On October 27, I made an entry about a recent Divisional Court case, Trozzi, interpreting s.45.1 of Ontario's Human Rights Code, which permits the Tribunal to dismiss an application the subject matter of which has been "appropriately dealt with" in another proceeding. The Court determined that Ms. Trozzi could not go to the Human Rights Tribunal to fight over a human rights issue that had already been considered and dealt with by the Health Professions Appeal and Review Board.
In that post, I argued that Trozzi may still leave the door open to an argument that the Tribunal is able to hear arguments about matters previously decided by labour arbitrators if they are of the opinion that the arbitrator didn't "appropriately" deal with the subject matter, as happened in the Barker case (which I talked about here in July).
On October 28, as an anonymous commenter on my Oct 27 entry has drawn to my attention, the Supreme Court of Canada released a decision in British Columbia (Workers' Compensation Board) v. Figliola, interpreting an almost identical section, s.27(1)(f), of the British Columbia Human Rights Code, which gives much more material for the discussion.
Figliola suffered a workplace injury which resulted in chronic pain, and British Columbia's WCB had a policy that essentially set out a fixed formula for what people with chronic pain would receive. He argued, among other things, that this policy contravened the Code, and took the argument to a Review Officer, who rejected it. Around this same time, the BC Legislature enacted legislation which removed the Workers' Compensation Appeal Tribunal's jurisdiction to consider human rights issues, which meant that the Review Officer's decision regarding human rights could not be appealed. As a side effect of this, it would have been possible to seek judicial review of the Review Officer's decision in respect of the human rights matter. Figliola decided instead to take the matter to the BC Human Rights Tribunal. The WCB argued that it should dismiss the application because its subject matter had been "appropriately dealt with" in another proceeding, and the Tribunal declined to do so.
The Tribunal's reasoning was premised on a previous BC Court decision interpreting the provision in context of a Barker-type case, where the Tribunal had reviewed an issue previously addressed by a labour arbitrator: The Court had felt that s.27(1)(f) captured the underlying principles of certain common law doctrines against multiple proceedings. The Tribunal, applying the common law tests literally, concluded in Figliola that they weren't strictly met, and therefore declined to exercise its discretion to dismiss the application.
The Supreme Court was unanimous that this was wrong. Capturing the underlying principles does not mean that the test should be applied technically. However, the analysis had an important schism, with a 5/4 split court.
Justice Abella's camp - the majority - argued that the Tribunal's discretion should be interpreted narrowly, requiring deference to other adjudicated decisions and not permitting discretion to hear such matters anyways. They allowed the appeal and dismissed the complaint.
Justice Cromwell's minority, on the other hand, argued that the language confers a wide discretion, and so while the Tribunal failed to answer the question correctly in the first place, the matter should be sent back to them to apply a proper analysis as to whether or not to proceed with the complaint. The implication being, of course, that the Tribunal should still be able to evaluate for itself whether or not the WCB had "appropriately dealt with" the subject matter.
Typically, we wouldn't give too much attention to the dissent. The majority's conclusion is now the state of the law in Canada, binding on everyone except the Supreme Court itself. The dissent is just that - a dissent - and even though it made some very strong criticisms of the majority's reasons for finding a narrow discretion (which essentially turned on the context in which s.27(1)(f) falls), the BCHRT is now stuck with the majority's decision.
The more interesting question is the consequences in Ontario, where we have essentially the exact same legislative provision. One might think that the Supreme Court would find that the same phrase has the same meaning in British Columbia and Ontario - in fact, there's a strong argument to that effect. Yet the reasons underlying the majority's interpretation in British Columbia is significantly based on the subsections surrounding the provision in the B.C. Legislation, which is in fact very different from the surrounding context in Ontario.
Meaning that, if Trozzi or some similar case goes to the Ontario Court of Appeal, it is quite possible that the Court would distinguish Figliola on that basis, and perhaps even conclude, given the strength of the dissent, that the dissent's interpretation of the provision is the one that should be applied to the Ontario language.
*****
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.
Monday, November 7, 2011
Employment Standards: The Cost of Reviewing Orders to Pay
I recall the first time I carried my own OLRB proceeding: An employer came to me after receiving a couple of Orders to Pay from an Employment Standards Officer, to the tune of about $13,000.
It was a small employer - essentially, he had purchased a franchise and had one employee so that he didn't have to spend all his time on front-line tasks - and his margins were very small. He was a fairly recent immigrant, with absolutely no grasp of employment standards. I have often wondered if franchisors target these demographics for exploitation: Immigrants who are entrepreneurial and hard-working, who don't realize the cost of doing business in Ontario, and will sign a franchise agreement thinking that it will let them make a lot of money if they work hard enough.
There were two aspects of the Orders that prompted him to come to me: The first was that he didn't think he should be liable. The second was that, in any event, he didn't have the operating funds to pay. So he wanted my help to fight them.
