Many employers wonder whether it is ever possible to terminate an employee who is excessively absent from work due to a disability. The answer is yes.
Put as simply as possible, an employer is entitled to end the employment relationship when, through no fault of the employee, the employee is no longer able to provide the employer with the services he or she was contracted to perform. This situation is known as a “frustration of contract”. When a contract of employment has become frustrated the employer is entitled to end the employment relationship without legal liability, save for payment of the employee’s pay and benefits for the notice period and severance pay (if applicable) prescribed by Ontario’s Employment Standards Act.
In order to demonstrate frustration, the employer must be able to establish that the employee is unable to perform some or all of the essential duties of the position (which could include a duty of regular attendance) and that there is no reasonable prospect for them being able to perform those duties in the foreseeable future. When assessing whether a contract of employment has become frustrated, employers must also assess whether they have fulfilled their duty to accommodate the disabled employee pursuant to the Ontario Human Rights Code (the Code). Under the Code it is not considered a discriminatory practice to terminate a disabled employee who cannot fulfill the essential duties attendant to their employment. However, in order to establish this, the employer must also establish that it is virtually impossible, without undue hardship to the business or workplace, to provide an accommodation that would enable the employee to perform the essential duties of their employment. The accommodation inquiry is an onerous and comprehensive process that must be undertaken with great care before a decision to terminate a disabled employee is made.
Contact the CCP team to help your company navigate this complicated area of the law.
DO pay close attention to the application form and notices regarding the filing of a response. It is important that you contact your legal counsel as soon as possible as there are very strict deadlines for filing a response – typically only 2 “business days” from when the application is received and you should not expect an extension to be granted. In preparing the response to be filed with the Labour Board, critical decisions will have to be made and information collected regarding the group of employees (the “bargaining unit”) the union is seeking to represent. Immediately begin preparing a list of these employees and their current employment status (full-time, part-time, on leave, etc.) to be reviewed with counsel. Steps can then be taken to develop a communication strategy during the short period leading up to a vote which is usually held on the 5th business day after the application is received (except for employers in the construction industry where a union may seek certification without a vote). The communication strategy will typically involve meetings with management and supervisors as well as communications with employees regarding union organizing – and your approach should be guided by experienced counsel.
DO NOT start questioning employees in the workplace about the union’s application and whether or not they are supporting the union. And, do not start discussions in the workplace threatening the closure or relocation of the business, the loss of work or jobs or a reduction in benefits or wages. The Labour Relations Act contains prohibitions on employer conduct which is found to improperly interfere in the decision of employees to seek union representation or a union’s ability to organize and represent employees. In some circumstances, improper conduct on the part of an employer in response to union organizing activity can result in a union being “automatically certified” to represent employees at an employer’s operations.
It is important that your counsel be experienced in labour relations matters as the important issues to be dealt with in these applications will not be familiar to those not regularly practicing in this area, the deadlines for responding are very short, and the positions or actions taken cannot generally be undone.
CCP has several lawyers who are experts in this area who can help employers sort through these difficult issues.
Whether a dismissal is the result of restructuring, a permanent lay-off or for any reason other than legal cause (best described as very serious misconduct) an employer has an obligation to comply with the notice and severance pay requirements under the Employment Standards Act (the “ESA”) and the common law for all non-union employees. The ESA requires an employer to give actual notice, or pay in lieu of notice, of up to eight (8) weeks depending on the employee’s years of service. As well, if an employer has an annual payroll in Ontario of 2.5 million dollars or more, the ESA also requires severance pay to be paid to any employee with five years’ service or more. The statutory severance requirement is one week per year of service (whether continuous or not) to a maximum of twenty-six (26) weeks. Unlike statutory notice, severance cannot be provided by way of working notice and must be paid out in accordance with the ESA.
Many employers mistakenly believe that they are only required to pay the ESA notice and severance pay when dismissing an employee. However, unless there is an enforceable employment agreement in place limiting the employee’s entitlement to their statutory minimums, or the employment agreement has become frustrated (see Question #1), an employer must provide common law notice, or pay in lieu of notice.
