Wrongful Resignation: Notice means notice!

April 10, 2014

Lisa Gallivan and Alison Strachan

Is an employee required to give notice of his or her resignation? The BlackBerry Limited v. Marineau-Mes, 2014 ONSC 1790 decision we tweeted about last week  @SM_EmployerLaw  considered this issue.  This blog provides more detail.

As always, our blog is a snapshot of what the court considered and decided. We encourage you to read the full-text of the decision for additional insight and information.

What happened

In the fall of 2013, BlackBerry Limited (“BlackBerry”) offered an employee, Marineau-Mes, a promotion to Executive Vice President. In this role, he would be responsible for approximately 3,000 employees including 11 Vice Presidents and 70 Directors. He signed a contract for the new role on October 16, 2013 that required he provide six months notice if he wished to resign from this position:

4.1 Termination by You – You may resign from employment with BlackBerry at any time upon providing six (6) months prior written notice. You will continue to provide active service during the notice period, unless the requirement for active employment is expressly waived in whole or in part by BlackBerry. Upon resignation, you will have no entitlement to compensation or damages of any kind except for unpaid base salary for the six month notice period, vacation earned to the Date of Termination (as defined in paragraph 4.5(b)[1]below) and reasonable unpaid expenses in accordance with prevailing BlackBerry policies. All of your benefits will cease upon the Date of Termination. For greater certainty, termination by you for Good Reason (as defined in paragraph 4.5(b) below) will not constitute a voluntary resignation for the purpose of this subsection 4.1.

Shortly after the contract was signed, BlackBerry, began experiencing economic challenges. A new CEO was appointed in November 2013. The new CEO advised  Marineau-Mes – whose promotion had not been announced – that his role might have a narrower scope than originally contemplated.

In December 2013, Marineau-Mes was offered the position of Vice President Core OS at Apple Inc.   In this position he would be involved in the development of software for the company’s operating system. On December 23, 2013, Marineau-Mes provided written notice of his resignation to BlackBerry.  He advised the next day that he would likely be going to California to work at Apple within two months’.

BlackBerry reminded Marineau-Mes of the “notice” obligations under his contract (4.1above) that required him to provide six months’ advance notice of his intention to resign.  When BlackBerry met with resistance, it filed an application for a declaration that the contract was binding and expired on June 23, 2014.

How did the employee respond?

The employee argued that the contract was not valid because:

  • BlackBerry’s remedy was an action for damages;
  • The contract offended the Ontario Employment Standards Act;
  • He did not assume the duties of Executive Vice President;
  • The six month notice period was the equivalent of a non-compete covenant; and
  • He had “Good Reason” to terminate the Employment Agreement.

The court did not agree and found that:

  • BlackBerry was not seeking an injunction, but was seeking a declaration that the notice period was effective to June 23, 2014;
  • There was no Employment Standards Act issue – BlackBerry did not end the respondent’s employment, but it might very well have required his services before the notice period expired – the provisions of the contract constituted a reasonable notice requirement given the industry and the respondent’s senior position;
  • The respondent had assumed the duties of Executive Vice President – he received a pay increase commensurate with his promotion and although the announcement of his promotion was delayed given that a promotion freeze was in place, he was congratulated by colleagues and throughout the fall of 2013 played an important part on BlackBerry’s team.
  • The notice period was not a non-compete covenant. It was part of a written employment agreement used in an industry so that companies like BlackBerry could protect themselves. Even if the notice period constituted a non-competition clause, reasonable competition clauses are enforceable and the notice period in the employment agreement was not offensive or overreaching, but reasonable.
  • The employee did not have “Good Reason” to terminate the agreement – requiring the respondent to assist with his transition out of the company instead of performing his regular duties did not amount to a material and detrimental alteration.

As a result of the court’s findings, BlackBerry was successful in obtaining a declaration that the contract was binding on the parties.

What this means to you

This will not be a clause that every employer should have.  However, if you have employees that you must gradually transition out of your company when they resign, you may want to consider a resignation clause with a reasonable resignation period similar to the BlackBerry employment agreement. This decision acknowledges that some companies may need to protect themselves from the abrupt departure of senior executive level employees. The employee in this case had been a long term employee of a company acquired by BlackBerry in 2010 which would suggest that there was a need for a reasonable period of transition out of the company, given the knowledge of the industry acquired by the employee over that period of time. The employee also acknowledged that he had read, evaluated and discussed the agreement with his personal advisors and with representatives of BlackBerry.

  • If a transition period is necessary for your organization, consider what would be reasonable and draft a resignation notice accordingly;
  • The longer the employment and the more senior the employee, the more likely a longer resignation period will survive judicial scrutiny; and
  • Always provide an employee with an opportunity to review the details, especially the employee’s obligations, of an employment agreement with a personal advisor.

Lisa Gallivan and Alison Strachan

Is an employee required to give notice of his or her resignation? The BlackBerry Limited v. Marineau-Mes, 2014 ONSC 1790 decision we tweeted about last week  @SM_EmployerLaw  considered this issue.  This blog provides more detail.

As always, our blog is a snapshot of what the court considered and decided. We encourage you to read the full-text of the decision for additional insight and information.

Stewart McKelvey Tweets

Stop Recommending Employees on LinkedIn

April 2, 2014

I wrote a blog about managers and supervisors who recommend their employees on LinkedIn in October 2012. A couple of recent calls have revealed that it may be worth re-publishing as a reminder.

Written by Clarence Bennett

Our local radio station this morning was asking the audience to call in and reveal their “pet-peeve”. As someone who provides advice on terminating employees, I have one: ‘managers who recommend employees on LinkedIn without thinking about the unintended consequences’.

Normally, if you are terminating a sub-par employee you will not recommend that person to another employer. It’s difficult to argue that an employee is useless while praising their attributes in writing. However, by allowing your managers to “recommend” people on LinkedIn, you are forcing your HR personnel and lawyers to do just that. Employees are encouraged to enhance their profile on-line by asking for recommendations from co-workers and supervisors. Co-workers and supervisors are reluctant to say no when asked, regardless of whether the employee is a good worker. Therein lies the problem.

One of the first things I do when I am asked to provide advice on terminating a poor performer is check LinkedIn. It is simply amazing how many times I find strong recommendations from their managers (sometimes even HR Managers and CEO’s) on their LinkedIn page. There are enough hurdles to overcome when terminating an incompetent employee without having to distance ourselves from recommendations on LinkedIn. Seriously, make it stop!

