Manager fired for just cause after sleeping with administrative assistant

Romantic and/or sexual workplace relationships are nothing new, and they're difficult for employers to deal with, in part because they're so prolific.  Employees spend an extremely large proportion of their waking hours in the workplace, and it's to be expected that many will develop strong emotions towards each other, whether in the nature of friendship, hatred, love, or lust.

A relationship can be quite benign when between two single people in different departments, and will have little impact on the employer, provided they remain discrete and professional in the workplace.  However, when people who are emotionally involved must work closely together, or are in a reporting relationship, it is more concerning to the employer:  It is more difficult for the employees involved to be discrete, and almost inevitable that others on the team will become aware of it.  This can cause uncomfortable situations, perceptions of favouritism, and increases office politics and drama, and that's unpleasant enough...but what happens if they have a bad break-up?  Suddenly, the employer is dealing with major conflict in the workplace.

There are also Human Rights Code concerns about intra-office flirtation.  Unwelcome advances by a person in a position to confer a benefit on the other in the workplace are Code violations, and while that's ordinarily viewed as a supervisor/subordinate matter, it may also apply to peers not in a reporting relationship, in the "I can move your vacation request to the top of the manager's pile" sort of sense.  (I'm not familiar with any cases concerning a strictly work-related benefit, where the person making the advance is in a position to make the other person's job easier, but that would be a trickier case.)

For an employer to hire the spouse of an existing employee often doesn't create the same issues, when done carefully, because the employer defines the working relationship of the couple (instead of the couple defining themselves regardless of working relationship) and moreover there is less chance of a break-up (though you never know).

But the real issues occur where you have a clear power imbalance.  When a manager engages in a relationship with a non-managerial employee, an employer should worry.  This remains true, if less so, even where the employee is not a direct report of the manager.  Concerns about favouritism are more severe at that level.  If the manager crosses the line in terms of the above-noted Code concerns, the employer is likely directly liable for that.

Thus, even employers who don't feel that they need a nepotism policy (i.e. family members working together) should always have a good fraternization policy.

And there's good news for employers dealing with managers who violate fraternization policies, in the form of the recent case in Reichard v. Kuntz Electroplating Inc.

The Case

Mr. Reichard was a manager of Kuntz, having worked there since 1984, and at age 41 began an extramarital affair with Ms. Thompson, an administrative assistant who at the time was, to use the words of the trial judge, "not directly under Reichard".  In 2005, Kuntz introduced a non-fraternization policy, as a mechanism to carry out its obligations to ensure that its workplace is free from sexual harassment.  The policy is not reproduced in the decision, but it appears that it may not have an absolute prohibition on romantic relationships, but requires disclosure to the employer of any romantic relationships.

8.  The policy was not introduced for moral reasons.  It was introduced to protect both employees of Kuntz and Kuntz.  Kuntz has a vested interest in not having any of its employees harassed sexually or otherwise.  It also wants to guard against any favouritism or perceived favouritism between employees.  In particular, the reporting provision would allow Kuntz to make arrangements to eliminate or mitigate a conflict of interest if there was a romantic relationship between two employees.

Under the policy, Reichard was required to disclose his ongoing romantic relationship with Ms. Thompson.  There were many rumours about the relationship, and Reichard's superiors asked him about it on multiple occasions, and he denied it.  (One has to wonder if these suspicions prompted the implementation of the policy in the first place.)

In 2006, on Reichard's suggestion, Thompson was transferred into his department over two other candidates, and he gave her "glowing" reviews.  There was evidence of favouritism, making other subordinates uncomfortable, and Reichard routinely took extended lunches with Thompson.

Finally, in 2008, Reichard confided about his troubled personal life, including that he had fathered Thompson's infant son, in another employee, who reported it to the employer.  Reichard then finally admitted the affair to the employer, and was suspended and told that he was on suspension and could not return until called by someone from the company.  The employer's evidence was that they were leaning towards discipline short of dismissal, but then discovered that in the days following the suspension he returned twice to the office despite the suspension.

The employer then concluded that it was unable to trust Reichard as his position required, and so terminated him for just cause.  The judge agreed with the decision, and dismissed Reichard's action.  It all turns not so much on the relationship itself, but on his continued deception about the relationship, breaching the non-fraternization policy.

My Thoughts


The Court's reasoning is a little thin on a couple of points.  Firstly, Reichard argued that the non-fraternization policy didn't apply to the relationship, because it pre-dated the implementation of the policy.  I'm not sure this should hold much sway, but I'm not comfortable with the way the judge disposed of it, either, being because Reichard had simply denied the affair rather than asserting that the policy didn't apply to him.

If one assumes that there wasn't a free-standing obligation on Reichard to disclose the relationship upon request (which may not be the case) and that the policy either did not or could not apply to pre-existing relationships (albeit doubtful), then Reichard would have been entitled to conclude that the relationship was none of the employer's business, and that he had no obligation to disclose.  To refute the applicability of the policy would have entailed telling the employer (at least impliedly) that the relationship predated the policy, which would in effect disclose the relationship and comply with the policy.  Therefore, the judge's conclusion that the policy applied because he didn't refute it has the effect of saying that disclosure was  necessary to preserve his entitlement to not disclose.  Incoherent.

Next, I'm concerned with the absence of any indication as to why Reichard returned to the office while on suspension.  If it was to talk to Thompson, then that's clearly aggravating.  If it was for some other reason - say, picking up the heart medication he forgot - then maybe not so much.

Third, the details of the suspension are thin, as well.  There's a line of case law suggesting that you can't discipline twice for the same offence (meaning that a suspension pending a final determination must be very carefully implemented, and it isn't clear that this happened in this case), and that, in the absence of contractual language to the contrary, an employer cannot suspend an employee unless just cause already exists.

The judge looked at everything in its totality and found that Reichard's misconduct was sufficient to justify termination, and that the return to the workplace was the straw that broke the camel's back, so to speak.  But if you suppose that just cause wouldn't have existed without the returns to the workplace, it isn't clear that the employer was entitled to tell Reichard to stay away (without entirely repudiating the employment contract), which would obviously impact the extent to which his returns can be seen as misconduct.

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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.

Discharged Richmond Hill bargaining unit member can't sue in wrongful dismissal

I've mentioned this before:  Members of bargaining units cannot sue their employers in Court for matters related to their employment.  This is a rule that is very firmly entrenched in the law, and there has been no sign of budging, yet we keep seeing cases crashing against this wall.

In the recent case of Doobay v. Town of Richmond Hill, Cyril Doobay became the most recent plaintiff whose case fell on jurisdictional bases, suing his employer for firing him in 2003 because he was drunk on the job.

He grieved the termination, and CUPE argued that the penalty should be reduced to accommodate his disability - alcoholism.  The arbitrator dismissed the grievance on August 24, 2004.  The arbitrator acknowledged the alcoholism as an issue (as well as the fact that the grievor had sought treatment), but found that reinstatement was impossible without the grievor taking full responsibility for his misconduct, which he had not.

Then, more recently, on November 4, 2010, he issued a statement of claim.

There are a lot of big problems here.

Firstly, there's the problem of delay.  For claims discovered before January 1, 2004, there was a six year limitations period.  For claims discovered since then, we have had a 2 year limitations period.  Disability issues (probably including alcoholism) can, in some circumstances, push back limitations periods...but in this case, that wouldn't really help Mr. Doobay, because if the claim was discoverable in 2003, then he had until 2009 to bring an action (which he did not), whereas if the discoverability date was pushed to 2004, that would only give him to 2006 anyways.  Limitations periods are fairly difficult to get around, in most cases.  The logic is that the limitations periods usually give a person *lots* of time to initiate a legal action, so if someone misses the deadline, there had better be a really good reason for it.  So this wall is pretty tough to get over.  If you can't do it, the action gets dismissed.