Common law notice is based on a number of factors, the most important of which are years of service, age, salary, position held and ability to obtain alternate employment. Each employee’s entitlement must be assessed individually but as a general rule an employer should assume that notice could be as much as one month’s salary for every year of service. Senior employees with shorter service may be entitled to more than one month per year of service and less senior, long term employees will likely be entitled to less than a month per year. Further, certain factors, such as inducement from secure employment or disability can extend the notice period.
It is important to note that the ESA entitlements are not paid in addition to common law notice but are inclusive of the common law obligations. In addition to notice, employers are also required to continue most fringe benefits during the common law notice period.
Employees do have an obligation to mitigate their damages by obtaining alternate employment and employers can receive credit for income earned by a former employee during the common law notice period. This may be an important factor in the structuring of termination packages.
There are a number of different strategies available when considering the best approach to an impending dismissal and employers are encouraged to contact employment counsel at CCP to determine the best way to manage their liability.
Employers are often faced with difficult decisions when the workplace has changed during a pregnancy/maternity or parental leave. It is important to understand that pregnancy, parental, compassionate, reservist and emergency leaves are all protected leaves under the Employment Standards Act (“ESA”) which means that employees have the right to be reinstated to their position following a return from any of these leaves. Because pregnancy leaves are longer than other protected leaves, they tend to generate the most complexity for employers. Quite often employers believe that the person replacing the incumbent on leave is a better candidate for the position. Other times, the employer may have concerns about the incumbent’s performance that were not addressed prior to the leave, or performance issues only come to light once the employee is off on leave.
Generally speaking, an employer must return an employee on a protected leave to the same position the employee held prior to the leave unless that job truly no longer exists (to be distinguished from the various job duties being reassigned to others in the workplace) or unless the employer can establish that the reason for not returning the employee is unrelated to the taking of the leave. Employers must be confident that they can establish that the reason for not returning the employee to the workplace is unrelated to the leave as ESA inspectors will take a hard look at the reasons for not reinstating as required under the ESA. In addition, the return to work must be meaningful – an employer will not meet their statutory obligations by returning an employee to work for a week before dismissing the employee. Unless performance concerns were specifically addressed prior to the leave, an employer will be required to reinstate the employee and take steps to address the performance issues prior to dismissing an employee returning from leave.
Employees must navigate these return to work issues carefully as a failure to comply with the reinstatement obligations can lead to significant damages being awarded to an employee – including a reinstatement to the position with full back pay from the date of dismissal.
The lawyers at CCP regularly provide employers with strategic guidance on handling these difficult return to work issues.
The key to protecting your business from the competitive activity of a departing employee is to ensure that the kind of competition they are restrained from engaging in is clearly defined within the limits of the law. Courts will rarely, if ever, enforce contracts that restrict employees from simply working in or starting a competitive business. The only rare exception may be where the departing employee can be characterized as having fiduciary obligations to his former employer.
Employers can restrain employees from unfairly competing with it by limiting the departing employee’s ability to solicit customers for a reasonable period of time and, if relevant, within a defined geographical area. Such non-solicit promises from employees must be backed by valid consideration – the employee must receive some form of value in exchange for the promise not to solicit. In this respect, non-solicit provisions are usually included in employment agreements that are negotiated and executed prior to the employment relationship starting, or in Release agreements validly entered into upon the employee’s termination of employment.
Absent negotiated non-solicit clauses, it is implied at law that an employee cannot take and rely upon his or her former employer’s confidential and proprietary documents to compete with it. Nevertheless, employment contracts can be useful, and at times absolutely necessary, to ensure that what ought to be considered “confidential” is clearly and unambiguously defined.
CCP works with employers to draft appropriate restrictive covenants to prohibit the solicitation of customers and employees and aggressively represents parties in injunctive and court proceedings to enforce these agreements.
If the Ministry of Labour Inspector is now in your workplace and investigating, you will likely have had a fatality or a critical injury. As an employer who has an Emergency Preparedness Plan in place, you would have already called 911 and got medical attention for the worker, cordoned off the accident area so that the scene cannot be disturbed until the Inspector arrives, called the worker’s family to provide them with information and which hospital the worker has been taken to, and as the employer, you have immediately called the Ministry of Labour to report the accident. You have already stopped work in the area, asked all witnesses to meet in a safe area, and considered whether any workers may need to speak to a grief counselor.
