Bill 68, Ontario’s Open for Business Act, 2010, recently passed second reading. If passed, the Bill would implement changes to the Ontario Employment Standards Act, 2000 (the “ESA”).

Among other things, the amendments would require an employee to advise their employer about an employment-standards dispute or disagreement before launching a formal complaint with the Ministry of Labour.

Presently, employees are under no obligation to tell their employer that they believe there has been an infraction of the ESA, and employees can file a complaint with the Ministry of Labour without previous warning.

Critics of the Bill suggest that making employees tell their employer about an alleged infraction may reduce the over-all number of complaints and leave employees vulnerable to reprisal for trying to enforce their rights.  If nothing else, it would put employees in an uncomfortable position by requiring them to advise their employer in advance that they intend to launch a complaint.

The changes have been proposed by the Ministry of Labour as part of their initiative to advance fairness in the workplace, and to modernize its Employment Standards program.  Among other things, these initiatives include launching a task force to eliminate a backlog of 14,000 claims, an online severance pay decision tool, and a future termination of employment/temporary lay-off tool to determine when a layoff becomes a termination.

Regardless of whether Bill 68 passes, employees should consult with an employment lawyer in a termination or lay-off situation.  As previously mentioned in other blog posts, the Ministry of Labor will only ever enforce the provincial legislation, and will not consider an employee’s full entitlement, and all available remedies.

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Beverly Salkeld was fired from her job as a counter clerk at 7-Eleven at the age of 52.  She was an exemplary employee with a record of good behavior, until she was warned by her manager for neglecting to ID a 24 year-old man.  Salkeld reviewed the video footage with her manager, and reluctantly signed a letter affirming that a further violation would result in her dismissal.  After failing to ID a 21 year-old mystery shopper 6 months later, Salkeld was put on paid leave and then let go.  The judge awarded her nearly $40,000.  Here’s why…

Did Salkeld break the law?

• The “ID Zone” policy dictates that employees are to ID anyone who appears to be younger than 30 years of age (5 years more than liquor purchase at the LCBO).

• The Tobacco Control Act prohibits the sale of tobacco to anyone under the age of 18, federally, and 19, provincially.

Since both the customer and mystery shopper were of legal age, Salkeld did not break the law on the incidents in question.  Allegedly, she breached company policy.

Why did she win the case if she breached policy? Is this really a wrongful dismissal?

The concern of the courts was the subjectivity involved in the judgment of who appears to be younger than 30.  Given her exemplary record, the judge found it difficult to believe that, “the circumstances here were significantly serious to amount to a loss of trust and just cause when balanced against Ms. Salkeld’s lengthy … [adherence] to the ID Zone policy”.

What did 7-Eleven do that was so bad?

The company is right to ensure that tobacco policies are adhered to.  Random inspections can result in costly fines and the loss of a license.  However, to restate Justice Lori Spivak, 7-Eleven erred in that they failed to conduct a proper investigation to determine whether the punishment was representative of the crime.  Salkeld was an employee with an otherwise unscathed employment history.  Her manager should have examined less severe disciplinary actions before deciding upon dismissal for cause.

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Justice Terrence Morrison called the actions of Connect, “reprehensible and egregious”.  Here are a few reasons why:

1. About a month after her dismissal, MacDonald-Ross was informed that she was being let go for cause, due to unauthorized use of company funds.  She explained to the court that these funds had been used to reward employees with pizza parties.
2. Company owner, Barry O’Donnell, claimed that Macdonald agreed to her termination after discussing the possibility of working on a freelance basis.  The only proof of this was a letter presented by the employer after the filing of the lawsuit.
3. Connect filed a police report claiming MacDonald-Ross stole funds – the report was also made after she filed her lawsuit.

For Justice Morrison, this was a clear case of concocted cause.  It goes without saying that the employer acted in bad faith, and should be penalized to deter future offenders.  However, large punitive fines are often seen as theatrical in the courts, especially when they are appealed and substantially reduced.  Whether or not Connect decides to appeal awaits to be seen.

See Don MacPherson’s article in the Daily Gleaner the more details on the case.

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A recent ruling by the Ontario Superior Court was published by Jeff Gray and Greg Keenan on the Globe and Mail website.  The ruling effectively ended the dual-class share structure for Magna and bestowed nearly a billion dollars to the Stronach family. 

Dual class share structures (offering separate shares for simple, multiple, and non-voting rights) have been under scrutiny, and are often accused of deterring investors because of the control it gives to business owners.  The concern of Magna’s shareholders has been the 66% controlling interest that the Stronach family has had, despite owning less than 1% of the equity.  Pension fund lawyers argued in court that the judge was required to look beyond the positive shareholder vote.  Issues of concern were a lack of information provided by Magna executives to shareholders, as well as possible negative repercussions the decision could have on capital markets.

Although an eighteen-hundred percent premium can turn some heads, executive compensation has always been astonishing. 