The liability issue was tricky. It was difficult to avoid the conclusion that he owed at least a couple thousand dollars. I was able to put together some technical legal arguments to the contrary, but they were a stretch, and I told him so. As for the rest...it was a factual dispute. If his version of the facts were accepted, then he wouldn't owe the money. If the employee was believed, he would, subject to some argument about the quantum.
But the really hard part was the lack of operating funds: In order to apply for Review of Orders to Pay, an employer must remit the full amounts of the Orders (with a cap for certain types of Orders) to the Director of Employment Standards in trust. If you don't have the money to pay the Orders, you can't apply for review.
(If you really can't pull together the money, then there's case law that suggests that you can go for judicial review instead...but given the expense of doing so, this is something that only has practical value where the Orders are truly massive, such as in the millions of dollars.)
So if you can't pay - and the application can't be processed without payment, and there are strict timelines which will block your application if you don't make the payment in time - then you're pretty much stuck.
My client was appalled by the seeming injustice of this, as he had never heard of anything like it before - you have to pay the money first before you can seek adjudication on whether or not you owe it? I explained to him that the law doesn't permit the OLRB to process an application without payment. A further challenge was generated by an ambiguity on the Board's application form itself: Payment was required for an application by the employer, but my client noticed that the form contemplates an objection by a director of the corporation, which doesn't require such payment. The client wanted to try it that way. Put simply, it's not novel for employers to try to get around paying that way, and it doesn't work. The OLRB has handled these applications two ways: Usually, they will dismiss the application outright unless there's been an Order for the director of the corporation to pay directly, though I've also seen cases in which they permitted the application to proceed, but only in relation to the director's personal liability - so the director, proceeding as a director, could not challenge the Order against the corporation itself.
With no other choice, the client was able to scrape together enough borrowed money to make the necessary payment, and we eventually negotiated a settlement of less than a third the total amounts of the Orders. Even after taking into account legal fees, the deal still saved him thousands of dollars.
*****
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 was a small employer - essentially, he had purchased a franchise and had one employee so that he didn't have to spend all his time on front-line tasks - and his margins were very small. He was a fairly recent immigrant, with absolutely no grasp of employment standards. I have often wondered if franchisors target these demographics for exploitation: Immigrants who are entrepreneurial and hard-working, who don't realize the cost of doing business in Ontario, and will sign a franchise agreement thinking that it will let them make a lot of money if they work hard enough.
There were two aspects of the Orders that prompted him to come to me: The first was that he didn't think he should be liable. The second was that, in any event, he didn't have the operating funds to pay. So he wanted my help to fight them.
The liability issue was tricky. It was difficult to avoid the conclusion that he owed at least a couple thousand dollars. I was able to put together some technical legal arguments to the contrary, but they were a stretch, and I told him so. As for the rest...it was a factual dispute. If his version of the facts were accepted, then he wouldn't owe the money. If the employee was believed, he would, subject to some argument about the quantum.
But the really hard part was the lack of operating funds: In order to apply for Review of Orders to Pay, an employer must remit the full amounts of the Orders (with a cap for certain types of Orders) to the Director of Employment Standards in trust. If you don't have the money to pay the Orders, you can't apply for review.
(If you really can't pull together the money, then there's case law that suggests that you can go for judicial review instead...but given the expense of doing so, this is something that only has practical value where the Orders are truly massive, such as in the millions of dollars.)
So if you can't pay - and the application can't be processed without payment, and there are strict timelines which will block your application if you don't make the payment in time - then you're pretty much stuck.
My client was appalled by the seeming injustice of this, as he had never heard of anything like it before - you have to pay the money first before you can seek adjudication on whether or not you owe it? I explained to him that the law doesn't permit the OLRB to process an application without payment. A further challenge was generated by an ambiguity on the Board's application form itself: Payment was required for an application by the employer, but my client noticed that the form contemplates an objection by a director of the corporation, which doesn't require such payment. The client wanted to try it that way. Put simply, it's not novel for employers to try to get around paying that way, and it doesn't work. The OLRB has handled these applications two ways: Usually, they will dismiss the application outright unless there's been an Order for the director of the corporation to pay directly, though I've also seen cases in which they permitted the application to proceed, but only in relation to the director's personal liability - so the director, proceeding as a director, could not challenge the Order against the corporation itself.
With no other choice, the client was able to scrape together enough borrowed money to make the necessary payment, and we eventually negotiated a settlement of less than a third the total amounts of the Orders. Even after taking into account legal fees, the deal still saved him thousands of dollars.
*****
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, November 2, 2011
The Small Claims Court: In Theory and Practice
The Small Claims Court is envisioned as an efficient, inexpensive process for relatively low-value matters.
But now having a jurisdictional limit of $25,000, the Ontario Small Claims Court is hearing matters with much more importance to the parties. And while the process hasn't changed much, and so is theoretically still simple and efficient, the parties tend to take greater steps to protect their procedural rights, dealing with so much money.
