Employment Law - Langer Law

The Court of Appeal revisits the Enforceability of Termination Provisions

Matthew S. Langer — Thu, 02 Jul 2020 19:14:42 +0000

In Waksdale v Swegon North America, 2020 ONCA 391, the Ontario Court found that if any part of a termination provision violates the Employment Standards Act (ESA) the entire provision will fail and the employee is not limited to the ESA minimums. This is a huge benefit to the employee as termination pay would no longer be limited by the ESA and instead is dictated by the common law.

The facts in Waksdale dealt with an employee who was terminated without cause and the employment contract included a lawful without cause termination provision. What the Ontario Court of Appeal found however, was that the employment contract had an unlawful just cause termination provision. The unlawful just cause termination provision nullified the termination provision so the employee was entitled to the much larger award of common law termination pay.

The reason the Ontario Court of Appeal found the just cause portion of the termination provision to be unlawful was that it breached the ESA. Under the ESA, an employee can be terminated for just cause and owed nothing by the employer if the employee was: “guilty of wilful misconduct, disobedience or wilful neglect of duty that is not trivial and has not been condoned by the employer.” The threshold for a just cause termination under the common law differs as it is whether the employee was reckless in neglecting their duties and through their own conduct invalidated the employment contract. This distinction is important because even if an employee is terminated for common law just cause, the employee can still be entitled to ESA termination pay. The threshold is very high for an employer to not have to provide the ESA minimums to an employee based on a just cause termination because it is very difficult to prove that an employee was “guilty of wilful misconduct, disobedience or wilful neglect of duty.”

A second important aspect of the Ontario Court of Appeal decision is that the severability clause was not used to effectively remove the unlawful just cause provision and only apply the lawful without cause provision. The Courts reasoning was that a severability clause cannot have any impact on provisions in an employment contract that are unlawful or have been made void by statute. Having concluded that the just cause provision and the termination without cause provision were to be understood together, the severability clause could not apply to sever the offending or unlawful provisions.

This Court of Appeal decision has cast doubt on the enforceability of employment contracts in Ontario and across Canada. If an unlawful just cause provision can no longer be impacted by a severability clause and voids the entire termination provision, many employees could be entitled to the enhanced common law notice upon their termination.

For more information on your legal entitlements if you have been terminated or if you need a termination package reviewed, contact Langer Law at (647) 926-4704.

This blog is for educational and informational purposes only and does not constitute legal advice. Results of cases described on this website may not be typical and are not guaranteed. The accuracy of the blog posts is not guaranteed. Contacting Langer Law or using this website does not create a lawyer-client relationship.

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Ontario Small Claims Courts limit increased to $35,000

Matthew S. Langer — Wed, 13 Nov 2019 01:25:08 +0000

Ontario has increased the maximum claim that can be filed in Small Claims Court from $25,000 to $35,000. This change takes effect on January 1, 2020.

On a practical level, employees who initiate a claim for wrongful dismissal or constructive dismissal against their employer can now safely initiate their claim in Small Claims Court for a total of $35,000 plus costs and disbursements. The increase to $35,000 benefits litigants who no longer need to forgo damages over and above $25,000.

Initiating a claim in Superior Court instead of Small Claims Court is more expensive and takes much longer to get to trial. Small Claims Court is a far more efficient avenue for litigation and the quick timelines can in certain circumstances lead to expedited settlement discussions between the parties.

If a claim has already been initiated in Small Claims Court, the claim can be amended to increase the amount of damages from $25,000 to $35,000 beginning on January 1, 2020.

If you have any questions feel free to contact Langer Law at (647) 926-4704 to schedule a free phone consultation.

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Jail Time Imposed on Employer Not Paying Wages

Matthew S. Langer — Fri, 04 Oct 2019 13:59:56 +0000

An Employee is entitled to receive wages for the time that they have worked. Getting paid on a timely basis the proper amount owing is crucial to the employment relationship. There are instances in which the Courts in Ontario have had to enforce fines and in the most serious cases, jail time, when Employers continually refuse to pay their Employers all that is owed.

Section 132 of the Employment Standards Act states that a person who contravenes the Act is guilty of an offence and on conviction is liable

if an individual to a fine of not more than $50,000 or to imprisonment for a term of not more than 12 months or to both.

if the person is a corporation, to a fine of not more than $100,000.

In 2017 the owner of a bankrupt restaurant chain with over 60 employees owed over $600,000 in salary, overtime, vacation pay, termination pay and severance pay. While $457,443 was ordered to be paid to the employees, the full amount was never paid. Ontario Court Justice of the Peace Karen Walker imposed a jail sentence on the owner of 90 days.