Now, I know what you’re thinking – aren’t we encouraged to provide letters of reference?  The answer is yes but not inconsistent with my rant. The Supreme Court of Canada in Wallace determined that a refusal to provide a former employee in that case with a letter of reference to help him seek alternate employment was evidence of bad faith. That case has some peculiar facts and, more importantly, there is a significant difference between a letter of recommendation and a letter of reference. The former is an endorsement, the latter simply references the experience obtained by an employee from working at your business. In short, you can say that an employee has 10 years experience doing a particular function without saying that they were good at it.

My advice is simple: encourage employees enhance their profile on-line through sites like LinkedIn but do not recommend employees on LinkedIn without careful consideration. Human nature makes it difficult for a person, when asked, to deny the request to “recommend” them. Therefore, I have been encouraging my clients to have a “no recommending employees on LinkedIn” clause in their social media policy. That provides a perfect excuse when denying an employee that request and, hopefully, avoids the opportunity for co-workers and subordinates to be offended. It would also be prudent to make one person in your organization responsible for issuing reference letters to avoid surprise letters surfacing after termination. Maybe I should deal with one “pet-peeve” at a time.

I wrote a blog about managers and supervisors who recommend their employees on LinkedIn in October 2012. A couple of recent calls have revealed that it may be worth re-publishing as a reminder.

Written by Clarence Bennett

Our local radio station this morning was asking the audience to call in and reveal their “pet-peeve”. As someone who provides advice on terminating employees, I have one: ‘managers who recommend employees on LinkedIn without thinking about the unintended consequences’.

New Brunswick MLAs to join the “Shared Risk Pension Plan”

April 1, 2014

Written by Scott Campbell and Level Chan

Members of the New Brunswick Legislative Assembly are the latest group of individuals to have their pensions transitioned to the “Shared Risk Pension Plan” model in that province.

On March 26, 2014, amendments were tabled to prospectively transition MLA pensions into the “Shared Risk Pension Plan”. These amendments are slated to come into force on July 1, 2014, although they will only impact on MLA’s service after the tentatively scheduled September 22, 2014 election.

Most public servants have already had their pensions transitioned to the new model. According to an official news release from the Office of the Premier: “Everyone has a role to play in pension reform and MLAs are no different … The legislation we introduced to make public service pensions more affordable, fair, sustainable and secure for all public service members has paved the way for MLAs to adopt a shared-risk model.”

This change, which will also increase the age for unreduced retirement on future service from 60 to 65, is projected to result in an annual savings of $1.3million.

A copy of the amendments (Bill 51) can be viewed here.

Written by Scott Campbell and Level Chan

Members of the New Brunswick Legislative Assembly are the latest group of individuals to have their pensions transitioned to the “Shared Risk Pension Plan” model in that province.

On March 26, 2014, amendments were tabled to prospectively transition MLA pensions into the “Shared Risk Pension Plan”. These amendments are slated to come into force on July 1, 2014, although they will only impact on MLA’s service after the tentatively scheduled September 22, 2014 election.

Most public servants have already had their pensions transitioned to the new model. According to an official news release from the Office of the Premier: “Everyone has a role to play in pension reform and MLAs are no different … The legislation we introduced to make public service pensions more affordable, fair, sustainable and secure for all public service members has paved the way for MLAs to adopt a shared-risk model.”

This change, which will also increase the age for unreduced retirement on future service from 60 to 65, is projected to result in an annual savings of $1.3million.

A copy of the amendments (Bill 51) can be viewed here.

Employee Discount Policies: Zero Tolerance

March 27, 2014

Lisa Gallivan and Alison Strachan

A recent Nova Scotia Labour Board decision considered whether an employee with 11 years’ service was dismissed for cause when he used an employee discount policy for a “friend”, contrary to company policy. The Board found a violation and that dismissal for cause was the correct course of action. If your company provides employee discount policies to employees, this is a decision you may want to learn more about.

In the hotel and retail industries, employers often provide employee discount policies discounting products and services the employer offers to the public. In Newell v. Marriott Hotels of Canada Ltd. (2014 NSLB 47) the employer, the Halifax location of one of its international hotels, provided an Associate Pleasure Discount Rate for employees that had the following conditions attached to it:

As a condition of receiving a Discount Card or Room Rate Discount Authorization Form, you must agree to all terms and conditions of the Room Rate Discount Program, and acknowledge your understanding of the following:

I understand that falsification of discount documentation or misrepresentation of information will constitute grounds for immediate termination of employment.

I understand that my conduct, as well as that of my family members and friends who receive a discounted room rate through the Room Rate Discount Program, is a reflection on Marriott International Inc. and its employees. If I, or if any of my family members or friends who receive a discounted rate through me, engage in any inappropriate conduct or behaviour, I will be subject to disciplinary action, loss or suspension of discount privileges, and/or termination of employment.

The employer offered room rate discounts to certain immediate family members and a lower room rate discount rate for friends and family. To make a long story short (and we always recommend your review of the entire decision (in this case 175+ paragraphs!)) the Board made the following findings:

  • The complainant was not credible on a number of material facts and was not forthright when he initially said he said he did not remember reading the policy terms and conditions;
  • The complainant “knew or ought to have known” his friend and his friend’s niece and nephew were not immediate family members and, therefore, not entitled to the lower discount rate;
  • The complainant knowingly misrepresented that his friend and his friend’s niece were family members and he “knew or ought to have known” that this misrepresentation that lead to a better discount could lead to termination under the employer’s policy;
  • The Complainant’s friend checked into the rooms even though they were not a class of people to whom the better rate applied; and that
  • The Complainant had the opportunity to get clarification from the employer for the lower rates and witnesses testified that “all employees knew of the conditions attached to the use of those cards, and that any misrepresentation could lead to termination”.

The Board also noted that the employer provided oral instructions on the policy:

The Board accepts the evidence of the witnesses for the Respondent over that of the Complainant where it differs on all material facts for the reasons stated. The Board further finds from the testimony of the witnesses on behalf of the Respondent, including Mr. Ransome the general manager, that the employees are told, even though it may not be a written term and condition, if they are using the associate card, they have to be in the room with their family members, otherwise, they must use the Friends and Family member discount where they do not have to stay in the room, and the Friends and Family rate has a much lower discount.