Lawyers get hired. Documentary production becomes more elaborate - lawyers will insist upon it, and while the technical Rules of documentary production are relatively relaxed in the technical sense, lawyers are not unjustified in asking for documentary production from the other side. (Acting for an employee on a Small Claims matter, I once sent the employer's counsel a list of documents and particulars I would insist upon, the list itself being about four pages long. It looked absurd, at a glance, but I could make a solid case that I was entitled to production in respect of each and every one of the documents I asked for. There were complex issues - the employer was arguing just cause and I was arguing condonation - and I was going to insist on a full and fair hearing, despite the relatively low dollar value. This was a major factor in pressing for a settlement which was favourable to my client.)
Every Small Claims Court file I've acted on has at least one of two factors making them expensive: Sometimes the legal issues are complex, as in wrongful dismissal matters, requiring lawyers. (Self-represented litigants are very poorly situated to argue about reasonable notice periods.) Other times, there are factual questions requiring an expert witness. And experts are expensive, too.
These aren't a small sampling of cases. A great many matters before the Small Claims Court have complex legal or factual issues. And the process is being increasingly unsuitable to self-represented litigants.
I've successfully defended actions simply on the basis that the plaintiff was unwilling to incur the expense of getting an expert witness that would be necessary to establish its case. I've also successfully represented plaintiffs suing for services rendered where the defendant alleged defects in the work product, but the defendant was unable or unwilling to present expert evidence establishing the defects. (You might be surprised by the frequency with which witnesses or litigants will say "I've been told that this is the case". In Small Claims Court, the rule against hearsay is somewhat relaxed, but I usually cross-examine in such a way as to highlight the hearsay nature of the comment, and then argue in my submissions that little-to-no weight should be given to it.)
The Court of Appeal released a case this past May, Krawchuk v. Scherbak, highlighting the need for expert evidence in cases where professional negligence is alleged. (Incidentally, this was released just a couple weeks after I wrapped up a trial in which the precedent would have been helpful. Doesn't matter - my client was still successful.) Unless the subject matter is one that would be understood by the ordinary lay person, or the conduct complained of is so obviously below the applicable standard that you don't need to know the specifics of the standard to recognize the work as being deficient, an expert is required in these cases.
Lawyers, experts, and additional productions all add a lot of expense to a proceeding. As the Small Claims Court evolves to deal with its increased jurisdiction, it is quickly becoming the not-so-Small Claims Court.
*****
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.
Monday, October 31, 2011
Supreme Court of Canada Addresses Costs at Canadian Human Rights Tribunal
I recently made a post addressing some of the challenges of the human rights system. One of the observations I made is that, with many legitimate claims resulting in entitlements in the 4-digit range, forcing complainants to go to Court for their entitlements would be tragic because of the legal costs of doing so.
A recent decision of the Supreme Court of Canada, in Canada (Canadian Human Rights Commission) v. Canada (Attorney General) illustrates that the same tragedy can result at administrative tribunals where complainants are provided with inadequate systemic assistance and required to retain their own lawyers: In 2003, the Canadian Human Rights Commission decided to restrict the advocacy assistance it provided to complainants. As a consequence, it seems, Donna Mowat was required to incur her own legal fees in pursuing her complaint before the Canadian Human Rights Tribunal following sexual harassment and release from her employment with the Canadian Forces.
Following a six-week hearing in 2005, the Tribunal found that she had been sexually harassed and the CF's response had not been adequate, but dismissed the rest of her complaint. Ms. Mowat was awarded $4000. She asked for costs, noting that her legal fees were nearly $200,000. (A six week hearing is exceptional, and speaks to the complexity of the matters in issue, and legal fees of that order do not seem unusual for such a protracted hearing, though the Tribunal was critical of the "lack of precision" in identifying the key issues, which is surprising for a represented litigant.) Noting the concern that, without a costs order, her victory would be "pyrrhic", the Tribunal looked to its broad jurisdiction to compensate a victim and make her whole, and awarded $47,000 in costs. The Supreme Court of Canada eventually (recently) concluded that the Tribunal had been wrong to interpret its powers thus, and found that the Canadian Human Rights Act did not empower the Tribunal to award costs: Costs, in law, are treated differently from compensatory damages, and so the Tribunal's compensatory powers did not include the power to award costs.
While there's a certain controversy and imbalance to Ontario's new approach, having free legal assistance available to applicants, there is a good argument to be made that it is preferable to this alternative, where a human rights remedy is going to usually cost more to obtain than it is worth.
A recent decision of the Supreme Court of Canada, in Canada (Canadian Human Rights Commission) v. Canada (Attorney General) illustrates that the same tragedy can result at administrative tribunals where complainants are provided with inadequate systemic assistance and required to retain their own lawyers: In 2003, the Canadian Human Rights Commission decided to restrict the advocacy assistance it provided to complainants. As a consequence, it seems, Donna Mowat was required to incur her own legal fees in pursuing her complaint before the Canadian Human Rights Tribunal following sexual harassment and release from her employment with the Canadian Forces.
