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HRTO Rules Legislation Permitting Different or No Benefits For Employees 65+ is Unconstitutional

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In Talos v. Grand Erie District School Board (“Grand Erie “), the Human Rights Tribunal of Ontario (“HRTO”) held that statutory provisions permitting employers to reduce or discontinue employees’ benefits after they reach age 65 is discriminatory and contrary to the Canadian Charter of Rights and Freedoms (“Charter “). Consequently, employers should review their benefits plans, and consider whether it may be necessary to adjust or eliminate such age-based distinctions.

Background

In 2006, the Ontario government passed legislation preventing employers from requiring employees to retire at age 65. At this time, there was a concern that the elimination of mandatory retirement might have serious consequences for the financial viability of benefits plans because more older employees would continue to be members of those benefits plans. The government therefore passed legislation allowing employers and insurers to reduce or eliminate employees benefits when employees reach the age of 65.

While the legislature acted with the intention of protecting the financial viability of benefits plans, it did not review empirical evidence confirming its actions were necessary to achieve financial viability.

The provisions at issue in Grand Erie–provisions under the Human Rights Code (“Code “) and the Employment Standards Act and its Benefit Plans  Regulation–collectively permit employers to reduce or eliminate benefits provided to employees when they reach age 65 without running afoul of the Code (the “statutory exception”). The legislation also permits certain age-based differentiations under life insurance and disability plans for employees under the age of 65, if the differentiations are justified on an actuarial basis.

HRTO Complaint

In Grand Erie, an application was filed by Mr. Talos, a teacher employed by the Grand Erie District School Board. Mr. Talos had received extended health, dental, and life insurance benefits from his employer until he reached age 65. This coverage offset the costs of his wife’s medications for arthritis and cancer.

When Mr. Talos turned 65, the School Board ended his benefits, relying on the statutory exception. Mrs. Talos was under 65 when her husband’s workplace benefits ended. As a result, she had to forego certain medications until she turned 65 and became eligible for Ontario’s publicly available health care benefits.

At the HRTO, Mr. Talos claimed that the statutory exception violated s. 15(1) of the Charter, which prohibits discrimination on the basis of age.  Mr. Talo’s allegation of discrimination was limited to the School Board’s group health, dental and life insurance benefit plans.

HRTO Decision

In a lengthy decision, the HRTO considered many fundamental issues of age discrimination. The HRTO reviewed a broad range of evidence, including expert testimony in the fields of sociology, economics, labour relations, and actuarial science. The HRTO also considered the viability of workplace benefits regimes in which coverage is extended to older workers, as well as Mr. Talos’ compensation, accumulated assets, union membership, pension entitlement, and the availability of public extended health benefits for those over 65 years old.

The HRTO found that Mr. Talos had experienced a disadvantage on the basis of age as a result of the statutory exception that permitted the elimination of his benefits when he reached the age of 65. The HRTO therefore concluded that Mr. Talos’ rights under s. 15(1) of the Charter  had been infringed.

The HRTO was therefore required to consider whether the violation was demonstrably justified in a free and democratic society under s. 1 of the Charter. The HRTO held that, although the financial viability of benefits plans was a pressing and substantial objective, the government’s decision to legislate the statutory exception was not justified because it was not necessary to preserve the financial viability of benefits plans.  For example, such benefits plans have continued to be financially viable in Manitoba and Quebec where statutes do not permit the reduction or elimination of benefits after an employee reaches the age of 65.

What Now?

Because the HRTO does not have the power to declare the statutory exception to be invalid, the legislation is still in effect. Nonetheless, Grand Erie strongly suggests that the statutory exception will be the subject of further litigation, and that benefits plans that make age-based distinctions for employees after reaching the age of 65 will now be subject to serious legal scrutiny. The HRTO is unlikely to diverge from its position in Grand Erie and can be expected to apply the same result in similar cases.

To reduce the risk of liability, employers should work with their benefits providers to explore ways of providing group health and dental benefits without making distinctions based on age. Certain age-based differentiations may be permissible where there is clear actuarial evidence confirming the differentiation is necessary to maintain the financial viability of the plan.

 – With thanks to Jan Nato for his assistance with this article.


Quebec Makes Broad Changes to its Workplace Standards

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The National Assembly of Quebec has made wide-ranging changes to the province’s labour standards legislation. The amendments were enacted through Bill 176, An Act to amend the Act respecting labour standards and other legislative provisions mainly to facilitate family-work balance, which received Royal Assent on June 12, 2018. Employers with operations in Ontario and Alberta, should also be aware that these provinces also made significant changes to their respective employment standards legislation earlier this year.

This is the first of two articles summarizing the key changes in Quebec. This article outlines changes to the scope of liability for directors and officers and new compliance obligations for Quebec employers. The second article will outline changes to leave entitlements.

Directors’ and Officers’ Liability

Bill 176 institutes a significant change in directors’ and officers’ liability under the Act respecting labour standards (“Act”). If an employer commits an offence under the Act, its directors and officers will be presumed to have committed the offence, unless the director or officer can establish that he or she exercised due diligence, taking all necessary precautions to prevent the offence. This change took effect as of June 12, 2018.

Psychological Harassment

Sexual harassment is now expressly included as a form of psychological harassment. This change reflects the government’s desire to codify the existing state of the law, since adjudicators have for years interpreted psychological harassment as including sexual harassment. In addition, employees will have 2 years, instead of 90 days, from the last incidence of offending behaviour to file a psychological harassment complaint. This represents an 8-fold increase in the limitation period. Both changes are in step with the #MeToo movement.

As of January 1, 2019, Quebec employers will be required to adopt a psychological harassment prevention and complaint processing policy. The policy must be made available to employees. Bill 176 also expressly requires that the policy include a section on sexual harassment, delineated in Bill 176 as “behaviour that manifests itself in the form of verbal comments, actions or gestures of a sexual nature.”

Pension and Benefits

Bill 176 prohibits any distinction based solely on hiring date in relation to pension plans or other employment benefits that affects employees performing the same tasks in the same establishment. This signals an important shift for employers. However, any existing distinctions that existed on June 11, 2018 are not subject to the new prohibition.

Personnel Placement Agencies

Clients are now “solidarily” liable with personnel placement agencies for the pecuniary obligations owed to agency employees under the Act and its regulations, including wages, holiday pay, overtime pay, etc. Previously, only the true employer was liable for such obligations. This change may have significant cost implications for many employers. A detailed examination of the contractual arrangements with business partners is necessary to assess and protect against potential liability. This proactive step will enable the employer to adjust its working relationships and the terms of its contracts, among other strategies. Follow this link for further information about how we can assist employers in this area.

Personnel placement agency employees are now entitled to the same wage rate as employees of the client where they perform the same tasks in the same establishment.

In addition, personnel placement agencies and recruitment agencies for temporary foreign workers are only permitted to operate under a license. Further, Quebec employers are prohibited from using the services of such agencies if they are unlicensed. These changes will take effect at a later date with the coming into force of a regulation under the Act.

Equal Pay for Equal Work

Employers are currently prohibited from:

  • paying a lower wage rate;
  • providing a reduced annual leave; or
  • providing a reduced indemnity for annual leave

to any employee who performs the same tasks in the same establishment as other employees, if the differential is solely because he or she usually works less hours each week. Bill 176 also expressly prohibits such differentials if they are made on the sole basis of “employment status”, although this term is not defined in the legislation. This incremental change takes effect on January 1, 2019.

Although not binding in Quebec, employers seeking guidance on the meaning of “employment status” may look to Ontario’s Employment Standards Act, 2000 (“ESA”). The ESA defines a “difference in employment status” in respect of one or more employees, as (a) a difference in the number of hours regularly worked by the employees; or (b) a difference in the term of their employment, including a difference in permanent, temporary, seasonal or casual status.

Work Scheduling

Incremental changes were made to the work scheduling provision. An employee may now refuse to work more than 2 hours after his or her regular daily working hours, or more than 14 working hours per 24-hour period, whichever period is the shortest. Further, if notice is given less than 5 days in advance of any proposed overtime, employees may refuse to work the overtime hours, unless the nature of their job requires it. These changes take effect on January 1, 2019.

Key Takeaways

Given the breadth of the changes under Bill 176, employers should conduct a full scale review of their policies and procedures, with input from legal counsel, to ensure they will be compliant. In doing so, employers should be careful not to overlook issues that may arise in connection with agency employees or matters often administered by third parties, including pension and benefits plans, and directors’ and officers’ liability insurance.

  • Many thanks to Jan Nato for his assistance with this article.

“Sorry, I Need Time Off”‒ Quebec Expands Employee Leave Entitlements

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This is the second article in our two-part series in which we highlight changes under Quebec’s Bill 176, An Act to amend the Act respecting labour standards and other legislative provisions mainly to facilitate family-work balance.

In our first article, we outlined the new standard for directors’ and officers’ liability and several new compliance obligations for Quebec employers. Here we focus on changes to leave entitlements.

Bill 176 implements numerous changes to facilitate employees taking time off when they need to, including, as the name of the Bill suggests, time off to care for family members. The more generous entitlements are in line with the National Assembly of Quebec’s mandate of promoting family-work balance.

Enhanced Leave Entitlements

Certain leave entitlements have been enhanced, as follows, with some of the changes already in effect and others coming into effect on January 1, 2019.

Entitlement Pre-Bill 176 Bill 176
Annual leave with pay 3 weeks of leave with 5 years of uninterrupted service. 3 weeks of leave with 3 years of uninterrupted service (in effect on Jan. 1, 2019).
Sickness leave

Leave applies to sickness, organ or tissue donation for transplant, or an accident.

At least 3 months of uninterrupted service required for leave entitlement.

Leave is unpaid.

Victims of domestic or sexual violence are now entitled to leave (in effect as of June 12, 2018).

No service requirement (in effect on Jan. 1, 2019).

First 2 days are remunerated with 3 mos. of uninterrupted service (in effect on Jan. 1, 2019).

Family or parental leave, concerning state of health

May be taken because of the state of health of the employee’s spouse, father, mother, brother, sister, or a grandparent.

Leave is unpaid.

May be taken because of the state of health of a relative [1] or a person for whom the employee acts as a caregiver (in effect as of June 12, 2018).

First 2 days are remunerated with 3 mos. of uninterrupted service (in effect on Jan. 1, 2019).

Family or parental leave, concerning the birth/adoption of a child or termination of pregnancy in or after 20th week First 2 days are remunerated with 60 days of uninterrupted service. No service requirement (in effect on Jan. 1, 2019).
Family or parental leave, concerning the death or funeral of a spouse, child, spouse’s child, father, mother, brother or sister 1 paid day and 4 unpaid days. 2 paid days and 3 unpaid days (in effect on Jan. 1, 2019).

[1] “Relative” is broadly defined and includes an employee’s or his/her spouse’s: child; father; mother; brother; sister; grandparent; the above persons’ spouses, children, or children’s spouses; foster parent; foster child; tutor/person under tutorship; curator/person under curatorship; or any person in respect of whom the employee or the employee’s spouse is entitled to certain government benefits.

