Case Summaries

Court Awards Moral Damages Because Termination Letter Was Misleading

The Ontario Superior Court of Justice in Russell v. The Brick LP, 2021 ONSC 4822 held that an employer should pay moral damages to an employee because of the manner of dismissal. This case is noteworthy because of the rather strict position the court takes on how an employer should carry out a dismissal. Particularly, the judge was not happy with the employer’s termination letter to the employee because it did not set out that if the employee rejected the offer contained in the termination letter that the employer would still pay the necessary statutory minimum entitlements in Ontario’s Employment

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Ontario’s Divisional Court Expands Severance Pay Entitlement

Ontario’s Divisional Court in Hawkes v. Max Aicher (North America) Limited, 2021 ONSC 4290 has ruled that employees are now entitled to severance pay even if the payroll used to determine if severance pay is appropriate is outside Ontario. The applicant in this decision brought his application for judicial review of the decision of the Ontario Labour Relations Board (“OLRB”) that set out that he could not get severance pay from his former employer. To remind our readers, Ontario’s Employment Standards Act (“ESA”) in section 64(1) sets out that employees are entitled to severance pay when the employer severs the

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COVID-19 May Lengthen Notice While CERB Will Not Reduce Entitlement

The Ontario Superior Court in the case of Iriotakis v. Peninsula Employment Services Limited, 2021 ONSC 998, is another development with respect to what the impact of COVID-19 will be on establishing the amount of reasonable notice an employee can expect when terminated by their employer. The plaintiff employee, Peter Iriotakis (“Mr. Iriotakis”) brought a motion for summary judgment to determine his notice entitlement in a wrongful dismissal case.   Mr. Iriotakis was terminated on a without cause basis in March 2020.  He was 56 years old and was employed by Peninsula Employment Services Limited (“Peninsula”) for about 28 months.  His title

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Hypothetical breaches of the Employment Standards Act still renders termination provision void

The COVID-19 pandemic has resulted in numerous developments in workplace law in Ontario and understandably, there has been a great deal of focus on such developments. However, contractual termination provisions in employment agreements remain a pivotal part of workplace conflict, which should not be forgotten because of the pandemic. In this blog, we discuss a recent decision in this ever-evolving body of law. Both employers and employees should pay attention to this case given this subject matter’s importance. It has been established that a termination provision in an employment agreement may be void if it could potentially breach the Employment Standards Act (“ESA”). 

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The Ontario Court of Appeal Released a Decision that will have a Big Impact on How Employers Draft Employment Agreements

A recent decision by the Ontario Court of Appeal majorly shifts the employment law landscape relating to the enforceability of termination provisions in employment agreements. The facts of the Ontario court of appeal’s case of Waksdave v. Swegon North America, 2020 ONCA 391, are surprisingly simple.  The appellant employee, Benjamin Waksdale (“Mr. Waksdale”), was employed by the respondent employer, Swegon North America Inc. (“Swegon”), from January 2008 until he was dismissed without cause in October 2018.  Mr. Waksdale was paid by Swegon an amount equal to two weeks pay in lieu of notice.  Mr. Wakdsale then sued for wrongful dismissal. Mr.

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Manastersky v. Royal Bank of Canada, 2019 ONCA 609 (CanLII)

SUMMARY James Anthony Manastersky (hereinafter “Mr. Manastersky”) was employed with RBC Dominion Securities, in its RBC Capital Partners Unit (hereinafter “RBC”) as a director for the Mezzanine Fund. After being terminated and the offer from RBC was refused, litigation began. The Trial Judge determined that RBC owed Mr. Manastersky 18-months in reasonable notice, and that they owed him an additional 5 months (as RBC had already paid Mr. Manastersky 13 months in reasonable notice) in damages for lost opportunity to earn additional compensation from investments, and that the exchange rate of the payment should be based on the foreign exchange

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Social Considerations do not Trump Precedent: Exceptional Circumstances Remain Key to Receiving Notice Beyond 24 Months

SUMMARY Michael Dawe (“Mr. Dawe”) was employed with the Equitable Life Insurance Company of Canada (“Equitable Life”) as a Senior Vice President. After being employed at the company for 37 years, he was terminated without cause. Mr. Dawe sued for wrongful dismissal. After the Motion Judge held that 30 months was the appropriate notice period and that Mr. Dawe was entitled to bonus payments over this period; Equitable Life appealed. In the Ontario Court of Appeal decision of Dawe v. The Equitable Life Insurance Company of Canada, an analysis into reasonable notice and bonus entitlements ensued which had Equitable Life win

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Employers Need to be Careful When Posting Reasons for Termination

In Hampton Securities Limited v. Dean 2018 ONSC 101, the Ontario Superior Court of Justice made the unusual decision to award an employee punitive and defamatory damages in the employment law context.  This decision serves as an important warning to employers that if they release or disclose reasons to the public upon terminating an employee for cause, the employee may be entitled to significant damages against that employer if those reasons are not reasonable and supported by evidence. FACTS As a proprietary trader, the Defendant, Christina Nicole Dean (“Ms. Dean”), was responsible for trading securities on behalf of her employer, the Plaintiff,

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Employers Need to Exercise Good Faith in Termination

Before entering into an agreement, a party may wish to reserve the right to unilaterally terminate a contract for whatever reason it sees fit. The party can insert into the contract a carefully worded clause for that purpose (“Termination Clause”), but as the decision in Mohamed v. Information Systems Architects demonstrates, a Termination Clause will only be effective if it is executed in good faith. FACTS The defendant, Information Systems Architects (“ISA”), hired the plaintiff, Mitchum Mohammed (“Mr. Mohamed”), as an Independent Consultant to work on a six-month project with Canadian Tire. ISA’s agreement with Canadian Tire had already specified that no

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Sometimes a Full and Final Release is not all that Final

The Ontario Superior Court of Justice recently applied the doctrine of unconscionability to a full and final release signed by a terminated and disabled employee, thereby allowing his dispute over the reinstatement of his Long-Term Disability (LTD) benefits to proceed. The case, Swampillai v. Royal & Sun Alliance Insurance Company of Canada, 2018 ONSC 4023, stands out because the signed release clearly stated that all claims, including those for LTD benefits, would be released. Nonetheless, the circumstances under which the plaintiff had singed the release ultimately led to a finding of unconscionability in his favor. THE FACTS Mr. Swampillai had worked

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Employer Liable for Long-Term Disability Claims by Former Employer

Long-term disability coverage hinges on several important factors, two of them being (a) whether or not the claim originated while the claimant was employed and (b) whether or not the claimant applied for benefits on time. Coverage will understandably be denied if a claimant deliberately applies for benefits once it’s too late. Yet suppose the claimant’s application is late due to an unawareness of the injury’s severity, will coverage still be denied? FACTS The plaintiff, Lenard MacIvor, suffered injuries to his back and brain during his employment with Pitney Bowes. He took about four months off before returning to work

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Employees Held Liable for Mistakes Made While at Work

Employer’s vicarious liability is an established doctrine in the common law that attributes liability to employers for the negligence of their workers. If an employee was negligent during the course of his or her work, the victim may claim damages against the employer. The doctrine is beneficial from a public policy perspective because it encourages employers to carefully train their workers and it helps ensure that victims will be fully compensated for their losses, among other things. Employer’s vicarious liability, however, does not preclude victims from also seeking damages against employees who are negligent. A recent Court of Appeal decision

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I am a Boss: Consequences of Inflating Your Position Title to Secure Employment

The Ontario Superior Court of Justice Decision in Skov v. G&K Services Canada Inc.,  2017 ONSC 6752 BACKGROUND The plaintiff, Kevin Skov (the “Plaintiff”) began his employment with the defendant G & K Services Canada Inc. (the “Defendant”) on September 11, 1995. The Plaintiff was terminated on a without cause basis on June 1, 2016, meaning the Plaintiff was employed for the Defendant for over twenty-one (21) years.  At the time of the Plaintiff’s termination he was employed as the Customer Development Manager. The Plaintiff was fifty-four (54) years old. The Defendant paid the Plaintiff termination and severance pay in accordance

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2 in 1 Creates Confusion: What is considered Mitigation Income?

In employment law, a duty to mitigate requires a terminated employee to make reasonable efforts to limit the loss. This generalized statement is not as straightforward as possibly imagined. The following discussion of the Ontario Court of Appeal’s Decision in Brake v. PJ-M2R Restaurant Inc., 2017 ONCA 402 sheds light on when income will not be deducted from what an employee is entitled to during the reasonable notice period BACKGROUND The respondent, Esther Brake (“Brake”) worked at various McDonald’s restaurants for a total of more than 25 years.  For the majority of Brake’s employment for McDonalds, the appellant, PJ-M2R Restaurant Inc.

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Payback – Cautionary Tale of What Being Terminated for Just Cause Can Cost an Employee

The Ontario Superior Court of Justice’s Decision in Cordeiro v Pinnacle Caterers Ltd., 2017 ONSC 4221 BACKGROUND The plaintiff, Keith Cordeiro (“Plaintiff”) brought an action against his former employer, the defendant, Pinnacle Caterers Ltd. (“Defendant”) for wrongful dismissal. The Plaintiff was terminated from his employment as a system supervisor in April 2014 for alleged cause. The Defendant alleged that the Plaintiff had stolen cash paid by a customer of the Defendant’s on April 12, 2014. After terminating the Plaintiff, the Defendant investigated the matter and determined that the Plaintiff had stolen a substantial amount of funds on eighty-one (81) other occasions

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Employer Ordered to Pay $200,000 for Placing Employee on Administrative Suspension

In a landmark 2004 decision, the Supreme Court of Canada ruled that employers must continue to pay an employee during an administrative suspension. While this case was decided in the context of Quebec civil law, it was largely decided based on fundamental common-law contract principles and has since been adopted in the remaining common-law provinces of Canada. The decision is an important one, not only for establishing the rule that employers must pay their employees on an administrative leave, but also because it establishes the rules governing the manner in which employees can be placed on administrative leave. If not

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Workin’ on the Night Moves; Requiring Employee to Work Night Shifts is Discriminatory, Alberta Court Says

The Court of Queen’s Bench of Alberta recently upheld an arbitrator’s ruling that SMS Equipment Inc. (“SMS Equipment”) discriminated against an employee because they required her to work night-shifts. The employee was a single mother of two and requested that she be allowed to work exclusively day shifts so she can care for her children. When SMS Equipment refused, the employee’s union filed a grievance and received a favourable ruling from the arbitrator. SMS Equipment applied for judicial review, but the Court upheld the arbitrator’s decision. FACTS SMS Equipment provides equipment and equipment services to construction, mining and petrochemical industries

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Just Cause or Just a Headache?