The second problem is what we call "res judicata" - the issue has been decided before, by the arbitrator.  Justice Lauwers found that this issue was res judicata (which in almost all cases results in dismissal of the action), but this wall was perhaps not so high, for a couple of reasons:

1. Mr. Doobay's lawyer was arguing that the arbitration process was tainted by a lack of appreciation of the nature of the disability and the availability of accommodation programs in the Town.  Now, I'm not sure that this argument rightly could have succeeded, because it doesn't really address the test for res judicata, and moreover it asks the Court to evaluate the results of the arbitration process...which might not be so bad, but for a couple of problems:This was an action, not a judicial review application; and Mr. Doobay probably wouldn't have had standing to seek judicial review.  (The judge notes that Mr. Doobay did not seek judicial review, which is "the customary way in which such decisions are challenged".  This may gloss over the fact that it is the union, not the grievor, with standing to seek judicial review, which fact the judge does not appear to bear in mind.) So the fact that this isn't a judicial review application isn't just a wrong choice of venue; Mr. Doobay probably could not have chosen a different venue, outside of asking CUPE to do so.
2. All that being said, the finding that this is res judicata is, strictly speaking, wrong.  One of the essential elements of the test of res judicata is that the parties involved must be the same.  The reason Mr. Doobay would not have had standing to apply for judicial review is that he was not a party to the proceeding, in the strictest sense.  Not being a party, the doctrine of res judicata could not block him from seeking remedies elsewhere.  Of course, other doctrines would block just about every other type of remedy conceivable based on facts that had formed the subject matter of an unsuccessful grievance arbitration.

The third problem, and the highest wall of all, is what I noted above, that a bargaining unit member cannot sue his employer in Court.  This is a jurisdictional point - the Courts have absolutely no discretion to relieve against the rule.  For that reason alone, this action was pretty much dead in the water from the outset.

But what becomes more interesting is the costs analysis.  You see, counsel for the Town sent a detailed letter to Mr. Doobay's lawyer explaining why the action was doomed to fail, and tried to use that letter to justify seeking substantial indemnity costs - i.e. costs on an elevated scale - in the amount of nearly $15,000.  There was some discussion as to whether the letter constituted an offer to settle; the judge found that it did not, as there was no real offer to compromise, and in any event the rules regarding offers to settle (Rule 49) don't really speak to outright dismissals of actions in any event, and don't entitle a successful defendant to substantial indemnity costs.

So Rule 49 really wasn't the way to go on that.  But the Court retains discretion to award substantial indemnity costs in any event, so one might have thought that the judge would have appreciated the fact that the defendant had tried to avoid the necessity of a motion by pointing out to the plaintiff the incontrovertible case law that would certainly lead to the dismissal of the action.  I don't know what led to the issuance of a statement of claim in the face of that doctrine, and I'm not going to speculate, but there doesn't seem to be any reason why the plaintiff should have forced the Town to incur the legal fees of bringing the motion, once it had full particulars of the Town's position.

No such luck - ultimately, the judge fixed costs at $3500, in the event that Richmond Hill demands them.

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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.

Covelli v. Sears update

The inaugural post for this blog, back in March, dealt with a decision in Covelli v. Sears Canada Inc.  Find my full post here.

Put briefly, Mr. Covelli had pleaded that Sears had "adopted a corporate policy or practice of terminating employees for just cause, notwithstanding that it knows or ought to know that no just cause at law exists, as a means of unlawfully evading its statutory and common law obligation to provide employees with notice of termination, or compensation in lieu of notice."  Sears brought a motion to strike these portions of the pleadings, and was unsuccessful.

Today, the Divisional Court released its decision on Sears' motion for leave to appeal.  (For a motion in the middle of proceedings like that one, there is no appeal as of right - the party wanting to appeal has to make a motion to get the Court to agree to hear the appeal.)  The Divisional Court refused the motion for leave, and so Sears is pretty much out of options - the pleadings of systemic practices are in, and the plaintiff is entitled to production of all relevant documents.  According to Master Sproat's original decision on the motion, that means "fewer than 200 file reviews".

We're easily talking tens of thousands of dollars for Sears' counsel to look through 200 files and determine what needs to be disclosed.  But worse than that, if there is any merit whatsoever to the allegations of systemic practices, then disclosing the necessary documents would be lethal.  The plaintiff (actually, plaintiffs) are suddenly in a very good bargaining position.

That being said, it still seems half likely to me that there may be some more motions to be fought over productions, if Sears wants to play hardball.

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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.

Settlement Privilege...or Not

It's often said that lawyers slap "Without Prejudice" on the top of just about any correspondence, where it isn't usually necessary.

It's true, technically, but not a bad practice generally.  What "Without Prejudice" means is that any offers in the letter are not binding if the terms of the offer are not accepted.  So if I'm suing you for $250, and I offer to settle for $200 on a "without prejudice" basis, and we still end up going to trial, you can't say, "Wait a second, I thought you were only going after $200 now."  In fact, you can't even show that offer to the Court before the decision is made on the merits - it's a privileged document, subject to what we call "settlement privilege".  The legal system wants settlements.  Settlements are cost-effective for the parties and for the system, and so we don't want parties to have to worry about what they're saying in settlement discussions, concerned that it will be thrown back against them in Court.  We want full and frank conversations toward settlements, so we protect settlement discussions from disclosure.

Usually.

The funny thing about the words "Without Prejudice" is that settlement discussions are presumptively privileged, so the addition of the phrase does nothing.  Documents to which the privilege doesn't properly apply will not be privileged despite the use of the words.  Still, we use them to make the point clearer.  Sometimes, even when the whole letter is marked "without prejudice", I'll still highlight that a particular concession is being offered on a strictly "without prejudice" basis, so that there can be absolutely no confusion on the point - I'm not necessarily agreeing with you about this, but let's put that disagreement aside for now.

And sometimes, even documents which would normally be privileged can still be relevant.  This was a dispute in a recent Galea v. Wal-Mart Canada Corp. decision.  Ms. Galea is suing Wal-Mart for wrongful dismissal, and her pleadings essentially argued the following:  Before Ms. Galea's employment was terminated, there were a series of discussions, including letters marked "without prejudice", in which the employer gave her ultimatums, that she could accept a different position, or could accept a particular severance package.  Ms. Galea is claiming bad faith damages, based in part upon these discussions.

Wal-Mart brought a motion to strike these portions of her pleadings, because of settlement privilege.  The Court does not fully decide the dimensions of privilege, and appears to leave that for the trial judge, finding that the pleadings can be amended to omit the details of the settlement offers which would be privileged.

Bad faith is often a point where settlement privilege can come into controversy.  It is not unusual for bad faith to be alleged regarding matters relating to offers to settle, and one can easily imagine cases in which this is accurate.  I once had an employee consult me on a release her employer was asking her to sign, offering to pay her an amount which I determined was exactly the statutory minimum.  The release was asked to be returned no later than the day before the employer was legally obligated to pay the stat minimum.  I can't believe that's a coincidence - that could potentially have created a bad faith argument.  On the other hand, in cases where an offer is a reasonable approximation of the employee's entitlements, it is hard to imagine a successful bad faith argument being made based on an offer to settle.

One thing that I see quite frequently, which is absurd almost to the point of humour, is a "without prejudice" termination letter.  Basically, the employer calls in the employee to the termination meeting, advises them that they're being terminated, and hands them the termination letter which is marked "without prejudice" because it contains a proposal to satisfy the employee's entitlements.

It's the termination letter(!).  You can't fire somebody on a "without prejudice" basis, so it could be difficult to keep that letter out of evidence.  No, far better practice is to provide a termination letter telling the employee what is happening, regardless of all else - they're fired, they're getting their stat minimums, etc. - and then provide a supplementary document, marked "without prejudice", containing the proposal for a full and final resolution of all matters outstanding.

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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.

Layoffs in Non-Union Contexts

An unusual case came out from the Ontario Superior Court of Justice recently, McLean v. The Raywal Limited Partnership, where the core question, as the Court puts it, is "whether the plaintiff was laid off or dismissed".

This is strange, and rare, because the terminology of a "layoff" doesn't usually properly apply outside of union settings.  Yes, people will often use the term "layoff" to describe a dismissal due to reasons of business restructuring, thinking that "fired" or "dismissed" implies that there was misconduct, but that's not really a fair distinction where there are no unions.  People are fired for just cause, or not for cause.

