In June 2010, amendments to Ontario's Occupational Health and Safety Act became effective, requiring most employers to implement policies and programs dealing with harassment in the workplace and violence in the workplace. It was big news in the HR field and employment law field at the time, and most large employers amended their policy manual to bring themselves into compliance. Yet many workplaces did not.
Many employers don't make much use of policies. I strongly recommend the implementation of a good policy manual for just about any workplace - and I can assist in the development of such - but one of the striking aspects of Bill 168 is that it made certain policies legally mandatory. Not just a good idea.
Especially in light of the mandatory requirement, there are a lot of risks associated with not having them. First, it's a quasi-criminal offence: An employer can be charged for breaching the Occupational Health and Safety Act. When injuries occur due to such breaches, fines typically run upwards of five digits, and it isn't at all uncommon to see fines in excess of $100,000. Earlier this year, Metro Ontario was fined $350,000 (plus, as always, a 25% victims surcharge) after a young worker was killed at a Mississauga store.
Even beyond those liabilities, however, there's the additional risk that liability could be incurred in respect of employees. If an employee is the victim of harassment or violence in the workplace, it will be much easier for an employee to make out a case for constructive dismissal, possibly seeking aggravated damages in addition to all else, if the employer has neglected its statutory obligation to provide a recourse mechanism.
On the flip side, while this hasn't worked its way through into the jurisprudence yet, I expect that it will be much harder than before for an employee to make out a constructive dismissal case on the basis of harassment where they haven't taken advantage of recourse made available to them in a properly-implemented policy.
*****
This blog is not intended to and does not provide legal advice to any person in respect of any particular legal issue, and does not create a solicitor-client relationship with any readers, but rather provides general legal information. If you have a legal issue or possible legal issue, contact a lawyer.
Tuesday, October 18, 2011
Friday, October 14, 2011
Summary Judgment Motion Fails Against HBC
Aileen Thorne worked for HBC for about 37.5 years before she was terminated without cause on February 1, 2011 at age 59. At the time of her termination, she was making just under $40,000 per year and was an "allocation associate", whatever that means.
It turns out that the meaning of "allocation associate" is pretty contentious.
She has sued in wrongful dismissal, seeking pay in lieu of reasonable notice. The usual factors are length of employment, age of the employee, availability of replacement employment, and character of employment. Length of employment and age of the employee are usually pretty uncontroversial (though occasionally there's a fight about the former), and availability of replacement employment is not often closely analysed. But character of employment...that is more difficult: Front-line employees with no significant responsibility don't get much; skilled labourers and managers get more. So there's often a fight about what the employee's duties actually entailed.
The facts of this case are like looking into a file of my own from last year, that settled this winter. Similar employer, comparable length of service, and the most significant fight being over the level of responsibility exercised by the employee.
Let me explain that, on files such as these, the margins are often very small for a plaintiff. For old employees with such incredible lengths of service, you can probably expect a notice period at a minimum of 12 months, ranging up as high as 24 months (seldom higher), depending on level of responsibility and other factors - so $40,000 to $80,000, right?
Wrong. For an employee with such long service in an employer as large as HBC, the statutory minimum entitlements max out both termination pay and severance requirements, being a total of 32 weeks pay on termination. 8 months, roughly. So if you walk away with 12 months at the end of the day, that actually only means an additional 4 months, which would mean $13,000 in this case. Minus taxes. Minus any EI overpayments that might be generated. Minus any mitigation earnings. Minus legal fees.
I've occasionally used contingency fee retainers for employee-side files, but I don't like to, for a couple of reasons. Between EI and taxes, an employee's take-home entitlements on additional pay in lieu of notice is fairly modest. If the lawyer then takes a percentage of the gross, then the employee often doesn't get anything - or occasionally actually still comes out behind.
In the Thorne case, Ms. Thorne brought a motion for summary judgment, presumably to try to deal with the matter expeditiously and save on legal fees. And recently, the Rules of Civil Procedure expanded the scope of motions for summary judgment, allowing motions judges to assess factual disputes in limited ways. In this case, however, the motions judge found that this was not an appropriate case in which to do so.
However, the judge reserved costs to the trial judge (rather than awarding them to HBC, the successful party on the motion), which is a real mercy to a plaintiff under such circumstances. As well, HBC's affidavits had suggested that, since it wasn't taking the position that the notice period would be less than 12 months, they were contemplating a further voluntary payment to the plaintiff, which the judge suggested that this was something that should be "carefully considered by a fair and compassionate employer". Shades of Brito v. Canac Kitchens, no?
*****
This blog is not intended to and does not provide legal advice to any person in respect of any particular legal issue, and does not create a solicitor-client relationship with any readers, but rather provides general legal information. If you have a legal issue or possible legal issue, contact a lawyer.
It turns out that the meaning of "allocation associate" is pretty contentious.
She has sued in wrongful dismissal, seeking pay in lieu of reasonable notice. The usual factors are length of employment, age of the employee, availability of replacement employment, and character of employment. Length of employment and age of the employee are usually pretty uncontroversial (though occasionally there's a fight about the former), and availability of replacement employment is not often closely analysed. But character of employment...that is more difficult: Front-line employees with no significant responsibility don't get much; skilled labourers and managers get more. So there's often a fight about what the employee's duties actually entailed.
The facts of this case are like looking into a file of my own from last year, that settled this winter. Similar employer, comparable length of service, and the most significant fight being over the level of responsibility exercised by the employee.
Let me explain that, on files such as these, the margins are often very small for a plaintiff. For old employees with such incredible lengths of service, you can probably expect a notice period at a minimum of 12 months, ranging up as high as 24 months (seldom higher), depending on level of responsibility and other factors - so $40,000 to $80,000, right?