The Ministry of Labour, as you know, needs to be admitted promptly when they appear at your workplace to do their investigation. Once they arrive, they should be brought to the place of the accident. They will usually want to speak with the Joint Health and Safety Worker Representative, so that person should be contacted. Workers should already know that they are required to answer the Inspector’s questions, if they know the answer and to not guess if they don’t. From your past safety talks, all employees will know what a caution is, but you should remind them if they do receive a caution from the Inspector, that they have the right to speak to legal counsel before going any further. The Inspector will want to see training records and minutes from the Joint Health and Safety Committee, so you should give committee members a reminder. We recommend that you contact legal counsel as soon as you can to ask about any further steps that might need to be taken, like written notification to the Ministry, assistance to any employees that have been given a caution, or if the Inspector has a warrant. As you recall from your training, when you have had a fatality or critical injury, there is a 99.5% chance of charges being served within the next year, so you will want to remember to co-operate but be cautious, and then start your own privileged management investigation.
CCP regularly assists companies when health and safety problems arise and provides legal representation in court to employers and supervisors when charges are laid.
Under appropriate circumstances an employer can suspend an employee for poor performance or other misconduct. In a unionized context however, an employee can grieve their suspension and they will be successful if the employer has not taken certain steps to ensure that the suspension is appropriate.
Employers must be sure that suspension is the appropriate form of discipline given the entire context of the misconduct. For example, a long service employee with a clean disciplinary record who engages in some misconduct out of character should probably be treated more leniently than a short service employee with a history of similar misbehavior. An employer cannot generally suspend one employee for the same kind of misconduct that has been condoned by the employer in the past. Of course, if your workplace is governed by a collective agreement, you must abide by any provisions regarding discipline in the workplace that could fetter your ability to suspend an employee. Also, be cognizant of the principle of progressive discipline, where more severe discipline should be reserved for more severe misconduct and meted out on a gradual basis. Accordingly, it may be appropriate to discipline by way of verbal and written warnings before progressing to suspension, and shorter suspensions should be exhausted before progressing to more lengthy suspensions.
For non-union employees the issue of suspension can be more complicated. There are a number of court decisions where a suspension was determined to be a constructive dismissal where the right to suspend was not provided for either explicitly in an employment agreement or a written progressive discipline policy or implied through past practice. Employers are encouraged to ensure they include progressive discipline language in their employment agreements or policy manuals in order to maintain the flexibility of being able to suspend an employee under the appropriate circumstances.
Yes, you can have existing employees sign new employment agreements. However, where such new agreements bring about changes to significant terms or conditions of employment (such as reductions in wages, notice of termination periods or vacation entitlements) you run the risk of facing a lawsuit for “constructive dismissal” – a type of wrongful dismissal – if you don’t do it properly.
To properly introduce new terms and conditions in a new employment agreement for current employees, the employer must provide “consideration”. This means the employee must receive something of value in return for his promise to abide and be bound by the new terms of the employment contract. A bonus or promotion can constitute effective consideration. In any case, the employee must be agreeable to the contractual changes being proposed.
Where additional compensation or a promotion is impractical or undesirable, it may be an option to lawfully terminate the existing employment relationship by providing the employee with his or her lawful entitlement to notice of termination, while offering new terms of employment that will take effect after the prior contract has been terminated. With this option, employers must be prepared to lose the employee if he or she is not agreeable to the new terms of employment.
What is clear from the law is that simply providing notice of the new terms of contract, without an employee’s express and valid consent or agreement, is not a lawful way of implementing written contracts of employment for existing employees. This is the case even if the amount of notice provided in respect of the new contract is equivalent to the amount of notice that the employer is required to give in order to terminate the employment relationship.
Transitioning employees on oral indefinite contracts of employment to written contracts of employment can be a worthwhile and value added business exercise. However, caution must be exercised in order to avoid liability and having trusted counsel in your corner experienced in employment law, like CCP, is always advisable.
The answer is yes.
