Employers commonly receive calls from Employment Insurance (EI) Officers seeking clarification of the information provided by the employer in a Record of Employment (ROE). The clarification or confirmation typically relates to the employee’s first / last day worked, insurable hours, insurable earnings and / or the reason for issuing the ROE (Block 16).

Employers who are asked to speak to their reason for issuing the ROE should pause and consider what, if any, information to share with the EI Officer. Employers should also carefully consider what steps to take upon receipt of correspondence from the EI Officer or the Canada Employment Insurance Commission (Commission).

A recent preliminary ruling in a complaint under the Canada Labour Code held that an employer would not be permitted to assert dismissal for misconduct because, according to the adjudicator, the issue had already been determined in an EI Officer’s decision to award EI benefits. Though troubling for employers, the Alexander v Huron Commodities Inc., 2019 CanLII 11915, ruling is not surprising given the facts in the case.

Background

Huron Commodities terminated Mr. Alexander’s employment in January 2018. The termination documentation did not set out a reason for termination, but, in the ROE, the employer indicated “dismissal” as the reason for issuing the ROE. Mr. Alexander applied for EI benefits.

In March 2018, after two “fact-finding” telephone conversations, the first with Huron (in which Huron stated it dismissed Mr. Alexander “for several things”, one being “missing fuel”, but that it had never looked into nor pursued this issue) and the second with Mr. Alexander, the EI Officer concluded that the employee had not engaged in any misconduct and awarded him EI benefits. In a letter to Huron, the Commission communicated the award of benefits, its determination that the reason for loss of employment did not constitute misconduct, and that if Huron disagreed with the decision, it could make a request for reconsideration. Huron did not take any action to challenge the decision.

However, in the unjust dismissal proceeding, Huron submitted that Mr. Alexander’s misconduct or, alternatively, his inability to adequately perform his duties, was the reason for his dismissal.

 Preliminary Decision

The adjudicator applied the three-part test for issue estoppel and concluded that the employer was estopped from arguing that Mr. Alexander was dismissed for cause:

  1. The question of misconduct before the adjudicator was the same question before the EI Officer and was fundamental to her decision—Mr. Alexander would not have been entitled to EI benefits if his dismissal was for misconduct.
  2. The EI Officer’s decision was a final, judicial decision—the Officer had authority to decide on EI benefits and on whether dismissal was for misconduct.
  3. The parties were the same in both instances.

Most importantly, in exercising his discretion to apply issue estoppel, the adjudicator found no basis for concluding that doing so would result in an injustice to the employer: the termination letter did not mention any misconduct; the EI Officer’s notes suggested Huron had neither looked into nor pursued the missing fuel issue, which was the only point that could be considered misconduct; and Huron did not take steps to challenge the Commission’s decision.

Key Takeaways

When indicating the reason for issuing a ROE, employers should consider not only the impact on the individual’s application for EI benefits, but also the potential implications for the employer in an unjust or wrongful dismissal complaint. This holistic approach should also be taken when drafting the termination documentation.

Employers should be cautious about liberal discussions with EI Officers, since such discussions may have implications on ancillary matters as in Alexander v Huron Commodities Inc. If an EI Officer calls, consider taking down his or her questions and asking for time to gather information and provide an informed response. This approach allows the employer to take time to properly review the matter, and to seek assistance from counsel in assessing the legal implications of proposed responses to those questions. As always, any correspondence relating to EI benefits should not go unattended and should receive prompt attention.

Successor rights are a long standing fixture in Ontario’s labour relations legislation. Generally speaking, under s. 69 of the Labour Relations Act (LRA), the purchaser of a business effectively steps into the seller’s shoes for the purpose of labour relations and becomes bound by any collective agreement that the seller is party to, unless the Ontario Labour Relations Board (OLRB) declares otherwise. The same principle applies where the business is leased, transferred or otherwise disposed of. The fundamental purpose of s. 69 of the LRA is to preserve the bargaining rights of the Union. The idea is that once the Union has been recognized with respect to a particular business, the Union may pursue that bargaining right when all or part of the business is sold.