Following a six-week hearing in 2005, the Tribunal found that she had been sexually harassed and the CF's response had not been adequate, but dismissed the rest of her complaint. Ms. Mowat was awarded $4000. She asked for costs, noting that her legal fees were nearly $200,000. (A six week hearing is exceptional, and speaks to the complexity of the matters in issue, and legal fees of that order do not seem unusual for such a protracted hearing, though the Tribunal was critical of the "lack of precision" in identifying the key issues, which is surprising for a represented litigant.) Noting the concern that, without a costs order, her victory would be "pyrrhic", the Tribunal looked to its broad jurisdiction to compensate a victim and make her whole, and awarded $47,000 in costs. The Supreme Court of Canada eventually (recently) concluded that the Tribunal had been wrong to interpret its powers thus, and found that the Canadian Human Rights Act did not empower the Tribunal to award costs: Costs, in law, are treated differently from compensatory damages, and so the Tribunal's compensatory powers did not include the power to award costs.
While there's a certain controversy and imbalance to Ontario's new approach, having free legal assistance available to applicants, there is a good argument to be made that it is preferable to this alternative, where a human rights remedy is going to usually cost more to obtain than it is worth.
*****
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.
Back to Basics: A Practical Guide to Wrongful Dismissal Resolution
While there's a new wrongful dismissal case coming out of Ontario's Superior Court of Justice every few days or so, the truth is that the vast majority of dismissals get settled very quickly, often even before issuing a statement of claim.
This post isn't designed to help people see the process through themselves; both sides really do need lawyers, and for very compelling reasons. I practice on both sides the fence, so I would encourage anyone finding themselves in this situation to contact me. Rather, I want to give readers a sense of what to expect, to be more comfortable with the process.
Before Termination
Employers should consult a lawyer before terminating the employee in the first place. (Indeed, you should consult a lawyer before even hiring, to get a good written contract in place.) If you want to terminate for just cause, you need a legal opinion about it first. Just cause is very difficult to make out, with risks of increased liabilities - sometimes significantly so - if you fail. And, where there is no just cause, you need to know what your "notice" obligations may be. (With a good written contract, drafted by a good employment lawyer and properly executed, these may be minimal. Otherwise, you're looking at owing "reasonable" notice, which even a good employment lawyer will only be able to estimate and give you a range.)
Upon Termination
Employers: There's a correct process for termination meetings. Half of it is common sense (yet frequently not done), but a good portion of it might not occur to everyone in every case. Have at least two people in the termination meeting, one taking notes. Be professional. Don't get dragged into an argument about the reasons for termination - have a script, preferably vetted by your lawyer, and refuse to be pulled off of it. (In most cases, you won't even want to give any substantive reasons.) Be discrete and sensitive. There is a lot to be said about how to behave on terminations, and a lot of it depends on the nature of the workplace and the specific employee. The termination meeting should be accompanied by the delivery of a termination letter, which will advise them about receipt of their last pay and statutory entitlements (which should be conditional on absolutely nothing), and requiring them to return all company property, reminding them of any ongoing confidentiality concerns, etc. At the same time, there should be a second letter, marked "Without Prejudice", offering them something further in exchange for signing a full and final release. (In the wake of Brito v. Canac Kitchens, there's a thought that more than the statutory minimums should be provided upon termination. I don't think that's yet having any real impact on the standard practice, though.)
Employees: When you are terminated, you will often receive an offer, conditional on you signing and returning it within x days. At this stage, there are several things to note:
(1) You are going to feel a range of negative emotions. It's almost a grief response. Anger, betrayal, despair, frustration...these are all perfectly normal. It's one small part of the reason you will need a lawyer - it's going to be difficult for you to deal productively and professionally with your employer in light of these feelings. (As a note to employers: This is also the reason that working notice is seldom a good idea.)
(2) Do not sign anything until you get legal advice. Employers are seldom generous with their initial offers, and in the vast majority of cases there is some flexibility for movement on both monetary and non-monetary terms. Sometimes, the entitlements are significantly more than what has been offered. Even if you have a written contract limiting your entitlements, termination clauses are hard enough to enforce that it is often worth seeking advice on the enforceability of the contract.
(3) Even if you have signed something without legal advice, it's still prudent to consult a lawyer. I have seen some employers put a release to a dismissed employee in exchange for payment of the statutory minimum. (In one case, the strict deadline was the day before stat minimums were due anyways. I can't help but think that that was calculated.) A release on such a basis will often be unenforceable. The rule is that an employee should never assume, without proper legal advice, that the fact they signed something means they are bound to it. (Of course, it is almost *never* a good idea to sign anything on the assumption that it will not be upheld by a court.)
(4) If you can't meet with your lawyer until after the strict deadline is up, don't despair. I've never seen an employer refuse to extend the timeframes of an offer upon request. In most cases, they know that, if they get sued, they'll owe more than the contents of the offer anyways. So they don't usually pull offers off the table.