The Ontario Superior Court of Justice awarded Alan Gordon (“Alan”) $100,000 in punitive damages due to the outrageous conduct of the defendant employer, Altus Group Limited (“Altus”), when they fired him. The trial judge’s finding rested in large part due to Altus’ unsubstantiated allegations that Alan was fired for just cause when in fact they fired him because of a legal dispute and simply wanted to avoid paying severance. FACTS Alan Gordon was hired by Altus after selling his business to Altus on November 1, 2008, with the final sale price of the business was to be adjusted by February

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You Compete Me; Employee Departures Complicated by Non-Compete Clauses

It is not unheard of for a business to “poach” high-ranking employees from their competitors in order to gain an edge. Hiring a competitor’s employee can provide access to useful information about distributors, clients, pricing and general business practice, which can prove key when looking to undercut the competition. In order to prevent this, many companies consider having their employees sign “non-competition agreements” which prevent them from working for a competitor following their departure. While these contracts tend to be limited in their scope and duration, they can go a long way in protecting a company’s interests, specifically in the

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Teacher Terminated for Falsifying Grades

A private school teacher (“Mr. Fernandes”) was terminated for falsifying student grades, so he sued the school for wrongful dismissal, among other things. While Mr. Fernandes initially won the case at trial, the decision was later overturned by the Court of Appeal. The Court of Appeal found that falsifying student grades and then lying about it gave rise to a breakdown in the employment relationship and therefore warranted summary dismissal. BACKGROUND Mr. Fernandes was a teacher at Peel Educational & Tutorial Services Limited, a private school in Mississauga (the “School”). He had taught computer studies for different age groups in

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Ouch – When Workplace Injury Leads to Frustration of an Employment Agreement it is Not Discrimination

The Human Rights Tribunal of Ontario’s Decision in Gahagan v. James Campbell Inc., 2014 HRTO 14. BACKGROUND The respondent, James Campbell Inc. (the “Respondent”), operated nine McDonald’s restaurants across eastern Ontario. One of these McDonald’s locations was in Lakefield, Ontario (“Lakefield McDonalds”). The applicant, Cathy Gahagan (the “Applicant”) worked at Lakefield McDonald’s for seven years, mostly at the grill station.  The Applicant was skilled at her job. On May 26, 2009, the Applicant injured her back while lifting a filter pan under a vat. As a result, the Applicant was received full loss of earnings benefits by the Workplace Safety and

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Let’s be Honest: the Importance of Honesty in an Employment Relationship

The Ontario Court of Appeal’s Decision in De Jesus v. Linamar Holdings Inc. (Camcor Manufacturing), 2017 ONCA 384 BACKGROUND The appellant, Ronald De Jesus (the “Appellant”), was employed by the respondent, Linamar Holdings Inc. (the “Respondent”) as a production supervisor. On or about October 8, 2013, the Appellant was terminated from his employment for cause after approximately 19.5 years of continuous employment. As such, the Appellant did not receive any notice or compensation in lieu of notice when he was terminated. The Respondent terminated the Appellant after a series of incidents that resulted in the Appellant allowing 1,500 defective camshafts to be

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Nothing in Life is Free: Can a Student or Intern be Entitled to Wages Despite an Agreement to be Unpaid?

The Ontario Labour Relations Board Decision in Sandhu v Brar, 2013 CarswellOnt 9676 (ON LRB). BACKGROUND The applicant, Chamkaur Singh Sandhu (“Mr. C. Sandhu”) in his capacity as a director of the numbered company 1363047 Ontario Ltd. (the “Employer”) brought an application for review of a Director’s Order to Pay the claimant, Harpreet Brar (the “Claimant”). The Claimant was a software engineer with ambitions to work as a computer technician. On October 20, 2009, the Claimant emailed Manbir Sign Sandhu, (“Mr. M. Sandhu”), brother of Mr. C. Sandhu and former director of the Employer, inquiring about a position with the Employer.

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What is a Newspaper? Online Articles Under the Libel and Slander Act

The Ontario Court of Appeal’s Decision in John v. Ballingall, 2017 ONCA 579 BACKGROUND The appellant, Darren John (the “Appellant”) is a musician who performs under the name of Avalanche the Architect. The individual respondent, Alex Ballingall (“Ballingall”) is a reporter for the corporate respondents, Toronto Star Newspaper Ltd. and Torstar Corporation (collectively “Toronto Star”). Prior to December 2013, the Appellant wrote a rap song, entitled “Got Yourself a Gun”. The lyric of this rap song resulted in the Appellant being charged with uttering threats to cause death or bodily harm and criminal harassment. Shortly after, Ballingall interviewed the Appellant with

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What Exactly Did We Agree To: A Reminder of the Principles of Interpretation of Commercial Transaction Agreements

The Ontario Court of Appeal’s Decision in Brompton Corp. v. Tuckamore Holdings LP, 2017 ONCA 594 BACKGROUND The parties, Tuckamore Holdings LP (“Tuckamore”) and Brompton Corp. (“Brompton”) entered into a purchase agreement where Brompton purchased the Tuckamore business (the “Agreement”). The Agreement involved an exchange of securities held by Brompton to Tuckamore, which resulted in Tuckamore becoming a minority shareholder in Brompton.  A term of the Agreement also included a written representation and warranty from Brompton to the benefit of Tuckamore regarding tax pools (“Tax Pool Term”). The Tax Pool Term read as follows (para 4): The Purchaser represents and warrants

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Sticking it Out: Consequences and Cautions regarding Resignation

The Ontario Court of Appeal’s Decision in Persaud v. Telus Corporation, 2017 ONCA 479 BACKGROUND The applicant, Jan Persuad (the “Applicant”) brought a claim for constructive dismissal against her former employer, the respondent, Telus Corporation (the “Respondent”). The Applicant also sought damages for intentional infliction of mental suffering and inducing a breach of contract. The Applicant worked for the Respondent for seven (7) years as the Java Developer on the Product Development team. The Appellant resigned two (2) days after her mentor resigned from his employment with the Respondent. The trial judge dismissed all grounds of the Applicant’s claim. The Applicant

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Improper Investigation Leads to Job-Loss Despite Court Ruling

Balraj Shoan was sanctioned by the Canadian Radio-television and Telecommunications (“CRTC”) following an investigation into allegations that he was harassing a fellow colleague. In response, Mr. Shoan applied for judicial review on the grounds that the investigation was not conducted in a fair manner. The Court sided with Mr. Shoan, but by that point he had already lost his appointment as the Commissioner for the Governer in Counsel (“GIC”). FACTS Mr. Shoan was accused of harassment by a fellow employee. Following a formal investigation by an impartial third-party, the Chairman and CEO, Jean-Pierre Blais, adopted 5 measures recommended in the

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Buyer Beware: What are your obligations to employees when purchasing a business?

The implications of continuity of employment is a vital consideration when purchasing a business with employees. Under section 9 of the Employment Standards Act, (Ontario) 2000, S.O. 200, c.41 (“ESA”), the employment of an employee is deemed not to have been terminated or severed if an employer sells a business. The employment, including the length of employment of the employee will be deemed to be with the purchaser of the business. As such, the purchaser will owe the employee all the same (and/or equivalent) obligations the employee was originally entitled to with the seller. EXCEPTIONS However, the ESA includes exceptions to this principle

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Court of Appeal Strikes Down Termination Clause

In a recent decision, the Ontario Court of Appeal ruled that a termination clause was not enforceable because it failed to clearly provide for the continuation of benefits during the notice period and because it failed to clearly provide that the employer would pay severance pay alongside termination pay. FACTS Julia Wood (“Ms. Wood”) was terminated from Fred Deeley Imports (“Deeley”) following restructuring. As per the employment contract, Deeley could terminate Ms. Wood’s employment without cause by providing “2 weeks’ notice of termination or pay in lieu thereof for each completed or partial year of employment with the Company.” The

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Watch Your Mouth: What Will Amount to Termination of an Employee Accidentally or Otherwise?

The Ontario Court of Appeal’s Decision in Sweeting v. Mok, 2017 ONCA 203 BACKGROUND The appellant, Dr. Lawrence Man-Suen Mok (hereinafter “Mok”) employed the respondent Tanya Sweeting (hereinafter “Sweeting”) as a practice assistance and office manager at Mok’s medical office (“Office”) for over twenty-two (22) years. Sweeting was a registered nurse and was fifty-two (52) years old at the time her employment relationship ceased. The circumstances of Sweeting’s dismissal were as follows. The secretary for Mok has stopped working at the Office and as a result, Sweeting’s workload increased. In attempts to lower the extra workload, Mok’s wife began working in

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When Can an Employee of a Corporation be Sued?

The Ontario Superior Court of Justice in Gyamfuaa v Leblanc, 2016 ONSC 5868 BACKGROUND The plaintiff, Maame Gyamfuaa (hereinafter the “Plaintiff”) was a nursing student at the University of Ottawa.  The Plaintiff alleged that the defendants, Barbara Leblanc, Judith Lafleur, Kelly Kidd, Dave Holmes, Gisele Carroll, Denis Prud’homme, University of Ottawa and Algonquin College (hereinafter collectively, the “Defendants”) wrongfully claimed that the Plaintiff had cheated on an exam. With regard to the alleged cheating, a Committee of Inquiry determined that the Plaintiff had committed academic fraud. The decision of the Committee of Inquiry was upheld by the Executive Committee of the

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National Bank of Canada Successfully Strikes Portion of Pleadings

The Superior Court of Justice granted the motion to strike portions of the Plaintiff’s pleadings which allege intentional interference with economic relations, finding that there was no reasonable possibility of success based on the facts as pleaded. FACTS The Plaintiff, Mr. Rajesh Joshi (the “Plaintiff”), worked for the National Bank of Canada (the “Defendant”) from 2009 until 2014, at which point the Plaintiff accepted a position with the Bank of Montreal (“BMO”). Shortly thereafter, the Defendant placed the Plaintiff’s name into a database which stores the names of people who have been found guilty of serious banking misconduct and operated

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Loose Lips Don’t Just Sink Ships – What Happens When You Breach a Confidentiality Clause of a Settlement Agreement?