At law, the best way of seeing the distinction between a layoff and a dismissal is that a layoff contemplates the recall of the employee.  And, in fact, the Employment Standards Act, 2000 has provisions dealing with temporary layoffs of limited durations, but that doesn't mean that they're available in every employment situation.  The employer needs to reserve the right in an employment contract.  As the judge put it in McLean, "In the absence of a contractual basis for layoff, the device of layoff does not exist at common law and any purported layoff will be, in fact, a dismissal."

In this case, in 1998 Natalie McLean was hired by Raywal.  Raywal had an employee handbook which included layoff provisions, but it was not integrated into her written offer of employment.  It was not referred to in the offer of employment, nor was she required to acknowledge in writing that it formed part of her contract.

I've talked about this before, usually in context of termination provisions:  Even if she received the handbook the day after accepting the offer of employment and read it and signed it, there would be a 'consideration' problem.  She wouldn't be contractually bound to it unless there's something of value passing in exchange for her agreeing to it.  (Other policies in an employee handbook are trickier - an employer has some rights to change the conditions of the work environment.  Hours of work, absenteeism and discipline policies, dress codes and decorum, use of office equipment...these are all things that the employer will be entitled to amend, within certain limits, unilaterally and on a regular basis.  The employee never really has a choice but to comply with these directions, and won't often be successful in arguing constructive dismissal on such bases.  But something permitting the employer to send the employee home without pay...that goes to the heart of the employment contract, and is not something that the employer will really be entitled to implement unilaterally.)

This case is a little more complicated than a simple consideration case, though, because McLean was laterally transferred to a different position in 2008, at which point she did sign a new contract which integrated the employee handbook.

In October 2010, McLean was told that she was being laid off, and given a recall date of June 27, 2011.  In late May, she was recalled, but she did not return to work.

So the question becomes whether or not the 2008 contract amendment was valid.  The judge found that there was no "obvious or certain improvement in compensation or terms of employment", and therefore no consideration.  (The employer argued that the provision of benefits through the layoff period was an improvement to her compensation package, but the judge understandably rejected that.  It would be a hard sell that saying "If we send you home temporarily, we'll leave your benefits in place" is a plus to somebody who is entitled not to be sent home.)

Therefore, McLean was dismissed and was entitled to pay in lieu of notice.  The judge found that no failure to mitigate was established, including by McLean not accepting an offer made on the eve of mediation in the litigation process, and awarded ten months' pay in lieu of notice.

My Thoughts


The decision largely makes sense to me, but I'm a little bit perplexed on the mitigation point.  It doesn't make clear when the litigation was commenced nor when, exactly, the offer on the eve of mediation was made, but while I can certainly understand the judge's reasoning dealing with the offer on the eve of mediation, I cannot understand how (or if) the judge dealt with the mitigation consequences of the original recall date or the notice of recall.

Given how the law of mitigation has developed, particularly after the Evans v. Teamsters case from the Supreme Court of Canada, failure to return following a recall notice, in most cases, would probably be considered a failure to mitigate.

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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.

Business Trips, Alcohol, and Criminal Charges

This weekend, when discussing current events, I had a question posed to me:  If two senior executives on a business trip get drunk on an airplane forcing the plane to make an unscheduled landing, resulting in criminal convictions and causing national embarrassment to the company, will they have any recourse if they are fired?

Of course, the question was a reference to this story.  Two employees of Research in Motion did exactly that, forcing an unscheduled landing in Vancouver en route to China.  They were charged with mischief, convicted (on guilty pleas), and sentenced to probation with restitution orders to the cumulative effect of over $70,000.  As far as I know, the employees haven't yet been fired, but they have been suspended pending further investigation.

So what's the answer?  My answer was that it will depend on the objective seriousness of the misconduct on the aircraft.  It sounds extremely serious, when the news reports are saying that it was necessary that they be physically restrained, and to land the aircraft at the nearest airport.  Certainly these are serious consequences, and such serious consequences will have a major impact on whether or not there is "just cause" for termination.  But if you read the news coverage carefully, you'll find scarce details as to what the employees actually did.  I often say that, when I read the news, I never assume I have all the relevant facts.  On what I have seen, even if it is all true, it still leaves open the possibility that the flight crew's reaction could have been an overreaction.

And really, there are two thoughts that might support such an inference:  Firstly, for the last decade in particular, airlines have been quite paranoid about security.  This is not a criticism; just an observation.  They will react harshly to any perceived security risk.  Secondly, the question arises as to how these two achieved such a state of intoxication aboard the aircraft?  Were they permitted to board already drunk?  Were they served the alcohol on the plane?  On the ground, we hold venues that serve alcohol to very strict standards - we expect a bartender, in a raucous and loud bar setting, to identify people who have had one too many and refuse to serve them more.  Is a flight crew not held to a similar standard?

One would also need to consider the objective seriousness of the conduct of each employee:  If one of them was acting in a way that caused a real threat to the safety and comfort of the other passengers, justifying the flight crew's response, but the other one was involved in less serious misconduct - say, egging him on - then it may well be that just cause may exist for one of them but not the other.

That being said, pleading guilty to the resulting offences might interfere with the employees' ability to successfully take such a position in subsequent civil proceedings.  To my mind, it is also an important factor that they were on a business trip.  Had it been two individuals on personal travel who happened to be employees of the same company, the analysis would be altogether different.  (Not to say that it couldn't constitute just cause, but the test would change.)


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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.

Changing Existing Terms of Employment

I recently had a searcher find my blog a search term to the effect of "Can my employer change the termination clause in my contract?"

Which is an interesting question, and covers a broader range of issues of contractual changes.

The first thing I want to highlight is that every employee has a contract.  Even if there isn't a written contract, the very nature of the employment relationship is contractual.  Without a written contract, there's an oral contract.  Where certain terms aren't expressly set out, the common law will often read in implied terms.  So when I talk about changing contractual terms, I am talking not only about modifying an existing written contract, but also about implementing a new written contract for an existing employee who didn't have to sign a contract in the first place.

I am often surprised by employers who come to me for advice on the dismissal of an employee, who never implemented a written contract with termination language.  For some smaller and midsize employers, it's almost expected - they often can't be expected to realize the consequences of not having one, while knowing that implementing employment contracts will require them to spend money on lawyers.  Small and mid-size employers often cut me off when I start talking about "notice" and say something to the effect of, "Yeah, we know all about that; we have to pay [up to] 8 weeks, right?"  They are quite chagrined when I tell them No, that without a written contract limiting notice, they'll have to pay out on the basis of "reasonable notice", which can range in some cases as high as two years' salary (and higher in exceptional cases).  But even larger employers often don't have such contracts, and these I would expect to know better.

This is why I say that "A stitch in time saves nine" is very true when dealing with employers and legal fees.  Paying a lawyer at the outset for assistance in developing contracts and policies can seriously limit liabilities down the road.  And legal fees - if you have to resist a wrongful dismissal action, you'll face the prospect of legal fees on such a scale that make the fees associated with contract drafting look like pocket change, even without considering the actual liabilities to the employee.

Can an Employer Unilaterally Change an Employment Contract?


Lawyers never give firm Yes or No answers.  Law is kind of like science:  "Yes, supposing that preconditions a, b, and c, are met, with a range of error of z%."  So to a simple Yes or No question, I'm going to say "Sort of, but only if it's done right."

Let's suppose that you have a job.  Maybe you started it twenty years ago, maybe you started last week, maybe you just accepted the offer and have a start date two weeks from now.  Then your employer comes to you and says "Sign this contract".  The contract affirms all of your other entitlements and responsibilities in all respects - salary, benefits, sick leave, job functions, reporting structure, etc. - and then you come to this "Termination" clause, saying that the employer is entitled to fire you on provision of x weeks notice (or maybe it's a formula, or maybe it's keyed to the Employment Standards Act minimums).  You've never before agreed to such a term.  Maybe you have an existing contract that doesn't have that term, or maybe you don't have an existing contract, and were never told that you'd be required to agree to such a term.

But your employer tells you to sign it, and you're worried about what might happen if you don't, so of course you sign it.

Then, six months later, your employer comes upon hard times, and fires you.  Can your employer rely on that termination clause?

The answer is "Probably not".  Such a contract runs into the problem of "lack of consideration" - you didn't get anything in return that you didn't already have for signing the contract, so it doesn't meet the legal definition of a contract.

