Law 419C – Employment Law
M. Cooperwilliams & G. Tyler 2013
Veronica Manski
Contents
Fundamentals of employment contracts (Em Ks): Offer & acceptance, consideration & certainty ........................................... 4
Machtinger v. HOJ Industries Ltd., [1992] SCC – A term in an Em K that provides less notice than the legislated provincial
minimum becomes null and void (per s. 3&4 ESA). Consistent with policy reasons, court will imply CL reasonable notice. RN
is based on 4 factors (Bardal). ................................................................................................................................................. 5
Watson v. Moore Corporations Ltd, (1996) BCCA - continued Em without more cannot amount to consideration. The
“more” could be evidence that ER forbeared from firing Ee unless they agreed to term. Modification of pre-existing K will
not be enforced unless there is a mutual benefit to both parties ............................................................................................ 6
Kussman v. AT&T Capital Canada Inc., 2002 BCCA - *constructive dismissal arising from failure by Er to give adequate
notice of a fundamental change to Em K. Er can give notice of a fundamental change to Em K, but notice must = Ee’s
entitlement to RNT (or notice provision in K), has to be unequivocal. ..................................................................................... 7
Wronko v. Western Inventory Service Ltd., 2008 ONCA – **Note: not law in BC but could get adopted** Er can’t just give
notice of a change and say after, since you didn’t accept you’re fired. If an Er doesn’t advise an Ee that a failure to accept
a new notice clause amounts to termination of the Em contract, and Er allows Ee to continue working, they will be seen to
have acquiesced to the Ee’s position that the old Em K terms govern the Em relationship. ................................................... 7
Ers’ obligations and Ees’ obligations (incl. fiduciary Ees) .......................................................................................................... 8
Employee’s Implied Contractual Obligations ............................................................................................................................... 8
Implied Duty of Fidelity on Ee to act in the Best Interest of the Er .............................................................................................. 8
-
Simpson v Consumer Association of Canada, 2001 OCA................................................................................................ 8
-
SS v Port Alberni Centre, 2000 BCSC 106 ....................................................................................................................... 9
Other Specific Implied Obligations on Ee: .................................................................................................................................... 9
Canadian Aero Service Ltd. v. O’Malley, 1974 SCC - [the case you flip to first when dealing with fiduciary Ees]. Top
management has fiduciary obligation to Er (even after resigning). Fiduciary relationships require duty of loyalty, good faith
and avoidance of a conflict of duty and self-interest. Fiduciaries can’t use their position to pursue property or business
advantages or opportunities. Case provides factors to be considered in determining whether FD has been breached. ...... 11
Frame v. Smith, 1987 SCC – Dissent by Wilson provides three characteristics of fiduciary relationships ............................. 12
The CL Obligations of the Employer under the Em K ................................................................................................................. 12
Sulz v. Canada (AG), 2006 BCSC (aff’d 2006 BCCA) – Ers have a duty to be proactive in preventing workplace harassment
and intimidation. Courts will require medical evidence showing effects of negligent infliction of mental suffering and
harassment. Er can be liable through VL of Ees. ................................................................................................................... 14
Jacobsen v. Nike Canada Ltd., 1996 BCSC – Duty to provide reasonably safe workplace (CL duty). Where Er introduces
conditions in the workplace that are reasonably foreseeable to put Ee in risk, Er’s liability for Ee can extend beyond the
workplace. SofC of tavern-owner applied to Ers in this case. ................................................................................................ 14
Em K’s vs. Independent K’s .....................................................................................................................................................15
671122 Ontario Ltd. v. Sagaz Industries Canada Inc., 2001 SCC – Case provides list of factors to consider in determining
whether relationship is bw Er and Ee or Company and IC. VL attaches to relationship b/w Er and Ee but not to Er and IC. 15
Vicarious Liability ...................................................................................................................................................................16
Bazley v. Curry, 1999 SCC - *Vicarious Liability* SCC endorses Salmond test which lays out when Ers should be VL for acts
of Ee. SCC sets out 2-step approach for determining when an unauthorized act of an Ee is sufficiently connected to the Er’s
enterprise that VL should be imposed (precedents, policy). Case also sets out general principles that can be used when
precedent is inconclusive. ...................................................................................................................................................... 16
Jacobi v. Griffiths, 1999 SCC – *Vicarious Liability* SCC endorses 2-step approach used in Bazley, for determining when an
unauthorized act of an Ee is sufficiently connected to the Er’s enterprise that VL should be imposed. Where policy rationale
pg. 1
is week, connection must be strong (case defines this). Court differs on how easily VL should be imposed on non-profits,
and on how to interpret deterrence. ..................................................................................................................................... 17
Common Law Em vs Unionized Labour ...................................................................................................................................18
Em Standards: The BC ESA ......................................................................................................................................................19
Who does the Act apply to? (S. 1) .............................................................................................................................................. 19
Wages, Payroll and Records ....................................................................................................................................................... 20
Hours of Work ............................................................................................................................................................................ 20
Overtime .................................................................................................................................................................................... 20
Statutory Holidays...................................................................................................................................................................... 21
Vacation (time) and Vacation pay .............................................................................................................................................. 22
Leaves ........................................................................................................................................................................................ 22
Termination of Employment ...................................................................................................................................................... 23
Variances.................................................................................................................................................................................... 23
Complaints and Enforcement .................................................................................................................................................... 24
Shore v. Ladner Downs, 1998 BCCA – *Em K – notice provisions will violate ESA in future* Court heavily draws on policy
reasoning and interpretation of employment standards legislation by SCC in Machtinger. Ratio: When a termination
provision fails to comply with ES legislation at any point in time, it’s going to be void and the Ee will be entitled to
reasonable notice at CL. ........................................................................................................................................................ 24
Macaraeg v. E Care Contact Centers Ltd., 2008 BCCA - *Em K silent wrt overtime entitlement* ESA provisions are not
incorporated as a matter of law into Em K’s, and the provisions of the ESA are adequately enforced through its own
administrative enforcement procedure (can’t sue to enforce) .............................................................................................. 25
Termination ...........................................................................................................................................................................26
Reasonable Notice on Termination............................................................................................................................................ 26
Bardal v. Globe & Mail Ltd., 1960 Ont. HCJ – seminal case setting out the factors to consider in determining RN............. 27
Ansari v. BC Hydro, 1986 BCSC, aff’d 1986 BCCA - **first case BC court will look at re: RN* If ER fails to give RN – has to
pay damages, not limited to salary. Reinforces Bardal factors – non-exhaustive list. Sets rough upper limit for notice at 1824 months ............................................................................................................................................................................. 27
Just Cause for Termination ........................................................................................................................................................ 27
McKinley v. BC Tel, 2001 SCC – Case establishes contextual approach to determining just cause. Look at what happened,
and then consider circs – was it bad enough, was Ee provoked, were they generally a good Ee over 25 years, etc. Then
decide if just cause exists. Approach 1) first consider whether the evidence establishes the Ee’s deceitful conduct on a BoP,
if it does 2) then consider whether the nature and degree of dishonesty warranted dismissal (consider circs) ................... 28
Em in the fed’l jurisdiction ......................................................................................................................................................28
Actton Transport Ltd. v. BC (Director of Em Standards), 2008 BCSC (aff’d 2010 BCCA) – Case sets out test for deciding
jurisdiction issues – focus is on whether business/operation is functionally integrated (vital or essential) to the federal
undertaking. .......................................................................................................................................................................... 28
Unjust Dismissal ......................................................................................................................................................................... 29
Constructive Dismissal............................................................................................................................................................30
Farber v. Royal Trust Co., 1997 SCC – Case sets out general principles regarding CD. Intention of ER is irrelevant – if it’s a
fundamental breach, from a RP’s perspective at the time, then it’s CD. ............................................................................... 30
Mitigation ..............................................................................................................................................................................31
Evans v. Teamsters, Local 31, 2008 SCC – Ees obligation to mitigate and continue working for the Er is not any different
where Ee has been WD or CD. The key thing is whether it would be objectively unreasonable to expect EE to mitigate
damages by returning to work for the dismissing Er. ............................................................................................................ 31
Russo v. Kerr Bros. Limited, 2010 ONSC – Where an Ee has been CD, the fact that they chose to continue working for the
Er in an effort to mitigate losses does not effectively amount to Ee condoning the change. P may stay in the workplace for
period of RN – but if Ee stays beyond period, then Ee seen to accept new Em K under changed terms................................ 32
Bowes v. Goss Power Products Ltd., 2012 ONCA – Where parties have agreed to a fixed period of notice in the event of no
cause dismissal, Ee is not required to mitigate losses. Policy reasons provided. ................................................................... 32
pg. 2
Post-Em Competition – Restrictive Covenants (RC’s) ..............................................................................................................33
Enforceable restrictive covenants .............................................................................................................................................. 33
Valley First Financial Services Ltd. v. Trach, 2004 BCCA – case provides important statement of principles regarding RCs 34
Severance or altering terms of RC? ............................................................................................................................................ 35
Shafron v. KRG Insurance Brokers (Western) Inc., 2009 SCC – important change in the law: if Er doesn’t get the RC right,
they’re out of luck. Courts will not apply severance to fix the RC. Case illustrates the importance of considering context in
which the Ee signed the RC (balance of power)..................................................................................................................... 35
Post employment common law obligations ............................................................................................................................... 35
Obligation to provide notice of resignation ............................................................................................................................... 36
RBC Dominion Securities Inc. v Merrill Lynch Canada Inc., 2008 SCC – There is no implied duty on non-fiduciary Ee not to
compete following termination of Em. Ees can compete during notice period. Damages are attributable to failure to
provide RN. ............................................................................................................................................................................ 36
Remedies for Breach of Em Ks (re: UNHAPPINESS) .................................................................................................................36
Remedy for Breach of Good Faith Dismissal .............................................................................................................................. 36
Honda Canada Inc. v Keays, 2008 SCC – Endorses first principle from Wallace that Er’s have a duty of good faith in
dismissing Ees. Appropriate remedy for breach of good faith dismissal is damages (NOT extending notice period).
Damages N/Ae just b/c Ee was dismissed and suffered hurt feelings. Punitive damages restrict to outrageous/malicious
acts. ....................................................................................................................................................................................... 37
Beggs v. Westport Foods Ltd., 2011 BCCA – Application of Honda; 1) There’s no Honda damages for normal distress or
hurt feelings from being terminated. It’s expected to be an unhappy time. 2) There has to be a clear causal link b/w the
way someone is terminated and the medical condition that they ultimately experience. .................................................... 38
Negligent Misrepresentation ..................................................................................................................................................... 39
Queen v. Cognos Inc., 1993 SCC – sets out key principles regarding Negligent Misrepresentation in Em context ............... 39
Human Rights and Em (DISCRIMINATION) ..............................................................................................................................40
Meiorin/BC (Public Service Employee Relations Commission) v. BCGSEU, 1999 SCC – eliminated distinction b/w direct and
adverse effect discrimination. Established 3 part test for assessing whether a discriminatory standard is a BFOR: 1)
purpose of standard is rationally connected to the job 2) honest and good faith belief it was necessary 3) standard is
reasonably necessary to accomplish legitimate work related purpose. In assessing discriminatory standard in a given case,
consider procedure and substance. ....................................................................................................................................... 41
Central Okanagan School District No. 23 v. Renaud, 1992 SCC - Duty to Accommodate in context of Union/Collective
Agreement – Did Union breach D2A? Ee, union and Er all have D2A. Er has duty to take reasonable measures short of
undue hardship. Case explains meaning of undue hardship. The fact that accommodation by Er would cause Union to file
grievance isn’t a good reason not to accommodate. ............................................................................................................ 42
Janzen v. Platy Enterprises Ltd., 1989 SCC – Sexual harassment is a form of sex discrimination. ER always liable when
harassment is committed by Ees carrying out power over other Ees in an abusive way on the basis of sex. Broader liability
than just Vicarious liability. ................................................................................................................................................... 43
Seneca College of Applied Arts & Technology v. Bhaudaria, 1981 SCC – discrimination by repeatedly refusing to hire
someone doesn’t give rise to a CL tort, especially when the HRC is so comprehensive (provides for administrative inquiry
and remedial relief, and allows a wide appeal to the Court on both law and fact). .............................................................. 44
Privacy Law and Em ................................................................................................................................................................44
Statutory Framework ................................................................................................................................................................. 44
Privacy in Employment .............................................................................................................................................................. 45
Appendix 1 – Employee vs Independent Contractor (Handy Dandy List) .................................................................................47
Appendix 2 – Policy Arguments ..............................................................................................................................................48
pg. 3
Fundamentals of employment contracts (Em Ks): Offer &
acceptance, consideration & certainty
Fundamental areas of contract law, as they relate to employment law

Principles of contract law have to be followed/obeyed

But it can be difficult to apply these in the Em context

In order for there to be an Em k, there has to be an offer
o
Offer can be very simple – “can you start on Monday”
o
Oral or written (letter of em or a written K)
o
There may not be anything more said as to terms or conditions of Em

Acceptance – by Ee
o
If you say yes, then you agree to anything said up to that point, but not to anything said after
o
After acceptance, too late for Er to come back and say there are other terms or conditions

Acceptance and starting the job may take place at different times
o
Firm could fold in the mean time  wrongful dismissal
o
Can get fired before you start

Terms
o
Anything said up to the point of acceptance (that is sufficiently certain), PLUS Regulatory requirements (implied)
o
There may be conditions precedent prior to Em

Allows Er to pull the offer

Ie. if you don’t finish your law degree before starting articles, if job has to be ratified by somebody else
(ie. approved by board of directors)

Certainty of terms
o
Can be a problem b/c many of the terms aren’t addressed at all, or are addressed in an incomplete way
o
Certain enough to form a term in the K?
o
Personnel policies, documents, handbooks – Ee doesn’t often see these before accepting but Er insists they’re part
of Em K
o
Ee can argue there wasn’t certainty of those terms at time of acceptance, and thus not part of Em K

Implied terms
o
Courts wind up filling in gaps in the Em K w/ implied terms, particularly where the work relationship has been very
long and b/c necessary terms weren’t there in the first place
o
Implied terms should reflect the parties’ intentions at day 1.

It’s often a fiction b/c people would’ve had no clue on day 1 what term should be in the future
o
Examples: Reasonable notice of termination, duty of honesty: EE has duty to be honest in Em

McKinley v BC Tel – breach of duty of honesty isn’t completely determinative of just cause – have to
consider the context and circumstances. There can be instances where Ee doesn’t have to be honest
o
Generally, it’s better if Er and Ee can spell out as many terms as possible from the start. Then each party knows
what the terms of Em are before they get into the relationship, and they don’t have to fight about it later.

Adding new terms: requires consideration
o
Anything that occurs after offer is accepted, requires new, additional consideration
o
Er can’t modify Em K, and have it be enforceable, without consideration
o
Singh v Empire Life Insurance, 2002 BCCA 452 – supports this point.

Er originally promised Ee a 2yr term K. Later gave him a K which provided only ESA notice. Then Ee is
fired. Ee sues for remainder of his salary under 2yr K.

Er argued that the new Em K replaced the original one setting out the 2 yr term

C.A. sided with Singh – Er can’t rely on the more recent Em K. Er presented no fresh consideration
when presenting new Em K – there was no consideration moving from Er to the Ee.

Court relies on Watson v Moore, 1996 BCCA –

Ee has a right to continued Em unless Er gives notice. Continued Em without more cannot
amount to consideration.

Court hears Er’s forbearance argument and agrees it could be consideration, but there has
to be really compelling evidence that but for Ee agreeing to this new term, the Ee would’ve
been fired

court affirmed general principle that modification of pre-existing K will not be enforced
unless there is a mutual benefit to both parties
o
If Er wants to add a new term to the K, Er has to give notice of the change AND consideration

Idea is that if you give Ee proper notice of a change, you’re effectively terminating existing K, and
replacing it with new K after notice period (Kussman)

Er can always terminate Em if notice is given, so Er can also change Em K if they give same amount of
notice.

Notice = RN under CL (or whatever is in the K, if valid) (Kussman)
pg. 4
o
Does Ee have to be aware that consideration is a quid pro quo for giving something up? Not practically.
Consideration needs to be Enhancement of terms and conditions of Em in some way
Touchstone concepts in Em Law

Reasonable notice of termination (RNT)

Constructive dismissal
CL Reasonable Notice of Termination (RNT) (see page 28)

Every EE has an Em K, even if it’s not written down. If there’s no express term regarding notice (either written or verbal),
then court will imply RNT into Em K
o
RNT: an amount of notice of termination, or payment in lieu

Court says reasonable notice is based on (Bardal)
1. Ee’s age (older, more notice)
2. length of their Em with this Er (longer, more notice)
3. based on nature of their position (more sophisticated or responsible, more notice)
4. availability of alternative Em (not many jobs available, more notice)

Judge is supposed to analyse these 4 factors and come up with amount of notice Ee is entitled to (so that it can be implied
into their Em K)
o
Rough upper limit is 24 months (for older Ee in senior position who’s been there a long time)
o
Mid level managers/directors – 6 months from day 1

Ee has duty to mitigate when terminated (Ie. attend out placement counselling)
o
Helps Er minimize losses by getting terminated Ee hired somewhere else, so Er can cut off severance pay
Constructive Dismissal

Constructive dismissal is when Er dismisses someone w/o saying it out loud, by changing some fundamental term of Em K or
combination of changes, to make it fundamentally different. Change is without Ee’s agreement and goes to root of Em K.
Freedom of K is affected by two types of legislation in Em context:
1) HR legislation (BC Human Rights Code)
o
Exists In every jurisdiction/province, and federally.
o
All of them say you can’t discriminate in Em (hiring, wages, promotions, etc.) on any of the prohibited grounds in
the legislation

Ie. age, gender, sexual orientation, family status, etc.

There can be some exceptions where Er ought to be allowed to establish a discriminatory requirement
for a position (ie. for Ee to follow certain faith for position as a minister)
o
Er can’t contract out of these HR requirements

Er can’t put in K that Ee will be fired if Ee misses work for more than 3/6 months because of
disability/illness
2) Employment Standards legislation (Employment Standards Act)
o
Establishes minimum standards for Ees: minimum wage, number of hours before entitled to overtime, minimum
vacation entitlement, statutory holidays, minimum notice entitlement)
o
Parties are allowed to K for better than this
o
Restriction on freedom of K is that you can never agree to anything in a K that’s less than something in ES
legislation (Machtinger). Result of attempt to do this (by Er), is that term is null and void, and CL requirement is
implied. Better for Er to agree to the minimums in legislation.
Machtinger v. HOJ Industries Ltd., [1992] SCC – A term in an Em K that provides less notice than the
legislated provincial minimum becomes null and void (per s. 3&4 ESA). Consistent with policy reasons,
court will imply CL reasonable notice. RN is based on 4 factors (Bardal).
Facts: M and L both worked at HOJ, started in 1978. There wasn’t a written Em K. In Jan. 1985, each is given a written Em K to sign. 6
months later they each get fired. The written K includes a standard form which says
(For M): Termination -- Employer may terminate employment at any time without notice for cause. Otherwise, Employer may
terminate employment on giving Employee _____0____ weeks notice or salary (which does not include bonus) in lieu of
notice. Bonus, if any, will be calculated and payable only to the date of the giving of notice of termination.
(For L): ….2 weeks

At the time, they were entitled to 4 weeks under Ontario legislation
Issue: Was the termination provision valid if it allows for less notice than the minimum in provincial Em legislation? (NO!)
Conclusion: No – you can’t contract for less than entitlement under the ESA. Section 3 and 4 of the ESA render such a term null and
void. Second issue court decides is what period then applies? SCC says if null and void, then it has no effect at all – can’t use it to infer
evidence of intention either. Based on policy reasons, it makes sense to imply the common law reasonable notice
Statute:

Sec. 3 of ESA: Subject to section 4, no employer… shall contract out of or waive an Em standard, and any such contracting
out or waiver is null and void.
pg. 5


Sec. 4 of ESA: (1) An employment standard shall be deemed a minimum requirement only.
(2) A right, benefit, term or condition of employment under a contract, … or under any other Act or any schedule, order or
regulation made thereunder that provides in favour of an Ee a higher remuneration in money, a greater right or benefit or
lesser hours of work than the requirement imposed by an Em standard shall prevail over an employment standard.
Court (SCC):

[19] In Canada, it has been established since at least 1936 that Em Ks for an indefinite period require the Er, absent express
contractual language to the contrary, to give RN of an intention to terminate the K if the dismissal is without cause:

[22] What constitutes reasonable notice will vary with the circumstances of any particular case. 4 factors to consider:
The reasonableness of the notice must be decided with reference to each particular case, having regard to the 1)
character of the employment, 2) the length of service of the servant, 3) the age of the servant and 4) the availability
of similar employment, having regard to the experience, training and qualifications of the servant. (Bardal)





[26] Ss. 3 and 4 render any term in an Em K, which does not comply with the minimum notice requirements of the Act, "null
and void". The contracts in this appeal attempt to do that, thus they are null and void.
o
[28] if a term is null and void, then it is null and void for all purposes, and cannot be used as evidence of the
parties' intention.
Policy – supports protecting Ee’s
o
Em K are not like normal commercial relationships. Not only is work fundamental to an individual's identity, but
also that the manner in which Em can be terminated is equally important.
o
The objective of the ESA is to protect the interests of Ees by requiring Ers to comply with certain minimum standards,
o
The harm which the Act seeks to remedy is that individual Ees, and in particular non-unionized Ees, are often in an
unequal bargaining position in relation to their employers

Ee are special relationships, they’re vulnerable and should be protected

We shouldn’t approach it from viewpoint that everyone is equal, have to protect Ees

Swinton: the terms of the Em K rarely result from an exercise of free bargaining power in the way that
the paradigm commercial exchange between two traders does. Individual Ees on the whole lack both
the bargaining power and the information necessary to achieve more favourable contract provisions
than those offered by the employer, particularly with regard to tenure.
Need to interpret act in a way that encourages Ers to comply with the minimum req’ts of the Act, especially considering fact
that many individual Ees may be unaware of their statutory and CL rights in the Em context.
In order to create incentive to apply with the ESA, it makes sense that CL notice should be imposed
Thus, if an Em K fails to comply with the minimum statutory notice provisions of the Act, then the presumption of reasonable
notice will not have been rebutted
Watson v. Moore Corporations Ltd, (1996) BCCA - continued Em without more cannot amount to
consideration. The “more” could be evidence that ER forbeared from firing Ee unless they agreed to
term. Modification of pre-existing K will not be enforced unless there is a mutual benefit to both parties
Facts:

Watson worked at company for 25 years, started as receptionist and eventually became a sales person. She rec’d a K after 13
yrs entitling her to 2 wks notice (less than ESA – not enforceable).

