The City interviewed Gismondi for three different jobs but decided not to offer him any of them. Instead, after 20 years, he was downsized. Gismondi was offered a severance package of 80 weeks pay. He refused the offer and sued, claiming that he had been treated unfairly.

Since the 1997 landmark decision of the Supreme Court in Wallace v. United Grain Growers, dismissed employees across Canada have been awarded increased severance packages for “bad faith” treatment. Grismondi argued that his case met this standard and an Ontario Superior Court agreed. In February, 2002, Grismondi was awarded more than two years’ pay, almost nine months more than the City’s original offer. Justice Gans held that the City harmed Gismondi by treating him “differently” from other candidates and by trying to be “diplomatic.”

The City appealed and the Ontario Court of Appeal released its decision on April 29, 2003. The decision was bad news for Gismondi, whose severance package was reduced back down to the eighty weeks that the City had originally offered. The Court of Appeal ruled that there was no reason why Gismondi should get more than eighty week’s pay.

Even though the City had been “sloppy” and had not properly followed its own procedure, this was not enough to convince the Court of Appeal to give Gismondi an extended notice period. There was no evidence of intent, malice or blatant disregard for Gismondi that is required in a bad faith case.

In its decision, the Court of Appeal set out a shopping list of conduct that can really land an employer in hot water. Here are some examples:

• Falsely alleging just cause when firing an employee
• Falsely telling an employee that the dismissal was for performance reasons
• Spreading word in the industry that an employee was terminated for dishonesty or for doing something “reprehensible”
• Refusing to provide a letter of reference
• Firing an employee right after a return from disability leave

All of these acts can cause humiliation, embarrassment and damage to the self- esteem of a dismissed employee. The appellate Court confirmed that employees should be compensated for these misdeeds even if the employer’s conduct did not affect their ability to find other work. The City had not done anything like this to Gismondi.

For most dismissed employees, the Gismondi decision is not really bad news. It reinforces the importance of treating employees fairly and honestly at the time of dismissal. Employers should provide a reference letter and a reasonable severance package in most cases. They should only allege just cause if they have a really strong case of misconduct and they should deal with dismissed employees fairly during the litigation process. This means that the severance package offered should take into account the person’s age, length of service, position, level of responsibility and expected difficulty faced in trying to find other similar work. An employer that designs a severance package with these factors in mind is not usually going to face an accusation of bad faith.

If employers do not meet these standards at the time of firing, dismissed employees can sue for an extended notice period. Extended damages have been awarded by courts across Canada for bad faith conduct. In one case an employee received extended damages when the employer falsely alleged forgery. In another case, the company refused to provide a Record of Employment and held back on commissions owing. Extended damages were also ordered when an employee was purposely fired just before his wedding. He was asked to accept a lowball offer and told that could not work elsewhere while receiving the payments.

None of this means that the average downsized employee is likely to get a better package these days, although there has been an upward trend since the Wallace decision was released in 1997. But employers are certainly more likely to exercise caution when letting staff go. If the employee has really been involved in serious misconduct, a just cause defence can still work, even though it is usually an uphill battle for employers to win. Otherwise, the Wallace decision can still be used by good counsel to get mistreated employees better settlements.

If you have been dismissed, you may be entitled to significant compensation. This can include severance pay, outstanding bonus, compensation for bonus during the severance period, benefits, pension contributions and other amounts. You might be able to get outplacement assistance paid for by the employer and some employers may even pay for your reasonable legal fees to get everything worked out. If you have been given a severance package or a termination letter, here are a few points to keep in mind:

1. Don’t Sign Anything!

Some employers will ask you to sign a severance proposal on the spot, possibly even while also making some threats about what might happen if you don’t sign. Fortunately, most employers are not that unreasonable and would prefer to allow you some time to consider an offer. Take the offer, say very little and let the employer know you will get back to them. Even if you are in a difficult economic position, you will rarely benefit from signing something on the spot at the time of dismissal.

2. Be Professional

Resist the urge to attack the employer, launch an email missive directed at company personnel or say things you might later regret. Such statements or emails are rarely helpful or productive. If you are being investigated for cause and you are being asked about certain allegations, you may have an obligation to respond. But once you have already been dismissed, there is rarely anything that you might say at a termination meeting that will help with your severance negotiations or with your future references.

3. Find Your Original Employment Contract

One of the first things you should do is find a copy of your original employment contract or offer letter. There may be a “notice clause” or a “severance clause” in the document. If your employment contract or offer letter does have this kind of clause, it may limit your entitlement to severance or notice. You might be stuck with a very limited severance payout. There are some ways around these types of agreements, but not always. This can be very technical and will almost always require professional assistance.