Imposing a jail sentence on an Employer who does not pay wages is not common but illustrates the strength of sanctions against an Employer under the Employment Standards Act. If you or someone you know is not receiving their proper wages, they should contact us right away.

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Constructive Dismissal – Has it happened to you?

Matthew S. Langer — Wed, 26 Jun 2019 01:22:05 +0000

An employee faces a constructive dismissal when the employer imposes a fundamental change to the employee’s job. Minor changes will not be found by a Court to be a constructive dismissal as an employer can legally alter the duties and responsibilities of an employee if the imposed changes do not strike at the heart of the employment relationship.

The following list are changes that can potentially lead to a constructive dismissal:

Unreasonable working conditions related to sexual harassment or discrimination;
Unreasonable working conditions related to bullying or harassment
Reduction in compensation by 10%;
Substantial geographical change of offices; and
Unwarranted demotion.

Not every reduction in compensation will be a constructive dismissal. While any decrease in compensation may heavily impact an employee, a nominal decrease may not be enough to show that the employee was constructively dismissed. Speak to a qualified employment lawyer for a full review of your particular circumstances but note that it is likely that if your compensation has been reduced by 10% or more, it is likely that you have been constructively dismissed.

If you believe that any of the above listed situations apply to your place of work, you may have been constructively dismissed. An important aspect of initiating a claim for constructive dismissal is that you have not consented or implicitly agreed to the change imposed by your employer.

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Statutory Severance Pay

Matthew S. Langer — Fri, 21 Jun 2019 16:00:48 +0000

Most employees are aware that they are owed termination pay when they are fired. What many employees and even some employers don’t know is that if certain circumstances exist, statutory severance pay is also owed. To simplify things and to provide a general overview of severance payments, an employee will receive approximately 1 week of severance pay per year of service (up to a maximum of 26 weeks).

An employee qualifies for statutory severance pay if the employee has been employed for 5 or more years AND the employer has a payroll in Ontario of at least $2.5 million OR because 50 or more employees have been terminated within a 6 month period.

If you have worked for over 5 years and you worked for a large company that employees over 50 people, you could potentially fit within the requirements for statutory severance pay. This is a mandatory payment that all employers must pay if the above noted qualifications are met. Don’t assume your employer is paying you all that you are entitled to.

Statutory severance pay must be paid either 7 days after you have terminated or on the next regular pay day from the day that you were terminated. Don’t let your employer off the hook, find out if you are entitled to extra pay.

If you believe you might qualify for severance pay on top of normal termination pay, you should speak with an employment lawyer who can determine your proper financial entitlements.

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Full and Final Release: Don’t Sign Without Proper Legal Guidance

Matthew S. Langer — Wed, 19 Jun 2019 16:00:05 +0000

If you have recently been terminated by your employer and you were given a termination letter and a release to sign, read the documents carefully. Your employer’s intention is to get you to sign a release that shields them from any legally viable claim.

Don’t be fooled into signing the release. Don’t allow your employer to hold termination pay over your head as an incentive to sign the release. Your employer is statutorily mandated to pay your entitlements under the Employment Standards Act, whether or not you sign the release.

If your employer has included a timeline to sign the release, they will generally allow for an extension. The reason why employers do this is because they ultimately just want you to sign the release. Make sure you bring the termination letter and release to an employment lawyer for a full and proper legal review.

If you sign the release, you are forfeiting your legal rights to initiate a claim for wrongful dismissal or for human rights damages. Before signing away your legal entitlements, contact us so that we can review the termination letter and release and advise you as to your full financial entitlements.

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Wrongful Dismissal

Matthew S. Langer — Mon, 17 Jun 2019 13:00:37 +0000

Have you recently been fired? Being fired from your job can be a challenge along with being very stressful. During these difficult times you need to be aware of your financial entitlements to ensure that your former employer is not getting one over on you.

All recently fired employees should speak with an employment lawyer who can review the file and determine what you are properly entitled to both under the Employment Standards Act and under the common law.

The starting point for your financial entitlements upon being fired is that you are owed 1 week per year of service up to a maximum of 8 weeks. However, these are the minimums that your employer must pay as per the Employment Standards Act. If you want to find out if you could be entitled to a month of pay per year of service, please contact us.

Please review the following simple calculation based on an employee who worked for a company for 5 years and was making $50,000 per year. This is just an example but it properly illustrates what you could be losing if you don’t contact an employment lawyer shortly after being fired. Under the Employment Standards Act you would be entitled to 5 weeks of pay which would be approximately $4,000. If the common law applies, the same employee could be entitled to 20 weeks of pay which would be approximately $19,000.