Wrong. For an employee with such long service in an employer as large as HBC, the statutory minimum entitlements max out both termination pay and severance requirements, being a total of 32 weeks pay on termination. 8 months, roughly. So if you walk away with 12 months at the end of the day, that actually only means an additional 4 months, which would mean $13,000 in this case. Minus taxes. Minus any EI overpayments that might be generated. Minus any mitigation earnings. Minus legal fees.
I've occasionally used contingency fee retainers for employee-side files, but I don't like to, for a couple of reasons. Between EI and taxes, an employee's take-home entitlements on additional pay in lieu of notice is fairly modest. If the lawyer then takes a percentage of the gross, then the employee often doesn't get anything - or occasionally actually still comes out behind.
In the Thorne case, Ms. Thorne brought a motion for summary judgment, presumably to try to deal with the matter expeditiously and save on legal fees. And recently, the Rules of Civil Procedure expanded the scope of motions for summary judgment, allowing motions judges to assess factual disputes in limited ways. In this case, however, the motions judge found that this was not an appropriate case in which to do so.
However, the judge reserved costs to the trial judge (rather than awarding them to HBC, the successful party on the motion), which is a real mercy to a plaintiff under such circumstances. As well, HBC's affidavits had suggested that, since it wasn't taking the position that the notice period would be less than 12 months, they were contemplating a further voluntary payment to the plaintiff, which the judge suggested that this was something that should be "carefully considered by a fair and compassionate employer". Shades of Brito v. Canac Kitchens, no?
*****
This blog is not intended to and does not provide legal advice to any person in respect of any particular legal issue, and does not create a solicitor-client relationship with any readers, but rather provides general legal information. If you have a legal issue or possible legal issue, contact a lawyer.
Thursday, October 13, 2011
The Corporate Veil and the Identity of the Employer
Corporate Law 101: A corporation is a legal person, and can enter into contracts, and (subject to personal guarantees, etc.) is the only one responsible for its own contractual obligations...unless one of about a hundred exceptions applies.
But that's what the 'corporate veil' is all about. If I own a corporation, and the corporation incurs liabilities, then unless the plaintiff can convince a Court to ignore the corporate veil, the plaintiff can only enforce a judgment against the corporation's assets, and not against my personal assets.
When you get into employment law, this principle occasionally triggers the question of "who is the employer?"
The Superior Court recently decided the Asselin v. Gazarek et al. case, which dealt with a complex scenario involving interrelated corporations with common owners.
Let's set up the cast of characters. There are three corporations, being Sheridan Chevrolet Cadillac Ltd. ("Sheridan"), the Pickering Auto Mall Ltd. (a "Saturn" dealership), and Gazarek Realty Holdings Ltd.
Gazarek Realty Holdings Ltd. is a real estate holding corporation and was, in essence, the landlord for Sheridan and Saturn. But it was a little bit more than that: Gazarek Realty Holdings Ltd. is solely owned by Gerald Gazarek, who also owned Sheridan, and whose daughter Leslie owned Saturn. So it's all a family affair. Operationally, there was also an unusual connection: For tax reasons, the holding corporation paid the salaries of managers at the dealerships, and was reimbursed for these payments by the dealerships.
Mr. Asselin started working for Saturn in 2006, and was 'transferred' to Sheridan (terminated and rehired?) in 2008, but was terminated in 2009. Both dealerships closed in 2009 and have no assets. The holding corporation continues to have assets, however. So the main question became whether or not the holding corporation was a common employer. (The length of the notice period and applicability of punitive damages were also in question, but they were all secondary to the question of whether or not the holding corporation was liable.) The Court concluded that the holding company was not liable.
In 2001, the Ontario Court of Appeal considered the question of 'what makes a common employer' in the Downtown Eatery (1993) Ltd. v. Ontario case, in which there was a "highly integrated or seamless group of companies" operating a nightclub together. The Court of Appeal succinctly drew the test of a common employer as "where effective control of the employee resides".
In this case, the Court raised three problems with Asselin's position:
Firstly, Asselin was not a manager, so his salary was paid by the dealerships, not the holding company. The Court acknowledges that the result might have been different otherwise, but the fact that he was paid by the dealerships distinguished it from case law (such as Sinclair v. Dover Engineering Ltd.) in which the employee worked for one company but was paid by another.
Secondly, the holding company didn't assert any control over Asselin's employment. One could easily imagine a scenario where payment of the managers would give the holding company effective control, but the fact that it was a purely technical arrangement for which the corporation was fully reimbursed suggested that there was not effective control.
Thirdly, the evidence did not support a contention of interrelation as in the Downtown Eatery case; rather, the dealerships carried on their own business with minimal interaction with the holding company.
Accordingly, the holding company is not liable, and the judgment for reasonable notice was only against the dealerships...which have no assets. Does that mean that Asselin is completely out of luck? Maybe. It might depend on what assets were in the corporation previously and what happened to them; there are "oppression" remedies that could be available.
As an interesting side note, the employer had initially alleged cause and only paid the statutory minimums, so Asselin tried to rely on the Brito v. Canac Kitchens case (which I discussed in this post, which is arguably inconsistent with established case law) seeking punitive damages, but the judge dismissed this claim fairly summarily.
My Thoughts
I have concerns about this decision.
On the point that the holding company was paying his managers but not him, I understand the distinction and I'm less inclined to question it, but from a policy perspective I wonder it Justice Conway's disposition of it is too summary. In a footnote, he notes that the nature of the tax advantage sought wasn't discussed at trial. The fact that it wasn't Asselin's salary is important, yet the holding company was still managing a portion of the dealerships' payroll expenses in an arrangement which clearly was not arms-length. Part of the reason (from the plaintiff's perspective, the entire reason) for the common employer doctrine is to prevent employers from structuring their affairs so as to protect their assets from claims by employees, and a non-arms-length delegation of payroll to a third-party corporation should definitely raise alarm bells that the Court should at least peek behind the corporate veil to see what's going on there.