Confidentiality clauses are standard practice for settlement agreements, particularly with respect to employment and labour law matters. An employer is afforded some incentive to resolve a matter when they include the protection of confidentiality. The case summary below highlights the consequences of breaching a confidentiality clause of a settlement agreement. The Ontario Superior Court of Justice Divisional Court Decision in Jan Wong v. The Globe and Mail Inc., 2014 ONSC 6372 BACKGROUND Jan Wong (“Wong”) was employed as a journalist at The Globe and Mail Inc. (“The Globe and Mail”) for over twenty (20) years. In September 2006, Wong was directed

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We Want You: Inducement and its Consequences

The Superior Court of Justice’s Decision in Butcher v. Protagon Display Inc., 2011 CarswellOnt 7143 BACKGROUND The plaintiff, Butcher (hereinafter the “Plaintiff”) worked for Somerville Merchandising Inc. (hereinafter “Somerville”) as a project manager for over six (6) years.  The Plaintiff brought an action for wrongful dismissal. The Plaintiff departed from Somerville in January 2008 and was at this time making approximately $56,000. In November 2007, the Plaintiff was approached, without prompting, by a recruiter regarding a potential employment opportunity with the defendant, Protagon Display Inc. (hereinafter the “Defendant”).  The Plaintiff had not been looking for new employment and had not posted

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Defendant Jailed After Failing to Comply with Mareva Order

The defendant was jailed for asset stripping and failing to meet discovery obligations under a Mareva Order. The Ontario Court of Appeal upheld the motion judge’s sanctions including a 90-day prison sentence and an order striking out the statement of defence and cross-claim. FACTS The plaintiffs, Trade Capital Finance Corp., were in the business of purchasing accounts receivable. They allege that they were sold fictitious accounts and defrauded for around $6,500,000 by the defendants, The Cash House Inc., 2454904 Ontario Inc. and Mr. Osman Kahn. Shortly after the plaintiffs initiated a lawsuit, they successfully obtained a Mareva Order preventing the

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So you’ve been terminated, do you have to accept an alternative position if offered?

A duty to mitigate is imposed on any employee after they have been terminated. The duty to mitigate means that after an employee is terminated, the employee must take reasonable steps to limit their losses. The limiting of losses usually includes looking or attaining other work. If an employee fails to mitigate, the court may reduce any award for damages that the employee would have otherwise been entitled to. On occasion after an employer has terminated an employee, they offer the employee an alternative position. The Ontario Superior Court of Justice’s Decision in Peticca v Oracle Canada ULC, 2015 CarswellOnt 5450

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Termination Clause Withstands Court Scrutiny

The Ontario Court of Appeal found that a termination clause prescribing minimum notice under the Employment Standards Act (“ESA”) was valid and therefore barred any claim on behalf of the former employee to common-law notice. FACTS The action on appeal involved a wrongful dismissal claim on behalf of the appellant against his employer. The appellant unsuccessfully brought a motion for summary judgment and subsequently appealed the motion judge’s decision. The appellant argued that the motion judge improperly translated the termination clause from French to English, resulting in a misinterpretation. In its original form, the termination clause read as follows: “Le CFT peut

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Sometimes Less is More

In a fairly recent decision, the Ontario Superior Court of Justice found in favour of the defendants on summary judgement, dismissing an action by the plaintiff-employer for alleged breach of a non-competition clause. FACTS This case involved a travel agent, Ms. Mary Murphy, who resigned from her employment with Donaldson Travel and Uniglobe Donaldson Travel (hereinafter the “plaintiffs”), and subsequently secured employment with Goligor’s TravelPlus (“Goligor’s”). After Ms. Murphy began working at Goligor’s, the plaintiffs lost four clients to Goligor’s. As a result, the plaintiffs alleged that Ms. Murphy poached these clients in violation of a non-competition clause contained in

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Court of Appeal Applies “Flexible Approach” to Assessment of Defamation Pleadings

The Court of Appeal recently overturned a motion judge’s ruling to strike a claim for defamation for not pleading the requisite material facts. The plaintiffs, Catalyst Capital Group Inc. and Callidus Capital Corporation, commenced an action against Veritas Investment Research Corporation and West Face Capital Inc. (the “defendants”) for civil conspiracy, intentional interference with economic relations and defamation. The defendants moved to strike the pleadings against them, respectively. The motion judge granted the motion to strike with respect to the plaintiffs’ claim for conspiracy to publish defamatory statements due to the plaintiffs’ failure to plead the requisite particulars. FACTS Catalyst

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Know When to Fold ‘em

It’s important to know when you have a losing case. In fact, that’s what lawyers are for: to tell you when your case is worthy of litigation and when your smartest move is to try to reach a settlement. Doing so can save hundreds of thousands of dollars in legal fees. Mr. Ravichandran Nadaraja and Ms. Kalaiyarasi Nanthakumar (the “appellants”) listed a residential property located at 39 Dairis Cresecent in Markham, Ontario. Following negotiations and the execution of an agreement of purchase and sale, the appellants refused to close the transaction. The respondents sued for specific performance and won on

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How can Breaks in Employment Service Affect your Reasonable Notice Period?

The Ontario Divisional Court’s Decision in Vist v. Best Theratronics Ltd., 2015 ONSC 2619. BACKGROUND The appellant, Best Theratronics Ltd. (“Best”) terminated the respondent, Margus Vist (“Mr. Vist”) without cause. Prior to his termination, Mr. Vist had worked as a general manager of Best earning approximately $115,000 per annum, plus benefits.  Mr. Vist was forty-nine (49) years old at the time of his termination. Almost two (2) months after Mr. Vist’s termination from Best, he obtained alternative employment in engineering and product management making approximately $85,000 per annum. Mr. Vist’s employment with Best had been continuous for two and a half

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GoodLife has Bad Lease

GoodLife Fitness Centres Inc. (“GoodLife”) entered into an asset purchase agreement with Extreme Fitness (“Extreme”) which involved taking on Extreme’s lease obligations for 635 Danforth Avenue, Toronto. The lease agreement (the “Lease Agreement”) between Extreme and 1079268 Ontario Inc. (“107”) remained silent on the use of the basement attached to the premises in question. When GoodLife eventually acquired Extreme and was assigned Extreme’s lease, 107 brought an application for rectification of the lease and a determination as to whether it was owed back rent by GoodLife for the additional costs arising from the use of the basement. The application judge

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Action Dismissed for Delay, Upheld by Court of Appeal

The Court of Appeal recently upheld a motion judge’s decision to dismiss an action due to “inordinate and inexcusable delay.” Eleven years had passed between the initiation of the lawsuit and the motion to dismiss. During that time, key witnesses had died. At the hearing, the plaintiffs were unable to provide reasonable explanations for the excessive delay in proceeding with the action. The motion judge found that given the inordinate delay and the likelihood that a prejudice would result from such a delay, the action warranted dismissal. FACTS The main action arose from two agreements entered into between the plaintiffs

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Are Random Drug and Alcohol Testing in the Workplace Enforceable?

The Supreme Court of Canada’s Decision in Communications, Energy and Paperworkers Union of Canada, Local 30 v. Irving Pulp & Paper, Ltd., 2013 SCC 34 BACKGROUND Irving Pulp & Paper Ltd. (“Irving”) operates a paper mill in New Brunswick. Between 1991 and 2006, Irving had no formal policy regarding alcohol consumption and drug use.  In 2006, Irving unilaterally imposed a “Policy on Alcohol and Other Drug Use” (the “Policy”) under Irving’s management rights conveyed under their collective agreement with Communications, Energy and Paperworkers Union of Canada, Local 30 (the “Union”). The Policy imposed a universal random alcohol testing, whereby ten percent

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Choice of Forum Clause Circumvented by Court of Appeal

The Court of Appeal hit the ground running in 2017, having already released 22 decisions as of January 16. This particular case involved an appeal of a failed motion for summary judgment brought by the plaintiff-appellants. At the motion hearing for summary judgment, Justice Edward M. Morgan of the Superior Court found that the Court had no jurisdiction over the dispute due to a “choice of forum clause” as agreed to by both parties, which required that all disputes were to be resolved in the Cayman Islands. The Court of Appeal overturned Justice Morgan’s ruling, granting summary judgment in favour

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What Happens when you have Been Dismissed During the Probationary Period of your Employment Without Just Cause?

Under section 54 of the Employment Standards Act 2000 (“ESA”) an employee who has been employed for less than three (3) months can be terminated without statutory notice or pay in lieu of notice. It is also the period normally used by employers as “probationary” for new employees. Recently, the Superior Court of Justice Ottawa Small Claims Court’s decision of Barton v Bowerman, 2016 CanLII 30100 (ON SCSM) discussed the impact of termination during a probationary period of six (6) months’. BACKGROUND The plaintiff, Ms. Nancy Barton (the “plaintiff”) brought a claim against the defendants, Jack R. Bowerman, CA-Professional Corporation and Mr. Jack

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Court of Appeal Finds Put-Right Option as Forming Part of Consideration

This dispute involved an Asset Purchase Agreement (“APA”), wherein the defendants purchased from the plaintiffs a judgment they had obtained against a third party. A corporation owned by the defendants bought the judgment for two promissory notes and $200,000. The APA contained a “Put-Right option,” which allowed the plaintiffs to compel the defendants to purchase the shares for $3.00 a share, if notice was given within one-year following January 22, 2013. Subject to proper notice, the defendants would then have 10 business days to finalize the purchase of these shares. If the defendants failed to purchase the shares in accordance

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Does An Employer Have To Protect Their Employees From Twitter?

