Canadian Employment & Pension Law

An aging workforce: the risks associated with succession and transitional planning

Stikeman Elliott LLP — Mon, 13 May 2013 08:50:32 -0500

Gary Clarke and Brandon Mewhort -

Succession and transitional planning is an important and necessary process in any organization, especially where a significant number of employees are nearing retirement. However, employers must be aware of the risks associated with their succession and transition plans, particularly where employees at or near retirement wish to continue working. Cowling v. Alberta Employment and Immigration, a recent decision of the Human Rights Tribunal of Alberta (the Tribunal), serves as a good reminder of those risks.

In Cowling, the complainant, a 67 year old labour relations officer (LRO) that had been employed by the Department of Human Services for 8 consecutive years on a series of contracts alleged that she was denied continuing employment and discriminated against due to her age. She had been notified approximately 1 year prior to the expiry of her latest contract that it would not be renewed. The reason given by the employer was that it planned to restructure the position she held, downgrading it a level from LRO 3 to LRO 2.

When the competition for the LRO 2 position opened, the complainant applied and was interviewed, but she was not successful, and neither were the other 110 applicants. Shortly after the unsuccessful LRO 2 competition, and after her contract expired, the employer redefined the LRO 3 position again, this time as labour relations advisor, a management position that was materially the same as the position that she had held for 8 years. In the staffing request for the LRO 3 position, the complainant’s name was even included as the previous incumbent. The complainant was aware of and could have applied for the job, but, due to confusion regarding the closing date, she did not.

After reviewing the evidence, the Tribunal held, among other things, that it was reasonable to infer that age was a factor in the denial of her continued employment, given the circumstances surrounding the employer’s restructuring and the non-renewal of her contract after 8 years of exemplary service. The Tribunal further held that, while succession and transitional planning is generally a legitimate and necessary process in any organization, it did not, in these circumstances, provide a credible explanation for the denial of her continued employment.

After concluding that the evidence strongly supported a finding of age discrimination, the Tribunal ordered that she be reinstated, and that she be paid 5 years’ of lost wages at a discounted rate, together with general damages of $15,000, interest and costs.

Our view:

This case illustrates how serious the consequences can be for employers that do not properly manage their succession and transition plans, particularly where employees at or near retirement wish to continue working. In order to avoid claims, employers must ensure that their plans and policies respect the rights of such employees, as well as their obligations pursuant to human rights legislation.

Employer's tax equalization policy for international employees continues past retirement

Stikeman Elliott LLP — Fri, 10 May 2013 16:03:13 -0500

Lyle Teichman -

In a recent decision, the Ontario Superior Court of Justice (Court) held that deferred compensation amounts paid to a retired executive employee were properly characterized as employment income and subject to the employer’s tax equalization policy (Hypo-tax Policy), even though the recipient was no longer an employee. (An appeal from the decision of the Court was dismissed by the Ontario Court of Appeal in April 2012.) Under the Hypo-tax Policy, the employer reduced the remuneration paid to eligible expatriate employees to reflect the taxes that would have been payable if the employee were a Canadian resident during the year. This case provides support to employers that maintain tax equalization policies for expatriate employees and continue to apply the policy to payments of deferred compensation made after the employment ceases.

In Louis Ivandic v Scotiabank, the former employee (Mr. Ivandic) was a retired banker. He commenced employment with Scotiabank in Canada in 1983 and in 1989 he assumed the role of the bank’s senior representative in Brazil. He became a non-resident of Canada in 1990. He then assumed senior roles with Scotiabank in different countries in Latin America eventually retiring from Scotiabank in 1990 in Peru. From the time of his departure from Canada, the bank subjected his salary to its Hypo-tax Policy, which was a mandatory term of the employment contract with Scotiabank’s senior expatriate employees. Under the policy, an expatriate employee’s remuneration is reduced in accordance with what would have been the taxes payable if the employee had remained a tax resident of Canada during the period in question. The bank then pays the employee’s actual tax obligation in the country in which the employee is assigned in accordance with the tax laws of that country. The Hypo-tax Policy is intended to equalize the taxes payable by expatriate employees relative to the taxes that would have been payable if he/she remained a Canadian resident, and to make foreign assignments with the bank monetarily neutral in the countries where the bank operates. The Hypo-tax Policy effectively eliminates any income tax benefits or barriers that might come into play in an expatriate employee’s decision to accept an international posting. The Hypo-tax was calculated annually by Ernst & Young.