Bill 176 provides that an employer may request that the employee provide documentation attesting to the reasons for the sick leave absence, if warranted, e.g., by the duration of the absence. This change comes into effect on January 1, 2019. Bill 176 also preserves the employer’s right to dismiss, suspend, or transfer an employee if the circumstances of sick leave or the repetitive nature of sick leave amounts to good and sufficient cause.

Longer Durations for Family or Parental Leaves

In addition, the maximum period of absence has increased for certain categories of family or parental leave. The following changes came into effect on June 12, 2018:

Category of Leave Pre-Bill 176 Bill 176
Caring for a relative because of a serious illness or serious accident (other than a minor child) 12 weeks over a 12 month period 16 weeks over a 12 month period
Caring for a relative because of a serious and potentially mortal illness (other than a minor child) Not defined 27 weeks over a 12 month period
Caring for a minor child because of a serious illness or serious accident 12 weeks over a 12 month period 36 weeks over a 12 month period
Following disappearance of minor child 52 weeks 104 weeks
Following death of minor child Not defined 104 weeks
Following suicide of spouse, parent, or child of full age 52 weeks 104 weeks

Key Takeaways

Most employers will need to review and update their leave policies and procedures to ensure they are in compliance with the new provisions. Employers should also develop guidelines for determining what kind of leave pertains and whether the leave needs to be paid or unpaid. Some employers may need to prepare for workforce continuity issues as a result of increased leave durations, including cross-training their staff on work assignments, and budget for retaining replacement workers based on forecasted need.

    – Many thanks to Jan Nato for his assistance with this article.

Inability to Monitor Residual Impairment From Medical Cannabis May Constitute Undue Hardship

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Recreational cannabis is very much in the spotlight as the date for legalization approaches. Yet issues related to employee use of medical cannabis are still front and centre for many employers, as demonstrated by a pair of recent arbitration decisions: Re IBEW, Local 1620 and Lower Churchill Transmission Construction Employers Assn. Inc. (Uprichard) (2017), 281 LAC (4th) 246 (“Lower Churchill 1”) and Re Lower Churchill Transmission Construction Employers Assn. Inc. and IBEW, Local 1620 (Tizzard) 2018 Carswell Nfld 198 (“Lower Churchill 2”).

Both decisions apply long-standing principles of accommodation to emerging issues of cannabis in the workplace. Lower Churchill 1 confirms that it is an underlying disability, not the prescription for cannabis, that will trigger the employer’s duty to accommodate. Lower Churchill 2 is an encouraging result for employers with safety sensitive workplaces in that the arbitrator held that the employer’s inability to effectively measure and monitor residual impairment from medical cannabis used outside of work hours constituted undue hardship. Both decisions are outlined below.

Key Takeaways

The following general conclusions may be drawn from the Lower Churchill decisions when read together:

  • while employers continue to owe a duty of accommodation to employees with recognized disabilities, this duty is not engaged simply because an employee holds a prescription for cannabis; and
  • the potential for several hours of residual impairment, and the current limitations on testing for present impairment resulting from cannabis, present a legitimate safety risk which may amount to undue hardship for employers in a safety sensitive environment.

While the Lower Churchill decisions result from labour arbitrations involving a Newfoundland employer, the above guidance is informative in all Canadian jurisdictions.

Lower Churchill 1: The duty to accommodate engaged by a recognized disability

The grievor in Lower Churchill 1 was a short service employee. He was responsible for driving a pickup truck and operating lifting equipment as an assembler on a transmission line. Due to the nature of the project, he was required to be on site for several weeks at a time. The grievor used medical cannabis, prescribed by his doctor, to manage chronic back pain and anxiety. He disclosed this use after the employer’s safety advisor detected the smell of cannabis in his truck. The grievor was dismissed in accordance with the employer’s zero tolerance policy which required disclosure of any drugs or medication which might have an impact on work. He had no record of unsafe work practices or safety related incidents.

The union brought a grievance for unjust termination. The arbitrator held that there was just cause for termination. The union sought judicial review of the arbitrator’s decision. The court sent the issue of termination of employment back to the arbitrator for further argument and consideration of whether an alternate, less severe penalty to dismissal would be more appropriate, and whether there could be some measure of accommodation.

The arbitrator reconsidered the grievance and ruled that the grievor be reinstated conditionally. However, he refused to order any terms of accommodation, stating that it would be inappropriate to make such an order on the basis of the information before him. The arbitrator underlined that there were no findings in his first award or the court’s decision that the grievor had a disability requiring accommodation. The legal obligation of accommodation would only be engaged where a disability has been established. A prescription for cannabis alone does not oblige the employer to accommodate.

The arbitrator also expressed his reluctance to impose an accommodation in that the accommodation process is a multi-party inquiry requiring participation by the employer, union and the employee, as was established by Renaud. Notably, neither the union nor the grievor had requested accommodation in Lower Churchill 1.

Lower Churchill 2: Inability to monitor residual impairment may constitute undue hardship

Lower Churchill 2 involved the same employer as Lower Churchill 1 but was heard by a different arbitrator. The grievor was offered a labourer position pending mandatory pre-employment drug and alcohol screening. After his test results came back positive, the employer learned that the grievor used medical cannabis every evening to manage pain from osteoarthritis and Crohn’s disease. After considering information provided by the grievor’s doctor and advice from a medical consultant retained by the employer, the employer eventually informed the grievor that he was no longer being considered for employment.

The union grieved the employer’s decision on the basis that the employer failed to accommodate the grievor’s disability. The employer argued that the position was safety sensitive and the safety risks added to the workplace by the grievor’s nightly cannabis use brought the employer to the point of undue hardship.

The arbitrator accepted that the labourer position was safety sensitive and that the grievor had a disability. He also found that requiring a labourer to perform work in a safe manner was a bona fide occupational requirement and he went on to consider the long-standing Meiorin test. To determine whether undue hardship was established under the third branch of the Meiorin test, the arbitrator considered a broad range of medical expertise on the effects of cannabis use. Two key questions were central to his inquiry:

  1. What is a safe interval of time between cannabis use and performance of safety sensitive duties?
  2. What ability do employers have to test for impairment caused by cannabis?

The arbitrator determined that there is no scientific consensus on question 1. He noted that Health Canada’s guidance states that cannabis-induced impairment may persist for 24 hours; a much longer period than suggested by other opinions that recommend patients avoid driving or other activities requiring alertness for 4 hours. On question 2, the arbitrator accepted that current testing methods cannot determine whether the subject is impaired at the time of testing, and therefore would not be useful to employers as a monitoring mechanism.

The arbitrator found that the grievor’s nightly dosage (1.5 grams of cannabis having THC levels of up to 22%) would have led a reasonable employer to conclude that there was an increased risk of harm from residual impairment. The arbitrator also found that the potential safety hazard could not be ameliorated by remedial or monitoring processes and therefore the employer would not be able to manage the risk of impairment on the jobsite. For these reasons, the arbitrator ruled that accommodating the grievor’s medical cannabis use in this case would constitute an undue hardship on the employer and denied the grievance.

  • Many thanks to Jan Nato for his assistance with this article.

Ontario Moves to Protect Free Speech on Campus: Universities and Colleges Must Develop Free Speech Policy

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Ontario universities and publicly-funded colleges are now required to develop and publicly post a free speech policy by January 1, 2019. No Bill has yet been introduced to detail these requirements. However, the government outlined the minimum standard for the policy and related requirements in a communication issued by the Office of the Premier on August 30, 2018.

What to include in the free speech policy

According to the government’s communication, the free speech policy must apply to students, faculty, staff, management and guests of the university or college. At a minimum, the policy must incorporate:

  • A definition of freedom of speech;
  • Principles based on the University of Chicago Statement on Principles of Free Expression;
  • Statements to indicate that the institution will:
    • apply existing student discipline measures to students whose actions are contrary to the policy, such as engaging in disruptive protests that significantly interfere with the ability of an event to proceed;
    • consider official student groups’ compliance with the policy as a condition for ongoing financial support or recognition by the institution;
    • encourage student unions to adopt policies in alignment with the institution’s free speech policy; and
    • use existing mechanisms to handle complaints and ensure compliance. However, any complaints against the institution that remain unresolved can be referred to the Ontario Ombudsman.

In defining freedom of speech, policy drafters may wish to consider the principles set out by the Supreme Court of Canada and that freedom of expression is protected under the Canadian Charter of Rights and Freedoms. The Court has established that “everyone can manifest their thoughts, opinions, beliefs, indeed all expressions of the heart and mind, however unpopular, distasteful or contrary to the mainstream” as part of a “free, pluralistic and democratic society.” Expression has both content and form, according to the Court. Activity is considered to be expression if it attempts to convey meaning. The content of expression can be conveyed in many different forms (e.g., written, spoken, art, etc.). However, freedom of expression is not an absolute right and has certain limits. For example, freedom of expression does not protect acts of violence, hate speech or discrimination.

No protection for hate speech or discrimination

The University of Chicago Statement on Principles of Free Expression (“Statement”) was developed in response to backlash against the university for inviting the Communist Party’s candidate for President to give a lecture on campus. The Statement recognizes that universities are places for open discussion and free inquiry. As such, universities should not shield members of the university community from opinions that they may disagree with; there should be no obstruction or interference with the freedom of members of the community to express their views.

However, the Statement also recognizes that freedom of expression is not absolute. Speech that violates the law, including hate speech and discrimination, should continue to have no place on campus. The Ontario government’s communication also notes that “[s]peech that violates the law is not allowed.”

Reporting requirements

As of September 2019, Ontario universities and colleges will be required to prepare an annual report on implementation progress and a summary of their compliance. The institution must publish the report online and submit it to the Higher Education Quality Council of Ontario.

Consequences of non-compliance

The Ministry of Training, Colleges and Universities may reduce operating grant funding to an institution that fails to introduce, report on, or comply with its free speech policy.

We will continue to monitor the government’s communications in relation to the free speech policy and will report on any further developments.

  • Many thanks to Shereen Aly for her assistance with this article.

Legalization Draws Near, Where are We Now on Employee Testing?

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Earlier this year, the Supreme Court of Canada (SCC) refused the union’s leave application in Suncor Energy Inc v Unifor Local 707A, 2017 ABCA 313 (Suncor ) thereby leaving the Alberta Court of Appeal’s (ABCA) ruling intact. The ABCA had held that evidence of substance-related safety risks across an employer’s workforce (including both union and non-union workers) may be taken into account when assessing the permissibility of random testing of unionized workers.

Suncor  is a favourable result for employers because it is in step with taking a holistic approach to workplace safety. But it is by no means a green light for drug and alcohol testing in the workplace. With the legalization of recreational use of cannabis fast approaching, we outline the current state of the law and key best practices for workplace impairment testing.

General Principles

In assessing the permissibility of a substance testing policy, courts and other decision makers must balance workplace safety and employee privacy.