In 1989, she gets new K with notice provision that had her entitled to 20wks notice at the time she was fired.

In 1993, company fired her. She sues for CL entitlement (based on 4 factors) of 18 months. Er wants to rely on most recent K,
which sets notice at 20 wks.
Issue: whether there was consideration for the 1989 amended K?

Er argues they gave two kinds of consideration – continued Em, and fact company forebeared from giving her notice

Tj gets it wrong – says fact they continued to employ her was consideration
BCCA:

Continued employment w/o something more doesn’t amount to consideration
o
[26] There is no evidence that there was anything other than continued employment that could be regarded as
consideration for the plaintiff's signature on the employment agreement.

[28] Unless it can be said that the defendant forbeared discharging her, nothing of value flowed from the defendant to the
plaintiff.

[31] Consideration for the plaintiff's Em K cannot be found just in the normal continuation of her existing Em.

[32] In order to demonstrate forbearance in the context of Em Ks, an Er must show that it intended to dismiss Ee if he or she
refused to sign Em K  Er needs to show evidence of that intention, something concrete

[36] Court didn’t find evidence was significant enough in this case to show that Ee would’ve been dismissed if she had not
signed and returned the agreement.

Thus no consideration for those agreements. Thus CL reasonable notice is imposed, applying Bardal factors.
o
Key factors are Ee’s age and years of service
Note: Now court would expect Er to produce chain of emails to show; if that doesn’t exist, there needs to be a witness to say that it
was discussed and they decided not to fire her
pg. 6
Kussman v. AT&T Capital Canada Inc., 2002 BCCA - *constructive dismissal arising from failure by Er to
give adequate notice of a fundamental change to Em K. Er can give notice of a fundamental change to
Em K, but notice must = Ee’s entitlement to RNT (or notice provision in K), has to be unequivocal.
*Example where relationship dissolves over time and parties end up in court
Facts:

AT&T lures Kussman over – says he will be very successful in their mid-market business. Promises him salary of $105k plus
sales bonus.

Soon after he gets there, things go sideways: Kussman felt as though small ticket area was poaching his business, economy
wasn’t doing well. AT&T reduced his base salary from $105k to $93k (12% more than 10%). They took away his
administrative help. Another sales person was hired and took away his business.

Culmination of all this was that Kussman sought legal advice, and that b/c of a concatenation of factors, he left his job and
sued for constructive dismissal (form of wrongful dismissal). Entitled to payment in lieu of notice.
Issue: Did Er provide adequate notice (amt Ee was entitled to) of fundamental change to Em K? (NO! resulted in CD)

One issue was reduction in salary – Er said “we gave him notice of that change, we’re entitled to make this change and give
notice, we’re not saying there was consideration, but we gave notice of it”.

[20] Certainly an Er can give notice of a fundamental change to the Em relationship, provided sufficient notice is provided
to the Ee. Such notice would have to be of the same order as that constituting RNT of the Em relationship.
o
You can give notice to achieve a change but it’s got to be equal to the Ee’s entitlement to notice of termination,
and it has to be unequivocal (Ee has to know what change will be).
o
Notice given by Er in this case doesn’t meet this requirement
Conclusion: Er’s actions collectively amounted to a constructive breach of the Em K. Ee is now entitled to payment in lieu of reasonable
notice.
Practical problems/consideration:

It’s difficult to predict notice (court wants you to get it right). Er’s have to err on the upside of the range. If notice period is
established in K then there’s no problem.

Sometimes/often these changes apply to more than one Ee, so do you apply it differently for each Ee based on what you
think the notice entitlement is, or do you aim for the middle of all of their ranges?

While in BC it’s good enough to just give notice of the change
o
In Ontario per Wronko decision, if Ee disagrees, then court says Er has to go a step further and give notice of
termination (not just the change).
Wronko v. Western Inventory Service Ltd., 2008 ONCA – **Note: not law in BC but could get adopted**
Er can’t just give notice of a change and say after, since you didn’t accept you’re fired. If an Er doesn’t
advise an Ee that a failure to accept a new notice clause amounts to termination of the Em contract, and
Er allows Ee to continue working, they will be seen to have acquiesced to the Ee’s position that the old
Em K terms govern the Em relationship.
Facts:


Ee – first job out of university, works for 13 yrs and becomes VP.
Ee was entitled to 2 yrs salary if terminated without cause per written Em K. New president takes over and wants to cut this
back – he delivers an Em k to Wronko by inter-office mail, asking him to sign it and return it to him. Trims notice from 2 yrs
back to 30 weeks (trims off $180k).

Wronko seeks legal advice, and responds to company that he won’t sign it, b/c of significant reduction in severance package.

Company won’t change position on this. New pres decides that per Kussman case, he’s going to give Wronko 2 yrs notice of
the change. Wronko originally disagrees with this.

2 yrs and 4 days after, new pres sends him the new K again and says he’s now bound by it. Wronko replied that he
understood his Em to be terminated and did not report to work.

Wronko sued for wrongful dismissal and claimed damages for breach of K.
Issue: Can notice of a change to an Em K, without more, terminate the old agreement?

CA – overturns this ruling saying that where an Ee has objected when notice of a change is given, the Er must say the notice
is for termination. (ie. Er “here’s the new terms, sign it”, Ee “I’m not going to sign it”, Er “fine, here’s your notice that you
will be terminated in 2 yrs time”)
o
Western had 2 choices: (1) terminate and offer new Em, (2) make no new agreement and continue on the existing
terms. (Hill)

Because there was no notice of termination, Western must be seen to have agreed to W’s repudiation so the old
agreement continues on. Western’s decision to terminate Wronko in September 2004 thus carried with it the
consequence that Wronko was entitled to 2 years termination pay pursuant to the terms of his existing Em K.

Court relies in part on Hill v Peter Gormann, BCCA 1957 (see below)

R: If an Er doesn’t advise an Ee that a failure to accept a new notice clause amounts to termination of the Em K, and Er
allows Ee to continue working, they will be seen to have acquiesced to the Ee’s position that the old Em K terms govern
the Em relationship.
pg. 7
 You can’t just give this notice of the change and then say after, well then you’re fired for not signing it.
Matthew: good to know this b/c even though Kussman is law in BC, this principle may get adopted.
Note:

Court relies in part on Hill v Peter Gormann, BCCA 1957: Mackay JA - mere continuance by an Ee in Em does not amount in
law to an acceptance by an Ee of a unilateral variation of his K by his Er. The Ee is entitled to insist on the Er’s adherence to
the terms of the K. Er could have terminated the Ee’s K and offered him Em on the new terms, but it did not do so.
o
“Where an employer attempts to vary the contractual terms, the position of the employee is this:
1) He may accept the variation expressly or impliedly in which case there is a new contract.
2) He may refuse to accept it and if the employer persists in the attempted variation the employee may treat this
persistence as a breach of contract and sue the employer for damages (“Constructive Dismissal”), or
3) While refusing to accept it Ee may continue in his employment and if the employer permits him to do this and
the Ee makes it plain that he is not accepting the variation, then the Ee is entitled to insist on the original terms.
o
If the plaintiff made it clear…that he did not agree to the change…the proper course for [the Er] to pursue was
to terminate the contract by proper notice and to offer employment on the new terms. Until it was so
terminated, the plaintiff was entitled to insist on performance of the original contract.”
Ers’ obligations and Ees’ obligations (incl. fiduciary Ees)
Employee’s Implied Contractual Obligations
-
-
Where a contract lacks certain express terms of employment, the court can imply terms into the contract
A term may be implied
o
in order to give effect to the unexpressed factual intentions of both parties (evidence from circumstances such as
pre-contractual negotiations, past practices, customs of firm or industry)
o
for standardized terms in contracts in order to reflect the judge’s perceptions of what the parties rights and
obligations ought to be as matter of public policy
o
may imply particular firm or person-specific obligations into a k on basis of evidence of what the parties expect the
employee to do
Examples of terms that have been implied by courts
o
Duty of fidelity – duty of employee to conduct themselves in the best interests of the employer
Remedies for Breach of implied obligations
o
Just cause for summary dismissal (**Primary Remedy)

Just cause assessed by action of employee, procedural unfairness by employer, mitigating circ.,
proportionality
o
Damages for losses caused by breach of duty

Difficulties with these are: small sums of money, difficulty quantifying employers losses, practical
obstacles of collecting small sums from numerous employees

Often these are regarding misuse of confidential business info or egregious conduct on employees part

Aside: Sometimes this is just a tactical device to head off a wrongful dismissal case against the employer
– you were so crappy at your job that we not only fired you but we are going to bring these claims
against you
o
Injunction to restrain certain breaches

Prohibition on continued exploitation of confidential info

Order of accounting (disgorge monies)
o
Accounting or penalizing damages
Implied Duty of Fidelity on Ee to act in the Best Interest of the Er
-
-
AKA, Duty of Loyalty
The more narrow duties in general are subsets as this overall duty.
Not just related to conduct at work, it’s a broader obligation not to harm employer
o
Ee must act reasonably, including when outside of work
o
Ee ought to do all they reasonably can to enhance interests of Er, or not do things that would harm the Ee
Simpson v Consumer Association of Canada, 2001 OCA
o
S was executive director of the organization. S sexually harassed other Ees on various occasions. S was fired
o
Various incidents (brought Ee to strip club and engaged her in sexual discussion, rendezvous at his cottage incl
skinny dipping, business meeting including nude hot tubbing, grabbing Ee’s behind)
o
About all of them, he said these weren’t workplace things, you can’t fire me for this.
o
ISSUE: C.A. had to determine whether Ee’s sexual harassment of Ee’s outside of the workplace breached his
duty to act in best interest of Er (loyalty/fidelity).
pg. 8
o
-
-
C.A.: although they didn’t take place in the work place, they’re all connected in some substantial way with work,
and they are part of his relationship with these people. All these people were his subordinates. It wasn’t okay
for him to say they were consensual b/c there was a power imbalance. Dismissal was for cause.
SS v Port Alberni Centre, 2000 BCSC 106
o
PAC was a non-profit org providing community services.
o
SS was one of their legal information workers, she was involved in an abusive relationship w/ her husband. Her job
was to provide counselling services to clients. She became friends with one of the ppl she was counselling; they
spent time together outside the centre. She disclosed the abusive relationship to the client, she introduced the
husband to the client, and the client eventually said that the husband sexually assaulted her (the client). Client
complains to plaintiff, who then cuts off the relationship. Client then complains to PAC, and they fire SS. SS sued
for wrongful dismissal.
o
ISSUE: Was there enough of a connection between SS’s personal relationship with counselling patient and her
work? She tied it to work by saying her time outside work with this person was justified b/c it would help, and was
part of her counselling. Er said that by allowing her into her private life, she compromised her professional
responsibilities, which gave cause for termination.
o
Court allowed SS’s claim for wrongful dismissal; it wasn’t cause for her termination. They said time she spent w/
client away from work was not by itself a breach of her obligations (court said it was to her credit). Court said
husband’s assault of client wasn’t SS’s fault and she can’t be blamed b/c she introduced them, and court said that
her cutting off contact with the client was the right thing to do.
o
Court concluded she didn’t breach duty of loyalty to act in best interest of Er.
 These cases illustrate duty of loyalty, as it relates to activity outside work.
Note: There’s no clear duty to perform the job competently.
Other Specific Implied Obligations on Ee:
1. The Residual Obligation to Advance the Employer’s Business Interests
2. Obedience to Orders and Insolence (Duty to follow reasonable, lawful directions)
Ee is bound to carry out Er’s orders so long as they are lawful, reasonable and within the scope of employment (and clear)
Not Lawful – thing they were told to do was a criminal act, would violate workplace safety obligations, or amount to a tort
Unreasonable – order that causes substantial harm to the Ee while recouping little benefit to the Er
Clear - to satisfy court Er needs to show that Ee ought to have known what they were supposed to do and they did not do it.
Disobedience/insubordination may entitle the Er to dismiss the Ee summarily provided req’ts of just cause are met
Insubordination (refusal to obey orders) different from insolence (profanity directed at the Er)
3. Absenteeism and Lateness
Ee must report to work when assigned by the Er in a timely manner
Can be a grounds for summary dismissal
Duty can be subject to human rights legislation
o
Mental or physically disabilities are protected here. Employer must recognize and try to accommodate disability
up to point of undue hardship to not be liable for wrongful dismissal
o
Individual absences (rather than long periods), or coming in late can amount to a Human rights claim.
In BC it is okay to fire an Ee if the reason they are absent is because of incarceration.
o
S. 13 of HR code prevents Ers from discriminating against someone b/c they’ve been convicted of a crime which is
unrelated to Em.
o
Re Fletcher Challenge, 2000 BCCA 584 – termination of Em was not b/c he was convicted of offence but because
he failed to show up for work. BCCA concludes that the conviction and offence were related to his Em.
Therefore this is allowed as discrimination.
4. Dishonesty
Ee is impliedly bound not to act in a deceitful, fraudulent, or otherwise dishonest manner towards the Er
Duty of honesty creates 2 opportunities for Er to get rid of troublesome Ee
1. First misconduct – this may be cause in itself for dismissal.
o
SCC: it’s not automatic, have to consider mitigating circumstances and context
2. Investigation of the misconduct – ask them their side of story; this is second chance for Er because if Ee lies in
investigation that is cause for misconduct too.
Relates to bonds of loyalty and trust b/w Er and Ee
Not considered culpable dishonesty if Ee refrained from disclosing past misdeeds with a previous Er during recruitment
process (so long as there is no fiduciary duty)
However if Ee lies when asked about it, this constitutes a serious breach of K, usually justifying summary dismissal
See McKinley
5. Drunkenness, Sexual Harassment, and Moral Impropriety
The Ee is impliedly bound to report for work in a sufficiently sober condition to perform the job effectively and w/o
endangering the safety of other persons in the workplace
Alcoholism and drug addiction are protected disabilities under human rights legislation so Er must reasonably accommodate
the Ee up to the point of undue hardship prior to firing them
Sexually harassing other Ees also violates implied terms of the Em K
pg. 9
Can be a ground of just cause especially if person is a supervisor
Can’t dismiss if harassment is relatively minor
Er can be liable to victim if it doesn’t take action
Modern courts also implies a duty on Ee not to commit any moral impropriety that would likely diminish the Er’s
reputation in the community  Relates to likelihood that Er will suffer economic harm
6. Incompetent or Negligent Performance of the Job (unclear duty, difficult to enforce in practice)
While there is an implied guarantee by Ee that he/she has the requisite expertise and capacity to effectively perform
contractual duties, this duty is not workable in practice
o
In theory, Er can dismiss with just cause when Ee fails to meet this duty
Very difficult to terminate Ee for performance issues – usually some sort of ‘disability’ crops up
o
If any dismissal is connected even somewhat with a disability issue then it will be breach of human rights, even if
dismissal with pay. Have to show the dismissal was in place clearly before disability – otherwise no way get away
with it.
the odds are not often better than 50/50 so lawyers typically advise Er to just give severance as part of termination rather
than risk ‘just cause’;
***How to manage a performance issue
1. Establish whether there were clear & objective standards for the Ee – should be concrete, clear and specific
2. Demonstrate/prove that the Ee failed to meet those standards
3. Put Ee on notice – “this is your obligation, this is how you’re failing to meet it” (so Ee knows what to do to improve)
4. Give Ee reasonable time to correct the problem – lay out how much time they have
5. Give them training and support to learn the required skills
6. Prove objectively using concrete evidence that they failed to learn the skill to meet the standard.
At the end of the day, judge may be more favourable to Ee so it may not be worth it to go for termination with cause. Er
should try to settle with Ee before trial.
Double letter strategy for terminating employee
(a) Terminate for cause - give Ee a letter which outlines why they were terminated for cause,
(b) ‘Without prejudice letter’ – outlines that there was sufficient grounds to terminate for cause, but if they sign this
letter, they can receive a settlement/payment in lieu of notice, but can never use the letter in court
Note: if Er would prefer to just settle this often makes more economic sense. Often reason Er goes to trial is more
symbolic/philosophical (message you want to send other Ee’s, human resources).
7. The Obligation Not to Wrongfully Exploit or Abuse the Employer’s Business Interests
Possible remedies for breach of the below duties might include
summary dismissal
damages (based on breach of K)
injunction: (1) there must be a prima facie case of illegality on the Ee’s part (2) Er must adduce concrete evidence to show
that it will suffer irreparable harm unless an injunction is granted (3) balance of convenience must favour issuing an
injunction (ie. more harm would be caused to Er if inj not granted than would be caused to Ee if granted) (4) it must be fair
and equitable in all the circs to grant the inj pending a full trial
Anton Pillar = Er applies for this which allows it to enter the Ee’s private residence and remove the material in question (if
suspects something stolen). Extraordinary measure so to grant this must be: Strong prima facie case of illegality, Potential
for serious harm to Er from misuse of material; Real possibility Ee destroy, hiding, or otherwise misusing it; Er must come to
court with ‘clean hands’ and undertake to pay to the employee any damages that might result from a wrongful
implementation of the order
Accounting (equity) - requires the wrongful exploiter of Er’s property to disgorge all profits it has obtained thereform as a
matter of “unjust enrichment”
Conversion (tort) – damages claim assessed in tort not contract
Punitive damages (tort rather than contract)
This implied duty includes these sub-duties:
The duty of an Ee not to make a secret profit from his or her Em
The Er’s presumptive right to ownership of any inventions or copyrights made by the Ee
The Ee’s duty not to compete with the Er’s business (can moonlight but not compete) – can plan to compete
o
Ee has a duty not to take a job, either during working hrs or in his/her spare time, with a firm that competes with
his/her Er’s business

Tied to trust and loyalty of Ee
o
Ee doesn’t violate duty if they plan to leave Er and take up competing Em or form a competing business of their
own (and even solicit fellow employees to work for them) (See RBC v ML case)
o
However, if Ee owes Er a fiduciary duty, Ee will be precluded from competing for a reasonable time (See Canadian
Aero case)
o
Duty not to compete ends the moment you walk out the door, unless there is a RC (RBC v ML)
The Ee’s duty not to misuse the Er’s trade secrets or ‘confidential’ info, trade secrets, and customer lists; the right to
whistleblow;
o
Confidential Info:

Not confidential if competitors have already discovered it

Southin in RBC Dominion Securities: If it’s in your head, it’s not confidential. If you have to write it down
or take it away on disk then can’t use it. This is adopted as the dividing line for confidential line.
-
pg. 10
o
o
May be subject to injunction if you try to sell it/use it
Ee can canvass customers of a former Er after his/her Em has ended, but can’t actively solicit them for his/her
business during the Em relationship
o
Can’t memorize customer lists before you leave; can’t “entice” customers to follow you
o
Exception for whistleblowing in some provinces
The superadded fiduciary obligation owed by Ee in a fiduciary relationship with their Er
o
Ees in a special fiduciary relationship w/ Er owe the firm a far more rigorous duty of loyalty

Resulting from position they have (Ie. executives at top level of organization)
o
A fiduciary obligation arises when A entrusts B with access to resources that can be used only for a limited
purpose as defined and authorized by A. The duty is breached when B acts opportunistically and uses those
resources to further personal interests rather than the interests of A
o
Test per courts whether someone is a fiduciary, (1) a fiduciary must exercise a relatively broad and independent
discretion in handling the critical aspects of an Er’s business (ie. regarding decision making, signing Er into binding
contracts) and (2) the Er’s business interests must be especially vulnerable to the actions of the fiduciary. (Frame v
Smith)

It is more about what the person is doing rather than what their title is (if doing all hiring firing
decisions; If making all decisions about who to enter in contacts with)
o
A fiduciary is bound by the following duties: 1) can’t quit in order to exploit a business opportunity discovered
during Em, but must offer the Er the opportunity of exploiting it. 2) Ee is bound to proactively disclose to the Er
any information that can reasonably be expected to have an impact on the Er’s business interests (ie. blemishes
on the Ee’s work record with previous Er’s, plans to resign and set up a competing business) (3) can’t compete
with a former Er for a reasonable time after the Em has ceased (kind of like a built-in RC)

Reasonable period of time – contextual/circumstantial. Court will look at amt of time it will take Er to
safeguard itself from vulnerability (ie. shore up relationships with clients), balanced against right of Ee
to establish replacement career

Also can’t entice other Ees to resign and work with you, but you can let coworkers and clients know
they are leaving a company and setting up elsewhere.
o
Breach of a fiduciary obligation allows the Er to pursue the remedies already mentioned: summary dismissal,
damages action or an accounting for profits obtained, and an injunction against the Ee or another 3rd party
o
Principles come from cases: Frame v Smith, & Canadian Aero
8. The Employee’s Duty to Give Notice of Termination/Resignation
Ee must give reasonable notice of resignation (See Ch 9)
Canadian Aero Service Ltd. v. O’Malley, 1974 SCC - [the case you flip to first when dealing with fiduciary
Ees]. Top management has fiduciary obligation to Er (even after resigning). Fiduciary relationships
require duty of loyalty, good faith and avoidance of a conflict of duty and self-interest. Fiduciaries can’t
use their position to pursue property or business advantages or opportunities. Case provides factors to
be considered in determining whether FD has been breached.
Facts:
-
The present appeal arose out of a claim by the plaintiff-appellant (C Ltd.) that the defendants had improperly taken the fruits
of a corporate opportunity (the “Guyana” project) in which C Ltd. had a prior and continuing interest.
The allegation against the defendants O and Z was that while they acted as directors or officers of C Ltd. they had devoted
effort and planning in respect of the particular corporate opportunity as representatives of C Ltd., but had subsequently
wrongfully taken the benefit thereof in breach of a fiduciary duty to C Ltd.
The defendant W, who had been a director of C Ltd. but never an officer, was brought into the action as an associate of the
other individual defendants in an alleged scheme to deprive C Ltd. of the corporate opportunity which it had been
developing through O and Z; and the defendant T Ltd. was formed by them as the vehicle through which the individual
defendants in fact obtained the benefit for which C Ltd. had been negotiating.
Court History:
C Ltd. failed before the trial judge, whose judgment was affirmed by the Court of Appeal.
SCC Held:
The appeal should be allowed against all defendants save W.
Issues:
1. What is the relationship of O and Z to C?
2. What duty(ies) did they owe to C as result of their relationship?
3. Has there been a breach of the duty, by reason of the conduct of O and Z acting through T to secure the K for the
Guyana project?
4. What is the liability associated with the breach, if established?
Court Reasoning:
1. O and Z were not mere employees, they were “top management” or senior officers of the company. O and Z were in a
fiduciary relationship to C.
2. Fiduciary relationship requires duty of loyalty, good faith and avoidance of a conflict of duty and self-interest. They were
precluded from obtaining for themselves, either secretly or w/o approval of C, any property or business advantage either
belonging to the company or for which it has been negotiating; especially where the officer is participating in the
pg. 11
-
-
-
negotiations on behalf of the company.
o
Case law supports this, even if person resigns to pursue the opportunity
3. Regarding breach, SCC stated “cardinal fact is that the one project, the same project which Z had pursued for C, was the
subject of his proposal for T”. In other words, it didn’t matter how similar the proposals were, it was a proposal for the same
opportunity.
o
Also, honesty of purpose regarding why they formed T is not relevant, it’s no defence.
o
O and Z continued after their resignations to be under a fiduciary duty to respect C’s priority, as against them
and T, in seeking to capture the contract for the Guyana project. They entered the lists in the heat of the
maturation of the project, known to them to be under active gov’t consideration when they resigned from C and
when they proposed to bid on behalf of T.
Whether or not the general standards of loyalty, good faith and avoidance of a conflict of duty and self-interest has been
breached depends on consideration of various factors (non-exhaustive list):
o
Among them are the factor of position or office held, the nature of the corporate opportunity, its ripeness, its
specificness and the director's or managerial officer's relation to it, the amount of knowledge possessed, the
circumstances in which it was obtained and whether it was special or, indeed, even private, the factor of time in
the continuation of fiduciary duty where the alleged breach occurs after termination of the relationship with the
company, and the circumstances under which the relationship was terminated, that is whether by retirement or
resignation or discharge.
4. Regarding liability, SCC says liability of O and Z does not depend on proof by C that it would have otherwise obtained the
K, not what profits it would have earned. C is entitled to whatever gain the defendants earned (either through accounting of
profits of unjust enrichment). SCC upholds the damages determined by the TJ of $125k.
Frame v. Smith, 1987 SCC – Dissent by Wilson provides three characteristics of fiduciary relationships
Oft-cited dissent by Wilson J.