4. Gather Information

For the best assessment of your employment situation and potential severance, you should gather key documents and information. Your compensation information for the past three years will be crucial including a breakdown of your base salary, bonus (if any), RRSP or pension contributions, car allowance, stock options or share purchase plan amounts, and other components of your compensation. As well, it will be helpful to try to put together a narrative of what occurred that you believe led to your dismissal. If this is a complete surprise and is really just a “restructuring,” there may be no need for an accompanying narrative. You should also try to make sure that you have any relevant emails, memos, performance assessments or other documents that relate to your performance or the reasons for your dismissal. If you are being dismissed for cause, it may be important to get witness statements about what took

5. Get Expert Legal Advice

If you have been provided with a severance package or you have been dismissed “for cause,” you should get specialized legal advice as soon as possible from an employment lawyer. You may be entitled to far more than the amount that the employer has offered. The employer may be willing to pay reasonable legal fees. You might be able to get certain clauses deleted or modified. Proper legal advice in this situation will usually involve a consultation fee. But you are entitled to objective advice about the best way of dealing with your situation and sound professional advice is almost always going to involve a fee. If the advice is “free,” you should check carefully what kind of retainer you will be expected to provide afterwards or what percentage of the settlement your lawyer will take. You should also find out whether the percentage is related to the whole package or only the improvement. You should feel comfortable with the overall fee arrangements not just the initial consultation itself. You should also feel comfortable that you will get the lawyer’s full attention at the initial meeting without an artificial time constraint so that you have enough time to go over everything that may be relevant.

6. Hit the Ground Running

In most cases, the best way of dealing with a dismissal is to begin the process of finding new employment fairly quickly. You should ask your employer for a reference letter or confirmation that you will be given a positive reference if the employer is phoned. Brush off your resume and consider getting professional assistance in developing a new version of it. Start using internet sources ranging from LinkedIn and Workopolis to Facebook and Monster as you put together your job search strategy. Keep track of all of your efforts, informal and formal contacts and applications. Try to set up “informational meetings” as well as interviews. Try to take care of yourself, which might include getting some exercise, making sure to get out and staying in contact with people important to you. Having a strong support network can help you feel positive about your transition and can also produce employment

Kenneth Krupat, Barrister
2000-393 University Avenue
Toronto, ON M5G 1E6
Phone: 416-593-0400
Fax: 416-593-0668
e: kkrupat@joblaw.ca
www.joblaw.ca

The GasTOPS case took seven years until it was completed.  There were 295 days of evidence spread over 3 years, with 70,000 pages of exhibits and 3,000 pages of written submissions.  It took the Court two years to produce the trial reasons, which were 668 pages in length.  The Court of Appeal heard the appeal in the matter over a period of four days and issued a 32 page decision.  One aspect of breach of fiduciary duty cases is that they can be very expensive and time consuming, regardless of who eventually wins.

The Trial Court had held that the four defendants were the designers of the core program of the GasTOPs products.  They were part of the senior management.  They all left to start up a new competing business together and took additional employees with them.  They then pursued “virtually every existing and potential GasTOPS’ customer, used the confidential information that they had obtained while at GasTOPS and also used GasTOPS’ technical information.  In short, they took virtually the whole of the business from GasTOPS and used it in their new venture.  In their first three years of business, nearly 80% of their business came from GasTOPS’ clients.  The Court ordered 10 years of lost profits against these four defendants and their new company.   The Court of Appeal had little difficulty upholding the finding that all four employees were fiduciaries, that 10 years was a reasonable time period for measuring damages and that the four defendants were jointly and severally liable.

The other decision issued by the Court of Appeal very different.  Mr. Brulé had been the acting CEO of Veolia ES Industrial Services Inc., a company that he had originally founded and then later sold.  He had an employment contract with Veolia that contained a non-competition provision.  The clause was poorly designed and did not wind up providing the protection that Veolia thought it had.  Mr. Brulé resigned from Veolia and provided notice of resignation as he was required to do.  On his way out the door, he made copies of company binders which contained various tenders and bids for public projects.  A few months later, he successfully bid on a project with the City of Ottawa with his new company.  Veolia sued for breach of fiduciary duty.