The usual starting point is to consider whether the policy applies to positions that are safety-sensitive. A safety-sensitive position is commonly defined as one where impairment due to substance use may pose a significant safety risk to the work environment and those within it – unfortunately this definition is rather circular. Accepted examples from the case law include certain positions at mining, construction, hydro, or oil extrusion sites, and positions involving the operation of heavy machinery or transportation of passengers.

The invasiveness and the reliability of the testing are also important considerations. More reliable, less invasive, methods of testing are more defensible.

Targeted Testing

Sometimes an employer may want to test a specific employee for substance use. Targeted testing is generally permissible if the employee holds a safety-sensitive position and specific circumstances exist, e.g., if the employee is reasonably suspected to be impaired on the job, or was involved in a workplace accident or significant incident that is not explained by operational or machinery failures. Targeted testing may also be permissible where the employee returns to work following substance abuse treatment and the testing is part of a rehabilitative program.

Random Testing

A random drug and alcohol testing policy, i.e., a policy which contemplates testing multiple employees on an unannounced basis, may be challenged in the context of a collective agreement, and also under human rights legislation.

Establishing that the position is safety-sensitive is not in itself enough to justify a random testing policy; as the SCC clarified in its 2013 landmark decision in Communications, Energy and Paperworkers Union of Canada, Local 30 v Irving Pulp & Paper, Ltd (Irving ), there must also be evidence of enhanced safety risks, such as general substance use in the workplace. This evidence, as established in Suncor, does not necessarily need to be specific to unionized employees. Rather, the risk may be established in the workplace more broadly, and might include instances of finding alcohol or drug paraphernalia on site, regardless of whether they are linked to unionized employees. However, whether evidence pertaining to non-union employees will be relevant, or determinative, will depend on the circumstances at issue.

Union grievances

The SCC also affirmed in Irving that certain threshold requirements (i.e., the “KVP test”) must be met if the employer is subject to a collective agreement:

  • the policy must not be inconsistent with the collective agreement;
  • the policy must not be unreasonable;
  • the policy must be clear and unequivocal;
  • the policy must be brought to the attention of the employee affected before the company can act on it;
  • the employee concerned must have been notified that a breach of the policy could result in discipline; and
  • the policy must have been consistently enforced by the company from the time it was introduced.

Human rights challenges

As mentioned above, an employee can challenge the employer’s substance testing policy under human rights legislation. Under human rights legislation, employers are required to accommodate employees with disabilities, but not to the extent of undue hardship on the operation of the employer’s business. If the policy is found to be discriminatory on its face, following the Ontario Court of Appeal’s 2000 decision in Entrop v Imperial Oil Limited (Entrop ), the employer would need to establish that the policy is justified as a bona fide occupational requirement by demonstrating that:

(1) the employer adopted the policy for a purpose rationally connected to the performance of the job;

(2) the employer adopted the policy in an honest and good faith belief that it was necessary to the fulfilment of that legitimate work-related purpose; and

(3) the policy is reasonably necessary to the accomplishment of that legitimate work-related purpose.

While the tests applied in Irving  and Entrop are distinct, both tend to focus on balancing workplace safety with employee privacy rights and have produced similar results. Both Irving  and Entrop are also relevant to pre-employment testing (testing as a condition of employment) in that the same balancing of interests – safety vs. privacy – as used in the employment context will be applied to pre-employment testing.

Marijuana Testing

Current testing does not accurately indicate when marijuana was consumed, and, until recently, there has been no consensus on a particular THC level (THC is the chemical responsible for most of marijuana’s effects) that indicates impairment. However, under a new Regulation (made under Bill C-46), the federal government has set specific blood THC levels for the purpose of measuring impairment when operating a motor vehicle or vessel. According to the Regulation, it will be a summary offence to operate a motor vehicle with blood-THC concentration of at least 2 nanograms per millilitre of blood, and a hybrid offence with at least 5 nanograms per millilitre of blood.

Generally speaking, these standards were not intended for workplace drug testing policies and are likely to be the subject of further legal debate. Nevertheless, employers who are seeking to implement a THC impairment standard in the workplace may be justified in adopting these standards, depending upon the nature of the workplace.

Best Practices

Employers who are contemplating putting a substance testing policy in place should proceed with caution and be sure to consult with safety experts and legal advisors. Employers should also, at a minimum, take the following precautionary steps:

  • Be aware of any signs of drug or alcohol use in the workplace. Document and retain any evidence suggesting such conduct. The evidence may be useful in justifying the implementation of a random testing policy.
  • Ensure that the proposed testing policy is in sync with the organization’s accommodation policy and that both policies adequately address employees who have addiction or substance abuse issues.
  • Ensure any proposed substance testing is as minimally invasive as possible, and accompanied by clear guidelines respecting employee privacy and the collection and use of personal information.
  • Be cautious about importing the federal government’s new impairment standards into testing policies. These standards may prove to be particularly useful in assessing impairment in post incident or accident circumstances where the employee consents to the testing. However, employers who choose to adopt these standards should ensure they watch for new legal developments in this area, as the standards will likely be subjected to legal scrutiny in the near future.
  • Where possible, seek consent from unions and joint health and safety committees before implementing a random testing policy.

In addition, employers must ensure that the substance testing policy and procedures align with the privacy legislation in their jurisdiction, e.g., by obtaining the requisite consents and respecting any limitations on the collection, use and disclosure of information applicable to the testing process. In doing so, employers should be aware that privacy laws vary by province.

– Many thanks to Shira Sasson and Jan Nato for their assistance with this article.

Legalization is in the Air – Ontario Moves to Amend Previous Government’s Cannabis Legislation

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The Ontario government has introduced proposed amendments to the province’s regulatory framework for cannabis. If passed, Bill 36, the Cannabis Statute Law Amendment Act, 2018, will alter the newly-introduced Cannabis Act, 2017  (not yet in force) and other provincial legislation to reflect the current government’s plan for dealing with the legalization of recreational cannabis on October 17, 2018.

Key changes under Bill 36

Employers should take note that, if passed in its current form, Bill 36 will:

  • remove the distinction between recreational cannabis and medical cannabis under the Smoke-Free Ontario Act, 2017  (not yet in force) (SFOA 2017);
  • prohibit smoking of cannabis, whether recreational or medical, in enclosed workplaces, enclosed public spaces and designated buildings, subject to certain exemptions for controlled areas in certain residential care facilities, hospices, designated guest rooms in hotels, motels and inns, and scientific research and testing facilities;
  • effectively permit smoking of cannabis in locations where tobacco smoking or use of electronic cigarettes is permissible under the SFOA 2017, such as sidewalks, public outdoor spaces, parks, etc.;
  • prohibit consuming cannabis in any manner in a vehicle or boat, whether by the driver or passenger;
  • conform with the definition of cannabis in Bill C-45, the federal government’s cannabis legislation; and
  • rename the Cannabis Act, 2017, the Cannabis Control Act, 2018.

If passed, Bill 36 will come into force on the later of October 17, 2017 or the date the Bill receives Royal Assent. The government has also proposed amendments to a regulation under the SFOA 2017 which would, among other things, effectively permit consuming cannabis in a vehicle or boat used as a residence provided certain other criteria are met. The government is seeking public comment by October 8, 2018 on the proposal.

What remains intact

Under Bill 36, the SFOA 2017 will still explicitly prohibit smoking writ large in enclosed public places and enclosed workplaces. Addressing concerns of second-hand smoke of all kinds, the SFOA 2017 effectively treats cannabis smoke in the same way as tobacco smoke.

The meaning of “enclosed” is defined as any premises covered by a roof. Enclosed workplaces include places or vehicles where employees work or frequent in the course of their employment, even if they aren’t working at the time. Enclosed public spaces are where the public is invited or permitted access. Schools, child care centres, any indoor areas of condominiums and residences, and reserved seating areas of sports and entertainment venues also fall under prohibited areas.

Employers should also be aware of the following:

  • employers may not dismiss or threaten to dismiss, discipline or suspend, impose any penalty, or intimidate a worker because they are in compliance with, or sought enforcement of, Bill 36;
  • substance testing policies are not impacted by Bill 36 and are only permissible in limited circumstances; and
  • employees can continue to refuse unsafe work under the Occupational Health and Safety Act.

What are your obligations

Under Bill 36, employers have the following obligations:

  • ensure that no one smokes or holds lighted tobacco or cannabis, or uses an electronic cigarette, in an enclosed workplace or other area over which the employer exercises control;
  • ensure that anyone who refuses to comply with the smoking prohibition does not remain in the enclosed area;
  • post prescribed signs respecting the smoking prohibition; and
  • remove ashtrays or similar equipment from the enclosed workplace.

An inspector appointed by the government may, without a warrant or notice inspect a workplace to ensure that an employer is fulfilling its obligations under the legislation. Where an employer fails to comply, they can be subjected to a fine of up to $100,000.00 for a first offence or $300,000.00 for subsequent offences.

In addition, employers continue to have a legal obligation to accommodate medical use of cannabis. Federal and provincial human rights legislation requires employers to accommodate employees with disabilities to the point of undue hardship, which is established on a case by case basis. Dependence on recreational cannabis where it amounts to a disability would also require accommodation, as is the case with alcohol dependence. Employers may also be required to cover benefits claims for employees with medical cannabis prescriptions.

Key takeaways

Employers can continue to expect that employees need to show up sober and ready to perform their duties. However, employers should nonetheless consider whether their workplace policies capture the employer’s expectations with regard to issues such as:

  • employee use of recreational cannabis during and prior to work; and
  • smoking prohibitions in or around the workplace and at company-sponsored events.

The employer’s policies will need to clearly define any prohibitions the employer intends to enforce. Such policies would need to be drafted as soon as possible, since legalization is fast approaching on October 17, 2018, and should be reviewed by legal counsel prior to implementation.

Many thanks to Shereen Aly for her assistance with this article.

It’s High Time: Ontario Finally Passes its Cannabis and Smoke-Free Legislation

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Ontario’s revised regulatory framework for cannabis is now in effect. Bill 36, the Cannabis Statute Law Amendment Act, 2018, received Royal Assent and came into force on October 17, 2018, amending 18 provincial statutes including the Cannabis Act, 2017  (now the Cannabis Control Act, 2017 ) and the Smoke-Free Ontario Act, 2017  (SFOA 2017).

Prior to Bill 36, recreational cannabis and medical cannabis were to be regulated separately, and consuming recreational cannabis in a “workplace” or “public place” (both broadly defined and not limited to enclosed areas) was to be entirely prohibited. Bill 36 effectively eliminates the distinction between recreational cannabis and medical cannabis for the purposes of regulating public consumption (among other things). To help employers adjust to the new reality of legalized cannabis, we outline below key aspects of the new legislation.

What is permitted

Smoking of cannabis, whether recreational or medical, is effectively permitted in locations where tobacco smoking or use of electronic cigarettes is permissible under the SFOA 2017, such as sidewalks, public outdoor spaces, parks, etc.

What is prohibited

The SFOA 2017 expressly prohibits:

  • smoking of cannabis, whether recreational or medical, in enclosed workplaces, enclosed public spaces and designated buildings, subject to certain exemptions for controlled areas in certain residential care facilities, hospices, designated guest rooms in hotels, motels and inns, and scientific research and testing facilities; and
  • consuming cannabis in any manner in a vehicle or boat, whether by the driver or passenger.