(5) In my years of experience, I have very seldom seen offers from employers that I could tell an employee was better than they would likely do in Court. In the vast majority of cases, I respond with a demand letter for the client's full entitlements. (In the rare cases where an employer is being generous, unlike some lawyers, I do tell my client as much and try to respond reasonably. If there's room for improvement with non-monetary terms, etc., I'll recommend the request, but an employer who is being generous knows that the offer is generous, and isn't going to move much on the monetary aspects of the settlement.)
(6) If you haven't been asked to sign anything, it's often because you've only been given your statutory entitlements. You likely still need to make a demand, and you'll need a lawyer to figure out what to demand.
Employer's Response to the Demand
There are myriad employer responses to a demand letter. Know that most demand letters will frame the employee's entitlements generously. Many employers will try to negotiate the demand down. While there's not much certainty as to reasonable notice periods, there's enough clarity as to the appropriate ranges that both lawyers can tell their clients, "This is the range, and there's a good chance that the other lawyer is telling the other side the same thing." So the employer tries to negotiate something at the low end of the range, the employee tries to negotiate something at the high end, and neither side really has much of a will to litigate when there are offers inside the range.
By contrast, many employers will completely reject demand letters at the outset. Even large and sophisticated employers do so. This is often strategic, and done with employees whose entitlements are fairly limited. (Sadly, it often also factors in the employee's tolerance for stress.) This approach is usually rationalized by the logic that, if you make the employee sue for his entitlements, some percentage of employees will simply not do so, and the increased costs and liabilities of dealing with the ones who do will be less than what is saved on the employees who walk away. In these cases, an employee can often expect that the employer will come to the table promptly upon issuance of a statement of claim. (Many prominent employer-side firms take the approach that, when served with a statement of claim, they immediately make a semi-reasonable offer to settle and ask for an indulgence so as not to be required to file a statement of defence while settlement discussions are ongoing. If the offer to settle appears to be in good faith, then most employee-side counsel will recommend granting the indulgence, as they know that a settlement is imminent, and there's little to be gained through hardball at that point.)
The ones that go to trial, these days, usually have a fair bit of money at stake and a real fight about one of a handful of things, such as whether or not there is just cause, enforceability of the written contract, how to characterize one of the factors that defines the reasonable notice period, or a dispute about constructive dismissal. Without some fundamental factual dispute underlying the calculation of the reasonable notice period or the entitlement to reasonable notice, the margins between what the employer might expect to have to pay and what the employee might expect to get are so small that the cost of litigation is prohibitive for both sides. Even when there is a fairly fundamental dispute, if there isn't a lot of money at stake, both sides still know that the most cost-effective approach is through an early settlement. What's a few months' notice for a minimum wage employee beside the amount of money it would cost to get to trial?
That being said, many employers will fight certain cases 'on principle': Where there's a clear-cut case for cause, an employer isn't going to settle, because it sends the message to other employees that they can act badly then cash out.
It's always important to hire a lawyer who knows what they're doing, but that's especially important for low-value cases. I've taken on clients whose cases I assessed at being mid four digits. At a lawyer's hourly rate, it doesn't take long before that all gets eaten up in legal fees, so a lawyer on such a case really needs to be careful about how much time is being spent. So far, in my practice I've been pretty good about being able to settle efficiently enough that my clients still get to keep most of their money. On the other hand, I have seen lawyers (even boutique employment lawyers) go five digits into legal fees before even issuing a statement of claim, on files that were not high value.
That's why the choice in lawyers is important. It is important to me to try to ensure that my client will be better off at the end of the day for having hired me, and if I don't think that's going to happen, I tell the client that. I offer free consultations to dismissed employees in most cases (some exceptions apply), so I would encourage any dismissed employees to contact me immediately.
*****
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.
This post isn't designed to help people see the process through themselves; both sides really do need lawyers, and for very compelling reasons. I practice on both sides the fence, so I would encourage anyone finding themselves in this situation to contact me. Rather, I want to give readers a sense of what to expect, to be more comfortable with the process.
Before Termination
Employers should consult a lawyer before terminating the employee in the first place. (Indeed, you should consult a lawyer before even hiring, to get a good written contract in place.) If you want to terminate for just cause, you need a legal opinion about it first. Just cause is very difficult to make out, with risks of increased liabilities - sometimes significantly so - if you fail. And, where there is no just cause, you need to know what your "notice" obligations may be. (With a good written contract, drafted by a good employment lawyer and properly executed, these may be minimal. Otherwise, you're looking at owing "reasonable" notice, which even a good employment lawyer will only be able to estimate and give you a range.)
Upon Termination
Employers: There's a correct process for termination meetings. Half of it is common sense (yet frequently not done), but a good portion of it might not occur to everyone in every case. Have at least two people in the termination meeting, one taking notes. Be professional. Don't get dragged into an argument about the reasons for termination - have a script, preferably vetted by your lawyer, and refuse to be pulled off of it. (In most cases, you won't even want to give any substantive reasons.) Be discrete and sensitive. There is a lot to be said about how to behave on terminations, and a lot of it depends on the nature of the workplace and the specific employee. The termination meeting should be accompanied by the delivery of a termination letter, which will advise them about receipt of their last pay and statutory entitlements (which should be conditional on absolutely nothing), and requiring them to return all company property, reminding them of any ongoing confidentiality concerns, etc. At the same time, there should be a second letter, marked "Without Prejudice", offering them something further in exchange for signing a full and final release. (In the wake of Brito v. Canac Kitchens, there's a thought that more than the statutory minimums should be provided upon termination. I don't think that's yet having any real impact on the standard practice, though.)
