Diagnosable Psychological Injury Not Required for Award of Aggravated Damages: ONCA

Can a ‘little white lie’ about the reason for an employee’s termination of employment result in an award of aggravated damages? What if the employee is unable to demonstrate a diagnosable psychological injury?

In Krmpotic v. Thunder Bay Electronics Limited, 2024 ONCA 332, the Court of Appeal for Ontario held that mental distress is a broad concept; it includes a diagnosable psychological condition arising from the manner of dismissal but is not limited to that. In the Court of Appeal’s assessment, “There is a spectrum along which a person can suffer mental distress as a result of the manner of dismissal.”

It just got considerably easier for employees to obtain aggravated damages from the manner of dismissal.

New Client Policy Results in Frustration of Employment

If you are an employer in the service industry, and your largest client introduces a new rule or policy that imposes new requirements on your employees, and if one of your employees refuses to comply with that new rule or policy, has the employee’s contract of employment been “frustrated” or must the employer allege that it has “cause” for termination?

In Croke v. VuPoint System Ltd, 2024 ONCA 354 (CanLII), the Court of Appeal for Ontario upheld a decision in which it was found that an employee’s refusal to comply with his employer’s client’s rule requiring proof of vaccination against Covid-19 was a frustration of contract.

This is case about Covid-19 vaccination, which is not about Covid-19.

Court of Appeal Clarifies Test for Condonation of Layoff

If an employee does not immediately object to being laid off, or “furloughed,” does that mean that the employee has agreed to or condoned such action?

In Pham v. Qualified Metal Fabricators Ltd., 2023 ONCA 255 (CanLII), the Court of Appeal for Ontario held that an employer cannot infer consent to a layoff from mere silence.

Report of Workplace Harassment Investigator Shielded by Qualified Privilege

Is the report of an investigator hired to investigate allegations of workplace harassment shielded by the doctrine of qualified privilege?

In Safavi-Naini v. Rubin Thomlinson LLP, 2023 ONCA 86 (CanLII), the Court of Appeal for Ontario confirmed that it is.

“Changed Substratum” Doctrine voids Executive’s Contractual Entitlement to One Year’s Severance: ONCA

Can substantial increases to one’s job responsibilities void what would otherwise be a binding termination provision in an employment contract?

In Celestini v. Shoplogix Inc., 2023 ONCA 131, the Court of Appeal for Ontario upheld the use of the “changed substratum” doctrine to void an otherwise legal, and some might even argue generous, contractual termination provision.

The Trumping of Hope. The Court of Appeal for Ontario’s Merciless Approach to Contract Interpretation in Employment Law

On September 16, 2021, I published a post titled “Hope for Ontario's Employer Bar: The ONSC's Decision in Rahman v. Cannon Design Architecture Inc.” The artwork I selected for that post was the iconic “HOPE” poster used in 2008 by the Obama campaign when the then-US Senator was running for President.

“Hope” was an appropriate word to describe the employer bar’s reaction to the Superior Court’s decision in Rahman. In that case, Justice Sean F. Dunphy of the Ontario Superior Court of Justice had held that an employee’s sophistication and the fact that she had retained independent legal advice were factors in the determination of whether a contractual termination provision ought to be enforced as written.

Justice Dunphy further held, following the approach more commonly employed in British Columbia (see my commentary in my post Employment Law Isn't Real) that, “Every contract – including this one – must be interpreted with a view to giving expression to the mutual intention of the parties as expressed in the words used by them.”

The employee in the Rahman case appealed Justice Dunphy’s decision to the Court of Appeal for Ontario.

And, just as “Hope” left Washington on January 20, 2017, hope for the employer’s bar was “trumped” when the Court of Appeal released its decision in Rahman v. Cannon Design Architecture Inc., 2022 ONCA 451 (CanLII).