At trial, Veolia was awarded $465,000 plus costs against Mr. Brulé.  The Trial Court held that the poorly worded employment contract should be “blue-penciled” and fixed in a way that seemed to reflect the parties’ intention.  It ruled that Mr. Brulé was subject to a two year non-competition agreement and that he had breached it.  On appeal of this issue, the Ontario Court of Appeal overturned this finding.  It referred to the Supreme Court of Canada decision in KRG Insurance v. Shafron and underscored the fact that Canadian courts will rarely “blue-pencil” non-competition agreements.  Since the agreement could not be “fixed,” Mr. Brulé had not breached any agreement.

The Trial Court also held that Mr. Brulé breached his fiduciary duties.  Since he took the binder and since he bid on the City of Ottawa project without telling his former employer, the Trial Court found him liable.  The Court of Appeal overturned both of these findings.  It held that the binders were filled with public documents and there was no proof that Mr. Brulé had taken or used anything that was confidential.  Moreover, it emphatically stated that he had no duty to his former employer to tell them that he was bidding on a project against them.  In short. unlike in the GasTOPS case, Mr. Brulé did not take a big chunk of his former employer’s business.  He entered into a bidding competition and won it fairly, without breaching any duties.  The Court of Appeal fully overturned the award of damages and ordered that Veolia pay Mr. Brulé’s legal costs.

Either or both of these cases may yet be appealed to the Supreme Court of Canada.  But they each provide different information about the nature of fiduciary duty claims and non-competition issues.  Where an employee or group of employees takes confidential information, uses it and competes unfairly against a former employee, significant damages may be awarded.  But where an employee, even a very senior employee, leaves and winds up competing against his or her former employer, that is not a breach of fiduciary duty on its own.  There must be some proof that the employee has misused confidential information that belonged to the former employer.

Here are some of the key things to look for as part of a “reasonable” severance package.

Severance Pay or Salary Continuation:  It goes without saying that the most important component is usually the severance itself.  Employers can choose to pay over time, with or without some kind of claw back (or “mitigation”) clause, or in one or more lump sums.  In most cases, this is the most important part of the severance package and in many cases, different components are negotiable.  The severance must, at a minimum, include compensation for the relevant provincial employment standards amount.  For example, in Ontario, the severance package must provide for notice pay under the Ontario Employment Standards Act and severance pay, if applicable.   If you are Federally regulated employee (someone who works in a bank, telecommunications company, tv network etc.,) the Canada Labour Code would apply instead of the provincial legislation.  Beyond the employment standards amount, employees can negotiate the length of time, the trigger for mitigation, the payment schedule or other terms.  This is all aimed at ensuring that the employee is compensated as required by Ontario common law, which itself, can vary wildly for each employee.  This is the area on which appropriate legal advice should generally be obtained.  The period of time for which the employee is being compensated is generally called the notice period or severance period.  

Bonus:  Dismissed employees should usually be compensated for accrued bonus for the current year (if there has usually been an annual bonus), as well as bonus for the severance period.  Many employers are quite reluctant to include the prospective bonus as part of the severance package.  If the employee has been getting the bonus every year and can show that he or she would have continued to get a bonus if employment had continued over the severance period, the bonus should be payable.  There may be wording in the original employment contract that overrides this entitlement, but it is often worth trying.  If there is wording in an employment contract or agreement that deals with the bonus, this will be something that needs to be properly assessed and considered. Commissions and Variable Pay:  For dismissed employees with fluctuating pay, the test is what the employee would have reasonably earned over the severance period.  Of course all accrued amounts are owed to the employee, subject to the terms of the employer compensation plan.  Going forward, most dismissed employees should be paid severance on the basis of overall estimated earnings, not just base salary for the entire notice period.

Benefits, RRSP and Pension Contributions:  Severance packages should include arrangements that compensate employees for all components of their compensation.  Generally, all benefits, including extended health benefits, STD and LTD insurance, RRSP contributions, pension contributions, and other perquisites should be continue during the notice period – or the employee should be compensated for the value of any items that are not being compensated.  For example, most insurers will not allow employers to continue LTD insurance plans.  Employees should request compensation for the loss of this employment benefit.  Many employers will agree to include that compensation in the severance package.  Pension losses can be a huge component of a severance package, particularly if the employer had a defined benefit pension plan.

Car or Mileage Allowance:  If the employee had the use of a company vehicle, the general rule is that the employee is entitled to be compensated for the personal use component of the vehicle.  In other words, if the employee used the vehicle for personal use 30% of the time (and showed that on his or her taxes), employers can be required to provide compensation for this loss during the notice period.  Some employers will be more flexible in this area and will either provide employees with the use of a vehicle over the notice period or pay a reasonable estimate of the real costs of the vehicle.