In its conclusion, the Board noted that the retail sector is especially vulnerable to losses through policy breaches by employees quoting from Stubbs v. T. Eaton Company, [1996] O.E.S.A.D., 217:

However, the importance of strict adherence to such a policy for a large retailer such as the Respondent cannot be denied. The failure to strictly apply the policy could result in significant losses. Nor would it be realistic to require the Respondent to tolerate such breaches if it could not prove a direct and personal gain to employees or their acquaintances, or a loss to the Respondent. Indeed, if it had not been for the somewhat unique circumstances involving this purchase, in that the VCR was returned at the discounted price and resold, the Respondent would have suffered a $90.00 loss.

What was the outcome?

The Board found the employer was justified in dismissing the Complainant for cause and this was not a case where progressive discipline would have been appropriate:

… for breaching the trust, by misusing and misrepresenting the discount policy when he knew or ought to have known the consequences for misusing and misrepresenting this card would lead to termination. The Board also finds that progressive discipline is not appropriate in this case as the Complainant knew or ought to have known that a violation of the use of this special discount would lead to his termination. Further, the Board finds the Complainant’s breach of trust and misrepresentation goes to the root of the employment contract.

What does this mean to you?

If you’re an employee, the message is clear. Policy terms and conditions should never be ignored. If you are an employer in retail or an employer offering company discount policies, this is welcome news because employers can impose and enforce terms and conditions that, if violated, can support discipline as set out in the policy. This decision confirms that when providing discount opportunities for employees, employers can adopt a zero tolerance policy leading to termination for deterrence to protect its business interests.

Lisa Gallivan and Alison Strachan

A recent Nova Scotia Labour Board decision considered whether an employee with 11 years’ service was dismissed for cause when he used an employee discount policy for a “friend”, contrary to company policy. The Board found a violation and that dismissal for cause was the correct course of action. If your company provides employee discount policies to employees, this is a decision you may want to learn more about.

March Madness Fever @ The Workplace: Much ado about nothing?

March 20, 2014

Clarence Bennett and Alison Strachan

March Madness is back again at a workplace near you and maybe even at your own. With 27 Canadians participating in this years’ tournament, public interest on this side of the border will be at an all-time high. Canadians have been exposed to teams like the Jawhawks, Orange and the Wolverines on Canadian networks and in Canadian media thanks to Andrew Wiggins, Tyler Ennis and Nik Stauskas.

Last year this time, Darren Heitner wrote March Madness Employee Productivity Problem is Overstated, Yet Influences Corporate Change in which he reported that a survey of 500 IT professionals disclosed that one-third were preparing to block, ban or slow down streamed March Madness content and 29% of those surveyed believed that content policies would get stricter over the next couple of years. Only 4% reported that policies will become more relaxed with time.

Heitner went on to say panic over productivity during March Madness might be “grossly inappropriate’, overstated and much ado about nothing:

In reality, the concern about a diminishing amount of productivity may be much to do about nothing. Challenger Gray & Christmas has made a name for itself through its annual study, but admits (at the end of its report), that ‘many will simply get a little more work done before or after the tournament to make up for any slowdown when games are on during office hours. In the end, March Madness will have little if any impact on employers.’

In a recent article in the Washington Post, Don’t worry about the March Madness productivity loss too much, Jena McGregor’s bottom line is:

But here’s the thing: Many people taking time to fill out their office bracket or surreptitiously catch the last two minutes of a game while at work are also answering e-mail while they sit on their couches at home. Worrying about how much productivity is lost a few weeks every spring ignores how much productivity is gained when employees do work while watching sports at home the rest of the year.

So let’s cool it a little on the March Madness productivity panic. The intertwining of our professional and personal lives is not really news. And it’s not going to change anytime soon.

Some workplaces latch onto the so-called “benefit” of allowing employees to participate in March Madness activities in the name of increased employee morale. Charlsie Dewey suggested March Madness shoots for employee morale that companies should allow staff to wear their favorite teams’ apparel or decorate their workspaces (within reason) to get in the spirit. Hopefully your workplace is not filled with fans of Oregon.

The Bottom Line

Whether March Madness is an issue or not at your workplace is something only you know given your particular workplace and employees. Regardless of whether it’s really much ado about nothing or whether you intend to increase employee morale, March Madness is a good time to review your workplace rules so that everyone knows what’s expected including the following policies:

  • Appropriate computer and internet use
  • Attendance
  • Workplace solicitation
  • Gambling
  • Harassment

While there may also be other relevant policies, these five seem to be the ones most vulnerable to March Madness breaches. Remember, as Charlsie Dewey suggests and as we have said from time to time, there is ALWAYS room for fun in the workplace. Putting an unwieldy damper on an opportunity that could increase employee morale should always be well thought out beforehand. Look for, and explore, opportunities and solutions that are appropriate for your workplace before taking too restrictive an approach to March Madness.

Good luck with your brackets, live streaming and evading IT block attempts!

Clarence Bennett and Alison Strachan

March Madness is back again at a workplace near you and maybe even at your own. With 27 Canadians participating in this years’ tournament, public interest on this side of the border will be at an all-time high. Canadians have been exposed to teams like the Jawhawks, Orange and the Wolverines on Canadian networks and in Canadian media thanks to Andrew Wiggins, Tyler Ennis and Nik Stauskas.

Case Comment: Can an employer cancel a termination?

March 18, 2014

Lisa Gallivan and Alison Strachan

A recent decision from Newfoundland and Labrador, Roche v. Sameday Worldwide 2014 CanLII 8782 says you can.

What happened?

In November 2008 an outside sales representative, with 29-years’ service (“the plaintiff”) was advised she was being removed from her position. She was given the option of two alternate positions (an inside sales position and an accounts receivable position) at less pay. A severance package was also discussed.   Before the employee accepted any option she went on sick leave for major depression and received short-term disability, followed by long-term disability (“LTD”). Her LTD  ended on August 28, 2009 when a Claims Specialist wrote to her saying she did not provide sufficient  medical information for it to continue. This letter was copied to the employer’s Disability Management Coordinator.

