Not My Pot: Wrongfully Dismissed Courier Wins…

A wrongfully dismissed courier has won a lawsuit at the Saskatchewan Court of Appeal.  In Hollander v. Tiger Courier Inc. (2014) SKCA 7, the courier was dismissed when a package of marijuana was delivered to the office addressed to him.  He claimed it was not his package and he had no knowledge of it.  The employer called the police but no charges were laid.  However, the employer terminated the courier and alleged that it had just cause.  It was not clear from the decision what happened to the pot, but presumably the police confiscated it.

The case had an unfortunate twist.  The courier had worked as an employee with the company for ten years.  But after that, he had become an “independent contractor” and worked in that capacity for three years before this incident occurred.  He had signed an independent contractor agreement that provided for thirty days’ notice of any dismissal (without cause).

When the courier was wrongfully dismissed, he sued for breach of contract but he did not sue for wrongful dismissal.  He did not claim that he was really an “employee,” nor did he directly challenge the independent contractor agreement, although he claimed other damages flowing from breach of contract.  If the courier had been able to challenge the contract and prove “wrongful dismissal,” he might have been awarded a year’s pay or more.

However, he only alleged “breach of contract.”  As a result, the courier put himself in a situation where if were to win his lawsuit, he would win thirty days’ pay, as required under his contract.  If he were to lose, he would get nothing.

At trial, the lower court judge held that the package of pot, that had been sent to the courier from his brother in Vancouver, was “clear evidence of illegal or criminal conduct” and this would justify termination, even though no criminal charges were ever laid.

The Court of Appeal disagreed.  It overturned this finding and ruled that there was no clear evidence that the courier himself had engaged in any criminal or other misconduct.  Just because a family member delivers a package of illegal drugs to a person’s workplace, this does not mean that the person has engaged in any improper activity..or at least there is no clear evidence of such misconduct.

However, the Court of Appeal went on to award damages of only thirty days’ compensation, which amounted to the grand total of $2,973.70.   This was really a pyrrhic victory for the plaintiff.  He lost his courier job and got only 30 days’ compensation after 13 years of work.  He also lost the pot, which may well have been worth close to the amount of the judgment.  And we haven’t even mentioned legal fees…

 

 

 

Wins Wrongful Dismissal: But Fails to Mitigate

In another blow to dismissed employees. a B.C. court has reduced the wrongful dismissal damages that would have been owing to an employee after the employee failed to return to work when “recalled.”  This follows a number of decisions across Canada including cases in Ontario, B.C. and even at the Supreme Court.  It has become quite clear that if an employee refuses to return to work when asked to return, even after being wrongfully dismissed, it may be very risky for the employee to refuse.

In the case of Hooge v. Gillwood Remanufacturing Inc., the plaintiff was a 36 year employee, working as a production supervisor at the time of dismissal.  He was put on a “lay off” by his employer without any advance notice or pay.  The defendant company claimed that it had the right to “lay off” the employee under the B.C. Employment Standards Act.  The plaintiff alleged that he had been dismissed and sued for wrongful dismissal.  One week after he filed his lawsuit, the employer purported to “recall” him back to work.

At trial, the B.C. Supreme Court held that the employee had in fact been constructively dismissed. The plaintiff had not had a written employment contract in place.  When he was put on a lay off, he was told that it was “indefinite” and that there were no plans to recall him.  He was given an ROE that said “shortage of work.”  The B.C. court agreed with the plaintiff that there was no term of his employment that would have permitted a “lay off” without pay after all of these years of employment.  He was, in fact, constructively dismissed and was entitled to eighteen months’ compensation.

However, the Court proceeded to look at the issue of mitigation.  “The law is clear that in certain circumstances an employee who declines an offer of re-employment from the same employer after having been dismissed, whether actually or constructively, may be found to failed to mitigate his damages, and have any award reduced on account of such failure to mitigate.”  As long as it would have been “reasonable” in all of the circumstances for the plaintiff to return to work, he or she may be obligated to do so.  The court discussed Evans. v. Teamsters Local Union No. 31  as well as other B.C. cases including Davies v. Fraser Collection Services Ltd. 2008 B.C.S.C. 942 and Besse v. Dr. A.S. Machner Inc. 2009 BCSC 1216.

Ultimately, the court concluded that the evidence did not establish acrimony, mistreatment, belittling, embarrassing actions or undermining of authority in the workplace.  The court concluded that the plaintiff should have returned to the same position, on the same terms and conditions, at the same rate of pay.  Here is the court’s reasoning:

“It seems to me that an employer who has laid-off an employee, or wrongfully terminated an employee without due notice, may very well come to the conclusion, particularly with the benefit of legal advice that its actions constituted a wrongful dismissal and may seek to mitigate its own exposure to the payment of damages by offering to re-hire the employee.”