Outplacement or Retraining:  Strictly speaking, an employer is not necessarily required to provide outplacement or retraining as part of a severance package.  However, an employer can be required to pay for the employee’s reasonable costs of “mitigation” if the employee incurs costs in trying to find other work.  As a result, many employers will provide direct outplacement arrangements at their expense.  Dismissed employees may be able to negotiate the type of arrangements that are being provided, the organization, location, and value of such services.  As well, dismissed employees can often arrange to have an employer pay for some upgrade or retraining courses if that will help the employee find new employment.  Though some of this may sound expensive for employers, overall, providing these arrangements may help the employer reduce the time period that it will take the employee to find new work and that might save the employer some money.

References:  Employers are not strictly required to provide helpful references though some judges may look at this down the road and award extra damages for an employer’s failure to do, even if the judge does not state that expressly.  Employees should ask for a mutually agreeable reference and an agreement that any reference requests will be answered in a manner that is consistent with the reference letter or summary provided.

Legal and/or Accounting Fees:  Most employers should be prepared to make some kind of reasonable contribution towards the legal fees of a dismissed employee.  Once a lawsuit has been commenced, the employer can be required to make these contributions if the lawsuit had merit.  Employers will often try to avoid a lawsuit by including payment for some of the legal fees in a negotiated severance package.

Waiver of Non-Competition Clauses:  Some employers may be prepared to waive or modify certain non-competition terms or clauses that were contained in a dismissed employee’s employment contract.  This can often be a tricky conversation.  It is usually more likely that employers will agree to modify a non-competition clause (that might have been unenforceable anyways) than to modify a non-solicitation clause, that may actually protect the employer’s business.  Telling an employer that you would like to go and take their clients’ business is not usually the best way to get a great severance package.  But telling an employer that you won’t be able to find any work because of an overly broad non-competition clause may be viewed as reasonable.

Other Perquisites:  Employers will sometimes provide for items like health club memberships, personal cell phone costs, professional memberships, private annual physical examinations, employer discounts and other items.  These items should be reviewed and considered individually.  Employees will also need to weigh the value of pursuing an item that may not be significant in comparison to the other items.

General Damages:  Most wrongful dismissal damages are fully taxable as if they were income.  The withholding rate may be lower (i.e. 30% if the amount is over $15,000) but at the end of the year, the employee will have to pay tax on the full annual marginal tax rate.  An exception is if there is a basis for some of the damages to be paid as “general damages,” which are non-taxable.  This, fortunately, is not applicable for most dismissals. I say fortunately because it would be a harsh world indeed if every employer who dismissed someone had also acted in a way that would warrant general damages.  Nevertheless, conduct that violates human rights legislation or  other “bad faith” conduct can warrant payment of general damages. It is very rare that employers will actually negotiate and pay these damages without an actual lawsuit or human rights complaint but it does sometimes occur.

These are some of the items to look for in a severance package, though entitlements to these items will really depend on the terms of the person’s employment, the length of service, the type of position, the existence of any employment contract or offer letter and a range of other factors.  A key factor is the likelihood of the dismissed employee finding new employment since all of these items are only really payable if they are arranged initially, or if the employee is actively looking for work and unsuccessful.  Dismissed employees who find new employment quickly may only be entitled to the applicable employment standards minimums.

There is no set formula for exact severance pay calculation.  Despite the fact that some lawyers might claim there is a very exact number if you plug a few variables into a “severance pay calculator,” that only produces a rough average, which may not even be statistically significant.  In most cases, there is a range, sometimes a fairly wide range.  Employees need to consider all of the different aspects of the proposed severance including which items are being paid and which are not, whether the severance is being paid as a continuance or a lump sum, and other related factors.

This list of items is provided only as a guideline for things that employees should consider when looking at a severance package that has been proposed.  In most cases, particularly when a number of different items are listed, employees should make the tax-deductible investment of obtaining proper legal advice from a qualified employment lawyer.

Linda Fraser had worked for UBS for more than 20 years.  She became ill after a holiday and was off work for six months on short term disability leave.  She tried to return to work but was unable to do so due to her illness, which had become more severe.  She went off again on short term disability leave for another six months.  After her second leave, Ms Fraser was off for a two year period on long term disability leave.