The meaning of “enclosed” is defined as any premises covered by a roof. Enclosed workplaces include places or vehicles where employees work or frequent in the course of their employment, even if they aren’t working at the time. Enclosed public spaces are where the public is invited or permitted access. Schools, child care centres, any indoor areas of condominiums and residences, and reserved seating areas of sports and entertainment venues also fall under prohibited areas.

Employer obligations

Employers are required to:

  • ensure that no one smokes or holds lighted tobacco or cannabis, or uses an electronic cigarette, in an enclosed workplace or other area over which the employer exercises control;
  • ensure that anyone who refuses to comply with the smoking prohibition does not remain in the enclosed area;
  • post prescribed signs respecting the smoking prohibition; and
  • remove ashtrays or similar equipment from the enclosed workplace.

Failure to comply with the above requirements may result in a fine of up to $100,000 for a first offence or $300,000 for subsequent offences.

No reprisals

Employers may not dismiss or threaten to dismiss, discipline or suspend, impose any penalty, or intimidate a worker because they are in compliance with, or sought enforcement of the SFOA 2017.

Substance testing

Substance testing policies are not impacted by the new legislation and are only permissible in limited circumstances.

Key takeaways

Employers can continue to expect that employees need to show up sober and ready to perform their duties. However, employers should nonetheless consider whether their workplace policies capture the employer’s expectations with regard to issues such as:

  • employee use of recreational cannabis during and prior to work (and at company-sponsored events); and
  • smoking prohibitions in or around the workplace (and at company-sponsored events).

The employer’s policies will need to clearly define any prohibitions the employer intends to enforce. Such policies need to be drafted as soon as possible, since legalization is now here, and should be reviewed by legal counsel prior to implementation.

  • Many thanks to Shereen Aly for her assistance with this article.

Conducting a Police Record Check? What You Need to Know for November 1

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Ontario employers who conduct police record checks for hiring or other purposes should be aware that new legislation comes into force on November 1, 2018. The Police Record Checks Reform Act, 2015  and its Regulations will apply to checks conducted on a Canadian police database. At present, police record checks are not regulated and practices vary depending upon where the check is completed. As of November 1, the process and contents of police record checks will be standardized in Ontario. Below, we outline what you need to know about the new requirements.

Consent required at two stages

The subject individual must give his or her written consent at the following stages:

(i) Consent to Conduct the Check: at the outset, the individual must consent to the particular type of check to be conducted; and

(ii) Consent to Disclose the Results: after receiving the results of the check, the individual must consent to the police record check provider providing a copy to the organization or person requesting the check.

Types of checks

Where consent is given as described above, Ontario’s police services will provide three types of checks:

(1) criminal record check;

(2) criminal record and judicial matters check; and

(3) vulnerable sector check.

The Act specifies the type of information that a police record check provider can disclose in relation to each type of check. The applicable information for each check is outlined below.

Criminal Record Check Criminal Record and Judicial Matters Check Vulnerable Sector Check
Criminal offence for which a pardon has not been issued or granted (except summary convictions from more than 5 years ago) Criminal offence for which a pardon has not been issued or granted (except summary convictions from more than 5 years ago) Criminal offence for which a pardon has not been issued or granted (except summary convictions from more than 5 years ago)
Finding of guilt under the Youth Criminal Justice Act Finding of guilt under the Youth Criminal Justice Act Finding of guilt under the Youth Criminal Justice Act
Conviction for which a pardon has been granted only disclosed where authorized under the Criminal Records Act (Canada) Criminal offence where individual was found guilty and received an absolute discharge (except where request made more than 1 year after absolute discharge) Criminal offence where individual was found guilty and received an absolute discharge (except where request made more than 1 year after absolute discharge)
Criminal offence of which the individual has been found guilty and received a conditional discharge on conditions set out in a probation order (except where request is made more than 3 years after the date of the conditional discharge) Criminal offence of which the individual has been found guilty and received a conditional discharge on conditions set out in a probation order (except where request is made more than 3 years after the date of the conditional discharge)
Criminal offence for which there is an outstanding charge or warrant to arrest in respect of the individual Criminal offence for which there is an outstanding charge or warrant to arrest in respect of the individual
Court order made against the individual, with certain exceptions Court order made against the individual, with certain exceptions
Conviction for which a pardon has been granted only disclosed where authorized under the Criminal Records Act (Canada) Conviction for which a pardon has been granted only disclosed where authorized under the Criminal Records Act (Canada)
Criminal offence charge resulting in finding of not criminally responsible on account of mental disorder, with certain exceptions
Non-conviction information authorized for exceptional disclosure in accordance with s. 10 of the Act

Restrictions on information provided

A criminal record check would not contain information about a criminal offence for which the individual received an absolute discharge. Additionally, non-conviction information in response to a request for a vulnerable sector check cannot be disclosed unless it satisfies certain criteria for “exceptional disclosure.” The criteria are: (1) the offence is one of the offences enumerated in the Regulations (2) the alleged victim was a child or a vulnerable person and (3) the police record check provider has reasonable grounds to believe the individual presents a risk of harm to a child or a vulnerable person, having regard to certain factors.

Restrictions on disclosure

An organization or person may not disclose information provided in the check except for the purpose for which it was requested or as authorized by law.

Reconsideration request

Generally, a request for reconsideration must be made in writing, not later than 45 days after receiving the record and the request can be accompanied by written submissions to be taken into account by the police record check provider. The provider has 30 days from the day after it receives a request for reconsideration to reconsider its determination and notify the individual of its decision in writing. Non-conviction information will not be disclosed if after a reconsideration, the provider concludes that the information does not meet the criteria for “exceptional disclosure.”

Penalties

An organization or person that willfully contravenes certain sections of the Act can be liable for a fine of up to $5,000.

Key takeaways

Employers should take steps to ensure that their policies and practices for obtaining police record checks comply with the Act and Regulations. Employers should also keep the following in mind:

  • individuals being screened will need to consent in writing to the specific type of check to be conducted as well as to the disclosure by the police record check provider of the information to the employer;
  • employers will no longer have access to non-conviction information, unless they request a vulnerable sector check and the criteria for exceptional disclosure are satisfied;
  • the Act expressly prohibits requesting a police record check in respect of an individual in a manner other than in accordance with the Act or disclosing or using the information received other than for the purpose for which it was received or as authorized by law; and
  • employers who seek police record checks as part of the recruitment process should anticipate potential delays in obtaining the required information.

– Many thanks to Shereen Aly for her assistance with this article.

 

 

Ontario Government Introduces Bill 47 to Reverse Most of Bill 148

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On October 23, 2018, the Ontario government introduced Bill 47, Making Ontario Open For Business Act, 2018, to repeal numerous provisions of the previous government’s Fair Workplaces, Better Jobs Act, 2017  (Bill 148). The government indicated that the proposed amendments are designed to “remove the worst burdens that prevent Ontario businesses from creating jobs while expanding opportunities for workers.” We outline the key provisions of Bill 47 below.

Key takeaways

At this time, employers should not take action to update their policies or practices to reflect Bill 47. Even if Bill 47 comes into force, employers should approach any future changes to Bill 148 entitlements with caution. The employer will be at risk of a constructive dismissal claim if it did not preserve the right to change the entitlement to correspond with its legal obligations. Legal advice should be obtained before any changes are made that would reverse or reduce Bill 148 entitlements.

Generally speaking, unionized employers who amended their collective agreement language to reflect Bill 148 requirements are likely without recourse until they negotiate again. Whereas employers who haven’t made changes to their language may have more flexibility. Employers who are currently engaged in bargaining should ensure that, where possible, they use language that limits the employer’s obligations to statutory compliance .

Proposed changes to the Employment Standards Act (ESA)

Bill 47, if implemented, would amend the ESA as follows:

Minimum wage Minimum wage would remain at $14 per hour (instead of increasing to $15 per hour on January 1, 2019). Annual adjustments to the minimum wage tied to inflation would restart as of October 1, 2020.
Scheduling Several scheduling provisions that were slated to come into force on January 1, 2019 would be repealed:
  • the right to request changes to scheduling after an employee has been employed for at least 3 months;
  • minimum 3 hours of pay for being on-call;
  • the right to refuse requests to work or be on-call where the employee was not scheduled with less than 96 hours’ notice;
  • 3 hours of pay where a scheduled or on-call shift is canceled within 48 hours before the shift was to begin; and
  • record-keeping requirements associated with these scheduling provisions.
Personal emergency leave

Current personal emergency leave entitlements would be replaced with a package of annual leave days for workers employed for at least 2 consecutive weeks, comprised of up to 3 days of personal illness, 2 days for bereavement and 3 days for family responsibilities.

Employers would be permitted to require evidence of entitlement to leave that is reasonable in the circumstances, including asking employees to provide a medical note from a qualified health practitioner.

Public holiday pay The prorating public holiday pay formula would be re-adopted, e.g., public holiday pay will be calculated as the total amount of regular wages earned and vacation pay payable to the employee in the four work weeks before the work week in which the public holiday occurred, divided by 20.
Misclassification An individual asserting a claim under the ESA would have the onus of establishing they are an “employee” where there is a dispute over classification.
Equal pay for equal work Employees would no longer be entitled to equal pay for equal work on the basis of a “difference in employment status” (e.g., part-time vs full-time; temporary vs. indefinite) and the related equal pay provisions for temporary help agency employees would also be eliminated.
Penalties The maximum penalties for a contravention of the ESA would be decreased to $250, $500, and $1000 (i.e., the pre-Bill 148 amounts).

What remains intact under the ESA

The government has indicated that the following changes to the ESA that were introduced under Bill 148 will not be repealed:

  • previous minimum wage increases;
  • the 3-hour rule, insofar as employers are required to pay employees for 3 hours of work, where an employee who regularly works more than 3 hours a day is required to report to work, but works less than 3 hours;
  • 3 weeks of paid vacation after 5 years of employment; and
  • leave entitlements in the case of domestic or sexual violence.

The government did not express any intention to repeal the related employer provision introduced under Bill 148. As such, separate legal entities will continue to be treated as one employer if “associated or related activities or businesses” are carried on through multiple entities.

The equal pay for equal work requirement on the basis of sex also remains intact (this requirement pre-dated Bill 148).

Proposed changes to the Labour Relations Act (LRA)

Bill 47, if implemented, would amend the LRA as follows:

Card-based certification Card-based certification would no longer be in effect in the building services industry, the home care and community services industry or for temporary help agencies.
Employee lists The current expedited process under which a union with the support of at least 20% of the proposed bargaining unit can apply for a list of employees in that bargaining unit (and their personal information) would be eliminated.
Remedial certification The test and preconditions for the Ontario Labour Relations Board (OLRB) to certify a union as a remedy for employer misconduct that were in force prior to Bill 148 would be reinstated. The OLRB would also be required to determine whether a vote or new vote would be a sufficient remedy, or whether certification of the union would be the only sufficient remedy.
Successor rights Successor rights in contract tendering for publicly-funded services would no longer apply.
Structure of bargaining units The OLRB would no longer have the power to review and consolidate newly certified bargaining units with existing bargaining units. The OLRB would have the power to review the structure of bargaining units where the OLRB is satisfied the bargaining units are no longer appropriate for collective bargaining.
Return-to-work rights Employees’ right to reinstatement following the start of a strike or lock-out would be reduced to six months (as was the case prior to Bill 148).

