Photo of Gillian Maharaj

Gillian Maharaj is an associate in Baker McKenzie's Toronto office. A graduate of Osgoode Hall Law School, Gillian completed her articles at a leading employment and labour law firm, focusing on human resources law and advocacy. Gillian is also involved in pro bono work. Her experience includes the Family Law Information Clinic at Newmarket Superior Court, the Will Drafting Project with Pro Bono Students Canada, Court Intake work at Scarborough Criminal Court, and the Child Protection Externship at the Children’s Aid Society of Toronto.

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

KERPs (Key Employee Retention Plans) and KEIPs (Key Employee Incentive Plans), otherwise referred to as “pay to stay” compensation plans, are commonly offered by employers to incent key employees to remain with the company during an insolvency restructuring proceeding when so-called “key employees” may be tempted to find more stable employment elsewhere. However, courts will carefully scrutinize these plans because there are multiple competing interests as well as the overall policy objective of maximizing recoveries from the restructuring which can be diluted through overly generous incentive plans. Employers who are contemplating restructuring under the Companies’ Creditors Arrangement Act  (CCAA) should be aware of the framework for assessing KERPs or KEIPs recently established by the Ontario Superior Court of Justice.
Continue Reading

In its recent decision in North v. Metaswitch Networks Corporation, the Ontario Court of Appeal concluded that a severability clause could not be used to “rewrite” or “read down” a termination provision to make it comply with the Employment Standards Act (the “ESA”). Instead, the Court of Appeal held, where any part of a termination clause is void, the entire provision must be struck and the severability clause becomes inoperative. This case is a reminder to employers that there are no shortcuts when it comes to drafting your employment agreements—termination provisions must be carefully drafted to limit termination liability without breaching local employment standards.
Continue Reading