Case in Point

Drafting Termination Provisions in Employment Contracts

By Frank Cesario on May 15th, 2013 Posted in Employment Law

Two cases of the Ontario Superior Court serve as reminders that termination provisions in employment contracts must be compliant with the Employment Standards Act, 2000 (“ESA”) for all purposes; otherwise they may be found void and unenforceable by a court.

In the first decision, Wright v. Young and Rubicam, the Court found that while a termination provision was compliant with ESA notice entitlements at the time of termination, it would not have complied with the ESA had the employee been terminated at a later date. Moreover, the termination provision was not compliant with the ESA as it excluded payment of statutory benefits.

That decision was recently followed in Stevens v. Sifton Properties Ltd., where the Court held that an employment contract was void because, while it referenced payment of notice or payment in lieu of notice in accordance with the ESA, it did not reference statutory benefits.

New High Water Mark for Punitive Damages Award: $4.5 million

By Kathryn Meehan on May 1st, 2013 Posted in Employment Law

A recent decision of the Court of Queen’s Bench for Saskatchewan, which granted an injured worker $4.5 million in punitive damages, has garnered considerable media attention.

The plaintiff, Mr. Branco, was a Canadian citizen. He sued his employer (Kumtor, owned by Saskatchewan-based Cameco) and insurers AIG and Zurich Life in relation to benefits arising from a workplace injury, which had occurred in 1999 while he was working overseas. Following the workplace injury, AIG was notified of the injury, triggering a “workers’ compensation” equivalent claim. There was extensive medical evidence that confirmed he was permanently disabled. Nonetheless, AIG discontinued Mr. Branco’s benefits for failure to cooperate with what the Court found to be an inappropriate vocational retraining program.

Saskatchewan Court of Appeal Finds Right to Strike Not Protected by Freedom of Association Guarantee in Charter

By Jacqueline Luksha on April 26th, 2013 Posted in Constitutional Law

A five-member panel of the Saskatchewan Court of Appeal has overturned a lower court decision which had found in part that restrictions on the right to strike in The Public Service Essential Services Act infringed the freedom of association guarantee in section 2(d) of the Canadian Charter of Rights and Freedoms.

The Court of Appeal referred to the 1987 labour trilogy decisions of the Supreme Court of Canada, in which the Supreme Court had concluded that freedom of association does not include the right to strike. The Court of Appeal noted that the finding on that point had not been overturned by the subsequent and evolving jurisprudence of the Supreme Court on section 2(d), and it was, therefore, bound by precedent. It stated:

[6] I conclude, for the reasons set out below, that the Province’s appeal with respect to the Essential Services Act must be allowed. In 1987, the Supreme Court ruled that freedom of association does not comprehend the right to strike. Its decisions on this point have never been overturned. While the Court’s freedom of association jurisprudence has evolved in recent years, it has not shifted far enough, or clearly enough, to warrant a ruling by this Court that the right to strike is protected by s. 2(d) of the Charter. Nor does the Essential Services Act offend any of the other Charter provisions referred to by SFL and the unions. It follows that the Act is constitutionally valid.

Our FTR Now on this decision, “No Charter-Protected Right to Strike Says Saskatchewan Court of Appeal” is now available.

Federal Appeals Officer Confirms Work Refusal Must Be Based on More Than “Hypothesis or Conjecture”

By Nadine Zacks on April 24th, 2013 Posted in Health and Safety

The Occupational Health and Safety Tribunal Canada has found that there was insufficient evidence of radiation contamination on parcels arriving from Japan after the Fukushima nuclear incident in 2011 to warrant a work refusal at a mail sorting facility. For a reasonable expectation of danger to exist, there must be more than hypothesis or conjecture.

The appellant was a Border Services Officer with Canada Border Services and worked at a mail sorting facility. Shortly following the Japanese tsunami, which caused extensive damage to the Fukushima nuclear facility, the appellant and another colleague noticed mail arriving from Japan. Fearing radiation contamination, they initiated a work refusal under section 128 of the Canada Labour Code (the “Code”). A Health and Safety Officer found that a “danger did not exist for the refusing employees” as there was no evidence that incoming mail was contaminated. The appellant appealed that finding.

Termination of Employee Following Work Refusal Results in Finding of Reprisal

By Nadine Zacks on March 28th, 2013 Posted in Health and Safety

The Ontario Labour Relations Board has found an employer violated the Occupational Health and Safety Act (“OHSA”) when it immediately terminated an employee instead of taking any steps whatsoever to investigate a work refusal.

The employee was a probationary truck driver who had worked with the employer for three months. He felt that the truck assigned to him was dangerous, pointing to broken mirrors, a leaking fuel tank, and an engine brake that did not work. His employment was terminated almost immediately after he raised these concerns with his employer and indicated he would not drive that truck.