Here, the court held that the plaintiff should have returned to work.

Fortunately, in this case, all was not lost for the plaintiff.  The defendant locked out its unionized employees and ceased operations approximately seven months after purporting to recall the plaintiff.  The court held that the plaintiff would not have been paid during the lock-out, so he would not have been able to mitigate his damages during that time period.  Nevertheless, he was docked 7 1/2 months’ pay for the time period during which he would have been able to work if he had returned to work when recalled.

This case, from a B.C. perspective, reinforces the interpretation of Evans that has become the law across Canada.  Employees who are fired, laid-off or otherwise dismissed – and then offered a return to work – even after they file a lawsuit, must be very careful in deciding how to answer the employer’s offer.  Refusing to return to work and then continuing a lawsuit can be very costly.

There is something to be said for the notion that employers might have made a mistake and should be entitled to reverse a decision and have an employee come back to work.  After all, in the unionized context, an employee can be reinstated.

However, more often than not, this type of case will simply be used by a range of employers looking to play games.  Employers can try to “lay off” employees without offering anything.  Then, if the employee sues, they can “recall” the employee.  This gives employers a way to try firing someone while minimizing the risk of owing any severance.  It seems to open up the door to all kinds of abuses by the types of employers that might choose to act unethically.  Certainly, there are situations in which employers may have a good faith “change of heart” or are otherwise justified in changing their minds and reversing a decision to dismiss an employee.

But that does not necessarily seem to be the case in many of the situations I see.  This line of case law creates uncertainty, economic and emotional stress for employees, and also makes it difficult to settle some cases reasonably, both from an employee and employer perspective.  Nevertheless, employees who ignore these decisions may be making a very costly mistake.

 

 

Employment Law Issues in Bawdy Houses

What employment law issues might be involved in running a bawdy house? Given the Supreme Court of Canada’s recent decision in Canada (Attorney General) v. Bedford, 2013 SCC 72, Canada’s prostitution laws have been struck out as being invalid.  However, the invalidity has been suspended for one year to give Parliament an opportunity to introduce new legislation regulating prostitution. One of the Supreme Court’s primary concerns was that the current laws may limit the ability of prostitutes to work in a safe environment.

Assuming that Parliament decides to permit non-exploitive bawdy houses in some form, I thought it might be interesting to consider some of the employment law issues that may arise.  Some of these are, of course, very similar and applicable to other types of employment.

1.  Independent Contractor vs Employee:  If running a bawdy house is legal, there may be questions as to the legal relationship between the bawdy house and the prostitute.  I have discussed some issues relating to independent contractors here.  Although most prostitutes may prefer to be treated as independent contractors, that may not always be the proper characterization of the relationship.  If the prostitute is actually employed by the establishment, that would, of course, trigger income tax withholding and deductions, including CPP and EI and the various protections under the applicable emloyment standards legislation.  Prostitutes working for a legal bawdy house, as employees, would be entitled to a guaranteed minimum wage, vacation pay, termination and, if applicable severance pay and other protection under the relevant act, including various leaves.

2.  Health and Safety Legislation:

Health and Safety legislation across Canada requires employers to take appropriate safety measures to protect their employees.  The Supreme Court of Canada alluded to the issue of prostitute safety as being one of the main reasons for striking the current legislation.  Bawdy house proprietors who employ prostitutes may well be required, by law, to provide such protection as a receptionist, body guard, sound monitoring of rooms, screening measures, health testing and preventative safety measures.  Employers who do not take proper safety precautions can be fined significant sums.

3.  WSIB Protection:

Employed prostitutes who are injured on the job should be entitled to WSIB benefits and to the protection of the legislation including the right to return to work after an injury.

4.  Human Rights Protection:

Employed prostitutes should be entitled to protection from discrimination on any of the enumerated grounds under applicable Provincial human rights legislation.

5.  Common Law Notice Entitlement:

Prostitutes who are hired by a bawdy house without an employment contract (or with one that does not otherwise legally address this issue) will be entitled to reasonable notice of dismissal or compensation in lieu of that notice – just as any other dismissed employee.   There are exceptions, such as just cause.  As well, the employee would be required to try to mitigate his or her damages by finding another workplace.  Nevertheless, this could provide prostitutes with a measure of protection against arbitrary dismissal.