In a 2006 letter setting out the terms of his assignment in Peru, Scotiabank advised Ivandic that the Hypo-tax Policy would be applied to his base salary, bonus and any stock-based compensation. Following his retirement in 2010, the bank continued to levy hypo-tax on all payments made to him (other than pension payments). Hypo-tax was therefore withheld from payments made after retirement under four deferred compensation programs in which he participated while a senior employee: stock appreciation rights (SARs), restricted share units (RSUs), performance share units (PSUs) and deferred share units (DSUs). From his retirement in May 2010 to July 2011, the bank withheld almost $900,000 in hypo-tax.

Mr. Ivandic claimed the hypo-tax policy did not apply to payments made to him by the bank after retirement, and that it would be unfair to apply the hypo-tax regime to his deferred compensation payments after he had retired from the bank. He asserted that that his contract of employment did not provide for payments made after retirement to be subjected to the Hypo-tax Policy, and that it breached his privacy rights for the bank to be privy to his personal retirement income circumstances after he ceased to be an employee for the purposes of calculating the hypo-tax.

The Court held, on an application for summary judgment, that the post-retirement deferred compensation payments received by Ivandic had their source in his prior employment with Scotiabank, and under Canadian tax law the deferred compensation amounts are properly characterized as employment income, notwithstanding that he is now retired from the bank. Under the Income Tax Act (Canada), it is the source of the payment, not the status of the recipent, that determines the characterization of the payment for tax purposes, and employment income amounts paid after the employment has ended continue to maintain their character. The Court further found that that Ivandic was contractually bound to the Hypo-tax Policy on his salary and deferred compensation payments as a condition of his employment as an expatriate executive employee. As a result, the Court held that the payments under the four stock-based deferred compensation plans retain their character as employment income and as such are subject to hypo-tax under his contract of employment.

In obiter comments, the Court noted that the application of the bank’s Hypo-tax Policy does not violate the employee’s privacy rights as the tax returns are prepared by a professional accounting firm on a confidential basis and the accounting firm only informs the bank of the amounts it is required to pay as tax to the country of residence and the amount of hypo-tax required to be withheld.

Comments

This case shows the importance of clear documentation and communication to support the application of tax equalization policies to amounts paid after the employment relationship has ended. Where it can be demonstrated that the tax equalization policy is a condition of employment, the court will support the application of tax equalization policies to employment-sourced payments made after retirement or termination of employment. This case is also interesting in that the Court was not influenced in its analysis by the fact that the bank could (and in the case of Mr Ivandic did) receive a cash windfall on the application of the Hypo-tax Policy.

Surplus Sharing Arrangement goes sour after Meilleur Avant date

Stikeman Elliott LLP — Wed, 08 May 2013 13:52:19 -0500

Lyle Teichman -

A recent decision of the Ontario Superior Court (Court) illustrates complexities that can arise where a pension plan is partially wound up, triggering a requirement to settle surplus entitlements on the partial wind-up, and the surplus subsequently vanishes.