But what if there is consideration?  A small raise, a nominal bonus, a guarantee of a Christmas gift with a value of at least a peppercorn.  Then that problem disappears.  So if the employee signs it, there's a good chance that the contract can be relied upon.

Though that isn't a 'unilateral' change to the contract.  The employee is agreeing to it.  Perhaps the agreement feels forced, because the employee expects they might be fired if they refuse to accept it, but unless the contract is unconscionable or can be voided through other doctrines, then their agreement to it is binding.

What happens if the employee refuses to sign?

Well, the employer continues to be entitle to terminate at any time on notice in accordance with the existing contractual terms.  Refusing to sign is not misconduct that will justify a termination for cause, but neither will it trigger any protection from termination.  An employer is perfectly entitled to terminate on provision of notice in response to a refusal to agree to new contractual terms.

An employer has a limited entitlement to unilaterally change terms of the employment contract, but when we're talking about a termination clause, or significant changes to remuneration or job duties, that will often be beyond that.  So strictly speaking, an employer isn't entitled to unilaterally impose new terms.

But the employer can give notice of termination, and offer new employment on different terms.  This has to be done carefully, and may trigger certain liabilities...and if it's done wrong, may not work.  In one case, an employer was trying to get out of a 'golden parachute' termination clause, and gave the employee two years notice that the clause was being changed, then fired the employee when he refused to accept the change two years later.  On the facts of that case, the employer was found to have breached the contract and was required to pay out pursuant to the golden parachute clause.  So it's tricky, and needs legal guidance to do properly.

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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.

Back to Basics: Sick Leave

Larger employers and their employees usually don't have too much trouble with sick leave.  They have policies and processes in place for taking sick leave, often with short-term and long-term disability insurers who will bear the direct costs to employees, internal HR staff to facilitate the return to work, and a sufficient workforce to be able to fill in any gaps caused by extended or unforeseen absences.

But start looking at small and mid-size employers, and you get myriad issues.  I've seen plenty of employers with no written contract and no policy setting out entitlements to sick pay, but whose practices are to pay salaried employees for the occasional sick day, etc...until they start running into more frequent or longer-term absences.  Then several questions start to arise:

1. Must an employer continue to employ an individual despite extended or frequent absences?
2. When an employee is able to perform only a part of their regular duties, how does this interact with sick leave?
3. Must an employer pay a salaried employee who is on sick leave?

Absenteeism is a difficult issue all around, because it's a pretty fundamental aspect of the employment contract that the employee has to show up.  That being said, where an employee is absent frequently or for an extended period of time due to a medically documented disability, an employer usually can't regard such absences as being misconduct.  Indeed, not only is a "for cause" termination off the table in such cases, but in many such cases even a "not for cause" termination (on notice or pay in lieu thereof) would be illegal, in violation of the Human Rights Code.

An employer must reasonably accommodate disability up to the point of "undue hardship".  Undue hardship is a high threshold.  We aren't talking about minor inconveniences or expenses; what many employers find difficult is the understanding that the issue will be viewed from the employee's side as well:  If the employer is entitled to refuse to accommodate, in many cases this will have the effect of terminating the employee's employment, just because they have been afflicted by a disability.  This is a big deal, with the result that courts and tribunals will expect an employer to bend over backwards to avoid this consequence.  Thus, hardship has to be very significant before it will become "undue".

Where an employee has been absent for extremely lengthy periods of time, and there can be no reasonable expectation of a return to work in the foreseeable future, this can sometimes generate 'frustration' of the contract, entitling the employer to terminate it.

The duty to accommodate is a double-edged sword.  An employer is obligated to reasonably accommodate an employee's medical needs:  If I need light duties and reduced hours, the employer should require only light duties and reduced hours (unless doing so would generate "undue hardship") for as long as it is necessary.  But on the flip side, I can be required to accept accommodated duties.  If I get fatigued and so can only work 4 hours per day, the employer is entitled to insist that I work those 4 hours per day.  I can't say, "Well, I'd rather just stay home on sick leave" if the employer is offering modified duties.  To that end, an employer is entitled to insist on being made aware of the employee's functional limitations.

However, an employee can't insist on being paid for time not at work, unless they're contractually entitled to do so.  If there's a short term disability insurer, the employee can seek money from there.  If there's a paid sick bank, of course, the employee can draw against it.  But in the absence of such things, an employee should not expect the money to keep coming in when they aren't going to work, and should consider looking into eligibility for EI sick benefits.

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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.

Bill 168 - Reprisals Update

Many of my entries seem to be very timely.  On November 18th, 2011, I made an entry about the OLRB's decision in Conforti v. Investia Financial Services Inc., in which the Board suggested that the anti-reprisal clause in the Occupational Health and Safety Act may not apply to reprisals against employees who make complaints under the harassment policies which the Act requires employers to implement, since Bill 168 became law last year.

The Harper v. Ludlow Technical Products Canada Ltd. case was decided on November 18th, as well, in which Vice-Chair Susan Serena dealt with the question head on.  Nearly her entire reasons are an excerpt from Conforti, and she concluded:

the Board does not have the jurisdiction under either section 50 or Part 111.0.1 of the OHSA over a complaint that alleges the company did not comply with its workplace harassment policy and/or the applicant was subjected to a reprisal after she filed a workplace harassment complaint

That being decided, let's look at some of the finer points of the interpretation.  In the excerpt from Conforti, we find the Board concluding that the Act does not require an employer to keep the workplace free of harassment, nor does it require any particular response to harassment complaints.  The Act only requires the implementation of a policy regarding harassment, and a program explaining to workers how to make complaints of harassment and detailing how the employer will respond.  Only the absence of the policy and program would constitute a violation of the Act, so only an employee complaining about the complete absence of a policy gets protection by the anti-reprisal provisions.  Complaining about deficiencies in the policy does not get protection against reprisals, because the Act doesn't have minimum requirements for the contents of the policy.  Complaining about how the employer responded to the policy doesn't get protection against reprisals, because the Act doesn't dictate how the employer has to respond.  And even a complaint under the policy does not get anti-reprisal protection, because the language of the anti-reprisal provision deals with employees seeking enforcement of the Act, and the absence of a statutory requirement that employers actually address harassment means that complaining about harassment isn't seeking enforcement of the Act.

One can understand why the OLRB would not want to get caught up in assessing the merits of a policy, whether or not an employer has complied with its policy, nor whether or not the employer's response amounts to 'reprisal'.  Let's face it, 'harassment' is a pretty amorphous concept, even as defined in the Act, and there would be large numbers of cases with large grey areas if the Board suddenly opened up its doors to anyone who felt harassed.  Even on the anti-reprisal side, it's easy to see a huge number of fights over whether or not an action was 'harassment' or 'reasonable discipline', and then whether or not the subsequent termination was a reprisal for a harassment complaint or the response to additional disciplinary conduct.  (Not all discipline leads to termination, but most 'for cause' terminations follow a series of disciplinary events.  If there's a fight over whether not an earlier one is 'harassment', then we get into an anti-reprisal fight too.)

But when the OLRB is framing this as a jurisdictional limitation, it is speaking in absolutes.  If the Act doesn't set any standards and doesn't give them jurisdiction to even inquire into such cases, then the inevitable conclusion is that it doesn't matter how obviously defective or inappropriate a harassment policy is, or how ridiculous an employer's response is to a complaint under the policy - so long as there is a policy, the employer is in compliance.

Here's an argument from absurdity:  Imagine that I am an employer, and I implement a harassment policy saying that I encourage harassment to toughen up everyone in the workplace.  The program says that people who feel that they are victims of harassment should suck it up, but if they really want to complain about it, they can come to me with the complaint and I will interrogate them thoroughly about it and ensure that they are put on the most menial duties imaginable for a period of time to be determined.  And in practical terms, I decide I'll fire anyone who complains about harassment.

On the OLRB's strict reading of the harassment language, my obligations are to "prepare a policy with respect to workplace harassment" (check), and to implement a program to implement the policy which includes "measures and procedures for workers to report incidents of workplace harassment" (check) and "set out how the employer will investigate..." (check) "...and deal with incidents and complaints of workplace harassment" (check).  According to the OLRB, all my obligations are satisfied, and they can't do anything about my patently absurd policy.  Even if an employee comes to me and tells me in good faith that they don't think that the policy is good enough, I can fire them for that too under the OLRB's interpretation.