Supreme Court of Canada Denies Leave to Appeal in Carrigan

By Rachel Arbour on March 28th, 2013 Posted in Pension and Benefits

Today, the Supreme Court of Canada denied leave to appeal from the Ontario Court of Appeal decision in Carrigan v. Carrigan.

The Court of Appeal’s decision awarded the payment of the pre-retirement death benefit payable under an Ontario registered pension plan to a member’s designated beneficiaries rather than to his common law spouse (Ms Quinn), thereby marking a departure from the pension industry’s widely held interpretation of section 48 of the Pension Benefits Act.

For more information on the leave to appeal denial, see our FTR Now of March 28, 2013 “Supreme Court Denies Leave in Carrigan.”

HRTO Renders Significant Remedies Decision

By Kathryn Meehan on March 26th, 2013 Posted in Human Rights

In the recent decision of Fair v. Hamilton-Wentworth District School Board, a non-union employee was reinstated to employment with back pay, despite having been away from the workplace for nearly a decade. The Human Rights Tribunal of Ontario explicitly rejected the employer’s argument that it would be unfair to order reinstatement in light of the length of time that had passed and stated that employers should be aware that “reinstatement is always an option in human rights cases.” The adjudicator concluded that had the employer properly accommodated the employee, she would have been returned to full-time employment in June 2003. The remedies were wide-ranging and significant in terms of cost, and included ordering the employer to:

reinstate the employee to a position at a level equivalent to that which the employee had previously held in 2003;
provide up to six months of training to the employee;
provide compensation for lost wages and medical/dental expenses incurred since the employee’s benefits were terminated;
provide compensation for the negative tax implications associated with receiving the back pay as a lump sum in a single year;
take steps to have the employee’s years of service with the pension plan reinstated, and to make all employer pension contributions for the period;
remit retroactive payments to the Canada Pension Plan; and
pay $30,000 for injury to dignity, feelings and self-respect

The decision is a stark reminder for employers of the potential risks associated with failing to comply with obligations under the Human Rights Code.

SCC to Render Leave to Appeal Decision in Carrigan

By Rachel Arbour on March 25th, 2013 Posted in Pension and Benefits

On March 28, 2013, the Supreme Court of Canada will render its leave to appeal decision in Quinn v. Carrigan.

The majority of the Ontario Court of Appeal awarded the payment of the pre-retirement death benefit payable under an Ontario registered pension plan to a member’s designated beneficiaries rather than to his common law spouse (Ms Quinn), thereby marking a departure from the pension industry’s widely held interpretation of section 48 of the Pension Benefits Act.

We will be monitoring the leave to appeal decision and will provide you with a further update.

In the meantime, a discussion of the Court of Appeal decision is found in our FTR Now of November 7, 2012, “Ontario Court of Appeal Decision Rewrites the Pension Pre-Retirement Death Benefit Regime.” A discussion of the position of the Financial Services Commission of Ontario is found in our News Item of February 6, 2013, “Carrigan v. Carrigan Estate Update: Ontario Pension Regulator Supports Common-Law Spouse’s Appeal.”

Divisional Court Confirms that Section 80(3) of the PBA Deems Employment to Continue Following Sale of Business

By Rachel Arbour and Andrea Yau on March 20th, 2013 Posted in Pension and Benefits

In Ontario Pension Board v. Ratansi, the Ontario Divisional Court confirmed that the Pension Benefits Act (“PBA”) deems that following a sale of business transaction, both employment and pension plan membership continue under the predecessor employer’s pension plan while the employee continues in employment with the successor employer. The decision overturns an earlier decision of the Financial Services Tribunal (“FST”).

The case involved employees of the Ontario government whose employment was transferred to the Canada Revenue Agency (“CRA”), resulting in their transfer for pension purposes from the Ontario Public Service Pension Plan (“PSPP”) to the federal Public Service Superannuation Fund. This transfer was a transaction as contemplated by section 80 of the PBA, which protects a plan member’s pension in a “sale of business” situation. Specifically, subsection 80(1) of the PBA recognizes the continuation of pension benefits with a successor employer, and subsection 80(3) provides that in a sale of business situation, if “an employee of the original employer who is a member of the original pension plan becomes an employee of the successor employer and a member of the successor pension plan, his or her employment is deemed, for the purposes of this Act, not to have been terminated by the change of employer.”

Employer’s Use of Video Surveillance in Fire Station Reasonable When Addressing a Serious Safety Concern

By Michelle Alton on March 13th, 2013 Posted in Labour Relations

Arbitrator Sheehan has affirmed that an employer may install and operate video surveillance in a workplace where it has legitimate and serious concerns about safety issues.

In this arbitration, a firefighters’ Association grieved the installation of cameras at two fire stations. It argued, among other things, that the requirement that the employees be subject to some surveillance was not reasonable and that the installation of the cameras contravened the Municipal Freedom of Information and Protection of Privacy Act (“MFIPPA”).

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