6.  Post Employment Restrictions: 

In most cases, it would be unlikely that an employer could prohibit  a prostitute from working as a prostitute for a certain time period after her or his employment ends with a specific employer.   An exception might be if the prostitute is a part owner of the bawdy house and is paid a significant sum of money for selling the business.   A more common scenario might be whether an employer could impose a non-solititation agreement for some period of time – to prohibit the prostitute from soliciting her clients for a period of time.  If this is set out in an enforceable employment agreement  and the time period is limited and reasonable, this type of restriction might be considered valid.

These are just some of the issues that might pop up with the new opportunity that at the Supreme Court of Canada has put forward.  It remains to be seen what type of legislation Parliament will enact and what type of prostitution regulation scheme it chooses to erect.  It may well be that Federal or even Provincial legislation could deal with many of these concerns directly in the body of the proposed act.

 

 

Deficient Notice Clause Upheld by Ontario CA in Dismissal Case

A recent decision of the Ontario Court of Appeal, involving a deficient notice clause, illustrates the perils of attempting self-representation in a wrongful dismissal case.  In the case of Musoni v. Logitek Technology Ltd., the case appears to have been decided without some of the key arguments relating to the validity of employment contracts even being raised.

The plaintiff worked as a customer support agent from October 2005 to March 6, 2008, a total of about 2 1/2 years.  Six months after the plaintiff began his employment, he signed an employment agreement.  The agreement included a clause which provided for fifteen days’ notice in the event of dismissal.

The plantiff was dismissed and was provided with two weeks’ severance.  He did not accept this amount and sued for $70,000 in wrongful dismissal damages.

At trial, the plaintiff noted that he had not obtained legal advice at the time he signed the contract.  However, he apparently agreed at trial that the agreement was “valid and in force.”  (This is really a legal conclusion rather than a factual matter).   Instead of arguing that he was owed more notice – and that the employment agreement was not valid, the plaintiff alleged the defendant had dismissed him for improper reasons, relating to his record of offences.

The trial judge concluded that since the plaintiff was dismissed on a “without cause” basis, he was only entitled to the minimum amount provided for in the employment agreement.  The reason for his dismissal was held to be irrelevant.  The lawsuit was dismissed and the plaintiff was ordered to pay the defendant’s costs in the sum of $5,012.

The plaintiff appealed to the Court of Appeal and represented himself once again.  The Court of Appeal upheld the employment contract and dismissed the case, ordering the plaintiff to pay another $3,500.

The striking aspect of this case is the arguments that do not appear to have been put before the trial judge or the Court of Appeal or considered by one of the two levels of court.

Firstly, the employment agreement  that the defendant relied upon was provided to the plaintiff six months after he commenced employment.  There is no suggestion in the trial decision that any new consideration was provided to the plaintiff.  Based on a number of cases that have previously been decided by the Ontario Court of Appeal, the employment agreement should have been thrown out for lack of consideration (See for example Hobbs v. TDI Canada Ltd.) Interestingly, one of the Court of Appeal judges who sat on the panel that decided Hobbs v. TDI Canada Ltd., Justice MacPherson, was on the panel in this case of Musoni v. Logitek Technology Ltd.  Yet there is no mention of any consideration argument.

Secondly, even if the employment agreement had been provided to the plaintiff in exchange for some new consideration, it contained a clause that provided for only 15 days notice.  If the plaintiff had been working for the defendant for three years, this 15 days would have been less than the minimum notice required under the Ontario Employment Standards Act, 2000 (21 days rather than 15).  At four years, it would have been significantly less, no matter what type of calculation is used.  These types of clauses that will eventually amount to less than the minimum amount required by statutory provision have been held to be void by Canadian courts.  (See, for example Shore v. Ladner Downs, a decision of the B.C. Court of Appeal).

It seems likely that if this case had been argued properly, the plaintiff should have been entitled to between 3 and 6 months’ notice, based on his annual income of $47,000.  Instead, he wound up with 15 days’ notice and a bill for the defendant’s costs of more than $8,500.  The case is an illustration of a situation in which the courts will not come up with the proper arguments for the unrepresented plaintiff.  So the plaintiff is ultimately left with a brutal result and only himself to sue for professional negligence – for not having raised some key legal arguments that any competent employment lawyer would have put forward.

A final note: Given that the case was probably only worth three or four months’ compensation, the proper place for this case would have been Ontario Small Claims Court, which has a monetary limit of $25,000, rather than the Ontario Superior Court.  Ouch!

 

Signing an Employment Contract in Canada? Points to Consider.