In Kidd v. The Canada Life Assurance Company et al, Canada Life had declared a partial wind-up of the Canada Life Canadian Pension Plan (Plan) in 2003 in relation to members who were terminated or retired as a result of the integration of Canada Life and Great West Life Assurance Company (the Integration Group). The Integration Group had commenced a class to determine, amongst other issues, the ownership of surplus on a partial windup of the Plan. The parties settled the action and under the terms of settlement Canada Life agreed to distribute approximately 70% of the estimated partial wind-up surplus to, amongst others, the Integration Group. The Integration Group members were informed that their estimated share of the surplus was worth approximately $55 million. As part of the settlement, Canada Life would in effect restart its pension plan under a new trust (the Ongoing Plan), which would receive the assets from the wound-up portion of the Plan. The plaintiffs in the class action and Canada Life successfully campaigned to secure the support of the class members for the proposed settlement and the settlement was ultimately approved by the court (the Approved Settlement). Class counsel was to receive approximately $5 million in fees and disbursements under the Approved Settlement.

After the Approved Settlement received court approval, the partial wind-up surplus diminished significantly due to falling interest rates and a greater than anticipated number of partial wind-up members who chose (or were deemed to have chosen) an annuity. As a further complication, the annuity market in Canada had effectively shut down and annuities were not available to be purchased. By August 31, 2012, the partial wind-up surplus was $2.6 million (i.e., Integration Group’s share was $1.8 million).

As a result of the changed circumstances, the parties commenced discussions aimed at amending the Approved Settlement. Also, as Canada Life was unable to solicit bids for annuities on the partial wind-up, it proposed to unilaterally transfer the assets and liabilities of the Integration Group to the Ongoing Plan and proceed with the implementation of the Approved Settlement. The Integration Group objected to this unilateral action. The parties ultimately entered into court-facilitated mediation and agreed to amended terms of settlement (the Amended Settlement) under which:

Canada Life would fund top-up payments (at a cost of approx. $1.2 million) to ensure promised minimum surplus payments of $1,000 could be made;
Canada Life waived its right to receive a reimbursement of professional fees and interest on a reimbursement of expenses (estimated value $1.3 million);
The plaintiffs (and certain other members) waived their entitlement to reimbursement of future legal fees previously approved by the court (estimated at $200,000); and
The assets and liabilities for Integration Group members who elected to receive deferred or immediate pensions would be transferred to the Ongoing Plan. The assets and liabilities would be notionally segregated and if a surplus for the notionally segregated group exists as at December 31, 2014, there would be a second distribution to the Integration Group subject to certain conditions, including:
- 10% of the 2014 surplus would be deducted from the distribution amount and remain in the Ongoing Plan; and
- The potential second distribution to eligible Members would be capped at $15 million.

The Court was asked to approve the Amended Settlement. The essential question before the Court was whether the Amended Settlement was fair, reasonable and in the best interest of those affected by it. The Integration Group and Canada Life argued that the Amended Settlement met the test of fairness as the members of the Plan on the partial wind-up would receive more than they would have received under the terms of the Approved Settlement if it was implemented with the reduced surplus. In addition, they had the prospect of receiving additional amounts if the surplus position of the segregated portion of the Ongoing Plan rebounded by the end of 2014. A group of class members objected to the Amended Settlement essentially on the basis that Canada Life stood to gain disproportionately to the class members.

The Court held that the Amended Settlement did not meet the tests of fairness for several reasons, including:

It felt that a 70%/30% surplus split was not fair to the partial wind-up members in view of the diminished amount of surplus, particularly in circumstances where Canada Life stood to receive certain advantages under the Ongoing Plan (i.e., the right to claim 100% of any future surplus). Also, Canada Life would be in a position to economically recover the lost surplus if the surplus conditions right themselves.
The $15 million cap on the potential second surplus distribution unduly favoured Canada Life.
Since Canada Life had mounted a cross-country campaign to seek member approval of the Approved Settlement, the Court felt it had a “moral duty” to fully share in the disappointment over the circumstances of the Approved Settlement. In short, the Court felt that Canada Life was not sharing enough of the pain.
The Court felt that a December 31, 2014 re-calculation date to reassess the surplus position of the segregated assets/liabilities in the Ongoing Plan was too early to allow economic conditions to rebound, and a December 31, 2017 date would be a fairer date.
Class counsel received substantial amounts under the Approved Settlement and did not share adequately in the pain under the Amended Settlement.