The Ontario Arbitration Decision in Toronto Transit Commission and ATU, Local 113, 2016 CarswellOnt 10550 BACKGROUND The Amalgamated Transit Union, Local 113 (the “Union”) brought a grievance against their employer, the Toronto Transit Commission (“TTC”)  seeking that the TTC’s Twitter account be permanently shut down. The Union’s argued that the TTC’s Twitter account created and fostered an avenue for passengers and other members of the public to denigrate, threaten and harass TTC employees. The Union also argued that the complaints by TTC employee about the hundreds of tweets (which were produced as evidence) were never addressed by TTC. Many of the

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Out of Time, Out of Luck

This dispute arose out of a loan agreement between Cross Bridges Inc. and Z-Teca Foods Inc. Cross Bridges lent money to Z-Teca, who was required to repay the full loan within 60 days of demand. Cross Bridges demanded repayment on October 21, 2009, Z-Teca made a series of payments. On January 10, 2011, Cross Bridges deposited a cheque from Z-Teca which did not clear due to insufficient funds. Cross bridges issued its statement of claim on January 17, 2013. On summary judgment, the motions judge held that the limitation period started to run on January 10, 2011, when the cheque

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Does Failing to Comply with Sick Leave Policy Give an Employer Just Cause to Dismiss an Employee?

The Ontario Superior Court of Justice’s Decision in Sinnathamby v. The Chesterfield Shop Limited, 2016 ONSC 6966 BACKGROUND The plaintiff, Suchethea Sinnathamby (the “plaintiff”) was employed by The Chesterfield Shop Limited (the “defendant”) as a customer service agent for fourteen (14) years. On October 4, 2010 the defendant terminated the plaintiff from her employment. The plaintiff brought an action for wrongful dismissal, claiming that she was terminated without notice after she called in sick. The defendant’s position was that the plaintiff was dismissed for just cause because she failed to provide the supporting medical documentation as required in accordance with the

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Court of Appeal Rejects Unconscionability Argument

Mayaben Shah and her company applied for a small business loan with the Bank of Montreal for her and her husband’s donut shop. In order to secure the loan, Mr. Ileshkumar Shah and Mr. Amer Javed provided a joint guarantee to the Bank of Montreal. The loan application went through and the principal company was provided with a loan of $213,486.00. Later, amidst financial turmoil, Mr. Shah resigned as a director of the company which operated the donut shop, and ceased involvement with the store despite remaining on the books as the Vice-President. The company defaulted on the loan and

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Is Public Disclosure of Private Facts a Tort?

The Ontario Superior Court of Justice Court’s Decision in Doe 464533 v N.D., 2016 ONSC 541 BACKGROUND The plaintiff Jane Doe 464533 (the “plaintiff”) and the defendant N.D. (the “defendant”) were high school sweethearts. The plaintiff brought a civil action against the defendant after the defendant posted an explicit video of the plaintiff online, which he had assured the plaintiff he would keep private. The defendant also showed the video to several of his friends from the parties’ home town. The video was removed from the website after three (3) weeks. It was undisputed however that there was no way

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Should I Stay or Should I Go?

“Should I stay or should I go” was quite possibly what Lauwers J.A. of the Court of Appeal was asking himself when he was tasked with deciding whether to lift a stay under Rule 60.01(5) of the Rules of Civil Procedure. Although, to be honest, he probably wasn’t, but the title does have a ring to it. A “stay” is a legal term for the halting of legal processes. It often arises in the context of a decision which is being appealed so as to prevent the losing party from having to pay funds under a judgment which may ultimately be

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Can Age As An Impediment Of Re-Employment Affect What Is A Reasonable Notice Period?

The Ontario Superior Court of Justice’s Decision in Stephanie Ozorio v. Canadian Hearing Society, 2016 ONSC 5440 BACKGROUND The plaintiff, Stephanie Ozorio (the “plaintiff”) brought a motion on consent for a summary judgement against the defendant, the Canadian Hearing Society (the “defendant”) for wrongful dismissal. The plaintiff was dismissed without cause as a part of the defendant’s restructuring process. The plaintiff at the time of her dismissal was the defendant’s Regional Director for the Toronto Region and had held this position since 2004. She managed up to sixty-five (65) staff and was responsible for overseeing the defendant’s budget of eight (8)

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Summary Judgment Overruled by Court of Appeal in Wrongful Dismissal Case

The Court of Appeal recently overturned a summary judgment, finding that the motion judge erred by allowing the dispute to proceed by way of summary judgement due to the fact that the case presented serious evidentiary difficulties which could not be properly addressed in the context of a simplified procedure under rule 76 of the Ontario Rules of Civil Procedure. FACTS Mr. Gounder and Mr. Singh had been working for Concept Plastics Limited (“Concept”) for 20 and 24 years, respectively, when they had been terminated due to the relocation of Concept. They sued for wrongful dismissal and won on summary judgment.

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When will a Court award Punitive Damages, but not Aggravated Damages against an Employer?

The Ontario Superior Court decision of Morison v Ergo-Industrial Seating Systems Inc., 2016 ONSC 6725 BACKGROUND Tom Morison (“Morison”) brought an action for wrongful dismissal against Ergo-Industrial Seating Systems Inc. (the “Employer”). The relationship between the Employer and the Employee began in August 2004. Morison was dismissed on October 22, 2012. The dismissal was done without prior warning. At the time of the dismissal of Morison was fifty-eight (58) years old, was a top salesperson with no prior disciplinary infractions. Upon termination, Morison was given a letter from the Employer offering five (5) months’ notice and stating he had been terminated

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Can a Hypothetical Breach of an Employment Agreement Effect the Agreement’s Enforceability?

The Superior Court of Justice Divisional Court’s Decision in Garreton v. Complete Innovations Inc., 2016 ONSC 1178 BACKGROUND Complete Innovations Inc. (“CI”) brought an appeal of the judgement that the plaintiff, Marcela Garreton (“Garreton”) was dismissed from her employment with CI without cause and awarding Garreton damages of $25, 000, representing five (5) months’ notice. Garreton had been working with CI for just over two (2) years at the time of her termination. The relationship between CI and Garreton was dictated by a written employment contract (the “Contract”) which included a termination clause with a prescribed notice period in the event Garreton

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What Severance is an Employee Entitled to under a Fixed Term Employment Contract?

The Ontario Superior Court’s Decision in Ballim v. Bausch & Lomb Canada Inc., 2016 ONSC 6307 BACKGROUND The plaintiff, Ms. Samina Ballim (hereinafter “Ms.Ballim”) brought a motion for summary judgement against the defendant, Bausch & Lomb Canada Inc. (hereinafter “Bausch & Lomb”) for breach of contract and wrongful dismissal. Ms. Ballim’s motion was based on her termination without cause. Ms. Ballim was offered and accepted a one-year fixed term employment contract from Bausch & Lomb commencing November 18, 2015, to replace an employee going on maternity leave. The employment agreement stated that it ‘was on a contract basis’ and that Ms.

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Do Geographical Boundaries Limit where you can bring a Claim for Defamation?

The Ontario Court of Appeal decision in Goldhar v. Haaretz.com, 2016 ONSC 515 BACKGROUND Mr. Mitchell Goldhar (“Mr. Goldhar”), a prominent Canadian business man and the owner of the Maccabi Tel Aviv Football Club, which plays in the Israeli Premier League was the feature of an article written in November 2011 by an Israeli newspaper, Haaretz. The article described Mr. Goldhar’s football club management model as being primarily influenced by Mr. Goldhar’s business interest in attaining a partnership with Walmart to operate in Canada. The article further described Mr. Goldhar as “bordering on megalomania” and questioned whether Mr. Goldhar’s frugality with

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Can you get a Religious Exemption from Paying Union Dues?

Under section 52(1)(b) of the Ontario Labour Relations Act, 1995, S.O. 1995, c. 1, Sch. A, (“OLRA”) an employee may not be required to pay union dues. To attain an exemption from paying union dues, the employee must satisfy the Ontario Labour Relations Board (“OLRB”) that their religious conviction or belief objects to paying the dues. The OLRB will assess whether the religious conviction or belief is truly held and whether paying dues would interfere with the employee observing his or her faith. However, the equivalent amount must be paid by the employee to or remitted by the employer to a

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When Notice is Insufficient

The Superior Court of Justice recently revisited the issue of what constitutes “notice of termination” and found that notice must be “clear and unambiguous” in order to suffice. Although this is by no means “new law,” the issue is worth revisiting as reasonable notice is a staple of employment law. FACTS The Plaintiff—a very sympathetic 71 year-old immigrant—had been employed by the Defendant for 12 years as a security guard. On November 24, 2014, the principal owner of the Defendant gave notice to the Plaintiff that, as a result of restructuring, the Plaintiff’s services would no longer be required as

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Do Employees have an Obligation to Provide Employers with Adequate Notice of Resignation?

The Ontario Superior Court of Justice Decision in Gagnon & Associates Inc. et. al. v. Jesso et. al., 2016 ONSC 209 BACKGROUND Gagnon & Associates Inc. (“GA”) owned by Pierre Gagnon (“Gagnon”) is a heating, ventilation and air conditioning business. Barry Jesso (“Jesso”) was hired in 1996 to oversee shipping, receiving and pricing. Jesso was quickly promoted to a full time salesperson in 1997. The employment relationship was governed by a verbal agreement. By 2006 sixty (60) percent of GA sales were attributable to Jesso and another GA employee. Jesso’s compensation at the time was twenty-five (25) percent commission on sales

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Arbitrator’s Decision Prevails in Court of Appeal

FACTS The Court of Appeal recently decided whether or not to overturn an arbitrator’s award for $2,240,000 arising out of a commercial dispute. The Appellant—The Coliseum Inc. (“Coliseum”)—entered into a long-term lease agreement with the City of Ottawa (“City”) to operate an indoor sports and recreation facility at Frank Clair Stadium. The dispute centered on the terms of the Minutes of Settlement previously entered into by both parties, with a focus on two key paragraphs which gave Coliseum an option to renew the contract, conditional upon and subject to the City’s bona fide redevelopment plans. In the event the City, acting in

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Intervention by the Court of Appeal to Clarify Damages related to Wrongful Dismissal and Discrimination

The Ontario Court of Appeal’s Decision in Strudwick v. Applied Consumer & Clinical Evaluations Inc. , 2016 ONCA 520 BACKGROUND The appellant Ms. Vicky Strudwick (hereinafter “Ms. Strudwick”) was employed by the respondent, Applied Consumer & Clinical Evaluations Inc. (hereinafter “Applied Consumer”) for fifteen (15) years before she became deaf in 2010 from an uncertain cause. A campaign of abuse against Ms. Strudwick began almost immediately in an attempt to induce Ms. Strudwick to resign. The campaign of abuse included, but was not limited to, publically belittling, harassing and isolating Ms. Strudwick because of her disability.  Applied Consumer also refused to accommodate

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Can Demoting an Employee after Maternity or Paternal Leave Amount to Discrimination?

