Employment and Labour Lawyers for Management

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.

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

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

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

In a recent SBH Update we discussed a case where a $600 million class action lawsuit against CIBC for unpaid overtime was denied certification.  Not surprisingly, this decision is being appealed to the Ontario Divisional Court. 
 
In a judgment issued in June 2009, Justice Lax of the Superior Court of Justice decided that this case should not proceed because it lacked the required commonality of issues to warrant certification as a class action. 
 
If Justice Lax’s decision holds up to appellate court scrutiny, it will deal substantial blow unpaid overtime cases of a similar nature.  However, as we discussed in our Update, there is another type of overtime class action and other employment related class actions lurking for employers to be mindful of. 
 
The plaintiffs’ lawyers will file material supporting the appeal by the end of August and CIBC will have 60 days to respond.  We would not be surprised to see this case ultimately end up before the Supreme Court of Canada.

Landon P. Young - lyoung@sbhlawyers.com

Ryan M. Conacher - rconacher@sbhlawyers.com

In a case that can only be described as a cautionary tale, an employer was ordered to pay 5 months pay in lieu of notice to an employee to whom it had intended to pay only 3 weeks ESA termination pay.  This case should serve as a reminder to employers to carefully review termination letters before they go to employees.
 
In Stowar v. Telehop Communications Inc., an employer mistakenly provided an employee with an offer of 5 months pay in lieu of notice in a termination letter, instead of the 3 weeks of ESA termination pay it had intended to provide.  The letter was poorly worded, and did not establish a possible demarcation between ESA termination pay and pay in lieu of notice at common law.
 
The court ruled that, once signed, the termination letter constituted a valid and binding contract that the employee could enforce against the employer. 
 
The lesson: when drafting termination letters, make sure you get it right the first time.
 
To view the entire case, visit the following link:
 
http://www.canlii.org/en/on/onsc/doc/2009/2009canlii32253/2009canlii32253.html
 
Jeremy D. Schwartz - jschwartz@sbhlawyers.com

Ontario has passed legislation amending the Employment Standards Act, 2000 to provide up to 13 weeks of leave of absence without pay for employees who undergo surgery in order to donate organs to other persons.  The new leave will come into force upon proclamation on a future date.
 
To read the Ministry’s press release, see
http://ogov.newswire.ca/ontario/GPOE/2009/05/27/c8217.html?lmatch=〈=_e.html 
 
Ryan Conacher - rconacher@sbhlawyers.com

 
A new month, a new blitz!  In keeping with its practice of conducting new health and safety “blitzes” every month, the Ministry of Labour has announced that its inspectors will be focussing on the protection of young and new workers during the month of June.

During such blitzes, Ministry inspectors are to take a “zero tolerance” approach to violations of the Occupational Health and Safety Act and its regulations.  The goal is to promote compliance and reduce injuries.   These blitzes are part of the Ministry’s broader “Safe at Work Ontario” program aimed at improving compliance and reducing injuries.

This blitz is to focus on workers aged between 14 to 24 years and new workers older than 24 who have been on the job less than six months or who have been reassigned to a new job.   According to the Ministry’s press release, its inspectors will give special emphasis to retail stores, wholesalers, restaurants, vehicle sales, service outlets and businesses involved in tourism, such as golf courses.  Municipal work sites, farming operations and construction sites are not to be targetted.

Under the Safe at Work Ontario program, employers with a history of non-compliance with health and safety laws and convictions or those in industries with high injury rates are more likely to be targetted.

To avoid the risk of costly charges and disruptive orders from Ministry inspectors that can be issued on the spot, employers with young workers should take some time to ensure that they are compliant with the Occupational Health and Safety Act and its regulations.  Some of the more common areas of non-compliance that result in orders and fines from inspectors include a lack of proper guarding on machinery, personal protective equipment and fall arrest equipment and procedures.

Employers should also make sure their workers meet the minimum age requirements for their industry.  These age requirements vary from 18 years of age for underground mining and window cleaning, 16 for mining plants and construction and logging, 15 for factory operations and repair shops and 14 for other industrial establishments.  The Ontario Employment Standards Act, 2000 does not contain minimum age requirements.  However, it does require employers to keep a record of an employee’s date of birth if the employee is under 18.

To read the Ministry’s press release, see http://www.news.ontario.ca/mol/en/2009/05/ontario-protecting-young-and-new-workers.html.

Landon Young - lyoung@sbhlawyers.com