Friday, October 7, 2011
My New Web Site
Earlier this week I announced the opening of my new practice in Don Mills. The LawyerBuchanan web site is now up and running, containing basic information (which will be expanded upon in the weeks and months to come) and a contact form.
Thursday, October 6, 2011
Human Rights and Quantum Physics
In Quantum Physics there's a thought experiment referred to as "Schrödinger's Cat", derived by Erwin Schrödinger in 1935. It's a bizarre concept, quite impossible to wrap one's head around, and it has worked its way into certain pop culture phenomena (such as the hit TV show "Big Bang Theory").
Einstein and others wrote an article postulating some of the premises of quantum physics (the "Copenhagen interpretation"), and Schrödinger thought that they were implausible. He used a reductio ad absurdum argument to show how the premise, if accepted, necessary led to absurd consequences:
Imagine a cat in a box with a device set up involving a tiny bit of a radioactive substance (so small that the atoms may or may not decay over the course of an hour) and a flask of acid. If the radioactive substance decays, the acid will be released and will kill the cat. If the radioactive substance does not decay, then the acid will not be released and the cat will be alive.
Einstein and others wrote an article postulating some of the premises of quantum physics (the "Copenhagen interpretation"), and Schrödinger thought that they were implausible. He used a reductio ad absurdum argument to show how the premise, if accepted, necessary led to absurd consequences:
Imagine a cat in a box with a device set up involving a tiny bit of a radioactive substance (so small that the atoms may or may not decay over the course of an hour) and a flask of acid. If the radioactive substance decays, the acid will be released and will kill the cat. If the radioactive substance does not decay, then the acid will not be released and the cat will be alive.
Schrödinger pointed out that, if one accepted the Copenhagen interpretation, until the box is opened, the cat would remain both dead and alive.
It seems pretty absurd, meaning that the Copenhagen interpretation must be wrong...right? The trouble, of course, is that over the course of several decades of experimentation and study since then, it has become pretty universally accepted in physics circles that the Copenhagen interpretation is correct. And therefore that the cat is, in fact, both dead and alive.
So how does this relate to workplace law? Bear with me for a moment while I explain how the Human Rights Commission put a cat in a box.
Until the end of June, 2008, every Human Rights proceeding in the Province started as a complaint to the Human Rights Commission. The Commission would investigate the complaint, and determine whether or not to refer it to the Tribunal. In theory, it's a 'gatekeeper' role, followed by an advocacy role. In practice, it ended up creating a large backlog at multiple stages - the Commission would often take years to investigate a complaint, before the Tribunal process even got started.
So the Legislature removed the Commission's gatekeeper role, and since June 30, 2008, people have the right to apply directly to the Tribunal, and are eligible for legal assistance through the Human Rights Legal Support Centre.
The transition was tricky. The Commission - though it no longer had jurisdiction to accept a new complaint - was able to sort out a part of its backlog until the end of 2008. Until then, people whose complaints hadn't been dealt with by the Commission had the right to drop those complaints and apply directly to the Tribunal. But that put it into a transitional stream, which was dealt with differently and for which HRLSC assistance wasn't available. In 2009, the Commission could no longer do anything with complaints, and somebody who had a complaint before the Commission *had* to make a transitional application by June 30, 2009, to keep the process alive. (Again, if the subject matter of the application was before the Commission, you *had* to use the transitional process.)
In early 2008, the Commission, aware that new cases weren't likely to be dealt with by the time they lost their mandate, basically started turning people away. Essentially, somebody would send in a complaint (which was traditionally deemed filed when received, unless upon assessment it was determined to be incomplete), and when the Commission would get to it they would call the complainant and suggest that they should drop the complaint and pursue the matter after June 30 by applying directly to the Tribunal. In most cases, the person would agree to do so.
But - and here's the rub - they didn't always get to these complaints before June 30 in the first place. There are a number of matters where similar issues arose, including the Patterson case, the Sharras case, and the Wilberforce case.
Ms. Patterson submitted a complaint on April 18, 2008. The Commission called her on June 5, 2008, and convinced her not to proceed with the complaint and to instead apply to the Tribunal the following month through the new process. When she did so, she checked the box indicating that she had filed a complaint with the Commission, which flagged the Tribunal to question whether or not the new process was available. They contacted the Commission, and the Commission explained that they didn't consider a complaint to be "filed" (within the meaning of the Human Rights Code) until it was accepted at the end of the assessment process. The Tribunal took this explanation at face value and allowed the application to proceed.