The employer’s legal duty to accommodate under the Ontario Human Rights Code includes allowing employees to be away from work for periods of time if the nature of their medical issue requires the absence.
Physicians play a necessary and critical role in this accommodation process in two key ways. First, the physician triggers the accommodation process by notifying the employer that the employee is experiencing a medical issue that restricts or prevents him or her from performing the ordinary job duties. Second, the physician provides an objective opinion about what the employee’s medical restrictions are, what his or her functional limitations are and how long the limitations are expected to last. It is not the physician’s role to direct the employer to provide particular forms of accommodation. That decision lies with the employer.
In this context, a note that simply says “required to be off for 2 months” is unhelpful. While an employer should accept the note as a validation of the employee’s need for accommodation, it doesn’t help in assessing whether other forms of accommodation, apart from a 2 month leave of absence would be appropriate, nor does it assist the employer in understanding how long the employee will require accommodated arrangements.
The best course of action when dealing with unhelpful physician notes is to write to the employee, explaining why the supplied note is inadequate and outlining the kind and scope of information that is required going forward. It is often useful to include a letter drafted to the employee’s physician that outlines the information that is needed, together with a medical authorization for the employee to sign and provide to the physician in order to permit direct communication between the physician and a single employer representative.
Employers should always be prepared to shoulder the cost of any medical reports. As well, employers must remember to limit their request for information only to what is required for the accommodation process. This means that information relating to diagnoses are rarely if ever relevant and should not be requested. However, information relating to functional limitations and abilities and prognosis details are appropriate.
The accommodation process, and the myriad issues that arise with the intersection of disability and employment, is rarely straightforward. The advice of counsel experienced in these issues, like CCP, is always value added.
Harassment complaints have taken on new complexity with the passage of Bill 168 under the Occupational Health and Safety Act (the “OHSA”). Employers in Ontario should now have formalized violence and harassment policies posted in their workplaces and all employees are required to be trained on these policies. Bill 168 requires that a harassment policy set out how a harassment complaint will be investigated so it is important for the employer to conduct an investigation in a way that is consistent with the workplace policy.
Special challenges are presented when it is a supervisor that is alleged to have engaged in the harassing behavior. Depending on the nature of the allegation either the supervisor or the employee who made the complaint may need to be transferred until the investigation is completed. As with all investigations, it is important to take the complaint seriously and investigate as soon as possible to bring resolution to the complaint in a timely manner. The investigator will want to determine whether or not the behavior is, in fact, harassment as defined under the policy (the definition should be consistent with the definition of harassment under the OHSA). It is not unusual for employees to feel that they are being harassed by a supervisor when a supervisor is either imposing discipline or performance managing the employee and it is important for employees to understand the difference between harassing behavior and legitimate workplace management.
If the complaint is not in writing, the complainant should be required to put his/her issues in writing so that the scope of the complaint cannot be “expanded” as the investigation proceeds. The complainant and the supervisor should be interviewed first. Through these interviews the investigator should be able to determine if any other individuals need to be interviewed. To the extent possible, the investigator should try to limit the number of people who need to be advised of the harassment. It may be necessary to conduct a second interview of the complainant or the supervisor (or both) once the other individuals have been interviewed.
Once the investigation is complete the employer should determine what immediate action, if any, is required. It is important that the complainant be advised of the outcome of the investigation, although they should not be told the specifics of any discipline that may be imposed if the complaint is validated through the investigation process. Investigations should be conducted as quickly and confidentially as possible.
The ultimate goal is to put an end to the workplace conflict by extinguishing inappropriate conduct and giving clear notice to the offending employee that their behavior is unacceptable. Dealing with a harassment complaint is not a matter to be taken lightly as an employee may have legal recourse by way of a Human Rights application, an Occupational Health and Safety complaint, a grievance where the workplace is unionized or a law suit if the employee feels that they can no longer work at the workplace. Depending on your familiarity in dealing with harassment complaints or the seriousness of the complaint, you may be well advised to use a third party investigator. The lawyers at CCP are experienced in both conducting investigations on behalf of clients as well as providing sound legal advice and direction on how to deal with the results of an investigation.
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