Labour Law FAQs
Normally a unionized employee cannot sue their employers for breaching their employment rights because those rights are governed by the employees’ collective agreement. Therefore, a unionized employee can file a grievance against their employer according to the grievance process under their collective agreement. If the grievance process is unsuccessful at resolving the issue, the next step is arbitration.
The union is the exclusive bargaining agent of its members, and therefore the union has carriage of the matter (i.e. grievance). The union has a duty to act in good faith and in a non-arbitrary fashion with respect to its union members. If a union has failed to act properly and/or failed to fulfill its duty to the employee, the employee can bring a duty of fair representation application (normally referred to as a “DFR Application”) to the Ontario Labour Relations Board (“OLRB”). It should be noted that a successful DFR Application is rare and the test which the OLRB uses to determine if a DFR is justified is rigorous.
It depends. A unionized workplace can either be a “closed shop” or “open shop” workplace. The designation of the unionized workplace will affect whether you are required to become a member of the union.
If you are employed in a “closed shop” workplace, you must be a union member to be hired and employed. In other words, the employment itself is conditioned on the employee’s membership in the union.
If you are employed in an “open shop” workplace, you do not have to become a member of the union. However, in an “open shop” workplace, employees who choose not to become members of the union are still subject to the collective agreement entered into by the union and the employer and are required to pay union dues. This situation is also known as the “Rand Formula,” which makes it mandatory for all employees to pay union dues regardless of their status with the union (i.e. member or non-member). Further, a non-union employee in an “open shop” workplace is normally deprived of participating in internal union affairs.
In Ontario, creating a union is different than being part of a bargaining unit. A bargaining unit is a group of workers usually with similar jobs, which have been certified by the Ontario Labour Relations Board (“OLRB”) or voluntarily recognized by the employer to have exclusive bargaining rights with the employer in negotiating a collective agreement. Creating a union does not automatically attain the bargaining unit status and rights of that status; rather, it requires the extra step of certification by the OLRB on application by the union or upon the employer’s voluntary recognition.
For most private-sector employees in Ontario starting a union and forming a certified bargaining unit where no union and bargaining unit already exist involves the following steps:
- Create a union constitution and purpose including union positions and structure such as president, vice president, treasurer, etc.;
- Appoint members to those positions;
- If the created union wants to create the bargaining unit, the union will have to attain forty percent (40%) support of employees, which can be evidenced by petition or union cards, etc.;
- Submit an application to the OLRB to certify the union as the bargaining unit;
- The OLRB will hold a vote by secret ballot to see if employees want the union to be certified;
- If the majority (50%+1) of employees who cast votes support unionization, the union is certified as the bargaining unit;
- The OLRB will serve notice on the employer that a union has been created and certified to act as the bargaining agent for a specific bargaining unit; and
- Subject to any objections from the employer, begin bargaining the first collective agreement with the employer.
No. An employer cannot prevent an employee from starting or joining a union. However, the employer has the right to voice their opinion with respect to a union, as long as they are objective in their opinion and it does not amount to undue influence, coercion or intimidation such as threatening an employee with job loss in relation to starting or joining a union.
If an employer does engage in conduct that intimidates, coerces or threatens an employee not to join or start a union, the employee may bring an unfair labour practice application (“ULP Application”) against the employer. If a ULP Application is filed and the issue cannot be resolved between the employee and employer, a Report will be made and given by the Ontario Labour Relations Board (“OLRB”), which would assess whether the complaint was valid either by holding a Hearing or solely upon the Report. If the OLRB determines the Application to be valid, it may order a remedy against the employer. What recourse should be ordered against the employer depends on the specific circumstance and can range from compensation to revocation of a disciplinary action taken against an employee.
No. Your current union cannot prevent you from switching to another union. Particularly, your union cannot coerce or intimidate you into staying a member of the union. However, depending on your union’s constitution, you may face consequences such as a union ban, a fine, etc. for holding membership in two unions (commonly referred to as “dual unionism”). This is due to the fact that when you become a member of a union you undertake to follow and operate under the union’s constitution. If you leave your union and you feel you are being treated contrary to the constitution, your former union’s internal governing body will likely include a procedure for recourse or assessment of your complaint. If the internal governing procedures of your union do not adequately address your complaint you may lodge an Application with the Ontario Labour Relations Board (“OLRB”), however, the OLRB is normally unwilling to participate in affairs that are considered internal to the union.