Why leave so much money on the table and let your previous employer off the hook. Contact an employment lawyer to review your file. It could be the best financial decision you can make. Let a us guide you through these stressful times.

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Human Rights Violation and Age

Matthew S. Langer — Mon, 03 Jun 2019 13:00:17 +0000

It is a clear violation of the Ontario Human Rights Code to dismiss an employee based upon any of the prohibited grounds of discrimination set out in the Code. The following prohibited grounds are outlined in the Code: race and colour, ancestry, place of origin, ethnic origin, citizenship, creed, sex, sexual orientation, age, record of offences, marital status, family status, and handicap.

The Code is important legislation for all employees in Ontario as it protects individuals while they are employed but also upon their termination. This often leads to two distinct types of discrimination: intentional discrimination which is less common and unintentional discrimination which may result from a corporate policy or decision that seems to treat all employees the same but has unjustified negative impacts on individuals that are protected by the Code.

One incorrect assumption that both employers and employees make is that there is a mandatory retirement age of 65. There is no law that states that an employer can legally terminate or force retirement upon an employee once they turn 65. If you are an employee who recently turned 65 and have been impacted by a policy of mandatory retirement or feel as though you have been terminated because of your age, you may have a human rights complaint on your hands.

Turning 65 is not a barrier for workers in Ontario to continue working at a job that they are able to adequately perform. However, if there is evidence that age is a relevant criterion for properly performing the required daily duties, a worker can be justifiably terminated if there is evidence that plainly illustrates that elderly individuals cannot complete their duties effectively. If you believe you have been terminated because of your age and you believe you are still capable of performing your duties, speak to an employment lawyer to ensure that your termination did not violate the Ontario Human Rights Code.

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Termination Pay – Statutory Minimums

Matthew S. Langer — Sat, 27 Oct 2018 03:05:33 +0000

The Employment Standards Act (“ESA”) outlines what an Employer must pay to a terminated Employee for termination pay. These minimum payments are just that, MINIMUMS. Don’t be short changed by your Employer when they offer you 1 week per year of service. Employer’s hope you take your ESA minimums.

The ESA minimums for termination pay are as follows:

Length of Employment	Termination Pay Owed
Less than 1 year	1 week
1 year but less than 3 years	2 weeks
3 years but less than 4 years	3 weeks
4 years but less than 5 years	4 weeks
5 years but less than 6 years	5 weeks
6 years but less than 7 years	6 weeks
7 years but less than 8 years	7 weeks
8 years or more	8 weeks

This is what an Employer must paid to an employee either 7 days after the employee’s employment is terminated or on the employee’s next regular pay date, whichever is later. More importantly is that an Employee can be entitled to substantially more than the minimums when no employment contract was signed at the beginning of the employment relationship. Other important factors are the age of the Employee, the salary of the Employee at the time of termination and the likelihood of getting a comparable job.

Don’t settle for a few weeks when you could potentially be entitled to a few months.

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Employment Contracts: All Employers Need Them

Matthew S. Langer — Fri, 18 May 2018 13:24:08 +0000

As an employment lawyer, my dream client is an older long-tenured employee who never signed an employment contract. This is because an enforceable employment contract is the best protection an employer has from a wrongful dismissal claim. Let this blog be a warning to every business owner, protect your financial interests and ensure that you have a properly drafted employment contract for each new employee that is hired.

The most significant benefit to an employer is that an employment contract legally limits the rights of the employee. A termination clause, if drafted properly, limits an employee’s rights to notice or termination pay in lieu of notice. Under the Employment Standards Act the general rule of thumb is that an employee is owed 1 week per year of service to a maximum of 8 weeks. Under the common law, the general rule of thumb is that an employee is owed 1 month per year of service to a maximum of 24 months. While these are just general rules of thumb, the point for employers is that minimizing the termination pay owing to terminated employees is in their best interests.

Without an enforceable employment contract, the bad news for employers is that the common law applies. Don’t make the mistake that can cost you thousands in termination pay when you want to terminate an employee. Get a properly drafted employment contract and feel protected.

If your business is already employing individuals and did not get an employment contract signed prior to the beginning of the employment relationship, you can still be protected. At any time, an employer can request that an employee sign an employment contract. However, the wrinkle is that based on contract law the employee must receive a tangible benefit for the new employment contract to be enforceable moving forward. Generally, in a situation such as this, the employer would pay either a signing bonus or increase the employees pay to reflect fair consideration for the new employment contract.

Don’t wait to be in a position where you need to terminate an employee before realizing the thousands in termination pay you owe them. Contact us now for a free consultation and ask about how an employment contract can protect your business.

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