[57] Relationships where a fiduciary has been found: between directors and corporations, solicitors and clients, trustees
and beneficiaries, agents and principals, life tenants and remaindermen, and partners

Categories of fiduciary relationship are never closed

[60] Relationships in which a fiduciary obligation have been imposed seem to possess three general characteristics:
(1) The fiduciary has scope for the exercise of some discretion or power.
(2) The fiduciary can unilaterally exercise that power or discretion so as to affect the beneficiary's legal or practical
interests. (ie. financial interests, practical interests, moral interests)
(3) The beneficiary is peculiarly vulnerable to or at the mercy of the fiduciary holding the discretion or power.
The CL Obligations of the Employer under the Em K
-
Have to first look to K for express obligations, then turn to implied duties
A. An Implied Duty of Fairness – doesn’t exist!
At CL, Er is not contractually bound to treat the employee fairly and decently
POLICY: Critics have argued that modern courts should imply a standardized duty of fairness for several reasons
(1) it enhances morale and productivity
(2) it would bring symmetry into the CL since Ee’s are bound to advance Er’s best interests
(3) it would mirror the commercial practice of implying a reciprocal duty to act reasonably and in good faith in
furthering the objectives of the K
(4) accords with Charter values and public opinion
(5) Er’s are mostly required to do this anyway through other CL requirements like just cause, reasonable notice, and
punitive damages against Er’s who act in a high-handed way
(6) it would be consistent with tort law
There are risks with implying a duty of fairness
o
Uncertainty and unpredictability
o
Unlimited litigation  expensive and time-consuming
o
Second-guessing by courts
o
It could prevent Er’s ability to get rid of Ee’s simply by giving notice
Wallace v. United Grain Growers Ltd., 1997 SCC
o
Plaintiff was wrongfully dismissed from his job at age 59 after 14 yrs of service; argued that Er had breached an
implied term in Em k obliging Er to treat him fairly in regard to his dismissal
o
Court rejected that there is an implied term of fairness. Said such a term would be overly intrusive on Er’s
freedom to manage affairs
o
SCC held that bad faith or unfair treatment of an Ee during the dismissal process can be taken into account in
determining the length of reasonable notice of termination. (this was later overturned)
o
Court also recognized that the special nature of the Em relationship makes Ee vulnerable, particularly in dismissal.
o
**Thus Er’s are under an obligation of good faith and fair dealing in the manner of dismissal which requires Ers
at a minimum to be candid, reasonable, honest and forthright with their Ees and to refrain from engaging in
conduct that is unfair or is in bad faith by being, untruthful, misleading or unduly insensitive.
pg. 12
-
Honda, 2008 SCC - Endorses first principle from Wallace that Ers have a duty of good faith in dismissing Ees. Appropriate
remedy for breach of good faith dismissal is damages (NOT extending notice period). Damages N/A just b/c Ee was dismissed
and suffered hurt feelings. Punitive damages restrict to outrageous/malicious acts.
B. The Implied Duty to Pay for Work Done, Gratuities, and Employee Expenses
Er is impliedly bound to pay wages for all work performed by the Ee (this is also supported in ESA)
o
Implied obligation relates to how much you have to pay or for what
o
There may be industry standard or custom that set out pay rate, etc which may be implied
CL comes into play when determining whether Ee is legally entitled to be paid – courts typically constru the contract contra
proferentem the Er’s interests
If Er benefits from services it didn’t specifically order the Ee to perform, Ee is entitled to recover the FMV of such services on
a quantum meruit
Courts have held that Er’s implied obligation to pay wages extends to tips and other gratuities
C. The Implied Duty to Give Notice of Termination
CL presumes parties intend their agreement to be for an indefinite term that can only be terminated by either party giving
due notice of that intent
D. The Implied Duty to Provide Work Opportunities
Er’s might try to say they’re temporarily laying Ees off – not firing them. But Er can’t do that, they have obligation to provide
work.
Layoff operates as a repudiatory breach of the Em K that entitles the Ee to damages for constructive dismissal, unless the Em
K expressly or impliedly entitles the Er to lay off without giving notice
They also have a duty to provide work they agreed to provide
o
Can be a form of constructive dismissal if they want you to do other work
E. No Implied Duty to Provide Sick Pay
There is no duty to provide sick pay. There is no duty to pay people who are sick.
Er’s do have a duty not to fire them because they are sick (duty to accommodate) but not to pay them while they are off
unless there is express contractual requirement.
F. The Implied Duty to Prevent Personal Harassment and Intimidation
Er’s have an implied contractual duty to prevent Ees from being harassed, bullied, or otherwise personally intimidated by
other Ees, customers, or other visitors to the worksite (See Sulz case)
The Er must take all reasonable steps to eliminate any personal harassment of which is aware or ought reasonably to
aware, including disciplining and dismissing the perpetrator and removing visiting offenders from the worksite.
Human Rights legislation puts a duty on Er’s to safeguard Ees against sexual harassment
Ways to pursue harassment claims:
o
WCB claims, particularly work-place bullying as legislation recently passed
o
Constructive dismissal claims – damages only for loss of notice
o
Sue in tort for intentional or negligent infliction of mental distress, etc.
pg. 13
Sulz v. Canada (AG), 2006 BCSC (aff’d 2006 BCCA) – Ers have a duty to be proactive in preventing
workplace harassment and intimidation. Courts will require medical evidence showing effects of
negligent infliction of mental suffering and harassment. Er can be liable through VL of Ees.
Facts:

a claim by a former R.C.M.P. officer that her immediate supervisors harassed her to the point that she became clinically
depressed. Her depression reached the stage at which she had no choice but to accept a medical discharge.

She claimed she was mistreated over a two year period. She previously had an exemplary record. That changed in 1994 with
the arrival of a new staff sergeant and her subsequent pregnancy.

She complained that her superior officers used harsh language, went out of their way in an attempt to penalize her for
supposed breaches of policy, and made derogatory remarks about her in the presence of other detachment staff. She also
alleged that her superiors claimed she had become pregnant to exploit the system and that they made threats she would
suffer for her conduct. She claimed she was ostracized from the other officers in the detachment and that her superiors
alleged she had a drug dependency problem. The instances of all these types of alleged misconduct were numerous.

All of this left Sulz with an extreme form of depression. The evidence was that she was left competitively unemployable (in
that she was only capable of working at uncomplicated tasks on a part-time basis, in a stress free environment).

Sulz sued for breach of contract and for negligent infliction of mental suffering.
Issue: is the RCMP liable for failing to protect her from intimidation and harassment in the workplace?
Court:

Court jumps through a bunch of hoops to try make someone responsible for this (RCMP specially protected)

Court allowed her to sue the provincial crown who hired the RCMP

BCSC upheld the claim, finding the conduct of the staff sergeant (and others) to be objectionable. His conduct violated the
R.C.M.P. harassment policy and his breach of the duty of care he owed her caused her serious psychological harm.
o
No question that he breached the duty/SofC: The Court concluded the staff sergeant was prone to angry
outbursts, particularly in relation to Sulz. His behaviour was intemperate and at times unreasonable. The staff
sergeant did little to curb his temper, he was causing serious emotional problems for her, and his frequent
outbursts and cutting comments were major causes of the troubled work environment she experienced.
o
The court accepted the evidence provided by two different doctors that stated the cause of her depression was
the work-place harassment, which they said a normal person would likely also suffered from.

The Court awarded Sulz wage loss damages of $825,000 and general damages (as a result of the emotional impact on her of
the treatment she endured) of $125,000. The bulk of the award ($600,000) was for future wage loss and in this regard the
Court was heavily reliant upon the medical assessment of her inability to return to gainful employment.

The Court’s award effectively indemnified Sulz, at the expense of her former employer, for the loss of a future career.

There wasn’t enough evidence to assess whether the RCMP was negligent for failing to take action against D

The evidence wasn’t enough to demonstrate intentional infliction of mental suffering
Note: That is the sort of result of which employers must be extremely wary. If for no other reason than that, employers should double
their efforts to ensure harassment of this type does not occur in their workplace.
Jacobsen v. Nike Canada Ltd., 1996 BCSC – Duty to provide reasonably safe workplace (CL duty). Where
Er introduces conditions in the workplace that are reasonably foreseeable to put Ee in risk, Er’s liability
for Ee can extend beyond the workplace. SofC of tavern-owner applied to Ers in this case.
Facts:


Action for damages for personal injuries. Liability and damages were at issue
P worked for D (employer) as a warehouseman. P was told to bring his car to work that day, in Vancouver. Supervisor
supplied workers with lots of beer. P and others went to clubs after work (break in causation?), drank more, then P drove
into a ditch and was rendered a quadriplegic.
Issue: what was the Er’s liability, if any?
Held: in favour of P, but liability apportioned 75% to D and 25% to P.

Standard of care is that of an employer.
o
Obligation on Er to take reasonable care for the safety of its employees
o
[41,42] Higher than duty owed to invitor and invitee
o
To make the place of employment…as safe as reasonable skill and care would permit
o
[43] The plaintiff's position is that Nike breached its duty to him to provide a safe workplace by providing a large
quantity of alcohol in the workplace and not restricting or monitoring its consumption, when it knew he would be
driving home, and then not taking steps to prevent him from driving.
o
Similar to the SofC of a tavern-owner, who has a positive obligation to do these things.

D failed to meet that SofC by providing free alcohol, failing to monitor its consumption, and by not preventing P from
driving.
o
They knew or ought to have known that employees would get drunk and drive their cars home
o
Their responsibility for Ee’s safety required that it not introduce into the workplace, conditions that it was
reasonably foreseeable put him at risk.
Note: most claims for danger in the workplace go through work safe bc
pg. 14
Em K’s vs. Independent K’s
-
-
-

-
Employee vs Independent Contractors (IC)
o
Contract of service (Ee) vs contract for services (IC)
o
The way the parties characterize the relationship isn’t necessarily determinative
o
Legislation differs as well
This is important b/c for IC, only the basic principles of contract law apply to that relationship
o
Em relationship conversely are governed by CL and statutory framework

Reasonable notice of termination  only applies to Em

Minimum req’ts of ESA applies to most Ee’s but not ICs

Sections of the Human Rights Code apply to Ee’s but not ICs

Privacy legislation dealing with Ee legislation doesn’t apply to ICs

Definition of worker in Worker’s Compensation Act applies to most Ees but only certain types of ICs

Tax legislation – Er has to make certain statutory deductions for Ees from paycheques, same req’ts
don’t exist for ICs (they have to remit amounts on their own)

If you’re paying person as IC, and then find out she’s an Ee, then you can be personally liable
for all the remittances you didn’t deduct
CL tests that exist for determining Ee or IC (on exam, reference CL tests, handy dandy list, and Sagaz)
o
Control Test

In Em, Er controls both worker and manner in which work is performed. Er decides what work is done,
who will do it, the how, when and where

In IC context, IC determines these things

ER sets control by deciding wages, vs IC who sets the fee for work
o
Four Fold Test
1. Control
2. Ownership of Tools
3. Chance of Profit
4. Risk of Loss - Ee has no skin in the game, but IC stands to lose money if things go sideways
o
Organization or Integration Test

Whether work performed by worker is integral part of company’s business (Em/Ee), or whether it’s
simply an accessory to that business

Whether worker is economically dependent on company for his/her livelihood (

IC isn’t so dependent on the company
Sagaz case: There’s no universal test, but a consideration of various factors (including those above) is the way to go
Two ways in which the issue arises in practice
o
At beginning of relationship, the parties decide to establish IC relationship b/c that’s what worker wants, but Er
wants all these controls put in place.
o
At termination of relationship, individual has been functioning as IC but really it’s been an Em relationship (indiv’l
is economically dependent). Er says business is down and let’s them go, so Ee says “you know what, i’ve really
been an Ee all this time and I think I’m entitled to 12 months notice”. Er says you can do that if you want, but if
you do we’ll have to report that you’ve received all this employment income and you’ll be liable to pay all this EI,
etc. In the end, it’s in the interests of both parties to make a deal.
Settlements – remember it’s possible to put a portion in taxable bucket (retiring allowance) and a portion in the non-taxable
bucket (pain and suffering)
671122 Ontario Ltd. v. Sagaz Industries Canada Inc., 2001 SCC – Case provides list of factors to consider
in determining whether relationship is bw Er and Ee or Company and IC. VL attaches to relationship b/w
Er and Ee but not to Er and IC.
Facts:
-
67122 Ontario Ltd (“Design”/”respondent”) was Canadian Tire’s principal supplier of synthetic sheepskin car seat covers
S, head of CT’s automotive division, advised Design that they would be replaced by Sagaz. S was receiving bribes through a
kickback scheme.
Sagaz hired AIM, owned and controlled by L, to market Sagaz’s seat covers, and to operate the scheme to pay S. Scheme was
eventually discovered by CT and S was fired. CT decided to continue supply relationship with Sagaz.
Design sued AIM, L, Sagaz and K (Sagaz’s president).
Court history:
Trial: damages were assessed against L and AIM jointly & severally. Action against K and Sagaz was dismissed.
o
Fresh evidence was adduced after the judge provided reasons, by L admitting to conspiracy and implicating K. TJ
wouldn’t allow evidence.
CA: reversed TJ’s decision, finding that Sagaz was vicariously liable to Design and therefore j&s liable with L and AIM for the
damages awarded. New trial was awarded wrt liability of K.
Issue: Is Sagaz vicariously liable for the tortuous conduct of its consultant who was hired to assist in securing CT’s business? (No, b/c
AIM was not an Ee but an IC and for policy reasons VL does not attach to this relationship.)
Held: appeal should be allowed and the order of the TJ restored.
Court:
pg. 15
Vicarious Liability: the law holds one person responsible for the misconduct of another b/c of their relationship
Relationships that attract vicarious liability not exhaustively defined or closed
Most common relationship that attracts VL is that b/w employer and employee
Policy reasons for VL: provides a just and practical remedy for the plaintiff’s harm and to encourage the deterrence of future
harm.
ER not VL for IC: It doesn’t make sense to anchor liability on an Er for acts of an ICr who conducts his or her own business,
and over whom the employer has little to no control.
No universal test for determining whether someone is Ee or IC
o
Must consider the total relationship of the parties
o
Central question is whether the person who has been engaged to perform the services is performing them as a
person in business on his own account
o
Key factors:

level of control Er has over worker’s activities (always a factor)

whether worker provides his or her own equip’t

whether worker hires his or her own helpers

degree of financial risk taken by the worker

degree of responsibility for investment and management held by the worker

worker’s opportunity for profit in the performance of his or her tasks
Above factors constitute a non-exhaustive list, and there is no set formula as to their application. The relative weight of each
will depend on the particular facts and circumstances of the case
Conclusion: In this case, SCC said it was clear that AIM was an independent contractor – in business on its own account. Thus it follows
that the relationship b/w Sagaz and AIM as employer and IC is not one which attracts vicarious liability.
-
Vicarious Liability




The circs in which the Er is VL for something the Ee has done (ie. causing harm to a third party)
The Er isn’t independently at fault, there’s nothing they ought to or could have done
Facts between the two cases were different enough to result in different outcome
The two decisions aren’t entirely consistent
Bazley v. Curry, 1999 SCC - *Vicarious Liability* SCC endorses Salmond test which lays out when Ers
should be VL for acts of Ee. SCC sets out 2-step approach for determining when an unauthorized act of
an Ee is sufficiently connected to the Er’s enterprise that VL should be imposed (precedents, policy).
Case also sets out general principles that can be used when precedent is inconclusive.
Facts:
-
The appellant Foundation, a non-profit, operated two residential care facilities for the treatment of emotionally troubled
children. It operated like a substitute parent to kids aged 6-12.
The Foundation hired C to work in one of their homes. They didn’t know he was a pedophile.
There wasn’t anything they missed in doing their background check.
Foundation appropriately fired him after they investigated a complaint that he had abused a child in one of its homes.
Respondent was abused by C and sued the Foundation for compensation for the injury he suffered while under their care.
Foundation said they didn’t know, and there was nothing they could’ve done to find out about this. They weren’t negligent.
Issue: Was the Foundation vicariously liable for its employee’s tortuous conduct?
Court history: Trial court and C.A. both found Foundation was VL.
Held: the appeal should be dismissed and the matter remitted to trial.
Law: (unanimous court)
SCC endorses ***Salmond Test, which states that Ers are VL for
(1) Ee acts authorized by the Er; or
(2) unauthorized acts so connected with authorized acts that they may be regarded as modes (albeit improper
modes) of doing an authorized act.
Issue was whether C’s conduct fell within second branch of test, to make Er VL.
[11] The problem is that it is often difficult to distinguish between an unauthorized “mode” of performing an authorized act
that attracts liability, and an entirely independent “act” that does not.
o
Test provides no criterion to decide - How is the judge to decide?
C was authorized to bathe and tuck in the kids. Was the abuse so connected to these authorized acts that ER should be VL?
When dealing with an unauthorized act (2nd branch of the Salmond test), use the following approach:
1) Court should first determine whether there are precedents which unambiguously determine on which
side of the line between VL and no liability the case falls.
2) If prior cases do not clearly suggest a solution, the next step is to determine whether VL should be
imposed in light of the broader policy rationales behind strict liability. (policy analysis)
In this case, court had to engage in policy analysis.
o
It’s a balance between the social interest in furnishing an innocent tort victim with recourse against a financially
responsible defendant, and a concern not to foist undue burdens on business enterprises
pg. 16
o
Two fundamental concerns underlie the imposition of vicarious liability: (A) provision of a just and practical
remedy for the harm; and (B) deterrence of future harm.
o
(A) Even though it’s a non-profit, it’s only fair that they should bear the burden of providing a just and practical
remedy for wrongs perpetrated by their Ees

Er introduces these risks so they should be liable. And they can spread risk using insurance. And victims
can’t. So it makes sense for Er to be liable.
o
(B) Deterrence:

This is so Er’s go beyond just the duty to not be negligent

Ers can use imaginative and efficient administration and supervision to reduce the risk of harm
Connection - has to be more than just a coincidence to justify imposition of VL
o
Unauthorized act has to be closely and materially related to authorized acts of Er, so as to serve as deterrent
o
Q: is there a connection or nexus between the Em enterprise and the wrong that justifies imposition of vicarious
liability on the Er
SCC concludes that in determining whether an Er is VL for an Ee’s unauthorized, intentional wrong in cases where
precedent is inconclusive, courts should be guided by the following principles (regarding connection):
1) Whether the wrongful act is sufficiently related to conduct authorized by the Er to justify the imposition of VL

VL is generally appropriate where there is a significant connection b/w the creation or enhancement of
a risk and the wrong that accrues therefrom

Incidental connection to Em enterprise, through time and place is not enough
2) In determining sufficiency of the connection b/w the Er’s creation or enhancement of the risk and the wrong
complained of, subsidiary factors may be considered. When related to intentional torts, the relevant factors may
include, but are not limited to, the following:
(a) the opportunity that the enterprise afford the Ee to abuse his/her power
(b) the extent to which the wrongful act may have furthered the Er’s aims
(c) the extent to which the wrongful act was related to friction, confrontation or intimacy inherent in the
Er’s enterprise
(d) the extent of power conferred on the employee in relation to the victim
(e) the vulnerability of potential victims to the wrongful exercise of the Ee’s power
 should consider policy analysis together with this approach to analyse the connection
Ultimate question: Did the Er’s enterprise and empowerment of the Ee materially increase the risk of the sexual assault?
o
TJ must consider Ee’s specific duties and whether there was a power or dependency relationship, in determining
whether they gave rise to special opportunities for wrongdoing
Court concludes Er was VL
o
[58] Applying these considerations to the facts in the case at bar, the Foundation is VL for the sexual misconduct
of Curry. The opportunity for intimate private control and the parental relationship and power required by the
terms of Em created the special environment that nurtured and brought to fruition Curry’s sexual abuse. The Er’s
enterprise created and fostered the risk that led to the ultimate harm. The abuse was not a mere accident of time
and place, but the product of the special relationship of intimacy and respect the Er fostered, as well as the special
opportunities for exploitation of that relationship it furnished. [Job had a great risk for child sex abuse]. Fairness
and the need for deterrence in this critical area of human conduct – the care of vulnerable children – suggest that
as between the Foundation that created and managed the risk and the innocent victim, the Foundation should
bear the loss.
Jacobi v. Griffiths, 1999 SCC – *Vicarious Liability* SCC endorses 2-step approach used in Bazley, for
determining when an unauthorized act of an Ee is sufficiently connected to the Er’s enterprise that VL
should be imposed. Where policy rationale is week, connection must be strong (case defines this). Court
differs on how easily VL should be imposed on non-profits, and on how to interpret deterrence.
Facts:
-
The Respondent Boys’ and Girls’ Club, a non profit, employed the respondent G as Program Director. It was G’s job to
supervise staff, organize activities, and form friendships with the children.
G sexually assaulted a male child, and had sex with a female child at his home outside working hours (the appellants)
G was fired and charged criminally.
The appellants sued the Club on the basis that it should be held VL for the intentional sexual abuse by its Ee (as well as
directly liable to the appellants for negligence and breach of fiduciary duty).
Court History: TJ only considered VL and found the club VL for the assaults committed by G. The C.A. allowed the Club’s appeal.
Issue: Should the B&G club be held VL for the intentional assaults committed by G in his home outside working hours?
Held: The appeal should be dismissed and the matter sent back to trial for a determination as to whether the Club is directly liable
under a fault-based cause of action.
Law:
This case endorses the Bazley decision but finds on the facts that it falls on the other line (Er not VL)
These factual distinctions led to the different result
o
[43] …The Club offered recreation in a public setting (as opposed to the privacy of Griffiths’ home) in group
activities with other persons including children and volunteers whose continuing presence would have been fatal
pg. 17
to Griffiths’ personal agenda. Griffiths had no job-created authority to insinuate himself into the intimate lives of
these children. Unlike Bazley the enterprise here had only two employees and its emphasis was on developing
(horizontal) relationships among the members, not (vertical) relationships to persons in authority.
Under policy analysis, court considers Compensation and Deterrence
Court differs on the Non-profit issue [69-71]
o
[71] VL is seen as a no-fault mechanism for spreading the loss over the customer base of the employer on the
theory that “a person who employs others to advance his own economic interest should in fairness be placed
under a corresponding liability for losses incurred in the course of the enterprise”
o
VL is limited by the “strong-connection” test, so won’t be extended just b/c Er has deep pockets
o
As a non-profit, the respondent can’t spread the risk of operation over consumers in the usual way. It has no
way to “internalize” the cost. This doesn’t mean non-profit can’t be VL (ability to pay isn’t a CP to imposition of
VL), but remedy shouldn’t be as easily available to plaintiff in such cases.
 This contradicts what was said in Bazley.
Court also differs on interpretation of “deterrence”
o
Court identifies it as a policy consideration, but states that there is little an Er can do to deter an individual from
committing a crime (sentencing should be enough of a deterrent).