The Ontario Court of Appeal’s Decision in Partridge v. Botony Dental Corporation, 2015 ONCA 836 BACKGROUND The respondent, Ms. Lee Partridge (hereinafter “Ms. Partridge”) worked for the appellant, Botony Dental Corporation (hereinafter “Botony”) for seven (7) years. Ms. Partridge was initially employed as a hygienist, but was promoted thereafter as Botony’s office manager.  Ms. Partridge went on maternity leave and upon her return she was demoted to her original position of hygienist. This also included a reduction in her hours and pay. The office manager position was left unfilled during this time. Ms. Partridge was terminated from her position within a

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Discovering Discoverability

BACKGROUND In a recent personal injury case arising out of a surgery-gone-bad, the Court of Appeal was charged with deciding on the issue of discoverability. The plaintiff-patient had suffered medical complications following a breast-reduction surgery. What followed was thirteen (13) months of continued treatment by her doctor, the same doctor that had (allegedly) caused or contributed to the complications. The plaintiff had surgery on March 25, 2009, and following numerous unsuccessful attempts by her doctor to ameliorate the damage, the plaintiff ultimately sued her doctor on June 4, 2012, almost three (3) years after the doctor’s impugned conduct. The doctor

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Is It Unfair Labour Practice For A Trade Union To Expel a Member Who Has Joined Another Trade Union?

The following analysis focuses on two unrelated cases before the Ontario Labour Relations Board (hereinafter the “Board”), which consider whether it is an unfair labour practice to expel a member from a trade union after that member has joined another union. In other words, the following assesses how dual unionism is dealt with in under the Labour Relations Act, 1995, S.O. 1995, c.1, as amended (hereinafter the “Act”). The Carpenters’ District Council of North America’s v. Labourers International Union of North America, 2013 CanLII 28943 (ON LRB)[Labourers’ case] BACKGROUND Under section 96 of the Act, applications were brought by the Carpenters’ District Council

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GM US May Hold Duties to Franchisees of GMCL

In a recent decision, the Ontario Court of Appeal overruled a lower court’s finding that GM US could not owe a duty of good faith and fair dealing under the Arthur Wishart Act. While the decision itself is limited in its application, it leaves the issue to be developed in future cases. THE ARTHUR WISHART ACT The Arthur Wishart Act (the “Act”) governs the relationship between franchisors and franchisees. It imposes certain duties on franchisors, for instance, to disclose to prospective franchisees all “material facts” relevant to the franchise, and to exercise a duty of good faith and fair dealing in the

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Is a Restrictive Covenant Enforceable where no Legitimate Interests Exists?

The Ontario Court of Appeal’s Decision in MEDIchair LP v. DME Medequip Inc., 2016 ONCA 168 BACKGROUND The applicant, DME Medequip Inc. (hereinafter “DME”) operated in Peterborough, Ontario one of the respondent’s, MEDIchair LP (hereinafter “MEDIchair”) franchise stores which sold and leased home medical equipment. DME and MEDIchair signed their latest franchise agreement in 2005, which contained a restrictive covenant. The parameters of the restrictive covenant included a bar on DME from operating a similar business within thirty (30) miles of their store or another of the respondent`s franchise stores for eighteen (18) months of the expiry of the agreement. In

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Deloitte Liable for Negligence in Auditing Practices; Decision to be Appealed to Supreme Court

In a 2016 decision, Ontario’s Court of Appeal upheld a Superior Court decision finding Deloitte liable in negligence for failing to meet their duties as auditor of Livent Inc. (“Livent”). Livent was a publically listed live entertainment company involved in the production of theatrical works such as The Phantom of the Opera, Show Boat, Kiss of the Spider Woman, Music of the Night and Sunsent Boulevard. Some time around 1998, it was discovered that Livent was insolvent, due in part to the actions of numerous high-level employees amounting to fraud and forgery. Livent filed for insolvency protection in Canada and the United States and

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Court of Appeal Finds No Reasonable Notice in Fixed Term Employment

OVERVIEW In a recent decision, the Ontario Court of Appeal awarded a former employee restitutionary damages rather than pay in lieu of reasonable notice. The employee was a manager at an automotive service centre in Bowmanville under a fixed-term, five-year contract. His employer, Benson Group Inc., terminated the employment contract without cause after twenty-three months. The central issue on appeal was whether the employee was entitled to common-law damages for wrongful dismissal or, alternatively, for the money he would have earned had the contract run its course. At trial, the motion judge found that the termination clause in the contract

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Lay-off Treated as Constructive Dismissal by Superior Court, Awarded Termination Pay

The Ontario Superior Court of Justice found that the employer, Gracious Living Corp., wrongfully dismissed the plaintiff-employee after having temporarily laid him off for three (3) months, despite having complied with Employment Standards Act (“ESA”) requirements regarding temporary lay-offs. The decision, following a similar one made in 2011 by the Court of Appeal in Elsegood v Cambridge Spring Service, serves as an important reminder for employers to ensure that temporary lay-offs are part of the employment agreement prior to taking any such action. THE FACTS The plaintiff-employee was laid-off for three (3) months after sixteen (16) years of service with the employer. At

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Ontario Small Claims Court Makes Big Decision

An employer ordered by the Ontario Small Claims Court to pay severance despite having provided their former employee a total of sixty-two (62) weeks working notice and ex gratia payment upon termination. The court found that although the sixty-two (62) weeks exceeded the employee’s cumulative entitlements to severance and notice under the Employment Standards Act (“ESA”), severance cannot be offset against notice, requiring the employer to make an additional payment to satisfy their separate severance requirement under the ESA. THE FACTS The employee in this dispute had been working as a legal assistant with the defendant employer for twenty-six (26) years. Upon termination without cause, the

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Arbitration Clauses and the Competence-Competence Principle

THE FACTS In Ontario Medical Assn v Willis Canada, the Court of Appeal was charged with deciding whether to overturn a Superior Court’s decision to stay an action in order to give an arbitrator the chance to rule on its own jurisdiction. The dispute involved three parties: the Ontario Medical Association (“OMA”) which is an umbrella body that represents the interests of the Ontario medical profession; Aviva Canada Inc. (“Aviva”) which is a personal and commercial insurance provider; and Willis Canada Inc. (“Willis”), which is an insurance broker. Willis and Aviva entered into a written agreement, whereby Willis acted as a

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Can Reasonable Notice of Termination Exceed 24 Months for Dependent Contractors?

The Ontario Court of Appeal’s Decision in Keenan v. Canac Kitchens Ltd., 2016 ONCA 79 BACKGROUND Lawrence Keenan (hereinafter “Mr. Keenan”) started working for Canac Kitchens Ltd. (hereinafter “Canac”) in 1976. Until 1983, Mr. Keenan worked as a kitchen cabinet installer. Mr. Keenan then became a foreman and was responsible for supervising installations of Canac kitchens in new homes.  Likewise in 1983, Marilyn Keenan (hereinafter “Mrs. Keenan”), who is the wife of Mr. Keenan, began her formal employment with Canac as a foreman. Both Mr. and Mrs. Keenan were hired as fulltime employees of Canac, but in October 1987 they were

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Can a Bonus Requiring “Active Employment” be owed during the Reasonable Notice Period after a Wrongful Dismissal?

The Ontario Court of Appeal’s Decision Paquette v. TeraGo Networks Inc. 2016 ONCA 618 BACKGROUND Trevor Paquette (hereinafter the “appellant”) worked for TeraGo Networks Inc. (hereinafter the “respondent”) for fourteen (14) years. The appellant was dismissed without cause in November 2014. The appellant’s position with the respondent was as Director, Billing and Operations Support Services. The appellant earned a base salary and was entitled to bonuses under the respondent’s bonus program. The appellant commenced an action against the respondent for wrongful dismissal after the parties failed to agree on a severance package. The parties agreed to have the matters of determining a

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Are an Employer’s Financial Circumstances Relevant when Determining what a Wrongfully Dismissed Employee is Entitled?

The Ontario Court of Appeal’s Decision in Michela v. St. Thomas of Villanova Catholic School, 2015 ONCA 801 BACKGROUND Domenica Michela, Sergio Gomes and Catherine Carnoval (hereinafter the “appellants”) are school teachers who were employed by St. Thomas of Villanova Catholic School (hereinafter the “respondent”), a private school, on a series of one-year contracts. The appellants were employed by the respondent for a total of thirteen (13), eleven (11) and eight (8) years respectively. The appellants each received a letter advising that their contracts would not be renewed for the upcoming academic year due to lower projected enrollment. Each appellant also

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Severance Action in British Columbia Fails on Duty to Mitigate

THE FACTS The British Columbia Supreme Court recently ruled against the plaintiffs in an action for pay in lieu of reasonable notice due to the plaintiffs’ failure to establish that they met their duty to mitigate. The plaintiffs worked at Hamburger Mary’s as a cook and waitress for approximately eighteen years. Hamburger Mary’s was purchased by the defendant, Cabaret, and temporarily closed down for renovations. On March 12, 2015, the plaintiffs were told that they would be laid-off while the restaurant was closed for renovations, but would be reinstated to their previous positions once the restaurant reopened, which was expected

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Court Forces Contractor to Pay Over $100K for Failure to Account for Distribution of Trust Money

In a recent decision, the Ontario Superior Court of Justice ruled in favour of the plaintiff for materials and money supplied for a variety of construction projects. The facts of this case are pretty straightforward. The plaintiff brought an action for money and materials supplied to the defendants, the defendants filed a statement of defence, which was struck, and the plaintiff brought a motion for judgement. The central issues in this motion were two part: 1) whether the defendant was in violation of section 8 of the Construction Lies Act (“CLA)”); and 2) whether any such liability should survive a discharge order

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Union Organizing Campaigns: When will the Ontario Labour Relations Board Intervene?