“Discretionary” Bonuses Contain Implied Term that the Discretion Will be Exercised in a Fair and Reasonable Manner: ONCA

If a company describes an employee’s bonus payment as being “discretionary”, with the allocation of bonuses to employees being “purely subjective” and completely bereft of any calculations, does that mean that the company can do whatever it wants in respect of such bonus?

In Bowen v. JC Clark Ltd., 2022 ONCA 614 (CanLII), the Court of Appeal for Ontario (Feldman, George and Copeland JJ.A.) held that “Where an employment agreement provides for a discretionary bonus, there is an implied term that the discretion will be exercised in a fair and reasonable manner.”

“Lowered Expectations” – Catchy Sketch Comedy Jingle, Bad Legal Principal

Those of us of a certain age will remember a sketch comedy television series originally inspired by Mad magazine that aired on Fox from 1995 to 2009 called “MADtv”. Among the recurring sketches on MADtv was a segment called “Lowered Expectations”, which spoofed dating videos.

The title “Lowered Expectations” poses a relevant employment law question: Does a dismissed employee have a legal duty to mitigate her damages by searching for a lesser paying job after a reasonable period of time has passed looking for a more comparable position?

Just as it is true that no one should have to lower their expectations in looking for love, in Lake v. La Presse, 2022 ONCA 742 (CanLII), the Court of Appeal for Ontario (van Rensburg, Pardu and Copeland JJ.A.) held that a motion judge had erred in principle when she accepted that, in mitigation, after a reasonable period of attempting to find similar employment, a dismissed employee must begin searching for a lesser paying job.

Sorry if you now have the theme song stuck in your head.

Court of Appeal Confirms Public School Teachers are Protected from Unreasonable Search and Seizure by Section 8 of the Canadian Charter of Rights and Freedoms

Are public school teachers protected from unreasonable search and seizure by section 8 of the Canadian Charter of Rights and Freedoms if the search and seizure is performed in the workplace by their employers?

As stated by the Court of Appeal for Ontario in the case of Elementary Teachers Federation of Ontario v. York Region District School Board, 2022 ONCA 476, “There is no doubt that they are.”

Court of Appeal Recognizes that Employees Terminated “For Cause” May Still Be Entitled to Statutory Termination Benefits

The law concerning the rights and responsibilities of Ontario’s employers to dismiss an employee “for cause” , and the rights of employee to nonetheless receive statutory termination pay and severance pay in event of a termination “for cause” finally received such much-needed clarity in the Court of Appeal of Ontario’s decision in Render v. ThyssenKrupp Elevator (Canada) Limited, 2022 ONCA 310 (CanLII).

While both the facts of the case and the depth of the Court of Appeal’s analysis on the critical point have caused some commenters to challenge the correctness of the court’s ultimate decision, I could not be more ecstatic about the methodology of the court’s approach.

How Much Time Do You Have to Sue for Unpaid Overtime?

The question of how much time one has within which to start a civil claim for unpaid wages, including unpaid overtime is actually more complicated than it sounds.

In Fresco v. Canadian Imperial Bank of Commerce, 2022 ONCA 115 (CanLII), the Court of Appeal for Ontario refused to allow an employer’s appeal in a proposed class action case on the basis that the applicable limitation period had expired.

The basis for the court’s decision was the application of the “reliance on superior knowledge and expertise” doctrine to the question of when an employee ought to reasonably have known that, having regard to the nature of the injury, loss or damage, a proceeding would be an appropriate means to seek to remedy it.

Allow me to explain.

Advocacy for Better Advocacy: The Right to Reply Factums in Civil Cases

Should parties on civil appeals be permitted to file “Reply Factums” without seeking leave of the court?

In Prism Resources Inc. v. Detour Gold Corporation, 2022 ONCA 4, Justice David Brown of the Court of Appeal for Ontario expressed his strong preference that they should.

“It's Too Late to Apologize” Court of Appeal Finds Refusal to Apologize For Inappropriate Conduct Just Cause for Termination of Employment

If you can get thorough this post without hearing Ryan Tedder’s voice singing “It's too late to apologize,” well you’re stronger than I am. “I said it's too late to apologize, it's too late.” (For those who don’t get the lyrical reference, or those who just want to hear the song, here’s the link: Timbaland - Apologize ft. OneRepublic.)