Most LTD policies change after two years.  For the first two years, Ms Fraser was required to show that she could not perform the duties of her employment, meaning the specific job that she had with UBS.  After two years, she was required to show that she could not perform the duties of any gainful occupation.  The insurer cut Ms Fraser off benefits when the definition changed and Ms Fraser sued the insurer to challenge that decision.  The lawsuit was totally separate from her wrongful dismissal case.

From UBS’ perspective, Ms Fraser’s disability coverage ended even though she was suing the insurer.  She was off work and no longer in receipt of benefits for a period of five months.  She did not keep UBS informed about her status.  After five months, UBS wrote to Ms Fraser and stated that her employment was being terminated.  It paid her out 8 weeks’ notice pay and 22 weeks’ severance pay under the Ontario Employment Standards Act and continued her extended health benefits for three more months.  Ms Fraser did not accept this decision and sued for wrongful dismissal.

At trial Justice Wein of the Ontario Superior Court reviewed the law of “frustration” and concluded that it applied in this case.  Ms Fraser was found to be “permanently disabled.”  The Court held that she is “totally disabled and her disability is permanent such that she will never be able to work again.”  As a result, the employment contract had ended and UBS was not required to provide any further payments.  The wrongful dismissal lawsuit was dismissed.

For employees in Ontario, the case is a reminder that employees have an obligation to keep their employers updated as to their status when they are off on a sick leave.  If disability benefits are cut off, they must provide information to their employers about their proposed actions.  If it becomes clear that the employee will not be able to return to work again, the employer may be able to conclude that the employment relationship has ended.  This will not necessarily lead to a viable wrongful dismissal lawsuit.

For employers, this type of decision is rare.  If the employee can show that he or she simply required more time to recover and kept the employer informed, the employer will not necessarily be able to rely on “frustration.”  The situation may also be different where the employee continues to receive LTD benefits.  Employers looking to rely on “frustration” will need to be reasonably sure that the employee will not be able to return to work for the foreseeable future.

The dismissed employee, Syed Hussain, was an assistant warehouse supervisor.  He had worked for the defendant Suzuki Canada for almost 36 years.  This had been his only full time job after immigrating to Canada from India in 1974.  Hussain was almost 65 at the time he was dismissed in February 2011, due to corporate restructuring.

After losing his job, Mr. Hussain took a period of time to get over the shock and to organize his efforts to find new employment.  He then applied to some 27 positions by July 2011, though his efforts were unsuccessful.

Justice Roberts, writing on behalf of the Court, noted that 24 months is usually the high end of  wrongful dismissal awards.  However, the Court held that Mr. Hussain was entitled to 26 months’ compensation due to the particular factors of his situation including his lengthy service, his age and other related factors.  The Court held that Mr. Hussain was entitled to benefits, RRSP contributions, and a discretionary bonus throughout the entire 26 month period.

Even though this wrongful dismissal case was decided only 10 months after Mr. Hussain was dismissed, the Court still awarded Mr. Hussain 25.5 months’ compensation and reduced the total notice period by only 1% for the contingent possibility that Mr. Hussain could find new employment over the remaining 16 months.

Finally, the Court ordered Suzuki Canada to reimburse Mr. Suzuki for almost $20,000 in legal fees.

This decision follows on the heels of the Ontario Court of Appeal decision in Di Tomaso v. Crown Metal Packaging, a case in which a long service mechanic was awarded 22 months’ notice in June 2011.

It is becoming quite evident in Ontario that long service employees are now entitled to notice periods at the higher end of the range, regardless of the type of position that the person held or the salary level that the employee enjoyed.

This trend is good news for Canadian employees, particularly long service employees who are not employeed in upper management positions.  Although for many years, the longest notice periods were usually awarded by courts only to the most senior employees in wrongful dismissal cases, that is now no longer an accurate summary of the law.  Age will still be a relevant consideration.  Employees who are dismissed after 20 years of service but are still in their 40’s may not be awarded the maximum amounts.  But dismissed employees in their 50’s and 60’s with many years of service will now all have a chance to obtain compensation of close to two years’ pay.

This questions was answered recently by the Ontario Court of Appeal in the case of Bowes v. Goss Power Products Ltd., a decision issues on June 21, 2012.

Peter Bowes had a written employment agreement with his employer.  The contract stated that he would receive six months’ notice or pay in lieu of notice if his employment was terminated without cause “prior to the completion of forty-eight (48) months from commencement.”  The contract said nothing about mitigation or about timing of the payment.

