Employment Law Flashcards
What are some factors considered when determining if a person is an employee or an independent contractor?
- the employer’s level of control over the worker’s activities
- whether the worker provides their own equipment
- whether the worker hires their own employees
- the worker’s degree of financial risk
- the worker’s degree of responsibility for investment and management; and
- the worker’s opportunity for profit
What is the distinction between director and employee?
Common law rules w respect to employment relationships do not apply to directors. In some cases the courts have recognized that an individual’s status as director is or has become an integral term of the employment relatipnship, giving rise to a right of reasonable notice of termination
Since a partnership does not have a separate legal personality from its partners, the conventional view is that
a partner cannot be in an employment relatipnship with the partnership. With the exception of cases where sufficient control is exercised by the partnership and dependency on the partner, allowing for an employment relatipnship for the purposes of human rights legislation
In cases of a successor employer, can employees be transferred?
Not without new contracts being established under new employer. Provisions in the ESA protect past service as an implied term unless explicit provisions provide otherwise. To protect employee’s right to continuity for benefits and pension reasons
An employee’s fundamental implied obligations also include the duty of
good faith and fidelity. Require that the employee:
- maintain confidentiality of the employer’s trade secrets and confidential information
- act honestly and faithfully, putting the employer’s interests first and avoiding any conflicting or competing personal interests
- not take any secret profits or commissions from the relationship
What is a fiduciary employee?
Certain employees, usually key employees or very senior level managers with significant responsibility for directing the employer’s business. Fiduciary employees must:
- avoid all conflicts of interest
- act only in the employer’s best interests
- not profit as a result of their position
What are the factors in determining a fiduciary employee?
- the employee is an integral and indispensable part of the management team that is responsible for guiding the employer’s business affairs
- is necessarily involved in the decision making process
- has broad access to confidential information that if disclosed would significantly impair the employer’s competitive advantages
Post employment, fiduciary employees generally cannot
- usurp or divert themselves any “maturing” or “ripe” business opportunities available to the former employer
- solicit or entice the former employer’s customers to do business with them
- solicit or entice the former employer’s employees to quit and join them
As of October 25, 2021, employers are prohibited from including
non-compete clauses in agreements unless
- the employee concerned is an executive or
- the non compete is part of the sale of a business and the seller becomes an employee of the purchaser immediately following the transaction
In balancing the interests of the public’s interest in discouraging retraint of trade and the parties’ right to contract freely, courts have held that restraint of trade convenants are only enforceable if
it is reasonable between the parties and with reference to the public interest (Elsley v JG Collins Insurance Agencies Ltd)
To assess the reasonableness of a restrictive covenant, the courts generally consider three factors:
- does the employer have a proprietary interest entitled to protection?
- are the temporal or spatial features of the clause too broad?
- is the covenant unenforceable as being against competition generally and not limited to proscribing solicitation of the former employer’s clients?
effective December 2, 2021, employers with 25+ employees must have a written policy on employees
disconnecting from work
effective april 11, 2022, employers with 25+ employees must have a written policy on
the electronic monitoring of employees
what type of employees are excluded from the ESA?
Effective January 1, 2023, business consultants and information technology consultants are excluded, as well as people holding positions that are political, judicial, religious, or elected trade union offices
What categories of employees does the ESA exclude from eligibility of notice, termination pay, and/or severance provisions?
- employees hired on fixed term contracts
- construction employees
- employees on temporary layoff
- employees terminated for wilfull misconduct, disobedience or wilful neglect of duty that is not trivial and has not been condoned by the employer
who does the ESA not apply to?
- employers and employees under federal jurisdiction. They are governed by Part III of the Canada Labour Code
Can people contract out of the ESA?
Only to provide a greater or more favourable benefit to the employee
The ESA has been characterized as
benefits-conferring legislation, and must therefore be interpretedin a broad and generous manner such that any doubt arising from difficulties of languages should be resolved in favour of the claimant
What is WPID?
the expansion of leave of absence provisions in the ESA due to COVID-19 quarantine requirements. the Worker Income Protection Benefit ended March 31, 2023
What is OHSA?
Ontario Health and Safety Act, addresses the prevention of injury and disease in the workplace
OHSA mandates a healthy and safety representative where
the number of worker exceeds 5. The rep must be selected from the workers who are not exercising managerial functions. Reps must identify hazards and make recommendations to the employer and workers, and investigate work refusals and serious injuries.
OHSA mandates a joint health and safety committee where
the number of workers exceeds 20. Members of the committee must identify hazards and make recommendations to the employer and workers, and investigate work refusals and serious injuries.
In federal jurisdiction, where there are 300 + employees,
Employers must establish a policy health and safety committe, to develop policies and programs, dispose of matters expiditiously, develop and monitor the program, monitor data on injuries and reports, and participate in inquiries, investigations, studies and inspections
What section os OHSA protects the right to refuse unsafe work?