Employment Law FAQs
The answer to this question will depend on whether you signed a contract that includes a non-solicitation or non-competition clause or both. A non-solicitation clause, if properly drafted, can prevent former employees and independent contractors from contacting the company’s clients or customers. Similarly, a non-competition clause can prevent former employees and independent contractors from competing with the company.
Such clauses come in many different forms. Some may be enforceable and some may not. Courts generally do not like enforcing non-solicitation clauses in the context of employment agreements because they undermine free trade and the individual’s liberty when it comes to seeking out and securing employment. Further, employees are often in an unequal bargaining position when it comes to negotiating terms of employment, firstly because they need income and secondly because they may be less sophisticated and have less access to legal advice than their employer when it comes to negotiating contracts. Nevertheless, employees and employers have the freedom to enter into contracts openly and without the interference of the courts, and their agreements must be enforced when they are both reasonable and they represent the will of the parties.
When determining whether a non-solicitation clause is valid, a court will ask the following question: “is the non-solicitation clause a reasonable restriction?” In order to determine whether the clause is reasonable, the courts will look at various factors such as (1) whether the employer has a proprietary interest that ought to be protected; (2) the geographic scope of the restriction as well its duration; and (3) the restrictiveness of the clause or the extent to which the restricted party’s actions are limited under the clause. That is, whether the clause prohibits competition generally or limited to preventing solicitation of clients by the former employee.
The larger the geographic scope of the clause, the less likely it will be upheld by the courts. For example, a clause that seeks to prevent solicitation of any and all clients or competition throughout the Province of Ontario will be less likely to be upheld than one that prevents solicitation or competition in the City of Toronto. In addition, the longer the duration of the restriction, the less likely a court will uphold it. Finally, the more restrictive the clause is in terms of conduct, the less likely it is to be upheld. In the context of non-solicitation clauses, this usually requires looking at which clients or potential clients cannot be solicited under the clause. If, for example, the clause prevents solicitation of “any and all past clients and potential clients,” it will not likely be upheld. Moreover, normally where a non-solicitation clause is sufficient to protect the former employer’s business interests, a non-competition clause would normally not be given weight.
Properly drafted non-solicitation clauses can be very useful in insulating employers from client ‘poaching’ by former employees, for example in situations where an employee leaves and takes a client with them.
Even if a non-solicitation clause is enforceable, however, these clauses have no power over the clients themselves who may personally seek out and transfer their business to whomever they like. As such, even a valid non-solicitation clause does not completely insulate an employer from the potential that they may lose clients to former employees or contractors. In industries where this is a big concern, it may be prudent to look into whether drafting a non-competition clause may be more appropriate. While non-competition clauses are more rarely enforced by the courts due to their more restrictive nature, they provide broader restrictions and can serve to protect employers from a broader range of competitive behaviour.
Finally, some employees are regarded as “fiduciaries” to their former employer. Such employees are normally highly placed in the corporate hierarchy (e.g. a CFO). In such cases, such employees could be prevented from engaging in competitive conduct even in the absence of an agreement with the type of clauses discussed above. This is because fiduciary employees are not “mere employees” in that they normally have access to significant confidential information and are able to exercise decisions of significance on behalf of their employer thereby making their employer vulnerable.
My boss has told me that management can no longer keep me at my current position. However, he did say that I could stay with the company if I take a new position but at a much lower rate of pay. Do I have to accept this new position?
The short answer is that, no, you do not have to accept the new position. This is because it may be construed as a “demotion” and possibly constructive dismissal which in turn would entitle you to notice or pay in lieu of notice under the Employment Standards Act and/or the common law.
To constitute constructive dismissal, the demotion must fundamentally alter the terms of your employment. Generally, a significant pay cut or a substantial reduction in management or supervisory duties will go a long way in showing that an employer altered the fundamental terms of the employment contract. When deciding on the issue of constructive dismissal, the court will embark on a two-part test: (1) the court must determine whether there has been a breach of an express or implied term of the employment contract; and (2) whether the breach occurred with respect to a fundamental term of the employment contract. Some cases are clearer than others.
