Case Update
When an enforceable termination clause isn’t enough:
Henderson v Slavkin et al., 2022 ONSC 2964
Rose Henderson was a receptionist at an oral surgery dental office for 30 years.
In 2015, as part of their retirement planning, the surgeons/owners of the practice asked Ms. Henderson and the other employees to sign employment agreements. Ms. Henderson was given the option to sign the new employment agreement (which contained a termination clause that limited her entitlements upon termination to her minimums under the Employment Standards Act, 2000) in exchange for a payment of $500, or to accept working notice wherein her employment would end in 2017.
Ms. Henderson signed the new employment agreement and continued working as a receptionist. On November 1, 2019, the employees were notified that the practice was closing and that their employment would end effective April 30, 2020.
Mrs. Henderson subsequently commenced a claim against the surgeons, wherein she challenged the enforceability of the termination clause, the conflict-of-interest clause and the confidential information clause in her employment agreement. The parties agreed that if the court determined that the termination clause was unenforceable, she would be entitled to 18 months of pay in lieu notice.
While the court did not agree that the wording of the termination provision itself was unenforceable, it determined that when read in conjunction with the wording of the confidential information and conflict of interest clauses, it was unenforceable. Specifically, the court determined that these two clauses were overly broad and ambiguous. They alluded to ways in which an employee could be terminated but did not clearly communicate to the employees what specific conduct or circumstances could lead to termination without notice of compensation in lieu thereof.
This decision is an important lesson that a court will review all provisions in an employment agreement when assessing an employee’s entitlements upon termination.
Why employers shouldn’t ignore an employee’s past experience:
Antchipalovskaia v. Guestlogix Inc., 2022 ONCA 454
The Court of Appeal for Ontario recently determined that when an employee is terminated and subsequently re-hired during proceedings under the Companies Creditors Arrangement Act (“CCAA”), an employee’s service prior to the CCAA proceedings (even if the associated claims are released) remains relevant when determining an employee’s common law termination entitlements should they later be terminated by the employer.
Ms. Antchipalovskaia (the “Employee”) started working for Guestlogix Inc. (the “Company”) in 2011. The Company commenced CCAA proceedings in 2016, and a group of investors agreed to purchase the shares in the Company. There was a condition that the CCAA plan would release the Company from any claims.
The Employee was told that her employment with the Company would be terminated, but that she would be rehired immediately in the same role and on the same terms after the CCAA plan was implemented. The Employee was permitted to vote on the plan, which she did in 2016, and the plan was later approved. The Employee was able to submit proof of the CCAA proceedings in order to receive her statutory termination entitlements under the Employment Standards Act, 2000.
In 2016, the Employee continued to work for the Company until 2019 when she was terminated on a without cause basis. The Employee filed a claim for wrongful dismissal, and the motion judge determined that the Employee was entitled to 12 months of reasonable notice which was due in part to her continuing service with the Company between 2011-2019.
The Employer appealed the motion judge’s decision to the Court of Appeal for Ontario (COA).
The COA held that the motion judge erred when it determined that the Employee’s service with the Employer should be treated as continuous and that based on the facts, the appropriate period of employment was 2016-2019.
Notwithstanding this assessment, the COA determined that the Employee’s years of service were still relevant when determining the reasonable notice period, specifically because the Employer benefited from the Employee’s prior experience. As such, the COA determined that the reasonable notice period was 7 months.
This decision shows that purchasers should understand that the seniority of the employees they assume may still be relevant when determining the reasonable notice period if they are subsequently terminated. Even if a release was obtained during the purchase, the COA’s decision shows that an employee’s experience may still be considered in assessing their entitlements, particularly in relation to how it benefits the employer.
Employment Standards Act, 2000: Things You Should Know
Infectious Disease Emergency Leave
As of July 31, 2022, employees can no longer be deemed to be on the Infectious Disease Emergency Leave (IDEL), this means that the provisions under the Employment Standards Act relating to layoffs and constructive dismissal apply.
For more information, see our recent blog post.
Electronic Monitoring Policies
The deadline to have an electronic monitoring policy is October 11, 2022.
Check out Janet Lunau’s blog series on Ontario’s new electronic monitoring policy requirement for employers.
Minimum Wage Increase
Ontario’s general minimum wage will increase to $15.50 per hour on October 1, 2022.
Ministry of Labour Updates
WSIB Webinars
The WSIB’s Health and Safety Excellence Program is hosting two webinars for smaller businesses and larger businesses:
Smaller businesses (1-99 Full-time employees) can learn how to double their health and safety rebates and receive $1,000 towards their health and safety plan.
Larger businesses (100+ full-time employees) can learn how to earn rebates and build a strong health and safety program.
For more information about the webinar and to sign up, click here.
Occupational Health and Safety Report
The Ministry of Labour has released an Occupational Health and Safety in Ontario Report that reviews health and safety in the province from April 2020 – March 2021.
The report outlines some initiatives that the Ministry is considering and implementing to make health and safety easier and more accessible for small businesses.
To review the report, click here.
Safety Compliance Initiatives
The Ministry of Labour has released a list of safety compliance initiatives for 2022-2023.
Included in the initiatives are inspection blitzes. Employers should review the Ministry’s areas and industries of focus to ensure that they are prepared if the Ministry shows up at their workplace.
Industries included in the list are warehouses, healthcare, and temporary health agencies.
Legislative Updates: What’s New
We’re tracking the following pieces of legislation, and will provide updates as they make their way through the legislative process:
Bill S-211 Fighting Against Forced Labour and Child Labour in Supply Chains Act
If passed, certain Canadian entities would be required to ensure they are not using forced labour or exploiting child workers overseas.
The Bill is currently at the committee stage.
Bill C-19 Budget Implementation Act
This Bill received Royal Assent on June 23, 2022
Amendments to the Competition Act came into force on that day, which enhance consumer protection in many ways, for example, criminalizing wage-fixing agreements among employers.
Bill C-27 Digital Charter Implementation Act, 2022
This Bill passed First Reading on June 16, 2022, and is therefore in the very early stages.
If passed:
It would implement Canada’s first artificial intelligence legislation
Significantly reform Canadian privacy legislation
Create a tribunal that deals with privacy and data protection.