By Melissa Campeau
Workplaces have been continuously evolving over the past few decades, and issues surrounding the employer/employee relationship (and everything in between) are far from black and white.
As office dynamics and work methods change and develop, it’s critical to have at least a basic understanding of different HR laws that can affect an organization.
Below are overviews on 12 different topics especially prevalent to HR workers in the realm of employment law.
Constructive dismissal
Trying to do more with less is common practice in many organizations as they tighten belts and tend to bottom lines. But the practice can land a company in hot water if they’re not careful.
“When an employer unilaterally and fundamentally changes an individual’s essential terms of employment, it’s often seen as unreasonable and unfair,” said Jeffrey Percival, partner with Pallett Valo LLP in Mississauga, Ont. “And legally speaking, it may be considered constructive dismissal.”
It can be a tricky area, though, because there’s room for interpretation.
“It’s very fact-specific,” he said. “Every situation is different and needs to be examined on its own merit.”
There are also plenty of details to consider.
“For example, if you’re going to change something about an employee’s role – it might be the duties they perform, a demotion, a temporary layoff, a change in pay or even location – the employee generally has to agree to those terms,” said Percival.
If the plan is to cut an employee’s pay, it’s permissible up to a certain point. “But once you start reducing an employee’s pay by around 15 or 20 per cent, you’ve crossed the line into constructive dismissal territory.”
“It’s an area of HR law that’s fraught with changes and uncertainty,” he said. “It’s best to tread cautiously and get qualified guidance when you need it.”
Employee contracts
Does your organization dust off a decade-old employee contract every time there’s a new recruit? If so, it’s time for a review.
“Contracts we might have thought were enforceable a few years ago, the courts might be taking a different view of them today,” said Michael Fitzgibbon, founding partner with Watershed LLP in Oakville, Ont. “In particular, they’re looking into any areas where the employer has given them wiggle room upon drafting.”
Fitzgibbon says that historically speaking, a big motivator when drafting employment contracts has been to make sure there’s an enforceable termination provision, limiting the employee to something less than the common law would imply.
“However, recently when courts have looked at termination provisions, they’ve looked at things like whether they provide for benefit continuation, which is required under the Employment Standards Act,” said Fitzgibbon. “They’ve struck down certain clauses as being unenforceable when they don’t.” When that happens, it can be costly for an employer.
“Five years ago, we might not have been so concerned about that type of drafting,” he said. Now, though, HR professionals need to advise their organizations to spend a lot of time when drafting contracts, considering all the areas where there may be ambiguity or room for interpretation.
Extraordinary damages
Extraordinary damages aren’t commonplace, but they can be extremely costly. Unlike compensatory damages, extraordinary damages are not designed to compensate an employee for some kind of loss when he or she is terminated.
“They are designed to punish the employer for that loss,” said Karen Sargeant, partner with Fasken Martineau DuMoulin, LLP in Toronto.
Certain behaviours are more likely than others to set off legal fireworks.
“The situation we see most often is mistreatment of a sick employee,” said Sargeant. “It can be hard in some cases to determine if someone is legitimately sick or not.” When an employer is investigating or communicating with the employee, it’s important not to get too aggressive. “We’ve seen moral damages in particular awarded in those cases where an employer crosses the line.”
In other cases, Sargeant has seen employers relentlessly pursue employees in some form of litigation.
“It could be a situation where the employer knows there’s not cause but continues to allege it,” said Sargeant. Conducting a biased and negligent investigation could also get an organization into hot water. “The process is as important as the substance with investigations.”
While extraordinary damage awards tend to be expensive when courts do award them, “the good news for employers is that the threshold to award them is very high,” said Sargeant.
Employment litigation
Earlier this year, the Supreme Court of Canada issued a decision dealing with the availability of summary judgment that has meant a major shift in employment litigation.
“On a practical level, it means that employees and employers can obtain results without having to wait for trial and sometimes before the employee has secured new employment,” said Janice Payne, partner at Nelligan O’Brien Payne LLP, based in Ottawa.
Judges are already showing a willingness to grant dismissed employees early decisions about the length of the notice period they’re entitled to, even when allegations of cause or failure to mitigate charges are involved.
“From an access to justice perspective, this is an important and welcome development,” said Payne.
Another recent decision by the Ontario Court of Appeal is getting plenty of attention, too. In that case, the court held that there was no obligation to mitigate damages when an employment contract was silent on the issue.
