Articles about Labour and Employment Law

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By Karen Zvulony, Toronto Employment Lawyer

Due to the fallout from the Covid-19/ Corona-virus pandemic, many employers have had to layoff employees, that is they have temporarily reduced employee hours or have had to stop them completely. Can an employer do so and expect an employee to return to work when business resumes to normal? 

A temporary lay off occurs when an employer significantly reduces an employees work hours, or fails to provide them with any work and tells them to stay home but expects to recall the employee back to work at some future time. The employer does not tell the employee that their employment has ended. 

In Canadian common law, the general rule is that employers do not have any legal right to “lay off” employees temporarily. There are some important exceptions to this general rule, such as unionized employees, if an employment contract provides for temporary lay-offs, if the nature of the employment contemplates layoffs (i.e. seasonal workers), or if the employee agrees to the layoff arrangement.  

If an employee is temporarily laid off (Covid-19 related or not) and, it does not meet any of the one exceptions noted above then the law of Ontario treats that lay-off as a termination of the employment relationship.

The employee could then claim any entitlements the employee may have such as damages for wrongful dismissal (i.e. for severance/pay in lieu of notice).  

If the employee is later recalled to work, then any entitlement to damages for wrongful dismissal would be limited to the period of layoff. 

Does Covid-19 Change the General Rule?

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Would it be different for employees who are laid off because the government has mandated that their employer’s close their business due to Covid-19? It is too soon to tell for sure, as the courts have not dealt with this issue, but it is reasonable to presume Covid-19 precautions will change the general rule. 

An employer who has been forced to close because of a government order due to Covid-19, could make a strong argument that the employment contract has been frustrated rather than terminated. 

Frustration of contract refers to situations when the contract is incapable of being performed due to an unforeseen event (or events), and through no fault of either party. Whether or not the current pandemic would be considered as a “frustrating event”, is a legal argument that the courts will no doubt have to deal with. 

If an employment contract is frustrated, then the employer is not terminating an employee, but rather the employment contract has simply come to an end. Since there is no termination, the employee would not be entitled to common law damages for severance or pay in lieu of notice. However, the employee is not completely out of luck as the Ontario Employment Standards Act provides that an employer must provide an employee with termination pay and severance in the event of frustration. This amount would be limited to the minimums outlined in the Employment Standards Act, 2000.

If you have been laid off due to Covid-19, you may be entitled to severance. As each case is different, it is best to speak to an employment lawyer to see what your entitlements may be. 

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The fear and danger of Coronavirus (COVID-19) has caused significant economic upheaval in Canada. Employees have had to cope with the crisis and adapt to the current reality.

We have identified a number of legal issues in the form of employment law questions from an employee’s perspective resulting from the COVID-19 situation.

If these questions affect you then you may wish to speak to Karen Zvulony our employment lawyer who can discuss your particular situation with you and offer some answers to your legal questions.

Coronavirus Questions from An Employee’s Perspective

  • Does my employer have to pay me if I am unable  to work due to Covid-19? 
  • Can I lose my job if I have Covid-19?
  • Can I lose my job if I am looking after someone with Covid-19?
  • Am I entitled to any additional severance if my employment is terminated at this time? 
  • Does my employer have to accommodate me to work from home? 
  • Can I lose my job if I have to look after children who are home from school due to Covid-19 and cannot work as a result?
  • If I have paid holidays/vacation do I have to exhaust this first if I am not able to work due to Covid -19 or can I save my vacation pay/days and apply for EI? 
  • If I have paid sick days do I have to use my paid sick days before collecting a benefit from the government? 
  • If a family member is sent home due to a potential contact with a positive Covid-19 person can my employer refuse to allow me to come to work? If so, do they have an obligation to pay me?
  • Can my employer force me to self-isolate? If so, do they have to pay me during this time? 
  • Can I tell my employer I do not feel comfortable coming into work even though the company is still open and I am not showing symptoms?
  • A co-worker recently returned from abroad, I am nervous, can I refuse to go to work? 
  • Can my employer force me to get a doctor’s note?
  • What happens if my employer is refusing to give me an ROE because they say I can continue to work on a limited basis?
  • I am limited for what I can do while working at home. Can my employer make me take a pay cut or reduce my hours?
  • I am under a probationary period with my employer. How will this affect me being laid off during the Covid-19?
  • I was on sick leave unrelated to COVID-19 and am now able to return to work. My employer is saying to stay home. What do I do?
  • Can an employer still terminate me during this time, even if my job has not been affected by COVID-19?
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The fear and danger of Coronavirus (COVID-19) has caused significant economic upheaval in Canada. Businesses and individuals have had to cope with the crisis and adapt to the current reality.

We have identified a number of legal issues in the form of employment law questions from an employer’s perspective resulting from the COVID-19 situation.

If these questions affect you or your business then you may wish to speak to Karen Zvulony our employment lawyer who can discuss your particular situation with you and offer some answers to your legal questions.