Ms. Sharras submitted a complaint in March 2008. The Commission's intake worker tried to contact her in late June, and having failed to do so, purported to close the file as withdrawn on July 2, 2008. In July, they finally got in contact, and the intake worker suggested that Ms. Sharras go directly to the Tribunal under the new process. The Commission provided the same explanation to the Tribunal as in Patterson, but this time the employer's counsel dug up the Commission's published policies, which actually had a definition of when a complaint was considered to be "filed"...which seemed to conflict with the explanation the Commission was now providing.
The parties ultimately agreed that, in that case, the complaint had been "filed" (so the Tribunal didn't ultimately decide that issue), and the question became whether or not the 'withdrawal' of the complaint prevented it from proceeding as a Transitional Application - in December 2008 the Tribunal allowed it to proceed in the transitional stream.
Ms. Wilberforce submitted a complaint in May 2008. In this case, the Commission didn't get to it until September, and they suggested that Ms. Wilberforce should proceed through the new process at the Tribunal. Which she did. This went to a full oral hearing on the issue of whether or not the complaint had been "filed", which was recently decided in this decision.
A few things are clear: First, in September 2008 Ms. Wilberforce was asked if she wanted to discontinue the Commission complaint and proceed to the Tribunal herself. The decision not to process the complaint was not made until after Ms. Wilberforce consented to it. Secondly, in September 2008 the Commission had no jurisdiction to accept the filing of new complaints.
The Tribunal accepted the Commission's evidence that a complaint was only considered filed after it had been assessed, but the timing of the filing was defined by when it had been received under the Commission's policies. If, in September, the assessment had been conducted and determined that the complaint was properly completed, it would have been considered to have been filed in May. However, without an assessment determining whether or not it was properly completed, it was not considered to have been filed.
So the filing of the complaint becomes Schrödinger's cat. Until it is looked at, the complaint can be considered both alive and dead. Though this is how particle physics appears to operate, I would argue that it isn't how our law should work.
It's worth noting that "accuracy and completeness" - the objectives of the assessment - can be regarded objectively, and are also clearly defined in the Commission's policies. It is not the case that a complaint can be considered both complete and incomplete at the same time, or accurate and inaccurate at the same time. If the complaint had some obvious deficiencies - unsigned or otherwise incomplete - that would have been a full answer to the suggestion that a complaint had been filed. But if one assumes that it was a properly completed complaint, received prior to the June 30 deadline, then it is difficult to see how the Commission had the discretion to not accept the filing of the complaint.
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This blog is not intended to, and does not, provide legal advice to any person in respect of any particular legal issue, and does not create a solicitor-client relationship with any readers, but rather provides general legal information. If you have a legal issue or possible legal issue, contact a lawyer.
Wednesday, October 5, 2011
Dance Instructor found not to be a "Key Employee"
I've occasionally discussed restrictive covenants before; what I haven't covered in much detail is the route that employers can occasionally go to prevent unfair competition by former employees who haven't signed restrictive covenants.
At common law, there is a concept of fiduciary duties, which is an obligation on one person to put another's interests ahead of his own. Professionals often owe their clients fiduciary obligations, and occasionally you get case law where a professional abused information received in confidence to their own advantage.
In the employment context, "key employees" may be considered to be fiduciaries of their employer, and are not permitted to use confidential information they acquired in their employment to unfairly compete with the former employer. A "key employee" is defined by the following non-exhaustive list:
At common law, there is a concept of fiduciary duties, which is an obligation on one person to put another's interests ahead of his own. Professionals often owe their clients fiduciary obligations, and occasionally you get case law where a professional abused information received in confidence to their own advantage.
In the employment context, "key employees" may be considered to be fiduciaries of their employer, and are not permitted to use confidential information they acquired in their employment to unfairly compete with the former employer. A "key employee" is defined by the following non-exhaustive list:
- An integral and indispensable component of the management team that is responsible for guiding the business affairs of the employer;
- Necessarily involved in the decision-making process; and
- Therefore, has broad access to confidential information that if disclosed would significantly impair the competitive advantages the former employer enjoyed.
Absent a restrictive covenant or fiduciary obligations, former employees are free to compete with former employers, including bringing to a new business the skills and knowledge acquired while serving the former employer. But restrictive covenants can limit that (if enforceable, which is not easy), and fiduciary obligations do as well in very similar ways.
In the recent case of Laplante v. Hennessy-Craibe, Laplante operated a dance studio in Cornwall and had employed Hennessy-Craibe as a dance instructor until she left to start her own studio. It appears that several students went with her. Laplante then sued and sought an interlocutory injunction preventing Hennessy-Craibe from soliciting current and former students.
This is surprisingly similar to Gatreau v. Arvelo (2004), also involving a defecting dance instructor, in this case from an employer in Brockville. I suppose Eastern Ontario must have a competitive industry for dance instruction. Similarly, in that case, the plaintiff alleged that the instructor was a fiduciary, but the judge rejected it.