Commentary

The court recognized it was in a “double bind” – it could either approve the Amended Settlement (which entailed a greatly reduced award of surplus to partial wind-up members but was monetarily greater that the amounts that would be available for distribution if it was rejected) or reject the Amended Settlement and force the parties to resume costly and protracted litigation over the greatly diminished surplus. Nevertheless, the court rejected the court-facilitated Amended Settlement as it felt the potential gains were unbalanced in favour of Canada Life.

This is an unfortunate case with no obvious winners in the outcome. This decision demonstrates that where parties to a surplus sharing arrangement are unable to implement the terms of the original arrangement due to greatly diminished surplus, the court will scrutinize the terms of any subsequent deal to ensure all parties (including counsel if necessary) share adequately in the pain and disappointment.

Hausse du salaire minimum pour les salariés du Québec

Stikeman Elliott LLP — Mon, 06 May 2013 12:12:12 -0500

Sylvie Thibault -

Depuis le 1^ermai 2013, le salaire minimum a été porté à 10,15 $ l’heure. Le taux horaire des employés à pourboire a quant à lui été majoré de 0,20 $ l'heure pour s'établir à 8,75 $. Avec cette hausse, le taux du salaire minimum du Québec demeure parmi les plus élevés parmi les provinces canadiennes.

La ministre a également annoncé certaines modifications à la compensation des travailleurs agricoles. Pour de plus amples renseignements, consultez le site www.cnt.gouv.qc.ca.

Rappelons que le salaire minimum est régi par la Loi sur les normes du travail (la LNT ) et le Règlement sur les normes du travail. Tout salarié visé par la LNT a droit de recevoir un salaire au moins équivalent au salaire minimum pour chaque heure travaillée, incluant les périodes « d’apprentissage », « d’initiation » ou « d’essai ». De plus, le salaire minimum doit être entièrement payé en espèces et aucun avantage ayant une valeur pécuniaire, tel qu’un logement ou accès à un véhicule automobile, ne doit entrer dans le calcul du salaire minimum.

Increase in minimum wage for Quebec workers

Stikeman Elliott LLP — Mon, 06 May 2013 12:02:04 -0500

Sylvie Thibault -

Since May 1st, 2013, the minimum wage has been increased to $10.15 per hour. The hourly wage of employees receiving tips has been increased by $0.20 per hour, bringing it to $8.75. As a result of this increase, Quebec's minimum wage rate is amongst one of the highest among the Canadian provinces.

The Minister also announced certain modifications to the compensation of agricultural workers. For additional information, consult the Board’s website www.cnt.gouv.qc.ca.

It is important to remember that the minimum wage is governed by the Labour Standards Act (the LSA) and the Regulation Respecting Labour Standards. An employee covered by the LSA is entitled to receive wages that are at least equal to the minimum wage for each hour worked, including training, initiation and trial periods. Moreover, the minimum wage must be paid fully and no benefit having pecuniary value may be taken into account in computing the minimum wage, such as lodging or the use of an automobile.

Bullying in the workplace - WorkSafeBC's new policies to take effect November 1, 2013

Stikeman Elliott LLP — Mon, 29 Apr 2013 08:35:55 -0500

Gary Clarke and Brandon Mewhort -

In 2012, Bill 14 (the Workers' Compensation Amendment Act, 2011) introduced amendments to British Columbia’s Workers’ Compensation Act (the WCA), to specifically address bullying and harassment in the workplace (see our blog post here). WorkSafeBC, which is tasked with the implementation of the WCA, has now approved three new Occupational Health and Safety Workplace Bullying and Harassment Policies (the Policies), which will take effect on November 1, 2013.