On the second point, the test is "effective control", and the Court points out that the holding company exercised no control over the managers. However, that would seem to gloss over the fact that the holding company and one of the dealerships had the same directing mind, which was also non-arms-length with the directing mind of the other dealership. To suggest that the holding company had no "effective control" is basically saying that "When Gerald told the managers what to do, he wasn't acting in relation to his role in the holding company." Did he put on a different hat?
It has to be more nuanced than that, and it is very difficult to draw a meaningful distinction of 'effective control' when both corporations are controlled by the same person.
On the third point, the finding that there was not sufficient integration between the companies glosses over a number of facts. Firstly: They use common professionals to assist them. I wouldn't suggest that we should use the fact that they retained only one lawyer in this proceeding against them (though one would expect a conflict of interest for a lawyer representing all three parties if they were at arms length), but they clearly got the same accounting advice as well. The fact that they both engaged the same non-arms-length management payroll structure tends to work against an allegation that they were all independently run.
Secondly: The dynamics of the 'transfer' to Sheridan are also quite unlike anything you might see in companies that are not related. The Court did not explore the dynamics in much detail, because the defence conceded that nothing turned on whether or not Sheridan and Saturn were both liable (a brilliant concession, perhaps?). Leslie's evidence was that he was terminated because they were having problems with him, but she 'inquired' to see if there was a place for him at Sheridan. ("Hey Dad, I've got this problem employee I want to get rid of; want to take him off my hands?")
Thirdly: When Sheridan terminated him after three months, he received ROEs from parts of his statutory notice from Sheridan and from Saturn. While Leslie testified that the failure to provide the same upon his termination from Saturn was an oversight, which was corrected when she was told he was fired from Sheridan, the fact alone that she was so promptly told of his termination from Sheridan is also indicative of operational integration. (And, if they weren't related, arguably a breach of Sheridan's duty of good faith and fair dealing.)
Most of those facts I'm pointing to deal with integration between the dealerships (and not necessarily the holding company). Ultimately, the defence didn't fight much about whether or not the dealerships were integrated, and so they are jointly and severally liable. But the fact of integration between the dealerships suggests against these being autonomous and independent operations, as the Court found, and - with the involvement of the holding company in their affairs - it is difficult to see how, if the two dealerships were common employers, the holding company would not be a part of that integrated group.
*****
This blog is not intended to and does not provide legal advice to any person in respect of any particular legal issue, and does not create a solicitor-client relationship with any readers, but rather provides general legal information. If you have a legal issue or possible legal issue, contact a lawyer.
But that's what the 'corporate veil' is all about. If I own a corporation, and the corporation incurs liabilities, then unless the plaintiff can convince a Court to ignore the corporate veil, the plaintiff can only enforce a judgment against the corporation's assets, and not against my personal assets.
When you get into employment law, this principle occasionally triggers the question of "who is the employer?"
The Superior Court recently decided the Asselin v. Gazarek et al. case, which dealt with a complex scenario involving interrelated corporations with common owners.
Let's set up the cast of characters. There are three corporations, being Sheridan Chevrolet Cadillac Ltd. ("Sheridan"), the Pickering Auto Mall Ltd. (a "Saturn" dealership), and Gazarek Realty Holdings Ltd.
Gazarek Realty Holdings Ltd. is a real estate holding corporation and was, in essence, the landlord for Sheridan and Saturn. But it was a little bit more than that: Gazarek Realty Holdings Ltd. is solely owned by Gerald Gazarek, who also owned Sheridan, and whose daughter Leslie owned Saturn. So it's all a family affair. Operationally, there was also an unusual connection: For tax reasons, the holding corporation paid the salaries of managers at the dealerships, and was reimbursed for these payments by the dealerships.
Mr. Asselin started working for Saturn in 2006, and was 'transferred' to Sheridan (terminated and rehired?) in 2008, but was terminated in 2009. Both dealerships closed in 2009 and have no assets. The holding corporation continues to have assets, however. So the main question became whether or not the holding corporation was a common employer. (The length of the notice period and applicability of punitive damages were also in question, but they were all secondary to the question of whether or not the holding corporation was liable.) The Court concluded that the holding company was not liable.
In 2001, the Ontario Court of Appeal considered the question of 'what makes a common employer' in the Downtown Eatery (1993) Ltd. v. Ontario case, in which there was a "highly integrated or seamless group of companies" operating a nightclub together. The Court of Appeal succinctly drew the test of a common employer as "where effective control of the employee resides".
In this case, the Court raised three problems with Asselin's position:
Firstly, Asselin was not a manager, so his salary was paid by the dealerships, not the holding company. The Court acknowledges that the result might have been different otherwise, but the fact that he was paid by the dealerships distinguished it from case law (such as Sinclair v. Dover Engineering Ltd.) in which the employee worked for one company but was paid by another.
Secondly, the holding company didn't assert any control over Asselin's employment. One could easily imagine a scenario where payment of the managers would give the holding company effective control, but the fact that it was a purely technical arrangement for which the corporation was fully reimbursed suggested that there was not effective control.
Thirdly, the evidence did not support a contention of interrelation as in the Downtown Eatery case; rather, the dealerships carried on their own business with minimal interaction with the holding company.
Accordingly, the holding company is not liable, and the judgment for reasonable notice was only against the dealerships...which have no assets. Does that mean that Asselin is completely out of luck? Maybe. It might depend on what assets were in the corporation previously and what happened to them; there are "oppression" remedies that could be available.
