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Difference between revisions of "Employment Law Issues (9:V)"
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Employment Law Issues (9:V) (view source)
Revision as of 04:31, 15 November 2016
, 04:31, 15 November 2016→C. Termination of Employment
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If the employer fails to give the employee reasonable notice or pay in lieu, this would constitute a breach of the employment contract by the employer, and the employee could sue the employer in Small Claims Court or BC Supreme Court. This is commonly called a wrongful dismissal claim. | If the employer fails to give the employee reasonable notice or pay in lieu, this would constitute a breach of the employment contract by the employer, and the employee could sue the employer in Small Claims Court or BC Supreme Court. This is commonly called a wrongful dismissal claim. | ||
Generally, common law | Generally, the notice periods recognized at common law tend to be larger awards than the statutory minimum. | ||
There are many potential issues involved if an employee is terminated. The below checklist and the information in this section of the chapter merely provide a starting point for further legal research. | There are many potential issues involved if an employee is terminated. The below checklist and the information in this section of the chapter merely provide a starting point for further legal research. | ||
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*If the worker was dismissed at the end of a fixed-term contract of employment, then their contract has simply been completed and there is generally no further entitlement to severance pay (unless their contract specifies otherwise). | *If the worker was dismissed at the end of a fixed-term contract of employment, then their contract has simply been completed and there is generally no further entitlement to severance pay (unless their contract specifies otherwise). | ||
☑ Determine whether the worker was dismissed or if they resigned. Sometimes a worker may have been forced to resign or may have had their pay or working conditions changed significantly; see Section V.C. Termination of Employment to determine whether your situation would be considered a constructive dismissal or a resignation. | ☑ Determine whether the worker was dismissed or if they resigned. Sometimes a worker may have been forced to resign or may have had their pay or working conditions changed significantly; see '''Section V.C. Termination of Employment''' to determine whether your situation would be considered a constructive dismissal or a resignation. | ||
*If the worker was dismissed, continue to the next step of the checklist. | *If the worker was dismissed, continue to the next step of the checklist. | ||
*If the worker voluntarily resigned, they are generally not entitled to severance pay (unless their contract specifies otherwise). | *If the worker voluntarily resigned, they are generally not entitled to severance pay (unless their contract specifies otherwise). | ||
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As discussed earlier, the employer-employee relationship is contractual. Every employee has an employment contract, even if a written document does not exist. | As discussed earlier, the employer-employee relationship is contractual. Every employee has an employment contract, even if a written document does not exist. | ||
Most employment contracts are contracts of indefinite hiring. This means that no definite term of employment was set out at the time of the contract, and there is an implied term that either party may terminate the contract upon giving “reasonable notice”. The implied term to give reasonable notice can be overridden by an express notice provision limiting the amount of notice the employer is obligated to give the employee. Accordingly the courts will assume that an employee should receive “reasonable notice” prior to termination unless the contract explicitly says something different. If there is an express notice provision in the employment contract, then that clause is binding, unless there is a reason for it to be invalid (see Section V.C.2(c) and (d) Invalid Contracts, below). | Most employment contracts are contracts of indefinite hiring. This means that no definite term of employment was set out at the time of the contract, and there is an implied term that either party may terminate the contract upon giving “reasonable notice”. The implied term to give reasonable notice can be overridden by an express notice provision limiting the amount of notice the employer is obligated to give the employee. Accordingly the courts will assume that an employee should receive “reasonable notice” prior to termination unless the contract explicitly says something different. If there is an express notice provision in the employment contract, then that clause is binding, unless there is a reason for it to be invalid (see '''Section V.C.2(c) and (d) Invalid Contracts''', below). | ||
If reasonable notice is not given, then the contract is breached, and courts can award damages in the form of compensation that would have been paid during that reasonable notice period. However, if there is just cause for dismissing an employee, no damages need be paid, and no notice need be given. Note that any wage claims that crystallized before the termination of the contract are not eliminated by just cause for dismissal. Just cause only relieves the employer from notice and severance pay requirements, but not liability for past wages, etc. | If reasonable notice is not given, then the contract is breached, and courts can award damages in the form of compensation that would have been paid during that reasonable notice period. However, if there is just cause for dismissing an employee, no damages need be paid, and no notice need be given. | ||
