Appearances at the Supreme Court of Canada dominated employment law discourse in 2019. However, employers and employees were faced with legislative changes and court decisions that will shape Canadian workplaces in the year to come.
Below is a review of employment law developments in 2019. Later this week we’ll post a follow-up blog highlighting upcoming changes and decisions we can expect in 2020.
Discriminatory hiring practices can be costly for employers
In Haseeb v. Imperial Oil Limited, a company was ordered to pay over $100,000.00 in lost wages and $15,000.00 for injury to dignity, feelings and self-respect, for a candidate the company never actually hired.
The applicant, Muhammad Haseeb, applied for a position at Imperial Oil. In doing so, he lied about his eligibility to work in Canada on a permanent basis. Haseeb’s human rights application was successful. However, his offer of employment was rescinded when the company learned that he was unable to produce proof of his eligibility to work in Canada on a permanent basis. The Human Rights Tribunal of Ontario found that Haseeb was discriminated against based on citizenship. Even though Haseeb lied during the hiring process, his dishonesty was irrelevant to the discriminatory hiring practice.
In deciding on the remedy, the Tribunal exercised its ability to award the lost income Haseeb would have earned had there been no discrimination. The tribunal considered lost wages and underemployment for the period of March 30, 2015 to May 3, 2019. In addition, the Tribunal awarded an amount for general damages. This decision is an important consideration for employers, particularly given the globalization of Canada’s workforce.
A violation of human rights law may have significant implications. Employers should review their hiring practices to ensure they are in compliance with human rights legislation. If an employee or potential candidate believes they may have been discriminated against during their employment or the hiring process, they should seek legal advice.
Confirmation of the 24-month reasonable notice cap following a wrongful dismissal
In 2018, we saw several decisions awarding notice periods beyond 24 months. These decisions cleared the way for wrongful dismissal claims seeking very large notice awards.
In 2019, the Ontario Court of Appeal put an end to this practice in Dawe v. The Equitable Life Insurance Company of Canada.
After a successful claim for wrongful dismissal, 62-year old Michael Dawe, an employee with 37 years of service, was awarded 30 months of reasonable notice. The Ontario Court of Appeal overturned the 30-month award finding that a 24-month award was more appropriate. As a general principle, 24 months has been identified as the maximum notice period a fired employee may be awarded. It has been held that only “exceptional circumstances” would support a notice period in excess of 24 months. The Court of Appeal in Dawe confirmed this approach when it found that an older employee with a lengthy tenure is not an exceptional circumstance warranting a departure from the established maximum notice period.
It can be difficult for a terminated employee to ascertain whether a severance package offered at the time of termination is fair. If you have been fired and offered a package, consult with an employment lawyer to better understand the offer and the terms of the separation package.
Independent tort of harassment rejected by the Ontario Court of Appeal
In Merrifield v. Canada (Attorney General), 201 ONCA 205, the Ontario Court of Appeal rejected the existence of the tort of harassment.
Peter Merrifield, a member of the police force claimed that he had been harassed and bullied for several years. He claimed this treatment negatively impacted his career and caused significant emotional distress. At trial, the court determined that the tort of harassment existed, and set out the appropriate test to substantiate a harassment claim.
The Ontario Court of Appeal did not agree. Instead, the Court of Appeal determined that no authorities or case law indicated that the tort of harassment exists and that the case failed to establish a compelling reason to create such a tort.
While the tort of harassment no longer exists for the time being, employers still have a duty to maintain a workplace that is free from harassment, and employees may still be able to seek damages related to their mental distress in wrongful dismissal or constructive dismissal matters.
Fail safe provisions may no longer resolve an otherwise breach of the ESA
In Rossman v. Canadian Solar Solutions, 2019 ONCA, the Ontario Court of Appeal considered an employment contract that included a termination provision that was contrary to the Employment Standards Act, 2000 (ESA). The employment contract also contained a saving provision that stated that in the event that the minimum statutory requirements as of the date of termination provided for a greater right or benefit than what was provided for in the termination provision of the employment agreement, the statutory requirement would replace the notice or pay in lieu of notice contained in the agreement.
The employer attempted to rely on the saving provision as a defence to the ESA breach contained in the original termination provision, but the Court of Appeal was not persuaded. In rendering its decision, the Court of Appeal provided policy-based reasoning for its decision. In doing so the court emphasized the purpose of the ESA and the need to protect vulnerable employees who may not be familiar with their legal entitlements.
Employment contracts, and termination provisions specifically, require frequent review and refinement. Employers should ensure employment agreements are reviewed prior to hiring to confirm compliance with the ESA.
If you are an employee that has been fired and your employment agreement contains a termination clause, have counsel review the agreement to guarantee your best severance package prior to signing a release.
Changes to the Canada Labour Code
On September 1, 2019, legislative changes came into effect that significantly shifted the work environment for federally regulated employees.
Some highlights from the changes to the Canada Labour Code include:
- The introduction of up to 5 days of personal leave, with the first 3 days being paid after 3 months of continuous employment.
- The requirement of a 30-minute unpaid break for every 5 consecutive hours of work.
- The increase of vacation entitlements to 2 weeks after 1 year of service; 3 weeks after 5 years of service, and 4 weeks after 10 years of service.
Further changes are expected to come into effect in the future, including changes to the calculation of notice period entitlements upon individual termination, modifications to the unjust dismissal process, and the introduction of a pay equity plan.
2019 was marked with decisions that have reinforced and clarified the application of several employment law principles. These decisions will clear the path for employees who have been wrongfully dismissed to exercise their rights and use the options available to negotiate and settle a proper severance package. It is important to seek legal advice and become familiar with the multitude of options available before signing a release.
If you believe that you may have been wrongfully dismissed and you would like to consult with an employment lawyer to better understand your rights, please contact Sultan Lawyers by telephone at 416-214-5111 or here.
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