As an interesting side note, the employer had initially alleged cause and only paid the statutory minimums, so Asselin tried to rely on the Brito v. Canac Kitchens case (which I discussed in this post, which is arguably inconsistent with established case law) seeking punitive damages, but the judge dismissed this claim fairly summarily.
My Thoughts
I have concerns about this decision.
On the point that the holding company was paying his managers but not him, I understand the distinction and I'm less inclined to question it, but from a policy perspective I wonder it Justice Conway's disposition of it is too summary. In a footnote, he notes that the nature of the tax advantage sought wasn't discussed at trial. The fact that it wasn't Asselin's salary is important, yet the holding company was still managing a portion of the dealerships' payroll expenses in an arrangement which clearly was not arms-length. Part of the reason (from the plaintiff's perspective, the entire reason) for the common employer doctrine is to prevent employers from structuring their affairs so as to protect their assets from claims by employees, and a non-arms-length delegation of payroll to a third-party corporation should definitely raise alarm bells that the Court should at least peek behind the corporate veil to see what's going on there.
On the second point, the test is "effective control", and the Court points out that the holding company exercised no control over the managers. However, that would seem to gloss over the fact that the holding company and one of the dealerships had the same directing mind, which was also non-arms-length with the directing mind of the other dealership. To suggest that the holding company had no "effective control" is basically saying that "When Gerald told the managers what to do, he wasn't acting in relation to his role in the holding company." Did he put on a different hat?
It has to be more nuanced than that, and it is very difficult to draw a meaningful distinction of 'effective control' when both corporations are controlled by the same person.
On the third point, the finding that there was not sufficient integration between the companies glosses over a number of facts. Firstly: They use common professionals to assist them. I wouldn't suggest that we should use the fact that they retained only one lawyer in this proceeding against them (though one would expect a conflict of interest for a lawyer representing all three parties if they were at arms length), but they clearly got the same accounting advice as well. The fact that they both engaged the same non-arms-length management payroll structure tends to work against an allegation that they were all independently run.
Secondly: The dynamics of the 'transfer' to Sheridan are also quite unlike anything you might see in companies that are not related. The Court did not explore the dynamics in much detail, because the defence conceded that nothing turned on whether or not Sheridan and Saturn were both liable (a brilliant concession, perhaps?). Leslie's evidence was that he was terminated because they were having problems with him, but she 'inquired' to see if there was a place for him at Sheridan. ("Hey Dad, I've got this problem employee I want to get rid of; want to take him off my hands?")
Thirdly: When Sheridan terminated him after three months, he received ROEs from parts of his statutory notice from Sheridan and from Saturn. While Leslie testified that the failure to provide the same upon his termination from Saturn was an oversight, which was corrected when she was told he was fired from Sheridan, the fact alone that she was so promptly told of his termination from Sheridan is also indicative of operational integration. (And, if they weren't related, arguably a breach of Sheridan's duty of good faith and fair dealing.)
Most of those facts I'm pointing to deal with integration between the dealerships (and not necessarily the holding company). Ultimately, the defence didn't fight much about whether or not the dealerships were integrated, and so they are jointly and severally liable. But the fact of integration between the dealerships suggests against these being autonomous and independent operations, as the Court found, and - with the involvement of the holding company in their affairs - it is difficult to see how, if the two dealerships were common employers, the holding company would not be a part of that integrated group.
*****
This blog is not intended to and does not provide legal advice to any person in respect of any particular legal issue, and does not create a solicitor-client relationship with any readers, but rather provides general legal information. If you have a legal issue or possible legal issue, contact a lawyer.
Tuesday, October 11, 2011
How to Get Rid of a Union in Ontario
I recently involved myself in a debate on Professor David Doorey's blog about 'democracy' in labour relations. I've followed his blog for some time, and I respect (though I often disagree with) his views, which are typically 'pro-union'. My own view on unions is quite nuanced: Unlike many lawyers who represent management, I don't oppose unions on principle. I've seen employers who remind me of the reason why unions exist. But I have had many occasions to question the activities of specific unions in specific contexts.
I believe that there are major problems with the current structure of our labour relations regime in Ontario, mainly because I believe that "labour" itself has become an entity with its own interests, and a powerful one at that. Rather than, as I believe should be the case, an advocacy mechanism for workers. The end result is that there are times when a union puts its own interests above those of individuals it represents, or even above entire bargaining units under its care.
So we frequently see cases in the jurisprudence involving employees trying to sidestep the union to deal with their employer (almost always unsuccessful, except in the Human Rights arena, where it *can* work), or taking on the union directly in a Duty of Fair Representation application (almost always unsuccessful, because there's a high threshold for it), and I have had plenty of employees call me directly because they aren't happy with the way that their unions are representing their interests. (Think about how big a deal that is: You've already paid union dues. You're not getting them back. Included in union dues is representation as against your employer. How dissatisfied would you have to be before you would hire your own lawyer at your own expense, paying hundreds of dollars per hour, to do something you've already paid somebody else to do?) The trouble is that there is seldom much to be done; under the statute, the union has the exclusive mandate to represent them, and they can't opt out of this.
Professor Doorey sees it thus: The bargaining unit, if displeased with the union, can get rid of the union. This is true. But it seldom happens, because bargaining unit members usually don't have the sophistication or resources to successfully decertify a union, and any employer involvement or assistance will usually be fatal to the effort. The rules governing decertification are actually fairly complicated.
So, for those employees who want to decertify a union, here's a general guide as to how. Remember that every case is unique in its own way, and the best way to move forward, if you can afford to, is to hire a qualified lawyer to assist you. The below is not legal advice, and does not cover every scenario. Especially note that the process is different for construction industry matters.