Coronavirus Questions from An Employer’s Perspective

  • Do I have to continue to pay employees who have tested positive for Covid-19 or are in quarantine? What about employees who have chosen to self-isolate?
  • I have been forced to close my business temporarily, what are my obligations to my employees? Does it make a difference if I voluntarily choose to close? 
  • As an employer, what are my liabilities if an employee in my workplace tests positive for Covid-19?
  • Can I fire an employee who has Covid-19 and did not report it?
  • I have an employee that was underperforming for some time and want to terminate them now, can I?
  • Am I required to allow employees to work from home? 
  • What are my obligations if an employee refuses to come to work? 
  • What if an employee cannot work remotely or otherwise due to childcare responsibilities due to the school closures?
  • If I have to lay off some employees but not all, how can I lay off without showing favoritism or the employee claiming a Human Rights issue?
  • I recently hired some employees who have not yet started, given the current situation, I no longer have work for them, what are my obligations if any?
  • Can I retract any offers of employment due to the current situation? 
  • What if one of my employees is using this crisis as an excuse?
  • Can I stop an employee from travelling? 
  • Can I give an employee the option of taking a wage cut/reduced hours in lieu of a layoff or termination? 
  • What can I ask employees or potential employees about their health?
  • Can I fire an employee that refuses to come to work because they want to self-isolate, yet I see on their social media that they are out in public places? 
  • I have an employee that has family members whom they live with that recently returned from abroad, can I refuse to allow them to return to work? If so, do I have to pay them? 
  • Do I have to give employees severance who are terminated due to Covid-19? 
  • Do I have to rehire the same employees back after they have been laid off due to Covid-19?
  • Do I have to accommodate employees to work remotely from home? What if this is not possible? 

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Fixed Term Employment Contracts

In the case of Howard v. Benson Group Inc. (2016 ONCA 256 (CanLII)) the Ontario Court of Appeal stressed that employers risk liability if they fail to have an enforceable termination clause in a fixed term contract. A fixed term contract generally refers to a contract that is subject to a definite period of time and is sometimes used by employers.  For example, the employer and employee agree that the employee will be employed from January 1, 2017 – December, 31, 2017. Generally speaking, at the end of the fixed term period, the contract will simply come to an end. Accordingly, the employee will not be owed anything for statutory or common law notice or severance from their employer.

Issues may arise if the employment is terminated before the expiration of the fixed term. A properly drafted fixed term contract should contain an early termination clause which would address what happens in the event the contract needs to be terminated prior to the expiry of the fixed term.   Generally, provided that the contract contains an enforceable early termination clause that complies with the minimum standards set forth in the Employment Standards Act, the employee’s damages and the employer’s liability resulting from the early termination would be limited to what is outlined in the early termination clause.

What Happens When There is an Ambiguous Agreement About Early Termination

What happens when a fixed term contract is terminated without cause prior to the expiry of the fixed term and the contract does not contain an enforceable early termination clause? The Ontario Court of Appeal addressed this question in the Howard case (cited above). The facts in Howard are straightforward. Howard was employed with the Defendant, Benson Group Inc. pursuant to a five (5) year fixed term contract.  The contract contained the following termination provision:

“Employment may be terminated at any time by the Employer and any amounts paid to the Employee shall be in accordance with the Employment Standards Act of Ontario”

The employer terminated Howard’s employment without cause after 23 months.  Howard sought damages equal to the balance left on the fixed term (i.e 37 months). The Employer disagreed taking the position that Howard’s entitlements ought to be in accordance with the early termination clause in the contract outlined above, which would be considerably less than the 37 months that Howard was seeking. The lower court Judge rejected the Employer’s argument that the early termination clause in the contract was enforceable and found that it was unenforceable due to ambiguity.

Accordingly, the lower Court found, Howard’s damages should be determined in accordance with the principles of the common law requiring reasonable notice and therefore rejected Howard’s position that his damages should be  based on the balance owing for the remainder of the fixed term; which was 37 months.  Howard appealed. (The Employer did not appeal the Motion Judge’s finding that the termination clause was unenforceable.)

The Court of Appeal agreed with Howard, finding that the Motions Judge erred in finding that damages should be in accordance of the common law reasonable notice. Specifically, the Court of Appeal stated at para 44 that:

[44]   In the absence of an enforceable contractual provision stipulating a fixed term of notice, or any other provision to the contrary, a fixed term employment contract obligates an employer to pay an employee to the end of the term, and that obligation will not be subject to mitigation. Just as parties who contract for a specified period of notice (or pay in lieu) are contracting out of the common law approach in Bardal v. Globe & Mail Ltd. (1960), 1960 CanLII 294 (ON SC), 24 D.L.R. (2d) 140 (Ont. H.C.), so, too, are parties who contract for a fixed term without providing in an enforceable manner for any other specified period of notice (or pay in lieu).

In other words, an employee whose fixed term contract is terminated prior to the expiry of the fixed term would be entitled to be paid until the end of the fixed term, which would be 37 months in the case of Howard.

More importantly, the Court held that there is no duty to mitigate damages. Normally a wrongfully dismissed employees has an obligation to minimize his damages by looking for alternate employment. The circumstances in Howard are an exception to this rule. Meaning, the employee’s damages, will not be subject to any deductions in the event the employee earns other income from the date of termination to the end of the fixed term. This is a departure from the common law obligation to mitigate in cases where the employee is provided with common law notice. The Court rationalized that unlike reasonable notice under the common law, the parties to a fixed term contract decided to opt out of the common law reasonable notice approach and therefore the duty to mitigate should not apply.

