Employer Alert: What to Do When the Ministry of Labour (MOL) Comes Calling

Apr 18, 2017

We often get calls from employers who are the subject of a Ministry of Labour (“MOL”) Inspection.

Sometimes the employer is a target of one of the MOL’s pro-active enforcement blitzes. For information on the MOL’s 2017-2018 blitzes, click here.

And sometimes an employee has called the MOL and lodged a complaint and an investigator has been assigned to investigate the complaint.

Why Are The Number of MOL Orders Increasing?

Several new obligations have been imposed on employers in the last couple of years and in our experience the MOL inspectors usually confirm whether or not an employer is in compliance with these new obligations regardless of the reason for the visit to the workplace. For information on some of these new obligations click here, here, and here.

The Results of a Recent MOL Investigation

This blog discusses a group of orders that a MOL inspector recently imposed on a small employer after an employee complained that she had been harassed at work.

Ironically, even though the employer had complied with the law that was the subject matter of the complaint, the MOL issued several orders against the employer for infractions of the Ontario Health and Safety Act (“OHSA”) including the following:

  1. The employer had not posted a copy of OHSA with the applicable regulation in the workplace
  2. The employer did not have a health & safety representative selected by the workers
  3. A health & safety representative had not inspected the physical condition of the workplace
  4. The employer did not provide basic occupation health & safety training to employees
  5. The employer did not have a health & safety policy posted in the workplace
  6. The employer did not have a workplace violence policy posted in the workplace
  7. The employer did not have a workplace harassment policy posted in the workplace
  8. The employer did not institute best practices for simple but dangerous activities

I suspect that a MOL inspector would issue these orders against many (if not most) Ontario small employers because most small employers are not aware of these obligations.

Penalties a MOL Inspector Can Impose

A MOL inspector has broad powers. If the employer co-operates with the inspector and the violations are minor then the inspector may simply issue an order with a deadline for compliance.

For uncooperative employers, repeat offenders, or serious violations of OHSA, the inspector can issue a ticket with a fine of approximately $ 295, or charge the employer with offences under Part I (maximum fine of $ 1000 per offence) or III (maximum fine of $ 500 000 for third offence) of the Provincial Offences Act. For more information on a MOL inspector’s powers, click here.

Lessons To Be Learned

You should try to stay up to date on changes to Ontario’s employment laws. We distribute this blog every two weeks as a public service to give you an idea of some of the changes in Ontario’s employment laws. We do not blog about all of these changes.

To help employers comply with Ontario’s employment laws we offer a fixed price compliance service that is tailored to your organization’s specific needs.

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 directly 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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