Step 1: Determine if you can bring the Application
The general rule is that you have to be a member of the bargaining unit in order to apply for termination of bargaining rights, and that any member of the bargaining unit can do so. However, the application can't be tainted by management influence, and there have been cases in which unions have argued that the person making the application was too closely connected to the managerial team.
Step 2: Find the Window
The Labour Relations Act sets out a variety of different circumstances in which you cannot make an application to terminate your union's bargaining rights.
The Application can be made under the following circumstances:
Let's say that my union and employer commenced a collective agreement with a 24-month term, starting May 1st 2011 and ending April 30th 2013. If I want to decertify the union, the window opens on February 1st, 2013 (three months before the end), and closes when a new collective agreement becomes effective. So if the employer and union are able to negotiate a new agreement to start for May 1st, 2013, I need to have my application in before then.
Or suppose my union and employer negotiate a long-term collective agreement, going from September 1st 2011 to August 31st 2016 (five years). I would then have three month windows at the end of the third, fourth, and fifth years of operation. (Window from June 1st to August 31st of 2014 and 2015, and then a window opening June 1st 2016 that ends when a new collective agreement becomes effective.)
One of many important things to remember is that, if the bargaining unit ratifies a new collective agreement, you're probably s.o.l. for a long time if you want to get the union out. When most employees treat a new collective agreement as being inevitable, and a question of how long it will take and what actions (i.e. strikes) may be required to get a better deal, that's a problem; people are likely to vote in favour of a tentative agreement so long as it is tolerable, and this is especially true of those who would rather be without a union in any event.
But there are also bars to initiating an application, even within those windows. There's a conciliation process available to the parties: The union or the employer can ask the Minister to appoint a conciliation officer or mediator, which triggers a bar for a period which essentially allows that process to run its course. In practice, this ends up being a way for the union to extend its protection. So it has one year to get a first collective agreement, and if it fails to do so, it asks the Minister to appoint a conciliation officer or mediator. Then, once that process runs its course, the bar is extended for a certain period of time beyond. Similar principles apply when subsequently renegotiating expiring collective agreements - conciliation bars an application after the expiration of the existing collective agreement.
If a strike or lock-out begins, that also creates a bar - essentially, if the bargaining unit gives the union the go-ahead for a strike, they have to give the union at least 6 months to try to accomplish its objectives.
One of the major practical challenges for an employee trying to decertify a union surrounds the whole 'conciliation' concept. How do you find out if the union has sought conciliation without asking questions that would tip off the union to your impending application? Ultimately, the best bet for decertifying unions is by making sure the application gets started within those three-month windows, and not waiting for existing collective agreements to expire.
Step 3: Get your "Evidence" together
In order to make an application to terminate bargaining rights, there are going to be two substantive requirements. First, you're going to have to show 'evidence' that at least 40% of the bargaining unit no longer wants to be represented by a union, and then later when a vote occurs at least 50% plus one of the bargaining unit has to vote on your side.
But first things first, so let's look at the evidence. It's best to think of it like a petition. Every page has to show what they're signing, and each name should have the printed name, signature, and date of signature. You also need to provide the OLRB with an alphabetical list of employees corresponding with the evidence filed, and a declaration verifying the evidence (OLRB Form A-80).
Step 4: Serve the Union and Employer and File the Application
Well, first you need to complete all the below documents. That's a given. After you find them all on the OLRB website. Which isn't quite as simple as it should be, but I've tried to simplify it with links to the PDF versions of everything. There are Word versions available, too.
You need to serve a termination package on the union, including the following:
And, on the employer, the following:
Then, within two days, you need to file (by any means except email, fax, or registered mail) with the OLRB the following:
See? Couldn't be simpler.
Step 5: Win the Vote
There are limits to what you are allowed to do in campaigning. Threatening, intimidation, etc., these tactics aren't kosher. But as a member of the bargaining unit, your speech isn't nearly as restricted as the employer's speech in terms of trying to persuade your fellow workers that the union isn't in their best interests. Remember that this is your campaign; the employer is barely more than a bystander, and can't do much to help you. And if they offer assistance, you should say no, or risk compromising the application.
*****
This blog is not intended to and does not provide legal advice to any person in respect of any particular legal issue, and does not create a solicitor-client relationship with any readers, but rather provides general legal information. If you have a legal issue or possible legal issue, contact a lawyer.
The author is a lawyer practicing in Newmarket, primarily in the areas of labour and employment law and civil litigation. If you need legal assistance, please contact him for information on available services and billing.
I believe that there are major problems with the current structure of our labour relations regime in Ontario, mainly because I believe that "labour" itself has become an entity with its own interests, and a powerful one at that. Rather than, as I believe should be the case, an advocacy mechanism for workers. The end result is that there are times when a union puts its own interests above those of individuals it represents, or even above entire bargaining units under its care.
So we frequently see cases in the jurisprudence involving employees trying to sidestep the union to deal with their employer (almost always unsuccessful, except in the Human Rights arena, where it *can* work), or taking on the union directly in a Duty of Fair Representation application (almost always unsuccessful, because there's a high threshold for it), and I have had plenty of employees call me directly because they aren't happy with the way that their unions are representing their interests. (Think about how big a deal that is: You've already paid union dues. You're not getting them back. Included in union dues is representation as against your employer. How dissatisfied would you have to be before you would hire your own lawyer at your own expense, paying hundreds of dollars per hour, to do something you've already paid somebody else to do?) The trouble is that there is seldom much to be done; under the statute, the union has the exclusive mandate to represent them, and they can't opt out of this.