In Laplante, even without referring to Gatreau, Justice Quigley came to the same conclusion: He did not see a serious issue to be tried, and felt that even if a trial judge ultimately found Hennessy-Craibe to be a fiduciary, Laplante could be compensated through an award of damages; therefore, he declined to award the injunction sought.
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There is also previous jurisprudence considering whether or not written restrictive covenants can be enforced against athletic instructors. Of course, every case is unique on its facts and the specific language of these clauses, but Courts have gone both ways when determining whether or not an athletic school is protecting 'legitimate proprietary interests' with restrictive covenants:
In Gold in the Net Hockey School Inc. v. Netpower Inc., a 2007 Alberta case, the Court found that a non-competition clause did not protect a hockey school's legitimate proprietary interests.
In Moffatt v. Sanchez, a 2004 Ontario decision involving a Tae Kwon Do academy, a non-competition clause was enforced against the former head instructor.
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This blog is not intended to, and does not, provide legal advice to any person in respect of any particular legal issue, and does not create a solicitor-client relationship with any readers, but rather provides general legal information. If you have a legal issue or possible legal issue, contact a lawyer.
Monday, October 3, 2011
Announcing My New Practice
I am proud to announce that I have now opened my own practice, in assocation with the lawyers of Swanick & Associates, in Don Mills. For any employees or employers in Toronto or York Region (or further afield but willing to make the commute) who require or might require a lawyer's assistance, I encourage you to contact me for detailed information on services and pricing. (See the disclaimer at the bottom of this post before emailing.)
Services include (but aren't limited to)...
For employers:
I am a firm believer in the "a stitch in time saves nine" approach to labour and employment law - with good proactive advice up front, you can often limit your liabilities and significantly reduce legal expenses. Good written employment contracts and policies, implemented correctly, can add a lot of value.
For non-unionized employees:
If you've been fired or mistreated by your employer, it often feels like a betrayal, and can be so stressful and demoralizing that it's hard to face the situation. I can help you understand your rights and - if necessary - pursue them. Where money is stretched thin, as it often is in these situations, I may be prepared to discuss alternative billing arrangements.
*****
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.
While this post advertises legal services, I make no guarantees that I will be able to take on your file. Until and unless I agree to be retained, I am not your lawyer. Please do not send confidential information in an initial email to me. Further, if you do not receive a response to an email in a timely fashion, assume that I have not received said email.
Services include (but aren't limited to)...
For employers:
- Wrongful dismissal defence
- Dismissal consultations
- Defending proceedings before the Human Rights Tribunal, the Ontario Labour Relations Board, and others
- Labour Arbitrations
- Policy development and consultations (including Bill 168 compliance, for those employers who still haven't caught up)
- Drafting of employment contracts
- Collective agreement consultations
I am a firm believer in the "a stitch in time saves nine" approach to labour and employment law - with good proactive advice up front, you can often limit your liabilities and significantly reduce legal expenses. Good written employment contracts and policies, implemented correctly, can add a lot of value.
For non-unionized employees:
- Wrongful dismissal consultations and litigation
- Constructive dismissal consultations
- Proceedings before the Human Rights Tribunal, the Ontario Labour Relations Board, and others
If you've been fired or mistreated by your employer, it often feels like a betrayal, and can be so stressful and demoralizing that it's hard to face the situation. I can help you understand your rights and - if necessary - pursue them. Where money is stretched thin, as it often is in these situations, I may be prepared to discuss alternative billing arrangements.
*****
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.
While this post advertises legal services, I make no guarantees that I will be able to take on your file. Until and unless I agree to be retained, I am not your lawyer. Please do not send confidential information in an initial email to me. Further, if you do not receive a response to an email in a timely fashion, assume that I have not received said email.
Wednesday, September 28, 2011
Third Party Insurers can (sometimes) rely on Post-Employment Releases
An employee always has to be careful when signing a full and final release, for a few reasons. The recent decision in Zelsman v. Meridian Credit Union is an excellent example of this.
Ms. Zelsman's employment was terminated, following which she applied for long-term disability benefits to the LTD insurer, Great West Life. This application was denied. Ms. Zelsman proceeded to litigate the termination of her employment via the Human Rights Tribunal, resulting in a settlement achieved at the mediation, involving a payment to Ms. Zelsman of $90,000, which appears largely to be compensation for the loss of her LTD insurance due to the denial of the LTD benefits.
Then, retaining a different lawyer, Ms. Zelsman appealed the denial of her LTD benefits, and was eventually successful...however, after granting her LTD application, resulting in a hefty lump sum of retroactive benefits in excess of $46,000, Great West Life found out about the full and final release, and - moreover - found out that it contained a term releasing Great West Life from any such liabilities, and reversed the payment.