First collective agreements

Mediation and mediation-arbitration

The mediation and mediation-arbitration provisions as well as provisions for educational support relating to first collective agreements would be repealed. Instead, pre-Bill 148 conditions for access to first agreement arbitration would be implemented.
Fines The fines for offences under the LRA would be decreased to $2000 for individuals and $25,000 for organizations (i.e., the pre-Bill 148 amounts).
Streamlining processes Expediting certain OLRB proceedings would be facilitated; the publication of certain documents (e.g. collective agreements, arbitration awards) would be required; and alternative means of communication would be recognized, such as e-mail and facsimile for various documents.

We will continue to monitor the status of Bill 47 and will report on further developments.

  • Many thanks to Shereen Aly for her assistance with this article.

Ontario’s Bill 47 Gets Green Light

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On November 21, 2018, Bill 47, Making Ontario Open for Business Act, 2018  (“Bill 47”), passed Third Reading and received Royal Assent. Bill 47 repeals or rewrites numerous provisions of the previous government’s Fair Workplaces, Better Jobs Act, 2017  (“Bill 148”). To help employers navigate and prepare for the many changes under Bill 47, we have summarized the key changes and what is left intact.

Key Takeaways

The Bill 47 amendments to the Employment Standards Act, 2000 come into force on January 1, 2019. However, employers should approach future changes to Bill 148 entitlements with caution. For non-union employees, the employer will be at risk of a constructive dismissal claim if it did not preserve the right to change the entitlement to correspond with its legal obligations. Legal advice should be obtained before any changes are made that would reverse or reduce Bill 148 entitlements.

Generally speaking, unionized employers who amended their collective agreement language to reflect Bill 148 requirements are likely without recourse until they negotiate again. Whereas employers who have not made changes to their language may have more flexibility. Employers who are currently engaged in bargaining should ensure that, where possible, they use language that limits the employer’s obligations to statutory compliance.

Employment Standards Act, 2000

The following changes under Bill 47 come into force on January 1, 2019.

Bill 148 Bill 47
Related employer Separate legal entities are treated as one employer if “associated or related activities or businesses” are carried on through multiple entities No change
Misclassification Misclassifying is specifically prohibited and the employer must establish that the complainant is not an employee Misclassifying is specifically prohibited but the complainant must establish that they are an employee
Scheduling 3 hour rule for shortened and cancelled shifts; on-call rule; right to request scheduling or work location changes; right to refuse work or on-call requests made with less than 96 hours of notice: all of the above were to come into force on January 1, 2019 3 hour rule for shortened shifts
Minimum wage Currently $14/hour; increasing to $15/hour on January 1, 2019 $14/hour; annual inflationary adjustments to restart as of October 1, 2020
Public holiday pay

As of January 1, 2018, public holiday pay = total amount of regular wages earned in pay period immediately preceding public holiday, divided by the number of days the employee worked in that period.

As of July 1, 2018, the “old” prorating formula re-adopted as an interim measure.

Prorating formula: public holiday pay = total amount of regular wages earned and vac. pay payable to the employee in the 4 work weeks before the work week in which the public holiday occurred, divided by 20 (i.e., the “old” formula)
Vacation pay 3 weeks’ paid vacation after 5 years’ employment No change
Equal pay for equal work Pay differentials based on “difference in employment status” are prohibited (e.g., PT vs. FT; temporary vs. indefinite) or for temporary help agency workers Repeal
Domestic or sexual violence leave Up to 10 days and up to 15 weeks of leave in a calendar year, with the first 5 days paid and the remaining days unpaid No change
Personal emergency leave (PEL)

10 PEL days with the first 2 days paid

Employer cannot require a certificate from a doctor or other qualified health practitioner (QHP)

8 unpaid leave days: sick leave (3 days), family responsibility leave (3 days), and bereavement leave (2 days)

No prohibition re. requiring doctor’s/QHP’s certificate

Fines Maximum fine amounts for contravention of the ESA increased Maximum fine amounts decreased to pre-Bill 148 amounts $250, $500 and $1000)

Labour Relations Act

The following changes under Bill 47 are in force as of November 21, 2018.

Bill 148 Bill 47
Employee lists Expedited process under which a union with support of at least 20% of the proposed bargaining unit can apply for a list of employees in that bargaining unit (and their personal information) Repeal
Remedial certification

The Ontario Labour Relations Board (“Board”) is required to certify the union if the Board is satisfied the employer’s contravention resulted in (a) the true wishes of the employees were not likely reflected in a representation vote; or (b) the union not being able to demonstrate 40% support.

The Board no longer has the option of ordering a representation vote under the circumstances described above and instead must certify the union for the bargaining unit the Board determines could be appropriate.

Reinstatement of pre-Bill 148 approach to penalty certification for employer misconduct.

Under the prescribed conditions, the Board would again have discretion to order a vote or certify.

Reviewing bargaining unit structure The Board may review structure of the bargaining unit if certain conditions are met (application made at time of certification application or within 3 months of certification; no collective agreement yet; same union represents both units) Repeal
Card-based certification

In the following sectors, the Board may certify the union (or direct a representation vote) if the Board is satisfied that more than 55% of employees in bargaining unit are union members: building services, home care and community services, and temporary help agencies.

If 40-55%: the Board will direct a representation vote.

Repeal (with transition clause for elections made before the in force date)
First agreements Mediation and mediation-arbitration provisions Return to pre-Bill 148 first agreement arbitration
Return-to-work rights No time limit on an employee’s right to reinstatement following the start of a strike or lock-out Employee’s right to reinstatement following the start of a strike or lock-out is reduced to six months (return to the pre-Bill 148 timeframe)
Fines Fines for offences increased ($5000 for individuals and $100,000 for corporations) Fines decreased to the pre-Bill 148 amounts ($2000 for individuals and $25,000 for corporations)

Please see our earlier blog post here for further details on the legislative changes under Bill 47.

Note that the current provision under the Labour Relations Act giving the Board the authority to review bargaining unit structures, will be repealed in its entirety instead of being revising as described in our earlier blog post. This change to Bill 47 was made in response to the recommendation of the Standing Committee on Finance and Economic Affairs.

Ontario’s Pay Transparency Act Put on Pause

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On December 6, 2018, Bill 57, Restoring Trust, Transparency and Accountability Act, 2018  (“Bill 57”), passed Third Reading and received Royal Assent. As a result of Bill 57, the Pay Transparency Act, 2018  (“Act”) will not come into force on January 1, 2019 as expected, and will be put on hold to allow the government to engage in public consultations.

As we wrote in our earlier post, Bill 57 does not change the substantive content of the Act, although it is foreseeable that future legislation will do so. The new government has quickly implemented many significant changes in labour and employment law. From this standpoint, it seems likely that the government will amend or even repeal the Act, as opposed to simply delaying the in force date.

Key Takeaways

For now, employers should minimize the time, money and resources spent on achieving compliance with the Act. Employers who have already implemented changes may find it more cost-effective to simply leave those changes in place until substantive legislative changes occur. On the other hand, employers who are still in the process of developing and implementing changes are likely better off putting their changes on hold until further notice.

Ontario’s War on “Red Tape” Continues: PC’s Table Bill 66

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The Ontario government introduced Bill 66, Restoring Ontario’s Competitiveness Act  (“Bill 66”) on December 6, 2018. If passed, Bill 66 will make amendments to several pieces of legislation in Ontario. The government has stated that its objective in introducing these changes is to “lower business costs to make Ontario more competitive” and to “harmonize regulatory requirements with other jurisdictions, end duplication and reduce barriers to investment.” We outline below the proposed changes to the province’s labour and employment legislation below.

Key takeaways

Employers should not alter their policies or practices to reflect Bill 66…yet. Employers can anticipate that the government will move quickly in advancing Bill 66 through the legislative process. The swift rate at which Bill 47 and Bill 57 were implemented is likely to be repeated in the case of Bill 66.

Proposed changes to the Employment Standards Act (“ESA”)

If Bill 66 is implemented in its current form, the ESA would be amended such that employers would no longer be required to obtain the Director of Employment Standards’s approval to make agreements to:

  1. permit their employees to exceed 48 hours of work in a work week; or
  2. allow averaging of an employee’s hours of work for the purpose of determining the employee’s entitlement to overtime pay.

Under Bill 66, the employer would be able to average the employee’s hours of work over a period not exceeding four weeks in accordance with the terms of an averaging agreement between the employer and the employee. Existing overtime averaging agreements in unionized workplaces would continue to be effective until a subsequent collective agreement comes into effect.

The current requirement to obtain the Director’s approval for excess hours and overtime averaging agreements came into effect in 2005 under the Liberal government. The provisions were controversial at the time due to the administrative burden placed on employers to obtain these approvals.

In addition, Bill 66 contemplates that employers would no longer be required to post a poster in their workplaces to provide information to employees about the ESA and its regulations.

Proposed changes to the Labour Relations Act (“LRA”)

The LRA has a unique set of rules for certifying unions in the construction industry that can result in province-wide, multi-employer collective agreements. Currently, employers subject to this regime whose primary business is not construction may apply to the Ontario Labour Relations Board to be declared a “non-construction employer” under the LRA, relieving them of their obligation to comply with the terms of these collective agreements.

If Bill 66 passes, designated employers, including municipalities, school boards, hospitals, colleges and universities, will be deemed to be “non-construction employers” under the LRA. Designated employers will be released from the obligations established under the “construction provisions” of the LRA. In some cases, this will enable designated employers to tender construction projects to non-union contractors and/or negotiate agreements specific to the circumstances of their sector.

We will continue to monitor the status of Bill 66 and report on its progress.

– Many thanks to Shereen Aly for her assistance with this article.

“Modernized” Federal Labour Standards: Key Changes & What to Do About Them

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On December 13, 2018, Bill C-86, the Budget Implementation Act, 2018  received Royal Assent. Bill C-86 has a wide ambit given that it primarily implements the February 2018 federal budget plan. Among other things, Bill C-86 makes numerous amendments aimed at “modernizing” the labour standards in the Canada Labour Code (“CLC”). To help federally regulated employers navigate the many changes to the labour standards, we have outlined the key changes to be aware of and what to do about them.

Takeaways

Overall, the Bill C-86 amendments to the federal labour standards vary in their subject matter and reach, closely reflecting Ontario’s Bill 148. Most of Bill 148, introduced by the Liberal government, has been reversed or modified by the current PC government. Employers will need to keep abreast of the effective dates for the changes under Bill C-86 to ensure that they maintain compliance. At this point, the timing for implementing these changes is not entirely clear, but all of the changes will likely be rolled out in 2019. We will monitor progress and will provide an update when the timeline becomes clear.