“The courts now require clear language to give credit to an employer for income earned post termination or to order relief if the employee has not made appropriate effort to mitigate,” said Payne.
When it comes to potential litigation, document everything, says Payne. Keep records accurate, up to date and accessible.
“HR professionals are on the front line in terms of providing necessary and effective litigation support to their employer and legal counsel,” said Payne.
Workplace investigations
Done right, workplace investigations are an important HR tool. Done wrong, they can be a difficult legal situation waiting to happen.
“There’s a steady stream of legal decisions from human rights tribunals, courts and arbitrators that outline the types of legal trouble employers can get into if they conduct a workplace investigation that is flawed,” said Janice Rubin, the managing partner at Rubin Thomlinson LLP in Toronto. In fact, she says, the type of trouble employers can get into can be quite costly.
What makes an investigation flawed?
“A litany of things,” said Rubin. A complainant may be handled in an insensitive way, a respondent may be treated unfairly or an investigator may neglect to interview all the witnesses, for example. Another big challenge, says Rubin, is that employers may appear to be biased because they’re internal to the organization and know all the players involved.
Preparation is key for anyone handling an investigation.
“There are many situations where a trained, competent internal investigator is appropriate,” said Rubin. Other times, it’s best to get someone outside the organization to help out. “I think an internal HR person needs to know how to recognize the signals or the triggers for using someone external to the organization.”
Just cause
Just cause – when an employer terminates an employment relationship because of significant misconduct by an employee – is the exception to the employment rule.
“If we took an organization, and they did 50 terminations over time, the vast majority are going to be without cause,” said George Vassos, senior partner at Kuretzky Vassos Henderson LLP. They may be triggered by restructuring, downsizing or poor fit, for example. “Because just cause is the exception, and that means HR and the organization need to be careful and pay close attention to the scenario and whatever’s causing them to think about just cause.”
The punishment also needs to fit the crime.
“All the just cause cases you see coming out of the courts are in that vein now,” said Vassos. “For example, you may have a 40-year employee who steals a can a pop and a one-year employee who steals $1 million.” Both are instances of theft, but would clearly warrant different responses.
The Supreme Court of Canada has identified employees as a vulnerable group in society and has noted that employees are most vulnerable at the time of termination.
“This takes us back to fairness and how employers have to be fair and exhibit good faith when they are terminating,” said Vassos, “especially when just cause is involved.”
Workplace harassment and violence
In the first year that Ontario’s Bill 168 came into force, nine out of 10 calls to the Ministry of Labour dealing with workplace harassment and violence are about harassment.
“In the past few years, we’ve seen a lot of media coverage of harassment and bullying, and it’s become a very powerful term,” said Shana French of Sherrard Kuzz LLP, Employment & Labour Lawyers. “With heightened sensitivity and awareness, the landscape changes and so do the legal obligations.”
Employers are facing evolving obligations to address harassment and violence in the workplace.
“The potential liability that can flow from a failure to meet those obligations is significant,” said French. “Also, when there’s a situation you may have an instinct to dismiss as frivolous, it’s important to recognize there might be significant consequences if you don’t handle it with due process.”
What this underscores for HR professionals is the need to stay on top of the issue.
“Be very diligent about establishing, implementing and reviewing your policies,” said French. Take even the most frivolous claim seriously and put it through the assessment process This won’t necessarily mean a full investigation, but it can’t be ignored. And finally, says French, “Take steps to prevent against any kind of violence in the workplace and encourage a respectful workplace culture.”
Privacy
With the proliferation of technology in the workplace, the issue of privacy has become a hot topic.
“It raises a lot of questions,” said Rich Appiah, partner at Israel Foulon LLP, based in Toronto. “Does an employer have the right to search employee equipment? Does the employee have a right to privacy? If the employee is suspected of wrongdoing, does the employer have the right to search through the employee’s computer or locker?”
In Canada, there are not necessarily concrete answers to these questions.
“Every case is different, and fact-specific,” said Appiah. “Human resources professionals need to understand that while we can articulate principles that ought to guide their decision making, every situation will be different and managed on a case-by-case basis.”
What employers can do, however, is to clearly state and communicate their privacy policy.
“The trend is towards protecting employee rights, except where the employer has taken steps to clearly circumscribe those rights in the workplace,” said Appiah.
One ongoing tension, in particular, relates to privacy and disability accommodation.
“The debate is over the extent of the employer’s right to access confidential medical information when faced with a request for accommodation,” said Appiah. “Should a medical note be enough or is the employer entitled to a greater amount of info?” In Canada, the courts are constantly challenged to find a balance between the two rights.