Normally, if you're not a party to a contract, you don't get to benefit from it. In this context, however, because the release so expressly released Great West Life, the Court was prepared to conclude that Great West Life could rely on it; in other words, the LTD benefits were toast.
So how does this happen? The biggest question is this: How did Ms. Zelsman get to the point of litigating against Great West Life after signing such an express release? Indeed, after getting the LTD benefits, Ms. Zelsman would have been happy to resile from the minutes of settlement, but that's not usually possible to do - particularly without $90,000 cash in hand to refund the employer.
Every management-side lawyer appears to have a different way of dealing with Minutes of Settlement and Full and Final Releases, but the one consistent fact is that they are all quite comprehensive, releasing anything and everything. In fact, usually the releases go well beyond the subject-matter of the current dispute, which adds real value to them for employers, but the consequence is that employee-side counsel have to be careful to ensure that their clients understand that they can't proceed with other claims afterward.
Indeed, given the extremely final nature of these Full and Final Releases, I've occasionally had to go back to employer counsel to get exemptions inserted for such things as pensions - so we're dealing with pay in lieu of notice, but the employee still has a tidy sum tied up in an employer pension plan to be dealt with (which usually isn't in dispute, so my client doesn't need to pay me to help deal with it). The response I usually get is "Well, of course the intention isn't to waive these entitlements", whereupon I respond, "Then you won't mind expressly saying so."
Simply, these releases envision a completely cut cord, saying "We're done dealing with you, and we won't deal with you again." If there is an unforeseen dispute down the road, I don't want these releases getting in the way. But that isn't always the case. So the releases have to be tailored.
Most of the time, it's a matter of saying to the client, "If you sign this, you don't get to come back and sue for more, you don't get to make a Human Rights Application, you don't get to make a claim for any more wages due, etc." Every so often, this shocks the client, because they thought they'd hired a lawyer just to deal with one isolated aspect of their relationship with their employer, and thought very cleverly that they'd get money now then come back for more money later on a different aspect.
In this case, the first lawyer assisting with Ms. Zelsman knew that there had been an unsuccessful application for LTD benefits, and presumably opined that it was better to go after the employer for it than to take on the insurance company. The second lawyer didn't realize that a settlement had been reached, and agreed to take on the insurance company. (They both were pretty successful in their respective tasks, it seems, but it was really one or the other.)
This is the other thing that can happen when you change counsel too many times: Facts get lost. It takes time, effort, and often money for your new lawyer to achieve the same level of familiarity with the file that your previous lawyer had.
Was Ms. Zelsman not told that the Minutes of Settlement would prevent her from going after Great West Life? Perhaps she was told, but didn't fully appreciate it? Or did at the time, but forgot? Or thought that she'd pull a fast one and try to proceed with her claim anyways (she very nearly pulled it off, after all)? As outside observers, we can't know. What seems almost certain is that, had she gone back to her first lawyer afterwards and said, "Now I want to go after the insurer", the first lawyer would have said, "Sorry, with the release you signed, you really can't." (Maybe this happened, and the client didn't listen. Who knows.) But retaining a second lawyer means increased legal fees of her own appealing the denial, increased legal fees (with a third lawyer) in making the Court Application, plus there's now a good chance that she'll end up having to pay several thousand dollars toward the insurer's legal fees.
The lesson to clients is: Tell your lawyer everything, and make sure you listen to what they say. The lesson to lawyers is not to take anything for granted. Maybe you think that the client has accepted your advice not to go after the insurer, but you never know if in the back of their own minds they're thinking that they'll be clever and try for both.
*****
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.
Ms. Zelsman's employment was terminated, following which she applied for long-term disability benefits to the LTD insurer, Great West Life. This application was denied. Ms. Zelsman proceeded to litigate the termination of her employment via the Human Rights Tribunal, resulting in a settlement achieved at the mediation, involving a payment to Ms. Zelsman of $90,000, which appears largely to be compensation for the loss of her LTD insurance due to the denial of the LTD benefits.
Then, retaining a different lawyer, Ms. Zelsman appealed the denial of her LTD benefits, and was eventually successful...however, after granting her LTD application, resulting in a hefty lump sum of retroactive benefits in excess of $46,000, Great West Life found out about the full and final release, and - moreover - found out that it contained a term releasing Great West Life from any such liabilities, and reversed the payment.
Normally, if you're not a party to a contract, you don't get to benefit from it. In this context, however, because the release so expressly released Great West Life, the Court was prepared to conclude that Great West Life could rely on it; in other words, the LTD benefits were toast.
So how does this happen? The biggest question is this: How did Ms. Zelsman get to the point of litigating against Great West Life after signing such an express release? Indeed, after getting the LTD benefits, Ms. Zelsman would have been happy to resile from the minutes of settlement, but that's not usually possible to do - particularly without $90,000 cash in hand to refund the employer.
