Employer Update: Additional Legal Information on Three Important Employment Law Developments

Jun 12, 2017

Every two weeks, I blog about a recent development in employment law or human rights law. Twenty-six blogs a year means there are a lot of new developments but I do not write about all of the changes in the employment law field each year.

I think employers currently need enhanced legal information on three human resource issues and so I am hosting a “learn by doing” seminar in October 2017.

This blog discusses these three areas.

Accommodating Employees with Mental Disabilities

Most human rights complaints filed with the Human Rights Tribunal of Ontario involve a disability and the number of claims filed by employees with a mental disability is skyrocketing. Accommodating an employee with a mental disability is extremely complicated from a legal perspective. The costs of failing to accommodate can be staggering.

In our seminar, we will discuss the legal landscape surrounding accommodation requests. We will then break into groups to review a specific request for accommodation and discuss how to respond to the request.

What to Do When the Ministry of Labour Comes Calling

On May 30, 2017 the Ontario government tabled proposed changes to the Employment Standards Act (the “ESA”) and also announced it intends to hire an additional 175 Ministry of Labour inspectors and that it intends to inspect 10% of Ontario workplaces each year. In addition, the Ministry of Labour has been pro-actively targeting certain industries for inspections the last few years. We have written about the considerable fines that such an inspector can impose on an employer for violations of Ontario’s employment statutes.

These developments mean that the Ministry of Labour is no longer waiting to receive a complaint from an employee before inspecting a workplace for compliance with the ESA and the Occupational Health & Safety Act (the “OHSA”). In our experience, most employers are not in full compliance with these laws.

In our seminar, we will discuss an employer’s legal obligations under the ESA including the proposed changes to the ESA. Some of these changes are expected to take effect on January 1, 2018. We will then break into groups and review one specific employer and discuss what needs to be done to bring this employer into compliance.

Employment Contracts

I think the best employment law investment is a well drafted legally enforceable employment contract.

I have drafted employment contracts for most of my clients but these contracts need to be reviewed periodically for at least three reasons. Changes in employment laws like the ESA may require changes in your contract. Another reason is because the courts are constantly considering the enforceability of different clauses that are contained in an employment contract. For example, in the last two years, the courts have refused to enforce many termination clauses. Yet another reason is because an issue may have developed in your workplace that you can manage by adding a clause to your employment contract.

In our seminar, we will discuss the benefits of using an employment contract, the kinds of issues that can be addressed in a contract, and what kinds of clauses the courts are refusing to enforce. We will also break out into small groups to review contractual clauses and discuss whether the clause is likely to be enforced.

The seminar for GTA employers is taking place on Monday, October 16, 2017 and the seminar for Simcoe County employers is taking place on Friday, October 20, 2017. Registration is limited to 30 for each seminar. The cost is $ 399 per person plus H.S.T.

For more information on this seminar, click here. To register, contact Judy Lam by calling (647) 204-8107 or e-mailing [email protected].

Employment Update 2017

For over 25 years, Doug MacLeod of the MacLeod Law Firm has been advising employers on all aspects of the employment relationship. If you have any questions, you can contact him at 416 317-9894 or at [email protected]

There are many ways to attack the termination clause in an employment contract. 

I am now surprised if employee counsel does not claim that their client’s  termination clause is not legally enforceable - usually because the termination clause does not allegedly comply with the Employment Standards Act.

This blog considers a case, McKercher v Stantec Architecture Ltd., 2019 SKQB 100, where an employee successfully attacked the termination clause in his contract because he did not explicitly agree to it after being promoted. 

The Facts

In 2006, Mr. McKercher commenced employment as a staff architect. The termination clause in his employment contract stated: 

Termination other than for cause will be with notice or pay in lieu of notice, based on your length of service. If the Employer terminates your employment for other than just cause you will receive the greater of:

  1. a)   Two weeks notice or pay in lieu of notice during the first two years of employment increasing by one week for each additional completed year of employment to a maximum of three months notice or pay in lieu of notice.

      or

  1. b)   The minimum notice of termination (or pay in lieu of notice) required by applicable statutes.

Eleven years later, when Mr. McKercher was employed as a Business Centre Sector Leader, his employment was terminated. The employer paid him the three months termination pay he was owed under his employment contract.

 

Another way to attack a termination clause: What is the changed substratum doctrine?

An Ontario judge in a 2012 case, MacGregor v National Home Services, 2012 ONSC 2042 (CanLII), described this legal doctrine as follows: "The changed substratum doctrine … provides that if an employee enters into an employment contract that specifies the notice period for a dismissal, the contractual notice period is not enforceable if over the course of employment, the important terms of the agreement concerning the employee’s responsibilities and status has significantly changed."

 

The rationale for this doctrine has been described by one judge, Schmidt v AMEC Earth & Environmental Ltd., 2004 BSCS 2012 (CanLII), as follows: "In my view, it was incumbent on the defendants to advise Mr. Schmidt that they intended to continue to rely upon the termination provision set out in the Agreement when substantial changes in his employment occurred. This would have allowed him to consider the matter and to negotiate for other terms. If the defendants wished to continue to rely on the termination provisions there ought to have been a ratification of the provisions as the nature of Mr. Schmidt’s employment changed."

 

Decision

The judge hearing this case relied on the following factors when deciding not to enforce the termination clause in the employment contract: ”...there is no evidence that (the employer) made it clear to the (employee) that the notice of termination provisions were intended to apply to the positions to which he was promoted. The employment agreement contains no express wording to this effect, nor does it contain any wording to support the inference of such an intent. Further, and in keeping with the analysis in Schmidt, the Court received no evidence that, as it promoted the plaintiff, SAL reasserted its understanding and expectation that the notice of termination limit would remain in effect.”

 

Lesson to be learned:

An employer should make it clear that the termination clause in an employment contract applies when an employee is promoted. This expression of this intent should be in writing and should be clear and unambiguous. I recommend that an organization’s employment be reviewed by an employment lawyer every year or two. If your employment contract does not address this issue then think about doing so the next time it is reviewed.

 

For 30 years, Doug MacLeod of   the MacLeod Law Firm has been advising employers on all aspects of the employment relationship. If you have any questions, you can contact him at 416 317-9894 or at [email protected]

The material and information in this blog and this website are for general information only. They should not be relied on as legal advice or opinion. The authors make no claims, promises, or guarantees about the accuracy, completeness, or adequacy of any information referred to in this blog or its links. No person should act or refrain from acting in reliance on any information found on this website or blog. Readers should obtain appropriate professional advice from a lawyer duly licensed in the relevant jurisdiction. These materials do not create a lawyer-client relationship between you and any of the authors or the MacLeod Law Firm.

 

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