What happened next in September 2009 was, in essence, a “perfect storm”.  To make a long story short (for the longer version read pages 15 – 23 of the decision), here is essentially what happened

  • The employee’s LTD claim was closed and her benefits ended in late September;
  • The employer wrote to the employee and asked her to contact her supervisor about a return to work (she did not);
  • The employer made inquiries of the insurer as to whether she had appealed the LTD decision (and was told she had not);
  • The employer finally advised the employee to contact her supervisor or have her employment terminated (she did not); and finally,
  • The employee was terminated (however in the meantime she had filed what was eventually a successful appeal of her LTD denial).

The employee sent a letter to the employer asking them to “re-consider” the termination and requesting her benefits be re-instated as soon as possible. The benefits were reinstated by the employer “to bring to an immediate stop the internal company paperwork necessary to give effect to the termination of [the employee’s] employment. Unfortunately, communication issues did not end there, the employee claimed she was terminated in October when ordered to return to work. The employer however continued to treat her as an employee  during that time.   For example, employer contributions continued to be made.

The  employee sued for wrongful dismissal.

In response the employer said the plaintiff had not been dismissed, but remained an inactive employee on long-term disability. The employer alternatively argued that if the Court determined the plaintiff was dismissed on October 2, her dismissal was for cause or as a result of frustration.

What did the Court say?

The termination letter was sent in error and the employer took immediate steps to revoke the dismissal before it could be given effect. The plaintiff, through her actions in requesting and accepting the health benefits, and in accumulating pensionable time continued to act as an employee of the defendant. The contract of employment was not repudiated when the employee issued her statement of claim, nor was it frustrated by the plaintiff’s illness. Why was employment not repudiated?

Termination by ultimatum?

  • No.
  • The termination letter was sent in error.
  • The employee asked the employer to reinstate her medical benefits “knowing that these benefits are only available to employees of the defendant” and the defendant complied and continued paying premiums for those benefits.
  • The employee continued to accumulate pensionable time as an employee of the defendant and paid both the employee and employer contribution without question from the employee.

Termination as a result of the employee filing her Statement of Claim?

  • No.

…[the employee] has continued to receive Blue Cross benefits and accumulated pension benefits as an employee of the defendant, uninterrupted by the issuance of her Statement of Claim. She rem ained a willing recipient of these benefits and the defendant a willing contributor. In short there is nothing to suggest that either [the employee] or the defendant treated the employment relationship as repudiated by this law suit per se.

Frustration?

  • No.

As I have concluded that [the employee] was not dismissed on 2 October 2009, the question of whether there would be justification for dismissal on account of her illness does not arise. Frustration of contract is only available to the defendant as a defence in circumstances where there has been a termination of the employment relationship. That did not occur…

What this means to you?

To avoid the “perfect storm” that existed in this case, employees and employers, must clearly communicate during periods of disability. This case underscores that a disability management plan must also provide for an internal communication system or strategy that pays attention to disability appeal period timelines (including any possible grace periods) before termination occurs.  And, if an employer learns of an appeal within a reasonable period after sending a final termination letter, it would be wise to take corrective action to rescind the termination.

Lisa Gallivan and Alison Strachan

A recent decision from Newfoundland and Labrador, Roche v. Sameday Worldwide 2014 CanLII 8782 says you can.

Up in the Air: Terminating via Skype

March 11, 2014

Grant Machum and Alison Strachan

Most labour and employment lawyers and human resources practitioners made a point of seeing the film “Up in the Air” starring George Clooney who, in his job at Career Transitions Corporation, traveled about the United States firing people. His position  nearly became redundant due to the arrival of Ms. Keener at Career Transitions, who promoted a plan to cut costs by conducting terminations via videoconferencing.  If you didn’t see the movie, click here for a teaser.

We know that videoconferencing or Skype can be a useful tool for interviewing potential employees who live or work far enough away for an in-person interview to be impractical.  But what about terminating an employee, airing a workplace grievance, or discussing performance over Skype?  

Inevitably, emotions run high when talking performance.  A recent decision from British Columbia, Oliver v. Sure Grip Controls Inc., 2014 BCSC 321,  is an example of a workplace issue being discussed that led to a contest in the courts over whether the employee was fired or whether he quit:

[1]          The plaintiff, Ronald James Oliver, seeks damages for the alleged wrongful dismissal from his employment with the defendant, Sure Grip Controls Inc. (‘Sure Grip’).

[2]          Sure Grip, as represented by its shareholders, president, Brent Kornelson, and the secretary, Cynthia Kornelson, allege that the plaintiff quit his job with Sure Grip.

What happened?

A written contract of employment was entered into with the employee on January 15, 2002 for employment in Kamloops.  By 2005, the employee had received a new job description as “marketing manager” changing his responsibilities and remuneration including participation in company profit sharing.  In January 2006, the President and Secretary moved from Kamloops to Victoria, delegating almost full responsibility for the Kamloops operation to the management team, including the marketing manager.  After this, two things happened that played a large part in fueling what happened next.  The employer implemented a Handbook and a Productivity Plan.

Handbook

(a)          Profit Sharing

Eligibility:  typically based on personal performance and company profitability, at the discretion of the owners.

(emphasis added)

(b)          Termination

The Handbook set out two categories of termination:  Quit (Resignation) and Dismissed.  Under Dismissed, the employer could pay up to one week’s pay for each full year of employment.

Productivity Plan

Under this 2010 plan, each month that an employee met or exceeded a specific target, he or she would “receive a productivity bonus equal to one percent of their wages during the program”.  If the average production rate over the period of employment met or equaled a certain number, final bonuses would be 10% of the employee’s wage.  This plan said “All active employees are eligible”.

In October, 2010, the plaintiff went on a medical leave for surgery and remained on that leave until February 2011.  When he returned, there were no profit sharing proceeds waiting for him.  When he questioned this, he was told he would not be getting one because he “was not an employee at the time the profits were given out”.  The employee continued to have questions as to why he was disqualified from the profit sharing proceeds and eventually, there were two Skype facilitated meetings to discuss the issue.

The Skype Meetings

On March 9, 2011, the employee and the employer connected via Skype.  The employer stuck to its position that the employee was not entitled to a bonus because he was not an employee at the time the bonuses were paid.  The employee argued this was unfair, raising that he had helped build sales of $50,000 to $500,000 per month over the years.  The employer suggested they all sleep on it and talk again the next day.  At the end of this conversation, the employee told the employer that he wanted to retire when he was 60 (he was 53 at the time).

