Many employers rely on the discretionary nature of their bonus plans to deny bonuses to employees they’ve dismissed. However, in last month’s decision in Singer v Nordstrong Equipment Limited, 2017 ONSC 5906, the Court held that stipulating that a bonus is discretionary in the policy doesn’t necessarily give the employer complete freedom to withhold the bonus. Rather, discretionary bonuses must be awarded through a “fair, identifiable process.” Continue Reading Is a Discretionary Bonus Really Discretionary?
We are pleased to report that the Ontario Court of Appeal has reaffirmed the principle that a purchaser of the assets of a business is free to offer employment on new terms to employees of the vendor and can rely on the resulting written employment agreement as binding (Krishnamoorthy v. Olympus Canada Inc., 2017 ONCA 873). Continue Reading Court of Appeal Rules Termination Clause Valid on Sale of Business
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 Severability Clause Cannot Save Illegal Termination Provision, Court of Appeal Rules
The Supreme Court of Canada (“SCC”) recently ruled that a unilateral contract renewal clause was valid, despite its potential to bind one party perpetually: Uniprix inc. v. Gestion Gosselin et Bérubé inc. The clause afforded sole discretion to the respondents to renew or terminate their contract with Uniprix. The wording of the clause, the nature of the contract and the relationship between the parties were determinative in the majority’s ruling, which upheld the decisions of the Court of Appeal and the Superior Court of Quebec. The SCC’s decision and our key takeaways are outlined below. Continue Reading SCC Decision Reminds Employers to Draft Termination Clauses with Care
The untimely passing of George Michael and the corresponding ubiquitous airplay of his hit “Faith” may seem a curious segway to legal developments, but we don’t like our readers getting unexpectedly ‘whammed’ by subtle yet powerful trending in the law. Continue Reading Supreme Court of Canada Tells Employers ‘You Gotta Have Faith’
To ring in the New Year, we highlight the ten most significant developments in Canadian labour and employment law in 2016: Continue Reading Top 10 Canadian Labour & Employment Law Developments of 2016
In a recent decision, Merritt v. Tigercat Industries, 2016 ONSC 1214, an Ontario court held that the employer did not have sufficient cause for dismissing an employee on the basis of his pending criminal charges and allegations by another employee of potentially related conduct, where the employer had failed to carry out a proper investigation into the matter. This case underscores the need to carry out an appropriate investigation before determining that termination, or any form of disciplinary action, is merited.
The case also brings clarity to the issue of whether an employee can refuse to answer questions in a workplace investigation that pertain to criminal charges brought against him. Continue Reading The Right to Remain Silent: Employer Mishandles Workplace Investigation (and Pays for It!)
On July 15, 2016, we wrote about the Supreme Court of Canada’s recent decision in Wilson v. Atomic Energy, 2016 SCC 29 (“Wilson”). In that case, the SCC held that most federally-regulated, non-union employees with 12 or more consecutive months of service can only be dismissed for “just cause”. See our earlier blog post here.
Following the Wilson decision, many federal employers were left wondering whether they still have the right to downsize or impose layoffs in response to a decline in their business. Such employers will be happy to learn that “downsizing” imposed for legitimate business reasons is still possible (subject to certain restrictions). Under s. 242(3.1)(a) of the Canada Labour Code, RSC, 1985, c L-2 (the “Code“), an adjudicator will not consider the complaint of an employee who has been laid off due to a “lack of work” or “discontinuance of a function”. Continue Reading Federal Employers May “Downsize” Despite Recent SCC Decision
On July 14, 2016, the Supreme Court of Canada confirmed that most federally-regulated, non-union employees can only be dismissed for “just cause” after 12 consecutive months of service (Wilson v. Atomic Energy, 2016 SCC 29). As a result of this decision, it is now clear that employees who are regulated under Part III of the Canada Labour Code cannot, following their first year of employment, simply be provided with termination notice or pay in lieu, absent a compelling reason for terminating the employment relationship. Continue Reading Supreme Court of Canada: A Dismissal “Without Cause” is an “Unjust Dismissal” (Part III of the Canada Labour Code)
A recent decision of the Ontario Court of Appeal (ONCA) has provided clarity in the debate over the validity of termination clauses in employment contracts that are silent on continuation of benefits through the statutory notice period. Continue Reading The Pendulum Swings Back: The Court of Appeal Rules Termination Clause Valid Despite Silence on Benefits Continuation