter”) was violated when Wal-Mart decided to close the store.  Under the Code, as with other provincial labour statutes, employers have the onus of proving that their actions were not motivated by anti-union animus (i.e. reverse onus).  In this case, however, since the store no longer existed, the SCC determined that the reverse onus provision of the Code did not apply and consequently, there was no possibility of reinstatement. The workers had other remedies, including financial, if they could prove that the company had engaged in unfair labour practices.

While this case raised several interesting issues relating to the Code and labour relations in Quebec, it did not consider whether Wal-Mart’s decision to close its doors was tainted in any way. Therefore, it will have little impact in the rest of Canada.

Landon Young: lyoung@sbhlawyers.com

On January 1, 2010 the rules governing civil actions in Ontario are to undergo sweeping changes. One notable change is the expansion of the small claims court jurisdiction from $10,000 to $25,000. The changes are supposed to improve access to justice and reduce the cost of litigation for all parties.

Initial opinions from employment counsel acting for both employers and employees have suggested the changes could lead to an increase in litigation. A recent decision at the Ontario Superior Court of Justice suggests the increase may be more conservative - and for unexpected reasons.

The new rules add a concept of “proportionality” to the provisions that guide judges’ assessments of what amount of costs should be awarded to a successful party in litigation. Parties often decide whether or not to bring a claim, or whether to settle instead of going to trial, based upon their estimations as to the potential costs they may be awarded (or that may be awarded against them). This is especially the case in claims of $50,000 or less, where legal costs can often rival the claim if the trial is lengthy or complex.

Pitney Bowes of Canada v. Noia, 2009 CanLII 63372 (ON S.C.) sheds some light on how this new concept of proportionality may be implemented. The Plaintiff claimed almost $23,500, but obtained judgement for only $13,400. The trial lasted two days. The Plaintiff’s lawyer had 16 years experience and claimed 62 hours were spent overall on the file. With legal fees and disbursements at partial indemnity (meaning typically around 40% of actual costs) that added up to $13,340 in costs claimed.

Applying the concept of “proportionality” as if the new rules were in place, the Court awarded only $1,600 for costs and disbursements. The Court found that the number of hours claimed was excessive and disproportionate to the complexity and value of the claim. However, certainly the decision cannot be taken to mean that a two-day trial could be tried for $1,600 in legal fees and disbursements.

The silver lining for employers: Employees may think twice before going to trial with the prospect of recovering so little in costs that they end up in the hole to their lawyer even in victory.

Jeremy Schwartz - jschwartz@sbhlawyers.com

The Canadian Federation of Independent Business (”CFIB”) appears to have ruffled the feathers of the WSIB.  In a combative September 3, 2009 press release, the CFIB blasted the WSIB for recent financial market losses and called for an independent review of the Board as a result of what the CFIB called “…blatant mismanagement and monopolistic complacency“.   The CFIB even compared the WSIB’s situation to the recent high profile public scandals involving E-Health and the Ontario Lottery and Gaming Corporation.

The WSIB replied aggressively (particularly by the ordinarily reserved standards of a public agency) in a responding press release and accused the CFIB of “distorting the facts” and suggested that the independent business lobby group was engaging in “sabre rattling“.  The Board pointed out that CFIB has been actively participating in various WSIB consultations and argued that the Board’s financial performance compared favourably to large Canadian pension funds over the course of the economic downturn.  The Board ramped up the rhetoric and stated that it was rejecting the “armageddon approach” and suggested that the CFIB ought not to issue “…unwarranted accusations and rhetoric at a time when we need to work together.”

The tone of both press releases closely resembled the approach typically taken by political parties in the heat of an election campaign.  It will be interesting to see what the next salvo in the PR battle brings.

Ryan Conlin: rconlin@sbhlawyers.com

An Employment Insurance Board of Referees has decided that both parents of newborn twins qualified separately for 35 weeks of employment insurance parental benefits.

Christian Martin’s wife gave birth twin girls who were premature, underweight and required constant care and attention. The Board heard evidence that the parents were overwhelmed and exhausted caring for the babies and as a result of complications during the pregnancy. The added complications required Mr. Martin to assist with the ongoing care, and would keep him out of work for approximately 35 weeks.

The parents each applied for 35 weeks of parental benefits. The mother received the full benefits for one infant, while Mr. Martin was denied benefits for the other. Mr. Martin appealed the decision. The Board focussed on the fact that Mr. Martin had to take time off work to care for the twins and allowed his appeal.

While this decision has no precedential value, Boards of Referees tend to be relatively deferential to one another. As such, it is likely that this decision will impact and increase future claims for parental benefits in the case of multiple births.

The EI Commission has 60 days to appeal the decision to the Federal Court. In the event that the decision stands, employers should be prepared for an increase in parental leave requests where an employee’s wife gives birth to multiple babies.

A copy of the decision can be found at http://www.scribd.com/doc/19865129/EI-Board-of-Referees-Decision-on-twins.

Ryan Conacher - rconacher@sbhlawyers.com

Employees who engage in medical dishonesty may find themselves disentitled to ESA termination and severance pay.

The ESA provides that employees who are guilty of “willful misconduct” or “willful neglect of duty” are not entitled to statutory notice of termination or severance pay.  These are typically treated as very high standards.  The key is that the conduct must be serious, and it must be willful.  In other words, failing to meet production standards will not usually be sufficient to disentitle an employee from statutory notice and severance pay, unless the employee was failing intentionally.

In Gray v. Springfield Hotels Airport Inc. (Hampton Inn & Suites Toronto Airport) (July 31, 2009), an employee provided her employer with a doctor’s note indicating that she would be off work for three weeks “due to medical reasons.”  In fact, during that three-week period she continued to work for another inn providing essentially the same services.  When her employer learned of her dishonesty she was fired without notice.  (She was not entitled to ESA severance pay because she had been employed for less than five years).

The Ontario Labour Relations Board held that the employee’s conduct constituted willful neglect of duty.  As such, she was not entitled to notice of termination under the ESA.  Notably, the Board rejected the employee’s argument that a problem she alleged was occurring at work excused her misconduct. 

To view the entire case, visit the following link:
 http://www.canlii.org/en/on/onlrb/doc/2009/2009canlii41186/2009canlii41186.html
 
Jeremy D. Schwartz - jschwartz@sbhlawyers.com