The Policies address the general duties of employers, employees, and supervisors regarding preventing and minimizing bullying and harassment in the workplace. WorkSafeBC defines bullying and harassment to include any inappropriate conduct or comment by a person towards a worker that the person knew or reasonably ought to have known would cause that worker to be humiliated or intimidated, but excludes any reasonable action taken by an employer or supervisor relating to the management and direction of workers or the place of employment.

WorkSafeBC also gives guidance to employers regarding what steps they can take to satisfy their obligations under the WCA with respect to bullying and harassment. It considers that reasonable steps that employers can take to prevent or minimize workplace bullying and harassment include:

developing a policy statement with respect to workplace bullying and harassment not being acceptable or tolerated;
developing and implementing procedures for workers to report incidents or complaints of workplace bullying and harassment including how, when and to whom a worker should report incidents or complaints;
developing and implementing procedures for how the employer will deal with incidents or complaints of workplace bullying and harassment; and
training supervisors and workers on recognizing the potential for bullying and harassment, responding to bullying and harassment, and procedures for reporting bullying and harassment.

In light of the amendments to the WCA and the approval of the Policies, employers should ensure that they are aware of their obligations with respect to workplace bullying and harassment, and that their policies and procedures reflect those obligations. Such policies and procedures will help to create and maintain a respectful working environment for employees, and they will also reduce the risk of claims for employers.

Plester v. PolyOne Canada Inc. Update: Serious safety violation is still not cause for termination

Stikeman Elliott LLP — Fri, 19 Apr 2013 08:42:49 -0500

Kelly O’Ferrall -

In a previous post, we discussed a decision which held that, PolyOne Canada Inc. (PolyOne), did not have just cause for terminating a senior employee who committed a safety violation and failed to report it, despite finding that the incident was very serious and could have resulted in harm to the employee. The Court of Appeal upheld this decision, although it disagreed, in part, with the basis for the lower court’s decision.

The safety violation, which you may recall from our previous post, was that a supervisor, John Plester, failed to lock-out a machine before attempting to fix it and then failed to report the violation, both of which were in breach of the employer’s safety policies. Even worse, Mr. Plester allegedly tried to convince his subordinates not to report the incident to his superiors.

Both the trial judge and the Court of Appeal agreed that, although the policy violation was very serious and a supervisor was subject to a higher standard than a line worker, Mr. Plester’s conduct did not amount to just cause for termination. This conclusion was based on the employee’s long-standing clean work record and the fact that the safety violation did not put other employees at risk. The Courts both rejected PolyOne’s argument that Mr. Plester’s behaviour amounted to a violation of the employer’s trust which was sufficiently serious to render a continued employment relationship impossible.

Where the trial judge and the Court of Appeal differed was on the significance of PolyOne’s response to a previous incident where an employee breached the same safety rule as the Mr. Plester but was not terminated by the employer (the Glassford Incident). Mr. Plester attempted to use the Glassford Incident to argue that the response in his case was disproportionate. The Court of Appeal stated that the Glassford Incident “cannot be used as a comparator and the trial judge erred in treating it as such”. The basis for this conclusion appeared to be that the employer only became aware of the Glassford Incident as a result of Mr. Plester’s action against PolyOne, although the Court of Appeal did not elaborate on this point.

Our Views

This case is a good reminder for employers to ask themselves two questions before terminating an employee for just cause. First, in view of the proportionality test, employers should ask what the employee’s track record looks like. The longer an employee has served without incident, the more egregious a single incident must be in order to justify a for-cause termination.

Second, employers should consider how they have dealt with other incidents of a similar nature in the past. Although in Plester v. PolyOne, the Court of Appeal decided that the Glassford Incident could not be used to support the employee’s argument that the termination was not justified, the trial judge and other cases relied on by the trial judge came to different conclusions, emphasizing the importance of past enforcement in cases such as these. Accordingly, it is important for employers not only to have clear written policies, those policies must be enforced on a consistent basis. Absent consistent enforcement, it will be difficult to rely on such policies in order to terminate an employee’s employment for just cause.