If you believe that you have been demoted and you do not agree to the terms of your new employment, it is extremely important that you make it clear to your employer that you do not accept the demotion (preferably in writing). If an employee is demoted and that employee accepts working at a different position, after a certain length of time the courts will treat the employee’s conduct as an acceptance of the new terms of the employment contract in place of the old. When this occurs, the employee will have been deemed to “acquiesce” to the new terms of the contract, thereby disentitling them from treating the ostensible demotion as constructive dismissal. If, however, you communicate your disagreement with the new employment terms, you could potentially sue for constructive dismissal after consulting with your lawyer.
On a final note, you should know that employees in Ontario are expected to “mitigate” their losses by looking for alternative employment. This means that, sometimes, an employee would actually have to accept the demotion if it would be reasonable to do so. The analysis in such a case is fact-specific and context-based.
There are a number of avenues for addressing harassment in the workplace. When you’re facing harassment by someone you work with, the first step is usually to speak to someone higher up with the power and authority to properly address the matter, such as a manager or the owner. Companies are required to have policies for addressing harassment in the workplace. If you work for a company that has a written harassment policy, it will usually set out the procedure for making a harassment complaint, in which case you can defer to that so as long as it is compliant with the law. Bigger companies usually have a Human Resources representative that is specifically charged with dealing with these matters. It’s always good to try internal means of addressing harassment before turning to the courts, firstly because these issues are treated very seriously by employers and will usually be resolved and; secondly, because making these complaints creates a paper trail which you can later refer to if things are not appropriately resolved by the employer.
Once all internal means of addressing harassment have been exhausted, you can proceed to retain legal counsel to determine whether it is appropriate to address your specific matter by way of the Ministry of Labour, the Human Rights Tribunal of Ontario or through the courts. The Human Rights Tribunal of Ontario (“HRTO”) has the jurisdiction to hear complaints and award damages arising out of harassment based on any of the prohibited discriminatory grounds set out under Ontario’s Human Rights Code. The Human Rights Legal Support Centre can offer guidance for individuals who may have questions about whether their matter falls within the HRTO’s jurisdiction, and about remedies, the HRTO may award. The Ministry of Labour is tasked with protecting employees from harassment on the job under the Occupational Health and Safety Act.
Finally, you can sue your employer for monetary damages for a variety of damages resulting from harassment, which can include: intentional infliction of mental distress, battery and negligence, constructive dismissal. If the conduct is egregious enough, you can sue for punitive damages in order to punish the employer.
Courts have accepted that termination arises in situations where an employee is subjected to a toxic environment. In GM of Canada Ltd. v. Johnson 2013, the Court of Appeal found that an employee can sue for constructive dismissal where the workplace becomes poisoned as a result of “serious wrongful behaviour.” There exists no clear line as to when an employer’s harassing conduct will result in constructive dismissal. It is worth saying, however, that the onus is high on an employee to establish that they were dismissed as a result of a “toxic environment.” The employee must establish evidence that “to the objective reasonable bystander, would support the conclusion that a poisoned workplace environment had been created.” The employee must establish that the employer’s conduct interfered with the performance of the employee’s duties.
My employer claims that I am an independent contractor but I don’t think they are right; can I do something about it?
The general question a court must answer to determine the nature of the relationship is whether the person who has engaged himself to perform these services performing them as a person in business on his own account.
Generally, courts look at the substance of the relationship with reference to factors that are indicative of the relationship. These factors include (1) the degree to which the employer/principal controls the activities of the worker/independent contractor; (2) whether the employee/independent contractor owns the equipment; (3) the degree of ownership of equipment by the employee/independent contractor; (4) whether the employee/independent contractor operates under a chance for profit or under risk of loss; (5) whether the employee/contractor has an office on the business premises of the employer and forms an integral part of the day-to-day business operations.
Why does it matter?