Section 43(3)
For whom is the protection of Section 43(3) suspended?
Police, firefighters, and where circumstances giving rise to the refusal are inherent in the worker’s work or are a normal condition of the worker’s employment
When did the Ontario government introduce provisions to prevent workplace harassment?
2010 and 2016 (aimed at sexual assault)
How often do workplace harassment policies need to be reviewed?
At least annually in workplaces with 6 or more employees
According to the Integrated Accessibility Standards (IAS), OReg 191/11, all employers in Ontario are now required to
comply with accessibility standards aimed at identifying and removing barriers in the workplace for persons with disabilities:
- providing individualized workplace emergency response information to employees with disabilities
- informing employees of supports available to employees with disabilities
- providing accesible formats and communication supports for information needed to perform the employee’s job
- training, and considering the employee’s disability when reviewing performance
Both employee and employer have the right to terminace employment at any time without cause by
giving notice of termination, or payment in lieu of notice
When is notice not required?
When the employer or employee has just cause for termination
What is payment in lieu?
The employer might pay the employee the value of pay and benefits they would have received had they worked during the required notice period.
Some basic factors considered by courts in determining whether notice is reasonable are (Bardal v Globe and Mail LTD)
- the character of the employment
- the length of service
- the age of the servant
- availability of similar employment, having regard to the experience, training, and qualifications of the servant
What are the other judicially recognized factors used when determining whether notice is reasonable?
- the employee was enticed to leave with promises of career advancement, additional compensation, etc
- the employer had a particular policy or practice with respect to notice
- there was an industry custom with respect to notice
- the employee had some forewarning of the dismissal
Who is entitled to notice/ severance?
employees who have been continuously employed for three months or more are entitled to
- at least one week of notice of termination if the period of employment is less than 1 year
- two weeks if the period of employment is one year or more and fewer than three years
- an additional week of notice for each additional year of employment up to a max of 8 weeks
What is severance?
Pay meant to compensate longer term employees for the investment they made in the company
Employers who terminate 50 or more employees in a four week period are
subject to different notice provisions, increasing the notice period depending on the number of employees affected:
- 50-199 ppl = 8 weeks
- 200-499 ppl = 12 weeks
- 500 + ppl = 16 weeks
government authorities must also be notified
When is severance pay required?
Per s64(1) of the ESA, when an employer severs the employment of an employee with 5 + years of service and:
- the severance occured because of a permanent discontinuance of some or all of the employers business and the employee is one of 50+ ppl who have had their employment relationship severed in the last 6 months
- the employer has a payroll of $2.5 million or more
If the parties have expressly agreed to notice terms in the contract, the courts will enforce those terms provided they:
- Meet the minimum standards in employment standards legislation and
- are not otherwise contrary to contract law principles under doctrines such as duress, undue influence, and unconscionability.
to justify the dismissal of a probationaryemployee,anemployer must show that
the employee was given a fair and reasonable opportunity to demonstrate suitability for the job and the employer made a good faith determination that the employee is unsuitable
if a employer terminates a fixed term contract prior to the end of the term, theymust
pay compensation equivalent to the income the employee would have earned during the contract unlessthe contract expressly states the sumpayable ontermination, or the employer has cause for termination
thefactual inquiry in determiningjust cause for dismissal in the context of each case involved:
- the nature and extent of misconduct
- the circumstances of the employee and the employer
- whether the misconduct is reconcilable with sustaining the employment relationship
Where the employer alleges cause based on incompetencec or substandard performance,they must show:
- it established reasonable, objective standards of performance
- the employee failed to meet those standards
- the employee was warned of the failure and that the employee’s position would be in jeaporady if the failure continued
- reasonable time was afforded to correct the situation
What is the definition of just cause?
The grounds for an employer or employee to terminate the relationship without notice. The grounds for summary dismissal have tradntionally included:
- serious misconduct
- habitual neglect of duty
- incompetence
- conduct incompatible with the employee’s duties
- wilful disobedience
May arise from a single incident or a series of incidents
The test for just cause is (McKinley v BC Tel)
whether the misconduct has given rise to a breakdown in the employment relationship, whether it violates an essential condition of the employment contract, breaches the faith inherent to the work relationship, or is fundamentally or directly inconcistent with the employee’s obligations to their employer
What is the three step factual inquiry test for determining whether the employment contract relationship has broken down?
- the nature and extent of the misconduct
- the circumstances of the employee and the employer
- whether the misconduct is reconcilable with sustaining the employment relationship
What is the duty to warn?
A fairly recent development, courts have determined that in certain cases of dismissal for neglect of duty or incompetence, an employer must warn the employee first that their job is in jeopardy and give the employee a reasonable opportunity to correct the misconduct or performance before termination.
When is the duty to warn not required?