New Social Security Tribunal (SST) established to hear Employment Insurance appeals begins operations

Stikeman Elliott LLP — Tue, 16 Apr 2013 08:38:22 -0500

Will Hockin -

As of April 1, 2013, Bill C-38 (also known as the Jobs, Growth and Long-term Prosperity Act) modified the Employment Insurance (EI) appeals process. As opposed to the former appeals system, whereby appeals of EI Commission decisions were heard by boards of referees and then subsequently by umpires, appeals will now be heard by the Social Security Tribunal (SST), a new independent administrative tribunal at arm’s length from Human Resources and Skills Development Canada (HRSDC).

The SST, composed of 74 members (39 of whom will be dedicated to EI appeals), will include two levels of appeals. In particular:

A General Division (first level of appeal); and
An Appeal Division (second level of appeal) to decide appeals of decisions made by the General Division. To qualify for an Appeal Division hearing, a claimant will have to obtain leave (permission) unless their appeal was dismissed summarily by the General Division.

EI appeals filed on April 1, 2013 or thereafter will proceed to the SST, whereas appeals filed prior to this date will continue to proceed under the former system for a one year transitional period. Following this transition period, the SST will be the only body responsible for hearing first and second level EI appeals.

Notably, the SST will also be responsible for appeals relating to Canada Pension Plan (CPP) and Old Age Security (OAS) entitlements. Murielle Brazeau, Chairperson of the SST, states that the SST, “simplifies and streamlines the appeal processes by offering a single point of contact for submitting an appeal.” However, and with respect to EI appeals specifically, as the SST will eventually phase out the approximately 1000 part-time referees and 32 umpires under the former appeal system, it remains to be seen whether this simplification will come at the expense of expediency.

To learn more about the SST, click here.

Employee reinstated, awarded almost 10 years of back pay and other compensation by Ontario Human Rights Tribunal

Stikeman Elliott LLP — Tue, 09 Apr 2013 12:39:34 -0500

Will Hockin and Mari Maimets -

Over a year after its decision holding the Hamilton-Wentworth District School Board (the School Board) liable for discriminating against former employee Sharon Fair (Ms. Fair) by failing to accommodate her post traumatic stress disorder (PTSD) and terminating her employment, the Human Rights Tribunal of Ontario (HRTO) has ordered the School Board to reinstate Ms. Fair and pay her an amount equal to nearly 10 years’ worth of back pay and benefits. The School Board was also ordered to pay $30,000 to Ms. Fair as compensation for injury to her dignity, feelings and self-respect.

Liability of the School Board

Ms. Fair had been employed with the School Board for approximately 16 years when she was terminated in July 2004. Starting in 1994, she acted as Supervisor, Regulated Substances, Asbestos, a position which she held until her termination. In 2001, she developed a generalized anxiety disorder resulting from the highly stressful nature of her job and her particular fear that she would be held personally liable for a breach of Ontario’s Occupational Health and Safety Act (the OHSA) if she made a mistake in her duties relating to asbestos removal. She was hospitalized for a time, diagnosed with PTSD and depression, and later received long-term disability (LTD) benefits.

Approximately two years later, and following an assessment determining that Ms. Fair was capable of gainful employment, her LTD benefits ceased. While medical documentation established that Ms. Fair was not totally disabled, there was, however, some ambiguity as to whether she could fill a position in which there was a risk of personal liability under the OHSA. As the School Board was of the view that all supervisory or comparable positions involved some risk of personal liability, it took the position that Ms. Fair could not perform the essential duties of her position and could not be accommodated. She was terminated shortly thereafter. Ms. Fair subsequently filed an application with the Ontario Human Rights Commission (the Commission) (which prior to 2008 was the government body responsible for dealing with human rights complaints) alleging that the School Board failed to accommodate her PTSD and terminated her employment as a result.

