Category: Uncategorized

Heller Beats UBER in SCC:

Here are quick takeaways from Heller v Uber ( 2020SCC 16) :

1. Employment cases are to determined under the Arbitrations Act even if they have a international aspect.

2. Under the Arbitrations Act, a Court may choose not to defer to an arbitrator on the issue of jurisdiction if the validity of the agreement is in question.

3. An arbitration agreement can be illegal if it is unconscionable.

4. If an arbitration procedure is effectively not accessible to one party, then that can make it unconscionable.

5. This agreement was not accessible to Heller due to cost, location of arbitration and choice of law., thus it was unconscionable, thus illegal and unenforceable .

6. The SCC declined to rule of the issue as to whether it was invalid because it offended the ESA.

No Holiday Pay During Notice Period:

In Kraus v S3 Manufacturing ( 2020 SKQB 175 ) Justice Megaw determined that the plaintiff was entitled to 18 months notice but that to pay him both 18 months wages plus the stat holiday pay for those holidays in the notice period would count as double recovery and thus was not allowed. The judge determined that there was no evidence to show that had the plaintiff actually worked out his notice period that he would not have been permitted to take those stat holidays and be paid when he was not at work.

The same issue would apply to a claim that I often see in mediation, which is a claim for vacation pay over the notice period. Unless there is a pattern shown that the plaintiff routinely did not take his or her vacation and was paid money instead, this claim fails. However where the employee’s vacation pay is paid on every pay check ( which is common in some industries) the plaintiff would be entitled to this payment over the notice period.

Having said that it is always prudent for plaintiff counsel to review with the client whether there is outstanding vacation pay from either the current year or as carryover from previous years. Also remember that vacation pay is payable on all cash compensation, including commissions and bonuses. This is often not done correctly and thus there can be very large claims for past vacation pay owing on bonuses, particularly for employees whose bonus compensation is a large part of their total compensation.

Also, it may be a small amount, but under the Ontario  ESA , employees are entitled to vacation pay on their termination pay but not on severance pay. This is often forgotten in termination letters.

 

Does Mitigation Income Earned During the Balance of Fixed term Contract Reduce Damages ? Depends on Which Province You Live in :

The law across all common law provinces seems to be that if an employee is terminated before the end of a fixed term contract and there is no valid early termination clause, then the employee is entitled to be paid for the balance of the unexpired term .

Secondly there seems to be a consensus that there is no duty for the employee to mitigate his or her damages. She can sit at home and collect her money.

But what if the employee does actually mitigate and earns income? After all, dismissed employees still have to eat while the court case goes on.

In Ontario it would seem that this income is not deducted but at least in BC and Saskatchewan it seems it is .

This is all discussed in great  detail in Crook v Duxbury, 2020 SKCA 43.

Maybe one day the SCC will sort this out.

No Duty to Investigate Where Just Cause is Upheld:

In McCallum v Saputo ( 2020 MBQB) Justice Rempel found that an employee had stolen product from a customer of the employer. The Employer relied solely on evidence they had collected and did not give the employee a real chance to give his side of the story.

However the Court found that absent a contractual obligation to do so, there is no duty of procedural fairness before terminating someone for cause and furthermore the employer can properly rely on additional evidence that they obtained after the dismissal.

My Comments:

The issue is not whether the employer made a reasonable decision about just cause. The issue is whether the Court finds that the employer has proven on the balance of probabilities that the plaintiff committed an act of just cause.

Thus where the employer conducts no investigation or a poor investigation but the Court finds the employee committed theft, just cause has been proven.

Where the employer conducts a perfect investigation which finds the employee guilty of theft but the Court disagrees with that conclusion, the employee will succeed.

Remember an investigation report is itself is NOT evidence of the matters set out in report. Each of those facts must be independently proven in Court.

