Employment Law in Ontario

Legal Update: As a result of recent changes to the regulations under the Employment Standards Act, 2000, employers in Ontario are now required to pay both statutory notice and severance to employees whose employment has been terminated due to frustration of contract (employment) arising from illness or injury.

 

Termination

How do the courts dealing in employment law decide how much severance you will get, your entitlement to reasonable notice of your termination? A court may apply an appropriate approach because it takes into consideration all of the situation’s unique circumstances.

The most pivotal factors and items that a court will look at when using this approach:

• The type of employment and position held. If you perform more managerial or supervisory duties, you are entitled to more severance pay. If your job or position is highly specialized and it is difficult to replace you, you will receive more severance as well.

• The length of your employment with the employer. If you have been with the company for a longer period, you are entitled to more severance. However, the length itself is not always definitive. Some short-term employees can be entitled to substantial severance packages depending on the other three factors of the test or if you were induced to leave a secure job.

• Your age at the time of termination of your employment. The courts generally take the view that older employees will have a greater difficulty finding a job similar to the one they were just fired from. As a result, courts usually award older employees more severance.

• The availability of similar employment that matches your experience, training and qualifications. Here, a court will consider all of the circumstances that are either preventing or helping you to find another, similar job.

• When it comes to assessing how much money you’re going to get once you’ve been terminated, you should consult with an employment lawyer  before agreeing to anything that may affect your legal entitlements.
   

Wrongful Dismissal

A 1997 Supreme Court of Canada decision, Wallace v. United Grain Growers Ltd., [1997] 3 S.C.R. 701, 1997 CanLII 332 (which is considered to be one of the most influential employment law decisions to date) established the standard requiring employers to treat employees with good faith and fair dealing at the time of their termination.

The case involved a 59-year-old employee who was dismissed without explanation after 14 years as his employer’s top salesperson. Wallace had been told at the time of his hiring that he could remain at the job until retirement if he performed as expected. However, when he sued for wrongful dismissal, the company responded by claiming he  had failed to carry out his duties and had been insubordinate. For Wallace, the employee, who was unable to find another similar job, the unexpected dismissal led him to suffer depression and require psychiatric treatment.

As a result of this case, a court will now consider an employer’s insensitive conduct and dealings with the employee as a factor when awarding damages to a wrongfully dismissed employee. Some examples of insensitive / bad faith conduct at the time of termination include:

• not being honest, reasonable or straightforward with the employee;
• misleading the employee;
• humiliating or embarrassing the employee;
• making unfounded allegations or negative public statements about the employee;
• falsely assuring the employee continued job security;
• refusing to produce a letter of reference or record of employment;
• not returning any personal property left at the office;
• firing the employee immediately upon returning from a disability leave;
• withholding money that is owed to the employee at the time of termination.
   

Constructive Dismissal

Changes in employment that frequently give rise to constructive dismissal claims are outlined below:

• Reduction in remuneration / pay
  -the employer is refusing to recognize the "agreement" it made with the employee
  -courts review all changes to remuneration, benefits, bonuses, commissions and profit-sharing to determine whether an employee will likely earn less overall income in the future
  -unless the employer can prove the employee consented to the change, it is generally considered constructive dismissal
• Demotion
  -some major demotions can be considered as constructive dismissal and it is suggested that you should seek legal counsel if you fell this may be the case
  -courts look at such factors as the substance of the new position, not just the job title; the range of salaries of the previous and new position as well as the organization's general career path and where the position fits within its plan
• Change in the responsibilities at work
  -if a person is hired to fill a specific job function, they usually cannot be forced to assume another one
• Geographic transfer
  -if an organization has stated that employees may have to relocate, or it is obvious from the nature of the position, constructive dismissal would not be found in this matter
   

Long Term Disability Benefits

Long Term Disability (LTD) usually insures any income payable from any job for pay or profit and is usually part of a benefits package supplied by employers. Recent court decisions, dealing with job loss and LTD, have found employers liable for providing long-term disability benefits to employees terminated before or while they experienced a disability:

• Asselstine v. Manufacturers Life Insurance Co. (2005 B.C. C.A.): The employee received notice of termination after being diagnosed with multiple sclerosis and was refused LTD benefits. The plaintiff (employee) was awarded $35,000 in aggravated damages and $150,000 in punitive damages.
• Re: Stelco Inc. (2005 Ont. S.C.J.): The employee, suffering from various health problems, was dismissed for chronic absenteeism. Short and long-term disability benefits were refused during the period of salary continuation. She was awarded 12 months' notice and LTD benefits.
• Zorn-Smith v. Bank of Montreal (2003 Ont. S.C.J.): The employee became ill from overwork and went on disability. The employer's physician declared her fit to return to work, however she refused. Plaintiff was awarded 16 months' notice and $15,000 for the infliction of mental suffering.
• Prinzo v. Baycrest Centre for Geriatric Care (2002 Ont. C.A.): The employee sustained injuries after falling in the company's parking lot. The employee was harassed and intimidated into going back to work, where she was terminated. The plaintiff was awarded 12 months' notice and $15,000 for mental distress.
• Keays v. Honda Inc. (2005 Ont. S.C.J.): The employee suffered from chronic fatigue syndrome and was terminated from employment. The employer misrepresented medical opinions, arranged a medical assessment in bad faith, and terminated the employee's disability accommodations. The plaintiff (employee) was awarded 24 months' notice, which included a nine-month Wallace award, and $500,000 in punitive damages.

Employment Contract

Employment Contracts may not be necessarily in writing. You should note that Written Employment Contracts however may not be enforceable. The enforceability of the contract of employment may be challenged on a number of basis and we suggest that you seek legal counsel to ascertain the validity of your employment contract. Usually terms of an employment contract come from a multitude of sources including:

• All written communication between you and your employer that deals with your employment
• Oral representations made by your employer
• Certain legislation affecting the workplace, including the Ontario Employment Standards and The Human Rights Act
• Common Law - which are the legal terms implied by the courts
• Company policies and past practices of your employer, including bonuses, vacation, relocation, annual reviews, performance problems, and other items related to your performance and position.
• Industry standards

Sexual Harassment

The Ontario Human Rights Commission identifies several kinds of sexual harassment.

Sexual harassment may occur when:

• Someone says or does things to you of a sexual nature which you do not welcome. This includes behaviour that a person should know you do not expect, want or welcome.

• A person having authority or power over you ( manager, supervisor, etc. )makes sexual suggestions or demands that you do not want or welcome.

• A person having authority or power denies you something important, such as a promotion or review, punishes you or threatens to do something to you for refusing a sexual request or advance.

The information contained at this web site is provided for reference purposes only and is not to be interpreted in any way as legal advice. You should seek professional legal counsel for your specific employment situation or job loss.