To ring in the New Year, we highlight the ten most significant developments in Canadian labour and employment law in 2020.
Continue Reading Top 10 Canadian Labour & Employment Law Developments of 2020
At common law, employers have a right to terminate an employment relationship, subject to reasonable notice of termination. When an employer breaches this implied duty, employees are entitled damages for wrongful dismissal, which presumptively include damages for lost incentive compensation unless an employer unequivocally ousts that right in an employment agreement or incentive plan. In Matthews v. Ocean Nutrition Canada Limited, the Supreme Court of Canada confirmed that absent “absolutely clear and unambiguous” language in the employment agreement or the incentive plan restricting such entitlement, incentive compensation is considered part of the damages owed in lieu of common law reasonable notice.
Continue Reading SCC Reminds Employers of the Costly Implications of Imprecise Language in Incentive Compensation Plans
On June 26, 2020, the Supreme Court of Canada released its decision in the highly publicized case of Heller v Uber Technologies Inc. The case arises from a Toronto-based UberEATS driver’s effort to bring a $400-million class action against Uber, on behalf of Uber and UberEATS drivers in Ontario. Mr. Heller alleged that Uber violated the Employment Standards Act, 2000 by treating Uber and UberEATS drivers as independent contractors and failing to provide them with employment-related entitlements like minimum wage, vacation, and overtime pay.
The issue before the Court was the validity of an arbitration clause in a standard form service agreement. The agreement was governed by the law of the Netherlands and required drivers to litigate their disputes with Uber in the Netherlands. Uber required all of its prospective drivers to enter into this agreement by having them accept the terms through their app. The Court ruled in favor of the drivers, finding that the arbitration clause was unconscionable because its terms effectively made it effectively impossible for the drivers to arbitrate their claims.
As a result of the decision, the class action can proceed to a certification motion.
Employers with arbitration clauses in their employment contracts or independent contractor agreements must revisit their agreements to determine whether they continue to be valid in Canada. Based on the Court’s decision, employers should not have arbitration clauses that require employees to pay substantial upfront fees to initiate the process. Employers should also consider whether they should pay the administration fees required for private arbitration, subject to the company’s right to a refund of those fees if it is successful in arbitration. If employers choose to keep arbitration clauses, they should ensure that in-person hearings remain local.Continue Reading Supreme Court of Canada Invalidates Uber Arbitration Clause in $400-Million Class Action
Claims alleging the misclassification of workers as independent contractors rather than employees are widespread. Properly classifying a worker’s status is critical because it determines substantive legal rights. In addition to independent contractors and employees, in Canada, there is a hybrid category — dependent contractors. To be classified as a dependent contractor, the contractor must be “economically dependent” on a particular client. Dependent contractor status may be found even where a worker conducts business through a corporation and hires employees to assist in the performance of the work.
In a significant decision, Canadian Union of Postal Workers v. Foodora Inc., the Ontario Labour Relations Board (the Board) held that couriers delivering food on behalf of Foodora Inc., an app based food delivery company, were dependent contractors under the Labour Relations Act, 1995 (the Act) and thus have the right to unionize under the Act. This is one of the first decisions commenting on the status of workers in the gig economy.Continue Reading Decision Delivers Dependent Contractor Status to Foodora Workers
The Ontario Court of Appeal released yet another decision on the interpretation and enforceability of termination clauses: Rossman v. Canadian Solar Inc., 2019 ONCA 992. Recent appellate decisions on this matter have been inconsistent on this issue and unfortunately, Rossman is more bad news for employers. Nevertheless this decision provides guidance that should be considered in reviewing and drafting termination provisions in employment contracts.
Continue Reading Saving Provisions Unable to Save Termination Clauses
Courts usually treat incentive compensation as part of the compensatory damages owed in lieu of common law reasonable notice of dismissal. However, if the employment contract and/or the incentive plan unambiguously extinguish entitlement to incentive compensation upon notice of dismissal, the agreement(s) will generally prevail over the common law entitlement. In O’Reilly v. IMAX Corporation, the Ontario Court of Appeal once again stressed the importance of using precise language in bonus or stock option plans to deny, or otherwise limit, employee entitlement to incentive compensation during the reasonable notice period.
Continue Reading Avoiding the Cost of Imprecise Language in Incentive Compensation Plans
To ring in the New Year, we highlight the ten most significant developments in Canadian labour and employment law in 2019.
Continue Reading Top 10 Canadian Labour & Employment Law Developments of 2019
The Ontario Superior Court of Justice has reminded employers that terminating a fixed term employment contract early can prove to be expensive.
Continue Reading No Termination Clause in a Fixed Term Contract – A Costly Omission!
Employers often wish to enter new or updated employment agreements with existing employees. The driving force is typically that circumstances have changed, but it can also be that the employer simply wants different or additional terms. However, the employer must give the employee valid consideration, otherwise the new or updated agreement will not be enforceable.
Continue Reading A New Contract for a Current Employee? Consider the Consideration!
The Ontario Court of Appeal has reiterated that, barring exceptional circumstances, reasonable notice for dismissal without cause will not exceed 24 months. The Court partially overturned the lower court’s decision in Dawe v The Equitable Life Insurance Company of Canada, which also ruled on the enforceability of unilateral changes to the employer’s bonus plan.
Continue Reading 24 Months Reaffirmed as the “High End” of Reasonable Notice; Bonus Plan Changes Must Be Accepted by Employee