I arbitrated a case awhile back where the case looked airtight for the employer to prove cause based on the evidence that the investigator had found. However, for various reasons the employer did not or could not present  the same evidence at the arbitration and they were unable to prove just cause.
On the other hand,  plaintiffs sometimes want to advance the argument that the investigation was faulty or negligent. Presumably this is to advance claim for punitive damages. If they do this the report does go into evidence and can be considered by the Court . Although this report  should not be considered as evidence of the facts set out in the report, it does get read by the judge and may well affect the judges’ view of the case.
I think in most cases plaintiffs are better off trying to keep the entire report out of evidence and forcing the employer to prove every point of the just cause allegation by live witnesses and admissible documents .

Court Finds that Investment Advisor Who Forges Client Signature and has License Suspended is Just Cause:

I read a lot of cases to keep up with my Wrongful Dismissal Database and this blog. I am constantly amazed at some of the cases that make their way to trial.

In Movassaghi v. Harbourfront Wealth Management Inc.,
(2020 BCSC 579) an investment advisor who was switching firms, forged the signature of one of his clients, without her consent, inorder to transfer her account to his new firm. The client found out and reported it both to his employer and the securities commission. His license was suspended for 8 months. The Plaintiff admitted the forgery.

As the Court noted, forgery is a criminal offence. Not surprisingly , the Court also found that it was just cause.

Duh! If this guy had walked into my office ( when I was an advocate ) , I would have told him he was lucky that he wasn’t facing criminal charges and to move on with his life.

Instead, he brings a hopeless lawsuit that holds him responsible for the defendants costs and makes public his misdeeds for all to see.

Ontario Court of Appeal Says Just Cause Clause Offends ESA and Voids Entire Termination Clause and Not Saved by Severability Clause:

In a short and punchy decision  called Waksdale v Swegon North America ( 2020 ONCA 391 which was released on the same day as I am writing this blog ) the Ontario Court of Appeal had a two part termination provision in an employment contract.

The first part said that if you were terminated for just cause , you get nothing. The Employer conceded that this was illegal because the ESA has a higher test for when you gets nothing and thus that clause was illegal . That is old news. Nothing special so far .

The second, separate clause had a perfectly legal if you are fired without cause all you get is the ESA minimums.

The Plaintiff was terminated without cause.

At the trial level the Judge   said that because they are different paragraphs, the illegality of the one clause does not affect the legality of the other clause.

This always struck me as a meaningless distinction. The Court of Appeal agreed with me .

This is what they said:

[9]          In the present case, there is no question that the respondent would not be permitted to rely on the Termination for Cause provision. The issue is whether the two clauses should be considered separately or whether the illegality of the Termination for Cause provision impacts the enforceability of the Termination of Employment with Notice provision. The respondent submits that where there are two discrete termination provisions that by their terms apply to different situations, courts should consider whether one provision impacts upon the other and whether the provisions are “entangled” in any way. If they are not, the respondent argues, then there is no reason why the invalidity of one should impact on the enforceability of the other. 

[10]       We do not give effect to that submission. An employment agreement must be interpreted as a whole and not on a piecemeal basis. The correct analytical approach is to determine whether the termination provisions in an employment agreement read as a whole violate the ESA. Recognizing the power imbalance between employees and employers, as well as the remedial protections offered by the ESA, courts should focus on whether the employer has, in restricting an employee’s common law rights on termination, violated the employee’s ESArights. While courts will permit an employer to enforce a rights-restricting contract, they will not enforce termination provisions that are in whole or in part illegal.  In conducting this analysis, it is irrelevant whether the termination provisions are found in one place in the agreement or separated, or whether the provisions are by their terms otherwise linked. Here the motion judge erred because he failed to read the termination provisions as a whole and instead applied a piecemeal approach without regard to their combined effect.

[11]       Further, it is of no moment that the respondent ultimately did not rely on the Termination for Cause provision. The court is obliged to determine the enforceability of the termination provisions as at the time the agreement was executed; non-reliance on the illegal provision is irrelevant.