Note that any wage claims that crystallized before the termination of the contract are not eliminated by just cause for dismissal. Just cause only relieves the employer from notice and severance pay requirements, but not liability for past wages, etc. | |||
==== a) Successive or Expired Fixed Term Contracts ==== | ==== a) Successive or Expired Fixed Term Contracts ==== | ||
If an employee had successive fixed term contracts, the courts may find there is in fact an indefinite term of employment; see ''Ceccol v Ontario Gymnastic Federation'' (2001), 55 OR (3d) 614. If there was a fixed term contract and the employee continued to work after the term’s expiration, the contract then becomes an indefinite contract. If the employee had an indefinite contract, but then signed a fixed-term contract, determine whether the new contract is valid; see Section V.C.2(c) and (d) Invalid Contracts, below. | If an employee had successive fixed term contracts, the courts may find there is in fact an indefinite term of employment; see ''Ceccol v Ontario Gymnastic Federation'' (2001), 55 OR (3d) 614. | ||
If there was a fixed term contract and the employee continued to work after the term’s expiration, the contract then becomes an indefinite contract. If the employee had an indefinite contract, but then signed a fixed-term contract, determine whether the new contract is valid; see '''Section V.C.2(c) and (d) Invalid Contracts''', below. | |||
==== b) Consideration ==== | ==== b) Consideration ==== | ||
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==== d) Invalid Contracts – Contrary to ESA ==== | ==== d) Invalid Contracts – Contrary to ESA ==== | ||
Any term of the written contract that does not meet the minimum standards set out by the ''Employment Standards Act'' (for provincially regulated employees) or the ''Canada Labour Code'' (for federally regulated employees) is invalid. | Any term of the written contract that does not meet the minimum standards set out by the ''Employment Standards Act'' (for provincially regulated employees) or the ''Canada Labour Code'' (for federally regulated employees) is invalid. A contractual termination clause is not enforceable if, at any time, the clause would provide the employee with less than his entitlement under the ''ESA''. See ''Shore v Ladner Downs'', [1998] 5160 DLR (4th) 76. | ||
If a term of the contract is invalid, then the employee will likely receive whatever the common law provides instead of what the contract said. | If a term of the contract is invalid, then the employee will likely receive whatever the common law provides instead of what the contract said. | ||
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In the absence of a valid termination clause in an employment contract, the employee is entitled to reasonable notice of dismissal at common law. The amount of reasonable notice, or pay in lieu, should be sufficient to allow the employee to find comparable employment, based on the employee’s age, length of service, and the nature of the employee’s position. | In the absence of a valid termination clause in an employment contract, the employee is entitled to reasonable notice of dismissal at common law. The amount of reasonable notice, or pay in lieu, should be sufficient to allow the employee to find comparable employment, based on the employee’s age, length of service, and the nature of the employee’s position. | ||
The case of ''Bardal v Globe and Mail Ltd'' (1960), 24 DLR (2d) 140 (Ont HCJ) includes a list of the four primary factors to be considered in determining the appropriate length of a notice period: i) character of the employment; ii) the length of service; iii) the age of the employee; and iv) the availability of similar employment, having regard to the experience, training and qualifications of the employee. These are known as the Bardal factors. The current upper limit of “reasonable notice” is 24 months, generally for the most long tenured, older, and senior level employees. | The case of ''Bardal v Globe and Mail Ltd'' (1960), 24 DLR (2d) 140 (Ont HCJ) includes a list of the four primary factors to be considered in determining the appropriate length of a notice period: | ||
i) character of the employment; | |||
ii) the length of service; | |||
iii) the age of the employee; and | |||
iv) the availability of similar employment, having regard to the experience, training and qualifications of the employee. | |||
These are known as the Bardal factors. The current upper limit of “reasonable notice” is 24 months, generally for the most long tenured, older, and senior level employees. | |||
The Supreme Court has endorsed this list in a number of cases; see e.g. ''Honda Canada Inc v Keays'', 2008 SCC 39, 2 SCR 362. | The Supreme Court has endorsed this list in a number of cases; see e.g. ''Honda Canada Inc v Keays'', 2008 SCC 39, 2 SCR 362. | ||
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Courts have a wide discretion to determine the appropriate damages based on the evidence of the plaintiff’s pre-dismissal earnings (''Davidson v Tahtsa Timber Ltd'', 2010 BCCA 528). If an employee’s earnings have varied in the years prior to dismissal, some courts in BC have calculated damages by averaging the employee’s annual wages (see ''Krewenchuk v Lewis Construction Ltd'', [1985] BCJ No 1553 (SC). Where remuneration is based on an annual salary and not an hourly rate, a court may still assess damages on the basis of the average salary paid in the years prior to dismissal (see ''Goodkey v Dynamic Concrete Pumping Inc'', 2004 BCSC 894) | Courts have a wide discretion to determine the appropriate damages based on the evidence of the plaintiff’s pre-dismissal earnings (''Davidson v Tahtsa Timber Ltd'', 2010 BCCA 528). If an employee’s earnings have varied in the years prior to dismissal, some courts in BC have calculated damages by averaging the employee’s annual wages (see ''Krewenchuk v Lewis Construction Ltd'', [1985] BCJ No 1553 (SC). Where remuneration is based on an annual salary and not an hourly rate, a court may still assess damages on the basis of the average salary paid in the years prior to dismissal (see ''Goodkey v Dynamic Concrete Pumping Inc'', 2004 BCSC 894) | ||