When the conduct is serious:
- theft
- fraud
- serious sexual harassment
- wilful disobedience on a matter of substance
What is condonation?
when an employer is aware of an employee’s misconduct sufficient to justify dismissal but chooses to overlook it and continue the employment relationship, the emplyoer is said to have condoned the misconduct and may not afterwards dismiss the employee for it.
What must an employer show to justify dismissal without notice or severance?
That the employee has been dismissed for misconduct that is both serious and intentional
What is constructive dismissal?
When an employer:
- unilaterally makes a change to an express or implied term of the employment contract that a reasonable person in the shoes of the employee would view as substantially altering an essential term of the contract or
- otherwise acts in a manner that would lead a reasonable person to conclude that the employer no longer intends to be bound by the contract, the employer commits repudiation of contract, which entitles the employee to consider themselves constructively dismissed and to claim damages in lieu of reasonable notice.
proof that an employee resigned must be
clear and unequivocal, proven by the employer
If an employer dismisses an indefinite term employee with no or insufficient notice, or if the employer constructively dismisses the employee, the employee has the right of
civil action against the employer for wrongful dismissal
What is a suit of wrongful dismissal based on?
Either a breach of the implied obligation to provide reasonable notice or breach of explicit notice terms, if any
What is the remedy sought in a wrongful dismissal suit?
award of damages equal to earnings and other contractual entitlements that the employee would have received during the appropriate notice period, subject to deductions like mitigation earnings
Employers may be held accountable for:
- mental distress damages caused by bad faith conduct in the manner of dismissal provided the employer suffers actual psychological harm and
- damages caused by dishonest conduct towards the employee during the employment relationship.
When are punitive damages awarded in wrongful/constructive dismissal?
in exceptional cases where the employer’s conduct constitutes a marked departure from ordinary standards of decency, the conduct is ‘independently actionable’ and compensatory damages are insufficient to express society’s repugnance at the conduct (Boucher v Walmart Canada Corp)
How can federal non-union employees bring a complaint for unjust dismissal?
Under Division XIV of Part III of the CLC. They must have completed 12 months of continuous employment and complaints must be made within 90 days of dismissal
Federal non-unionized employers may not
dismiss an employee without cause simply by providing the required notice and severance
What can employees do if they are not covered by the ESA and are not represented by a union?
They can generally file a complaint with the Ministry of Labour if they feel their employer has contravened the ESA
Who conducts investigations for the Ministry of Labour?
Ministry appointed employment standards officers (ESOs)
An ESO’s remedial powers include:
- orders to pay wages owed to an employee (including termination and severance pay
- compliance orders
- notices of contravention
- orders to reinstate or compensate an employee in resp of the contravention
The ESA generally precludes employees filing complaints if they have already
commenced a civil action proceedings in the matter, and vice versa
Employees represented by the union must generally pursue ESA remedies through
the grievance process
What is the benefit of bringing ESA proceedings rather than a court action?
- there is no cost for the employee to file and prosecute an ESA complaint
- unpaid wages claims of up to 6 months can be enforced against the employer’s directors personally
In what circumstance may a court action be better suited than an ESA proceeding?
if the claim involves substantial common law damages unavailable in ESA proceedings
An employee’s right to damages for the employer’s failure to provude proper notice of termination is subject to the qualification that:
the employer is not responsible for the losses that the employee might reasonably have mitigated by finding an alternative source of income during the period of notice (Evans v Teamsters Local Union No 31)
The employer bears the burden of proving failure to mitigate damages by showing that:
- the employee failed to make reasonable efforts to find replacement work AND
- suitable replacement work could have been found had the employee made reasonable efforts
The reasonableness of an employee’s efforts to mitigate is measured in relation to:
The employee’s position and circumstances, not the employers. Courts have held that employees are entitled to some recovery time after being dismissed, and can be reasonably expected to look for positios of equal pay or status, rather than looking at and accepting any job
All income earned by a wrongfully dismissed employee is during the notice period is
generally deducted from the damages awarded for the failure to provide proper notice. Statutory entitlements such as ESA termination pay are not deducted
Where the employment contract expressly provides for a stipulated sum upon termination without cause and is silent as to the duty to mitigate,
the employee is not required to mitigate, per Bowes v Goss Power Products Ltd
Just cause at common law does not necessarily exempt the employer from
giving ESA notice of termination or termination and severance pay
In less serious instances where summary dismissal may not be warranted, the employer may impose
disciplinary sanctions short of dismissal provided they are:
- reasonable
- proportionate to the misconduct
most courts have held that employers may not impose disciplinary sanctions without pay unless the employment contract clearly allows the employer to do so
where a fiduciary employee breaches their obligations, courts hve allowed the employer to elect between
- an assessment of damages based on the restitutionary approach and
- one based on the employer’s losses from the breach
What are the the four options for an employer who’s employee has breached the employment contract?
- summary dismissal
- disciplinary sanctions
- civil action for damages
- injunctive relief