[12]       The mischief associated with an illegal provision is readily identified. Where an employer does not rely on an illegal termination clause, it may nonetheless gain the benefit of the illegal clause. For example, an employee who is not familiar with their rights under the ESA, and who signs a contract that includes unenforceable termination for cause provisions, may incorrectly believe they must behave in accordance with these unenforceable provisions in order to avoid termination for cause. If an employee strives to comply with these overreaching provisions, then his or her employer may benefit from these illegal provisions even if the employee is eventually terminated without cause on terms otherwise compliant with the ESA.  

Having lost that argument, the Defendant tried to rely on a sever ability clause.

Nope, says the Court.

14]       We decline to apply this clause to termination provisions that purport to contract out of the provisions of the ESA. A severability clause cannot have any effect on clauses of a contract that have been made void by statute: North v. Metaswitch Networks Corporation, 2017 ONCA 790, 417 D.L.R. (4th) 429, at para.

44. Having concluded that the Termination for Cause provision and the Termination of Employment with Notice provision are to be understood together, the severability clause cannot apply to sever the offending portion of the termination provisions.  

This case will have a monumental effect because almost every  termination clause that that I have ever read has the typical just cause clause.

Moreover this will not just affect ESA termination clauses but every  single termination provision in Ontario. In other words, even if the termination provision said you get 3 weeks per year  of service with a maximum of 52 weeks, but it also had the just cause clause, the employee would be entitled to common law reasonable notice.

 

 

 

29 Month Break in Service Ignored in Assessing Reasonable Notice :

In Hetherington v Sask Liquor & Gaming Authority ( 2020 SKQB 110 ) Mitchell J. had a situation where the plaintiff worked for 19 years for the Sask govt, then quit and worked for another employer for 29 months, then returned to the Sask govt and 10 years later was laid off at age 65.

In deciding that for notice purposes that she was a 28 year employee, the judge noted the following factors:

1) Upon her rehire, she was granted the highest salary grade.

2) She was given 5 weeks vacation in recognition of her prior service.

3) She was given prior service recognition for her pension.

4) Her 29 month absence amounted to only 7.86% of her time with the Sask Govt.

5) In her 25th year, she got a letter from the Premier thanking her for her 25 years of service.

She was awarded 17 months notice.

This reminds me of a case I had similar to this many years ago where the fact that my client had a watch from the company thanking him for his 30 years of service clinched the deal. Thank God my client held onto that watch !

 

CLC Adjudicator Awards $90,000 in Costs :

In P.D. v Bank of Nova Scotia ( 2020 CarswellNat 640) ) Adjudicator Kaufman found that she did indeed have the authority to award costs to the Complainant in an unjust dismissal case.

She then in essence awarded substantial indemnity costs, the only reduction being on some of the paralegal fees. There was no reduction for the lawyers’s hours or rates.

This what she said on the issue of the level of costs:

57 As it would be inequitable to impose a costs obligation, if only partial, on the successful complainant, who has done little to contribute to the costs she incurred, other than to have been misjudged by the employer, I find no persuasive reason to order the employer to pay costs on a Partial Indemnity scale.

My Comment:

What is interesting about this case seems to be the acceptance that to make the injured party whole, all of their reasonable legal fees should be paid by the employer. This would make CLC adjudications perhaps even more beneficial to  terminated employees than a wrongful dismissal court case  where the default cost award is only partial indemnity costs.

Four Verbal Sexual Harassment Comments is Not Just Cause :

In Hucsko v A.O.Smith Enterprises ( 2020 ONSC 1346) Taylor J. had a situation where a 60 year old male employee  interacted with a fellow manager in the following fashion:

