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Employment Outline: 2003
Original version by: Sacha Paul, Jon Woolley, Kusham Shanna, Sharon Reid, Pearl Reimer in 2002.
Updated and expanded in 2003 by Jennifer Dundas
Topic 1: Employment as Contractual Relationship
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Employment (Emp) is a relationship that goes to the essence of a person
In Canada we have a reasonable notice requirement of termination
In USA, they have at will employment where there is no need for notice (unless provided in a statutory
provision). The idea reflects a traditional freedom of contract approach
The nature of the working world
 Productive labour- we work to get cash to buy stuff
 Labour is detennined on supply and demand principles
 The contract illusion presupposes a freedom of contract that would not exist for people who need to work to
live.
 Emp derIDes one's identity and goes to self-worth
 Beatty argues that people should have a proprietary interest in their work that requires all dismissals be for
CAUSE and thus
 no need for notice
 Note that how we organise work reflects how we view society
The Ordinance of Labourers (1349)
 Emp begins with the old master/servant relationship
 Note that Emp law starts with the Ordnance of Labourers (1349) that capped labour prices at a pre-plague rate
and forced all able bodies to work.
Pahl: On Work: Historical. Comparative and Theoretical Approaches
 Work, in Pahl's view, was always nasty and brutish and never in some pre-Industrial golden age (such is the
nature of Western Capitalism, I might add!)
 At all time the work done within the household has been overlooked as work, though it is an essential
precondition to productive labour.
Beattv: Labour is not a commodity
 EMP has two purposes of (1) means of productive output in a society (2) source of identity.
 It is facile to paint EMP law with the fantasy that all EE go in with consent as the world don't work that way,
everyone has to eat and that mitigates against a meaningful consent
 Beatty sees an inconsistency between the contractual tenD requiring notice and the reality that EMP has a
personal element to it. The ability to tenninate with notice is a powerful tool against the EE. Thus the self-worth
of the EE without ajob will drop.
Gunderson: Neoclassical Determination of Income .
 Neo-classical economics sees everything in terms of choice. X chooses to be in labour force and contributes to
get wages. What is paid is based on supply and demand.
Weber: Freedom and Coercion
 Power of freedom of contract is an illusion for workers who really cannot negotiate hours worked, conditions
etc. The freedom of contract benefits the powerful and that is normally the ER.
Topic 2: Parties to the Employment Contract
England Chapter 2: Identifying a Contract of Employment
ESA: "employee" means an individual who is employed. T_is is too vague to enable us to determine whether “X” is an
employee, so the common law must be relied on. As Judy Fudge has noted, the common-law definition of employment is
slightly narrower than the statute - requiring that it be a relationship arising from a contract. Nonetheless, this
requirement of a contract is consistently applied by the courts before they will recognize that the ESA applies. The test
for whether such a contract exists is found in Montreal Locomotive.
Find that the person fails to meet the test of employee? Note that:
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This case demonstrates why the current legal tests of employment are inadequate. The growth in non-standard
employment means that people like - are increasingly deprived of protections that courts originally intended to apply to
the majority of working people.
A. Status as an "Employee"
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Know the difference between an EE and an Independent Contractor (IC)
How work has changed in the past, changes how we determine who is an EE
The old control test worked well for traditional labourers but does not work well when you have skilled
professionals over which the ER knows little thus cannot really control
The current challenge in EMP law is dealing with people who are self-EMP
Current tests on who is an EE do focus on control to a degree
Also if you need to determine who is an EE for an act (e.g. Human Rights) then you should look to the purpose
of the act
WHO IS AN EMPLOYEE
The four-part test from Montreal Locomotive is to be applied. Control / ownership of tools / chance of profit / risk of
loss.
(application)
However, as seen in Truong and Rosin, the courts tend to see control as an important and even dominant part
of the determination.
The situation of “X” shows why it is unfair to employees for the control test to hold such a primary place in the
application of the test in Montreal Locomotive. Close supervision by a superior is not a fair reason to give one person
more legal protections than another. In a technologically advanced society, increasing numbers of people hold skills and
knowledge their supervisors lack thus making close supervision and control impossible or difficult. It would be fairer for
the courts to adopt a more permissive standard - as the Ontario courts did close to 70 years ago in Carter, finding that
an intermediate category existed, entitling a largely independent person to the benefit of the right to reasonable notice,
(or the requirement of just cause) in the event of dismissal. Alternatively, the courts could adopt the more permissive
approach recommended by A. Brooks (quoted by Judy Fudge), who recommends that there be only one category of
contract - that of "contracts for the performance of work".
On the other hand - returning to the purposive approach to employment legislation as recommended in Imperial Taxi employment legislation is not designed to provide an economic buffer for entrepreneurs running their own businesses.
On this basis, one could argue that “X” is not entitled to protection, since his attempt to argue for employment status
appears to be pretext to give him access to benefits that were never intended by legislators or the courts to be his.