On March 10, 2011, the parties again Skyped.  The employee was told again that he would not get the bonus as he was on medical leave and was not an employee at the time.  There was much dispute over what else was said at this meeting.  Although the employer claimed that it was during this Skype session that the employee said he was quitting, it admitted in Discovery that the employee did not say he was quitting.

What happened next?

The employee received two Record of Employment forms (one for holiday pay and the other severance), both saying he had been dismissed. What happened next was that the dismissed employee  became a plaintiff in a wrongful dismissal suit and the employer became the defendant.

What did the court say?

The court found that the defendant had terminated the plaintiff saying:

[32]        It may be that the plaintiff expressed unhappiness working for Sure Grip; however, the contentious item for the plaintiff was the failure of Sure Grip to pay money that the plaintiff thought was due to him under the Productivity Exercise Plan 2010.  The plaintiff made it clear in the first meeting of his intention to retire at age 60 from Sure Grip.

[33]        In the first and second Skype meeting, there is no dispute about the topics that were discussed.  Mr. Kornelson does not deny that he stated he was letting the plaintiff go and that he said ’Wow, that went a lot better than I thought it was going to go’.  This relates to the plaintiff’s firing by Mr. Kornelson.  Mr. Kornelson tells the plaintiff that he will put together a package for him.

[34]        Upon telling the plaintiff that he was being let go, Mr. Kornelson asked the plaintiff to work for Sure Grip for a couple of weeks.  The plaintiff’s response was consistent with someone having been fired.  Had Mr. Kornelson not fired the plaintiff, he would have said so after the plaintiff said ‘You just fired me, I am going to pack up my office and I am going home’.  Mr. Kornelson said nothing in response to this comment and he has not explained why he did not.

[35]        Subsequently, the ROEs state that the plaintiff was dismissed.

[36]        Mr. Kornelsons’ words, the plaintiff’s reaction and response to those words, objectively viewed, cause me to conclude that the plaintiff’s employment with Sure Grip was terminated.  I conclude the plaintiff has met the evidentiary burden.

[37]        Mr. Kornelsons’ reasons for giving the plaintiff a severance package are flimsy.  They state that they liked the plaintiff, he was a good employee and friend, and they wanted to make sure that he would receive unemployment insurance.

But the matter didn’t end here.  The defendant claimed that it was limited to payment of one week per year of service under the Handbook as set out above.  The court found against the defendant again on this issue saying that the Handbook Statement (although signed by the plaintiff) made it clear that the Handbook was “not a contract of employment and should not be deemed as such”.  As such, the court concluded that the plaintiff was entitled to the common law principles of reasonable notice.

Reasonable notice

The plaintiff had been employed for a little over 9 years, was 53 years old when terminated, supervised at various times anywhere from one to three employees and was able to obtain employment after his termination.  Due to these factors, the court awarded 12 months’ notice less earnings from his new employment.

What this means to you

As a general rule and as a best practice, don’t use videoconferencing to terminate an employee.  Leave discussions that can be emotional, passionate or misunderstood for in-person meetings.  To not do so will leave the door open to unanswered questions, misunderstandings and the possibility of an acrimonious lawsuit as occurred in the Oliver v. Sure Grip Controls matter.

The second issue flowing from this decision serves as a reminder that, if you want to rely on a term or condition to limit notice at the time of termination, the best place to say this is in the employment contract not in a subsequently distributed policy or handbook. If you don’t follow this general rule, you should expect even more fuel for an acrimonious lawsuit.

Grant Machum and Alison Strachan

Most labour and employment lawyers and human resources practitioners made a point of seeing the film “Up in the Air” starring George Clooney who, in his job at Career Transitions Corporation, traveled about the United States firing people. His position  nearly became redundant due to the arrival of Ms. Keener at Career Transitions, who promoted a plan to cut costs by conducting terminations via videoconferencing.  If you didn’t see the movie, click here for a teaser.

We know that videoconferencing or Skype can be a useful tool for interviewing potential employees who live or work far enough away for an in-person interview to be impractical.  But what about terminating an employee, airing a workplace grievance, or discussing performance over Skype?  

Curiosity caught the cat: Case comment on privacy in the healthcare setting

March 5, 2014

Written by Lisa Gallivan and Alison Strachan

…They were not her patients, nor were they within her circle of care.  The Grievor had no need to know the medical information.

Arbitrator William F. J. Hood, Q.C.

A physiotherapist with 25 years of clean service was discharged after her employer discovered she inappropriately accessed her employer’s Picture Archiving & Communication System (“PACS”).  An audit disclosed that from January 2012 to October 2012, she accessed the personal health information of 99 persons without authorization and there was evidence apart from the audit of other improper access.  In discharging, the employer relied on its comprehensive confidentiality, privacy and IT policies and the employee’s responsibilities and duties under her professional regulating body.  The union grieved the discharge.  The majority of an arbitration board upheld the discharge.  A brief review of the decision, Health Sciences Association of Saskatchewan and Saskatchewan Association of Health Organizations, Representing the Prairie North Health Region, 2014 CanLII 5231 (SKLA) (“Prairie North Health Region”), follows.

In a previous blog Workplace Confidentiality:  More about insisting on privacy!  we told you that arbitrators take breach of confidentiality, particularly accessing medical records, seriously.  As a general rule, most arbitrators hold health care employees to higher standards than other workplaces saying there should be a zero tolerance standard for improper access. There are some arbitrations, however, where arbitrators substituted a lengthy suspension for discharge when they determined that an employee’s access, although improper, “was not for personal gain” (see Eastern Regional Integrated Health Authority and NAPE, a 2012 Newfoundland and Labrador Arbitration decision ).  What made Prairie North Health Region different when the access itself was not necessarily for “personal gain”?  The grievor’s credibility and the fact that the employer/employee trust relationship was permanently broken.

What were some of the credibility issues?

The triggers for a credibility assessment, in Prairie North Health Region, were the “excuses” or attempts to “minimize” the privacy intrusion raised by the union and the physiotherapist during the hearing which were found to be either illogical or inconsistent with the evidence heard, namely:

  • The union alleged there was improper confidentiality training and inconsistency.
  • The physiotherapist claimed her access of personal health information was because of “medical curiosity”, “learning” and the “need to understand”, in one case, the medical diagnosis of a prominent member of the community who had passed away.
  • The physiotherapist claimed she had not read any of the confidentiality and privacy policies before her termination and the employer did not instruct her to read them.
  • She did not think accessing personal health information alone was wrong.