There are countless problems with this approach.  The first and most obvious is that it completely defeats the purpose of the harassment provisions in Bill 168.  The second is that, while you might think that the words "with respect to workplace harassment" are pretty broad, the plain language of the provisions in their totality makes it clear that there are additional obligations.  The program has to set out "how the employer will investigate and deal with incidents and complaints of workplace harassment."  If I have to create a program saying how I will do something, it doesn't make sense to suggest that I don't actually have to do it.  So implied in that obligation is an obligation to "investigate" and to "deal with" harassment complaints.  And it is patently absurd to think that these obligations are completely devoid of some contents, at least to the extent that the investigation should be one that is carried out in good faith and that "deal with" requires a good faith attempt to resolve the issues.

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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.

Stranger than Fiction, Volume V: The Drugged Vendor

A decision was recently released in Ryan in Trust v. Kaukab, a dispute arising from a real estate deal gone south.  Justice Pepall's decision is lengthy, but well-written and easy to follow, particularly given the extremely convoluted fact-pattern.

I'll try to sum up as briefly as I can, at the risk of oversimplifying some of the issues:  Mr. and Mrs. Kaukab owned a dilapidated property in Mississauga, and were trying to sell it for over $600,000.  After listing several different times with different realtors, they finally entered into negotiations with Mr. Ryan, who wanted to buy it on behalf of himself and his business partner, and reached an agreement at $425,000.

At first, Mr. Kaukab was holding himself out as the sole owner of the property.  The last realtor he used (being the wife of another realtor on the matter, the husband being a novice realtor getting back out of the business) did due diligence and discovered that Mrs. Kaukab was also on title.  Mr. Kaukab responded by insisting that he had authority to sign for her, and did so.  He proceeded to sign several different "sign-backs" - i.e. counter-offers reducing the price towards the ultimate price agreed upon, always signing for his wife as well.  His wife's evidence was that she was completely oblivious to all things related to the property, and she did acknowledge on examinations for discovery that she didn't pay attention to the listing because it was "his responsibility".

With a signed agreement of purchase and sale in place, the Kaukab's realtor suggested a lawyer and proceeded to send the deal to him.  Mr. Ryan sent the purchase transaction to his own lawyer.  This is all common.  Mr. Ryan's business partner wanted a different lawyer on the deal.  No problem.  But the Kaukabs suddenly dropped off the radar, not answering the phone or the door, and their realtor found it impossible to contact them.  This would have been the first indication anyone had that there was anything going south with the deal...

...and then the other shoe dropped:  Mr. Kaukab retained a different lawyer to write to the lawyer his realtor had recommended, alleging that he had been "tricked" into signing the agreement of purchase and sale, that he had never intended to sell it for $425,000, and he took the position that the existing agreement of purchase and sale was not valid.  The tricks alleged including the 'rolling' of parts of the document or obscuring the terms of what he was signing.  In the context of some documents (even ones which appear to be uncontroversial), he denied that he had signed and said that it was 'possible' that somebody else had forged his initials.  General evasiveness like that kills credibility.

At trial, he gave evidence that, at the meeting in which the final agreement of purchase and sale was signed, the realtors had insisted that he have a coffee, but he refused and asked for water instead.  The trial judge described his version of events as follows:

Mr. and Mrs. Martin left for 10 to 15 minutes and then came back with two waters, one for Mr. Martin and one for Mr. Kaukab.  Mr. Kaukab then sipped some of the water.  He said he went into a dream-like condition and his limbs went heavy.  He did not tell Mrs. Martin he felt unwell.  His suspicion, which he testified was not confirmed, was that his water was drugged. 

The judge rejected this version of events, finding that the Kaukabs were not credible witnesses.  At one point, the judge used a common turn-of-phrase, describing Mr. Kaukab's evidence as not having "the ring of truth".  The judge went on to say that his evidence had "the ring of preposterousness."

So what happened next?  Well, Ryan brought legal proceedings seeking ownership of the property, and no defence was received, so he obtained default judgment and a vesting order that he owned the property.  He and his partner then paid off outstanding tax arrears and started renovation work on the already-dilapidated and still-deteriorating property.  Everything looked rosy until the Kaukabs brought a motion to set aside the default judgment.  Apparently getting some poor legal advice about the 'worst case scenario', Ryan continued the renovation work - literally hundreds of thousands of dollars worth.  (Subsequent appraisals valued the property at over $2 million.)  Then the Kaukabs won their motion to set aside the default judgment, and - subject to repaying Ryan for the tax arrears - got vacant possession of the property back.

The deal fell through in 2003, the default judgment was set aside in December 2004, and the action was finally decided recently.  The judge found that the contract was binding and the Kaukabs had breached it, but that the plaintiffs hadn't proven much in the way of damages.  The property wasn't so unique as to justify "specific performance" - i.e. transfer of the property - and damages arising from the Kaukabs' breach hadn't been established.  The actual work done to the property prior to receiving notice of the motion to set aside the default judgment was compensable, but that only amounted to $20,000.  The rest of the work, knowing of the motion to set aside the judgment giving them title, was undertaken 'at their own risk', so they couldn't claim for that work.

At the end of the day, it looks like a big windfall to the Kaukabs.  They successfully defended the bulk of the claim, and so get to keep their renovated property (which they had been looking to sell as a dilapidated property), having to pay for only $20,000 of the renovations.  Of course, legal fees on both sides of this case are pretty substantial.  The Kaukabs made their own counterclaims and crossclaims, for which they were unsuccessful, but they were successful in defending the bulk of the claim.  It would be interesting to see how the costs fall at the end of the day.

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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 City of Toronto is Mobilizing for Another Labour Battle

David Miller fought the union in 2009, with the result of a lengthy strike that showed Toronto just how much labour action can stink.  Since then, we've gotten an anti-labour Federal majority government in place which feels it can step on the labour movement with impunity, a Toronto mayor who is about as tactful as a grizzly bear when it comes to labour policy, and our middle-of-the-road Provincial government has lost its majority government.

Right now, there's a clear public sentiment that permits and encourages governments to "take on" the unions.  At the same time, the law has been shifting the other way, and may continue to do so in response to extreme anti-labour government action.

All that being said, when it comes to labour policy, McGuinty can still govern almost as if he had a majority.  He only needs a couple opposition votes to pass a bill, and anything pro-labour will easily garner NDP support while anything anti-labour will easily garner PC support.  (The only risks lie in "middle-of-the-road" legislation that neither the right nor the left can back.)  McGuinty has made it fairly clear that he is not prepared to intervene in labour actions on the same sweeping pre-emptive basis as Harper has been doing in the Federal sphere.

So now Rob Ford is mustering his troops for another battle against the union, according to this Toronto Star story.  Reportedly, the Ford administration has been recruiting temporary replacement workers to fill in for unionized workers during a strike or lockout.  The closest thing to a denial that the Ford administration has issued is a statement by the Deputy Mayor that Ford has not "personally" interviewed anybody.  (Which is a pretty weak denial, when you think about it.)

Ordinarily, unions pick the timing of strikes, and they pick them to generate the maximum hardship to the employer.  The lockout is a tool in the employer's arsenal to take some control of the situation, to force an inevitable interruption on terms more favourable to itself.  (For example, the recent Canada Post dispute was characterized by the union commencing 'rolling' strikes, with random temporary interruptions across the country, meaning that the actual bargaining unit members weren't put to great hardship while significantly interfering with the employer's operations.  Canada Post responded with a complete lockout.)

Temporary replacement workers are somewhat controversial, called "scabs" by those in the labour movement.  Historically, they were the subject of significant harassment and even violence when trying to cross the picket lines.  We'd like to think that we've moved beyond that, that these kinds of violent labour disputes are a relic of the 1930's, but picketing still tends to stir up a mob mentality.  In fact, in 1992 nine replacement workers were murdered in Giant Mine in Yellowknife when a member of the striking bargaining unit caused an explosion in the mine.