The Ontario Labour Relation Board’s Decision in C.H.C.W. v. Stratford Shakespearean Festival Foundation of Canada, 2000 CarswellOnt 2637 BACKGROUND An application for trade union certification was brought by Canadian Health Care Workers (hereinafter “CHCW”) to represent the employees of The Stratford Shakespearean Festival Foundation of Canada. These employees were, at the time represented by Service Employees International Union Local 220 (hereinafter “SEIU”), and subject to a collective agreement. As such, prior to CHCW’s application for certification during the collective agreement’s open period, CHCW for several months conducted an organizing campaign. On CHCW’s application, a differently constituted Board ordered a representation vote.

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Be Specific-Inferring Common Intention Rules the Day when Joint Venture Agreements remain Silent: The Ontario Court of Appeal’s Decision in Zachary Timoon Dentistry Professional Corp. v. Tonino Ciocca Dentistry Professional Corp., 2015 ONCA 812

BACKGROUND Through their professional corporations, two dentists entered into a joint venture agreement (hereinafter “JVA”) to continue their business relationship in general practice dentistry. The JVA included a provision which related to the necessary notice to effect termination, but did not include the consequences of termination, such as whether a dissolution or a buy-out would take place with respect to the parties’ interests in the general dentistry practice. Dr. Tonino Ciocca on behalf of Tonino Ciocca Dentistry Professional Corp. (hereinafter the “appellant”) began additional training with the view to establish an independent practice from the business relationship governed by the

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Bearing the Evidentiary Burden when Advancing an Appropriate Jurisdiction Outside of Ontario Argument: The Ontario Court of Appeal’s Decision in Eco-Tec Inc. v. Lu, 2015 ONCA 818

In decision by Associate Chief Justice Hoy, which was unanimously endorsed, the Ontario Court of Appeal confirmed that the correct test for place of contract related to electronically transmitted agreements is in the jurisdiction where acceptance is received. The Court also confirmed that the principle that the party advancing the argument for a more appropriate or convenient forum bears the evidentiary burden, even when that jurisdiction is not Ontario. BACKGROUND Eco-Tec Inc. (hereafter the “respondent”), is an Ontario corporation which researched, developed and manufactured technology and products that are proprietary. The respondent brought an action in Ontario against Dr. Lu,

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Strict Liability Defences at Play for Banks against Fraudulent Employees: The Ontario Court of Appeal’s Decision in Teva Canada Limited v. Bank of Montreal, 2016 ONCA 94

In a unanimous decision by the Ontario Court of Appeal greater clarity has emerged as to the available defences for banks under the Bills of Exchange Act, R.S.C. 1985 c. B.4 (“BEA”) with respect to employee cheque fraud. BACKGROUND Teva Canada Limited v. Bank of Montreal, 2016 ONCA 94 involved a former finance department employee of Teva Canada Limited (“Teva”) who requisitioned numerous cheques over three (3) years, from various bank accounts at several banks (the “Banks”), which amounted to over five (5) million dollars in transfers. The former employee was not authorized to make such requisitions but managed to

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Tort Law Saves the Day: Supreme Court of British Columbia Rules in Favour of Employee in Negligent Misrepresentation Action

THE FACTS In a recent case, the Supreme Court of British Columbia was charged with the task of deciding a negligent misrepresentation action. Negligent misrepresentation is a cause of action in tort, which allows the receiver of false or misleading information to seek recourse through the courts for losses incurred as a result of that misrepresentation. The cause of action arises often in the context of employment, specifically where employers make inaccurate representations to prospective candidates regarding the terms of the employment contract. In this case, the plaintiff—Mr. Feldstein—was a software engineer with cystic fibrosis. Cystic fibrosis is a degenerative

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Summary Judgement Ruling Establishes Holding Companies are Not Common Employers

THE CASE The Superior Court of Justice ruled on the issue of common-employers and personal liability of directors in the context of a wrongful dismissal action. The plaintiff was the manager of a Nissan Infiniti automotive dealership in Ottawa, which was owned and operated by the Tony Graham automotive companies. After he was terminated, the plaintiff sued the dealership, along with the directors and the holding companies associated with the dealership. The defendants brought a motion for summary judgement to have the claims dismissed as against the directors and the holding companies on the basis that they were not employers

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Strengthening Solicitor-Client Privilege – Supreme Court of Canada declares probative sections of the Income Tax Act unconstitutional

In two companion decisions handed down on June 3, 2016, the Supreme Court of Canada (“SCC”) affirmed that sections of the Income Tax Act (“ITA”), which attempted to erode the protection of solicitor-client privilege, were unconstitutional. The decisions clarified that legal professionals cannot be compelled to disclose their clients’ identities, communications or any other privileged information with respect to tax audit and/or collection powers of the Canadian Revenue Agency (“CRA”). Meaning, the objectives of tax legislation and laws cannot justify abrogating the protections of solicitor-client privilege. Canada v. Chambre des notaries du Québec 2016 SCC 20 BACKGROUND Notaries in Quebec

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Saliken Decision Reaffirms High Threshold for ‘Just Cause Termination’ and Strikes Out Release

THE FACTS In a recent 2016 decision, the Supreme Court of British Columbia ruled in favour of the Plaintiff-employee, awarding him pay in lieu of reasonable notice following a termination. The Plaintiff was a helicopter technician for Canadian Heli Structures Ltd. (CHS), owned and operated by the Defendant, Alpine Aerotech Limited Partnership. During an inspection by one of the Defendant’s clients, the Plaintiff was questioned regarding his tools and work station. The Plaintiff’s responses were defensive, unprofessional and at times, rude. At one point, when asked about an uncalibrated depth gauge, the Plaintiff said something to the effect of “I

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Dismissals Without Just Cause are Unjust under the Canada Labour Code: The Supreme Court of Canada’s Decision in Wilson v. Atomic Energy of Canada Ltd [2016] S.C.J. No. 29

AFTER A LONG ANTICIPATED WAIT, ON JULY 14, 2016, THE SUPREME COURT OF CANADA (“SCC”), DELIVERED DECISION AFFIRMING THAT NON-UNIONIZED FEDERAL EMPLOYEES ARE ENTITLED TO COMPARABLE PROTECTIONS TO THOSE AFFORDED TO UNIONIZED EMPLOYEES. BACKGROUND Mr. Joseph Wilson (“Mr. Wilson”) worked for Atomic Energy of Canada Limited (“AECL”) for four and a half (4.5) years. Mr. Wilson was a non-unionized federal employee who in November 2009, was dismissed without cause, a clear disciplinary record and received six-months of severance pay. Mr. Wilson filed a complaint of “Unjust dismissal” under section 240(1) of the Canada Labour Code (“Code”).  As a result of

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Limited Scope of Mitigation of Damages in Employment Context

THE FACTS In Marques v Delmar, the Ontario Superior Court of Justice makes a few interesting decisions in respect of reasonable notice and the calculation of damages. The plaintiff in this case worked for the defendant as a Director of Housing and Distribution between August 11, 2014, and April 7, 2015, about three months short of a year. On April 7th, the defendant terminated the plaintiff without cause. In lieu of reasonable notice, the plaintiff was offered a lump sum payment totalling the equivalent of four weeks’ base salary, which amounted to $14,230.97. The questions before the court were three

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The Supreme Court of Canada Defines the Defence of Responsible Communication in Grant v. Torstar Corp

The significance of the Grant v. Torstar Corp 2009 SCC 61 (“Grant”) decision rests principally with the creation of a new defence of responsible communication on matters of public interest to a defamation cause of action. Defamation is a common law cause of action which, according to the Canadian Encyclopedia Digest, involves: any written, printed or spoken words or of any audible or visible matters or acts which tend to lower a person in the estimation of others or cause a person to be shunned or avoided or exposed to hatred, contempt or ridicule. In 2009, the Supreme Court of

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Hyperlinks and Defamation: The Supreme Court of Canada’s Decision in Crookes v. Newton

In a 2011 decision the Supreme Court of Canada (SCC), affirming the British Columbia lower courts, held that a simple hyperlink to defamatory material does not in and of itself constitute publication of that material. Thus, a hyperlink (without direct reference to the defamatory statement) would not satisfy the threshold element of publication set out in Grant v. Torstar Corp., [2009] 3 S.C.R. 640 to establish a defamatory action. BACKGROUND Mr. Newton was the owner of a website which contained news, stories and commentary on a variety of issues. In 2008, Mr. Newton published an article entitled “Free Speech in

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Labour Board Automatically Certifies Union as a Result of Employer Interference – Provides Strong Protection to Employees in the Context of Unionization

In a 2014 decision, the Ontario Labour Review Board (OLRB) finds that an employer violated section 70 of the Labour Relations Act (the “Act”) by making statements that amounted to “coercion, intimidation, threats, promises or undue influence” in relation to a unionization effort, and awards a remedy of automatic certification under section 11 of the Act. THE FACTS The case involved an application for certification filed by UA Local 787 (the “Union”) pursuant to the construction industry provisions of the Act. Shortly after filing the certification application, the Union filed an application to be certified for a bargaining unit of

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Disability Benefits and Wrongful Dismissal

Employment contracts may contain provisions relating to long-term disability benefits, allowing suffering employees to maintain a certain quality of life while taking the time required to recover with the hope of keeping their employment relationship intact. Canadian employment law has evolved to balance the interests of the employer and the employee concerning accommodations appropriate for suffering employees. As such, much of the litigation in this area of the law centers on determinations of the extent of the employee’s disability as well as the employer’s actions in accommodating the employee. Of course the issues are never simply black or white and