These allegations and claims were hard for the arbitration board to accept due to evidence received at the hearing, namely:

  • The following statement appeared on the PACS login page:

The information in PACS is confidential personal health information.  By accessing this system you agree to be legally bound to the PACS Services / Access Policy.

  • The physiotherapist admitted during the hearing that she had accessed information about an individual and shared it with that individual’s spouse and that she also shared information about a patient with the patient’s daughter.
  • There was a pattern of accessing, not the physiotherapist’s patient information, but information about co-workers, supervisors, well-known prominent figures, family and a spouse of a physician.
  • The physiotherapist eventually acknowledged her signature on a form she signed to gain access to PACS and on a form she signed acknowledging that she had read and understood the IT Acceptable Use Policy.  This was after she denied seeing the policies during her testimony in chief.

Arbitrator Hood, Q.C., said:

It defies logic that the Grievor would not look at the hard copy of the patient’s chart, knowing that this was wrong, and at the same time somehow rationalize that electronic access to medical records through PACS was not wrong.

Further, the Grievor’s story as to why she did what she did does not hold together.  The Grievor asserts her reasons were for ‘learning’, ‘medical curiosity’ and the need to have a ‘better understanding of the medical diagnosis’.  The problem with this story is, in some cases, there was no medical predisposition, and even if there was, the medical issue had nothing at all to do with her speciality of knees and joints.  It is not logical the Grievor accessed medical information online for learning purposes in disciplines other than her own.

Was the termination “just and reasonable?”

Having found that the physiotherapist knew what she was doing was wrong, Arbitrator Hood, Q.C., writing for the majority, considered whether the termination was just and reasonable.  He concluded it was, based on the following:

  • The access was not isolated.
  • The grievor’s appetite for medical information was not modest (438 confidentiality breaches occurring during working hours).
  • The grievor was not provoked.
  • The access was not on the “spur of the moment”.
  • The employer’s confidentiality policies, codes of conduct and two governing professional bodies that licensed the grievor as well as the Health Information Protection Act were not enough to suppress the grievor’s temptation.

Arbitrator Hood, Q.C. said:

An overriding factor is the overall seriousness of the misconduct.  The sheer magnitude of the confidentiality breaches perpetrated on such a diverse group of the public, at times on a daily basis over an extended period of time, is so appalling that we are not prepared to set aside the discharge.

In this case, the seriousness is exacerbated by the members of the group whose confidentiality rights were violated.  The persons included past and present co-workers, supervisors, senior management of the Employer, immediate and extended family, as well as well-known, prominent members of the community.

Should the board substitute another type of penalty?

Arbitrator Hood, Q.C. said no.  Notwithstanding a progressive discipline scheme, the discharge without progressive discipline was upheld on the basis of the damaged trust in the employer/employee relationship:

The Employer is held accountable to protect the confidentiality of personal health information.  The Employer is statutorily bound to maintain this confidentiality.  The consequences of violating this confidentiality are significant.  The Employer is reposed with a public trust to which it is held accountable.  This trust is onerous.

What this means to employers charged with protecting the confidentiality of personal health information

The facts in the Prairie North Health Region were overwhelming and sometimes incredulous.  Discharge is always viewed as a last resort, referred to as “the capital punishment for employee misconduct in collective bargaining agreements” in the decision.  The outcome of an arbitration case can never be 100% predictable because of the large role individual facts play.  Allegations of privacy and confidentiality breaches will continue, whether as a result of human curiosity, snooping or just plain nosiness.  The issue for employers is what type of discipline is necessary to address the issue.  Employers are equipped with strong guidance from arbitrators saying that in some industries, ‘zero tolerance’ is the standard and unless there are sufficient mitigating circumstances, dismissals should be upheld.  Even in cases where mitigation does play a role, arbitrators are saying lengthy unpaid suspensions are appropriate.

Employers, whether unionized or non-unionized, in the health care, banking or any other sector where confidentiality is an expected condition of employment, should continue to educate employees through codes of conduct or confidentiality policies and should clearly say discipline will follow when these policies are violated.  As in all cases, policies and discipline must always be consistent and equally applied.

Written by Lisa Gallivan and Alison Strachan

…They were not her patients, nor were they within her circle of care.  The Grievor had no need to know the medical information.

Arbitrator William F. J. Hood, Q.C.

A physiotherapist with 25 years of clean service was discharged after her employer discovered she inappropriately accessed her employer’s Picture Archiving & Communication System (“PACS”).  An audit disclosed that from January 2012 to October 2012, she accessed the personal health information of 99 persons without authorization and there was evidence apart from the audit of other improper access.  In discharging, the employer relied on its comprehensive confidentiality, privacy and IT policies and the employee’s responsibilities and duties under her professional regulating body.  The union grieved the discharge.  The majority of an arbitration board upheld the discharge.  A brief review of the decision, Health Sciences Association of Saskatchewan and Saskatchewan Association of Health Organizations, Representing the Prairie North Health Region, 2014 CanLII 5231 (SKLA) (“Prairie North Health Region”), follows.

NB Human Rights Cases: Legal costs not available to successful party

March 3, 2014

Clarence Bennett and Ellen Oakes Thompson, of our Fredericton office, acted for the Respondent in a recent Human Rights Board of Inquiry matter reviewed in this blog.  Clarence provides the following summary of the case.

Until Friday, it was unclear whether a successful party could obtain costs at the end of a Human Rights Board of Inquiry in New Brunswick. A decision of the New Brunswick Labour and Employment Board in 2009 (McConnell) found that the New Brunswick Human Rights Act had jurisdiction to award legal costs to a successful complainant, but not a successful respondent.  The Board has now reconsidered that decision in Downey (yet unreported) in light of the obiter of the New Brunswick Court of Appeal (who dismissed an appeal in the case) and the Supreme Court of Canada decision in Mowat.

McConnell (Human Rights Board of Inquiry)

In McConnell, the complainant alleged that his employer had discriminated against him by failing to accommodate his mental illness.  The Human Rights Tribunal found the employer had taken reasonable steps to accommodate the complainant, and that none of the allegations had been substantiated.