Every management-side lawyer appears to have a different way of dealing with Minutes of Settlement and Full and Final Releases, but the one consistent fact is that they are all quite comprehensive, releasing anything and everything. In fact, usually the releases go well beyond the subject-matter of the current dispute, which adds real value to them for employers, but the consequence is that employee-side counsel have to be careful to ensure that their clients understand that they can't proceed with other claims afterward.
Indeed, given the extremely final nature of these Full and Final Releases, I've occasionally had to go back to employer counsel to get exemptions inserted for such things as pensions - so we're dealing with pay in lieu of notice, but the employee still has a tidy sum tied up in an employer pension plan to be dealt with (which usually isn't in dispute, so my client doesn't need to pay me to help deal with it). The response I usually get is "Well, of course the intention isn't to waive these entitlements", whereupon I respond, "Then you won't mind expressly saying so."
Simply, these releases envision a completely cut cord, saying "We're done dealing with you, and we won't deal with you again." If there is an unforeseen dispute down the road, I don't want these releases getting in the way. But that isn't always the case. So the releases have to be tailored.
Most of the time, it's a matter of saying to the client, "If you sign this, you don't get to come back and sue for more, you don't get to make a Human Rights Application, you don't get to make a claim for any more wages due, etc." Every so often, this shocks the client, because they thought they'd hired a lawyer just to deal with one isolated aspect of their relationship with their employer, and thought very cleverly that they'd get money now then come back for more money later on a different aspect.
In this case, the first lawyer assisting with Ms. Zelsman knew that there had been an unsuccessful application for LTD benefits, and presumably opined that it was better to go after the employer for it than to take on the insurance company. The second lawyer didn't realize that a settlement had been reached, and agreed to take on the insurance company. (They both were pretty successful in their respective tasks, it seems, but it was really one or the other.)
This is the other thing that can happen when you change counsel too many times: Facts get lost. It takes time, effort, and often money for your new lawyer to achieve the same level of familiarity with the file that your previous lawyer had.
Was Ms. Zelsman not told that the Minutes of Settlement would prevent her from going after Great West Life? Perhaps she was told, but didn't fully appreciate it? Or did at the time, but forgot? Or thought that she'd pull a fast one and try to proceed with her claim anyways (she very nearly pulled it off, after all)? As outside observers, we can't know. What seems almost certain is that, had she gone back to her first lawyer afterwards and said, "Now I want to go after the insurer", the first lawyer would have said, "Sorry, with the release you signed, you really can't." (Maybe this happened, and the client didn't listen. Who knows.) But retaining a second lawyer means increased legal fees of her own appealing the denial, increased legal fees (with a third lawyer) in making the Court Application, plus there's now a good chance that she'll end up having to pay several thousand dollars toward the insurer's legal fees.
The lesson to clients is: Tell your lawyer everything, and make sure you listen to what they say. The lesson to lawyers is not to take anything for granted. Maybe you think that the client has accepted your advice not to go after the insurer, but you never know if in the back of their own minds they're thinking that they'll be clever and try for both.
*****
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.
Sunday, September 25, 2011
Withholding Unearned Vacation from an Employee's Final Pay
This topic recently came up in a discussion group I'm part of on LinkedIn, and I thought it deserved some attention on this blog. Essentially, the question is this: If your employee takes unearned paid vacation then quits before earning it, can you withhold the pay from his final pay cheque?
The answer is, in true lawyer's form, a firm "Maybe".
It happens often enough, sometimes because an employer just wants to be generous, but more often where employees are permitted to take vacation in the year in which it is earned. Suppose I earn three weeks of vacation per calendar year, and am expected to take it in the year earned: Unless my last week of the calendar year is a vacation week (which would unduly restrict the scheduling freedom of both the employee and employer), it's inevitable that some of my vacation will be pre-taken.
So supposing I took all three weeks of vacation in the first part of the year, and quit at the end of August...I've received three weeks of vacation pay, but only earned two weeks, so I've gotten a week's pay out of my employer that I'm not entitled to. Of course, my last pay will usually contain a week or two (or more) worth of wages, so my employer can just take what I'm owed out of that, right?
Usually, the Ontario Labour Relations Board is really finicky about employers withholding sums owing out of money owed. There are certain circumstances in which it is permitted. But outside of those specific circumstances, it is not. So there have been cases in which the employer has suspected an employee of theft, fraud, or damaging employer property, and fired the employee, withholding any wages due as partial compensation for the damages the employer has suffered. The employee goes to the Ministry of Labour, and the Ministry then tells the employer something to the effect of, "As far as payment for wages earned goes, we don't care if he walked away with a full cash register; you still have to pay him the money. If you want to sue him separately, that's your own business." And the OLRB will come to the same conclusion.