Mitigation
In this country, the idea of mitigating with a former employer crystalized with the 2008 Supreme Court of Canada case Evans vs. Teamsters, says Hendrik Nieuwland of Shields O’Donnell MacKillop LLP.
“Essentially that case says an employee who is dismissed and is offered another job by the dismissing employer needs to accept it in order to mitigate their damages, so long as this new job doesn’t lead to an atmosphere of hostility, embarrassment or humiliation.
“That’s the overarching test,” he said. “Whether or not that test is satisfied is solely fact driven, so it will depend entirely on the circumstances of each case.”
For HR professionals who may find themselves in a position of offering a new job to an employee to mitigate damages, Nieuwland offers several words of advice. First of all, the job offer is most likely to be acceptable to the court if a reorganization lead to the employee’s original job being eliminated or changed enough to lead to constructive dismissal. Next, the employer needs to clearly outline the new job, the new responsibilities and why the employer thinks the employee is a good fit. As much as possible, keep the compensations terms the same and keep the negotiations professional and amicable. And finally, give the employee as much notice as possible and ample time to consider the offer.
Terminations during the course of investigations
To keep investigations from causing legal troubles down the road – especially when they lead to terminations – the key is for employers to be honest and straightforward during the process.
“The employer has an obligation of good faith and if they fail to exercise that obligation of good faith in either the investigation process or the termination process, then they run the risk of more severe consequences than has previously been the case,” said Hugh Scher, Scher Law Professional Corporation.
Changes to how courts are handling these cases are important, says Scher, because it’s reframing the way terminations are being done. “Potentially, more scrutiny is required of employers in terms of how they go about their investigations, the processes they follow in those investigations and the consequences of those investigations.”
Scher says another potential complication with flawed investigations is becoming more prevalent.
“There’s a question of whether a court is going to permit employees or employers simply to bring motions for the fixing of notice periods in employment termination cases where there is a legitimate argument to be made about a breach of obligation of good faith and fair dealing,” he said. “In other words, are the two linked or are they separate legal obligations that the courts are going to look at separately?” If the investigation is handled transparently and according to a sound policy, it makes whatever follows – including a termination – less complex and problematic.
Discrimination
The idea of equality in the workplace – that people should be treated the same, regardless of individual characteristics – may seem self-evident.
“However, how that looks on a day-to-day basis given the variety of factual circumstances that present themselves becomes difficult,” said Melanie Reist of Morrison Reist. “All of the different prohibitive grounds of discrimination under the Human Rights Code mean you’re dealing with a lot of variety: ethnicity, race, creed or religion, disability – so it’s multi-faceted.”
She added, “I think what’s also problematic is that the decisions coming out of the tribunal often seem somewhat hard to reconcile and inconsistent. It’s a difficult area for lawyers as well, and that’s why it’s really critical for HR people to have an understanding of the law and the obligation that the employer has.”
Tough situations can happen in any workplace, despite preventative measures. That’s where having really solid policies and established processes are key.
“Where an employer has policies and procedures in place and those are followed, then even if the tribunal decides against an employer, it will significantly reduce the liability of that employer,” said Reist. “Just take your time if a situation comes up. Gather information, see the issue from all sides and refrain from quickly jumping to any conclusions.”
Human rights damages in wrongful dismissal cases
A landmark case last September marked the first time a court awarded damages for a violation of the Human Rights Code in a wrongful dismissal case.
“The judge awarded $20,000 in general damages for violation of the Code in addition to wrongful dismissal damages,” said Justin Heimpel with Sorbara, Schumacher, McCann LLP in Waterloo, Ont. “It’s expected that this case will be used as a precedent for other cases in which these damages are claimed.”
For HR professionals, this underscores the ongoing need to be aware of potential human rights issues in the workplace, especially when it comes to matters involving disability and discipline or termination.
“In last year’s case, the employee was terminated without cause during a disability leave,” said Heimpel. “The court was critical of the employer for being disingenuous with the employee in terms of her return to work and the reason that was given for dismissal.”
Ultimately, the court found that the employee’s disability was a factor in the decision to terminate, and this is a violation of the Code.
“HR professionals need to proceed carefully when it comes to disability leaves,” said Heimpel. While there may be special circumstances that warrant a different approach, it’s generally advisable to avoid terminating employment while the individual is on a disability leave, or immediately upon his or her return to work.