Employees: When you are terminated, you will often receive an offer, conditional on you signing and returning it within x days. At this stage, there are several things to note:
(1) You are going to feel a range of negative emotions. It's almost a grief response. Anger, betrayal, despair, frustration...these are all perfectly normal. It's one small part of the reason you will need a lawyer - it's going to be difficult for you to deal productively and professionally with your employer in light of these feelings. (As a note to employers: This is also the reason that working notice is seldom a good idea.)
(2) Do not sign anything until you get legal advice. Employers are seldom generous with their initial offers, and in the vast majority of cases there is some flexibility for movement on both monetary and non-monetary terms. Sometimes, the entitlements are significantly more than what has been offered. Even if you have a written contract limiting your entitlements, termination clauses are hard enough to enforce that it is often worth seeking advice on the enforceability of the contract.
(3) Even if you have signed something without legal advice, it's still prudent to consult a lawyer. I have seen some employers put a release to a dismissed employee in exchange for payment of the statutory minimum. (In one case, the strict deadline was the day before stat minimums were due anyways. I can't help but think that that was calculated.) A release on such a basis will often be unenforceable. The rule is that an employee should never assume, without proper legal advice, that the fact they signed something means they are bound to it. (Of course, it is almost *never* a good idea to sign anything on the assumption that it will not be upheld by a court.)
(4) If you can't meet with your lawyer until after the strict deadline is up, don't despair. I've never seen an employer refuse to extend the timeframes of an offer upon request. In most cases, they know that, if they get sued, they'll owe more than the contents of the offer anyways. So they don't usually pull offers off the table.
(5) In my years of experience, I have very seldom seen offers from employers that I could tell an employee was better than they would likely do in Court. In the vast majority of cases, I respond with a demand letter for the client's full entitlements. (In the rare cases where an employer is being generous, unlike some lawyers, I do tell my client as much and try to respond reasonably. If there's room for improvement with non-monetary terms, etc., I'll recommend the request, but an employer who is being generous knows that the offer is generous, and isn't going to move much on the monetary aspects of the settlement.)
(6) If you haven't been asked to sign anything, it's often because you've only been given your statutory entitlements. You likely still need to make a demand, and you'll need a lawyer to figure out what to demand.
Employer's Response to the Demand
There are myriad employer responses to a demand letter. Know that most demand letters will frame the employee's entitlements generously. Many employers will try to negotiate the demand down. While there's not much certainty as to reasonable notice periods, there's enough clarity as to the appropriate ranges that both lawyers can tell their clients, "This is the range, and there's a good chance that the other lawyer is telling the other side the same thing." So the employer tries to negotiate something at the low end of the range, the employee tries to negotiate something at the high end, and neither side really has much of a will to litigate when there are offers inside the range.
By contrast, many employers will completely reject demand letters at the outset. Even large and sophisticated employers do so. This is often strategic, and done with employees whose entitlements are fairly limited. (Sadly, it often also factors in the employee's tolerance for stress.) This approach is usually rationalized by the logic that, if you make the employee sue for his entitlements, some percentage of employees will simply not do so, and the increased costs and liabilities of dealing with the ones who do will be less than what is saved on the employees who walk away. In these cases, an employee can often expect that the employer will come to the table promptly upon issuance of a statement of claim. (Many prominent employer-side firms take the approach that, when served with a statement of claim, they immediately make a semi-reasonable offer to settle and ask for an indulgence so as not to be required to file a statement of defence while settlement discussions are ongoing. If the offer to settle appears to be in good faith, then most employee-side counsel will recommend granting the indulgence, as they know that a settlement is imminent, and there's little to be gained through hardball at that point.)
The ones that go to trial, these days, usually have a fair bit of money at stake and a real fight about one of a handful of things, such as whether or not there is just cause, enforceability of the written contract, how to characterize one of the factors that defines the reasonable notice period, or a dispute about constructive dismissal. Without some fundamental factual dispute underlying the calculation of the reasonable notice period or the entitlement to reasonable notice, the margins between what the employer might expect to have to pay and what the employee might expect to get are so small that the cost of litigation is prohibitive for both sides. Even when there is a fairly fundamental dispute, if there isn't a lot of money at stake, both sides still know that the most cost-effective approach is through an early settlement. What's a few months' notice for a minimum wage employee beside the amount of money it would cost to get to trial?
That being said, many employers will fight certain cases 'on principle': Where there's a clear-cut case for cause, an employer isn't going to settle, because it sends the message to other employees that they can act badly then cash out.