Whether successor rights extend to the context of court-appointed receiverships had been an unsettled area. Recently, the OLRB determined that a court-appointed receiver that actively operated the debtor’s business through its agent was a successor employer for the purpose of s. 69 of the LRA: United Food and Commercial Workers International Union, Local 175 v Rose of Sharon (Ontario) Community cob as Rose of Sharon Korean Long-Term Care Home, 2018 CanLII 32988 (Rose of Sharon). We outline key aspects of the OLRB’s decision below. Continue Reading Ready to Bargain with the Union? Court-Appointed Receivers at Heightened Risk of Successor Employer Determination

As we reported in our earlier post, in Merrifield v The Attorney General, 2017 ONSC 1333, the Ontario Superior Court allowed an employee’s claim against his employer and two superiors for the “tort of harassment” and awarded significant damages against the defendants as a consequence. In its decision released today, the Ontario Court of Appeal (“ONCA”) held that there is currently no independent tort of harassment in Ontario, overturning the lower court’s decision. However, the ONCA did not rule out “the development of a properly conceived tort of harassment” that may apply in appropriate contexts. Continue Reading The Verdict is In: Ontario Court of Appeal Finds No Tort of Harassment (Yet)

This is part two in our series on recent Ontario Superior Court decisions that employers should be aware of before finalizing future employment agreements. See here for our first part, on the recent trend of lengthy notice period awards for long service employees of advanced age.

As most employers know, unenforceable termination clauses often give rise to costly wrongful dismissal claims. Yet the case law in this area is constantly evolving, and it is increasingly challenging to stay abreast of what a court will consider to be enforceable. Continue Reading Defining “Cause” in a Termination Provision: Mind Your Language!

The #MeToo and Times Up movements have led to significant cultural shifts and a collective call to action to end sexual harassment and related forms of exploitation. Since many of the high profile allegations involved abuse of power and quid pro quo demands in the context of employment relationships, the impact on employers has been profound. Continue Reading Not Just South of the Border: Canadian Employers Should Expect More Gender-Based Disputes

To mark International Women’s Day, we’re pleased to share an article from our US colleagues on recent efforts to close the gender pay gap, including salary history bans in the US and global efforts toward transparency reporting. The article, authored by Todd BoyerCaroline Burnett and Elizabeth Ebersole, can be accessed here.

This is the first of our two-part series on recent Ontario Superior Court of Justice decisions that employers need to be aware of before finalizing their next employment agreement. The decisions highlight the risk of failing to include an enforceable termination provision in the employment agreement. Absent such a provision, an employee dismissed without cause will be entitled to “reasonable notice” of termination at common law.

In this first part, we examine two recent decisions of the Court that suggest that the Court now favours longer notice periods for long service employees of advanced age: Dawe v Equitable Life Insurance Company, 2018 ONSC 3130 (Dawe) and Saikaly v Akman Construction Ltd., 2019 ONSC 799 (Saikaly). Until recently, 24 months was generally considered as the upper limit of notice entitlement that courts would award absent exceptional circumstances. Continue Reading Dismissing a Long Service Employee of Advanced Age May Prove to be More Costly

Following our DPA roundtable in June 2018 and the recent focus on DPAs in the media related to the SNC-Lavalin corporate criminal prosecution, Peter MacKay and Christopher Burkett will be pleased to answer your questions via teleconference on March 5, 2019 at 12:30 PM (EST). Please register here and dial-in to gain important insights on:

  • How the Canadian DPA system will work in practice and how it impacts the Integrity Regime;
  • How the current debate around DPAs and alleged political interference may impact the regime going forward;
  • The critical lessons learned from negotiating DPAs in other jurisdictions;
  • Strategies for self-disclosure and dealing with parallel multinational investigations, multiple enforcement agencies, and global settlement negotiations; and
  • Designing compliance programs and conducting effective internal investigations to ensure your company qualifies for a DPA.

In addition, we’ll discuss best practices for implementing effective corporate compliance programs.

For questions about registering for the teleconference, please contact Kylie Aramini, at kylie.aramini@bakermckenzie.com.

Overtime class actions are in the headlines again. On February 22, 2019, a class action claim seeking damages of over $100 million was filed against Flight Centre, an Australia-based travel services provider with stores in Canada and internationally. The claim alleges that Flight Centre systematically failed to pay overtime to its retail sales employees, referred to as “travel consultants”, requiring them to consistently work more than their scheduled hours, and implemented policies that fail to comply with the overtime entitlements under employment standards legislation. Continue Reading Back in Class: Overtime Pay Class Action Brought Against Global Travel Retailer

The world is facing another year of unprecedented change making uncertainty the new normal for global employers. We are watching geopolitical crises play out on the global stage with a global economic slowdown waiting in the wings. Global employers must navigate a course through this highly charged, shifting competitive landscape which is compounded by the challenges presented by increasing regulation, disruptive technologies and an intergenerational workforce which is transforming the world of work.

In this year’s edition of the Global Employer Magazine, we review the key themes and trends that dominated the employment law landscape in 2018 and provide guidance on what to watch out for in 2019.