Professor Doorey sees it thus: The bargaining unit, if displeased with the union, can get rid of the union. This is true. But it seldom happens, because bargaining unit members usually don't have the sophistication or resources to successfully decertify a union, and any employer involvement or assistance will usually be fatal to the effort. The rules governing decertification are actually fairly complicated.
So, for those employees who want to decertify a union, here's a general guide as to how. Remember that every case is unique in its own way, and the best way to move forward, if you can afford to, is to hire a qualified lawyer to assist you. The below is not legal advice, and does not cover every scenario. Especially note that the process is different for construction industry matters.
Step 1: Determine if you can bring the Application
The general rule is that you have to be a member of the bargaining unit in order to apply for termination of bargaining rights, and that any member of the bargaining unit can do so. However, the application can't be tainted by management influence, and there have been cases in which unions have argued that the person making the application was too closely connected to the managerial team.
Step 2: Find the Window
The Labour Relations Act sets out a variety of different circumstances in which you cannot make an application to terminate your union's bargaining rights.
The Application can be made under the following circumstances:
- If more than a year has passed since the union was certified, and no collective agreement has been reached;
- If a collective agreement exists and has a term of three years or less, then after the start of the last three months of its operation (and before a new collective agreement commences or a renewal of the agreement is effective);
- If a collective agreement exists and has a term of more than three years, then between the start of the 34th month and the start of the 37th month of its operation, then for the last three months of each year of its operation thereafter (and for the last three months of its operation before it expires).
Let's say that my union and employer commenced a collective agreement with a 24-month term, starting May 1st 2011 and ending April 30th 2013. If I want to decertify the union, the window opens on February 1st, 2013 (three months before the end), and closes when a new collective agreement becomes effective. So if the employer and union are able to negotiate a new agreement to start for May 1st, 2013, I need to have my application in before then.
Or suppose my union and employer negotiate a long-term collective agreement, going from September 1st 2011 to August 31st 2016 (five years). I would then have three month windows at the end of the third, fourth, and fifth years of operation. (Window from June 1st to August 31st of 2014 and 2015, and then a window opening June 1st 2016 that ends when a new collective agreement becomes effective.)
One of many important things to remember is that, if the bargaining unit ratifies a new collective agreement, you're probably s.o.l. for a long time if you want to get the union out. When most employees treat a new collective agreement as being inevitable, and a question of how long it will take and what actions (i.e. strikes) may be required to get a better deal, that's a problem; people are likely to vote in favour of a tentative agreement so long as it is tolerable, and this is especially true of those who would rather be without a union in any event.
But there are also bars to initiating an application, even within those windows. There's a conciliation process available to the parties: The union or the employer can ask the Minister to appoint a conciliation officer or mediator, which triggers a bar for a period which essentially allows that process to run its course. In practice, this ends up being a way for the union to extend its protection. So it has one year to get a first collective agreement, and if it fails to do so, it asks the Minister to appoint a conciliation officer or mediator. Then, once that process runs its course, the bar is extended for a certain period of time beyond. Similar principles apply when subsequently renegotiating expiring collective agreements - conciliation bars an application after the expiration of the existing collective agreement.
If a strike or lock-out begins, that also creates a bar - essentially, if the bargaining unit gives the union the go-ahead for a strike, they have to give the union at least 6 months to try to accomplish its objectives.
One of the major practical challenges for an employee trying to decertify a union surrounds the whole 'conciliation' concept. How do you find out if the union has sought conciliation without asking questions that would tip off the union to your impending application? Ultimately, the best bet for decertifying unions is by making sure the application gets started within those three-month windows, and not waiting for existing collective agreements to expire.
Step 3: Get your "Evidence" together
In order to make an application to terminate bargaining rights, there are going to be two substantive requirements. First, you're going to have to show 'evidence' that at least 40% of the bargaining unit no longer wants to be represented by a union, and then later when a vote occurs at least 50% plus one of the bargaining unit has to vote on your side.
But first things first, so let's look at the evidence. It's best to think of it like a petition. Every page has to show what they're signing, and each name should have the printed name, signature, and date of signature. You also need to provide the OLRB with an alphabetical list of employees corresponding with the evidence filed, and a declaration verifying the evidence (OLRB Form A-80).
Step 4: Serve the Union and Employer and File the Application
Well, first you need to complete all the below documents. That's a given. After you find them all on the OLRB website. Which isn't quite as simple as it should be, but I've tried to simplify it with links to the PDF versions of everything. There are Word versions available, too.
You need to serve a termination package on the union, including the following:
- OLRB Form C-3, completed with the union's name and the date in the appropriate fields (the full name of the form is Notice to Union of Application for Termination of Bargaining Rights Under Section 63 of the Act...don't you love pithy names?);
- A completed copy of Form A-6 (Application for Termination of Bargaining Rights Under Section 63 of the Act);
- A blank copy of Form A-7 (Response to Application for Termination of Bargaining Rights Under Section 63 of the Act);
- A copy of Information Bulletin 2 (which is where this list is found, incidentally);
- A copy of Information Bulletin 3;
- A copy of Information Bulletin 5; and
- A copy of Part III of the Board's Rules of Procedure.
And, on the employer, the following:
- Form C-4;
- The same Form A-6 as above;
- A blank Form A-8;
- A blank Schedule C (List of Employees)
- A copy of Information Bulletin 2 (which is where this list is found, incidentally);
- A copy of Information Bulletin 3;
- A copy of Information Bulletin 5; and
- A copy of Part III of the Board's Rules of Procedure.
Then, within two days, you need to file (by any means except email, fax, or registered mail) with the OLRB the following:
- A signed original and a completed copy of Form A-6;
- The evidence that the employees don't wish to be represented by a union;
- The above-noted list of employees corresponding with the evidence;
- Form A-80
See? Couldn't be simpler.