The traditional EE test per Montreal Locomotive (1947) PC is:
1. Control (not always conclusive)
2. ownership of tools
3. chance of profit
4. risk of loss
The "business integration" test per Denning (Stevenson Jordan & Harrington)
 A contract of service (EE) is one where the person's work is integral to the business
 A contract for services (Ie) is where the work done for a business is not integral but accessory
Factors relevant for this test include:
1. OWNERSHIP OF TOOLS: not determinative
2. RISK OF LOSS/GAIN: not meaning people who get commission, etc, but where a person puts $$ into biz is
more likely to be self-employed
3. REGULAR EMP: if X works for Y exclusively then EE. But if X works for A, B, C, etc then X is likely an IC .
4. DELEGATION RIGHTS: EEs normally do work personally, whereas for an IC it doesn't matter in do it or
Mary (my delegate) cleans the washrooms so long as it gets done. BUT this is not determinative see franchisers
as EE though they hire own staff
5. LEGAL STATUS: X is more likely an IC if he works and makes contracts under his Corporate name, but at
times courts can look behind the veil ifthe corporate EE is in a vulnerable and EE like position
6. PUBLIC IMAGE: if X sees self as EE then likely an EE and public sees X as an EE. E.g. X wears a company
uniform
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7.
FORMAL CONTRACT: little to no weight is given to how parties to a contract see themselves as it is selfserving and can be divorced from reality
Truong v. British Columbia (1999) BCJ No. 2049 (CA). 24)
Vietnamese court interpreter fired. Court looked at the significant features of her working relationship. E.g. she was on a
roster of interpreters called on a rotational basis. Had to adhere to code of conduct, dress code, cdn't sub-delegate, had to
report. But she submitted invoices, had no deductions for CPP etc. Mt. Loc Test: she was an employee.
 Total relationship is looked at, but control looms large in any determination of who is an employee.
 Legal ability to work for someone else, when realistically it is not possible, suggests status of employee.
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Status for tax purposes not determinative.
Re Imperial Taxi Brandon (1983) Ltd and Hutchison (1987) Man CA
Taxi driver (H) contracts with cab company (ITB) that would allow H to drive people and get paid on a distance
travelled basis. H would keep all fares. ITB owned cabs, covered costs of cabs insurance, licenses maintenance. H made
less (2,000 less) than minimum wage plus all entitled overtime and holiday pay by the contract. Issue: On a judicial
review application. Did the Manitoba Labour Board err in deciding that H is an EE for the Payment of Wages Act?
Majority (Twaddle): The CA said purpose of EMP acts are to prevent exploitation of people who must follow the
directions of an ER of when to work. Notes that each of the EMP acts makes a line between an EE and an IC. The
difference for CA between the two with reference to the purpose ofthe act is the degree of control exercised by ER on EE
or IC. The decision of the Labour Board that H is an BE is reasonable in law and fact.
Ifwe a pI the Montreal Locomotive Factors
 Interpret the definition of "employee" in the ESA in light of the purpose of the statute. (the purpose is to prevent
the exploitation of those who have no choice other than to follow an employer's orders - especially with regard
to hours and manner in which work is to be done.) (Note: wording of the act has changed since this case, but
the purpose has not.)
 Montreal Locomotive factors apply, but as with Truong, control looms large.
INTERMEDIATE CATEGORY BETWEEN EE AND IC??
England text: courts have recognized an intermediate step between employees and individual contractors. An IC may be
entitled to reasonable notice (Carter v. Bell), or summary dismissal only for just cause (Beaudoin v. Canadian Corporate
News). Employers have all kinds of incentives to turn employees into IC's, so courts hv decided to impose obligations.
Carter v. Bell (1936) (reasonable notice for IC) (cited in Machtinger) (saleperson on commission for long term)
In discussing the nature of the relationship between the plaintiff and the'defendant, Middleton J.A. stated at 440:
"There are many cases of an intermediate nature where the relationship of master and servant does not exist but
where an agreement to terminate the arrangement upon reasonable notice may be implied. This is I think such a
case. The mode of remuneration points to a mercantile agency pure and simple, but the duties to be performed
indicate a relationship of a more permanent character.
“A number of points were listed in order to demonstrate that permanency, the plaintiff: (i) chose the sub-agents
and their training; (ii) recommended them to the company for their employment; (iii) was endeavouring to
create a market for the defendant's products; (iv) was the exclusive agent; (v) entered a new territory as
representative of the defendant; and (vi) relocated with his family to the new territory.
“In the result, Middleton J.A. held that the contract was one which could only be terminated upon reasonable
notice.”
 Where the facts show a working relationship with a high degree of permanency, and there are few other
indications of employment status, the courts may find that the worker fits into an intermediate category between
employee and independent contractor, which requires reasonable notice.