DIFFERENCE: In Bazley deterrence related to the Er taking better steps, but here judge is talking more
about deterring individual (this is important) rather than trying to make Er liable.
[75] we shouldn’t be too hard on non-profits who are doing good things. If we hold them to high standards, than they may
stop doing these things.
o
Shouldn’t hold them liable for what are unforeseen and unforeseeable criminal assaults by Ees
Application to the case
Court endorses same approach as SCC in Bazley in terms of the (a-e) factors that should be considered in assessing the
sufficiency of the connection b/w the Er’s creation or enhancement of the risk and the wrong complained of
o
Where policy considerations are weak, connection b/w the enterprise risk and the harm must be very strong in
order to find VL
o
Strong connection  there must be a material increase in the risk of harm occurring in the sense that the
employment significantly contributed to the occurrence of the harm.
The court deals with the result on the facts in [80] as related to Bazley. Essentially the non-profit in this case didn’t provide
Griffith much opportunity to be alone or in any intimate situation with the kids (this was prohibited), no authority for
touching other than casual, Griffith had to entice the children to his home in order to commit assault, parents in this case
gave permission for kids to go to his home and knew home visit wasn’t part of club’s activities.
Conclusion: Where as here the chain of events constitutes independent initiatives on the part of the Ee for his personal gratification,
the ultimate misconduct is too remote from the Er’s enterprise to justify “no fault” liability. Er not found VL.
Common Law Em vs Unionized Labour
CL Em
- focus is on independence and flexibility for Er and
Ee
-
-
-
-
Unionized Labour
- Unionized labour: focus is on consistency and security primarily for Ee’s
- When a workforce unionizes, Ee’s give up some control, independence and
flexibility but they get a lot of security, protection and consistency for that
Em is fundamentally Common law with statute
- Labour is fundamentally from statute
o
Arises from labour relations jurisdiction
In CL world, all relationships are individual
- Who is subject to unionized relationship?
o
An Ee in a bargaining unit is subject to a labour relations code
whether they want to be or not
o
They become certified under legislation through some statutory
process
o
Majority governs in that bargaining unit
Establishment of Contracts for Em and terms?
Ees bargain contracts and terms with Er, upfront
- Unionized employees don’t negotiate or have input. They’re subject to
or further into the relationship. They have input.
collective agreements – one big K to represent bargaining unit. Union takes
into account age of members, what they want and bargains w/ Er on their
behalf. Union members don’t have individual relationship w/ Er.
Termination
Er’s can always terminate Ee’s. If there isn’t cause
- Er can’t terminate Ee on RN. Can only terminate Ee if there’s cause
then they have to provide RN/payment in lieu.
(misconduct) or perhaps if the work is simply gone (there isn’t any more
Can’t terminate if it violates human rights code.
work to do)
Progressive discipline – steps Er moves toward to get to cause
For performance issues, have to give them
- Progressive discipline is fundamental. Only in rare scenario can Ee be
warnings and opportunity before you terminate
terminated without progressive discipline.
them.
- Usually verbal, then written warning, then short suspension, then longer
For misconduct, don’t necessarily have to give
suspension, then you can terminate. Er has to prove along the way that
pg. 18
warnings
- Not very important in non-unionized world. Er’s
can ignore it, except for notice entitlement. Er’s
make decisions based on merit, education and
ability, or based on arbitrary distinctions.
- Ee’s can get fired if they don’t come to work.
- Ee can have a hard time raising an issue with Er.
Can go to ES branch for some complaints, or
court/tribunal but they need a lawyer.
misconduct is still there all along, within sunset clause (usually 2yrs).
- Gives Ee a lot of protection. Encourages fairness and consistency in
discipline.
Seniority
- Very important in union world (layoffs, shifts, promotions, etc.)
Work stoppages
- Ees can strike/fail to come to work. Labour code says as long as bunch of
requirements are met (collective bargaining agreement has expired, etc.),
then union is entitled to direct members to not come to work.
Dispute resolution
- More powerful process for Ees here: grievance process – can take
complaints to Er. It allows smaller issues to get dealt with. Relief is available
for some things at Labour Relations Board. Ee has strength of union behind
them as long as union is satisfied they ought to be resolved.
Payment of dues
- Unionized Ees pay dues to the union (2-4% of annual income).
Em Standards: The BC ESA
-
-
Legislation meant to apply to almost everyone and give them bare minimum requirements, and establish a quick and easy
process to enforce those rights
o
Doesn’t apply to all Ees
Legislation like this in every province  BC ESA
Canada labour code covers federal jurisdiction (Em standards is one part of the code)
Who does the Act apply to? (S. 1)






“Employee” includes:
o
A person (including a deceased person), receiving or entitled to wages for work performed for another,
o
A person an Er allows, directly or indirectly, to perform work normally performed by an Ee, (ie. internship)
o
A person being trained by an Er for the employer's business,
o
A person on leave from an Er, and
o
A person who has a right of recall;
 Machtinger: we should have a purposive broad interpretation of Em legislation
Exceptions – Federal Employers
o
Federally regulated Ers are governed by the Canada Labour Code
o
Examples: Banks; Broadcasting; Rail Transportation; Postal Contractors
Exceptions – Regulation
o
S.31 of the Regulation lists specific exemptions: Professionals such as accountants, engineers and dentists;
Students engaged in work study programs
Exceptions – Unionized employees (S. 3)
o
If a collective agreement deals with any of the following, then corresponding provisions in the Act do not apply:
Hours of work or overtime, Statutory holidays, Annual Vacation or Vacation Pay, Seniority retention, recall,
termination of employment or layoff
o
Some provisions of the Act apply regardless of whether the matter is addressed in a collective agreement
o
Example: Payment of wages; Special clothing; Record Keeping; Group terminations; Leaves and jury duty
Exceptions – Managers (Regs, S. 34(f))
o
Managers are exempt from the hours of work, overtime and statutory holiday provisions
o
“Manager” is defined as:

A person whose principal Em responsibilities consist of supervising and/or directing human or other
resources

A person employed in an executive capacity
Exceptions – Independent Contractors
o
Independent contractors are not considered employees
o
How to tell the difference? (+Handy Dandy list)

Control test;

Four-fold test

Organization or integration test; and

Permanency Test
pg. 19
Wages, Payroll and Records






Wages – Rates (S. 16)
o
General minimum wage - $10.25/hr effective May 1, 2012
o
Special minimum wage rates in the Regulation: liquor servers; live-in home support workers; resident caretakers;
farm workers
Wages – Payment Methods (S. 20)
o
Cash, cheque, draft or money order acceptable
o
Direct deposit only if authorized
o
At-least Semi-monthly:

No more than 16 days between pay days

No more than eight days after pay period
Wages – Deductions not allowed by Er
o
(S. 21) Er cannot directly or indirectly withhold wages

Deducting wages to recover an Ee’s cash handling mistake or till shortages

Implementing a policy that requires an Ee to pay for damage to property or inventory
o
(S. 21) Ers cannot require Ees to contribute towards the costs of business (except under the Regulation)
o
What is a “cost of business”?

Transaction fees on credit card charges? NO

Tools provided by an Ee? Can require Ee to come w/ a tool but the cost of running it is Er’s

Speeding tickets? Ee responsible
Wages – Deductions allowed (S. 23)
o
Where permitted by statute (ie. EI, CPP, tax deductions), pursuant to a garnishing order, or where authorized
under a wage assignment
Wage Assignments (S. 23)
o
Assignment must be in writing
o
Amount must be paid according to assignment or within one month of being deducted, whichever is sooner
o
Employee must provide written notice to employer and assignee in order to cancel assignment
Payroll and Record Keeping (S. 28)
o
A wage statement must be provided on each pay day unless the statement would be the same as in the past pay
period

S.27 lists what information must be provided in the wage statement (ie. rate of pay)
o
Payroll records must be kept for all Ees during their Em, and for two years after

Records must be kept in English and maintained at principal place of business

S.28 lists what information records must contain
Hours of Work




Note: excludes managers
Meal breaks (S. 32)
o
Ees must receive a 30 minute meal break at least once every 5 hours

Er has to show Ees take breaks

Saying Ees self-manage their breaks provides no record
o
Unpaid, unless Ee is required to work or to be available for work during the break
o
No req’t for short-breaks in act
Split Shifts (S. 33)
o
Split shifts are shifts separated by a number of hours off

Example: Restaurant Ee begins shift at noon, works until 2:00 and then has two hours off before being
required to return for balance of their shift
o
Split shift must be completed within 12 hours of start

In the example above, the Ee must finish their shift by midnight at the latest
Minimum Daily Hours (S. 34)
o
Act sets out minimum hours Ees must be paid if required to attend at work
o
Ensures Ees are not called into work only to be told to go home without any work or pay
o
Ees not scheduled to work, or scheduled for less than eight hours

Entitled to minimum 2 hours pay, whether or not work is performed
o
Employees scheduled to work eight or more hours

Entitled to minimum 4 hours pay, whether or not work is performed
o
If work is suspended for reasons beyond Er’s control, Ee entitled to greater of 2 hours or actual time worked
o
Exceptions: Minimum pay not required if

Ee is unfit to work

Ee fails to comply with Workers Compensation Act
Overtime


Note: excludes managers
Common misconception that salaries Ers aren’t entitled to overtime.
pg. 20








Overtime claim often brought when Ee gets fired
Entitlement (S. 35)
o
Overtime rates apply where Er requires or directly or indirectly allows Ee to work

More than 8 hours/day

More than 40 hours/wk
o
Er has to make concrete efforts to send people home or will be liable to pay overtime
o
Work may include:

Travel required as part of the job

Time when an Ee is on call at a designated location

Time required to attend conferences, business meetings or training
o
To avoid disputes regarding overtime Er should:

Keep accurate records of hours worked

If Ees are working overtime without authorization, advise them to stop

Implement a policy or procedure for approving overtime before it is worked
Hours free from work (S. 36)
o
Ee entitled to at least 32 consecutive hours free from work each week, or pay 1.5x the regular wage rate for time
worked during the 32 hour period
o
Employee is also entitled to have eight hours off between shifts unless required to work because of an emergency
Rates (S. 40)
o
Daily Overtime

0-8 hours - regular rate

8-12 hours - 1.5 x regular rate

12 hours plus - 2 x regular rate
o
Weekly Overtime

All time in excess of 40 hours/wk must be paid at 1.5 x regular wage rate

Only the first eight hours worked each day are used to calculate total hours for weekly overtime
No Excessive Hours (S. 39)
o
ESA does not proscribe maximum hours, but Er must not require, or directly or indirectly allow Ees to work
excessive hours or hours detrimental to an employee’s health and safety
o
 No cases on this
Overtime Banks (S. 42)
o
Ee may request (must be in writing) Er to establish overtime bank
o
Er required to credit overtime wages to the time bank instead of paying them out under the Act
Payouts (S. 42)
o
Ee may request:

Payment of all or part of wages credited to the time bank

Time off with pay in lieu of being paid wages in the time bank

Closure of the time bank

Er must pay amount credited to time bank
o
Er may close the time bank on one month’s notice

Pay all wages credited to the time bank within 6 months; and/or

Allow Ee to use the wages credited in the time bank to take time off with pay;
Averaging Agreements (S. 37)
o
Ers can reduce overtime liability through averaging agreements
o
Useful in environments where flexible work arrangements commonly exist
o
Examples (One week agreement, EE might work four on (10hr days), three off. Two week agreement Ee might
work 5 on in the 1st week, and three on in the 2nd week).
o
Overtime and hours free from work – established through agreement
Statutory Holidays




Note: excludes managers
Statutory Holiday – Entitlement (S. 1)
o
Act lists the following statutory holidays: New Years day; BC Family Day; Good Friday; Victoria Day; Canada Day;
BC Day; Labour Day; Thanksgiving Day; Remembrance Day; Christmas Day; Any other day prescribed by regulation
(none at present)
Statutory Holiday Pay – Entitlement (S. 44)
o
Entitled to statutory holiday pay if:

Employed for at least 30 calendar days

Worked or earned wages for at least 15 of 30 calendar days before holiday
o
Employees governed by an averaging agreement eligible if they have worked any time in the previous 30 calendar
days before holiday
Statutory Holiday Pay – Calculation (S. 45)
Amount Paid ÷ Days Worked
o
Amount Paid includes total wages for the 30 day period, including paid vacation time if taken, but excludes
overtime
pg. 21
o


Days Worked is the number of days the employee worked or earned wages within the 30 calendar day period,
including any vacation days taken in the 30 calendar day period.
Statutory Holiday Pay if Ee Working (S. 46)
o
Employees who work statutory holidays are entitled to be paid:

1.5x the employee ’s regular wage for the time worked up to 12 hours;

2x the employee’s regular wage for any time worked over 12 hours; and

An “average day’s pay”
Statutory Holiday Pay - Substitutions (S. 48)
o
Act permits employers to substitute another day for a statutory holiday
o
Statutory holiday provisions will apply to that day as if it were a statutory holiday
o
Employee (or a majority of employees) must agree to substitution
o
Employer must retain record of agreement for two years
Vacation (time) and Vacation pay




Vacation time and vacation pay are two separate entitlements
Vacation Time (S. 57)
o
Act provides amount of time off an employee must receive each year:

12 consecutive months = 2 wks/yr. (Has to be taken in year in which they’re earned)

5 consecutive years = 3 wks/yr. (Can have leaves within this time)
o
Er decides when Ee is entitled to take vacation time
Vacation Pay – Calculation (S. 58)
o
Vacation pay begins to accrue after five days of employment
o
Based on a % of an employee’s gross earnings from the previous year

In the first five years, employees receive 4% of total wages earned the previous year

After five years, employees receive 6% of total wages from earned the previous year
o
VP is technically on top of your salary, but in reality Er will just pay you while you’re on vacation instead of paying
you 4% per paycheque and then not pay you while you’re on vacation
Vacation Pay – Payouts (S. 58)
o
Vacation pay must be paid:

At least 7 days before Ee takes vacation or

On regular scheduled payday, if agree in writing or provided by collective agreement
Leaves



Leave = Unpaid time off
Pregnancy Leave (S. 50)
o
Unpaid leave for employees giving birth to a child
o
Length of leave depends on when request is made, and whether there are any complications with the pregnancy
o
If leave requested while Ee is pregnant

Up to 17 consecutive weeks of unpaid leave

Can’t begin more than 11 weeks before expected birth date and not later than the actual birth date

Can’t end earlier than 6 weeks after actual birth date (unless less than 17 weeks being taken) or later
than 17 weeks after the actual birth
o
If leave requested after birth or termination of pregnancy

6 consecutive weeks beginning on the date of the birth or the termination of the pregnancy
o
Extension (S. 50)

Up to 6 additional weeks if employee is unable to return to work for reasons related to the birth or
termination of the pregnancy (physical, emotional or psychological)
Parental Leave (S. 51)
o
Paid leave for natural or adoptive parents of a child

In addition to mat leave, usually adds up to full year off
o
Length and timing of the leave depends on the relationship of the employee to the child
o
Parental Leave – Birth Parents (S. 51)

If birth mother has taken pregnancy leave, she is entitled to 35 consecutive weeks of unpaid leave

If birth mother did not take pregnancy leave, she is entitled to 37 weeks of unpaid leave

Leave must begin after the child’s birth and no later than 52 weeks after actual birth date

Birth fathers are entitled to up to 37 consecutive weeks of unpaid leave
o
Parental Leave – Adoptive Parents (S. 51)

Adoptive parents are entitled to up to 37 consecutive weeks of unpaid leave. This leave must begin
within 52 weeks after the child is placed with the parent.

Marital status does not matter: Includes same sex partners, Common law partners
o
Parental Leave – Extension (S. 51)

Parental leave can be extended by 5 additional weeks in the event a child has a physical, psychological
or emotional condition requiring an additional period of parental care

Additional time must follow conclusion of parental leave ends
pg. 22






Pregnancy and Parental Leave (S. 51)
o
Maximum 52 weeks of unpaid leave plus extensions
o
Employee must comply with procedure for requesting both types of leave
Family Responsibility Leave (S. 52)
o
Up to 5 days unpaid leave per year to meet responsibilities related to:

Care, health or education of a child in the employee’s care

Care health of a member of the employee’s “immediate family”

Immediate family defined a spouse, child, parent, guardian, sibling, grandchild, grandparent
or any person who lives with an employee as a member of their
Bereavement Leave (S. 53)
o
Up to 3 days unpaid leave upon the death of an “immediate family” member
o
No requirement to provide notice
o
Not required to take all three days, nor to take them consecutively; Take within a reasonable time
o
Not an annual entitlement
Compassionate Care Leave (S. 52.1)
o
Up to 8 weeks of unpaid leave to provide care or support to a family member who has a serious medical condition
with a significant risk of death within 26 weeks

Immediate family or member of a prescribed class
o
Employee required to provide a medical certificate as soon as practicable
Leaves – Duties of Employer (S. 54)
o
Leaves must be granted
o
No termination or change in conditions of employment
o
Place employee in the same or comparable position upon return
Leaves – Effect on Employment Status (S. 56)
o
Employment deemed continuous for purpose of calculating certain benefits
o
Employer must continue to make payments to pension, medical or other benefit plans as before
o
Employer must provide all increases in wages and benefits
Termination of Employment





Individual Notice (S. 63)
Length of service
Severance Pay
Less than 3 mos.
None
3 to 12 mos.
1 week
12 mos. to 3 yrs.
2 weeks
3 or more yrs
1 week/yr, to maximum of 8 wks
 Duty to provide notice discharged by notice, payment in lieu, or a combination of both
Termination during layoff (S. 63)
o
An employee on lay off cannot claim termination pay until layoff exceeds 13 weeks in a 20 week period
o
Termination date will be date upon which employee commenced layoff
o
No right to lay off Ees in CL. If Er lays off Ee, Ee can claim termination and CL notice (even if they have no claim
under the Act)
Group Notice (S. 64)
o
Additional notice required where a large number of Ees are being terminated at a single location within a two
month period:

50-100 employees – 8 weeks

101 to 300 employees – 12 weeks

301 or more employees – 16 weeks
o
Notice must be provided to: Each Ee to be terminated; A trade union (if applicable); Minister of Labour

Specify number of employees affected, date of the termination and reason for same
Exceptions (S. 65)
o
Not required to provide notice where:

Casual employment (Em is optional for Ee)

Defined term employment (contract)

Employment was for specific work to be completed within 12 months

Employment has become impossible to perform due to unforeseeable event (Act of God provision)

Employee employed by a construction employer at one or more construction sites

Terminated Ee refused reasonable alternative Em with Er (breached duty to mitigate)
Variances

Variances (S. 72)
o
Employer and employees, or any of them, may apply jointly to Director of Employment Standards for variances
(contract out of certain parts of act)
pg. 23
Complaints and Enforcement