While Ms. Fair’s application was filed in November 2004, the Commission had not dealt with the matter for some 4 years. In 2009 Ms. Fair filed a fresh application with the HRTO pursuant to the transitional application rules then in effect. A decision in the matter was ultimately not released by the HRTO until February 2012. In its decision, the HRTO acknowledged that while there was some ambiguity as to whether Ms. Fair could fill positions involving personal liability, it held that once it was established that Ms. Fair was capable of gainful employment it was incumbent on the School Board to clarify this ambiguity and work with Ms. Fair to determine what risk of liability she could accept. The School Board was aware of Ms. Fair’s limitations and it did not canvass possible solutions for her accommodation needs. It was also held that although Ms. Fair could have been a supervisor in a position other than asbestos removal, the School Board’s Controller had refused to discuss alternate positions she might fill, and as a result, she was not considered for appropriate work opportunities. The School Board also rejected Ms. Fair’s application for a posted supervisor position in June 2003, a position for which she was qualified.

While the decision established the liability of the School Board, the HRTO did not rule on the appropriate remedy. Instead, it was decided that a further hearing would be held if the parties were unable to agree in this regard.

Remedial Measures

As the parties failed to reach such an agreement, on March 14, 2013 the HRTO issued its remedial decision and ordered the School Board to take a number of significant actions, including the following:

To reinstate Ms. Fair to suitable alternative employment and adjust her length of seniority accordingly;
To pay her the amount of the full-time wages she would have earned (with the exception of any income and non-repayable benefits she actually received from that date) from June 26, 2003 (the date the supervisor position was posted) until the date of reinstatement;
To pay her pension contributions to the Ontario Municipal Employees Retirement System and to the Canada Pension Plan (or compensate her for any losses arising from lost contribution years) as if she had been employed throughout the period;
To pay for out-of-pocket medical and dental expenses which would have been covered by her benefit plans had she been accommodated and to compensate Ms. Fair for the adverse tax consequences of receiving almost 10 years of pay in one lump sum; and
To pay Ms. Fair $30,000 as compensation for the injury to her dignity, feelings and self-respect.

Pre and post-judgment interest was also awarded on the damages ordered. Regarding pre-judgment interest specifically, such interest was notably awarded from the date of the complaint even though awarded amounts would have been paid out over time and were not due and payable at the time Ms. Fair’s application was filed. While the School Board argued that a reinstatement order would be unfair in light of the time that had elapsed since Ms. Fair’s termination, the HRTO noted that Ms. Fair submitted her original application in a timely way and had since consistently sought reinstatement and that the delay in proceedings was largely attributable to the Commission and not Ms. Fair. The HRTO’s determination that reinstatement was preferred was also influenced by the following holdings: (i) that Ms. Fair would have continued to be employed by the School Board had she not been terminated and the purpose of human rights legislation is to make a complainant “whole”; (ii) that Ms. Fair was still capable of full-time employment at the School Board; and last (iii) there was no animosity between Ms. Fair and the School Board and those individuals responsible for her termination no longer worked at the School Board.

With respect to its award for lost wages and benefits, the HRTO justified its order by referring to the general principle holding that the purpose of compensation is to restore a complainant as far as is reasonably possible to the position they would have been in had the discrimination not occurred. This general principle applied despite the fact that almost 10 years had passed since Ms. Fair’s termination. The HRTO was also satisfied that Ms. Fair had made sufficient efforts to mitigate her losses following her termination, as she obtained alternative part-time employment and continued to look for a full-time position.

While Ms. Fair also claimed for compensation relating to the loss of the spousal life insurance plan that ended on her termination, the HRTO noted that Ms. Fair’s spouse had since developed serious medical issues which would affect the premium of such insurance upon her reinstatement. It was held that this loss was too speculative and, in any event, she failed to mitigate this loss by purchasing other insurance following her termination.