The Employment Standards Act (“ESA”) provides certain protections and minimum entitlements for employees in Ontario such as: minimum wages, entitlements to overtime pay, vacation time, leaves of absence, termination pay and severance. In order to qualify for these protections, however, one must be an “employee” under the law. Independent contractors are exempt from the ESA because, in theory, independent contractors are less reliant on a single employer and therefore do not need the same kind of protection. Independent contractors are in business for themselves—they can hire and fire their own employees, pick their own jobs and control the amount of work they have. The employer-employee relationship, however, is typically marked by a power imbalance. Usually, employees rely on a single employer for their livelihood. Employers are generally more sophisticated when it comes to legal matters—they have more resources at their disposal to seek competent legal advice and they usually do not rely on any single employee to a significant extent. If your employment relationship is marked by such a power imbalance, it will be more advisable to be classified as an employee to have access to the protections under the ESA.
Moreover, employees, inappropriately characterized as “independent contractors,” may be entitled to reasonable notice or pay in lieu thereof at common law in the event of termination. The difference in compensation can be substantial and is worth exploring. In fact, because of the potential implications of mischaracterizing one’s status, the law has even carved out an intermediate category known as a “dependent contractor” in an effort to protect the rights of individuals who fall somewhere in between the two categories but who have a level of economic dependence.
In other circumstances, it may be more favourable to be regarded as an independent contractor, for example, due to taxation reasons. Prior to going down this route, however, it is necessary to talk to a lawyer to avoid potential liability down the road. Ultimately, the law cares for the true essence of the relationship and not how you choose to characterize yourself.
Employers in Ontario are legally obligated to give their employees working notice or pay in lieu of notice to afford the terminated employee an opportunity to secure alternate means of supporting themselves before they’ve lost their income. If an employer alleges just cause for termination, however, they are not required to provide any notice or pay to the employee whatsoever. Further, employees are not eligible for Employment Insurance if they’re fired for cause. Because of the seriousness of being terminated for cause and the drastic implications it has for an individual’s financial well-being, courts place a high burden on employers for establishing just cause for termination. Below are some of the common reasons employees are dismissed for just cause.
Misconduct can include a variety of activities that injure the employer’s business or reputation including: criminal activities, disobedience, sexual harassment and absence or lateness. Not all conduct, however, will warrant termination. To warrant dismissal, the misconduct must result in a serious deterioration in the employment relationship of the parties or must be of a degree and nature that is fundamentally inconsistent with the express or implied conditions of the employment relationship.
There is no hard-and-fast rule as to what kind of misconduct warrants dismissal. In analyzing the issue, courts will look at the nature and frequency of the misconduct, the employee’s tenure and track record with the employer, the employee’s duties and responsibilities, and the impact that the misconduct has on the employment relationship and on the employer’s business.
Dishonesty is a specific form of misconduct that commonly arises in just-cause dismissal cases. Dishonesty can be as innocuous as calling in sick when you’re not, or as severe as fraud or misappropriation of funds. Determining whether dishonesty justifies dismissal for cause involves a fact-specific analysis, with reference to the duties and responsibilities of a position, the essential terms of the employment contract, and the consequences of the act(s) of dishonesty on the employment relationship and on the employer’s business interests. Generally, dishonesty will warrant dismissal for cause when it gives rise to a breakdown in the employment relationship by violating essential conditions or by breaching the good faith inherent in the work relationship, or, by being fundamentally inconsistent with the obligations of the employer.
INCAPABILITY OF PERFORMING WORK OR INCOMPETENCE
An employee can be fired due to incompetence. In order to warrant dismissal for cause, the incompetence must be both substantial and persistent in the face of multiple warnings. In certain circumstances, however, serious incompetence can justify sudden dismissal for cause when, for example, the incompetence causes a danger to the public.
In cases of chronic incompetence, the employer must issue clear warnings which outline the specific inadequacies and the possibility for termination if the employee fails to improve. The employer’s expectations must be reasonable and the employee must be given an opportunity to improve their performance.
WHAT CAN YOU DO ABOUT IT?
Being terminated for “just cause” can have serious implications for your legal rights and your future career. Not only does a just cause termination disentitle you from severance pay, termination pay and Employment Insurance, but it can later interfere with your ability to find work. As such, if you have been terminated for just cause, it is very important to speak to a lawyer. It is important to realize that the mere fact that an employer has terminated you “for cause” does not mean that they were right to do so. In fact, it is often the case that your employer may have alleged just cause wrongfully and inappropriately which means that you may have grounds to seek redress in the form of substantial compensation.