3      Samar Niazi began her employment with the defendant in 2014 as a Project Manager. In her position she interacted with the plaintiff but their lines of report were different. The plaintiff worked on projects being managed by Samar Niazi.
4      On June 28, 2017, Samar Niazi made a complaint to Nodine Kalcic, the Human Resources Manager of the defendant, regarding four incidents involving she and the plaintiff.
5      She reported that on the day following a managers’ dinner meeting, during the course of a conversation with the plaintiff about the previous evening, she said everyone “had a good time”. The plaintiff then asked if she had danced on the tables. She told him that his comment was inappropriate and she terminated the conversation.
6      The second incident reported by Samar Niazi involved a conversation between she, the plaintiff and Aymen Abdel-Rehim, the Product Development Engineering Manager of the defendant and the plaintiff’s immediate superior. They were discussing the next step to be taken on a project. The plaintiff said to her that she needed to go and sit on a male coworker’s lap and ask him nicely to provide information which was needed. She said both she and Aymen Abdel-Rehim told the plaintiff that his comment was inappropriate. In her written complaint, Samar Niazi did not provide dates on which the first two incidents occurred.
7      The third incident occurred during the week of June 19, 2017. She was at the plaintiff’s desk. They had a discussion about gardening. The plaintiff said to her that any reason for her to bend over and go down on her knees was good. She did not say anything and walked away from the plaintiff’s desk.
8      The fourth incident occurred on June 26, 2017. This interaction again occurred at the plaintiff’s desk. They were discussing a PowerPoint presentation about a project on which they were both working. Plaintiff began composing an email. Samar Niazi’s name was the first of the recipients. She made a comment about being at the top of the list. The plaintiff responded by saying “of course you are on top, you are getting pumped from under the skirt so you cannot stand anymore”. As he made this comment the plaintiff made multiple thrusting gestures with his hips. She was shocked by the comment and the gesture. She decided to make a report to Human Resources.
Ms Naizi was not cross examined by Plaintiff’s counsel.
The Plaintiff testified as follows:
12      With respect to the dancing on tables comment, the plaintiff testified that he and Samar Niazi had a discussion before the managers’ dinner about her not wanting to attend. He encouraged her to go to the dinner meeting. The next day Samar Niazi said she was very happy she had gone to the dinner meeting and everyone enjoyed themselves. The plaintiff asked if everyone was dancing on the tables. He meant this to suggest that everyone had had a lot of fun.
13      The plaintiff testified that in a meeting with Aymen Abdel-Rehim and himself, Samar Niazi was complaining about not receiving necessary information from another coworker by the name of Simon. The plaintiff said he told her to sit on him until he produced the information she needed. He said he intended to convey to Samar Niazi that she had to pin down the coworker until she received the information she required.
14      The plaintiff explained that the down on your knees comment was made during the course of a conversation he had with Samar Niazi about gardening. He said he suggested that she use a kneeling pad while removing weeds from her lawn. He said he did not make a thrusting gesture with his hips. Rather, his chair became stuck in a rut in the carpet in his cubicle which necessitated a thrusting type gesture to extract the chair from the rut in the carpet.
15      With respect to the pump the skirt comment, the plaintiff testified that he and Samar Niazi were discussing a difficult project which they had both worked on and which was nearing completion. She was the Project Manager. He told her that she would be the subject of much praise for bringing the project to a successful completion. According to the plaintiff he told Samar Niazi that she was going to have so much sunshine pumped up her skirt that she would not be able to sit down. He explained this to be a colloquialism from a 1970s movie. It means to praise someone or give someone a lot of credit.

There is no reference in the judgment a to what movie he was referring to.

Now you would think that it would be important for the Court to determine whether in fact the comments were of a sexual nature.

Apparently that was not relevant.

40      The focus of this trial was about whether the comments made by the plaintiff to Samar Niazi amounted to sexual harassment. There was much evidence and discussion about whether the comments made by the plaintiff to Samar Niazi were sexual in nature or were harassing generally. Because of the view I take of the evidence, it is unnecessary to categorize the comments made by the plaintiff. It is unclear to me whether the defendant concluded that the plaintiff’s conduct amounted to sexual harassment. Regardless of how the plaintiff’s comments were categorized, they did not justify summary termination of the plaintiff’s employment.

This is where the case gets weird.

The Defendant conducted an internal investigation and concluded that inappropriate comments had been made to some degree.