Complaints (S. 74)
o
In writing, to Employment Standards Branch
o
Six month time limit (limitation period)
o
Can be confidential or anonymous
Investigations (S. 76)
o
Director must investigate complaint unless it falls into an exception (ie. out of time, frivolous, not made in good
faith, insufficient evidence, being dealt with in another forum)
o
Director may conduct investigation on own initiative
o
Director encourages settlements (S. 78)
Determinations (S. 78)
 Decision made by an Employment Standards Branch
o
Order compliance
o
Pay $$$
o
Order reinstatement (leaves, retaliation)
o
Post notices
o
Dismiss complaint
Director may reconsider determination (S. 86)
No constitutional authority (S. 86.1)
No authority to apply Human Rights Code (S. 86.2)
Enforcement
o
Liens for unpaid wages (S. 87)
o
Demands on third parties (S. 89)
o
File in Court as judgment (S. 91)
o
Seizure of assets (S. 92)
o
Director or officer liable for up to 2 months’ unpaid wages (S. 96)
o
Monetary penalties (for repetitive breaches) - $500/$2,500/$10,000 (S. 98)
Appeals (Part 13)
o
Director’s determination to Employment Standards Tribunal

Error in law

Failure to observe natural justice

Fresh evidence (S. 112)
o
Then reconsideration application to Tribunal (S. 116)
o
Then judicial review to BCSC
Shore v. Ladner Downs, 1998 BCCA – *Em K – notice provisions will violate ESA in future* Court heavily
draws on policy reasoning and interpretation of employment standards legislation by SCC in Machtinger.
Ratio: When a termination provision fails to comply with ES legislation at any point in time, it’s going to
be void and the Ee will be entitled to reasonable notice at CL.
Facts:
-
Ee and Er had EmK that read:
o
Firm policy dictates your employment to be probationary for the first 6 months during which employment may be
terminated at the sole discretion of the Firm without cause. Notice period within and after the probation period to
be 30 days by either party.
Ee was later terminated without cause, well after probation period ended, and was given 30 days payment in lieu of notice.
Er argued provision in Em K applies.
Ee argued that he was either entitled to be paid based on RN because provision was void as being in violation of ESA in the
future, or that the provision in the K was ambiguous and does not apply to termination without cause outside of probation.
TJ agreed with Ee and granted 5 months notice as Em K provision was void.
Issue: What to do when provision in EmK doesn’t comply with ESA in the future? Should the contractual term be held to have been
void from the beginning or, as the Er contend, should it be held to become void only when the statutory requirement rises above the
period fixed by contract.
BCCA:
ESA sets out minimum requirements (s. 2)
o
S. 42 sets out minimum notice provisions: 2 weeks if Ee has completed 6 consecutive months, plus 1 extra week
for 3 yrs employment and each year thereafter up to max 8 weeks
While the provision in the Em K was actually longer than the statutory minimum, it would be less than the statutory
minimum after 5 yrs time. P argued it was essentially an agreement to waive the minimum legislated requirement.
Court considers authorities
o
Thomson v Moore Corp, 1986 BCSC

Em K called for notice of “at least two weeks”

Clause implicitly waives legislative minimums and is thus void and of no effect

Common law notice applies
pg. 24
o
Suleman v BC Research Council, 1989 BCSC

Em K called for 30 days notice

Void b/c at date of termination Ee was entitled to 8 weeks notice per ESA

Court followed decision in Thomson v Moore and applied damages wrt common law notice, of 8 months
o
Machtinger, SCC 1992

Em Ks called for minimal or no notice on termination without cause. SCC upheld that provisions were
void since they were below the statutory minimum, and imposed common law notice.
Not directly applicable in this case b/c at current time Em K is not in violation of statutory minimum (but policy
considerations are important)
The plain language of the section in the ESA weighs in favour of the interpretation that the contractual provision should
be held to be void from the beginning.
Iacobucci’s policy considerations in Machtinger also support this interpretation
o
The objective of the Act is to protect the interests of employees by requiring employers to comply with certain
minimum standards, including minimum periods of notice of termination.
o
reasonable, fair and uniform minimum standards
o
The harm which the Act seeks to remedy is that individual employees, and in particular non-unionized employees,
are often in an unequal bargaining position in relation to their employers.
o
Accordingly, an interpretation of the Act which encourages employers to comply with the minimum
requirements of the Act, and so extends its protection to as many employees as possible, is to be favoured over
one that does not.
o
In my view, an approach more consistent with the objects of the Act is that, if an employment contract fails to
comply with the minimum statutory notice provisions of the Act, then the presumption of reasonable notice
will not have been rebutted. Employers will have an incentive to comply with the Act to avoid the potentially
longer notice periods required by the common law, and in consequence more employees are likely to receive the
benefit of the minimum notice requirements.
The policy considerations applied in Machtinger would not be served if the contract were to be interpreted in favour of
the employer so as to leave the individual employee responsible for determining, at the point of termination, whether the
statutory minimum had risen above the notice period stated in the contract
From Machtinger
o
I would conclude that both the plain meaning of ss.3, 4 and 6 and a consideration of the objects of the Act lead to
the same result: where an Em K fails to comply with the minimum notice periods set out in the Act, the
employee can only be dismissed without cause if he or she is given reasonable notice of termination.
Conclusion: Appeal by defendant dismissed; notice period of 5 months by TJ imposed.
Ratio per Grady: When a termination provision fails to comply with ES legislation at any point in time, it’s going to be void and the
Ee will be entitled to reasonable notice at CL
Macaraeg v. E Care Contact Centers Ltd., 2008 BCCA - *Em K silent wrt overtime entitlement* ESA
provisions are not incorporated as a matter of law into Em K’s, and the provisions of the ESA are
adequately enforced through its own administrative enforcement procedure (can’t sue to enforce)
Facts:

Ms. M was hired by E Care in May 2004 when she signed a written Em K, which set out her rate of pay, vacation entitlement
and group benefits. Importantly, the Em K was silent wrt M’s entitlement to overtime.

Long hours were worked by M, but she was told that E Care did not pay for overtime. After 30 months of employment, she
was dismissed on a without cause basis and provided with two weeks’ pay in lieu of notice.

M responded by initiating a civil action against E Care. She sued for wrongful dismissal and sought damages in lieu of
reasonable notice and payment for overtime worked during the course of her employment.
o
It was only possible to claim overtime under the ESA – Em K was silent on issue
Issue: 1) Are Ee’s statutory rights under the ESA inferred into the Em Kas a matter of law? (BCCA: No) 2) Can an Ee sue for a right
based on Employment standards? (BCCA: No) (This was significant b/c it could determine whether there could be a class action. (No
provision for class actions through ES branch); and clarify issue regarding limitation period, which under ESA is 6 months, but under is 6
years in CL breach of K).
BCSC: Held the minimum overtime provisions of the ESA were incorporated as a matter of law into the Em K b/w M and her former Er;
and M’s entitlement to overtime in accordance with such provisions could be enforced by way of a court action.
BCCA:

Held: ESA provisions are not incorporated as a matter of law into Em K’s, and the provisions of the ESA are adequately
enforced through its own administrative enforcement procedure (dealt with by director and can be appealed to a tribunal).

Because claim only existed under ESA, which has a robust/broad enforcement mechanism, then she can only pursue it
through ESA and not through court.

[45] general rule that rights conferred by statute are to be enforced in the statutory regime. In my view, an important
indicator of legislative intent is the enforcement regime in the legislation.
o
How robust is it?

[71] It is settled law, I think, that where a statute creates an offence, and defines particular remedies against the person
pg. 25



committing that offence, prima facie the party injured can avail himself of the remedies so defined, and no other; but the
object and provisions of the statute as a whole must be examined
[73] The law is clear: the general rule is there is no cause of action at common law to enforce statutorily-conferred rights.
The exception arises when, on a construction of the legislation as a whole, the court concludes the legislators intended that
statutorily-conferred rights can be enforced by civil action.
Court then looks at ESA to see if it was legislator’s intent for people to pursue claims through civil action
o
Court: the ESA is intended as a complete code, you can’t pursue claims in civil court based solely on rights
contained in the ESA
ESA provisions implied in contract? No bc then you could sue in cl over them.
Termination
-
Em K can only be terminated if done in accordance with express or implied terms of K that deal with notice period
o
Exception: just cause based on Ee misconduct or gross incompetence
Notice: Three layers
o
Statutory framework – employment standards

Minimum floor; Max is 8 weeks; Additional notice for bigger groups of Ee
o
Express contractual notice provisions

“If you’re terminated, you will get x”

As long as it complies with ESA (equal to or greater), then it will prevail

Often there is no express term, or it is illegal (less than ES- Machtinger, or going to not comply in the
future – Shore) or unenforceable (ambiguous)

Sometimes if substratum of employee relationship has changed – not enforceable (ie. I was hired as a
sales person and now I’m the CEO – so term no longer applies). Has to be a big change.
o
Common law: where express terms aren’t there or aren’t enforceable, then we look to CL (what is reasonable)
Reasonable Notice on Termination




CL notice can be provided as working notice (I’m going to terminate you in 12 weeks) – this doesn’t happen often
Usually see ‘payment in lieu’ or ‘severance’  damages Er pays for failing to provide notice of termination (Ansari)
What’s owing during notice period is wages, but also other forms of remuneration (car allowance, dental coverage) (Ansari)
Policy basis for reasonable notice:
o
Protection of the vulnerable worker – Machtinger
o
Recognition of seniority
o
Discourage Ems from unprofessional and unlawful termination

RN is meant to represent amount of time it will take worker to find another job
o
They shouldn’t suffer any hardship
The four Bardal factors for determining RN:

Availability of alternative Em, wrt training, experience and qualifications of Ee
o
Court will look at status of labour market for that person’s skills, expertise and experience
o
Will consider Ee’s special training that will assist/impede them
o
The more jobs there are out there, the lower amount of notice they will get
o
Court may look at impact that Ee’s termination might’ve had on their reputation in the industry (ie. all other Em’s
know Ee was terminated)

Nature of the position/Character of Em
o
Higher/longer notice awarded for higher status occupations
o
Court will look at qualification, education, level of responsibility, training  not just title
o
Availability of jobs may now tend to outweigh nature of position.

Length of service
o
Longer service determines longer notice
o
If you worked 25 yrs it may take you longer to get another job (the focus is on them getting another job, not on
rewarding them for long service)
o
If there was a break in the service of only a couple months, it will be considered continuous Em
o
Exception: if Ee is terminated and paid severance, and then rehired, then they weren’t a continuous Ee during that
gap.

Age
o
Older you are, the longer notice you get
o
Exception: if a really young CEO was terminated, it will be really hard for them to find a comparable position (age
could work against them as well).

Other factors may come into play in particular cases
o
Inducement – If Ee has a really secure position in one job but is induced to quit by another Er, the fact they were
induced will be considered. Loses significance as times goes by.
pg. 26
o
-
Salary – having a higher paying job is going to make finding alternative Em more difficult (justifies increased
notice)
o
Relocation – if Ee has to relocate to find a new job, justifies longer notice period
o
Immigration status – Ee’s work visa may be particular to job with particular Er. For that Ee to get another job it
could be really difficult – justifies longer notice period.
Exam: won’t have to say how much reasonable notice a person should get
Bardal v. Globe & Mail Ltd., 1960 Ont. HCJ – seminal case setting out the factors to consider in
determining RN
Facts: An employee who used to be a manager at an ad company was approached by the Globe to become the assistant ad manager
(eventual manager). Bardal stressed the importance of job security and received assurances the job would be permanent. He took the
job, and 17 years later after climbing up positions, he was terminated. Er offered him 6 months.
Issue: Was 6 months notice sufficient?

Ers have a contractual obligation to give reasonable notice and allow the Ee to serve out their notice. (working notice) If the
Ee is dismissed without RN he is entitled to the damages that flow from the failure to observe this contractual obligation,
which damages the servant is bound in law to mitigate to the best of his ability.

Court rejected 6 months and instead set out the seminal statement on reasonable notice at [21]
o
There can be no catalogue laid down as to what is reasonable notice in particular classes of cases. The
reasonableness of the notice must be decided with reference to each particular case, having regard to
o
1) the character of the employment, 2) the length of service of the servant, 3) the age of the servant and 4) the
availability of similar employment, having regard to the experience, training and qualifications of the servant.
Conclusion: Court concluded Ee was entitled to a year’s notice; court awarded damages in lieu, less amounts earned by the Ee in a new
job.
Ansari v. BC Hydro, 1986 BCSC, aff’d 1986 BCCA - **first case BC court will look at re: RN* If ER fails to
give RN – has to pay damages, not limited to salary. Reinforces Bardal factors – non-exhaustive list. Sets
rough upper limit for notice at 18-24 months
Facts: 4 graduate engineers were dismissed from their employ with BC Hydro. A was 54 and had worked for 19 years, L was 55 and had
worked for 10 years, Y was 46 and had worked for 11 years, and P was 33 and had worked for 9 years.
Issue: What damages flow from Em’s breach of K? What happens if notice isn’t provided

If Er fails to give RN, then law requires him to compensate Ee by an award of damages that is intended to put Ee in position
they would’ve been in had notice been provided

the recovery of lost income is not limited to salary, but includes other benefits incidental to the employment being
terminated (ie. car allowance, medical):

Court looked at Bardal, said not meant to be exhaustive, but important
o
Ee’s competence only relevant to determining just cause – doesn’t reduce entitlement to RN
o
Doesn’t matter how specialized job was
o
Long term Ee has a moral claim to damages (more notice)

Rough upper limit: 18-24 months, the most that any Ee should be able to get, barring the most extreme and exceptional
case (ie. where degree of responsibility, age and years of service are extensive)
Just Cause for Termination
-
-
-
If someone’s performance is so poor, or they have behaved so badly that it constitutes a fundamental breach of the Em K,
then Er is released from it’s obligation to provide reasonable or express notice. Instead they can terminate summarily,
immediately, without notice
o
Usually involves Ee misconduct
o
Difficult to prove gross incompetence
If breach isn’t fundamental, then ER would have duty to help Ee improve or to accomodate them etc.
CL doctrine of cause has a number of main features
1) Decision has to be made in good faith, non-arbitrarily, and without discrimination.

What happens has to have harmed the Er’s reputation or legitimate business interests.

Er has to treat Ee’s in a consistent manner.
2) Proportionality – the punishment has to fit the crime and take into account mitigating factors.

Single instance usually not going to be enough unless really severe (assault, theft, sexual harassment,
competing with Er).
3) Procedural fairness – there’s not usually a duty to comply with rules of natural justice, but Er has to provide Ee a
chance to explain.
4) All of this is weighted towards the Ee. If it’s a close call – misconduct is bad but not that bad – court will side with Ee
and provide reasonable notice instead of immediate termination on just cause.
Classification of cause
o
Theft/fraud
o
Neglect of duty/incompetence/poor performance - there has to be warnings and standards set (See p 10)
pg. 27
o
o
o
o
o
Absenteeism (not related to illness or disability)
Misrepresentation of qualifications – depending on nature of misrep might be enough
Refusal to relocate – the law gives Er’s some flexibility in dictating where the Ee’s going to work. (ie. has to be a
local office change – ie. Burnaby vs surrey)
Long term illness – ability to perform core duties in the future, Em k becomes frustrated. Usually has to be 2 years.
Other forms of misconduct
McKinley v. BC Tel, 2001 SCC – Case establishes contextual approach to determining just cause. Look at
what happened, and then consider circs – was it bad enough, was Ee provoked, were they generally a
good Ee over 25 years, etc. Then decide if just cause exists. Approach 1) first consider whether the
evidence establishes the Ee’s deceitful conduct on a BoP, if it does 2) then consider whether the nature
and degree of dishonesty warranted dismissal (consider circs)
Facts: McKinley was a CA, rose through the ranks at BC Tel. He had been there 17 years and was 48 years old when he developed high
blood pressure and took medical leave. He rejected severance package Er offered. Er later claimed his illness had frustrated the K.
After the trial started, the Er abandoned frustration and started alleging cause based on a letter they discovered from a physician
recommending a treatment that could have allowed him to go back to work (which he never disclosed to Er). BCCA held, contrary to
what TJ said, that there are no degrees of dishonesty, dishonesty is always cause.
Main issue: was whether dishonesty in and of itself was enough to justify termination, or whether circs had to be looked at

CA awarded new trial, on basis that TJ erred in instructing jury to consider context. CA felt dishonesty was enough for just
cause
SCC (Iacobucci):

Court finds there are two competing lines of authority – dishonesty on its own justifies summary dismissal, vs you have to
consider circumstances
o
Court notes that cases that say “dishonesty is enough” all dealt with very serious forms of Ee dishonesty

Court decides that first line of reasoning is the right one – contextual approach is preferred.
o
Whether an Er is justified in dismissing an Ee on the grounds of dishonesty is a question that requires an
assessment of the context of the alleged misconduct.
o
More specifically, the test is: whether the Ee’s dishonesty gave rise to a breakdown in the Em relationship.
o
A TJ must instruct the jury to determine:
(1) whether the evidence established the Ee's deceitful conduct on a BoP; and
(2) if so, whether the nature and degree of the dishonesty warranted dismissal.

Based on consideration of facts only regarding seriousness of misconduct

Underlying this approach is the principle of proportionality

Court notes how important Em is in the lives of many people  thus care must be taken in fashioning rules that allow Er to
terminate Em without notice.

Court notes there is often a power imbalance b/w Er’s and Ee’s; criticizes approach that doesn’t consider the circumstances

Look at what happened, and then consider circumstances – was it bad enough, was Ee provoked, were they generally a
good Ee over 25 years, etc. Then decide if just cause exists
Matthew: Generally very difficult to prove
Em in the fed’l jurisdiction





Determined according to
o
Separation of powers in Constitution – s. 91 and 92

Federal if labour relations is an integral aspect of a federal undertaking (Actton)

Incl. aeronautics, interprovincial trucking, telecom, navigation and shipping, grain terminals, Canada
post, banks, first nations related activities
o
Jurisprudence

Most common examples based on jurisprudence: airlines, nuclear facilities
Federal employees governed by Canada Labour Code
o
Part one: industrial relations (federal labour code)
o
Part two: occupational health and safety (federal equivalent of works comp act)
o
Part three: standard hours, wages, and holiday
Important to know jurisdiction between two things
Unjust dismissal – separate from wrongful dismissal, exists under s. 240 of Canada labour code
For employment purposes, leading case on jurisdiction is Northern Telecom 1979 SCC, also a First Nations case - Niltu’o’o
o
These cases are quite specific
Actton Transport Ltd. v. BC (Director of Em Standards), 2008 BCSC (aff’d 2010 BCCA) – Case sets out
test for deciding jurisdiction issues – focus is on whether business/operation is functionally integrated
pg. 28
(vital or essential) to the federal undertaking.
Facts: Acton owned an interprovincial trucking business. They paid the wages of the Ee’s in question, but contracted their services to
another company (supersave disposal) which provided intraprovincial services. The Ees made a claim under the ESA. ES Tribunal
ordered Actton to pay the 4 Ees unpaid wages under the ESA. Er appealed on basis that it’s federal - appeal tribunal held that Actton
was federally regulated, but the garbage disposal business was purely intra-provincial and not functionally integrated with Actton’s
inter-provincial federally regulated trucking operations. Case went to BCSC for judicial review.
Issue: is the appropriate jurisdiction federal or provincial?
BCSC:

No question that Actton was federal – Actton said the other company was part of their business and thus federally regulated
o
In alternative, they said superSave was so integrated into their company that they were also federal

Three key points
1. the general rule is that labour and employment relations fall under provincial, not federal, jurisdiction;
2. however, the federal government has authority over L&E relations if these latter matters are an integral aspect
of an enterprise or undertaking that clearly falls under federal jurisdiction (for example, aeronautics or
banking); and
3. whether an enterprise or undertaking is inherently a federal matter depends on the essential nature of its
normal or regular operations.

A business can have separate operations, each of which is separately regulated (prov/fed)
o
The fact that an intraprovincial operation shares owners with an interprovincial operation isn’t determinative

In order to be considered federal, the intraprovincial business must also be functionally integrated with the
interprovincial operation such that the whole is properly regarded as a single integrated federal undertaking rather than
two separate undertakings
o
Functional integration requires that prima facie the provincial undertaking be vital or essential, not just integral, to
the federally regulated undertaking.
o
To be "vital or essential" the provincial undertaking must be shown to be "absolutely indispensable or necessary"
to the federal undertaking.