Putting aside the media hype, it is worth noting the following:

• The publicity garnered by this case will influence shareholder sensitivity in future corporate buyouts.  Be mindful of the attention you may attract by providing too little information to shareholders.  This could result in stakeholders questioning the fiduciary obligation of your board of directors, as it did in this case. 

• Shareholders should carefully weigh the pros and cons of paying an exorbitant price for a buyout.  Ensure that you have access to the information needed to make an educated decision on the value gained; try not to make an emotionally-charged decision based on a mentality of “them” vs. “us”.

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Always negotiate
Companies realize that most people will just take what they are offered, happy to get anything at all. So they deliberately offer less than they are ultimately prepared to pay. There is usually some flexibility in the figures – so ask for more.

Patience
Since the majority of lawsuits settle well before trial, the key for dismissed employees is to appreciate when they have great facts on their side — and also when they don’t. As the costs associated with litigation act as a deterrent for employees, employers understand that most will accept a reduced settlement at the outset rather than waiting for more. However, if you have a good case, you can expect that many of your legal costs will be recovered – so be patient or be prepared to take a discount.

Select your lawyer wisely
The guidance of experienced counsel is imperative to ensure your case is properly advanced and persuasively argued and that critical mistakes are avoided. A lawyer’s Google rankings have nothing do with his or her legal skill. Similarly, there are no rules limiting lawyers without much experience in employment law from professing that they practise it, on their websites and in the media — and they often do. Avoid legal practitioners who brandish promises of extraordinary results. In law as in life, if something is too good to be true, it is often is. Also avoid lawyers, or paralegals, who merely dabble in employment law, since they may not keep abreast of the recent developments — and worse, employers’ counsel often knows who they are.

Understand an employer’s apprehensions
They have skeletons in their closets as well. In one of my cases, we are arguing that an employer’s standard form employment contract is illegal. The cost to the company of paying this claim is irrelevant. If it loses, all of its contracts will be void.

Daniel A. Lublin is an employment lawyer with Whitten & Lublin LLP, which provides practical legal advice and advocacy for workplace issues.

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Diane Giles was scheduled to finish her shift at 8 a.m. and was asked to stay in order to attend a meeting scheduled for noon.  Giles contended that, “if she had attended the meeting, she would have had to work all night, stay awake all day, attend the meeting and then go back to work and go without sleep for two days.” Newly appointed program manager, Shauna Baylis, admitted that the meetings were previously scheduled for 9:30 a.m., but that she was unaware of Giles’ scheduling issues.  After informing her manager of her concerns, Giles was told that her schedule was “irrelevant”, and that she needed to attend the meeting.  She didn’t.

Although insubordination can be grounds for immediate dismissal, an employee can still refuse to comply with clear instructions or policies with a reasonable excuse. Judge Valmond Romily noted that, “the circumstances of this isolated act of disobedience…should have required a greater attempt at reasonable accommodation”, “rather than the extreme resolution of dismissal for cause.”

Acts of insubordination can often feel personal, and employers may be tempted to fire otherwise unsuitable employees, using the incident as an excuse.  Courts do not look kindly upon this behaviour, especially if the incident did not significantly affect the relationship between the employer and employee.

• Having legally compliant dismissal procedures in place will improve your ability to deal with difficult situations.

• Make sure that new staff is educated on Employment Standards regulations and company policy.  Managerial requests that do not comply with regulations can lead to costly issues down the road, and the potential for constructive dismissal claims.

Overall, remember, one isolated act of disobedience does not always substantiate cause for dismissal.

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For a short list of these misconceptions, see below.

Poor performance is cause for dismissal. Except in extraordinary cases, poor performance does not provide a right to withhold severance.  Similarly, the quantum of severance is not judged based on performance, meaning that both stars and incompetents should receive the same payouts if fired.

Promotions, bonuses or salary must be assessed fairly. An employer may decide, often arbitrarily, who it wishes to promote and how it will compensate its employees.  It is entitled to show favouritism, as long as its decision is not based on personal characteristics, such as race, religion or gender.

If an employee is terminated, she will not receive EI. On the contrary, only employees who are terminated for “cause” or those who resign may be ineligible.  Employees who are fired for poor performance, laid off, restructured, or downsized are all eligible for employment insurance.

The Ministry of Labour will protect your rights. Provincial agencies can only enforce statutory rights, found in legislation. However, most employee grievances are based on common law rights, which are separate from legislation. To challenge your employer on any significant financial issue, you will typically have to go to court – and you will need a lawyer.

An employee is entitled to a letter of reference. This is simply untrue.  Although the failure to provide a reference can contribute to the severance you may receive, there is no rule or law compelling an employer to provide a reference letter or even to confirm your previous employment.

Harassment is in the eye of the beholder. Today, employees too easily view themselves as “harassed.” Harassment is a subjective concept.  For it to amount to a meritorious legal claim, the conduct complained of must be such that no reasonable employee would be expected to persevere, in the eyes of the judge, not just the employee.