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Termination, Inducement and Bonuses

Canadian employment law is more than just an exercise in statute and case-law precedent – there is an art to draw on the specifics of each case in order to elicit the right decision. Cases involving termination of employment can be particularly unpredictable as varying circumstances have a great impact on what the Court considers a just result. In Canada employees are entitled to a reasonable notice period prior to termination that allows that individual reasonable time to seek other employment and get back on their feet again. Where the appropriate notice period is not provided the employee would be

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Unjust Enrichment – Medication and Monopolies

In the case of Apotex Inc. v. Eli Lily and Company, 2015 ONCA 305, Eli Lilly and Company and Eli Lilly Canada Inc. (“Lilly”) had used the process available under the regulatory scheme of the Patented Medicines (Notice of Compliance) Regulations, SOR/93-133, in order to keep Apotex’s generic counterpart to Strattera (a drug used in the treatment of Attention Deficit Hyperactivity Disorder) off the market. Lilly thus ensured a virtual monopoly on sales of the drug. Apotex’s generic counterpart to Strattera was approved on October 10, 2008. Lilly had immediately launched prohibition proceedings to protect its patent rights and prevent the issuance of

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Punishing your Boss with Punitive Damages

Losing one’s job can be devastating and seeking to punish your employer for it may seem like the right thing to do. However, a lawsuit is intended to bring about “compensatory” results – to put one in the position they would have been but for the wrong committed by way a monetary award. The only way to “punish” the employer, in a civil lawsuit, is to get the court to order the wrongdoer to pay more as punishment. This is known as “punitive damages.” Punitive damages are awarded against parties in order to deter certain conduct that courts finds egregious

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Character of Employment and Calculating the Reasonable Notice Period

In employment law, when an employee is wrongfully terminated, the court will look at a variety of factors to determine the length of the notice period an employee is entitled to. The character of employment is one of those factors. The character of employment is the unique qualities that each job has (such as whether or not the job required the employee to have some sort of special skill). Generally, Ontario courts have determined that when an employee utilizes a special skill in their employment they may deserve a greater notice period than another employee who does not despite the

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Probationary Employees in the Unionized Context

Collective agreements generally set out that probationary employees do not enjoy the same level of job protection that permanent employees enjoy. For example, probationary employees can be terminated without the employer having to establish a “just cause” for his or her dismissal. However, the common law has set out that although an employer may terminate a unionized probationary employee for less than “just cause” they still cannot terminate the probationary employee “just because.” For example, a unionized probationary employee must not be terminated in an arbitrary or discriminatory fashion nor can the employee be terminated in bad faith. These issues

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Denial of Benefits and Discriminatory Practices

In Canada (Attorney General) v. Hicks, 2015 FC 599 (CanLII) the Federal Court heard an appeal concerning the validity of a Canadian Human Rights Tribunal (“CHRT”) decision which held that the Human Resources and Skills Development Canada (“HRSDC”) discriminated against its employee on the basis of family status. The Court reasoned so because the HRSDC did not allow the employee Temporary Dual Residence Assistance (“TDRA”) under the Treasury Board’s Relocation Directive (“RD”) to assist him with moving expenses associated with relocating and maintaining temporary dual residences when the employee moved from Nova Scotia to Ontario because of his job with the HRSDC.

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Workplace Safety and the Extent of a Due Diligence Defence

Employees in Ontario have the right to work in conditions that are safe. Workplaces covered by the WSIB (and they are many) allow employees to claim benefits in the event of a work related injury. As a result of WSIB coverage, the employee would not be allowed to sue the employer for damages related to a workplace injury and the compliant employer’s risk of financial exposure would be limited to the payment of premiums only. However, employers may also be subject to prosecution under the Occupational Health and Safety Act R.S.O. 1990, c. O.1 (the “Act“) if there are allegations that an

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Dependant Contractor and the Employer-Employee Relationship

Our common law governs employee and employer relationships ensuring that the principles of justice are served whilst balancing the diverse interests of all parties involved. One of the chief concerns of employment law is whether an employer-employee relationship exists in the first place. Through the common law various tests were developed to assess whether an employer-employee relationship exists in situations where employment circumstances may be unclear. Tetra Consulting v Continental Bank et al., 2015 ONSC 4610 (CanLII) dealt with a determination as to whether an employer-employee relationship existed for the purposes of making a disposition with regards to the appropriate notice

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Renewing a Commercial Lease Agreement

Commercial lease agreements can be a lucrative source of income for landlords in that tenants pay monthly rent and typically sign leases for extended terms. There is also value to be gained for tenants from continuous business operations located at a particular premise which is recognizable and known by its customer-base. Thus, commercial lease agreements usually contain renewal clauses, allowing tenants to extend an already lengthy lease for another term. The case of 1251614 Ontario Ltd v Gurudutt Inc. 2015 ONSC 2141 concerns the affect of a renewal clause contained in a commercial lease agreement. This particular renewal clause was somewhat unique

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Reasonable Notice Period and the Duty to Mitigate Damages

It is well known that a wrongfully terminated employee deserves an adequate notice period prior to termination or pay in lieu of notice. The length of the reasonable notice period is determined by an employee’s length of service, position or title, age and ability to find new or alternate employment. The employee also has a legal duty to mitigate his damages. This means that the employee cannot simply “wait out” his or her notice period to collect the maximum award that was available under the law. They must go out and look for new or alternative employment. The employer’s common

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The “Entire Agreement” Clause

Most people entering into any type of agreement, be it an employment contract, a commercial lease or a partnership agreement, usually focus on provisions relating to the parties’ monetary obligations. Few care to read the “general” clauses usually found at the end of the document. Normally, most people consider these provisions “boilerplate” and of lesser importance. However, all clauses matter and their significance – even if seldom tested – may prove relevant in the future. One such clause is the “entire agreement” clause found virtually in all contracts. The entire agreement clause is a provision which purpose is to limit the parties’

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Bernard v. Canada: Privacy Rights in the Unionized Workplace

The preservation of industrial peace has been a cornerstone of Canada’s labour relations system since its inception. The union – introduced for the benefit of workers – is normally a welcome addition to most employees. However, some employees do not seek (some even resist) the union’s protection and commensurate long-term involvement. The Supreme Court of Canada’s decision in Bernard v. Canada (Attorney General), 2014 SCC 13 (CanLII) (“Bernard“) illustrates this tension. It touches on issues of the union’s right to the personal information of members of a bargaining unit it represents, regardless if that employee was actually a member of the union.

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Piercing The Corporate Veil

A corporation has a separate and distinct legal identity under Canadian law. This means that the corporation can do business, own property and have title to various assets. The general rule is that a potential claimant against a corporation cannot bring an action against the corporation’s shareholders, directors and / or officers but must confine their requests for relief as against whatever capital or assets the corporation has. However, there are instances where a potential claimant against a corporation can bypass the corporation and seek relief as against the property or assets of the shareholders, directors and / or officers

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Can My Employer Fire Me While I am on Sick Leave?

Being sick can cause a lot of turmoil in one’s personal and professional life. For example, a person can often go on sick leave for an indeterminate period of time depending on their illness which may or may not result in big unexpected changes for their employer. So what is the employer or employee to do? Should the employer keep the job available for the employee to attend to once they return from sick leave? Can they fire the employee and hire another person to do the job? The short answer is: “it depends.” The employer should be very careful

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Does the Duty to Accommodate Survive an Employee’s Dismissal?

The Canadian Human Rights Commission (“CHRC”) dismissed Mr. Davinder Khaper’s (“Mr. Khaper) complaint alleging that his former employer, Air Canada, had discriminated against him based on his mental disability, race and national or ethnic origin in terminating his employment. Mr. Khaper proceeded to bring an application for a judicial review of the CHRC’s decision with the Federal Court. He was not successful, so he appealed further. In Khaper v. Air Canada, 2015 FCA 99, the Federal Court of Appeal dismissed Mr. Khaper’s appeal. Mr. Khaper commenced work with Air Canada in 1997. During that time he was often subject to letters

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Riding to the Rescue of Collective Bargaining Rights

The Supreme Court of Canada released a significant decision on the expansion and meaning of freedom of association in the labour context pursuant to section 2(d) of the Canadian Charter of Rights Freedoms. In a 6-1 decision, the court ruled in favour of RCMP members’ constitutional right to representation of their choosing and one that would be independent of managerial control vis-à-vis the employer. The majority held that the right to collective bargaining must be meaningful if it is to pass constitutional muster. The core issue in Mounted Police Association of Ontario v. Canada (Attorney General) [2015] S.C.J. No. 1

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Related Companies may be held Liable for Wrongful Termination in “Common Employer” Doctrine

The Ontario Court of Appeal has upheld a decision of the Superior Court of Justice and dismissed an appeal in the case of King v. 1416088 Ontario Ltd. In King, the court held that when there is a sufficient relationship among seemingly independent companies, that group of companies may be looked at as one entity or one “common employer” and therefore could be held liable for wrongful terminations. The court further held that those interrelated companies may also all be held liable for pension agreements despite the fact that only one company executed the agreement. Jack King (“King”) worked as a bookkeeper for

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What Can We Learn From Hydro One’s Firing of a Heckler?

An employee has been fired for what seems to be an increasing trend these days, namely for bad behaviour that did not take place at work but on their own personal time. Hydro One has fired an employee who was caught making rude and derogatory on-air comments to a female television reporter during a Toronto soccer game last week. Unfortunately for this employee, his behaviour was on camera and posted all over social media. Once Hydro One got wind of his on-air antics, he was promptly fired. The employee who was fired was an assistant management engineer at Hydro One

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Federal Court Says That the Use of Meta Tags is Not an Infringement of Trademark or Copyright

Have you ever heard of a “meta tag”? You may not have if you are not a professional website developer. A meta tag is small piece of code in a website that can enable a search engine or web browser to identify a particular site. You cannot see a meta tag simply by looking at a website online. However, sometimes the meta tag can be used by competing businesses to try to gain an advantage over the other resulting in litigation. This happened in Red Label Vacations Inc. v. 411 Travel Buys Limited, 2015 FC 19. The plaintiff, Red Label Vacations

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When Can a Unionized Employee Sue Their Employer?