Step 5: Win the Vote
There are limits to what you are allowed to do in campaigning. Threatening, intimidation, etc., these tactics aren't kosher. But as a member of the bargaining unit, your speech isn't nearly as restricted as the employer's speech in terms of trying to persuade your fellow workers that the union isn't in their best interests. Remember that this is your campaign; the employer is barely more than a bystander, and can't do much to help you. And if they offer assistance, you should say no, or risk compromising the application.
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This blog is not intended to and does not provide legal advice to any person in respect of any particular legal issue, and does not create a solicitor-client relationship with any readers, but rather provides general legal information. If you have a legal issue or possible legal issue, contact a lawyer.
The author is a lawyer practicing in Newmarket, primarily in the areas of labour and employment law and civil litigation. If you need legal assistance, please contact him for information on available services and billing.
Friday, October 7, 2011
My New Web Site
Earlier this week I announced the opening of my new practice in Don Mills. The LawyerBuchanan web site is now up and running, containing basic information (which will be expanded upon in the weeks and months to come) and a contact form.
Thursday, October 6, 2011
Human Rights and Quantum Physics
In Quantum Physics there's a thought experiment referred to as "Schrödinger's Cat", derived by Erwin Schrödinger in 1935. It's a bizarre concept, quite impossible to wrap one's head around, and it has worked its way into certain pop culture phenomena (such as the hit TV show "Big Bang Theory").
Einstein and others wrote an article postulating some of the premises of quantum physics (the "Copenhagen interpretation"), and Schrödinger thought that they were implausible. He used a reductio ad absurdum argument to show how the premise, if accepted, necessary led to absurd consequences:
Imagine a cat in a box with a device set up involving a tiny bit of a radioactive substance (so small that the atoms may or may not decay over the course of an hour) and a flask of acid. If the radioactive substance decays, the acid will be released and will kill the cat. If the radioactive substance does not decay, then the acid will not be released and the cat will be alive.
Einstein and others wrote an article postulating some of the premises of quantum physics (the "Copenhagen interpretation"), and Schrödinger thought that they were implausible. He used a reductio ad absurdum argument to show how the premise, if accepted, necessary led to absurd consequences:
Imagine a cat in a box with a device set up involving a tiny bit of a radioactive substance (so small that the atoms may or may not decay over the course of an hour) and a flask of acid. If the radioactive substance decays, the acid will be released and will kill the cat. If the radioactive substance does not decay, then the acid will not be released and the cat will be alive.
Schrödinger pointed out that, if one accepted the Copenhagen interpretation, until the box is opened, the cat would remain both dead and alive.
It seems pretty absurd, meaning that the Copenhagen interpretation must be wrong...right? The trouble, of course, is that over the course of several decades of experimentation and study since then, it has become pretty universally accepted in physics circles that the Copenhagen interpretation is correct. And therefore that the cat is, in fact, both dead and alive.
So how does this relate to workplace law? Bear with me for a moment while I explain how the Human Rights Commission put a cat in a box.
Until the end of June, 2008, every Human Rights proceeding in the Province started as a complaint to the Human Rights Commission. The Commission would investigate the complaint, and determine whether or not to refer it to the Tribunal. In theory, it's a 'gatekeeper' role, followed by an advocacy role. In practice, it ended up creating a large backlog at multiple stages - the Commission would often take years to investigate a complaint, before the Tribunal process even got started.
So the Legislature removed the Commission's gatekeeper role, and since June 30, 2008, people have the right to apply directly to the Tribunal, and are eligible for legal assistance through the Human Rights Legal Support Centre.
The transition was tricky. The Commission - though it no longer had jurisdiction to accept a new complaint - was able to sort out a part of its backlog until the end of 2008. Until then, people whose complaints hadn't been dealt with by the Commission had the right to drop those complaints and apply directly to the Tribunal. But that put it into a transitional stream, which was dealt with differently and for which HRLSC assistance wasn't available. In 2009, the Commission could no longer do anything with complaints, and somebody who had a complaint before the Commission *had* to make a transitional application by June 30, 2009, to keep the process alive. (Again, if the subject matter of the application was before the Commission, you *had* to use the transitional process.)
In early 2008, the Commission, aware that new cases weren't likely to be dealt with by the time they lost their mandate, basically started turning people away. Essentially, somebody would send in a complaint (which was traditionally deemed filed when received, unless upon assessment it was determined to be incomplete), and when the Commission would get to it they would call the complainant and suggest that they should drop the complaint and pursue the matter after June 30 by applying directly to the Tribunal. In most cases, the person would agree to do so.
But - and here's the rub - they didn't always get to these complaints before June 30 in the first place. There are a number of matters where similar issues arose, including the Patterson case, the Sharras case, and the Wilberforce case.
Ms. Patterson submitted a complaint on April 18, 2008. The Commission called her on June 5, 2008, and convinced her not to proceed with the complaint and to instead apply to the Tribunal the following month through the new process. When she did so, she checked the box indicating that she had filed a complaint with the Commission, which flagged the Tribunal to question whether or not the new process was available. They contacted the Commission, and the Commission explained that they didn't consider a complaint to be "filed" (within the meaning of the Human Rights Code) until it was accepted at the end of the assessment process. The Tribunal took this explanation at face value and allowed the application to proceed.
Ms. Sharras submitted a complaint in March 2008. The Commission's intake worker tried to contact her in late June, and having failed to do so, purported to close the file as withdrawn on July 2, 2008. In July, they finally got in contact, and the intake worker suggested that Ms. Sharras go directly to the Tribunal under the new process. The Commission provided the same explanation to the Tribunal as in Patterson, but this time the employer's counsel dug up the Commission's published policies, which actually had a definition of when a complaint was considered to be "filed"...which seemed to conflict with the explanation the Commission was now providing.