It's always important to hire a lawyer who knows what they're doing, but that's especially important for low-value cases. I've taken on clients whose cases I assessed at being mid four digits. At a lawyer's hourly rate, it doesn't take long before that all gets eaten up in legal fees, so a lawyer on such a case really needs to be careful about how much time is being spent. So far, in my practice I've been pretty good about being able to settle efficiently enough that my clients still get to keep most of their money. On the other hand, I have seen lawyers (even boutique employment lawyers) go five digits into legal fees before even issuing a statement of claim, on files that were not high value.
That's why the choice in lawyers is important. It is important to me to try to ensure that my client will be better off at the end of the day for having hired me, and if I don't think that's going to happen, I tell the client that. I offer free consultations to dismissed employees in most cases (some exceptions apply), so I would encourage any dismissed employees to contact me immediately.
*****
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.
Friday, October 28, 2011
Stranger than Fiction, Volume III: The "Sovereign Man"
I had never heard of this concept before, until reading about it in a recent decision by Justice Brown. Apparently, some folks have taken to believing that they can simply refuse to recognize the authority of the domestic government and live as a "sovereign man". They claim that there's a legal logic to it, namely that they can separate into two separate entities - the "juristic person/strawman/legal entity", and the "flesh and blood living man" - and so while the state may have authority over the legal entity, the flesh and blood person can't be held to account for actions of the legal entity. It sounds almost like a bizarre extrapolation of the corporate veil. I don't fully understand the whole farce - I suspect because it doesn't actually make sense - but somehow the birth certificate is supposed to be integral to the creation of the legal person.
The recent decision was in MBNA Canada Bank v. Luciani, in which Luciani registered a financing statement under the PPSA purporting to secure a $28 million interest owed to him by the bank. The bank demanded that he remove it, and he said that he would only if the bank advanced him and his wife a $125,000 line of credit. "A good old-fashioned shakedown", as Justice Brown called it. Suffice it to say that the PPSA registration was ordered discharge, with the rare measure of full indemnity costs being awarded to the bank.
The previous decision was in Mercedes-Benz Financial (DCFS Canada Corp) v. Kovacevic (sentencing decision here), and this case involved a fellow who had signed a contract with himself by which the legal himself took on all of the flesh and blood himself's debts, with the result that the flesh and blood self could continue to drive around a financed Mercedes notwithstanding the fact that the legal self hadn't bothered to pay for it. Even after a Court ordered the return of the car. Justice Brown found him in contempt of Court and sentenced him to five days in prison. The car was returned.
It's a hoax, really, similar to the "income taxes are unconstitutional" argument that started in the States and spread to Canada, involving people who come together trying to find a way to justify their desire not to pay taxes, who come up with some constitutional interpretation they think is clever (usually ignoring significant parts of the constitution, and always ignoring the bulk of constitutional jurisprudence), and they enter into a cycle of self-affirmation, in which like-minded people will continue to tell each other that they're right, until they become so confident of the absolute and unchallengeable correctness of their position that they are puzzled and baffled and convinced that there is a conspiracy against them when the authorities, including the Courts, tell them that they're wrong.
I googled "sovereign man" and found a video of a man in a Guelph courtroom...as a first sidebar, note that videotaping court proceedings in Canada is a serious offence...being quite elusive as to his identity (not unlike what Justice Brown described in Kovacevic), nearly getting kicked out of the courtroom before he handed up his birth certificate. The JP called for a short recess, and left the courtroom, whereupon the 'sovereign man' declared that, as the "judge" had abandoned the court, he was now in charge of the courtroom, and he purported to dismiss the case. And left. Further research indicates that he was charged with by-law violations as a consequence of parking his car on his lawn. The trial continued without him and he was fined $260. Not to mention the investigation into the video. I'm surprised he didn't end up being held in contempt himself.
Yet, most of the references to this case on the internet are positive, applauding him and interpreting the video very strangely, suggesting that the JP's departure somehow implied that he had conquered the courtroom and won the day.
I don't expect any of my usual readers will need any such clarification, but let's be clear anyways: The "Sovereign Man" scheme does not work in Canada. It does not get people out of having to comply with the law, having to pay just debts, or having to be held to account for their actions. The fact that anyone believes otherwise is a testament to the down side of the internet - it is an amazing tool for information, but equally powerful for spreading misinformation as well.
The recent decision was in MBNA Canada Bank v. Luciani, in which Luciani registered a financing statement under the PPSA purporting to secure a $28 million interest owed to him by the bank. The bank demanded that he remove it, and he said that he would only if the bank advanced him and his wife a $125,000 line of credit. "A good old-fashioned shakedown", as Justice Brown called it. Suffice it to say that the PPSA registration was ordered discharge, with the rare measure of full indemnity costs being awarded to the bank.
The previous decision was in Mercedes-Benz Financial (DCFS Canada Corp) v. Kovacevic (sentencing decision here), and this case involved a fellow who had signed a contract with himself by which the legal himself took on all of the flesh and blood himself's debts, with the result that the flesh and blood self could continue to drive around a financed Mercedes notwithstanding the fact that the legal self hadn't bothered to pay for it. Even after a Court ordered the return of the car. Justice Brown found him in contempt of Court and sentenced him to five days in prison. The car was returned.
