Scenario 4 Flashcards
Kyle, a doctor, is the sole medical practitioner of a family medical clinic in Etobicoke, Ontario. Kyle has been a family doctor for more than 35 years and now wants to retire. He has been looking for a younger doctor to take over his practice for the past 2 years. Helga has worked at the practice as a receptionist for 10 years, initially for the previous doctor and then for Kyle when he took over the practice 8 years ago. Helga is aware Kyle is looking for someone to take over the practice but she has always been assured that she will be retained by the new doctor. After taking a 3-week vacation to Thailand, Helga returns to the office and finds that Claudia has now assumed Kyle’s practice, with Kyle working only 1 day per week. A month later, Kyle tells Helga he intends to sell the practice to Claudia, who will continue to employ Helga. Although Helga is good at her job, she never seems to “click” with Claudia. After working for Claudia for 2 years, Helga is terminated with 2 weeks’ pay in lieu of notice. Helga believes she is entitled to 12 years of severance pay and meets with an HR consultant about her options. Which of the following factors is key to deciding whether Helga is entitled to continuous employment under Claudia’s ownership? a) Whether Claudia continued to employ Helga after taking over the practice. b) The length of time Claudia employed Helga after taking over the practice. c) Whether Claudia bought the practice and continued to employ Helga.
The answer is c. Whether Claudia bought the practice and continued to employ Helga. Functional Area: B4 Rationale(s): A is incorrect. A sale of business must be proven to exist: e.g., contractual arrangement. B is incorrect. A sale of business must be proven to exist: e.g., contractual arrangement. C is correct. ESA, s. 9, states that where a business or part of a business is sold and the purchaser employs an employee of the seller, the sale does not result in termination of employment. Reference(s): Case scenario based on Drake v. Blach, 2012 ONSC 1855; Abbott v. Bombardier Inc., 2007 ONCA 233. Houser Henry & Syron, LLP, Buying or Selling a Business in Ontario? Don’t Forget about the Employees (http://houserhenry.com/uploads/2015/04/Update-Dont-Forget-Employees.pdf). Labour Pains: “Continuity of Employment Following the Sale of a Business” (http://www.ottawaemploymentlaw.com/2014/08/continuity-of-employment-following-sale.html); “The Law Can Be an Asset Sale” (http://www.ottawaemploymentlaw.com/2012/05/law-can-be-asset-sale.html). Employment Standards Act, 2000, S.O. 2000, c. 41, s. 9.
Kyle, a doctor, is the sole medical practitioner of a family medical clinic in Etobicoke, Ontario. Kyle has been a family doctor for more than 35 years and now wants to retire. He has been looking for a younger doctor to take over his practice for the past 2 years. Helga has worked at the practice as a receptionist for 10 years, initially for the previous doctor and then for Kyle when he took over the practice 8 years ago. Helga is aware Kyle is looking for someone to take over the practice but she has always been assured that she will be retained by the new doctor. After taking a 3-week vacation to Thailand, Helga returns to the office and finds that Claudia has now assumed Kyle’s practice, with Kyle working only 1 day per week. A month later, Kyle tells Helga he intends to sell the practice to Claudia, who will continue to employ Helga. Although Helga is good at her job, she never seems to “click” with Claudia. After working for Claudia for 2 years, Helga is terminated with 2 weeks’ pay in lieu of notice. Helga believes she is entitled to 12 years of severance pay and meets with an HR consultant about her options. Helga wants to sue for severance pay. Which of the following is critical to the success of her claim? a) Pay stubs received from both Kyle and Claudia. b) Proof that she has been constructively dismissed. c) A contractual agreement showing she was to continue as an employee of the clinic.
The answer is a. Pay stubs received from both Kyle and Claudia. Functional Area: B4 Rationale(s): A is correct. Pay statements act as a form of employment record, as they show Helga’s remuneration from both her employers. The record of pay statements also demonstrates that Helga remained employed with the practice for many years, and as a result of her length of service, termination pay entitlements significantly increase. B is incorrect. Considering that Claudia did not make significant changes to any fundamental term of Helga’s contract without consent, constructive dismissal cannot be argued. C is incorrect. A contractual agreement is not critical to Helga’s success in her claim, as the employer can review the contract and decide to fire Helga, while fulfilling its statutory obligations. Reference(s): Houser Henry & Syron, LLP, Buying or Selling a Business in Ontario? Don’t Forget about the Employees (http://houserhenry.com/uploads/2015/04/Update-Dont-Forget-Employees.pdf). Employment Standards Act, 2000, S.O. 2000, c. 41, s. 9.
Kyle, a doctor, is the sole medical practitioner of a family medical clinic in Etobicoke, Ontario. Kyle has been a family doctor for more than 35 years and now wants to retire. He has been looking for a younger doctor to take over his practice for the past 2 years. Helga has worked at the practice as a receptionist for 10 years, initially for the previous doctor and then for Kyle when he took over the practice 8 years ago. Helga is aware Kyle is looking for someone to take over the practice but she has always been assured that she will be retained by the new doctor. After taking a 3-week vacation to Thailand, Helga returns to the office and finds that Claudia has now assumed Kyle’s practice, with Kyle working only 1 day per week. A month later, Kyle tells Helga he intends to sell the practice to Claudia, who will continue to employ Helga. Although Helga is good at her job, she never seems to “click” with Claudia. After working for Claudia for 2 years, Helga is terminated with 2 weeks’ pay in lieu of notice. Helga believes she is entitled to 12 years of severance pay and meets with an HR consultant about her options. Which of the following factors will the court likely consider when reviewing Helga’s claim for severance pay? a) Claudia did not create a new contract with Helga after buying the practice and therefore must recognize Helga’s previous service. b) Claudia acted in good faith by continuing to employ Helga after buying the practice but she is not required to recognize Helga’s previous service. c) Claudia is not obligated to recognize Helga’s previous service, so 2 weeks’ pay in lieu of notice is sufficient for the 2 years Helga worked for Claudia.
The answer is a. Claudia did not create a new contract with Helga after buying the practice and therefore must recognize Helga’s previous service. Functional Area: B3 Rationale(s): A is correct. Considering Claudia did not create a new contract with Helga, she must recognize Helga’s length of service and provide compensation that reflects that length of service. Two weeks’ pay in lieu of notice would not sufficiently reflect Helga’s 12 years of service. B is incorrect. The continuation of existing employees’ contracts is not an act of good faith. It is a decision made to help the new employer transition. This would not be a factor considered by the court where Helga’s termination is concerned. C is incorrect. Claudia inherited Helga’s contract from Kyle, which means her length of service included her service with Kyle. Therefore, Claudia did not sufficiently compensate Helga. Helga should receive payment that reflects her 12 years of service in lieu of notice. Reference(s): Unit 5: Understanding Employment Legislation, Module 2: Termination, Severance and the Common Law.