Conclusion

In conclusion, the Howard case is a stark reminder of the importance of having a properly drafted and enforceable early termination provision in any fixed term contract.

Wood v. Deeley: Ontario Court of Appeal Refuses to Enforce Poorly Drafted Termination Clause By Toronto Employment Lawyer, Karen Zvulony An employment agreement, which contains a well drafted and statutorily compliant termination clause can be a useful tool for employers to limit their liability in the event of a termination without cause. The recent Ontario […]

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By Toronto Employment Lawyer, Karen Zvulony

One of the best, and most cost-effective ways an employer can protect itself from paying costly severance and termination packages is by having a properly drafted and executed written employment agreement with its Employees that limits and outlines how much severance will be payable upon termination. As simple as it sounds, ensuring that enforceable employment agreements are in place is key to limiting an employer’s liability.

Basic Requirements For an Employment Agreement

From the employers perspective, it is crucial that any employment agreement must comply with the minimum standards set forth in the Ontario Employment Standards Act.  Moreover, like all valid contracts, an employment agreement must use clear and concise language.  The agreement should be agreed to before the employee starts working to ensure that there is valid consideration for the employee signing the agreement. A change in position or promotion may necessitate a new agreement being signed.

In addition to limiting the amount of severance payable on termination, employment agreements may also address other issues such as:

  • changes in responsibilities or reporting structure,
  • when (and if) an employer can reduce an employee’s salary
  • whether an employee can be relocated;
  • and any post-employment obligations (such as non-solicitation and non competition).

An employment agreement can also ensure that are no misunderstandings with the employee regarding the terms and conditions of the employment and that no misrepresentations were made to the employee prior to the acceptance of the employment that they employee relied on or that they can claim to have relied on later on.

On the practical side, clearly outlining the expectations of the employment relationship at the very beginning will likely save headaches down the line. No one likes to be caught by surprise.

Don’t Leave Your Business Vulnerable

In my experience of assisting employees, I have come across many poorly drafted employment agreements that have been used against the employer.  It never ceases to amaze me, how many employers neglect to properly protect themselves.

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Toronto Employment Lawyer, Karen Zvulony was cited as an expert in employment law and the law of just cause by The Globe and Mail.  You can read the article here.

Karen Zvulony, Toronto Employment Lawyer, discusses the definition of wrongful dismissal and the law of firing/terminating employees in Ontario, Canada. She discusses an employees rights under the Employment Standards Act and the Common Law. She also reviews factors that could aggravate (i.e. bad faith) or mitigate (i.e. new employment) a damages award. A must read for any employee that believes they were unfairly dismissed.

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by Shaya Silber, Toronto Privacy Lawyer

Employers have access to unprecedented amounts of information on their employees and job candidates. Many people, especially young people, don’t realize how much information they are publishing about themselves, and what the possible implications are.  The Onion posted a video about how every presidential candidate in 2040 has already been disqualified because of internet posts that will come back to haunt them. While the Onion’s clip is obviously a spoof, there is some truth to it.

Any post or comment that is posted on Facebook, Twitter or other social media has the potential to remain online and available to the public indefinitely. What may seem like a humorous or harmless post to an 18-year-old college freshman, might be viewed differently by a job recruiter down the road. Careless posting can be serious, resulting in lost jobs and other opportunities.

However, a number of stories have surfaced recently about employers asking job candidates for their Facebook passwords in order to gain access to information that would otherwise be considered private.

In response, the Information and Privacy Commissioner of Ontario (the IPC), recently put out a report on privacy in the workplace. The report discusses how the web has become a central tool for human resource professionals in vetting potential job candidates.

Information that is available online to the public is fair game for employers. However, employers should be cautious about demanding Facebook passwords from employers. This may lead to claims, including lawsuits for violation of privacy. It is too early to determine whether the tort of Intrusion upon Seclusion applies to cases like this, as it has not yet been tested in the courts.

Furthermore, employers should be cautious regarding the amount of information they gather, as well as the impact said information has on the hiring decision.  Decisions based on information gathered online, such as a candidate’s social networking account, could potentially lead to a human rights complaint. The report states that:

human rights and privacy laws provide stronger protections for job applicants. Employers cannot ask for information that may directly or indirectly reveal a prohibited ground of discrimination.

Toronto Privacy Lawyer

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Karen Zvulony, Employment Lawyer Karen Zvulony was recently cited by the Nova Scotia Labour Standards Tribunal as an authority on employment law in the case of MacDonald v. Quality Cameras & Computers Limited, 2011 NSLST 11 (CanLII).  The case revolved around an issue of constructive dismissal.  In determining the law of constructive dismissal the Tribunal referred to Karen’s popular article called What is Constructive Dismissal? The Tribunal recognized her as a legal authority and agreed with her legal conclusions.

If you believe that you have been constructively dismissed or have an employment law question then please do not hesitate to contact Karen Zvulony for an initial consultation.