Withholding an overpayment of vacation pay is different, however, because vacation pay is *also* a form of wages. In essence, cutting my vacation overpayment from my last pay is like saying, "Oh, we've already paid you that portion of your last pay." And the OLRB will frequently accept that.
But not always. There's a line of cases in which the employer never suggested that overpayments of vacation pay would be recovered until after the employee made a complaint to the Ministry regarding other unpaid amounts - essentially making an ex post facto assertion that their obligations were satisfied or offset by those vacation overpayments. The OLRB rejected the employer's asserted entitlement to withhold the overpayment in these cases, and there's a certain logic to it. When the relationship was working well, the employer was perfectly happy to let the employee take a couple of extra vacation days in a year without feeling the need to conduct a reconciliation of it. It's the same underlying logic as a discretionary bonus - you give the employee more than they're entitled to because you're happy with the job they're doing, and you want them to be happy to stay in the job. Then, down the road, the relationship breaks down, and the employer goes back and says, "Oh, you remember all those perks I gave you? I want you to compensate me for them now." It seems wrong.
There's an easy way around this, however. Keep track of vacation entitlements on a regular basis. Maintain a good vacation policy that asserts that overpayments must be reconciled, and will be deducted from the employee's final pay if the employee leaves before earning the vacation taken, and have the employee agree to that policy. When an employee requests vacation time that isn't already earned, make sure that, if you approve the request, the approval contains a reminder of the policy, that if they leave before earning the vacation pay they'll be responsible for the overpayment and it will be deducted from their wages.
I've heard HR and bookkeeping professionals say that this sort of policy is *necessary* to recover an overpayment - i.e. it's inappropriate to withhold an overpayment unless you have such a written policy in place or told the employee in writing that it would be the consequence. That's not strictly true. It probably arises from the Carlisle case, in which the employee was entitled not to have a deduction for vacation pay that she overtook *right before her effective resignation*, and the OLRB justified the "harsh" result by pointing out that the employer could have avoided the situation through proper use of a policy. (Or by refusing the vacation she had requested after putting in her two weeks notice.)
However, I would opine that the current state of the law is set out more concisely by Brown Bear Day Care case, in which there was an 'understanding' of pre-taking vacation, once discussed in a staff meeting but never reduced to writing. The Board summarized the existing case law on the point and came to the following conclusion:
*****
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 answer is, in true lawyer's form, a firm "Maybe".
It happens often enough, sometimes because an employer just wants to be generous, but more often where employees are permitted to take vacation in the year in which it is earned. Suppose I earn three weeks of vacation per calendar year, and am expected to take it in the year earned: Unless my last week of the calendar year is a vacation week (which would unduly restrict the scheduling freedom of both the employee and employer), it's inevitable that some of my vacation will be pre-taken.
So supposing I took all three weeks of vacation in the first part of the year, and quit at the end of August...I've received three weeks of vacation pay, but only earned two weeks, so I've gotten a week's pay out of my employer that I'm not entitled to. Of course, my last pay will usually contain a week or two (or more) worth of wages, so my employer can just take what I'm owed out of that, right?
Usually, the Ontario Labour Relations Board is really finicky about employers withholding sums owing out of money owed. There are certain circumstances in which it is permitted. But outside of those specific circumstances, it is not. So there have been cases in which the employer has suspected an employee of theft, fraud, or damaging employer property, and fired the employee, withholding any wages due as partial compensation for the damages the employer has suffered. The employee goes to the Ministry of Labour, and the Ministry then tells the employer something to the effect of, "As far as payment for wages earned goes, we don't care if he walked away with a full cash register; you still have to pay him the money. If you want to sue him separately, that's your own business." And the OLRB will come to the same conclusion.
Withholding an overpayment of vacation pay is different, however, because vacation pay is *also* a form of wages. In essence, cutting my vacation overpayment from my last pay is like saying, "Oh, we've already paid you that portion of your last pay." And the OLRB will frequently accept that.
But not always. There's a line of cases in which the employer never suggested that overpayments of vacation pay would be recovered until after the employee made a complaint to the Ministry regarding other unpaid amounts - essentially making an ex post facto assertion that their obligations were satisfied or offset by those vacation overpayments. The OLRB rejected the employer's asserted entitlement to withhold the overpayment in these cases, and there's a certain logic to it. When the relationship was working well, the employer was perfectly happy to let the employee take a couple of extra vacation days in a year without feeling the need to conduct a reconciliation of it. It's the same underlying logic as a discretionary bonus - you give the employee more than they're entitled to because you're happy with the job they're doing, and you want them to be happy to stay in the job. Then, down the road, the relationship breaks down, and the employer goes back and says, "Oh, you remember all those perks I gave you? I want you to compensate me for them now." It seems wrong.