=== 5. Just Cause Dismissal === | === 5. Just Cause Dismissal- General === | ||
If an employee is guilty of serious misconduct which goes to the heart of the employment relationship, the employer may dismiss the employee for just case. | If an employee is guilty of serious misconduct which goes to the heart of the employment relationship, the employer may dismiss the employee for just case. | ||
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(1) Good faith performance of Contracts | (1) Good faith performance of Contracts | ||
The Supreme Court of Canada affirmed the principle of good faith performance of contracts and its creation of the new common law duty of honesty in contractual performance in Bhasin v Hrynew, 2014 SCC 71. | The Supreme Court of Canada affirmed the principle of good faith performance of contracts and its creation of the new common law duty of honesty in contractual performance in ''Bhasin v Hrynew'', 2014 SCC 71. | ||
This case was referenced in Styles v Alberta Investment Management Corporation, 2015 ABQB 621, where the court awarded $440,000 for the employer's refusal to pay awards under a long term incentive plan, in breach of duty of honest performance and good faith. | This case was referenced in ''Styles v Alberta Investment Management Corporation'', 2015 ABQB 621, where the court awarded $440,000 for the employer's refusal to pay awards under a long term incentive plan, in breach of duty of honest performance and good faith. | ||
If one suspects the employer acted in bad faith in the manner of dismissal, one should do further research to determine whether the employee has a strong case. For a table of cases in which aggravated or punitive damages were sought, and a list of the damages awarded, see “Aggravated and Punitive Damages and Related Legal Issues”, Employment Law Conference 2013, Paper 8.1, CLE BC. | If one suspects the employer acted in bad faith in the manner of dismissal, one should do further research to determine whether the employee has a strong case. For a table of cases in which aggravated or punitive damages were sought, and a list of the damages awarded, see “Aggravated and Punitive Damages and Related Legal Issues”, Employment Law Conference 2013, Paper 8.1, CLE BC. | ||
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If the conduct of the employer was especially outrageous, harsh, vindictive, reprehensible, or malicious, then the court may award punitive damages (see ''Honda Canada Inc v Keays''). The focus will be on the employer’s misconduct, and not on the employee’s loss; the damages are not designed to compensate, but rather to punish and deter. Generally, the discretion to award punitive damages has been cautiously exercised and used only in extreme cases. Courts are wary of the risk of double-compensation where punitive damages and aggravated damages are considered in the same case. | If the conduct of the employer was especially outrageous, harsh, vindictive, reprehensible, or malicious, then the court may award punitive damages (see ''Honda Canada Inc v Keays''). The focus will be on the employer’s misconduct, and not on the employee’s loss; the damages are not designed to compensate, but rather to punish and deter. Generally, the discretion to award punitive damages has been cautiously exercised and used only in extreme cases. Courts are wary of the risk of double-compensation where punitive damages and aggravated damages are considered in the same case. | ||
Punitive damages are, however, currently on an upward trend in B.C. Since the Honda decision, courts have generally required medical evidence showing that an employee suffered mental harm in order to award aggravated damages, and this has left certain employees, who are less susceptible to suffering mental harm, without that recourse. The courts are tending to award punitive damages more often now than in the past in order to make up for this discrepancy. If an employee was treated particularly harshly, but did not suffer documented medical harm, consider claiming punitive damages. See the paper entitled “Aggravated and Punitive Damages and Related Legal Issues” for a table of cases in which aggravated or punitive damages were sought in order to compare your situation to others and determine an appropriate amount of damages (link in [[{{PAGENAME}}#13. Aggravated and Punitive Damages | section V.C.13: Aggravated and Punitive Damages]], above). | Punitive damages are, however, currently on an upward trend in B.C. Since the ''Honda'' decision, courts have generally required medical evidence showing that an employee suffered mental harm in order to award aggravated damages, and this has left certain employees, who are less susceptible to suffering mental harm, without that recourse. The courts are tending to award punitive damages more often now than in the past in order to make up for this discrepancy. If an employee was treated particularly harshly, but did not suffer documented medical harm, consider claiming punitive damages. See the paper entitled “Aggravated and Punitive Damages and Related Legal Issues” for a table of cases in which aggravated or punitive damages were sought in order to compare your situation to others and determine an appropriate amount of damages (link in [[{{PAGENAME}}#13. Aggravated and Punitive Damages | section V.C.13: Aggravated and Punitive Damages]], above). | ||
If the employee has suffered any of the following situations through the employer’s conduct, consider claiming for punitive damages: | If the employee has suffered any of the following situations through the employer’s conduct, consider claiming for punitive damages: | ||