The Tribunal also concluded that there was no jurisdiction to award costs to the successful respondent.  Oddly, in his provisional award (in the event that the decision is overturned on judicial review), the Tribunal concluded it had jurisdiction to award legal costs to a successful complainant.  The Tribunal analysed paragraph 20(6.2)(e) of the Human Rights Act of New Brunswick which grants jurisdiction to the Tribunal to compensate a successful Complainant for any “consequent expenditure” arising from the violation of the Act.  The Tribunal also reviewed subsection 20(4), which entitles parties to be represented by counsel.  From these sections, the Tribunal concluded the intent of the Act was to grant authority to award legal costs to a successful complainant.  However, the Board stated that since the legislation was silent on cost awards to successful respondents, it did not have jurisdiction to award costs to a successful respondent.

Mowat (SCC)

Mowat was a member of the Canadian Forces who filed a complaint about her treatment as a woman. Ultimately she was awarded $4,000 for sexual harassment to compensate for “suffering in respect of feelings or self respect.” The Tribunal proceeded to consider her claim for legal costs. It awarded her $47,000 for costs, a decision that was upheld by the Federal Court but overturned by the Federal Court of Appeal. The SCC upheld the Court of Appeal’s decision on the issue of costs.

The SCC found that the Act provides that the Tribunal can “compensate the victim for … any expenses incurred by the victim as a result of the discriminatory practice.” The SCC found that “expenses” do not include legal costs. The SCC held that if Parliament had intended for costs to be awarded, it would have included the familiar and widely accepted legal term “costs” in the Act. This position was supported by the fact that there had been numerous unsuccessful attempts to amend the Act to include the ability to award costs and that costs are specifically referenced in provincial and territorial human rights legislation.

McConnell (NB Court of Appeal)

McConnell ultimately received the following from the NB Court of Appeal which recognized the inconsistency in this approach and stated:

… the Board concluded that should the complainant be successful in any of his claims, the Board possessed the jurisdiction to award costs to the successful complainant. However, the costs issue was decided without the Board having the benefit of the Supreme Court’s recent decision in Canada (Canadian Human Rights Commission). In that case, the Court ruled the federal human rights tribunal did not possess the jurisdiction to award costs to a successful complainant. The interpretative arguments advanced in that case in support of the right to award costs to this party only are similar to the ones considered by the Board in the present case. This is why the Supreme Court’s decision casts a long shadow over the Board’s ruling.

Downey:

On Friday, February 14, 2014, the Board had another opportunity to consider the costs issue in Downey. In that case, Downey alleged that his employer discriminated against him because of a physical disability, namely, a workplace injury. The claim was dismissed by the New Brunswick Labour and Employment Board acting as a Human Rights Board of Inquiry referenced the McConnell and Mowatt decisions and stated: … on appeal to the NB Court of Appeal, Robertson J.A. poetically observed that the Supreme Court of Canada decision in Mowat casts a long shadow over the Board’s ruling… with that background in mind, the Board has determined that it will not award costs to a successful party”.

What this means:

This is the first time the Board has dealt with the Court of Appeal’s decision in McConnell and, significantly, the Board has decided to follow the approach of the Supreme Court of Canada and will not award legal costs to the successful party in a Human Right complaint.

As we normally win, we consider this bad news. However, this is markedly better than the Board’s previous decision interpreting the legislation as allowing costs for Complainants and not for Respondents.

Clarence Bennett and Ellen Oakes Thompson, of our Fredericton office, acted for the Respondent in a recent Human Rights Board of Inquiry matter reviewed in this blog.  Clarence provides the following summary of the case.

Until Friday, it was unclear whether a successful party could obtain costs at the end of a Human Rights Board of Inquiry in New Brunswick. A decision of the New Brunswick Labour and Employment Board in 2009 (McConnell) found that the New Brunswick Human Rights Act had jurisdiction to award legal costs to a successful complainant, but not a successful respondent.  The Board has now reconsidered that decision in Downey (yet unreported) in light of the obiter of the New Brunswick Court of Appeal (who dismissed an appeal in the case) and the Supreme Court of Canada decision in Mowat.

Accommodation: The interplay between “frustration” and “undue hardship”

February 18, 2014

Written by Jennifer Taylor, Research Lawyer

The Ontario Human Rights Tribunal (“the Tribunal”) has found that an employer who does not accommodate a disabled employee may still have a successful defence if the employee was incapable of doing the job even with accommodation. In Gahagan v Campbell Inc, 2014 HRTO 14, an employee suffered a back injury on the job and was unable to work for two and a half years. She was eventually terminated, and she filed two human rights complaints: one based on discrimination, and the other based on reprisal. She was unsuccessful on both complaints. 

What happened?

The complainant worked in the respondent’s restaurant in Lakefield, Ontario for seven years. The respondent operated nine fast food restaurants in the region. The restaurant where the complainant worked was a smaller ‘satellite’ outlet connected to a gas station, with only 20 employees (compared to 75-100 at the employer’s largest restaurant) – a fact that became important in the accommodation analysis.

The employee’s injury occurred in May 2009 when she “twisted her back lifting a filter pan from underneath the vat for the French fries.” She received workers’ compensation benefits and, in September 2009, began an occupational rehabilitation program with a physiotherapist with the goal to return to work in six-eight weeks.

She did not return to work and was terminated:

There was a meeting in November 2009 between the Return to Work (“RTW”) Specialist from the Workplace Safety and Insurance Board; the complainant’s physiotherapist; and the co-owner of the respondent, to discuss whether the complainant could return to work. The complainant had a number of physical restrictions: she could not lift more than 10 pounds; twist or bend; stand for longer than 10 minutes; or sit for longer than 5 minutes. She would only be able to work three days a week for three hours a day, with a rest day in between.

The respondent advised that it was unable to accommodate the complainant, and even refused to let the RTW Specialist behind the counter to see the actual work site “because of liability concerns.” The respondent had three reasons why it could not accommodate:

  • “It was a small restaurant with approximately 20 staff and there was no capacity to provide shadow coverage to assist the applicant;
  • The restaurant was a fast-paced environment which did not provide the opportunity to rest or sit and take breaks;
  • The employer was concerned about the applicant having a recurrence or new injury.”