Misclassification: Misclassifying individuals as non-employees is now expressly prohibited. Further, the employer will bear the onus of proving an individual is not an employee.

What to do: 

  • Review arrangements with independent contractors and other service providers to identify potential risk.
  • Consider making changes to the arrangement and the terms of the contract where risk is identified.
  • Keep in mind that reviewing contracts is not enough for a proper risk assessment ‒ the employer’s day-to-day expectations and the economic realities of the arrangement, among other factors, need to be taken into account.

Equal pay for equal work: As a general rule, pay rate differentials based on “employment status” are prohibited. The general rule requires equal pay where employees work in the same industrial establishment under similar working conditions and perform substantially the same kind of work, requiring substantially the same skill, effort and responsibility. Despite the general rule, exceptions permit employers to establish distinct pay rates on the basis of seniority or merit systems, systems measuring the quantity or quality of each employee’s production, or any other prescribed criterion.

Temporary help agency employees will also be entitled to the same pay rate as employees of the client in the circumstances described above. The exceptions described above also apply in the case of temporary agency employees. In addition, actions that deter or prevent an employee from becoming an employee of a client of a temporary help agency are expressly prohibited, including fees charged to the employee or the client for establishing an employment relationship.

What to do: 

  • Review and update policies and practices relating to pay rates.
  • Review and revise job descriptions to better differentiate among classes of employees as appropriate.
  • Audit your workforce to assess whether the new equal pay rules are met.

Termination: Individual notice of termination requirements are increased based on length of service. Notice entitlement begins at 2 weeks for employees with 3 months of service and increases to up to 8 weeks for employees with at least 8 years of service. Employers will have the option of providing sixteen weeks of wages, in lieu of sixteen weeks of notice to the Minister of Labour, where the employer terminates the employment of at least 50 employees (provided that notice to the Minister is given at least forty-eight hours before the group termination).

What to do: Employers who have not already done so should budget for increased costs associated with terminations or layoffs in 2019 and beyond.

Continuous employment: The continuous employment provisions are expanded; in particular, there will be continuous employment where an employee is employed in connection with the operation of a work, undertaking or business, both before and after a lease or transfer from one employer to another, if the work, undertaking or business is federal, or if it becomes federal due to the lease or transfer. As well, there will be continuous employment for employee contracts transferred to another employer as a result of a re-tendering process.

What to do: Increased entitlements to vacation time and vacation pay, notice of termination, etc. may apply where employment is deemed to be continuous under the new provisions. As such, employers should factor this possibility into their budget planning for 2019 and beyond.

Leaves: As outlined below, new leaves have been added, along with incremental changes to existing leave entitlements.

What to do:

  • Develop guidelines for determining what kind of leave pertains and whether the leave needs to be paid or unpaid.
  • Prepare for workforce continuity issues as a result of the increased leave entitlements, e.g., cross-train staff on work assignments and budget for retaining replacement workers based on forecasted need.
Leave type Current CLC Bill C-86
Maternity 6 months’ service required for eligibility No service requirement for eligibility
Paternity 6 months’ service required for eligibility No service requirement for eligibility
Personal Up to 5 days for illness, injury, health-related family responsibilities, education-related responsibilities for family members under 18, urgent matters, citizenship conferral, or prescribed reasons – first 3 days paid for employees with 3 months’ service
Medical 17 weeks unpaid for sick leave – 3 months’ service required for eligibility – employer may require health care practitioner’s certification for absence Up to 17 weeks unpaid for personal illness or injury, organ or tissue donation, or medical appointments during work hours – no service requirement for eligibility – employer may require health care practitioner’s certification for absence of 3 days or longer
Court or jury duty Leave to act as a witness, juror or to participate in jury selection, no maximum leave period specified – no service requirement for eligibility
Reservist No maximum leave period – 6 months’ service required for eligibility Maximum leave period of 24 months in 60-month period – 3 months’ service required for eligibility

Other incremental changes:

Entitlement Current CLC Bill C-86
Vacation 2 weeks’ vacation and vacation pay of 4% of wages (all employees); 3 weeks’ vacation and vacation pay of 6% of wages after 6 years’ service 2 weeks’ vacation and vacation pay of 4% of wages after 1 year of service; 3 weeks’ vacation and vacation pay of 6% of wages after 5 years’ service; 4 weeks’ vacation and vacation pay of 8% of wages after 10 years’ service
Holiday pay 30 days’ service required for eligibility No service requirement for eligibility
Breaks Unpaid 30-minute break during every work period of 5 consecutive hours
Rest periods Rest period of at least 8 consecutive hours between work periods or shifts
Medical and nursing breaks Unpaid breaks as necessary for nursing/expressing breast milk
Notice of work schedule Written work schedules must be provided at least 96 hours before the start of the first work period or shift under the schedule – employees may refuse work that starts within 96 hours from the time the schedule was provided
Working age 17 years is the minimum age for working without regulatory restriction 18 years is the minimum age for working without regulatory restriction
Expenses Employees are entitled to reimbursement of reasonable work-related expenses

Communicating information to employees: Employers must post the most recent version of any materials that the Minister makes available and that contains information respecting employers’ and employees’ rights and obligations under the CLC. Employers must also, within the first 30 days of employment, provide employees with a copy of such materials.

  • Many thanks to Marc Di Pierdomenico for his assistance with this article.

Top 10 Canadian Labour & Employment Law Developments of 2018

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To ring in the New Year, we highlight the ten most significant developments in Canadian labour and employment law in 2018.

  1. Legalization of recreational marijuana. Across Canada, the legalization of recreational cannabis has had a significant impact on employers, requiring them to implement changes to their workplace policies and procedures. The legalization of recreational marijuana has placed a spotlight on issues resulting from current technological limitations of testing for “current impairment”, and has required employers to adapt to the idea of a controlled substance that is legal for both recreational and medicinal use.
  2. Ontario introduces, and largely reverses, major workplace legislation reforms. Ontario’s Bill 148, the Fair Workplaces, Better Jobs Act, 2017, introduced a wide range of changes to workplace legislation, including increases to minimum wage, paid vacation, and protected leave time, as well as new “equal pay for equal work” requirements. A majority of these changes came into force in 2018. However, on November 21, 2018, the new provincial government reversed most of these changes under Bill 47, the Making Ontario Open For Business Act, 2018.
  3. Alberta implements major reforms to workplace legislation. The Alberta legislature passed comprehensive amendments to its workplace legislation, most of which took effect on January 1, 2018. These changes were enacted through Bill 17, the Fair and Family-friendly Workplaces Act; and Bill 30, An Act to Protect the Health and Well-being of Working Albertans, including enhanced leave and vacation entitlements, the implementation of a new administrative penalty system under the Employment Standards Code, the expansion of “card-based certification” for new unions, and other changes to legislation regarding occupational health and safety and workers’ compensation.
  4. Major changes to Quebec’s workplace legislation. In 2018, the National Assembly of Quebec made significant changes to the province’s workplace legislation under Bill 176, An Act to amend the Act respecting labour standards and other legislative provisions mainly to facilitate family–work balance. Changes include expanded leave entitlements, the inclusion of “sexual harassment” as a form of psychological harassment, the prohibition of any distinction based solely on hiring date in relation to pension plans or other employment benefits, and changes to directors and officers liability.
  5. British Columbia initiates workplace legislation reform. In June of 2018, BC’s Employment Standards Act Reform Project Committee issued recommendations for amendments to British Columbia’s Employment Standards Act, including enacting the right to refuse overtime in circumstances where overtime would conflict with certain family commitments, changes to overtime averaging requirements, and enhanced leave entitlements. On October 25, 2018, the BC government released the report of the Labour Relations Code Review Panel, recommending several amendments to the Labour Relations Code, including shortening the time between the filing of an application for certification and the certification vote, expanding remedial certifications, and expanding the statutory freeze period. It is very likely that these recommendations will give rise to substantial changes to BC’s workplace legislation in 2019.
  6. Ontario’s Pay Transparency Act, passed and put on hold. On May 7, 2018, Ontario’s former provincial government enacted Bill 3, An Act respecting transparency of pay in employment. The Pay Transparency Act was set to take effect on January 1, 2019, requiring Ontario employers to publish a salary rate or range in all publicly advertised job postings, prohibiting employers from asking candidates about their past compensation, and eventually requiring employers to post pay transparency reports online. However, Ontario’s new provincial government passed legislation on December 6, 2018, effectively placing the Pay Transparency Act on hold. It is likely that the Pay Transparency Act will be significantly amended or repealed by the new Ontario government in 2019.
  7. Ontario’s Police Record Checks Reform Act. As of November 1, 2018, Ontario legislation established three standard types of police records checks in Ontario, and set a procedural framework for executing the checks. This legislation is helpful in reducing the likelihood that unnecessary information will be disclosed to employers during the police record check process, and will reduce the confusion that has resulted from having different police record check processes administered in different regions across Ontario.
  8. Asset purchasers free to offer employment on new terms. On August 2, the Supreme Court of Canada refused leave to appeal the decision in Krishnamoorthy v Olympus Canada Inc, 2017 ONCA 873. In that case, the Ontario Court of Appeal ruled that, when a business’ assets are sold (as opposed to its shares), and the purchaser offers new employment to that business’s employees under different terms and conditions, the resulting employment contracts are generally enforceable, assuming they comply with employment standards legislation. In other words, new offers of employment in the context of an asset sale are fundamentally distinct from new offers of employment in the context of a share purchase, where the enforceability of amendments are often unenforceable for lack of “fresh consideration”.
  9. Two Ontario Court of Appeal cases give rise to further uncertainty regarding the enforceability of termination clauses. In Amberber v. IBM Canada Ltd., 2018 ONCA 571 and Nemeth v. Hatch Ltd., 2018 ONCA 7, the Ontario Court of Appeal sought to clarify and limit the contractual language threshold for ousting the common law entitlement to reasonable termination notice. These cases will strengthen the employer’s enforceability argument in many cases. However, it continues to be difficult to resolve apparent inconsistencies in the case law, and to predict what will occur in the litigation of each particular case.
  10. Increased legal scrutiny for benefits plans that make age-based distinctions at age 65. In Talos v. Grand Erie District School Board, 2018 HRTO 680, the Human Rights Tribunal of Ontario concluded that the applicant had been discriminated against on the basis of age as a result of the statutory exception that permitted the elimination of his benefits when he reached the age of 65. The HRTO therefore determined that Mr. Talos’ rights under s. 15(1) of the Charter had been infringed. Furthermore, the HRTO held that, although the financial viability of benefits plans was a pressing and substantial objective, the government’s decision to legislate the statutory exception was not justified because it was not necessary to preserve the financial viability of benefits plans. This case strongly suggests that the statutory exception will be the subject of further litigation, and that benefits plans that make age-based distinctions for employees after reaching the age of 65 will now be subject to serious legal scrutiny.

Many thanks to Massimo Orsini for his assistance with this article.