It's a hoax, really, similar to the "income taxes are unconstitutional" argument that started in the States and spread to Canada, involving people who come together trying to find a way to justify their desire not to pay taxes, who come up with some constitutional interpretation they think is clever (usually ignoring significant parts of the constitution, and always ignoring the bulk of constitutional jurisprudence), and they enter into a cycle of self-affirmation, in which like-minded people will continue to tell each other that they're right, until they become so confident of the absolute and unchallengeable correctness of their position that they are puzzled and baffled and convinced that there is a conspiracy against them when the authorities, including the Courts, tell them that they're wrong.
I googled "sovereign man" and found a video of a man in a Guelph courtroom...as a first sidebar, note that videotaping court proceedings in Canada is a serious offence...being quite elusive as to his identity (not unlike what Justice Brown described in Kovacevic), nearly getting kicked out of the courtroom before he handed up his birth certificate. The JP called for a short recess, and left the courtroom, whereupon the 'sovereign man' declared that, as the "judge" had abandoned the court, he was now in charge of the courtroom, and he purported to dismiss the case. And left. Further research indicates that he was charged with by-law violations as a consequence of parking his car on his lawn. The trial continued without him and he was fined $260. Not to mention the investigation into the video. I'm surprised he didn't end up being held in contempt himself.
Yet, most of the references to this case on the internet are positive, applauding him and interpreting the video very strangely, suggesting that the JP's departure somehow implied that he had conquered the courtroom and won the day.
I don't expect any of my usual readers will need any such clarification, but let's be clear anyways: The "Sovereign Man" scheme does not work in Canada. It does not get people out of having to comply with the law, having to pay just debts, or having to be held to account for their actions. The fact that anyone believes otherwise is a testament to the down side of the internet - it is an amazing tool for information, but equally powerful for spreading misinformation as well.
*****
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 27, 2011
The First of the s.45.1 Cases
I have previously expressed concerns with the Human Rights Tribunal of Ontario's various applications of s.45.1 of the Human Rights Code. This section allows the HRTO to dismiss an application if the subject matter of the application has been "appropriately dealt with" in another proceeding. In the linked post, I noted a case in which the Human Rights Tribunal refused to dismiss an application on this ground because it disagreed with the analysis that Arbitrator Surdykowski used in reaching it.
The Divisional Court just released a decision in College of Nurses v. Trozzi on a similar issue. Trozzi sought a nursing license from College of Nurses. The College imposed conditions on the license on the basis of certain medical conditions she had, and she challenged the decision at the Health Professions Appeal and Review Board (HPARB). She lost.
While waiting for the decision from the HPARB, she initiated a Human Rights Application, and the College sought dismissal under s.45.1. The Tribunal found that the HPARB had failed to apply the correct analysis to the question. The College sought judicial review.
That the Divisional Court even heard the application for judicial review at this stage is surprising - the Tribunal proceeding is ongoing, and normally this would be regarded as "premature". But as it went to a "true" jurisdictional question, the Court refused to quash the application for judicial review.
The Divisional Court unanimously allowed the application for judicial review, but there were different sets of reasons. The majority felt that the HRTO overstepped its bounds by attempting to sit in review of another statutory Tribunal with a "public protection mandate". Justice Lederer, by contrast, felt that the distinction of "public protection mandate" is somewhat meaningless, and that the Tribunal overstepped its bounds simply by trying to sit in review of another statutory Tribunal at all.
I don't think that this is the last s.45.1 case we're going to see, but the Divisional Court appears to be putting the HRTO in its place pretty firmly.
The Divisional Court just released a decision in College of Nurses v. Trozzi on a similar issue. Trozzi sought a nursing license from College of Nurses. The College imposed conditions on the license on the basis of certain medical conditions she had, and she challenged the decision at the Health Professions Appeal and Review Board (HPARB). She lost.
While waiting for the decision from the HPARB, she initiated a Human Rights Application, and the College sought dismissal under s.45.1. The Tribunal found that the HPARB had failed to apply the correct analysis to the question. The College sought judicial review.
That the Divisional Court even heard the application for judicial review at this stage is surprising - the Tribunal proceeding is ongoing, and normally this would be regarded as "premature". But as it went to a "true" jurisdictional question, the Court refused to quash the application for judicial review.
The Divisional Court unanimously allowed the application for judicial review, but there were different sets of reasons. The majority felt that the HRTO overstepped its bounds by attempting to sit in review of another statutory Tribunal with a "public protection mandate". Justice Lederer, by contrast, felt that the distinction of "public protection mandate" is somewhat meaningless, and that the Tribunal overstepped its bounds simply by trying to sit in review of another statutory Tribunal at all.
I don't think that this is the last s.45.1 case we're going to see, but the Divisional Court appears to be putting the HRTO in its place pretty firmly.
*****
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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