Since intraprovincial garbage collection is not an inherently federal matter, the Ees of that aspect of Actton's business would
only fall under federal jurisdiction if the garbage collection operations were functionally integrated with Actton's
interprovincial/international trucking operations.
o
Court looked at operational, business realities, substance of activity being carried out, nature or character of
undertaking being carried on. Court concluded NOT functionally integrated.
o
SSD wasn’t vital or essential to Actton’s business. Also businesses didn’t have common management.
Conclusion: Court confirmed decision of tribunal; Found that supersaver did garbage disposal in BC and this business wasn’t
functionally integrated with Actton’s business.
Unjust Dismissal
-
-
-
Right/claim for Ee’s under Canada Labour Code
UD: statutory wrongful dismissal claim that federally regulated Ees have
Unique features
o
In an UD complaint, adjudicator has jurisdiction to reinstate Ee’s, rather than just award payment in lieu of notice
o
Can give some damages like relocation costs, retraining costs, etc.
o
Who can bring a claim for UD: 1) Person has to be Ee (can’t be independent contractor), 2) not a manager, 3) 12
months continuous Em 4) complaint has to be made w/in 90 days of dismissal but minister has discretion to
extend. 5) existence of dismissal (termination by Er not resignation by Ee or for cause termination) (doesn’t
exclude constructive dismissal)
o
Just cause – worker’s conduct that causes or is likely to cause substantial harm to the production process
(incompetence?), legitimacy of management’s authority to issue orders (gross breach – stealing), or public
confidence in the employer’s business (reputational damage)
o
Doesn’t apply for layoffs – layoff is a bona fide gesture to provide efficiency, adjudicator will look at whether layoff
was genuine. Will look at whether Ee was properly selected to layoff
o
There can be no collective agreements or a statutory mechanism for redress
o
Conciliation procedure/steps
o
Ministerial approval for adjudication
If Er has issue with any of these things, has to raise it prior to a hearing (ie. lack of jurisdiction, Ee hasn’t met qualifications
(they’re an independent contractor and shouldn’t be able to bring claim)
Federal employees have protections that are very similar to unionized employees (ie. just cause protection), or termination
without cause if provided with notice, or proper layoff
If dismissal is deemed unjust, reinstatement is the preferred method, although only awarded in roughly 33% of cases
o
Not appropriate where there’s deterioration of relationship, loss of trust, contributory fault of the Ee, attitude of
Ee is not likely to improve, Ee is physically unable to work, job no longer exists, where company has gone bankrupt
o
Monetary order is awarded
Practically, federally regulated employees will usually file an UD claim, and Er’s don’t want to have to reinstate so they settle
claim for monetary amounts.
pg. 29
Constructive Dismissal







Type of wrongful dismissal; “implied termination”
Leading case on this is Farber; essentially sets out everything stated below – See also Kussman
CD occurs when there’s a fundamental breach by the Er, of the Em relationship
o
Position Ee works in is changed in some fundamental way by Er, allows Ee to quit and say Er terminated them, and
seek damages for reasonable notice (unless there’s a contractual term)
Key steps:
1) What are the terms of the Em K?
2) Has there been a breach of those terms?
3) Is the breach sufficiently serious - does it go to the root of the K so that it can be said it’s a fundamental/repudiatory
breach?
4) Has Ee accepted that breach, or has Ee continued to work and by conduct condoned the breach?
Risky for Ers and Ees
o
Balancing act for Er’s, to be able to make changes in the workplace
o
If Ee thinks they’ve been constructively dismissed and walks away from the job, if they’re wrong they’ve quit
Key issues:
o
Compensation

Depending on how much it has changed as % of total salary

Guideline: 10% change in overall remuneration equals constructive dismissal

Depends on economic climate, reason for the change
o
Job duties

Er has some latitude to change minor job duties w/in scope of job Ee was hired to do

Can’t change essential nature of Ee’s position

It’s a question of degree of change  Demotion usually is enough to amount to CD

Look at whether Ee is now on same level as ppl who used to report to them.
o
Relocation

Typically Er is allowed to dictate where the Ee works, so long as Er’s discretion is exercised reasonably
and with good faith

Considerations: scope of business, Ee’s experience (ie. if Ee has been traveling around their whole
career), Family and length of service
o
Unfair Treatment

No implied duty for Er to treat Ee fairly

But if Er creates a poisoned environment or allows one to carry on, the Ee can leave and allege CD
Condonation
o
Where Ee has accepted change by continuing to work at job w/o protest, Ee is estopped from claiming CD
o
Reality is courts are going to give Ee reasonable period of time to try out ‘new’ job under changed conditions.
Allowed to do it for a while before it’s viewed as condonation
o
It’s a reasonable person test – would a reasonable person in their shoes have intended to accept the change and
given up their right to sue
o
Courts are going to be really generous to the Ee in the circumstances
Farber v. Royal Trust Co., 1997 SCC – Case sets out general principles regarding CD. Intention of ER is
irrelevant – if it’s a fundamental breach, from a RP’s perspective at the time, then it’s CD.
Facts: Farber worked as real estate agent, eventually became regional manager. Making a lot of money. Company restructured and
eliminated various positions. He was offered position of branch manger (major demotion) at a problematic, less profitable branch. He
refused to accept that position, left and sued for CD
Lower courts: dismissed the claim, they thought position offered was reasonable and adequate in terms of both
compensation and prestige.
Issue: Did the Er’s acts result in constructive dismissal? YES
In cases of CD, the courts in the CL provinces have applied the general principle that where one party to a K demonstrates an
intention no longer to be bound by it, that party is committing a fundamental breach of the K that results in its termination.
Thus, it has been established in a number of Canadian CL decisions that where an Er unilaterally makes a fundamental or
substantial change to an Ee’s Em K -- a change that violates the contract’s terms -- the Er is committing a fundamental
breach of the K that results in its termination and entitles the Ee to consider himself or herself constructively dismissed.
The Ee can then claim damages from the employer in lieu of reasonable notice.
Each CD case has to be decided on its own facts, by looking at features of Em K of particular EE.
Er doesn’t have to have intended to fundamentally change the position. Look at nature of change and circs of individual in
deciding whether a substantial fundamental change has occurred?
When determining whether there was a fundamental breach, have to look at it through the Ee’s lense at the time decision
was made (not after the fact)
o
What would a reasonable person have done/thought at that time?
A: It’s clear that the change the respondent unilaterally imposed on the appellant through its June 1984 offer substantially
altered the essential terms of the Em K. At the time the offer was made, any reasonable person in the same situation as the
pg. 30
appellant would have come to that conclusion.
o
It was a significant demotion, lowered by 4 positions, position held 8 yrs before.
On that basis the court decided that not only the demotion but the change of compensation was enough to justify it as a
CD claim.
Held: TJ and CA erred – he’s awarded 12 months notice based on 1983 salary
Matthew: *Farquar and Butler Brothers – BC case, quite similar to Farber. If ever looking at CD, look at this case as well.
Mitigation








Ees have a duty to mitigate when they are wrongfully dismissed/constructively dismissed
o
Even if you’re entitled to damages in lieu of notice from wrongful dismissal, can’t just take money and sit at home.
o
Ees have a duty to mitigate loss and replace some or all of that income. (Michael vs Red Deer College, 1976 SCC)
o
Ee’s have a duty to go out and look for a new job.
o
Damages are income they’ve lost during notice period, so they have a duty to replace that income. Every dollar
they earn during that period comes off damages they’re owed.
o
Avoided loss – means Plaintiff did mitigate, they earned money, and avoided some part of the loss, and ought not
to be compensated for that
Ers can also have a duty to mitigate, in the context of post-employment competition.
o
Ie. Ee leaves old Er, goes to new Er, competes against old Er and causes the old Er a loss, old Er has to show that
they attempted to mitigate their loss (what did they do to re-establish those customer relationships, hire new
sales person, recover lost data, etc.)
Mitigation – legal principle that someone who has suffered a loss has an obligation to take reasonable steps to reduce or
mitigate that loss. Have to act reasonably to reduce damages.
Applications/Consequences of mitigation
1) Failure to mitigate: Where Ee fails to do this or do it adequately, damages ought to be reduced b/c of failure to
look for a new job – in practice reductions by court have been minimal.

Avoidable loss - idea that Plaintiff cannot recover an avoidable loss, b/c they failed to mitigate
2) Earnings during notice period come off damages – they haven’t suffered a loss to the extent that they’re missing
out on earnings.

Practically, most (4/5) Ee’s find a job in a short period of time, so Er’s should not be willing to settle
early on (or early offer should be modest). Er should focus on making sure Ee is mitigating
3) The expenses of mitigation – can sometimes be a big deal. Ee has duty to mitigate and is willing to take reasonable
steps, but Er has to reimburse Ee for expenses incurred in reasonable efforts to find work.
Burden is on Er to prove that Ee failed to mitigate or made earnings at new job. (Michael v Red Deer College)
o
Failure to take steps is difficult for Er to prove
o
Er has to lead evidence of specific positions that Ee didn’t apply for that were available
Expectation is that Ee will apply for jobs that are reasonable wrt compensation, geography, prestige
o
Not expected to move to new town or city
Mitigation in context of Constructive Dismissal
o
Mitigation adds a 2nd hurdle to CD cases for Ee

Not only must Ee show CD, but EE must also show that they’ve acted reasonably in walking away from
the changed job rather than staying in it until they found Em somewhere else.
o
In some cases, mitigation might require Ee to stay in the job.
o
Russo case takes it a step further and recognizes that Ee’s might choose to stay in the job as a means of
mitigation, and aren’t condoning the change. Staying in the job doesn’t necessarily mean condonation.
The cases demonstrate application of these principles
o
Evans is about Er firing Ee, and then Er can offer them their job back, and then say they failed to mitigate if they
don’t accept.
o
Creates another tactical opportunity for Er’s to attempt to establish mitigation argument
Evans v. Teamsters, Local 31, 2008 SCC – Ees obligation to mitigate and continue working for the Er is
not any different where Ee has been WD or CD. The key thing is whether it would be objectively
unreasonable to expect EE to mitigate damages by returning to work for the dismissing Er.
Facts: Evans was employed as business agent for the union. He’d been there for a long time (23 years), very senior position, made a lot
of money. Union representative changed, and he let Evans go. The next day he made a demand for 24 months of pay (12 months
working notice + 12 months pay on top of that). The two sides negotiated but couldn’t come to a deal.

About 5 months later, union offered him his old job back for 24 months as notice period. They expected him to say no and
then would show it as failure to mitigate. He didn’t accept it. He did say he would come back if it wasn’t limited to 24 months
(full-time) and also if the union would guarantee his wife’s employment. The union refused, he sued for WD. He was found
entitled to 22 months notice, before mitigation issue
Issue: Does refusing to return to job after you’ve been fired constitute failure to mitigate?

Obviously Ees have a duty to mitigate (Michael v Red Deer College)
pg. 31


If he had been Constructively dismissed, he might have a duty to stay in the job (2nd hurdle).
Controversial new development in the law: Ee’s obligation to stay in the job should not be any different whether WD or CD
o
Both WD and CD are characterized by Er-imposed termination of the Em K
o
Not always the case that Em relationship will be less damaged in CD than in WD
o
In some cases, it will make sense for Ee to come back to their job to mitigate even though Er has terminated them.
In either WD or CD, Ee may find continuing work to be difficult.
o
Relationship should be considered on a case-by-case basis when the reasonableness of the Ee’s mitigation efforts
is being evaluated, rather than create a different approach for each type of dismissal.

Nonetheless, it is an accepted principle of Em law that Ers are entitled to give Ees working notice and that, absent bad faith
or other extenuating circumstances, they are not required to financially compensate an Ee simply because they have
terminated the Em K.

Unless returning to work would be unreasonable, on an objective basis, an Ee is expected to mitigate damages by
returning to work for the dismissing Er
o
In assessing whether it’s reasonable to come back, court will consider: is job, duties, reporting relationships,
remuneration essentially the same? Are personal relationships more difficult?
o
Ee not required to stay/return to work in an atmosphere of hostility, embarrassment or humiliation (Farquhar)

Major factor court considered was that he had been willing to return to work initially and at 5 months time. In the court’s
view, this evidence makes it clear that the relationship b/w Mr. Evans and the union was not seriously damaged and, given
that the terms of Em were the same, it was not objectively unreasonable for him to return to work to mitigate his damages.
Held: SCC dismissed his appeal
Russo v. Kerr Bros. Limited, 2010 ONSC – Where an Ee has been CD, the fact that they chose to continue
working for the Er in an effort to mitigate losses does not effectively amount to Ee condoning the
change. P may stay in the workplace for period of RN – but if Ee stays beyond period, then Ee seen to
accept new Em K under changed terms.
Facts: P was 53 years old and had 37 years of service. Didn’t finish highschool. Kerr bros had been only Er. Started as shipping clerk, and
ultimately became warehouse manager, earning $130k annually. Company began to struggle financially. New president takes over and
begins making dramatic changes. He demands that P agree to reduction in salary to $60k. Obviously this is CD, unless Ee consents.

P consults lawyer, lawyer makes severance offer. Negotiations ultimately unsuccessful.

P doesn’t quit, he stays in the job and declares clearly to Er that he’s not agreeing to change and considers it CD. P claims
he’s going to sue for notice, but will accept income in the mean time.

Case goes to trial almost 2 years later and P is still employed by them.

Defendant agrees it was a CD, but claims that P had condoned the change by staying in the job.
Issue: Where an Ee has been CD, but chooses to continue working for Er in an effort to mitigate damages, does this amount to
condoning the change? (NO!)

The court accepted his position and sided with him.

Er very clearly understood that the P took the position that he had been CD, and that he did not consent to the changes in
his terms and conditions of Em. Thus, when the P remained in the workplace under the reduced terms, the Er had no right
to assume that the P had elected to do so under a new Em K. The only basis on which the P could be in the workplace under
the reduced terms was by his acceptance of the reduced terms as a means of mitigating his loss during what would be a
period of reasonable notice.

Once the D had been told that the P accepted that a CD had occurred, and that he did not accept the new terms and
conditions, the D could have told the P to leave the workplace. Alternatively, the D could have kept the old terms and
conditions in place for the period of RN. However, the D did neither. It simply allowed the P to remain in the workplace
knowing that the P took the position that he had been CD, and that he did not accept the new terms.

In the circs, the D must be taken to have understood that the P was remaining in the workplace, but not under the
acceptance of any changed terms and conditions of Em.

There is no reason in principle why the P cannot be considered to be mitigating his loss by so doing.

A: P can remain in the workplace under the changed terms as a means of mitigating his damages, but only for the period
of RN. If he elects to remain in the workplace under the changed terms beyond the period of RN, with the consent of the D,
it must then be concluded that he has accepted a new Em K under the changed terms after the expiry of the period of RN.
Bowes v. Goss Power Products Ltd., 2012 ONCA – Where parties have agreed to a fixed period of notice
in the event of no cause dismissal, Ee is not required to mitigate losses. Policy reasons provided.
Facts: Bowes was a VP Sales & marketing. He had a written Em K, which stated that on termination he was entitled to specified
amounts of pay in lieu of notice, based on period of service.

Important part: 6 months pay in lieu of notice if Em was terminated before completion of 48 months of service

He was able to find a job 2 weeks after he was terminated. Er said that after 3 weeks they were no longer required to pay
him (per statutory minimum)
Issue: when an Ee’s entitlement to termination is set out in Em K, is that entitlement subject to a duty to mitigate (is Ee entitled to
be paid outright that amount regardless of whether Ee has another job lined up to start right away)?
pg. 32
ONCA:





Presumption is no duty to mitigate when there’s an express clause, unless parties agree otherwise.
Summary of important employment law principles at [23-5]
o
… unless otherwise stated, every Em K contains an implied term that an Er must provide RN to an Ee prior to the
termination of Em. If the Er fails to give RN of termination, the Ee is entitled to damages from breach.
o
CL requires Ee to reasonably mitigate such damages, by seeking an alternative source of income (Er doesn’t have
to compensate for avoidable losses)
o
Where parties to an Em k substitute a fixed period of notice, this displaces the CL period of RN. Parties are
entitled to do so so long as they comply with minimum statutory requirement relating to notice (Machtinger)
When an Em K fixes the period of notice but makes no specific reference to mitigation, does this attract the obligation to
mitigate in the event of a breach in the same way that the obligation attaches to the CL to provide RN or pay in lieu thereof?
o
Fixing of notice is akin to fixing liquidated damages or a contractual amount, thus there is no obligation on the Ee
to mitigate his or her damages.
o
It demonstrates parties’ decision to opt out of the CL approach applied in Bardal. Damages for contractually
stipulated notice or pay in lieu should not be analogized directly to damages for common law reasonable notice.
Whether the sum agreed on amounts to liquidated damages or a contractual amount is not relevant. Either way there is no
duty to mitigate implied into the K. Parties must specifically agree if they want mitigation to apply. Parties shouldn’t have to
add a provision to expressly exclude the duty to mitigate.
Policy: Em K’s are primarily drafted by Ers, thus it’s not unfair to require Ers to be explicit if they intend to require an Ee to
mitigate what would otherwise be fixed or liquidated damages. In fact, what is unfair is for an Er to agree to a fixed amount
of damages, and then, at dismissal, inform the Ee that future earnings will be deducted from the fixed amount.
Post-Em Competition – Restrictive Covenants (RC’s)







important distinction b/w this and post-Em obligations (see later section)
restrictive covenants: express contractual term that restricts Ee from doing something after Em
o
prima facie illegal and presumptively unenforceable as being in restraint trade
o
In Em context, burden on Er to show it was reasonable
Courts pay a lot of attention to the precise terms in the RC, think very carefully about that particular language
Types of restrictive covenants:
o
confidentiality provision:

in addition to CL duty not to disclose confidential information);

might establish a bigger duty than CL: include more docs, info, etc.
o
non competition provisions:

might purport to prevent Ee from competing against ex Er

Very rarely enforceable b/c contrary to public interest

They’re still used but may not be enforceable: practical reality is that they are there to dissuade people
not to hold up in court
o
prohibitions against solicitation: of customers or of other employees
most RCs aren’t worth it to try and enforce; Only worth it when it’s a group of Ees, or the case involves insurance brokers or
finance people who take a lot of clients
Shaffron: important to understand the context in which the RC was agreed to. Was it in employment context or business
context (sale of business)?
o
Policy: Ee ought not to be restrained more than necessary/reasonable to not work; protection of vulnerable Ees
o
RCs only enforceable when reasonable

prima facie unenforceable; burden is on old Er to rebut that presumption by arguing it’s reasonable
o
if not entering agreement as part of Em but rather selling business then RC isn’t presumptively unenforceable (b/c
not part of Em K; just a term in an agreement of purchase and sale)
RC may be part of original employment agreement, Er might try to put in place during Em relationship (raises issue of
consideration for that new agreement), or encountered at end of relationship as part of severance agreement (rare)
Enforceable restrictive covenants


Unambiguous and Clear (Shafron)
o Er must show that the precise words are unambiguous, clear to the employee what they are prevented from doing
o this is one of the easiest things to spot to say it’s unenforceable
o contra proferentum: interpreted against Er if there is uncertainty
Relate to a proprietary interest worthy of protection (Valley First)
o no reason why someone should be restrained from competing if Er doesn’t have a proprietary interest
o Er doesn’t have a right to corner the market
o Er must point to something Er has a legitimate interest in protecting
o ex: relationships with customers, IP, ways that Er does its business, trade secrets, training the Er has provided
pg. 33


RC is reasonable
o Generally, RC can’t be broader than absolutely necessary to protect Er’s legitimate interest
o the more narrower it is the more likely it is to be enforced
o 3 parts of reasonableness:
 Geography – reasonably specific to some particular area (Shafron, Valley First)
 Duration – reasonable in time duration, the shorter the better (Shafron, Valley First)
 Usually from 3 months to 2 years; occasionally 3-5 year (but probably not enforceable)
 court will consider nature of the business; length of business cycle, how long Er needs to consolidate their
business
 Scope of activities – Er must be reasonable in selecting which activities the RC will relate to
 ex: non competition v non solicitation
o generally Ee shouldn’t be prevented from competing against Er
o more reasonable to say Ee should be limited from soliciting old customers
 how are “customers” defined in RC? Is it reasonable?
o think about kinds of products, services involved as an Ee vs what the RC covers
Public interest: courts will also consider whether the RC ought to be enforced as a matter of public interest, even if RC is otherwise
enforceable.
o ex: if Ee provides services to the public (like health services, vets, etc.)
Additional notes

Should someone that has been wrongfully dismissed be subject to RC?
o
Case law is unclear on this but likely they will not be held to the RC
o
Can address this in RC by saying it applies even if dismissed without notice RC will still apply
Valley First Financial Services Ltd. v. Trach, 2004 BCCA – case provides important statement of
principles regarding RCs
Facts: T worked for Valley and had written producer k that included a clause restricting T from competing against Valley within 50 Km
of Vernon for 2 years after termination of agreement. It also included non-solicitation clause. T resigned and started new business,
brings most of the support staff from Valley over, calls former clients to let them know of move. About 99% of new business
commission earned from 40 former customers of Valley.
Issue: Were the non-competition and non-solicitation components of the RC enforceable?

The court very easily struck-down the non-compete clause as unenforceable
o
There were problems with ambiguity of language, the duration, what is meant by “to be involved with” or
“associated with” financial services.

Then, court considered whether T was subject to Common Law Duties as an Ee?
o
CA had to determine whether T was fired or whether T was still employed for the period after he announced he’s
leaving.
o
important b/c if he’s still employed in those 2 weeks he’s still subject to CL duties as an Ee (duty of loyalty and
fidelity). if he was fired then he wouldn’t be subject to those common law duties
o
(makes sense for employer to keep paying employee during that notice period)
o
Court finds that T and his assistants were in fact fired

Then court considers whether the non-solicitation clause was valid and enforceable
“(b) he will not solicit business from, contact or have any dealings with any of the [Valley First] Clients, either directly or
indirectly, in any way relating to the Business or to the business of general insurance and financial services, for a period of
two (2) years from the date of such termination.”
o
Problems with clause: the clause makes no reference to geography, scope of activities is unclear
o
**Modern view of law regarding RCs:
1) a RC will be enforceable only if it is reasonable b/w the parties and with reference to the public interest;
2) reasonableness must be considered in the context of the covenant itself, the agreement in which it is
found, and all of the surrounding circs;
3) a RC in an Em K will be construed more strictly against the Er than a RC in a K for the sale of a business
against the seller.
4) an Er seeking to rely on a RC must show that it has a proprietary interest entitled to protection and that
the temporal and spatial restrictions in the covenant are no wider than reasonably required to adequately
protect that interest.
5) If the Er has shown that the covenant meets these criteria, the onus of proving that it is contrary to the
public interest lies on the party challenging the validity of the covenant.

T only carried on business in group benefits dep’t, clause about general financial services is much broader, thus court finds
that the scope of activities prohibited is too broad, and should not be enforced
o
The clause would effectively prohibit him from soliciting clients who had no dealings with that dept
Conclusion: clause is unreasonable and should not be enforced.
pg. 34
Severance or altering terms of RC?



Is the Er out of luck if the clause is unreasonable? or is there some other way to give that Er protection?
State of the law post Shafron: all or nothing; either Er gets it right or it doesn’t get the benefit of the clause
Important change b/c prior to Shafron, there were lots of cases in which courts found a way to give Er protections even though RC
unreasonable as it stood
o ‘Russian doll’ clauses: contained alternative clauses if the larger one found unreasonable
o blue pencil: mechanical process; idea that the court draws a blue pencil through words (just crossing out words in the RC);
to make what remains reasonable
o notional severance: more creative, less mechanical; court not limited to crossing out words; could replace court’s view of
reasonable terms into the covenant, impose that on employee
Shafron v. KRG Insurance Brokers (Western) Inc., 2009 SCC – important change in the law: if Er doesn’t
get the RC right, they’re out of luck. Courts will not apply severance to fix the RC. Case illustrates the
importance of considering context in which the Ee signed the RC (balance of power).
Facts: S sells insurance agency to KRG who renames it and sells it to another party. S remains employed with KRG after sale under
different Em Ks which has a RC preventing S from being employed as insurance broker in “Metropolitan City of Vancouver” for 3 years
after leaving job (as long as not termination without cause). S begins working as insurance salesman in Richmond.
Issue: Whether the doctrine of severance may be applied to resolve an ambiguity in a RC. Should the RC be enforced?

CA: replaced the term with Vancouver, Burnaby, Richmond – used notional severance to construe the contract
o
notional severance: reading down an illegal provision in a contract in order to make it reasonable and enforceable

court is altering the terms of original document with severance
SCC:

General rule in CL that anything in restraints of trade is void. Exception: where it is reasonable

Court notes the importance of considering context in which the Ee signed the RC
o
Was it in context of Em where there is typically a power imbalance b/w parties, or was it in context of selling
business where power is more level b/w the parties.
o
The court will consider the balance of power when these are signed.
o
RCs are typically prima facie unenforceable for policy reasons and the onus is on person seeking to rely on
covenant to show that it is reasonable to rely on.
o
There is less of a presumption against enforceability when the negotiating power is roughly equal.