The labour movement doesn't like replacement workers because they *really* undermine the bargaining power of the union.  The employer is able to bring in more people (other than managers) to do bargaining unit work.  They're currently legal in Ontario, and have been since Harris was elected in 1995, but you still occasionally see an NDP private member's bill trying to prohibit them.

And really, they make sense as a bargaining tool.  If temporary replacement workers are a cost-effective way of the employer carrying on its business, then maybe we should question the value added of the experienced bargaining unit members.  Real bargaining power comes from being difficult to replace.  To have legislation that prohibits the employer from replacing you is an artificial inflation of bargaining power, and let's face it:  In most bargaining scenarios, the unions do not need inflated bargaining power.

Still, Ford's approach takes it to a new level.  Usually, you bring in temporary replacement workers in response to a work interruption.  To have a bank of temporary workers lined up in case of an interruption...well, he's preparing for a lengthy siege.  It's provocative, and it suggests that the City is going to enter negotiations with the intention of crushing the union.  Ford's objective is to not need the unionized workers, and if he pulls it off to any degree at all, there is going to be a lot of strife on the picket lines.  It won't be a pretty picture.

If this does turn into a labour dispute, then for once the far right will certainly not be calling on McGuinty to enact 'back-to-work' legislation.

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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.

RCMP Fights for the Right to Unionize

A story in today's Toronto Star describes a Court challenge launched by RCMP officers to end a ban, in place since 1918, on Mounties forming Unions.

There is a notation in the article that they aren't seeking anything that other police forces don't already have, and describes an existing "staff relations representative program" which is described as not providing for meaningful collective representation.

In light of the B.C. Health Services case, you'd think it's pretty academic, then:  Prohibiting union membership would violate the Charter, and couldn't be justified under s.1 because other police forces can unionize without adverse consequences.

Nothing's ever quite that simple, however.  In fact, other police services do not have the right to unionize.  In Ontario, the Police Services Act expressly prohibits police officers from being members of trade unions.  However, they are part of respective "Police Associations", which are very similar to unions, with similar rights to those conferred under the Labour Relations Act.

It does sound like the program available to the Mounties isn't on the same level as these Police Associations.  But, without knowing the exact dynamics of the program, I think Fraser might be an obstacle for this challenge.  Fraser confirms that there is a right to collective bargaining, but held that no particular structure for such bargaining is required.  In other words, if the existing program grants the right to make collective representations, there is a strong prospect that the Courts would read into it an obligation on the RCMP to consider these representations in good faith, and that any Charter issues would be thereby resolved.

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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.

Bill 168: Harassment Complaints and Reprisals

I came across an interesting case today, a recent decision by the Ontario Labour Relations Board in Conforti v. Investia Financial Services Inc.  Two issues arise: What does "harassment" mean, and what are the limits of an employee's rights following the implementation of Bill 168?

The Facts


Put briefly, Mr. Conforti was disciplined for emails which were "less than professional, specifically belligerent and derogatory in nature".  The emails are reproduced in the decision, and, as the Board observes, this characterization was "undoubtedly accurate".  He was advised that further such communications would result in the termination of his employment.

He then sent an email back a few days later, alleging harassment, in a tone which remained disrespectful, and was fired two days later.  He applied to the OLRB for recourse based on reprisal.

What does "harassment" mean?

The Occupational Health and Safety Act now defines workplace harassment as "engaging in a course of vexatious comment or conduct against a worker in the workplace that is known or ought reasonably to be known to be unwelcome".

Read literally, one might think that this means that, if you do anything at all that vexes an employee knowing that it isn't welcome, it's harassment.  So if I ask an employee to complete a difficult task that I know he doesn't enjoy, or if I discipline an employee for engaging in misconduct, are these things harassment?

Of course, most lawyers know better than to read things so literally.  It seems pretty obvious that employers remain entitled to exercise certain rights...but exactly how far do those rights go?

Traditionally, harassment was the stuff of Human Rights-based claims, and had to be based upon a prohibited ground (race, age, sex, etc.), and countless claims of unfair and 'discriminatory' treatment died for absence of a connection to a prohibited ground of discrimination.  Does Bill 168 open a door to recourse for treatment that is simply unfair?  If I am your manager, and I decide that I don't like you, and so I assign you to do all the unpleasant tasks in the department and have your co-workers do all the fulfilling and interesting tasks, is that harassment?  Does it make a difference if my assignments are based not on personal emnity, but on a good faith assessment of competence?

These are nuanced questions, the likes of which we can expect to arise routinely in the jurisprudence in the not-so-distant future.  As the Board observes in Conforti, there is a risk "the Board's resources will be overwhelmed by employee complaints arising out of routine disciplinary matters".

Does the anti-reprisal section of the OHSA prohibit reprisals for making complaints?


While ultimately not deciding the point, the Board suggests that the only obligations in respect of harassment of Bill 168 are that an employer implement anti-harassment policies and programs, and that s.50 of the Act, which protects employees against reprisals for acting in compliance with the Act, seeking enforcement of the Act, or giving evidence in proceedings under the Act, does not in fact protect employees against reprisals for making a complaint under the anti-harassment policy.

The Board looks at its own historical jurisprudence (pre-Bill 168) finding that harassment wasn't remedial under the Occupational Health and Safety Act, and concludes that, if the government had intended to require employers to keep their workplaces free of harassment, it would have included a provision in the Act saying so expressly.

In other words, by the reasoning of this Board Member, an employer could implement an anti-harassment policy as legally required and then make a practice of immediately firing any employee who makes a complaint under the policy, and this would be perfectly permissible under the Act.

My Thoughts

In my respectful opinion, the obiter on the latter issue is complete and utter nonsense.  The OHSA imposes some extremely broad obligations on employers.  Many obligations are specific to certain types of physical hazards, which is likely why the OLRB has not traditionally seen harassment as coming within its scope, but many are not.  See, for example, s.25(2)(h), that an employer shall "take every precaution reasonable in the circumstances for the protection of the worker".

In the context of the Act prior to Bill 168, it isn't hard to see why harassment might not have often been seen as included:  It really wasn't designed with that sort of issue in mind.  That being said, in certain exceptional cases, a broader view was taken - for example, Arbitrator Shime's decision in the 2004 Stina grievance against the TTC found a remedy in the OHSA for harassment which caused severe emotional distress.  (And if you look through annotated versions of the Act, it looks out of place in the case list:  This employee died, that employee died, that employee lost an arm, that employee lost a leg, that employee became depressed.  Not to belittle depression - it can indeed be very debilitating - but hazards to mental health clearly aren't easily compared to hazards to physical health.)

What the Board member is forgetting is that, today, there is only one principle of statutory interpretation, which is this:  "the words of an Act are to be read in their entire context and in their grammatical and ordinary sense harmoniously with the scheme of the Act, the object of the Act, and the intention of Parliament."

So, with harassment now having a place on the podium of the OHSA, it does not make sense to continue to read the employer's general obligations to maintain a safe working environment as not including an obligation to maintain an environment which is harassment free.  If we interpret the OHSA as it stands now to permit reprisal for complaints made under the mandatory policy, or as not imposing obligations on the employer in respect of the manner in which complaints under the policy are handled, it would completely undermine the purpose of the mandatory policy.

If this interpretation holds the day, then Bill 168 becomes essentially meaningless.  It would require employers to incur the expense of developing policies, without contributing to employee protection in any meaningful way.

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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.

Negotiating a Severance Package

When discussing severance packages on termination of employment, the first thing employees need to remember is this:  Never sign anything without legal advice.

Similarly, one of the first things employers should remember is never to ask an employee to sign anything without giving them an opportunity to obtain legal advice.

On some wrongful dismissal disputes, you get 'make-or-break' issues, where the employer might not have any liability at all if successful.  These are cases involving issues such as constructive dismissal, deemed quit, or just cause.  Or sometimes a dispute can be between minimal liability and significant liability, where there is a question as to the enforceability of a written contractual term.  If there's a real dispute on any of these points on a high value case, it could well require a trial, or a significant compromise on the parts of both sides to reach a settlement.

However, in the vast majority of terminations, the only real dispute is about 'how much' - namely, the length of the notice period.  Sometimes, this is coupled with an argument about some of the Bardal factors - most notably, the character of employment.  But in most cases this dispute is not going to hold up a settlement for long.