Rather than fire the Plaintiff , the Defendant told the Plaintiff that if he underwent some sort of training and provided a direct apology to Ms Niazi , that would end the matter.

The Plaintiff then hired a lawyer who wrote to the Defendant and said that his client would take the training but that he  refused to make an apology which admitted any wrongdoing on his part.

The Defendant then fired the Plaintiff for cause for the following reasons:

a) making inappropriate and vexatious comments to a coworker;

b) the failure to show remorse; and,

c) wilful insubordination based on a refusal to accept and comply with corrective action determined to be appropriate by the defendant.
Apparently the Judge was quite upset at the Defendants decision to fire the Plaintiff after the lawyer’s letter said that his client would not provide a letter of apology.
44      The termination of the plaintiff’s employment followed quickly after receipt of a letter from the plaintiff’s lawyer. Rather than responding to counsel’s letter and attempting to negotiate the wording of a letter of apology acceptable to both plaintiff and the defendant, the defendant chose to end the plaintiff’s 20 years of employment. I conclude that an important factor in the defendant’s decision to terminate the plaintiff’s employment was that he had consulted a lawyer. This is not a justifiable reason to dismiss an employee of long service.
With all due respect, it would seem likely that the reason for the termination coming shortly after receiving a lawyers’ letter was not because he had the audacity to seek legal advice, but rather of the position conveyed in the letter that the Plaintiff would not apologize because he felt that he had done nothing wrong.
It is very difficult to feel confident that someone will change their behavoir in the future if they truly believe that they have done nothing wrong in the past.
That presumably is what the Defendant referred to in the termination letter when they cited lack of remorse as a ground for termination.
This is how the Judge sized up what the Defendant should have done:
45      In my view, the defendant was faced with a situation in which two employees were in a difficult working relationship. Samar Niazi had made it clear that she would not accept a token apology. She did not want the plaintiff to be given “a slap on the wrist”. The defendant was entitled to make a decision about which of two employees it wished to continue to employ. The defendant was entitled to terminate the plaintiff’s employment on the basis of an incompatible working relationship with Samar Niazi. What the defendant was not entitled to do was create a situation in which it could rely on just cause to terminate the plaintiff’s employment.
In other words, the Defendant could have also chosen to terminate Ms Niazi and simply provide reasonable notice?
I think if the Defendant solved the “problem ” by firing the victim, it would have faced numerous legal actions with huge monetary consequences.

 

Doing Zilch to Look for New Job is NOT a Failure to Mitigate :

In Hucsko v A.O.Smith Enterprises ( 2020 ONSC 1346) Taylor J had a situation where a 60 year old Senior Product Designer was awarded 20 months notice.

When it came to mitigation efforts,  the Judge said:

51.     I have no difficulty in concluding that the plaintiff failed to make reasonable efforts to find alternate employment. He made no effort to find another job. He decided, without even testing the job market that he would be unable to secure alternate employment because of his age and the circumstances of his dismissal. Susan Hucsko testified that her husband did not look for another job because he had a passion for sailing since he was a child. He had always wanted to build a sailboat. She said he enrolled in the program at Westlawn so that he could build a sailboat for them to enjoy in retirement.

One would normally think that this would result in some reduction of the notice period .

But no. The Judge went on to say :

However, I also find that the defendant has not discharged its burden of proving that if reasonable job search efforts had been made, the plaintiff would have found another job at a similar level of remuneration as he was receiving at the time of the termination of employment.
52      The defendant provided no assistance to the plaintiff to find alternate employment. Outplacement counselling was not offered. No reference letter was offered. As I have already indicated, there was no evidence that alternate employment was available in the plaintiff’s field within a reasonable distance of the plaintiff’s residence.
53      I decline to reduce the period of notice for a failure to mitigate.
It should be noted that the Employer fired this guy in part because of four serious incidents of verbal sexual harassment. However they are criticized for not giving him a reference letter.
Clearly the Employer should have led some evidence that there were job opportunities that might have been available for him if the Plaintiff even bothered to pretend to look for a job.