Our Views

This case illustrates how serious the consequences can be for employers who do not take seriously their duty to accommodate employees with disabilities, particularly in cases where reinstatement is sought and remains a viable option. The HRTO will not hesitate to issue significant damages awards if it deems such awards necessary to properly address discriminatory conduct on the part of an employer. Further, the decision also serves as a reminder that accommodation obligations under the Human Rights Code are a two-way street, and that even in the face of ambiguous medical documentation an employer should take steps to clarify an employee’s restrictions and limitations.

New statutory leaves proposed by Minister of Labour

Stikeman Elliott LLP — Mon, 08 Apr 2013 15:11:09 -0500

Kathleen Chevalier -

Ontario’s new Minister of Labour, Yasir Naqvi, recently tabled Bill 21, the Employment Standards Amendment Act (Leaves to Help Families), 2013. If passed, Bill 21 would entitle provincially regulated Ontario employees to 3 new job-protected leaves: Family Caregiver Leave; Critically Ill Child Care Leave; and Crime-Related Child Death and Disappearance Leave. As their names suggest, each of these leaves are intended to assist employees by protecting their job security while on leave due to family demands or crises.

As previously discussed, in 2011 the Government introduced Bill 30, which contained amendments similar to the proposed Family Caregiver Leave. However, Bill 30 fell victim to the prorogation of the Ontario legislature in October 2012. The leaves of absence set out in Bill 21 are in addition to Family Medical Leave, available when an employee’s family member has a serious medical condition with a significant risk of death occurring within 26 weeks.

Family Caregiver Leave

Employees that need to provide care and support to a family member with a serious medical condition would be entitled to up to 8 weeks of unpaid leave. A “family member” is defined as:

a parent, step-parent or foster parent of the employee or the employee’s spouse;
a child, step-child or foster child of the employee or the employee’s spouse;
a grand-parent, step-grandparent, grandchild or step-grandchild of the employee or the employee’s spouse;
the spouse of a child of the employee;
the employee’s brother or sister;
a relative of the employee who is dependent on the employee for care or assistance; and
any individual prescribed as a family member.

If requested by the employer, an employee must provide a certificate issued by a qualified health practitioner stating that the family member has a “serious medical condition.” The leave must be taken in full weeks, and requests must be presented to the employer in writing.

Critically Ill Child Care Leave

Individuals that have been employed for at least 6 consecutive months will be entitled to up to 37 weeks of unpaid leave, taken in full weeks of a single period or 2 or more periods that together do not exceed the entitlement, to provide care or support to their critically ill child. Bill 21’s definition of a “critically ill child” was adopted from the Employment Insurance Act, but expanded to include step-children and foster children, and children that are critically ill as a result of an injury. Employers must be advised of an employee’s intention to take this leave in writing, and a medical certificate attesting to the illness of the child and outlining the period during which the child requires care or support must be issued by a qualified health practitioner and provided to the employer.

Crime-Related Child Death and Disappearance Leave

Employees who have been employed for at least 6 consecutive months and are parents to a child who disappeared as a result of a crime will be entitled to up to 52 weeks of unpaid leave. Where it is probable, considering the circumstances, that an employee’s child died as a result of a crime, the employee will be entitled to 104 weeks of unpaid leave. Bill 21 defines “child” as a child, step-child or foster child less than 18 years of age; and “crime” as an offence under the Criminal Code, other than an excluded offence as prescribed by the regulations made under paragraph 209.4(f) of Canada Labour Code. Where the employee is charged with the crime, or where it is probable, considering the circumstances, that the child was a party to the crime, the employee will not be entitled to the leave. An employee who wishes to take this leave must advise his or her employer in writing and provide a written plan that indicates the weeks that will constitute the absence. This leave may be taken in a single period.

Our views

If passed, Bill 21 will significantly expand family leave entitlements under the Employment Standards Act, 2000 which currently only provides 10 days of Personal Emergency Leave and 8 weeks of Family Medical Leave. We will provide further updates on Bill 21 as it progresses through the process.