Mr. Bowes was dismissed without cause and he was able to find new employment after only two weeks.  His employer paid him out three weeks’ notice as required under the Ontario Employment Standards Act, but then refused to pay out the rest of the amount specified in the employment agreement.  Mr. Bowes was forced to file a lawsuit.  He was unsuccessful initially and then appealed his case to the Ontario Court of Appeal.

The Court of Appeal reviewed the case law dealing with mitigation of damages in these circumstances.  It emphasized that an employer and employee can fix an enforceable notice period which provides some certainty to both parties.  It may well be a lower amount than the employee would have otherwise been entitled to receive under common law.  However, by doing so, the employer gives up the right to the benefit of mitigation if the employee successfully mitigates damages.

In particular, the Court of Appeal stated the following, quite emphatically:

1.  “A fixed term of notice or payment in lieu is not equivalent to common law damages for reasonable notice.” and

2.  Payment in lieu of a fixed term of notice, being liquidated damages or a contractual amount is not subject to a duty to mitigate;

The Court of Appeal stated that it is unfair of an employer to draft an employment agreement with a set severance term, that is less than the employee might have had under the common law, and then try to get out of it at the point of dismissal by informing the employee “that future earnings will be deducted from the fixed amount.”

The Court decision, written by Chief Justice Winkler, on behalf of a unanimous Court of Appeal, concludes:

“Where an agreement provides for a stipulated sum upon termination without cause and is silent as to the obligation to mitigate, the employee will not be required to mitigate.”

In the present case, Mr. Bowes was awarded the full six months’ pay, as specified in employment contract, despite the fact that he found other work quickly.

This is a very important decision for Ontario employees as it clarifies an area in which there had been mixed case law.  The Ontario Court of Appeal has stated very clearly that employers must pay out fixed contractual severance amounts, even if the dismissed employee finds new employment quickly – unless the employment agreement very clearly states otherwise.

Employers can still use contracts that include mitigation provisions but these provisions must be included in the original employment agreement and must meet all of the other normal conditions of enforceability.

On Friday October 19, 2012, the Supreme Court issues its long awaited decision in R. v. Cole, a case involving the possession of child pornography by a teacher on a work issued computer.  While this is primarily a criminal law case rather than an employment case, the Supreme Court made some key pronouncements about workplace privacy and, particularly, the privacy of computer data.

First, citing R. v. Morelli, a 2010 decision, the Supreme Court reinforced the notion that Canadians have a high expectation of privacy in their own personal computers.  The Court also noted that computers contain information that is “meaningful, intimate and touching on the user’s biographical core.”  It concluded that “vis-a-vis the state, everyone in Canada is constitutionally entitled to expect privacy in personal information of this kind.”  However, the Court also concluded that workplace policies and practices can “diminish an individual’s expectation of privacy in a work computer.”  Here, Mr. Cole only had a “diminished expectation of privacy” of his personal computer.  The school had an “acceptable use policy” and Mr. Cole was aware of this policy.  Although the Supreme Court stated that it would “leave for another day” the issue of “the finer points of an employer’s rights to monitor computers issued to employees,”  here it concluded that the school principal had the right to seize and search a school issued computer if the principal had reasonable grounds for believing  that the hard drive contained compromising photos of a student.

The Court went on to distinguish between the school’s conduct and that of the police.  With respect to the police, the Supreme Court found that there had been a violation of the Canadian Charter of Rights and Freedoms in that Mr. Cole had been subject to an search that violated section 8 of the Charter.  However, a 6-1 majority of the Court held that the evidence should still be allowed, even though it had been gathered in circumstances that violated Mr. Cole’s rights, because of section 24(1) of the Charter which allows Courts to weigh the seriousness of the rights’ violation.  Only Madame Justice Abella would have excluded the evidence that was found to have been gathered in a way that violated Mr. Cole’s rights.

In a workplace privacy context, this decision contains some helpful language describing the importance of computer data for Canadian employees.  However, the ultimate result here is a diminished expectation of privacy for many Canadian employees.

Another recent case, in an entirely different context, is the case of Jones v. Tsige, a decision of the Ontario Court of Appeal.  This was a case addressing the right of an employee in Ontario to sue for “invasion of personal property.”  Here, in the context of a family dispute, an employee of the Bank of Montreal accessed another employee’s personal bank records illegally, numerous times.  The Court of Appeal held that there is a tort of invasion of privacy in Canada and focused on the tort of “intrusion upon seclusion,” which the Court of Appeal affirmed as an existing tort in Canada.