The parties ultimately agreed that, in that case, the complaint had been "filed" (so the Tribunal didn't ultimately decide that issue), and the question became whether or not the 'withdrawal' of the complaint prevented it from proceeding as a Transitional Application - in December 2008 the Tribunal allowed it to proceed in the transitional stream.
Ms. Wilberforce submitted a complaint in May 2008. In this case, the Commission didn't get to it until September, and they suggested that Ms. Wilberforce should proceed through the new process at the Tribunal. Which she did. This went to a full oral hearing on the issue of whether or not the complaint had been "filed", which was recently decided in this decision.
A few things are clear: First, in September 2008 Ms. Wilberforce was asked if she wanted to discontinue the Commission complaint and proceed to the Tribunal herself. The decision not to process the complaint was not made until after Ms. Wilberforce consented to it. Secondly, in September 2008 the Commission had no jurisdiction to accept the filing of new complaints.
The Tribunal accepted the Commission's evidence that a complaint was only considered filed after it had been assessed, but the timing of the filing was defined by when it had been received under the Commission's policies. If, in September, the assessment had been conducted and determined that the complaint was properly completed, it would have been considered to have been filed in May. However, without an assessment determining whether or not it was properly completed, it was not considered to have been filed.
So the filing of the complaint becomes Schrödinger's cat. Until it is looked at, the complaint can be considered both alive and dead. Though this is how particle physics appears to operate, I would argue that it isn't how our law should work.
It's worth noting that "accuracy and completeness" - the objectives of the assessment - can be regarded objectively, and are also clearly defined in the Commission's policies. It is not the case that a complaint can be considered both complete and incomplete at the same time, or accurate and inaccurate at the same time. If the complaint had some obvious deficiencies - unsigned or otherwise incomplete - that would have been a full answer to the suggestion that a complaint had been filed. But if one assumes that it was a properly completed complaint, received prior to the June 30 deadline, then it is difficult to see how the Commission had the discretion to not accept the filing of the complaint.
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This blog is not intended to, and does not, provide legal advice to any person in respect of any particular legal issue, and does not create a solicitor-client relationship with any readers, but rather provides general legal information. If you have a legal issue or possible legal issue, contact a lawyer.
Wednesday, October 5, 2011
Dance Instructor found not to be a "Key Employee"
I've occasionally discussed restrictive covenants before; what I haven't covered in much detail is the route that employers can occasionally go to prevent unfair competition by former employees who haven't signed restrictive covenants.
At common law, there is a concept of fiduciary duties, which is an obligation on one person to put another's interests ahead of his own. Professionals often owe their clients fiduciary obligations, and occasionally you get case law where a professional abused information received in confidence to their own advantage.
In the employment context, "key employees" may be considered to be fiduciaries of their employer, and are not permitted to use confidential information they acquired in their employment to unfairly compete with the former employer. A "key employee" is defined by the following non-exhaustive list:
At common law, there is a concept of fiduciary duties, which is an obligation on one person to put another's interests ahead of his own. Professionals often owe their clients fiduciary obligations, and occasionally you get case law where a professional abused information received in confidence to their own advantage.
In the employment context, "key employees" may be considered to be fiduciaries of their employer, and are not permitted to use confidential information they acquired in their employment to unfairly compete with the former employer. A "key employee" is defined by the following non-exhaustive list:
- An integral and indispensable component of the management team that is responsible for guiding the business affairs of the employer;
- Necessarily involved in the decision-making process; and
- Therefore, has broad access to confidential information that if disclosed would significantly impair the competitive advantages the former employer enjoyed.
Absent a restrictive covenant or fiduciary obligations, former employees are free to compete with former employers, including bringing to a new business the skills and knowledge acquired while serving the former employer. But restrictive covenants can limit that (if enforceable, which is not easy), and fiduciary obligations do as well in very similar ways.
In the recent case of Laplante v. Hennessy-Craibe, Laplante operated a dance studio in Cornwall and had employed Hennessy-Craibe as a dance instructor until she left to start her own studio. It appears that several students went with her. Laplante then sued and sought an interlocutory injunction preventing Hennessy-Craibe from soliciting current and former students.
This is surprisingly similar to Gatreau v. Arvelo (2004), also involving a defecting dance instructor, in this case from an employer in Brockville. I suppose Eastern Ontario must have a competitive industry for dance instruction. Similarly, in that case, the plaintiff alleged that the instructor was a fiduciary, but the judge rejected it.
In Laplante, even without referring to Gatreau, Justice Quigley came to the same conclusion: He did not see a serious issue to be tried, and felt that even if a trial judge ultimately found Hennessy-Craibe to be a fiduciary, Laplante could be compensated through an award of damages; therefore, he declined to award the injunction sought.
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There is also previous jurisprudence considering whether or not written restrictive covenants can be enforced against athletic instructors. Of course, every case is unique on its facts and the specific language of these clauses, but Courts have gone both ways when determining whether or not an athletic school is protecting 'legitimate proprietary interests' with restrictive covenants:
In Gold in the Net Hockey School Inc. v. Netpower Inc., a 2007 Alberta case, the Court found that a non-competition clause did not protect a hockey school's legitimate proprietary interests.
In Moffatt v. Sanchez, a 2004 Ontario decision involving a Tae Kwon Do academy, a non-competition clause was enforced against the former head instructor.
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This blog is not intended to, and does not, provide legal advice to any person in respect of any particular legal issue, and does not create a solicitor-client relationship with any readers, but rather provides general legal information. If you have a legal issue or possible legal issue, contact a lawyer.
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