Defining “Cause” in a Termination Provision: Mind Your Language!

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This is part two in our series on recent Ontario Superior Court decisions that employers should be aware of before finalizing future employment agreements. See here for our first part, on the recent trend of lengthy notice period awards for long service employees of advanced age.

As most employers know, unenforceable termination clauses often give rise to costly wrongful dismissal claims. Yet the case law in this area is constantly evolving, and it is increasingly challenging to stay abreast of what a court will consider to be enforceable.

In Khashaba v Procom Consultants Group Ltd., 2018 ONSC 7617, the Court reminded employers that a valid termination provision must guarantee an employee at least their minimum entitlements under the Employment Standards Act (ESA). Under the ESA, the standard for terminating employment without notice (or wages and benefits in lieu) is non-trivial “wilful misconduct” (or “wilful neglect of duty”). The employee must receive at least their ESA entitlements if their employment may be terminated for conduct that falls short of this standard. Otherwise, following Khashaba, the clause will be unenforceable and the employer may be liable for providing reasonable notice of termination.

Key Takeaways

The Khashaba decision holds that if a “for cause” termination provision provides for termination without notice, it must satisfy minimum standards under the ESA. The statutory standard — non-trivial “wilful misconduct” and “wilful neglect of duty” — is distinguished from the common law standard, and a breach of the common law standard is not necessarily a breach of the statutory standard. Thus, a contract that provides for no notice of termination (or pay and benefits in lieu) on the basis of the (lower) common law standard will be unenforceable.

A practical solution to resolve this issue is to always include language in a “for cause” termination provision that confirms minimum statutory entitlements will be provided in any event (e.g. “Where there is “cause” for termination of employment, the employee will not be provided termination notice, or wages and benefits in lieu, save and except that which is required under the ESA”). Alternatively, the provision would have to effectively distinguish between what entitlements apply in the case of the common law standard versus the statutory standard.

To identify the best language for a termination provision in the circumstances at hand, employers should seek assistance from legal counsel.

Background

Mr. Khashaba applied for a 6-month fixed-term contract with Alectra Utilities through Procom, a recruiting, staffing and placement agency. In emails to Mr. Khashaba, Procom sent him congratulatory messages, asked him to complete online training and a criminal background check and provided him with a contract of employment, which he signed and returned. Based on these communications, Mr. Khashaba understood that he had secured the job with Alectra and submitted his notice of resignation to his then-current employer. However, Alectra did not hire Mr. Khashaba for the position.

Mr. Khashaba brought an application under the Rules of Civil Procedure, seeking a determination of rights and the interpretation of the employment agreement that he alleged was concluded between himself and Procom.

In his application, Mr. Khashaba claimed that the “Early Termination” provision in the employment agreement (copied below) was unenforceable because the “Termination for Cause” clause allowed for termination for behaviour meeting the standard of “cause” at common law, as opposed to “wilful misconduct” as required under the ESA. As such, he argued that the entire “Early Termination” provision of the employment agreement, consisting of five clauses, was void. He sought termination pay for the common law notice period, constituting the remaining term of the contract.

        5.        Early Termination

(a)        Resignation   You must give 2 weeks’ prior written notice to Procom if you wish to terminate this Agreement before the Scheduled End Date, which notice may be waived in whole or in part by Procom at its sole discretion, without any further obligation or liability to you, other than accrued wages, vacation pay, and benefits continuation (if applicable) to your last day of active employment.

(b)        Termination for Cause   Procom may, at its option, terminate your employment immediately for cause, without prior written notice or compensation of any nature. For these purposes, “cause” means any grounds at common law for which an employer is entitled to dismiss an employee summarily without notice or compensation in lieu of notice.

(c)       Termination without Cause   Notwithstanding the fixed Term of this Agreement, Procom may terminate your employment without cause at any time by providing you with only the minimum amount of notice of termination or pay in lieu thereof (at the Company’s sole discretion, in any combination), minimum benefits continuation (if applicable), and minimum severance pay (if applicable), as required by the Employment Standards Act, 2000, as well as accrued wages and vacation pay up to and including the date of termination. In no event will you receive less than your minimum entitlements under the Employment Standards Act, 2000. If a greater entitlement is required under the Employment Standards Act, 2000 than this provision grants to you, your entitlements shall automatically be increased to satisfy only the minimum entitlements required by the Employment Standards Act, 2000 on the termination of your employment. You understand and agree that the entitlements set out in this paragraph will constitute your full, exclusive and final entitlements to notice or pay in lieu of notice, severance pay (if applicable), and benefits continuation (if applicable), including in the event of a constructive dismissal and including any entitlements to common law notice and by your acceptance of this Agreement waive any further other claim at common law relating to such termination.

(d)       You agree that these provisions respecting resignation and termination shall remain in effect throughout this Agreement and any renewal or extension of this Agreement, notwithstanding any other changes to the terms and conditions of this Agreement or to any renewal or extension of this Agreement, unless a specific written agreement is made to change these provisions.

(e)        Return of Property   Upon termination of your employment for any reason whatsoever, you shall immediately return all property of the Client…

Decision

The Court considered whether there was a valid contract, whether the contract violated the ESA, and the consequences of the violation.

The Court found that Procom had concluded a contract of employment with Mr. Khashaba, and that the “Termination for Cause” clause did not comply with the ESA. The Court determined that the clause permitted termination without notice (or pay in lieu thereof) for conduct meeting the standard of just cause at common law, while the ESA requires the higher standard of “wilful misconduct”. According to the Court: “[w]ilful misconduct involves an assessment of subjective intent, whereas just cause is a more objective standard. Wilful misconduct is colloquially described as “being bad on purpose.” Careless, thoughtless, heedless, or inadvertent conduct, no matter how serious, does not meet the ESA wilful misconduct standard. By contrast, common law just cause for dismissal may be found on the basis of prolonged incompetence, without any intentional misconduct.”

However, the Court rejected the submission that the non-compliance with the ESA in the “Termination without Cause” clause voided the entire “Early Termination” provision. Rather, the remainder of the “Early Termination” provision was still valid and enforceable. The Court emphasized that it was “not interpreting, rewriting or reading down any part of the Employment Agreement to make it comply with the ESA” in finding only the “Termination for Cause” clause was void.

While the Court remarked that the circumstances bore no resemblance to a typical termination, it ultimately held that Procom terminated its employment agreement with Mr. Khashaba without cause. Under the “Termination without Cause” clause, Mr. Khashaba was entitled to the minimum amount of pay in lieu of notice of termination, minimum benefits continuation, and minimum severance pay as required by the ESA. Since Mr. Khashaba worked for Procom for less than three months, pursuant to s. 54 of ESA, he was not entitled to any notice of termination, pay in lieu of notice, benefits or severance pay. Therefore, he was not entitled to any damages under the “Termination without Cause” clause.

  • Many thanks to Shereen Aly for her assistance with this article.

Hot Off the Press: Bill 66 Ushers in More Changes for Ontario Employers

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On April 3, 2019, Restoring Ontario’s Competitiveness Act, 2019  (Bill 66) received Royal Assent. Bill 66 amends several pieces of legislation in Ontario. The government has stated that the changes are intended to “lower business costs to make Ontario more competitive” and to “harmonize regulatory requirements with other jurisdictions, end duplication and reduce barriers to investment.”

Changes to the Employment Standards Act (ESA)

As we reported in our earlier post, Bill 66 amends the ESA as follows:

  • No Approvals Needed for Excess Hours/Overtime Averaging: Employers are no longer obliged to obtain the Director of Employment Standards’ approval to make agreements to either: (1) permit employees to exceed 48 hours of work in a work week, or (2) allow averaging of an employee’s hours of work for the purpose of determining entitlement to overtime pay.
  • Changes to Averaging Agreements: Employers may average the employee’s hours of work in accordance with the terms of an averaging agreement between the parties over a period that does not exceed four weeks. Existing overtime averaging agreements in unionized workplaces would continue to be effective until a subsequent collective agreement comes into effect.
  • No Posting of Posters: Employers would no longer be required to post a poster in their workplaces to provide information to employees about the ESA and its regulations. Copies of the most recent poster still need to be provided to employees.

These amendments are in force as of April 3, 2019.

Changes to the Labour Relations Act (LRA)

As we explained previously, the LRA has a unique set of rules for construction industry employers that can entail province-wide, multi-employer collective agreements. Employers subject to this regime whose primary business is not construction may apply to the Ontario Labour Relations Board to be declared a “non-construction employer” under the LRA, relieving them of their obligation to comply with the “construction provisions” of the LRA.

Deemed non-construction employers

Bill 66 amends the definition of “non-construction employer” in the LRA and provides that designated employers will be deemed to be “non-construction employers”, thereby releasing them from labour relations law applicable to the construction sector, including collective agreements negotiated on a sector-wide basis. In some cases, this will enable designated employers to tender construction projects to non-union contractors and/or negotiate agreements specific to the circumstances of their organization.

Designated employers will include municipalities, school boards, hospitals, colleges and universities, as well as the following entities:

  • local boards under the Municipal Act, 2001 or the City of Toronto Act, 2006;
  • local housing corporations under the Housing Services Act, 2011;
  • corporations under the Municipal Act, 2001 or the City of Toronto Act, 2006;
  • district social services administration boards under the District Social Services Administration Boards Act; and
  • public bodies under the Public Service of Ontario Act, 2006.

The government has not yet set the date on which these amendments will come into force.

Opt-out election

Bill 66 also provides that employers that fall within the aforementioned categories are able to “opt-out” of these new rules by filing an election with the Minister. The following conditions must be met for the “opt-out” election to apply:

  • A trade union must represent employees of the employer who are employed/may be employed in the construction industry on April 3, 2019;
  • The election must be made by a person with authority to bind the entity, and the election must be made in writing; and
  • The election must be filed with the Minister within three (3) months of April 3, 2019.

Once an “opt-out” election is made, it is irrevocable. However, this does not preclude an employer from subsequently making an application under section 127.2 of the LRA to declare that a trade union no longer represents those employees of the “non-construction employer” that are employed in the construction industry.

The opt-out election provisions are in force as of April 3, 2019.

We will monitor and report on the timing for the amendments that are still due to come into force.

24 Months Reaffirmed as the “High End” of Reasonable Notice; Bonus Plan Changes Must Be Accepted by Employee

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The Ontario Court of Appeal has reiterated that, barring exceptional circumstances, reasonable notice for dismissal without cause will not exceed 24 months. The Court partially overturned the lower court’s decision in Dawe v The Equitable Life Insurance Company of Canada, which also ruled on the enforceability of unilateral changes to the employer’s bonus plan.

Key Takeaways

Generally speaking, employers can anticipate that 24 months represents the “high end” of reasonable notice, even for employees at the senior executive level who are close to retirement. However, each case needs to be assessed individually since the particular circumstances could entail a longer notice entitlement.