The complainant was approved for a CPP disability pension in October 2010, and made a successful application for LTD benefits from her insurer in September 2011. In early October of 2011, the complainant was terminated based on the respondent’s assessment that she would not “be able to return to work, with or without accommodation” so the employment contract was frustrated. The complainant had not returned to work since her injury, at the respondent’s or elsewhere.

What were the human rights complaints?

The complainant made two human rights applications that were later consolidated. She filed the first one in September 2011, before she was terminated. In this application she alleged discrimination based on the respondent’s failure to fully cooperate with the return to work process in November 2009, mainly by not letting the RTW Specialist behind the counter to inspect the work location.

After the complainant was terminated, she complained of reprisal—prohibited under section 8 of the Ontario Human Rights Code—based not only on the termination itself, but also on the respondent’s delay in submitting its statement for her LTD application.

What did the Tribunal find?

According to the Tribunal, the respondent failed to accommodate the complainant:

[23]        There is no evidence before the Tribunal that the respondent engaged any process whatsoever to determine whether it could have accommodated the applicant in 2009. On this basis alone, the applicant has established that the respondent failed to accommodate her disability-related needs. The respondent’s defence is the applicant was incapable of doing her job, with accommodation.

The Tribunal turned to section 17 of the Ontario Human Rights Code, which sets out a statutory duty to accommodate a person with a disability to the point of undue hardship, but also provides a defence of incapacity:

17.  (1)  A right of a person under this Act is not infringed for the reason only that the person is incapable of performing or fulfilling the essential duties or requirements attending the exercise of the right because of disability.

(2)  No tribunal or court shall find a person incapable unless it is satisfied that the needs of the person cannot be accommodated without undue hardship on the person responsible for accommodating those needs, considering the cost, outside sources of funding, if any, and health and safety requirements, if any.

The respondent met its onus to prove that the complainant was incapable of performing the job – even with the accommodation of working three hours a day for three days per week. The Tribunal found that none of the complainant’s suggested accommodations were workable:

  • Letting her sit down – Putting a chair in the grill area was a health and safety concern and also a fire hazard, as the grill and vats were in the same small area and other employees could trip over the chair and injure/burn themselves.
  • Changing her role – Letting the complainant work as a “runner” to collect the food for drive-thru orders was not feasible at this McDonald’s, which was too small to require a separate runner position.
  • Hiring someone else to help – Having an extra staff person as a ‘shadow’ at the grill station was not feasible either, given the small number of employees at the store. On this point, the Tribunal stated: “The duty to accommodate does not require an employer to provide ‘make work’ or to create a job that is not productive or that, in the employer’s view, does not need to be done.”

The Tribunal concluded:

[29]        On the basis of all of the evidence before me, I find the applicant was incapable of performing the essential duties of her job with accommodation in November 2009 because of the nature of her physical restrictions at that time. The respondent could have accommodated the applicant by providing three-hour shifts every other day, but even with this accommodation, the applicant was unable to perform the essential duties of her job. The respondent was not required to hire a shadow for the applicant and putting a chair in the grill station was not feasible. As such, the respondent has established the applicant was incapable of working in November 2009 with accommodation. This complaint is dismissed.

(emphasis added)

The Tribunal found that the respondent terminated the complainant based on frustration of contract, not because she made a human rights application. There was no evidence of a retaliatory intent.

General comments on the interplay between the doctrine of frustration and accommodation:

Determining when accommodation reaches the point of undue hardship is always a fact-specific and case-by-case exercise, and this decision provides an example of how the analysis might play out in practice.

Section 17 of the Ontario Human Rights Code governs when an employee will be found incapable of performing his or her job and lists several factors for a court or tribunal to consider in the accommodation analysis: cost; outside sources of funding; and health and safety requirements. These statutory factors echo some of the more well-known common-law factors established by the Supreme Court of Canada in British Columbia (Public Service Employee Relations Commission) v BCGSEU, [1999] 3 SCR 3:

  • cost
  • interchangeability of the workforce
  • substantial interference with the rights of other employees

While human rights legislation in Atlantic Canada does not list factors for assessing undue hardship, as Ontario’s does, each Human Rights Act contains a general provision on when discrimination will not be found in an employment situation:

  • Newfoundland and Labrador: s. 14(2) says the prohibition on discrimination does not apply to the expression of a limitation, specification or preference based on a good faith occupational qualification.
  • New Brunswick: s. 4(8)(a) says that it is not discrimination where there has been the termination of employment or a refusal to employ because of a bona fide qualification based on the nature of the work or the circumstance of the place of work in relation to the physical disability or mental disability, as determined by the Commission.
  • Nova Scotia: s. 6(e) says it is not discrimination where the nature and extent of the physical disability or mental disability reasonably precludes performance of a particular employment or activity.
  • Prince Edward Island: s. 6(4)(b) says it is not discrimination in employment where disability is a reasonable disqualification.

In Gahagan, the complainant’s three suggested accommodations (letting her sit down; changing her role; hiring someone else) were deemed unworkable, and the Tribunal agreed that her permanent inability to work meant that the employment contract was frustrated.

The test for undue hardship often intersects with the law on frustration of the employment contract, as it did in this case. The Supreme Court in Hydro-Québec acknowledged this intersection of contract law with human rights obligations, and stated:

“The employer’s duty to accommodate ends where the employee is no longer able to fulfill the basic obligations associated with the employment relationship for the foreseeable future.”

What does this mean for employers?

The respondent in Gahagan did not actually do anything to accommodate the complainant. Nevertheless, the Tribunal was satisfied that the complainant’s suggestions were not workable for her role at that particular restaurant’s location, so she was incapable of fulfilling her job requirements even with accommodation. Employers should, of course, always take a proactive approach to accommodation of employees with disabilities to the point of undue hardship, and Gahagan helps in determining when that point will be reached.

Written by Jennifer Taylor, Research Lawyer

The Ontario Human Rights Tribunal (“the Tribunal”) has found that an employer who does not accommodate a disabled employee may still have a successful defence if the employee was incapable of doing the job even with accommodation. In Gahagan v Campbell Inc, 2014 HRTO 14, an employee suffered a back injury on the job and was unable to work for two and a half years. She was eventually terminated, and she filed two human rights complaints: one based on discrimination, and the other based on reprisal. She was unsuccessful on both complaints.