Congratulations!  YoConract Signingu have made it through the interview process and have now  been given an employment contract.  The contract may contain terms that significantly alter your legal rights.  Don’t assume that the document is a “standard form” or that it is non-negotiable.  You should consider the terms carefully.  You may consider getting legal advice to have it reviewed properly.  Here are some things to consider before signing:

1.  Termination Clause:  In Canada, this is the number one item to watch for.  If  there is no termination clause, you will generally be entitled to common law “reasonable notice” on dismissal.  This can be in the range of one month per year of service and can often be much more than that.  Under Canadian law, employers can use termination clauses to limit the amount of compensation you might get in the event of a dismissal.  Employers can provide that they are paying as little as the minimum amounts under the applicable employment standards legislation.  With proper wording, they can exclude common law amounts.  If you sign a clause like this, it may be enforceable.  This could end up costing you thousands of dollars.  These clauses are often negotiable.  If the employer will not negotiate, this type of clause could be a deal-breaker for some people, especially those with other options.  Ideally, a Canadian employment contract should simply state that in the event of dismissal, you will be provided with notice and/or compensation in accordance with common law.  Beware of any reference to the Employment Standards Act in a termination clause.

2.  Post Employment Restrictions:  This is the second most important reason employers use written employment contracts in Canada.  If there are no post-employment restrictions, you are generally free to work wherever you like, with whomever you like after you leave a workplace.  Employers often include non-solicitation clauses (of clients or employees), non-competition clauses and confidentiality clauses in their agreements.  Some of these clauses may be enforceable.  They may also make it very difficult for you to find alternate employment later on, even if the enforceability of the clause is uncertain.  These clauses are often negotiable.  Be very wary of extensive non-solicitation, non-competition or other similar clauses.

3.  Probation:  Contrary to what most people believe, there is no “standard” or automatic probation term.  Although probation is referenced in the Ontario Employment Standards Act, for example, this type of clause is not automatic.  If you are leaving other employment to accept a position – and even if you are not, you may be able to get the employer to delete the probation clause.    You may also be able to get the employer to start your health and medical benefits immediately without a probationary period.

4. Compensation:  It goes without saying that the various components of your income should be set out clearly- including salary, bonus, car allowance, pension or RRSP contributions, stock options or share grants and any other amounts that have been discussed.  Employees can often negotiate a signing bonus, particularly if you found the position directly or if you are leaving other employment to accept this role.  If the terms of a plan (for example, a bonus plan or a commission plan) are vague or not provided, you should consider requesting further information or even some guarantees for the first year or two.  Vacation and sick days should also be specified.  Vacation time is often negotiable.

5.  Role and Responsibilities:  The position should be described in sufficient detail, ideally with a job description attached as an appendix, if appropriate. Watch for language in the employment contract that would permit the employer to change your position, job location, hours of work or other key employment terms with minimal or no notice.  These clauses may be enforceable and could alter your legal rights.

6.  Lay-Off:  Some employers include a clause that states that the employer can put its employees on a “lay-off” in the even of a work slowdown, without advance notice or compensation.  These clauses may be legally enforceable and may alter your common law rights.

7.   Entire Agreement Clause:  Many employment contracts in Canada contain an “entire agreement” clause.  This clause means that any promises that may have been made to you must be included in the employment contract or they will become worthless.  If the employer has said anything about future salary increases, bonus amounts, promotions, benefits, or other terms, make sure that these promises are included in the written employment contract.  Otherwise, these promises will become worthless.

8.  Jurisdiction:  Generally this is not an issue.  If you are working in Ontario, for example, you should expect that the employment contract will reference Ontario law and will confirm that Ontario courts have jurisdiction over any issues.  However, some employers do try to transfer the jurisdiction, especially if they think they will more likely to get an injunction in a non-competition case in another location (i.e. somewhere in the U.S….).  While these clauses may not necessarily stand up in court, they can create complications.  Employers may sometimes include mandatory arbitration clauses, which have the effect of ousting the jurisdiction of the courts.  These clauses should also be considered carefully.

Conclusion

In Canada, employment law is reasonably favourable to employees.  Many employment terms are “implied,” which means that they are deemed to be part of your employment contract even if they are not in writing.  Most employees would be best off with a simple offer letter confirming the start date, the job responsibilities and the salary and compensation arrangements.

Of course, the flip side is true for employers, who are generally much better off with a more detailed employment contract.  If you are provided with an extensive employment contract containing numerous terms that limit or affect your common law rights, this may be an ominous sign of things to come.  See how flexible the employer is about negotiating these terms.  Speak to current or past employees about how the workplace is actually run and managed.  In some cases, the position may seem like such a great opportunity that you are prepared to overlook all of the problematic terms of the employment contract.  Ultimately, that is a business decision that you have to make based on your personal circumstances.  But you should make that decision only once you are fully informed about the impact of these different contract clauses.

 

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