The Court referred to this developing tort as an “incremental step” in the common law.  The key features of the law are:

1.  The actions by the defendant must have been intentional or reckless;

2.  The defendant must have invaded the plaintiff’s private affairs or concerns;

3.  A reasonably person would regard the invasion as “highly offensive causing distress, humiliation or anguish.”

But, unless actual harm is demonstrated, the Court award will be a “modest conventional sum” with a randomly fixed “upper range” of $20,000, other than in exceptional cases where punitive damages should be awarded.  In this case, the Court of Appeal fixed the damages at $10,000.

How do we reconcile these two types of cases in the context of employee expectations of privacy?

If an employer searches an employee’s personal computer or other personal effects that happen to have been brought to the workplace,or otherwise, that will clearly violate the employee’s right to privacy and may fit within the tort of “intrusion upon seclusion.” Context will be important.

If, on the other hand,  the computer is a workplace computer, the employer may have the right to search the computer based on the overall context.  Some key considerations will be:

Was there a workplace policy in place giving the employer the right to search the computer? 

Was the employee aware of the policy?

Was the search reasonable in all of the circumstances?

Obviously, if the employer can demonstrate that it had the right to access the company issued computer, there would be no basis for a claim for “intrusion upon seclusion.”  If the answer to some or all of these questions is “no,” there may be a basis for an employee claim.

As the law continues to develop, Canadian employees should still be extremely cautious about using their workplace computers for any non-work related matters.  Employees are best off to try to keep their personal business to their own personal computers – whether used at home during non-work hours or on a break at the workplace.  Alternatively, employees can use their own personal devices such as smart phones or tablets.  Personal data that is on a workplace computer may well wind up being discovered and used by the employer for disciplinary or other purposes.

Although the law may eventually wind up developing greater legal protection in these circumstances, as of these two recent decisions, employees in Canada still have a diminished expectation of privacy for data contained on their workplace computers.

In a recent case of the Ontario Superior Court, Chevalier v. Active Tire & Auto Centre, a wrongful dismissal case brought by a 33 year employee was dismissed for failure to return to work.

The plaintiff, Earl Chevalier, a service centre manager with Active Tire, was placed on a lay-off with minimal notice and no compensation.  Mr. Chevalier wasted no time in suing Active Tire for wrongful dismissal two weeks after being dismissed.  He claimed that he could not be “laid-off” with no pay  and that this was a constructive dismissal.  In response to the lawsuit, Active Tire wrote to Mr. Chevalier, apologized and asked him to come back to work.  Mr. Chevalier elected not to return to work and instead proceeded with his law suit.

At trial, the Court agreed that Mr. Chevalier had been constructively dismissed.  Active Tire could not just lay him off with no notice after 33 years.  However, the main issue was whether Mr. Chevalier should have been required to return to work in these circumstances.  He argued that Active Tire had tried to “make his life miserable” in the period leading up to his dismissal and he therefore would have had to return to work in an atmosphere of “hostility, embarrassment or humiliation.”

After reviewing the evidence, the Court rejected Mr. Chevalier’s claims.  It held that a “reasonable person” would have returned to work in all of the circumstances.  Mr. Chevalier was not able to demonstrate to the Court that his workplace had become intolerable and he was therefore required to return.

If Active Tire had not called Mr. Chevalier back to work, the Court ruled that he would have been entitled to 16 months’ compensation – the time period it took Mr. Chevalier to find new employment.  However, the result in this case was that he was not entitled to anything and was required to pay legal fees to Active Tire, as well as his own.

This case is an example of the risky nature of wrongful dismissal litigation.  It illustrates the importance of obtaining proper legal advice and following it.  Under current Canadian case law, employees who are dismissed or laid off off must seriously consider an employer’s offer to return to work, if it is an offer made in good faith.  Important points to consider may be:

• Is the offer to return an offer for the same position that the employee held?
• Will the pay and working condition remain the same?
• Is there significant evidence of conduct that is embarrassing or humiliating?
• Does the employee have other employment possibilities?

Dismissed employees should carefully review all of these issues, as well as other related matters, with competent employment law counsel.  Making the wrong decision can be costly and harsh.