Severance poses concerns for RCs: applying it invites Ers to draft overly broad RCs with prospect that courts will read it down
to reasonable ones; no incentive for Ers to draft reasonable RCs (no downside, risk for the Er)

Blue pencil severance may be resorted to sparingly where the part to be severed is not a key part of RC. Only time you can
cross out words if words are clearly severable, trivial and not part of the main proport of RC.
o
In other words this doctrine cannot be used to save a RC.

General rule: RCs are all or nothing. If the party doesn’t get it right, the courts will no longer resort to severance to fix it
Conclusion: The term “Metropolitan City of Vancouver” was ambiguous and there was no context or other evidence demonstrating the
mutual understanding of the parties at the time they entered into the contract as to what geographic area it covered. Further, the trial
judge found that the RC was unreasonable (para. 52). It was inappropriate for the Court of Appeal to rewrite the geographic scope in
the RC to what it thought was reasonable.
Post employment common law obligations

what happens when there is no RC?
o no express contractual provision governing post employment
 Obligations can vary depending on whether the Ee is a fiduciary or not:
1) fiduciary:
o Ee at top level of hierarchy in company, ability to bind company
o under heightened duty of loyalty, and as part of that they have obligations that relate to post-Em competition
1) can’t quit employment to exploit a business opportunity (See Canadian Aero Services)
2) can’t compete for a reasonable period of time
 implied restrictive covenant applies to fiduciaries only
 reasonableness will depend on the length of time required for Er to safeguard themselves from
vulnerability in question (ie. shore up business contacts/client) v. the length of time person can be
without Em
2) non-fiduciary employees:
o obligations are more limited
o restriction on misusing confidential information that Ee is privy to while employed
o other than that, nothing stopping Ee from competing right after you leave
o can prepare to compete while still an Ee as long as Ee is not actually competing
o difficult issue: what is confidential info? (See p 10-11)
 courts will try to limit what is construed as confidential info
 examples:
 computer programs relating to operation of business,
pg. 35
 operating instructions about manufacturing process or the way they do business,
 list of suppliers, hard copies of customer lists (you can memorize it but can’t take the hard copy);
 employee records
 not included:
 general experience, knowledge you’ve gained by working in that position
o Policy: CL wants a mobile labour force
Obligation to provide notice of resignation






first look to the K if it specifies, otherwise common law notice applies
providing notice: give Er enough time to train someone new, preserve the business that way
o notice of resignation: 1-2 weeks
o not stipulated in ESA
o more extreme cases up to a month; not a lot longer
during your notice:
o you are still an Ee, have duty to follow lawful instructions of Er
o Er still has to pay you during that notice period (even if Er tells you to go home)
‘wrongful resignation’:
o if you fail to provide that notice, you are breaching the Em K
o have to put Er in position they would have been in had you provided notice (lost production by virtue of Ee’s absence)
usually it’s not worth it for an Er to go after Ees for failure to give notice; Er stands to gain very little (b/c not much money they can
point to in that period – small amount of money)
failure to provide reasonable notice doesn’t operate to prevent Ee from going out and competing right away
o there’s nothing Er can do about that; can only go after Ee for failure to provide notice, can’t stop them from competing
RBC Dominion Securities Inc. v Merrill Lynch Canada Inc., 2008 SCC – There is no implied duty on nonfiduciary Ee not to compete following termination of Em. Ees can compete during notice period.
Damages are attributable to failure to provide RN.
Facts:
 D (RBC Branch Manager) coordinated a move that caused all investment advisors of branch to leave w/o notice, for competitor ML
 in weeks prior to departure: Ees had copied client records, transferred copies to ML
 RBC sued D and other Ees for breach of fiduciary duty; breach of implied duty not to compete; breach of implied duty to provide
reasonable notice; misuse of confidential info
 none of Ees are fiduciaries
 RBC sued competitor, ML for breach of duty in tort for inducing RBC staff to terminate Em K without notice & their k obligation to
compete fairly
 BCSC: D had an implied duty as a manager to retain the Ees under his supervision for the benefit of his Er
Issue: whether there’s a CL duty on Ees not to compete with Er in absence of RC after employment (NO!)
SCC
 D had an implied duty to retain the Ees under his supervision for benefit of Er because he was manager. There was a duty of good
faith that he failed to perform while he was employed
o There may be a duty on managers to report any pending departures under their supervision they become aware of
 Court held damages are attributable to failure to provide RN of resignation; compensable
 In addition to liability for failing to provide RN, were Ees also liable for breaching a duty not to compete? NO
o Ee is free to compete after termination even if Ee hasn’t provided reasonable notice – can compete during notice period
o Em ends when Ee or Er terminates relationship
o Er is confined to damages of not giving notice
o note: still can’t misuse confidential info
Remedies for Breach of Em Ks (re: UNHAPPINESS)
Remedy for Breach of Good Faith Dismissal
-
-
Fairly recent area of the law. No consistency in describing damages relating to breach of Em K
o
Bad faith damages
o
Mental distress damages
o
Moral damages
o
Tied to depression/illness
Idea that Ee is unusually unhappy about termination of their Em
o
Where Ee has treated Ee so poorly, court wants Er to compensate Ee
pg. 36
-
-
Problem with this from K perspective is the contractual breach is failure to provide notice. But unhappiness rarely comes
from fact they didn’t get notice – it comes from the termination itself or the way in which they were terminated.
o
So if breach didn’t cause unhappiness, then it ought not to be compensated.
o
But the law has sought out ways to compensate Ees when they ought to be compensated.
Two cases
1) Wallace v United Grain Growers, 1997 SCC

Established two things
1) There is a duty of good faith in the manner of dismissal. Er has a duty to act in GF when they
terminate someone (this is still true post Honda – still relevant)

No duty of good faith during employment. Only kicks in at dismissal
IGNORE: 2) If that duty is breached the person ought to be made whole through a remedy that is the
notice period is extended (this is no longer relevant – overruled in Honda)
o
FACTS: P was hired at age 45, told he was hired for life. He was terminated at age 59. Problem was that Er cooked
up allegations for cause for termination, knowing they weren’t true. P sued for wrongful dismissal. Er alleges cause
issues in defence. Er maintained those allegations for 2 yrs leading to trial, then eventually withdraws these claims
at trial. As a result of termination and how P was treated, P developed mental issues.
o
TRIAL: P gets 21 months and aggravated damages.
o
Man CA: rolled notice back to 15 months, and said no aggravated damages (there had to be independent
actionable wrong occurred).
o
SCC

ISSUE: what is the appropriate remedy for Er treating Ee so poorly?

Court confirmed that in order to get AD there has to be independent actionable wrong.

AD wasn’t appropriate in this situation.

Should there be a tort or contractual claim of bad faith discharge? NO

P argues for this, and says it should be a tort claim to make Ee whole.

SCC said this is fundamentally inconsistent with Er’s right to terminate Ee’s, and constitute
their workforce. (See [75]).

What should be done for this guy in this case?

IGNORE [78] bad faith in manner of dismissal is another factor that should be considered in
notice period (adding to Bardall factors). [91-95] Ee’s are vulnerable. Then court talks about
various examples – Er’s should be candid, reasonable, honest and forthright with Ee’s. [98]
Er’s shouldn’t be dishonest or misrepresent thing.
(Note: adding to the notice period doesn’t make sense – ie. if someone mitigated and got a job right away,
then adding more notice wouldn’t benefit them, inequity for ppl who weren’t paid very well, it didn’t
necessarily represent what they went through; doesn’t fit with Hadley principle that you should focus
damages on what was in parties’ contemplation at time K was entered into)
2) Honda – embraced first principle established in Wallace that Er’s have a duty of good faith in dismissal. Court said
because of Wallace, Ers and Ees now aware that breach of duty of good faith dismissal is compensable via damages.
Thus requirement of ‘reasonable contemplation’ in Hadley v Baxendale now met in future mental distress cases.
Damages are the appropriate remedy.
Honda Canada Inc. v Keays, 2008 SCC – Endorses first principle from Wallace that Er’s have a duty of
good faith in dismissing Ees. Appropriate remedy for breach of good faith dismissal is damages (NOT
extending notice period). Damages N/Ae just b/c Ee was dismissed and suffered hurt feelings. Punitive
damages restrict to outrageous/malicious acts.
FACTS: Ee had worked at Honda for awhile. Ee was absent a while b/c of chronic fatigue syndrome. He eventually came back but had
many absences. Honda was a bit aggressive (though SCC said they managed his absences properly). Honda eventually referred him to
an independent medical examiner to express an opinion. Ee refused to attend. Honda eventually let him go b/c they felt they had done
all they could.
 Er’s conduct wasn’t overly egregious, but there wasn’t cause for Ee’s termination so he’s entitled to damages for wrongful
termination
TJ granted 15 months based on Bardal factors, and extended to 24 months b/c of Wallace bump, and then also gave him
$500k in punitive damages
CA doesn’t touch notice period but reduces punitive damages
ISSUE: How should misconduct by Er in dismissal be addressed?
SCC:
Overturned findings of fact about misconduct.
Court revisited historical development of the law
o
An action for wrongful dismissal is based on an implied obligation in the EmK to give reasonable notice of an
intention to terminate the relationship in the absence of just cause. Thus, if an Er fails to provide reasonable
notice of termination, the employee can bring an action for breach of the implied term (Wallace, at para. 115).
o
The general rule is that damages are confined to the loss suffered as a result of the Er’s failure to give proper
notice and that no damages are available to the Ee for the actual loss of his or her job and/or pain and distress
that may have been suffered as a consequence of being terminated. (affirmed in Peso Silver Mines Ltd. (N.P.L.) v.
pg. 37
Cropper, 1966 SCC):
Vorvis v. ICBC, 1989 SCC: Er’s are entitled to terminate EmK w/ due notice; aggravated damages are not usually
appropriate. The Court in Vorvis nevertheless left open the possibility of allocating aggravated damages in
wrongful dismissal cases where the acts complained of were also independently actionable.
o
Wallace, 1997 SCC: Court endorsed Vorvis approach that there can be ADs if there is an “independently actionable
wrong”, thus rejecting both an implied contractual duty of good faith and a tort of bad faith discharge.
o
Fidler, 2006 SCC: the Court concluded that it was no longer necessary that there be an independent actionable
wrong before damages for mental distress can be awarded for breach of K, regardless of whether K is a “peace of
mind” K.

Conclusion based on Hadley v. Baxendale (1854):
Damages are recoverable for breach of K if they 1) arise naturally from the breach or 2) could be
supposed to have been reasonably contemplated by both parties”

Thus, in cases where parties have contemplated at the time of the K that a breach in certain
circumstances would cause the plaintiff mental distress, the plaintiff is entitled to recover

Court inferred that HvB principle was behind extension of notice period rationale in Wallace
**Court concludes that following Wallace, any EmK meets the HvB req’t for reasonable contemplation b/c Er’s and Ees are
aware that damages are recoverable for breach of good faith dismissal. There’s an expectation by both parties to the K that
Er’s will act in good faith in the manner of dismissal. Failure to do so can lead to foreseeable, compensable damages. Note,
this is somewhat of a fiction b/c no Ers/Ees would be aware of Wallace case, and this ignores ecisions from before Wallace.
o
Damages are available only if they result from conduct during the course of dismissal that is “unfair or is in bad
faith by being, for example, untruthful, misleading or unduly insensitive” (Wallace)
o
Per Wallace, Ers have “an obligation of good faith and fair dealing in the manner of dismissal” and an obligation to
be “candid, reasonable, honest and forthright with their employees” on dismissal.
Where damages appropriate, shouldn’t extend the notice period. Should award based on actual damages related to mental
distress
 Becomes like a personal injury case, have to lead medical evidence
Punitive damages
o
They’re a big deal, high standard to get them.
o
Punitive (punish) not compensatory (for consequences). Er has to behave really badly.
[62] … punitive damages are restricted to advertent wrongful acts that are so malicious and outrageous that
they are deserving of punishment on their own.
[68] … conduct meriting punitive damages awards must be “harsh, vindictive, reprehensible and malicious”, as
well as “extreme in its nature and such that by any reasonable standard it is deserving of full condemnation
and punishment”
Conclusion: In this case, Er’s actions weren’t serious enough to warrant aggravated damages or punitive damages.
o
Aggravated damages now not so important b/c rolled into H v B damages. Now seeing more punitive damages b/c Honda closed the
door a bit on compensatory damages
Beggs v. Westport Foods Ltd., 2011 BCCA – Application of Honda; 1) There’s no Honda damages for
normal distress or hurt feelings from being terminated. It’s expected to be an unhappy time. 2) There
has to be a clear causal link b/w the way someone is terminated and the medical condition that they
ultimately experience.
FACTS:
-
She worked part-time at D’s grocery store for 10 yrs. A fire destroyed her home. She called in saying she wouldn’t be in for a
while – didn’t know when she’d return. He tried to reach her again, but phone was disconnected. He didn’t attempt to
contact her again after first week.
After a month, Er completed a Record of Employment stating how Em had come to an end – saying she quit.
She was suffering from depression and anxiety related to home burning home. She saw doctor and got note to obtain EI. She
visited workplace and was told ROE was ready, she picked it up. Opens it and sees that it says she quit.
She hires a lawyer, they send a letter to company’s counsel. There’s a nasty back and forth regarding whether she quit or
was terminated, whether she could return to work based on medical situation.
TRIAL: It goes to trial where TJ awards her $20,000 in wrongful dismissal damages and $20,000 for mental distress. Er appeals
ISSUES: 1) Was there a termination? 2) Did she fail to mitigate by not accepting Er’s offer to return to work? 3) Should damages award
be upheld?
BCCA:
1) Court confirms that termination did occur, she didn’t quit. And 2) that it would’ve been unreasonable for her to return to
work based on the lawyer’s letters.
o
Back and forth correspondence between lawyers for each party effectively terminated the Em K, particularly the
denial by Er’s counsel that she had not quit her job even though there was substantial medical evidence that she
was unable to work.
o
This communication also likely foreclosed the possibility of any positive consideration by the respondent of the
appellant’s offer of re-employment. …
3) Court focuses on Honda mental-distress damages caused by manner of dismissal
pg. 38
o
If an Ee can establish that he or she suffered mental distress that was caused by conduct in the manner of
dismissal, which is found to be “unfair or is in bad faith by being, for example, untruthful, misleading or unduly
insensitive”, the Ee may be able to recover compensatory damages.
o
Must meet requirement of ‘reasonable foreseeability’ per HvB
o
Compensatory damages for mental distress caused by conduct in dismissal are to be distinguished from the
“ordinary psychological impact” of the dismissal or “[t]he normal distress and hurt feelings resulting from
dismissal”, which are not recoverable
Court finds she should not have been awarded compensatory damages
o
Er’s conduct was reasonable. They didn’t know reason for her continued absence so filled out ROE saying she
quite was reasonable. No evidence of bad faith or unfair dealings.
o
There was nothing wrong with manner of dismissal, they hadn’t done anything wrong
o
No link b/w manner of dismissal and her anxiety/depression  this was really related to losing house through fire
and losing job. Thus, her condition isn’t compensable. For this reason compensatory damages award is overturned
Note: Thin skull rule – there still has to be a breach of duty to dismiss in good faith; if there is a breach and the person goes off the
deep end (extreme debilitating depression) then company is liable.
Negligent Misrepresentation
-
-
-
-
-
-
-
NM is tort liability. There’s really two types of misrep
1) Fraudulent Misrepresentation – very rare. Occurs where one party makes a statement of existing fact that they
know to be untrue and the other party relies on it to their detriment.
2) NM i) two parties have a judicially recognized special relationship (like Er Ee), ii) one party makes a statement of
existing fact to other side that is untrue/inaccurate/misleading iii) without taking care to verify its accuracy (acted
negligently), iv) this causes the other side to suffer some kind of detrimental reliance.
i) Special relationship
o
Can and does exist b/w Er and potential Ee during interview process
o
Potential Ee is relying on representations made by Er
o
This is reasonable
ii) Representation is untrue, inaccurate or misleading
o
Has to relate to some existing fact – relate to job the person is applying for, not some expectation for the future
o
Usually relates to nature of job duties, degree of job security, whether qualifications from another country are
acceptable here
o
Doesn’t relate to persuading a potential Ee to accept job to be based on company’s potential future growth
iii) Negligence
o
Er has to have acted negligently – failed to take reasonable care to make sure representations are accurate, true
and not misleading
o
Torts standard is that of a reasonable person – has Er fallen below that standard
iv) Reliance
o
Ee has to have reasonably relied on the information
o
Ie. they received this information and then accepted the job
Damages
o
Reliance has to have been detrimental meaning it caused actual damages – ie. relocation expenses, resigned from
previous position
Remedy: to restore person to position they would’ve been in but for negligent misrepresentation
This is all set out in Queen v. Cognos
Queen v. Cognos Inc., 1993 SCC – sets out key principles regarding Negligent Misrepresentation in Em
context
FACTS:
-
Queen was an accountant living in Calgary. Was looking afield for a new more challenging position. Interviewed for a
position in Ottawa – during interview the manager told the appellant that the project in question was a major one which
would be developed over a period of two years with enhancements and maintenance thereafter, and that the position being
interviewed for would be needed throughout this period. Manager said staff would double.
At no point, did the Manager advise that all of this was contingent on funding and was awaiting budgetary approval.
Queen accepted position, and after 2wks signed Em K, which included termination provision that he could be terminated at
any time "without cause" upon one month's notice, or payment of one month's salary in lieu of notice,
5 months after work commenced, he was advised that there would be a reassignment of personnel involved with the project
owing to diminished research and development funding. The first notice of termination of employment he received was
rescinded, but roughly 1 year later he received a second notice effective October 25, 1984. He worked until that day and
was paid until November 15.
Q brought action in tort claiming that based on interview, they represented project was already a reality and that job
wasn’t contingent on a future event. He said he wouldn’t have left his job in Calgary and relocated if this had been the case.
TJ allowed claim, CA overturned, and it went to the SCC
ISSUE: Was it negligent misrepresentation? 1) Was there a duty of care based on special relationship? 2) Were the representations
pg. 39
made negligently?
Court sets out elements of test for negligent misrepresentation
Cognos concedes that misrepresentation was untrue, inaccurate and misleading, and that Q relied on it and suffered
damages. Cognos said however that 1) special relationship was negated and 2) that they hadn’t acted negligently.
1) Was the special relationship negated by disclaimer in Em K signed 2 weeks after interview?
o
A K can bar a tort claim, limit a tort claim or have no effect. It depends on what K says. [38]
o
Court finds special relationship does exist – there was sufficient proximity. Not unreasonable to impose DoC in
such a circumstance.
o
Court finds that based on this, it was foreseeable that the appellant would rely on the information given during
the hiring interview in order to make his career decision. Also foreseeable that Q would sustain damages if
representations were untrue. Disclaimers in K were signed 2wks after interview, therefore not valid. Doesn’t
negate DoC.
 Er was under a DoC during the pre-employment interview to exercise reasonable care and diligence in
making representations as to the employer and the employment opportunity being offered.
2) Were the representations made negligently?
o
Standard of care is that of the "reasonable person". It is a duty to exercise such reasonable care as the
circumstances require to ensure that representations made are accurate and not misleading:
o
Court says this goes beyond being truthful and honest, it also extends to exercising caution and care to make sure
what you say is accurate and not misleading
o
Court finds Manager failed – he knew, or ought to have known, that the truth of his representations regarding the
project depended on certain approvals and ought to have known that approval was at best speculative; he knew Q
had a position in Calgary and was relying on this information to relocate and enhance his career.
o
The manager also implicitly represented that the job applied for did in fact, at the time of the interview, exist but
the TJ found this was not the case.
o
His conduct fell below SoC expected of a reasonable person in his circumstance
Did the language in the K allow a tort claim to be made?
o
There was no disclaimer or limitation of liability based on K that was signed that might somehow protect company
from earlier misrepresentations that were made
Conclusion: The respondents owed Q a duty of care during the hiring interview – their conduct fell below the standard – the
representations were made negligently. Q reasonably relied on the representations to his detriment. The EmK did not negate a claim
for NM based on representations made in the interview.
SCC restored the Trial judgment for damages related to NM
o
$50k for lost income
o
Relocation expense
Human Rights and Em (DISCRIMINATION)

Statute



Most often relate to mental health issues like depression, etc.
Human rights issues are entirely a matter of statute;
o
BC  Human Rights Code to understand HR issues as they apply in the province, as opposed to common law.
Each jurisdiction has similar legislation that prevents discrimination on the prescribed specified grounds.
o
ER can discriminate/exercise discretion about EE for all reasons other than the prescribed grounds.
3 sections relevant to employment law
o
S. 11 – Employment advertisements can’t discriminate on prohibited grounds.
o
S. 12 – Er can’t discriminate through wages/pay rates.
o
S. 13 – prohibiting discrimination in employment on a series of grounds, including:

Race;
 physical disability (includes addictions; also, some

colour;
cases about obesity being a physical disability);

ancestry;
 mental disability (depression, stress related

place of origin;
conditions, OCD); sex (and pregnancy, an aspect of

political belief;
sex);

religion;
 sexual orientation; age (now can’t have mandatory

marital status;
retirement age, but can be subject to change in

family status (can mean being a
benefits coverage);
mom/single dad/relationship to
 conviction of a criminal offence unrelated to
particular family member, like
employment (can’t discriminate for something not
being someone’s kid);
related to the employment)
o
Hot issue now: childcare obligations and what that means with family status/obligations.
pg. 40
What is Discrimination?

Treating an EE differently than you would have if the person didn’t have that characteristic.
o
Key: ER must be treating that person differently because of that characteristic. Not enough that it’s coincidental.
o
It’s discrimination if it was any part of the issue/reasoning.
Complaint process

In BC, complaint is brought under HR code, goes to HR tribunal.
o
If loser is unhappy with the decision, review can go to BCSC.
o
If breached on discriminatory grounds, could be a breach of good faith dismissal
o
HR claims aren’t worth much, claimant’s counsel may want to pursue it through civil suit for more $.