We have had a number of telephone calls over the years from disgruntled unionized employees who seek to take their employer to court over a variety of workplace disputes. Their main complaint is that they tried to go to their union but for one reason or another and that route was not getting them the results they were seeking. So they try to go to court. Unfortunately, in most situations, the union employee is probably out of luck if a civil action is what they are seeking. The short answer is that the courts have decided that employment disputes in

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Defamation on the Internet – Blog Operators Held Accountable for Defamatory Posts

The recent case of Baglow v. Smith, 2015 ONSC 1175 (CanLII) brings to the forefront the issue of internet defamation in the context of a political blog This case starts off with a bang. Madam Justice Polowins writes the following in the first three lines of her judgement: Political debate in the Internet blogosphere can be, and, often is, rude, aggressive, sarcastic, hyperbolic, insulting, caustic and/or vulgar. It is not for the faint of heart. This case is an action in defamation involving political bloggers on the Internet. The plaintiff, Dr. Baglow, was the owner and operator of an internet blog

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Parental Leave, Maternity Leave and the Human Rights Code: Partridge v. Botany Dental Corporation

The recent Superior Court decision of Partridge v. Botany Dental Corporation serves as a reminder to employers that they have obligations under the Employment Standards Act to make sure that they reinstate employees who have gone on maternity or parental leave. However, this case also sets out how courts are also broadening the scope of that obligation such that a refusal to reinstate an employee may amount to a breach of the “family status” protections of the Human Rights Code. The plaintiff, Lee Partridge (“Partridge”), was a 39 year-old dental hygienist. She worked for the defendant, Botany Dental Corporation (“Botany”) for over 7 years until

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Supreme Court of Canada Creates New Duty of Honest Contractual Performance

The Supreme Court of Canada has unleashed bold new changes to the common law that has huge implications in employment and commercial or business litigation. The case, Bhasin v. Hrynew, 2014 SCC 71, created a new duty of honest contractual performance between parties. The parties were engaged in the business of education savings plans in Alberta. The plaintiff, Bhasin, had a “commercial dealership agreement” (“agreement”) with a company called Canadian American Financial Corp (“CAF Corp.”). This agreement set out that Bhasin was to act as an “enrollment director” and was responsible for marketing these education savings plans to parents. Bhasin

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Class Action Lawsuit Brought Against Deloitte

A Toronto lawyer has launched a $384 million class action lawsuit against Deloitte LLP (“Deloitte”). The lawsuit alleges that lawyers who worked at the accounting firm’s document-review division were misclassified as independent contractors, depriving them of basic employee rights. Deloitte is one of the largest audit and financial consulting firms in the world. The lawsuit further alleges that the lawyers should have been treated as employees because the substance of their relationship with Deloitte was that of an employee rather than an independent contractor. For example, the lawyers worked under the direct supervision of Deloitte, Deloitte provided them with work

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Constructive Dismissal: Potter v. New Brunswick Legal Aid Services Commission

The Supreme Court of Canada released a decision which addressed when suspending an employee may be considered constructive dismissal. Mr. Potter was a lawyer who was appointed as an Executive Director of the New Brunswick Legal Aid Services Commission (“Commission”) for a seven-year term. During his term the Commission decided to suspend Mr. Potter with pay and advised him not to return to work until further notice. The Supreme Court decided that Mr. Potter was in fact constructively dismissed. The court held that (1) the court must recognize an express or implied contract term that has been breached and determine

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Target’s Severance Deal a Step in the Right Direction

In January 2015 it was announced that the U.S. retail giant Target will be closing all its 133 Canadian stores and laying-off 17,500 employees in the process. The company also announced it was bankrupt and seeking bankruptcy protection. Target has since created a trust fund to pay severance to its laid-off employees. The trust fund is now sitting at 90 million which should be enough to give employees at least 16 weeks of termination pay. The Target trust fund is a unique situation. In most cases, where the employer is bankrupt, terminated employees have to line up along with every

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Zeilikman Law’s New Year Employment Law Newsmakers of 2014

Happy New Year from Zeilikman Law! Employment law is never stagnant – each year brings new changes and challenges to our door. So in celebration of the New Year and because we were in a reflective spirit we decided to set down the top 5 employment law news events that took place over the course of 2014. 1. JIAN GHOMESHI When the CBC fired Jian Ghomeshi in October, it set forth a firestorm of controversy and media frenzy. However, it also raised important issues about whether or not an employer can fire an employee based on what they do while

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Should I sign a release?

At Zeilikman Law we are often confronted with the following situation: an employee has just been dismissed by their employer and as part of their termination they have been offered a severance package. However, the employer will only provide the severance package if the employee signs a release (the deadline is usually strict). A release is an agreement which will act to bar any future claim that an employee may have against the employer relating to their termination of employment. So should the employee sign the release right then and there? Absolutely not. The employee should take the proposed severance

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Can an employee be fired for things they do outside of the workplace?

It is quite rare for an employee to be fired for things they do outside of the workplace. And, generally, what employees do in their private lives, as long as it remains private, has no bearing on whether or not they can be fired by their employer. However, this does not mean getting fired for your “off hours” activities cannot happen. An employer has the right to terminate an employee for behaviours or activities that take place outside of the workplace as long as those behaviours are contrary to the public image and reputation of the employer. In fact, many

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Employee vs. Independent Contractor

Contrary to popular belief, the presence of an agreement stipulating that a person is an independent contractor rather than an employee is not determinative of one’s status in the eyes of the law. This is because the courts will look to the substance of the parties’ relationship, regardless of how they choose to classify it. TYPICALLY, COURTS ASK THE FOLLOWING QUESTIONS TO DETERMINE IN WHAT CAPACITY SERVICES ARE PROVIDED: Whether or not work is done only for the purported employer / principal. Who decides how, when and where services are provided? Who has ownership of the “tools” with which services

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Resumé Fraud and the Law

When faced with the prospect of a new and exciting job, the temptation to “sell” oneself beyond one’s true worth may be irresistible. It is not uncommon to embellish one’s credentials in the course of an interview or through a resume in order to “get one’s foot in the door.” To a certain degree, most people are guilty of some form of self-aggrandizement when employment is within reach. However, in addition to the obvious ethical drawbacks associated with misstatements of reality, lying on one’s resume or obtaining a job through actual fraud or misrepresentation may have serious legal consequences. On

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Can I be stopped from competing with a former employer or a business I recently sold?

Canada’s economic and commercial system seeks to encourage entrepreneurial competition and innovation. However, the law is not blind to the pitfalls of unfettered commercial activity amongst market players. Thus, it is often the case that business purchase and sale agreements include limitations on a vendor’s future activities upon a sale of business. In legal parlance, such limitations are called “restrictive covenants.” Generally speaking such covenants are considered by the courts as a restraint on trade and, as such, as against public policy. However, what if upon the sale of a business, the vendor opens another business of a similar kind

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Business Oppression

When the corporation’s control gets out of hand, when the conduct of its managers is detrimental and abusive, a corporation’s shareholders are entitled to certain remedies. One such remedy is the oppression remedy – the “super remedy” of business litigation.Oppression remedy is the most comprehensive type of remedy in corporate law. It accords the court a great deal of discretion in dealing with conduct that is deleterious to the well being of the corporate organization. Section 248(3) of the Ontario Business Corporations Act (“OBCA”), provides, among other remedies, the following relief: an order restraining the conduct complained of; an order to regulate

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The fiduciary role in a business context

Generally speaking, there are three characteristics to a fiduciary relationship. First, the fiduciary has the power to make choices. He or she must be able to exercise some discretion or power over another person. Second, the fiduciary must have the power to affect a beneficiary’s interests. The fiduciary can exercise such power unilaterally so as to affect the beneficiary’s practical interests. Third, the beneficiary is vulnerable to or is at the mercy of the fiduciary. A fiduciary relationship, thus, goes beyond mere duty of care or contractual liability; it is a relationship that is premised on power imbalance and trust.

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You do not need to have a contract to owe something to someone

Individuals and companies often think they have obligations towards each other only pursuant to the agreements they enter into in the course of their commercial activities. However, nothing could be further from the truth. Over the centuries, the common law has established various extra-contractual duties (in legal parlance, “causes of action”), which are owed between members of society whether or not an actual agreement had been made. Arguably the most commonly invoked extra-contractual obligation owed by individuals and companies is the existence of a duty of care. Companies or individuals who fail to perform within various legally established norms can

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It takes a lifetime…

It is often said that it takes a lifetime to build a reputation and only a few seconds to destroy it. The law of defamation seeks to address the problems associated with negative communications with respect to a person’s character. Defamation is a statement that is communicated by a third party that tends to harm a person’s reputation. Defamation can occur either verbally (“slander”) or in writing (“libel”). Reputational damage can have extremely negative consequences on a person’s life in general and on a business in particular. With the rise of the Internet, defamatory statements have been easier to proliferate

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What is a “contract”?

What is a contract? A contract is a promise made from one party to another to do something or to refrain from doing something in the future. A contract is formed when an offer is accepted and something of value is exchanged. The law of contracts is complex and nuanced. However, one thing is clear: holding people to their promises is fundamental to a civilized and well-structured society. Consider a world where people would make preparations, spend substantial sums of money and commit themselves to a certain outcome only to be told by the party making the promise that it

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Insurer gets off the hook as a result of a deal struck between the employer and the employee

The doctrine of “privity of contract” stands for the proposition that only parties to a contract can enforce it. What happens, however, when parties contract to release a third party from liability? Can the third party, who has never even seen the contract, rely on its terms? The Supreme Court of Canada answered this question in the affirmative in the London Drugs and Fraser Rivers decisions. In certain circumstances, the Court ruled, exceptions are allowed. This rule was revisited in an employment context where as a result of a release entered into by the employer and the employee the third party insurance company was

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