There's an easy way around this, however. Keep track of vacation entitlements on a regular basis. Maintain a good vacation policy that asserts that overpayments must be reconciled, and will be deducted from the employee's final pay if the employee leaves before earning the vacation taken, and have the employee agree to that policy. When an employee requests vacation time that isn't already earned, make sure that, if you approve the request, the approval contains a reminder of the policy, that if they leave before earning the vacation pay they'll be responsible for the overpayment and it will be deducted from their wages.
I've heard HR and bookkeeping professionals say that this sort of policy is *necessary* to recover an overpayment - i.e. it's inappropriate to withhold an overpayment unless you have such a written policy in place or told the employee in writing that it would be the consequence. That's not strictly true. It probably arises from the Carlisle case, in which the employee was entitled not to have a deduction for vacation pay that she overtook *right before her effective resignation*, and the OLRB justified the "harsh" result by pointing out that the employer could have avoided the situation through proper use of a policy. (Or by refusing the vacation she had requested after putting in her two weeks notice.)
However, I would opine that the current state of the law is set out more concisely by Brown Bear Day Care case, in which there was an 'understanding' of pre-taking vacation, once discussed in a staff meeting but never reduced to writing. The Board summarized the existing case law on the point and came to the following conclusion:
The circumstances before me most closely resemble the situation in MenuPalace. On the evidence before me, Hollander (and all other employees) were made aware well before Hollander’s employment ended that there would be an annual reconciliation of vacation days taken and vacation days earned. It cannot be said that she was lulled into thinking that the overpayment would not be recovered, which is a consideration that seems to have affected the decisions in Modern Niagara and Hillis, and which also finds currency in the comment in MenuPalace that the reconciliation of the overpayment must occur “within a reasonable time”. I find that the Employer here was permitted recover the overpayment it had made to Hollander, and did not require her written authorization to do so. On the basis of the same reasoning, it was also permitted to recover the overpayment it had made to Hollander in respect of paid sick leave, and did not require her authorization to do so.
*****
This blog is not intended to, and does not, provide legal advice to any person in respect of any particular legal issue, and does not create a solicitor-client relationship with any readers, but rather provides general legal information. If you have a legal issue or possible legal issue, contact a lawyer.
Tuesday, September 20, 2011
When will the HRTO refuse to defer an Application?
"The Tribunal will generally defer an application where there is an ongoing grievance under a collective agreement based on the same facts and issues."
That sentence has been part of literally hundreds of decisions from the Human Rights Tribunal of Ontario. Because the Supreme Court (in the Parry Sound decision) found in 2003 that labour arbitrators have parallel jurisdiction to interpret and apply human rights legislation, it is common practice for any bargaining unit member feeling that their human rights have been violated to both grieve the issue and make an application to the HRTO. This is legitimate. However, because the HRTO doesn't want to proceed with parallel proceedings, it takes the position that, if there's a grievance moving forward, it will let the grievance go first.
There's a certain logic to this. Firstly, grievances often include matters above and beyond human rights-based allegations, which the HRTO can't deal with. So if only one proceeding needs to proceed, it will usually be the grievance. Secondly, the HRTO is well-positioned to evaluate after the completion of the grievance process whether or not there are outstanding human rights issues that need to be dealt with. Thirdly, labour arbitrators are privately paid by the parties (i.e. the union and the employer), whereas the HRTO is government-funded with limited resources, so to the extent that it can defer part of its caseload to others, it will.
To applicants, however, there are certain advantages to the HRTO. Yes, they have the union to assist them in the grievance process, but there are also free legal services available to applicants to the HRTO. Ultimately, the big difference is that the individual applicant drives an HRTO proceeding, whereas it's the union (taking into account the needs of the grievor but also the rest of the bargaining unit) driving grievance proceedings.
So for a grievor who has grown disillusioned with his or her union representation (which happens fairly frequently), it's a bit of a kick in the face that they are forced to proceed with the grievance before they can move forward with the HRTO application. And as an added bonus, if the union and the employer reach a settlement of the grievance - even over the objections of the grievor - there is a good chance that the HRTO will conclude that the subject matter of the proceeding has been "appropriately dealt with", and not proceed with the application. (See Rysinski v. Aecon Industrial.)