Further, if the employer seeks to make changes to its bonus plan, or other key terms of employment, the employer must bring the changes to the employee’s attention. It is not sufficient to simply provide the employee with a copy of the new bonus plan (or other new terms). As a best practice, employers should do the following:

  • provide a clear communication which outlines the key changes in the bonus plan (or other employment terms);
  • provide opportunity for employees to ask questions or obtain more information;
  • allow sufficient time for employees to consider the new plan;
  • encourage employees to obtain independent legal and/or financial advice; and
  • ask employees to indicate, in writing, whether they acknowledge and accept the new plan.

Employers should also keep in mind that valid consideration must be given for new contractual terms to be enforceable. Apart from enforceability issues, employers should proceed with caution when contemplating changes to bonus plans since such changes can constitute constructive dismissal. Legal advice should be sought to mitigate risk in this area.

Background

Superior Court of Justice decision

Earlier this year, the Superior Court of Justice ruled that Mr. Dawe, a 62 year-old Senior Vice President with 37 years of service was entitled to 30 months of reasonable notice – see our post here. The Court also found that Mr. Dawe’s bonus, amounting to $380,000 in the year preceding his dismissal, formed an integral part of his compensation. Further, the Court found that Mr. Dawe had not accepted the unilateral changes that the employer made to its bonus plan in 2006, a number of years prior to his dismissal:

I am not persuaded simply providing a copy of the plan document meets this standard.  In essence, providing only a copy of the document transfers the onus to the employee of finding any negative terms of employment.  These are complex documents, drafted by lawyers, and most difficult to read and understand.  In my view, an employer has a duty to inform the employee of all expected terms of employment.  That is particularly the case here as Equitable Life had changed the method of establishing bonus plans and was attempting to introduce a forfeiture clause that was not part of the prior system.

Finally, the Court held that the provisions in the 2006 bonus plan designed to limit bonus entitlement upon the termination of employment were ambiguous and unenforceable.

Court of Appeal decision

The Court of Appeal partially overturned the lower court’s findings.

The Court reiterated that 24 months represents the “high end” of reasonable notice which will only be exceeded in exceptional circumstances. The Court stated that this period already reflects and rewards Mr. Dawe’s lengthy and loyal service. No circumstances warranted going beyond this upper threshold in Dawe. While the Court reaffirmed the “soft cap” that it commented on in other cases, it did not provide guidance as to what circumstances would warrant a notice period in excess of the cap. Accordingly, employers can expect that employees will continue to seek notice in excess of 24 months on the basis that exceptional circumstances apply in their situation.

The Court agreed that Mr. Dawe was entitled to his bonus but it did not fully accept the lower court’s reasons. The Court found that the terms of the bonus plan were sufficiently clear to exclude Mr. Dawe’s bonus entitlement. However, the Court agreed with the lower court that the employer could not enforce the terms of the 2006 bonus plan because it had not brought them to Mr. Dawe’s attention.

The Court noted that “A pre-condition to acceptance is knowledge of the changes.” The Court stated that while Mr. Dawe could have known about the unfavourable changes because of his role in the termination of employment of other employees, this does not mean he had actual knowledge of the change in his own employment contract. The employer’s failure to highlight this change to Mr. Dawe meant that he could not be deprived of his bonus entitlement.

  • Many thanks to Jan Nato for his assistance with this article.

A New Contract for a Current Employee? Consider the Consideration!

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Employers often wish to enter new or updated employment agreements with existing employees. The driving force is typically that circumstances have changed, but it can also be that the employer simply wants different or additional terms. However, the employer must give the employee valid consideration, otherwise the new or updated agreement will not be enforceable.

The Ontario Court of Appeal’s decision in Theberge-Lindsay v. 3395022 Canada Inc. serves as a reminder that continued employment in itself is not valid consideration. The Court also addresses a new issue: is valid consideration given if the new agreement follows the employee’s resignation albeit if the resignation is rescinded prior to its effective date? The Court held that a re-hiring in this context constitutes valid consideration. The Court also confirmed that changing the corporate entity intended to serve as the employer does not break the employee’s service if the actual employer remains the same.

Key Takeaways

The Court’s holding that a resignation breaks the chain of employment, even if it is rescinded prior to its effective date, is a favourable result for employers. Nonetheless, the need for fresh consideration will depend on the situation at hand. Legal counsel can advise on ways to bolster the enforceability of agreements with existing or re-hired employees. Legal counsel can also assist with calculating service, and other aspects of employee entitlements on dismissal. Employers should also be attuned to the fact that decision makers will look beyond the form of an agreement to determine who the actual employer is. Proactive attention to this issue can save time, money and, in certain cases, the employer’s reputation.

Background

The plaintiff, Ms. Theberge-Lindsay, was hired as a dental hygienist in 1993 by Dr. Kutcher, a dentist and periodontist. In the succeeding years, for tax purposes, Dr. Kutcher used various corporate vehicles to employ his hygienists. At various points, Dr. Kutcher required Ms. Theberge-Lindsay to sign new employment agreements reflecting the new employer entities. Each of the agreements limited her entitlement upon dismissal without cause to the minimum required by employment standards legislation.

In March 2005, Ms. Theberge-Lindsay resigned with an effective date of July 7, 2005. In or about May 2005, she notified Dr. Kutcher that she intended to remain employed in his dental office, having ended her engagement which had prompted her resignation. At trial, Ms. Theberge-Lindsay testified that Dr. Kutcher told her that he was pleased to have her stay. However, Dr. Kutcher presented her with a new employment agreement on June 30, 2005 which she then signed. This agreement also limited her entitlement upon dismissal without cause to the statutory minimum.

In 2012, Ms. Theberge-Lindsay was dismissed without cause. She was provided with one week’s salary in lieu of notice, in satisfaction of the most recent employment agreement, entered by the parties in 2011.

Lower Court’s Decision

The lower court found that Ms. Theberge-Lindsay had 19 years of uninterrupted service and that each of the employment contracts she signed was unenforceable since the offer of continued employment alone did not constitute valid consideration. The trial judge found that Ms. Theberge-Lindsay was wrongfully dismissed and entitled to damages representing 15 months of reasonable notice.

Court of Appeal’s Decision

The Court of Appeal made three key findings. First, the Court agreed with the lower court that the 2011 employment contract was void for lack of consideration and accordingly Ms. Theberge-Lindsay was not obliged to accept one week’s salary as notice of dismissal.

Second, the Court overturned the lower court’s finding that Ms. Theberge-Lindsay had 19 years of uninterrupted service. Instead, the Court accepted the employer’s argument that the 2005 resignation broke the chain in her employment. The Court found that there was valid consideration for the June 30, 2005 employment contract, specifically, “Ms. Theberge-Lindsay’s offer to again be employed by Dr. Kutcher and his acceptance of her offer to again employ her”, despite there being no changes to the terms of the employment. The termination clause in the June 30, 2005 contract was determinative of her entitlement to notice – under which Ms. Theberge-Lindsay was entitled to 7.5 weeks of notice.

Third, the Court left in place the lower court’s finding that Dr. Kutcher was Ms. Theberge-Lindsay’s actual employer despite the various changes he made to his corporate entities. As a result, these changes did not break Ms. Theberge-Lindsay’s length of service.

We will monitor any further judicial treatment of the Theberge-Lindsay decision.

  • Many thanks to Alissa Scarcello for her assistance with this article.

Now Effective: Changes to the Canada Labour Code (Part One)

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Changes to the Canada Labour Code (“CLC” or “Code”) are effective on September 1, 2019.  To ensure compliance, federally regulated employers should review their policies and procedures.

This is part one of a two part series summarizing changes to the Code.  This part focuses on federal employment standards related to vacation, holiday and leave entitlements.  The remaining changes will be summarized in part two.

Changes to Minimum Standards Regarding Vacation and Holidays

An employee can make a written request to take vacation in more than one period. An employee may take certain leaves during their vacation time by providing their employer with written notice. An employee may commence a statutory leave in the middle of a vacation period. The employee’s remaining vacation days are then postponed.

Employees will now be entitled to:

  • 2 weeks of vacation at 4% vacation pay after 1 year of service;
  • 3 weeks of vacation at 6% vacation pay after 5 years of service; and
  • 4 weeks of vacation at 8% vacation pay after 10 years of service.

Moreover, for the purpose of calculating vacation entitlements, an employee’s years of service are transferred in the event of a sale of business which results in the employee working for a federally regulated employer, that was previously provincially regulated. Employees also do not need to be employed for 30 days before receiving statutory holiday pay.

New Leaves Standards

Bereavement Leave

Employees may now take three days of paid bereavement leave and two days of unpaid leave for an immediate family member’s death to be taken from the day of the death until six weeks after the funeral, burial, or memorial service (whichever occurs the latest).

New Leaves

The Code now provides three new unpaid leaves:

  • Family Responsibility Leave: an employee who has been continuously employed for 3 months or more may take three days a year for family responsibilities related to the healthcare of the employee’s family members or the education needs of an employee’s family member who is less than 18 years old. An employer can request documentation to substantiate the leave within 15 days of the employee’s return to work. The employee must provide documentation if it is reasonable for them to obtain and provide it. The definition of who qualifies as a family member for the purposes of this leave will be specified in the regulations.
  • Leave for Victim of Family Violence: an employee who is the victim of family violence or who is the parent of a child that is the victim of family violence is entitled to 10 days in a calendar year to seek medical attention for themselves or their child, to obtain services from organizations that aid victims of family violence, to obtain counselling, to relocate temporarily or permanently, to seek legal or law enforcement assistance or prepare for legal proceedings, or to take any measure as prescribed by regulation. An employee who has likely committed the family violence is not entitled to this leave.  An employer can request documentation to substantiate the leave within 15 days of the employee’s return to work.
  • Leave for Traditional Aboriginal Practices: an Aboriginal employee (defined as Indian, Inuit, or Métis for the purposes of this leave), who has been continuously employed for three months may take five days per calendar year to hunt, fish, harvest or engage in any other traditional Aboriginal practice prescribed by regulation. The employer may request documentation substantiating that the employee is an Aboriginal person, within 15 days of the employee returning from the leave.

Existing leave entitlements have been modified as follows:

  • Medical Leave: employees are now eligible for up to 17 weeks unpaid leave for personal illness or injury, organ or tissue donation, or medical appointments during work hours. There is no service requirement for eligibility. An employer may require a health care practitioner’s certificate for an absence of 3 days or longer. The pension, health and disability benefits and the seniority of an employee who is absent from work due to medical leave, accumulate during the entire period of the medical leave of absence.
  • Maternity and Paternity Leave: the minimum service requirement for eligibility has been removed.
  • Personal Leave: employees are now entitled to up to 5 days for illness, injury, health-related family responsibilities, education-related responsibilities for family members under 18, urgent matters, citizenship conferral, or prescribed reasons. The first 3 days of leave are paid for employees with 3 months’ service.
  • Court or Jury Duty Leave: employees may take leave to act as a witness, juror or to participate in jury selection. The maximum leave period is not specified. There is no service requirement for eligibility.
  • Reservist Leave: employees can take a maximum leave period of 24 months in a 60-month period. There is a 3 months’ service requirement for eligibility.

 

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