Daniel A. Lublin is an employment lawyer with Whitten & Lublin LLP, which provides practical legal advice and advocacy for workplace issues.

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On Sunday, the on-line whistle-blower, Wikileaks, released 91,000 U.S. military records dating between January 2004 and December 2009.

The reasons behind the information leak remain unclear.  However, we suspect that if the identities of those involved with the security breach are ever revealed, that they will seek the protection of any applicable “whistleblower” laws.

“Whistleblowing” is the term given to an employee’s unauthorized disclosure of information he or she honestly and reasonably believes violates the law, professional standards, or involves mismanagement, corruption, abuse of authority, or demonstrates a danger to the public or other employees.  In general, employees are prohibited from divulging or publishing his or her employer’s confidential information; however, in rare circumstances an employee will be allowed, or may be required, to disclose that information.  However, in whistleblowing cases, the courts must strike a balance between the interests of the employer in protecting their business against false accusations which would damage their reputation, and an employee’s right to exercise free speech without getting fired for doing so.

The Supreme Court of Canada has not addressed the issue in an employment-law context, but in unionized workplaces the Court has indicated that in certain circumstances the employee can “go public” so long as he or she has exhausted all internal whistleblowing mechanisms.

Employees may be protected in their whisleblowing based on legislation and the Criminal Code but will want to consider speaking with counsel to determine the availability, or extent, of legislative protection.

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An article by Kenyon Wallace in Wednesday’s National Post details a Federal Court of Appeal decision against the Royal Canadian Mounted Police.  The court has ruled that the RCMP  “engaged  in racial and religious discrimination when it expelled a Muslim man from its cadet academy,” allowing the man, Ali Tahmourpour to return to training 11 years after his dismissal from the cadet academy.

In 2008, the Canadian Human Rights Tribunal also ruled that Ali Tamourpour “faced verbal abuse and hostility from instructors, ridicule over his wearing of religious jewellery, and poor performance evaluations while enrolled in the RCMP’s Regina cadet academy…”

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For several years Chris Ehlers worked as a sales representative for Bohler Uddeholm Africa, a male dominated multinational steel retailer based out of Africa.  In early 2008, Ehlers began to undergo a series of sex change procedures.  Ehlers soon became the subject of disrespectful comments by co-workers.  For example, Ehlers received an SMS message which said: “I will never have respect for low-class and a wannabe woman”.

Ehlers complained to Bohler’s management.  Following a formal inquiry, Ehlers was provided with the following ultimatum:  revert to being a man or accept a severance package.  Eventually, Ehlers was terminated after a second inquiry into the complaint found that the employment relationship had been seriously prejudiced by Ehlers.  This decision was premised on the belief that an employer has the right to protect its business image in a predominantly male-oriented market.

Ehlers is now suing Bohler for discrimination.  Despite having been offered the equivalent of $21,000 CAD to settle the case, Ehlers’ desire is to be reinstated in her position at Bohler.

Ehlers advances the position that she ought to have been kept on as a Bohler employee regardless of gender.  Ehlers had and continues to have the necessary occupational qualification, skill and knowledge to perform the duties required of a Bohler sales representative.  Ehlers’ ability to perform the work did not change in any material way once Ehlers’ identity was changed from Chris to Christine.

In response to Ehlers’ discrimination lawsuit, Bohler claims that Ehlers had failed to disclose to the company that she was undergoing sex change procedures.  Once disclosed, the parties initially agreed that Ehlers would hide the effects of the process and continue to wear men’s attire in order to protect the company’s image.  As soon as it became clear that Ehlers would identify herself as a woman in the workplace and dress in women’s attire, Bohler claims that her “continued presence in the office had become impractical”.

There is no doubt that in Canada the protections provided to employees pursuant to Federal and Provincial human rights legislation trump any interest that an employer may have in regard to its image.  The mere fact that an industry or market is male or female dominated does not make it acceptable to discriminate on the basis of gender.

If an individual is qualified to do the job, as was Christine Ehlers, gender should not come into the equation unless there are exceptions expressly contemplated by the legislation.  For example, in Ontario the following exceptions allow discrimination on the basis of sex in the employment context:

• Employment-related benefits plans;
• Services and contracting with respect to reasonable bona fide insurance differentiations, distinctions, exclusion or preference;
• Employment by religious, philanthropic, educational, fraternal or social institutions where it is a reasonable and bona fide and favours persons manifesting the ground of discrimination; and
• Employment where a person’s sex is a bona fide occupational requirement.

If Bohler was arguing its case in Canada, it would be required to satisfy an adjudicator that Ehlers’ gender is a bona fide occupational requirement for the performance of the duties of a sales representative in the steel industry.  In my view, Bohler would face a lot of resistance in Canada.  After many years of political advocacy, our society has finally started to recognize that a person’s gender does not, in any way, determine one’s ability to perform work-related duties.  To accept Bohler’s position would constitute a regression to the many advancements our society has made with respect to the equality of sexes.

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