It is in this context that I find the recent HRTO decision in Dalrymple v. 412506 Ontario Ltd. interesting. Ms. Dalrymple worked for St. Jacques Nursing Home, and her claims are apparently as follows: On June 30th, 2009, she suffered an injury in the workplace, and provided a doctor's note substantiating her absence from work to August 10th, at which point there was a follow-up appointment scheduled. Due to a family emergency, she was unable to attend that appointment, but ended up getting back to the doctor 3 days later for a note addressing the relevant period. In the mean time, the employer immediately jumped on her temporarily-unsubstantiated absence and terminated her employment. After she began a Labour Market Re-entry program under the WSIA, the employer suddenly contacted her (no doubt finally having received better legal advice) to offer her accommodated work, which compromised her position in the Labour Market Re-entry program.
Ms. Dalrymple initiated a grievance in September 2009. There is no word as to what happened to the grievance since then, except that the union has indicated that it has now decided to refer the grievance to arbitration and the employer has agreed to waive the timeframes for referral of the grievance. The HRTO decision notes that Ms. Dalrymple "asserts that the union has not represented her very well." In June 2010, she commenced the HRTO application.
Now, with the grievance potentially moving to arbitration (as well as some related issues that may be going to WSIAT), the employer has asked to defer the HRTO Application. And those who may have thought that deferral is automatic...have been proven wrong.
*****
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.
That sentence has been part of literally hundreds of decisions from the Human Rights Tribunal of Ontario. Because the Supreme Court (in the Parry Sound decision) found in 2003 that labour arbitrators have parallel jurisdiction to interpret and apply human rights legislation, it is common practice for any bargaining unit member feeling that their human rights have been violated to both grieve the issue and make an application to the HRTO. This is legitimate. However, because the HRTO doesn't want to proceed with parallel proceedings, it takes the position that, if there's a grievance moving forward, it will let the grievance go first.
There's a certain logic to this. Firstly, grievances often include matters above and beyond human rights-based allegations, which the HRTO can't deal with. So if only one proceeding needs to proceed, it will usually be the grievance. Secondly, the HRTO is well-positioned to evaluate after the completion of the grievance process whether or not there are outstanding human rights issues that need to be dealt with. Thirdly, labour arbitrators are privately paid by the parties (i.e. the union and the employer), whereas the HRTO is government-funded with limited resources, so to the extent that it can defer part of its caseload to others, it will.
To applicants, however, there are certain advantages to the HRTO. Yes, they have the union to assist them in the grievance process, but there are also free legal services available to applicants to the HRTO. Ultimately, the big difference is that the individual applicant drives an HRTO proceeding, whereas it's the union (taking into account the needs of the grievor but also the rest of the bargaining unit) driving grievance proceedings.
So for a grievor who has grown disillusioned with his or her union representation (which happens fairly frequently), it's a bit of a kick in the face that they are forced to proceed with the grievance before they can move forward with the HRTO application. And as an added bonus, if the union and the employer reach a settlement of the grievance - even over the objections of the grievor - there is a good chance that the HRTO will conclude that the subject matter of the proceeding has been "appropriately dealt with", and not proceed with the application. (See Rysinski v. Aecon Industrial.)
It is in this context that I find the recent HRTO decision in Dalrymple v. 412506 Ontario Ltd. interesting. Ms. Dalrymple worked for St. Jacques Nursing Home, and her claims are apparently as follows: On June 30th, 2009, she suffered an injury in the workplace, and provided a doctor's note substantiating her absence from work to August 10th, at which point there was a follow-up appointment scheduled. Due to a family emergency, she was unable to attend that appointment, but ended up getting back to the doctor 3 days later for a note addressing the relevant period. In the mean time, the employer immediately jumped on her temporarily-unsubstantiated absence and terminated her employment. After she began a Labour Market Re-entry program under the WSIA, the employer suddenly contacted her (no doubt finally having received better legal advice) to offer her accommodated work, which compromised her position in the Labour Market Re-entry program.
Ms. Dalrymple initiated a grievance in September 2009. There is no word as to what happened to the grievance since then, except that the union has indicated that it has now decided to refer the grievance to arbitration and the employer has agreed to waive the timeframes for referral of the grievance. The HRTO decision notes that Ms. Dalrymple "asserts that the union has not represented her very well." In June 2010, she commenced the HRTO application.
Now, with the grievance potentially moving to arbitration (as well as some related issues that may be going to WSIAT), the employer has asked to defer the HRTO Application. And those who may have thought that deferral is automatic...have been proven wrong.
[15] I do not find it appropriate to defer this Application because of the outstanding grievance. The grievance was filed almost two years ago and the union has recently advised that it has decided to refer the grievance to arbitration. As of the date of this Interim Decision, the Tribunal has not been advised of any date set for arbitration and has not been provided with documentation showing that the grievance has in fact been referred to arbitration.
[16] The referral to arbitration is also well after the Tribunal’s process was initiated. The parties have filed substantive pleadings and a mediation has been held. At this stage of the Tribunal’s proceedings I do not find it appropriate to defer the Application because of the outstanding grievance.
*****
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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