In November of 2020, I wrote a post titled “Refusing to Apologize for Inappropriate Comments Not Cause for Dismissal”. In that post I reviewed the Ontario Superior Court of Justice’s decision in Hucsko v. A.O. Smith Enterprises, 2020 ONSC 1346 (CanLII), in which Justice G.E. Taylor held that an employer was not justified in summarily ending the employment relationship because the employee refused to apologize for inappropriate comments and it could not use the previous findings concerning inappropriate comments to later justify the termination.

The employer appealed.

For reasons reported as Hucsko v. A.O. Smith Enterprises Limited, 2021 ONCA 728, the Court of Appeal found that there was cause to terminate the employee’s employment.

Too late.

Employment Law Isn't Real

“Employment law isn’t real.”

Mention to my father that to which I have dedicated my intellectual focus and professional pursuits and he will be quick to inform you that employment law is not a real thing. He will ask you, rhetorically, who has ever heard of such a thing.

My father’s perspective on the subject of employment law reminds me of something I remember being told in law school: “There is no point taking environmental law.” Perhaps somewhat unexpectedly, it was my environmental law professor who told me and my classmates such a thing. The reason, my professor teased, that there was no point in taking environmental law was because “environmental law” was not a distinct subject. It was, others would argue, simply applied criminal law, or applied tort law. So long as one had an understanding of criminal law and private rights of remedy, why would one need an entire law course dedicated to the subject of the environment? “Because,” came the obvious answer, “it’s different.”

I did not take employment law in law school. Didn’t take labour either. In fact, the closest I came to learning about the subject in law school was one lunch hour talk about mandatory retirement, which I only attended because a friend had asked me to, and there was pizza.

Had I taken such a course however, and had the professor chosen to introduce the subject in the same provocative way that my environmental law professor had, I suspect that she would have said something similar to what I heard down the hallway in my environmental law class: ‘There is no point in taking employment law.’ Employment law is, by and large, applied contract law, with occasional criminal law and tort law, but mostly applied contract law.

“Employment law” therefore is not real. It is not unique or distinct. If one knows contract law, one can wing it at employment law.

If that thesis is true, then the Court of Appeal’s decision in, Waksdale v. Swegon North America Inc., 2020 ONCA 391 (CanLII) is wrong.

"It ain't over till it's over." - Yoga Berra's Profound Answer to Employment Law's Vexing Question

"It ain't over till it's over." According to a very quick Google search, the very height of what passes for research in 2020, Yogi Berra first uttered the phrase about baseball's 1973 National League pennant race.

While he almost assuredly never intended to do so, Berra has provided the quintessential answer to one of employment law’s most vexing questions – as it applies to stock option plans, when does an employee’s employment terminate?

In O'Reilly v. IMAX Corporation, 2019 ONCA 991 (CanLII), a decision authored by the Chief Justice of Ontario, the Honourable George R. Strathy concerning the interpretation and application of an employee stock option plan, Ontario’s top court held that the words “when employment terminates”, did not establish, in unambiguous terms, when the date of termination was nor when employment terminated. Applying the rule of contractual interpretation established by the Court of Appeal in the case of Gryba, (i.e. in the absence of unambiguous terms to the contrary, the terms of a contract should be presumed to refer to lawful termination rather than unlawful termination ) the court held that, when it comes to employment, it ain't over till it's over.

Commentary

If one has found the interpretation of contractual termination clauses to be an exercise in parsing words, then one is truly in for a treat when it comes to interpreting equity plans, such as stock option plans.

The problem in the O’Reilly case is highlighted at paragraph 52 of the court’s reasons for decision, where Chief Justice Strathy notes, “While the language in all the plans at issue in this case extinguish the respondent’s right to exercise any unvested awards as of the date of “termination” or when employment “terminates”, they do not establish, in unambiguous terms, when the date of termination is or when employment terminates.” By comparison, language that has been held to be clearer with respect to when an employee’s entitlement terminates has included the phrase “ceases to perform services for”.