If each side has a good lawyer in most of these cases, then both sides will probably have a similar estimated ranges - and an estimate is all you ever get in cases without a written termination clause - of the reasonable notice period that a Court would award.  So, in a given case, I might opine that an employee is entitled to 8-10 months notice, give or take.  There's always uncertainty.  A judge sympathetic to the employee might go higher; an unsympathetic judge might go lower.  So the employee hoping for a 12-month notice-period probably doesn't have his head in the clouds, nor does the employer hoping for a result in the ballpark of 6 months.  But neither side is likely to be able to reasonably expect such results.

As a lawyer, my job is to assess the risks of different strategies and advise my clients of the same, but it's up to the client to determine his/her own risk tolerance.  The key thing to remember is that nobody wants litigation, but some people are more willing to go that route than others.  Offers send messages - a skilled negotiator can often read the sweet spot on the deal after the first couple of offers - and the message that an unreasonable offer can send is “I’m not prepared to settle except on terms unfairly favourable to me.”

The other party might be prepared to concede, and settle on less-than-favourable terms to avoid litigation, but otherwise they're more likely to go further in the other direction, to send a clear response that they are not going to play ball, and to bring you into the range they regard as reasonable.  So, in the scenario I described above, suddenly you have an employee asking for 16 months and an employer offering only 4.  That is a big difference, and it is going to require both parties to completely change the philosophy of their positions to reach any middle ground.  Initiating litigation will often be necessary, and the more legal steps and the more negotiation that is necessary, the higher the legal costs of both sides go.

Alternatively, if both parties from the outset send messages that say “Let’s make a deal”, then there`s a higher probability that a quick agreement will be reached with minimal legal expenses, though both sides may be left wondering if they could have perhaps gotten a slightly better deal had they pressed the point further.

In other words, the harder you press your bargaining position, in an attempt to get a better deal, the more you will likely have to pay your lawyer.

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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.

Lest We Forget

Some of my readers may know that I spent a number of years in the Canadian Forces Reserves.  I never went overseas, but I know many who have, and regardless of how I feel about the politics of the conflicts, I continue to respect and honour those who serve.

So today, I feel it necessary to step aside from blogging about labour and employment issues, and address the message of Remembrance Day.

To my mind, the message has been convoluted in recent years.  "Support Our Troops" has become more of a statement about the politics of the conflict, rather than about support for the individuals on the ground.  There is a difference.  We have a volunteer army, who sign up to serve the country.  Few could criticize that sentiment, and so wherever that service takes them, we must continue to respect the individuals involved.

And yes, we must remember that for which they are serving.  Democracy.  Freedoms.  Rule of law.  Peace.  While I tend to think that it is disingenuous to think that Canadian democracy is really enhanced by what we do in many specific conflicts, it remains true that the integrity of our democracy is protected by the troops themselves.

But Remembrance Day is not a day of celebration.  It is not a day to praise our soldiers for winning wars and securing continued Canadian independence.  It is a day of solemn collective introspection, remembering the costs of war and honouring those who paid the ultimate price in service of their country.

War is hell.  That is what we learned in the first two world wars.  That is what we commemorate with Remembrance Day.  And if we ever start to think of war as anything other than hell, to be avoided unless absolutely necessary, then we do a disservice to all those brave young men (and women, now) who had to die before we learned that lesson.

It is generally acknowledged today that the First World War was not a noble conflict.  It was a war of politics, of rival powermongers seeking to establish dominance.  That does not stop us from recognizing the courage and sacrifice of the soldiers involved.  On both sides.  There are stories, likely myths, of men on both sides of No Man's Land coming together for brief moments of camaraderie - true or not, these stories remind us that the men in the other trenches were not evil.  And the fact that we can commemorate such an absurd war with such solemn respect for the soldiers involved in it proves that supporting the troops does not require that we support the war.

Dissent is not just a democratic right.  Dissent is a democratic duty.  If we believe that a conflict is wrong, or that we should not be involved in it, we have an obligation to be heard, and our respect for the soldiers enhances this obligation.  Our young men and women swear oaths to serve us as a country.  If we as a country proceed to send them into conflicts where they will be killed for no good reason at all, that is an insult to them, and to their oaths.

You may think, reading the above, that I am speaking of Afghanistan, or Iraq, or Libya.  I am not.  Please take these comments in a more general sense.  People protesting against military conflicts need to remember not to personalize the conflicts to the soldiers involved.  And others need to remember that a protest against the war is not inherently a personal attack against the soldiers, nor is it unpatriotic.  We, as citizens of a democratic country, need to be able to have these conversations without deteriorating into personal attacks against anyone.  Otherwise, what is it that our soldiers are protecting?

Legal Remedies of the Still-Employed

I've had a remarkable number of calls lately from people who still have their jobs, but who take issue with actions of their employer, be they disciplinary issues, changes to the nature of the job, or unreasonable employer demands backed up by a threat of termination.

It is possible to take the position that you have been constructively dismissed.  As I've discussed before, it isn't easy, and it's never guaranteed.  It adds an additional couple of layers of uncertainty onto an already uncertain process.  And while it is possible to sue your employer while still working for them, that’s only appropriate in some situations (and will likely cause problems for you with most employers).

The last example I gave really puts this in perspective.  An employee facing unreasonable demands and a threat of termination has two choices:  Give in to the demands, or risk being unemployed.  Assuming that it isn’t a demand they are entitled to make, they won’t be able to make out a case for just cause when you refuse to do so, which means you’ll be entitled to pay in lieu of notice of termination if you get fired.

But how much is that?  And is it enough?  Let’s suppose that you make $50k per year, and are entitled to approximately six months’ notice.  You’ll have a claim worth $25,000.  Which seems like a lot of money, when you say it this way:  If I get fired, I can get $25,000.  But it isn’t that simple.  First off, it’s truer to say “I can maybe get $25,000 or so.”  And then you have to factor in legal fees (which can be substantial), taxes, the fact that any EI entitlements will be deferred until after the six month period...not looking like such a lot of money anymore, is it?  Oh, and don’t forget that you may have to go to the end of a litigation process, years out, before you see a dime of it - unlike straight dismissal cases, employers are often very reluctant to acknowledge any basis for liability in constructive dismissal cases.

And here’s the hitch:  You’ll be unemployed.  How long will you be out of work?  Six months?  A year?  Longer?  Even if it’s shorter, there’s no windfall to be had here – if you find an equivalent new job in two months, you’d only win two months’ pay from your own employer, assuming you win at all.  (That's the 'mitigation principle' at work.  Don't be discouraged from looking for work, though, or accepting a job - failing to take reasonable steps to secure replacement employment can reduce your entitlements, too.)

So you really have to say “I can maybe get $25,000 or so, less legal fees, but I’m not sure when I’ll get it, and in the mean time I’ll be unemployed and I’m not sure when I’ll start getting a steady pay cheque again.”

In other words, when remaining gainfully employed is an option for you, you should think very carefully about your options before throwing that away in exchange for a chance of some litigation entitlements.



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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.

Taming Tyrants, or Fanning the Flames?

There is a column in today's Globe and Mail with suggestions as to how to "Tame an Office Tyrant".  Some of the suggestions aren't bad, but they presuppose a certain type of demeanour in the first place, and moreover they ignore the fact that the office tyrant does have a lot of control over both your day-to-day conditions and your long-term career prospects.

Having dealt with office tyrants, seen office tyrants professionally, and read dozens of judicial decisions arising from the actions of office tyrants, I'm going to suggest that there is a certain element of naïveté in the approach. I'm going to go through the suggestions one by one, before offering my own input, which is admittedly more of a lawyer's perspective on it.

(1)  Don't let them see you sweat.  In some situations, this will escalate things.  Now, I absolutely agree that you shouldn't get angry or emotional or lash out at the boss, but to remain a "sea of calm" tends to aggravate people who are furious.  I'm not entirely sure of the psychological reasons for this - my lay theory is that a person throwing a tantrum wants to make everyone else as miserable as they are, and when it isn't working, it only makes them act out more.  Being a "sea of calm" when the world is falling apart makes the people who are upset think that you really don't get what they're saying, or perhaps don't care about the gravity of the situation. #7 is a better way of approaching this.