This is a short list of a few of the main topics that I will be covering and some of the key points:

1.  Workplace  Accommodation: Sabbath Observance:  Many Canadian employees of different faiths observe a weekly Sabbath.  Since the Canadian Charter of Rights and Freedoms (the “Charter”) came in effect in 1985, the Canadian Supreme Court has, on a number of occasions, recognized the importance of accommodating minority religious requirements, including a weekly Sabbath.  Canadian employers are required to accommodate the Sabbath observance of their employees by permitting employees to take the day off unless doing so would create “undue hardship” for employers.  In unionized workplaces, unions are also responsible for cooperating with this duty to accommodate these needs.  There are very few cases in which Canadian courts, tribunals or arbitrators have actually found that it would create “undue hardship” to permit an employee to observe his or her weekly Sabbath, although there have been some.  One recognized exception would be if the employer was looking to hire a person specifically to work on the Sabbath day.  Another would be if work on the Sabbath could be shown to be an essential requirement of the position.  For the most part, however, even small workplaces have been required to permit employees to observe their weekly Sabbath breaks.

2.  Workplace Accommodation: Religious Holy Days:  As with weekly Sabbath observance, Canadian employers have also been required to permit employees to take time off to celebrate or observe religious holy days, subject to “undue hardship.”  This may include a significant number of days in a calendar year.  However, the legal question has been whether employers are required to pay for these observances.  The short answer, for the most part is “no.”  If employers provide “discretionary days off” or “personal days” or most other types of paid days, employees are permitted to use these days, as paid days off, to observe holy days.  Employees are not required, and cannot be required, by their employers to use up paid vacation time for these days. Moreover, if there is a way to make up the days through scheduling time, extra hours, or time shifting, employers are required to permit their employees to use these methods.   Many employers do provide two or three paid annual “personal” or “discretionary” days which employees can use for these purposes.  But, in most cases, employers are not required to pay for religious holy days even though they must permit employees to observe these days by not attending at work.   If employees elect not to use their vacation time for these observances, they can take unpaid holy day time – or try to make up the time otherwise.

3.  Workplace Accommodation: Daily Prayer Breaks: There are fewer cases involving daily prayer breaks.  However, Canadian law recognizes that employers must accommodate these requirements to the point of undue hardship.  Employers may put rules into place to ensure that a workplace or a post is not left vacant while an employee takes a prayer break.  For example, a system of notifying a superior, obtaining approval or “signing out” at the required time may be reasonable.  Employers are not necessarily required to pay for this prayer break time and can ask employees to work extra time to make up this break time – unless the employees are simply using break time that is otherwise available to all employers.  Employers are not necessarily required to provide designated prayer areas, though if this is something that can be arranged, it may be preferable over having the employees leave the workplace.

4.  Workplace Accommodation: Religious Dress: Canadian employers are required to permit their employees to wear various forms of religious dress unless doing so would create undue hardship (which usually means safety concerns in this area).  Thus employees may wear turbans, kippahs (yarmulkes), hijabs, crosses, kirpans and other forms of religiously required headgear or attire to work.  Employers, in most cases, cannot require employees to shave their beards or other facial hair that is grown for religious purposes.  Clothing that is not religiously required but is a cultural practice may be permitted as well, though this may be open to question.  Clothing worn for religious or cultural reasons which completely covers a person’s face such as a niqab or a burka may also create issues if the employee works, for example, in a customer service environment.  Employers may argue that it is an essential requirement of the position that the employee’s face be visible while working.  It is unclear how courts and tribunals will decide these cases.  In 2012, the Supreme Court determined that women who wear niqabs may be required to remove them when testifying in court in some circumstances.  However, this has not yet been applied to workplaces.

4.  Workplace Accommodation: Employer Requirements:  If employees are asked to do something that would violate their religious beliefs, practices or customs, they may be able to get an exemption from these requirements for religious reasons.  The test would be whether the issue can be accommodated without creating undue hardship.  In one case, for example, some 407 employees refused to participate in a new security system that involved biometric hand scans, for fear of having the “Mark of the Beast” imprinted on their hands.  An arbitrator accepted this argument and exempted the employees from the biometric hand scan program, finding that this was something that could be accommodated.  Employers are not required, however, to accommodate religious requirements that would affect the human rights of other employees.  So if, for example, an employee requests that he or she not be required to work with members of the opposite gender, that request need not be accommodated in a Canadian workplace since it would affect the equality rights of other employees.

Other issues may arise that relate to religious freedom in the workplace.  The Supreme Court of Canada has established that employees seeking any of these accommodations for religious purposes are not required to prove that they are religiously required by a particular religion or religious leader to observe such practices.  Rather, they need only prove that they are sincere in their belief and observance of a particular practice.  In other words, employees must show that they believes that they are required to observe a particular practice and actually follow it, sincerely.  If this can be demonstrated, Canadian employers are required, in most cases, to accommodate the practice to the point of undue hardship.