Used to have distinction between direct discrimination and adverse effect discrimination, but Meiorin eliminated this
o
Direct: explicitly excludes on some ground
o
Adverse effect: doesn’t on its face seem discriminatory, but has that effect. Ex: work schedule, seven day Sabbath
observer (Reinaud), uniforms and religion.

In order to make claim,
1) Claimant must show prima facie that they’ve been treated differently than they would have if they didn’t have this
characteristic. Matthew thinks this isn’t hard to do.
2) Once established, onus shifts to ER to justify what they’ve done. Have three responses to prima facie case:
1. Rebut by showing there’s no adverse treatment, that what EE thinks happened didn’t happen.
2. Show no nexus between treatment and characteristic. The treatment wasn’t because of the prohibited ground
(ex: no raise b/c you did a shitty job, not because you’re black).
3. Show that the discriminatory decision was a bona fide occupational requirement (BFOR). “We discriminated
against you but we had no choice”. See Meiorin for three-part test.

NOTE: ER may even claim that EE doesn’t have the ‘ground’ of discrimination in the first place.
Meiorin/BC (Public Service Employee Relations Commission) v. BCGSEU, 1999 SCC – eliminated
distinction b/w direct and adverse effect discrimination. Established 3 part test for assessing whether a
discriminatory standard is a BFOR: 1) purpose of standard is rationally connected to the job 2) honest
and good faith belief it was necessary 3) standard is reasonably necessary to accomplish legitimate work
related purpose. In assessing discriminatory standard in a given case, consider procedure and substance.
FACTS: Lady Meiorin worked as forest firefighter for 3 years successfully. BC Gov’t established minimum physical fitness standard for
these folk. Part of test was running standard (aerobic test). Meiorin had in the past performed her work satisfactorily, couldn’t pass the
aerobic standard and was dismissed. Union brought grievance on her behalf.

Arbitrator found that due to physiological differences, most women have lower aerobic capacity than most men; unlike most
men, women can’t increase the capacity through training.

No evidence that the prescribed aerobic standard was necessary for the work’s safety and efficiency.

Adverse effect discrimination found by arbitrator, Gov’t hadn’t discharged burden of showing it had accommodated
claimant until undue hardship.
ISSUES: 1) Whether the Gov’t improperly dismissed the claimant; 2) Whether the aerobic standard that led to dismissal unfairly
excluded women from forest firefighting jobs (DISCRIMINATION)
ANALYSIS: [50] Stop categorizing discrimination as ‘direct’ or ‘adverse effect’; replace it with a unified approach for several reasons:
(policy reasons aren’t really that important here)
Court:

[54] Adopt a three step test for determining whether an ER has established on BOP, that a prima facie discriminatory
standard is a bona fide occupational requirement (BFOR).

(Note: so if there is discrimination, this is the test to find out if it’s ok or not)

ER MUST ESTABLISH:
1. They adopted the standard for a purpose rationally connected to the performance of the job.

Ex: taxi driver, can’t be blind.

ID the general purpose of the standard; determine whether it’s rationally connected to job performance.

Determine: What is the impugned standard generally designed to achieve?

If purpose is broad, like work safety, likely won’t spend much time here; if narrow, closer analysis.

Focus is not on the validity of the standard, but on the validity of its purpose.
2. It was adopted in an honest and good faith belief that it was necessary to fulfil the legitimate work-related purpose.

If imposition of standard wasn’t thought to be reasonably necessary or was motivated by discriminatory animus, it can’t be a
BFOR. (Matthew: rarely see this litigated).
pg. 41

Analysis here shifts from the general purpose of the standard to the particular standard itself.
3. That the standard is reasonably necessary to the accomplishment of that legitimate work related purpose.

[62] ER must show it’s impossible to accommodate the claimant and others adversely affected by the standard without
experiencing undue hardship.

Some hardship is acceptable, it’s only undue hardship that satisfies the test (Renaud)

[63] Relevant factors are financial cost of accommodation, the relevant interchangeability of workplace facilities,
prospective interference with other EEs (is there a point where effect on other EEs becomes too great).
o
Apply these considerations with common sense and consideration to facts of each case.

[64] Individual testing is important, determine whether a person can be accommodated, don’t generalize based on groups of
people with those characteristics.
o
ER here should have tested Meiorin in particular and whether she was still able to do the work given her aerobic
capacity.

[65] Have to consider a) did Er investigate alternative approaches such as individual testing methods? b) why were
alternatives not implemented, if available? C) Is there a way to do the job that is less discriminatory while still accomplishing
the employer’s legitimate purpose? D) Is the standard properly designed to ensure that the desired qualification is met
without placing an undue burden on those to whom the standard applies?

[66] Obligation on Er consists of both substance and procedure: Consider 1) the procedures, if any, that were adopted to
assess the issue of accommodation (has ER investigated other approaches), and 2) the substantive content of either a more
accommodating standard which was offered or alternatively the ER’s reasons for not offering any such standard.
o
go through process to decide whether they can accommodate, and come to a decision based on the standard that
was used to examine individual person.

[67] Result: If the prima facie discriminatory standard is not reasonably necessary for the Er to accomplish its legitimate
purpose or if individual differences may be accommodated without imposing undue hardship on the Er, then the standard is
not a BFOR.
APPLICATION TO CASE:

Prima facie case of discrimination is established, Gov’t must show the aerobic test was a BFOR.

[71] First and second steps satisfied (workplace safety; honest good faith belief in standard).

Third fails: didn’t demonstrate that the particular aerobic standard is reasonably necessary to ID those people who are
able to perform the tasks of forest firefighters safely and efficiently.

Gov’t didn’t demonstrate it would experience undue hardship if a different standard/testing method was used

Procedures adopted by researchers who developed the aerobic standard were problematic because:
1. Approach was primarily descriptive; merely describing the characteristics of a subject doesn’t necessarily allow one
to identify the standard minimally required for the safe and efficient performance of the job.

Merely described the average of what people could do, not the minimum.
2. The studies failed to distinguish female and male test subjects; males constituted majority of sample. Record didn’t
permit a decision as to whether men and women require the same minimum level of aerobic capacity here.

[78] Beyond all that, Gov’t didn’t show any accommodation. So not only did they not look at her individually, they also didn’t
show that they took steps to accommodate her.
CONCLUSION: Aerobic test was not a BFOR, arbitrator’s decision to reinstate the claimant to her former position stands; she gets
compensation for her lost wages and benefits.
Central Okanagan School District No. 23 v. Renaud, 1992 SCC - Duty to Accommodate in context of
Union/Collective Agreement – Did Union breach D2A? Ee, union and Er all have D2A. Er has duty to take
reasonable measures short of undue hardship. Case explains meaning of undue hardship. The fact that
accommodation by Er would cause Union to file grievance isn’t a good reason not to accommodate.
FACTS: Custodian was seven day Sabbath observer, but work schedule (part of Collective Agreement “CA”) interfered with claimant’s
‘no work from Friday sundown to Saturday sundown’ policy. EE gave a bunch of other alternatives to ER, were rejected by union. Only
practical accommodation was Sunday to Thursday shift, but it involved exception to CA and union wouldn’t consent to it.
ISSUES: Whether ER is relieved of duty to accommodate when it would require an alteration of a CA proposed by a union of EEs;

Whether a union in these circumstances is in breach of duty to accommodate.
ANALYSIS:
[16] NATURE AND EXTENT OF DUTY TO ACCOMMODATE:

The D2A requires an Er to take reasonable measures short of undue hardship.
o
“Short of undue hardship”  measures that occasion undue interference with the Er’s business or undue expense
are not required. But it also means more than mere negligible effort
o
Some hardship is acceptable, only “undue” hardship satisfies the test
pg. 42
o
What constitutes reasonable is a question of fact in each case.
Considerations in determining whether hardship is undue:
o
financial costs
o
disruption of CA
o
problems of morale with other Ees - more than minor inconvenience must be shown before the complainant's
right to accommodation can be defeated. Er must establish that actual interference with the rights of other Ees,
which is not trivial but substantial, will result from the adoption of the accommodating measures.
o
size of operations (can influence whether cost is undue or the ease with which workforce or facilities can be
adapted)
 reality: the bigger the workforce, the greater the duty to accommodate will be
o
Where safety is an issue, have to consider magnitude of risk and who bears it
 List is not exhaustive! Factors will vary from case to case.

[25] Union cannot contract out of provincial human rights legislation through collective agreement – it must comply
o
Provision in this case not directly discriminatory but has this adverse effect – so provision not invalid but valid in
general application
o
What the human rights legislation requires is that the appellant be accommodated by exempting him from its
provisions to the extent that it no longer discriminates against him on the basis of his religion.
o
[26] Effect of CA is relevant in assessing the degree of hardship that occurs by interfering with terms of the CA

[43] Duty of complainant (EE):
o
to participate in the search for accommodation.
o
to facilitate the process.
o
Thus in determining whether the D2A has been fulfilled the conduct of the complainant must be considered.
o
[44] Ee also has duty to accept reasonable accommodation. Complainant can’t hold out for ‘perfect’
accommodation.
CONCLUSION: EE did all that could be expected of him. ER, EE, and Union all have a D2A. Union and Er failed to discharge D2A. Er didn’t
proceed with accommodation b/c they thought union would’ve filed grievance – grievance was wrong and would’ve been dismissed.
Union’s CA created the adverse effect discrimination – they also refused to accept Er suggested accommodation, which was a
reasonable suggestion.

Janzen v. Platy Enterprises Ltd., 1989 SCC – Sexual harassment is a form of sex discrimination. ER always
liable when harassment is committed by Ees carrying out power over other Ees in an abusive way on the
basis of sex. Broader liability than just Vicarious liability.
FACTS: Sexually harassed by creepy cook, manager did nothing when she finally complained about it. She quit. Another EE had same
problem, when she complained manager and creeper continued with verbal abuse. Manager insinuated that it was their fault, asked
why they let Creep get away with it, etc. Eventually manager fired her.

Both filed complaint with Manitoba HRC; adjudicator found persistent and abusive sexual harassment; ER jointly and
severally liable. ER appealed. CA overruled, EEs appealed to SCC.
ISSUES: Is sexual harassment a form of sex discrimination? YES, sexual discrimination always amounts to sex discrimination [48].
ANALYSIS: [56] Sexual harassment in workplace is broadly defined as unwelcome conduct of sexual nature that detrimentally affects
work environment or leads to adverse job related consequences for the victim.

Sexual harassment constitutes sex discrimination: it’s a practice or attitude which has the effect of limiting the conditions of
Em of, or the Em opportunities available to EEs on the basis of a characteristic related to gender.

Sex discrimination doesn’t exist only where gender is the sole ingredient in the discriminatory action and where, therefore,
all members of the affected gender are mistreated identically.
o
Discrimination doesn’t require uniform treatment of all members of a particular group.

Not a defence to say ‘not all females are being harassed’.
o
It’s sufficient that the ascribing of a group characteristic to a person is one factor in the way they’re treated.
o
Discrimination should not be limited to situations where it is perfectly inclusive or uniform

Crucial fact: only female EEs ran the risk of sexual harassment (in this circumstance).

Respondent didn’t meet its responsibility to ensure that those who exercise power over EE weren’t abusive (manager and
cook claimed to have power to hire and fire), especially after the appellants made specific complaints.

Liability of ER: Much broader than concept of vicarious liability. When this conduct happens on work time, the ER is liable.
Full stop.

Sexual harassment = sex discrimination, always.
CONCLUSION: The offending EE was acting in respect of his Em when he sexually harassed the girls, his actions were clearly work
related. ER found liable for his conduct.
Point: could bring case for constructive dismissal under these circumstances.
pg. 43
Seneca College of Applied Arts & Technology v. Bhaudaria, 1981 SCC – discrimination by repeatedly
refusing to hire someone doesn’t give rise to a CL tort, especially when the HRC is so comprehensive
(provides for administrative inquiry and remedial relief, and allows a wide appeal to the Court on both
law and fact).
FACTS: B was highly qualified for teaching position, applied repeatedly, never got interviewed or hired while less qualified people were
hired. Claimed it was because of her East Indian heritage and wanted to claim a tort action of discrimination instead of going through
HRC.
ISSUES: Should a CL intentional tort of discrimination be recognized? NO.
ANALYSIS: No CL cause of action to civil courts based on discrimination.

Ontario HRT had broad enforcement and remedial authority, could issue remedies, and these decisions could be appealed to
courts by judicial review.

Because the statutory scheme was so comprehensive, didn’t need to CL tort.
CONCLUSION: discrimination by repeatedly refusing to hire someone doesn’t give rise to a CL tort, especially when the Human Rights
Code provides for an administrative inquiry and remedial relief, and allows a wide appeal to the Court on both law and fact.
Privacy Law and Em
Statutory Framework







Key question: Which statute applies in a given context?
In BC:
o
Privacy Act
o
Freedom of Information and Protection of Privacy Act (FOIPPA)
o
Personal Information Protection Act (PIPA)
o
Personal Information Protection and Electronic Documents Act (PIPEDA)
Privacy Act (1979)
o
S.1: wilful violation of another’s privacy is a tort
o
Nature, degree of privacy entitlement depends on what’s reasonable in the circs
o
S. 2: Exceptions – ie. not a violation if there’s consent, incidental to lawful protection of property, or authorized by
law
o
Watts v Klaemt, BCSC

P employed by Ministry of Social Services. D was neighbour of P’s daughter and son in law. D was fearful
of son in law, began intercepting their phone calls. He recorded P advising kids how to defraud welfare
system. She eventually lost her job, brought claim against him.

Court found him liable – intentionally violated personal privacy. Acts were disproportional to his fear of
son in law. Court awarded damages but not for lost job which was related to her fraud.
FOIPPA (1993)
o
Applies to provincial public bodies
o
Legislation is meant to address concern over how personal info is collected, stored and used
o
Also access to personal and general information.
o
Exception – where info is privileged; where disclosure will cause serious harm to organisation
PIPA (2004)
o
Applies to provincial private sector organizations (ie. unions, doctors offices, companies, etc.)
o
Legislation is meant to address concern over how personal info is collected, stored and used
o
Also access to personal and general information.
o
Similar exceptions as FOIPPA
PIPEDA (2001)
o
Applies to employees of federally regulated works or undertakings and private sector in the course of commercial
activities (banks, telecom, airlines, shipping)
o
It does not apply in provinces w/ substantially similar legislation (since 2004)
o
PIPEDA governs in BC!
Commonalities
o
Personal information protection

“reasonableness” – what is reasonable in the circs?

Limited collection, use & disclosure  why is it being collected and for what use?

Identification of purposes

Knowledge & consent of individuals, can be express or implied

Security safeguards that are appropriate to sensitivity of information need to be used

Transparency (re: how companies are using info, need clear policies) & accuracy (provisions for how
individuals can correct info)
pg. 44
o
o
Access to Information

General vs personal rights

Specific exceptions and redactions
Regulatory oversight

Privacy Commissioner of Canada  enforces PIPEDA

BC Information and Privacy Commissioner  enforces PIPA + FOIPPA
Privacy in Employment




Hiring
o
Ie. Interviewing, resumes/applications, reference checking, background checks, psychological and aptitude testing
o
Each may be permissible if reasonably required to make hiring decision; can’t over-collect
o
Regarding social media, Commissioner says people have expectation of privacy so Ers must be reasonable
Employment Records
o
Ie. resumes, personnel files, work performance evaluation and documentation, disciplinary records
o
Union – some CAs require disclosure on request of Em records
o
Ee always entitled to personal information
o
Managers – there’s no such thing as “secret notes” so don’t write down something you don’t want Ee to see
Disclosure of Ee info
o
To unions; to boards, tribunals, courts; to other third parties: insurers, disability carriers, etc. (to extent required
to provide services)
o
Reasonable in these circumstances
Significant debate over:
o
Personal searches of Ees;
o
Drug & Alcohol testing;
o
Medical information;

Attracts high degree of privacy

Usually relates to medical certificates

Balanced approach b/w legitimate reason and Ee’s expectation of privacy

Legitimate reason: Er’s duty to establish fitness to work  Er generally entitled to nature of
illness, prognosis and expected date of return

Er must have reasonable grounds to question medical certificate or require additional info

Once Er obtains info, Er has a duty to protect confidentiality and security of medical info

Access limited to those with a “need to know”
o
Video surveillance and GPS monitoring;

Requires justification, ie. need to show it’s necessary to protect against vandalism, document conduct,
for safety of the workplace, etc.

Extent and use of surveillance or monitoring must match stated objectives

Again, it’s a balance of competing interests

Eastmond v CPR (PIPEDA)

CPR set up video of rail yards b/c of vandalism/theft. Ees complained. It was upheld by court
– reasonable purpose

Schindler Elevator (BC PIPA)

Installed equipment to record data in vehicles. They said it was for Ee management purposes.
This was upheld as reasonable

UBC (BC FOIPPA)

Surveillance equipment on campus security vehicles. Held to be reasonable but court said
they had to inform the union of it.

In all cases, court will look at:

What would a reasonable person consider appropriate in the circs?

Is the purpose reasonable and was the surveillance or monitoring conducted reasonably

Balancing of interests in light of the relevant circumstances

Relevant factors in court’s analysis may include:

What is the purpose of the collection?  Is there a legit need? (ie. theft, Ees work
unsupervised, safety)

Is the surveillance/monitoring likely to be effective?  reasonable likelihood required

Is the information sensitive in nature (eg medical conditions, marital status, sexual
orientation, etc.)? Not sensitive: name, age, home address

How much personal information is being collected?  Can’t collect more than is reasonably
necessary for stated purpose

Do alternatives exist? Er has to consider less intrusive alternatives

Is the information being collected covertly? Then ER has to be more sensitive

Is the loss of privacy proportional to the benefit gained?
o
Computer Searches and Monitoring

Reasonable expectation of privacy where Ee is using Er’s equipment on work time?
pg. 45




Increasing recognition of a diminished expectation of privacy
Arbitral test

Is it reasonable in the circumstances (ie. wasting of Er’s resources, legal liability, corporation
reputation)

Is it conducted reasonably
o
Look at scope and extent of search

Privacy adjudicators – has Er considered less intrusive means?

UBC case – Er was concerned that Ee was surfing the internet too much. Er installed key stroke software
on Ee’s computer. Generally, first step should be talking to Ee (not installing software). If fraud is
suspected, Er is permitted to do it covertly.

R v Cole (Ontario) – criminal case – Accused was a high school teacher. He copied onto school issued
laptop nude photos of female student. School’s IT Ee discovered this and other porn on laptop. Police
seized laptop and reviewing contents w/o warrant. Teacher was charged.

SCC: teacher had a reasonable expectation of privacy in personal information on laptop.
Computers used for personal purposes contain info that is meaningful, intimate, and touching
on the user’s biographical core. Ownership isn’t determinative (of whether warrant was
needed and likelihood of privacy being violated). Workplace policies and practices may
diminish expectation privacy but do not remove it entirely.

Result of this decision was privacy was diminished by not removed completely. Er’s still have
to be reasonable and have legit reason to collect and store data.
Conclusion: Privacy in Em is complicated, it’s expanding, both parties have a point, neither party’s rights are absolute (it’s
always a balance), and the struggle to achieve balance will continue.
Remedies:
o
PIPA Commissioner can make orders + fines (not very meaningful).
o
Criminal sanction
pg. 46
Appendix 1 – Employee vs Independent Contractor (Handy Dandy List)
Employee vs. Independent Contractor:
Factors Suggesting
Employee Status
Company determines and schedules hours and days of
work, starting and finishing times, lunch and coffee
breaks, vacations, etc.
Company controls how work is to be performed, and
directs and supervises work.
Employee works exclusively for company.
Employee is paid on hourly or salaried basis, with rate
established by company.
Employee receives a regular paycheque, with statutory
deductions.
Employee may be disciplined for misconduct or
unsatisfactory work performance.
If work needs to be redone, company must pay employee
to do so.
Employee may not hire or engage others to perform
his/her work.
Company supplies office space, tools and equipment used
by employee.
Company pays all business costs, including rent, supplies,
insurance, etc.
Company provides training.
Employee performs work that is integral to company’s
business.
Employee is economically dependent on company.
Employee must comply with company’s rules, policies,
handbook, dress code, etc.
Remuneration is paid to employee personally.
Company pays for employee’s WCB coverage.
Employee is signatory to employment contract.
Employee participates in company’s group benefits plan,
pension plan, RRSP plan, etc.
Employee is hired for indefinite term.
Employee has no financial investment in the business
(aside from perhaps a minor shareholding)
Factors Suggesting
Independent Contractor Status
Contractor determines own hours of work, subject only to
deadlines and operational requirements established by
company.
Company determines end result, but contractor decides how
work is to be performed.
Contractor has other clients.
Contractor is paid a fee for service, with the rate negotiated
between the parties.
Contractor submits invoices, including HST, and is paid
without deduction.
Contractor is not subject to discipline, but may have contract
terminated if work is not satisfactory.
Contractor is not paid for work that needs to be redone.
Contractor is free to hire or engage other workers to perform
the services.
Contractor provides own office space, tools and equipment.
Contractor pays own business costs.
Contractor looks after own training.
Contractor provides services that are ancillary to company’s
business.
Contractor is not economically dependent on company.
Contractor must comply with only minimal rules, that
company requires all contractors to observe.
Remuneration is paid to contractor’s company (if
applicable).
Contractor is registered with the WCB and pays for own
coverage.
Contractor is signatory to independent contractor
agreement.
Contractor purchases own benefit coverage, and makes own
RRSP contributions.
Contractor is hired for a fixed period, or to perform specific
work.
Contractor has a financial investment in the contractor’s
business.
pg. 47
Appendix 2 – Policy Arguments
Nature of Policy Argument
Employees are vulnerable
Employment is important to individuals
and their identity; special relationship
Object of the ESA
Modern courts should imply a
standardized duty of fairness on Ers
Vicarious Liability Policy Analysis
Reasons why Ee’s duty to mitigate
should be the same whether WD or CD
Policy against use of severance to fix
RCs
Reference
Machtinger; Wallace v United Grain Growers (p 12); Shore v Ladner Downs (citing
Machtinger); Shafron
Machtinger; Wallace v United Grain Growers (p 12); Shore v Ladner Downs (citing
Machtinger)
Machtinger; Shore v Ladner Downs (citing Machtinger)
Page 12
Bazley v. Curry
Evans
Shafron
pg. 48