(2)  Listen actively.  Hmm.  When your boss is talking to you, should you listen?  I'm going to file this one away under "s" for "self-evident".  Even though three quarters of what they're saying is nothing but personal insults, if there are instructions buried in the other quarter, you need to know what they are.  Easier said than done, however.

(3)  Be a role model.  Acting respectfully, honestly, and diplomatically is always a good idea, but I think it's a little naïve to expect to be able to teach your boss how to behave more professionally.  They're not looking to you for life advice.

(4)  Be a problem solver.  Try to proactively prevent situations from arising that will cause your boss to freak out.  Either, these actions are part of your job, in which case it gets filed under "s", or they aren't, in which case in some situations you're taking a risk by being seen as meddling in things that aren't your affair.

(5)  Harness strengths and weaknesses.  I actually kind of like this one.  The subtext is fun:  If your boss behaves himself when clients are around, then keep clients around.  (Actually, this isn't an uncommon feature of the office tyrant.  Being great at schmoozing is how people with no HR skills get into positions of authority.)  But it isn't really a solution.

(6)  Use humour.  See my objections to #1.  If you're joking about a situation that your office tyrant thinks is serious...duck.

(7)  Show empathy.  Good idea, if you can pull it off.  Bringing the boss down by getting him/her to realize that you're on the same page is prudent.  But on the same note, this won't always work:  Your boss isn't looking for a friend or sounding board, but is trying to vent, and might react badly to any attempt to take control of the situation.

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You might be picking up a theme from my critiques:  In most cases, I don't think a subordinate is in any position to 'fix' an office tyrant; you either have to live with it or end it.

If you're in a larger company, there's a tendency to accept that managers come and go.  Occasionally you get a bad one, but if you can put up with it for a couple years, then hopefully one of you will move elsewhere.  In a smaller company, where your manager doesn't answer to anyone, it is a much more difficult situation, but people still like to think, especially in a tough economy, that they can just deal with it for as long as they need to.

Sometimes, you can find ways of living with it.  I once worked with an office tyrant who used a subordinate as a verbal punching bag, but in the form of an abusive relationship, would come back with bonuses after bad episodes.  If you really want to live with it, then actively listening to your boss when he's fuming with anger isn't going to do it; you need to go back to the boss once he's calmed down to figure out how he really wants you to move forward.

The difficulty with a strict 'tolerance' approach is that, if it really starts to go downhill for one reason or another, you don't have good records of why it started downhill.  I'm a big advocate of case-building, on a 'just in case' basis.

When your boss flips out, document it.  Keep a record.  Don't let the record-keeping interfere with your duties, because in fact the record-keeping needs to reflect that you have been completing your duties in an exemplary fashion, but make notes on your lunches, on your breaks, or in the evening on the day of any unprofessional conduct by the boss.

If the boss gives you instructions verbally which are new, or which you think will conflict with other expectations, then confirm the instructions by email.  If you have articulable concerns about the consequences of these instructions, put them in the email.  Email is awesome for case-building.  In many cases, I consider it wise to bcc your own home email account, or print off a copy of the email for your own records, redacting any confidential information.  (Remember that the records you keep should be kept at home, not in your work desk or on your work computer.  You never know when you might no longer have access to either.)

What are you building a case for?  Well, three things.  The first is that you're building a case for future in-house dealings with the employer.  If the employer wants to hold you responsible, by way of discipline or the withdrawal of discretionary bonuses, etc., for something that's gone wrong, having records establishing that you were following express directions from your manager...can be helpful.  The second is that, if your conflict with your manager ultimately leads to you being fired in spite of your best efforts, a solid record of unprofessional conduct by your manager will help to defuse any case for just cause they might try to make, and further enhance a pitch you might make for moral damages in a wrongful dismissal suit.  Put simply, having records puts you into a better negotiating position.  The third is that, if you reach the point that you simply have to quit, those records may in some circumstances allow you to seek recourse for constructive dismissal.  Without detailed records, your evidence at trial ends up being something like, "He was always yelling at me.  One time, he did this.  Another time, he did that."  And the Court ends up having to look at the small handful of specific allegations you're making.  With detailed records, you can list off the dates and particulars of every temper tantrum your boss ever threw, right down to which names he called you on which occasions.  This is far more compelling.  (Normally, Courts like to draw adverse inferences from the fact that you're not raising these issues with the other party as they go along.  In employment relationships, however, the Courts tend to understand an employee's reluctance to put the employer on notice.)

In my own dealings with office tyrants, I put virtually everything into emails.  Firstly, it lays a clear record of communications.  If I tell my boss that a client is upset and wants to talk to him, and he resolves to call the client back but promptly forgets, then two weeks later when the client totally freaks out, the boss is half-likely to come back on me, accusing me of not telling him.  If I send an email to my boss that a client is upset and wants to talk to him, then not only does it make it less likely that the boss will forget, but it also covers my own behind in case he does.

Remember that your boss is the one in charge.  If the office tyrant tells you to do something, then subject to certain limitations, you should do it.  If you've been doing it one way for thirty years, and your boss comes in with a new approach that you think will be catastrophic, then you should respectfully voice your concerns (by email, ideally), but if your boss insists that he wants it done his way, then do it his way, to the best of your abilities.  If you were right that the results are catastrophic, avoid saying "I told you so" - you've got your back covered by the fact that you recommended against the strategy in writing; no need to rub it in - but if you're wrong and the strategy works, all the better.

And the other thing to keep in mind is Bill 168.  If you can't tolerate the office tyrant's unprofessional conduct, then your workplace should have a mechanism in place for making complaints of harassment.  As a practical matter, I'd be reluctant to use that mechanism in a small workplace until it is becoming absolutely intolerable...but as it approaches the threshold of intolerability, then the phrase "nothing to lose" comes to mind.

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I once had an office tyrant come into my office for an unscheduled meeting on a file I had had some minimal involvement on months earlier, and she thoroughly reamed me out for allegedly having dropped the ball when I was working on it.  After she left, I reviewed my own personal records of the emails we had exchanged at the time, and the story the emails told was that she had instructed me to do exactly what she was now upset at me for doing, and I had done exactly as I had been told.

I went out on a limb there, and sent an email confirming the contents of our 'discussion', referring her to the prior emails, retracting the apology that I had prematurely proffered, and explaining how upset I was at both the false allegations of misconduct and the inappropriate manner in which they had been made.

Now, there may be situations in which talking about my feelings may open up a productive discussion.  Maybe, in some situations, a boss would respond to such an email with an apology.  I knew my boss well enough, though, to know that this wasn't one of those situations.  Tyrants don't like being told they're wrong, and this is especially true when they actually are wrong.  And while she actually completely ignored my email (and in fact ignored me completely for a week afterward, which was difficult in such a small environment), I didn't send that email without already being willing to start looking for another job.

The reason I sent that email was two-fold.  Firstly, I had wrongly offered the apology, and I couldn't leave it standing out there, largely as a matter of pride.  There's no question that pride is counter-productive in these situations - do as I say, not as I do.  Secondly, I was very careful in framing the email so that there was not even the slightest hint of insubordination.  No name-calling, no unsubstantiated allegations, nothing improper or disciplinable...so that if we ever ended up litigating over conduct in the course of the employment relationship, I could put that email before the Court, putting on the record my own contemporaneous characterization of her treatment of me, without giving the Court any reason to think worse of me.  Yes, while the reasonable thing for a manager to do in response to that email would be to apologize, I knew full well that my boss would not, and to some extent I was counting on that.  I had "won that round", so to speak, and would be an important victory in the event that the threat of litigation ever arose.

Word of wisdom for employers:  You really can't ignore an email like that.  If it's right, apologize.  Nothing takes the wind out of a well-documented incident of mistreatment like a voluntary apology.  If it's wrong, put on the record the reasons it's wrong.  If the employee ventures into insubordination in the course of the email, then discipline them for it.  (Yes, that's right, if I air a legitimate grievance, and then start into the name-calling, you should apologize to me for your actions that upset me in the first place, and at the same time impose discipline for my own inappropriate conduct.)

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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.