What the court strains to say in its decision in O'Reilly is: When drafting an equity plan, if you wish to avoid the vesting of equity awards during the common law notice period, then both: (a) say so, and (b) be absolutely crystal clear about when the entitlement terminates. A further, much more subtle message should be to not wrongfully dismiss your employees in the first place, but one digresses.

Quit While You're Ahead and Leave the Numbers Out of It

Quit while you’re ahead and leave the numbers out of it. Those are the fundamental lessons from the decision of the Court of Appeal for Ontario in Rossman v. Canadian Solar Inc., 2019 ONCA 992 (CanLII).

In yet another case concerning a contractual termination clause, the Court of Appeal for Ontario held that adding the words “Benefits shall cease 4 weeks from the written notice” after language guaranteeing that the employer would comply with the ESA not only violated the terms of the ESA on its face but created ambiguity as to the employer’s true intentions.

Commentary

The case is a useful primer on the fundamental principles governing contractual termination clauses. In his reasons for decision, MacPherson J.A. sets out what he calls the “leading ‘umbrella’ cases in employment law” (see paragraphs 16-24 of the court’s reasons for decision), which is worth a read for anyone new to this issue.

As I read the Court of Appeal’s decision, the reason the termination clause failed is because of the placement of the ‘ESA guarantee.’ I get the sense that, had the employer’s guarantee to provide minimum statutory entitlements followed the ‘four-week’ clause, then perhaps the court would have upheld the provision. It’s tough to say though.

The lesson that I think one can glean from this decision is that if an employer wants to put a limit on something, then they would be prudent to refrain from using actual numbers.

Time Spent as Independent Contractor Relevant Factor in Calculating Reasonable Notice

Is the amount of time spent as an “independent contractor” an appropriate fact for the court to consider when calculating the reasonable notice period if the worker later becomes either a true employee or dependant contractor?

In Cormier v. 1772887 Ontario Limited c.o.b. as St. Joseph Communications, 2019 ONSC 587 (CanLII), affirmed by the Court of Appeal for Ontario in Cormier v. 1772887 Ontario Limited (St. Joseph Communications), 2019 ONCA 965 (CanLII), Justice Paul Perell held that, it would be wrong in principle to ignore those years of the relationship in determining the reasonable notice period.

The case is an important read for those who may elect to start their relationship one way, but then change it over time.

Discretion to Depart from R.49 Costs Presumption Not Unfettered: ONCA

Does a trial judge have absolute, unfettered discretion in awarding the costs of a proceeding? To what extent does the fact that one of the parties made an offer to settle play a role in fettering the trial judge’s discretion?

In Barresi v. Jones Lang Lasalle Real Estate Services Inc., 2019 ONCA 884, the Court of Appeal for Ontario (Feldman, Fairburn and Jamal JJ.A.) held that, “The discretion to depart from the presumption as to costs in r. 49.10(1) is not unfettered and must be exercised in accordance with the purpose of the rule.” The case thus stands as an important reminder of the import of that rule.

"Failsafe" Language Fails to Save Termination Provision

If a contractual termination clause provides for “the greater of” ESA entitlements and a set amount, will the guarantee of “the greater of” act as a failsafe if the rest of the provision is contrary to the provisions of the ESA?

In Andros v. Colliers Macaulay Nicolls Inc., 2019 ONCA 679 (CanLII) , the Court of Appeal for Ontario said “no.”

Employee Has Right to Change Mind about Resignation: ONCA

Can an employee change her mind about resignation, if the impetus for such voluntary resignation ceases to be an issue, and the employee has not yet left employment?

In the third in a series of decisions concerning “working resignation”, English v. Manulife Financial Corporation, 2019 ONCA 612 , the Court of Appeal of Ontario said yes.