SHELTERED WORKSHOP
Fenton v BC (1991) BCCA
F is a person with a troubled background and was charged at one point for obstructing a cop but was not guilty due to
insanity. He was put into FPI as psychiatric place for help. FPI has some work therapy programs that are not vocational
but for treatment and rehab. The working is optional and there is only 4 hours of actual work from 8 am to 3 PM. The
patients are given a gratuity based on a pay structure based on attendance, behaviour, co-op with others, efficiency. No
patient is allowed to get more than 100/month. F worked various odd jobs and escaped from time to time only to return
to FPI. Issue: is a patient doing work programs as part of therapy entitled to be an EE under the BC ESA and thus get a
guaranteed minimum wage? Held: CA looks to the "real economic benefit" test to determine if F is an EE. The purpose
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of the FPI program is to treat patients and prepare them for working life. CA said that the costs of running the programs
for the patients far exceed its expectation of profit. CA dismissed F's point that many ER don't turn profits and they still
have EE. (Perhaps we must look at the substance of the relationship)
*Beware that we should not be expanding Fenton to many other situations.
 Where the employment relationship arises from a therapeutic program, the test for whether someone is an
employee derives from whether there is a "real economic benefit" to the employer in running the program. (The
program does not have to be profitable in order for this threshold to be met.}
 Consider the objectives of the program - if the dominant purpose is therapeutic, then it is more likely that there
is no employment relationship.
Although it could be argued that an important part of the learning experience in such programs is to discover the
positive aspects of employment, and it cannot be denied that one positive aspect is having legal protection against the
unilateral whims of an impulsive and possibly vindictive employer. It is something that gives added value and meaning to
attaining the status of employee. The employer is required to treat the employee with more respect - in the sense of
respecting his or her rights to such things as notice or just cause. It makes little sense to deny this respectful treatment to
the very people are most vulnerable to being treated without respect - those with intellectual or psychological
disabilities. Providing such an employee with reasonable notice or pay-in-lieu is not likely to be onerous, given the low
wages, and the fact that profitability is not a goal of the program.
Other ways to approach this issue:
 Human rights complaint: discrimination on the basis of a disability.
 Charter challenge to the exemption in the legislation.
VOLUNTEER // BROAD INTERPRETATION OF THE ACT // CONTROL AS A FACTOR
Canada (AG) v. Rosin (1991) FCA
R is an 18 year old army cadet who was in a parachuting course until the organisers of the course found out that R had
only one eye. The army said that two eyes are needed for the parachuting course though R had successfully done 2 of the
3-week program without incident. R would get an honorarium and room and board for the cadet courses. Issue: Is
RanEE for the purposes of a human rights regime to make a human rights complaint based on discrimination on
disability? Held: R is an EE for the HRA (Human Rights Act). FCA rejects army contention that cadets are like kids at a
summer camp. Note that EE for HRA need not mean person is an EE for tax purposes or vicarious liability. R is an EE
because of control over him by army and army gets benefit from R by utilising his skills as a parachuter in future. Army's
honorarium counted as wages.
 HRA needs a large and liberal interpretation to uphold the purposes of the act.
 A high degree of control over a person acting in a voluntary learning capacity can suggest employment status,
where employer is in a position to benefit from the increased skill and knowledge (for purposes of the HRA).. .
 Human Rights Act is more inclusive in determining who is an employee.
 Control is a significant factor.
Fudge: New Wine into Old bottles?: Updstina leasl forms to reflect chsnaina employment norms
Introduction
 PREMISE: legal theories around EMP are outdated and thus law is divorced from reality. Result is that some
ERs may structure affairs to avoid being an ER with EEs.
 A further challenge to EMP law is non-standard work.
 The nature of work is changing so legal relationships should change. (My note: as they did during The Plague,
in the 1300's, at the dawn of the Industrial Revolution, and in the 20th century with the emergence and
acceptance of a rights based philosophy.) . Statutory law no longer there to protect workers, but as a framework
to avoid helping employees.
 The concept of the employment relationship as being one that is contractual is outmoded and inadequate. The
law is now out of touch with the reality of workers.
 The common-law definition of employment as a relationship arising from a contract for employment.
The social and legal meanings of Employment
 Employment is a contractual relationship based on service as opposed to a contract for services (IC).
 However, the exact nature of the EMP contract is hard to find at CL and in statute. The statute definition is
often vague thus giving judges a reason to resort to CL definition, even though the statute and its purpose may
have intended something broader. (see Re Becker Milk (1974)
 Since EMP is based in contract law, we also see that EMP is at the mercy of supply and demand and market
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forces of
 freedom of contract etc.
 The original concept of EMP is one based in neo- feudal master and servant law where the servant owes duties
of good faith, fidelity, and obedience. Some see master/servant premises in EMP law as outdated (see England)
or useful (see Madame Justice Southin in King v. Mayne Nickless Transport (1994) BCCA)
 ince EMP contracts are vague and judges have stepped in to impute intention (e.g. notice periods), judges define
the terms in a way that is congruent with historical precedent on EMP law and their own perceptions of
balancing of rights and the prevailing social conditions.
 Many including Justice Iacobucci in Wallace v UGG see EMP contract as a different type of contract where
there is an inequality of bargaining power between EE and ER that is not always there in ordinary contract
situations.
 Due to inequality, how the parties see their relationship (e.g. as IC and not EE) is unimportant. Courts use tests
to see who at law is an EE.
Two problems lie with the judicial approach to defining EE
1. Tests premised on a traditional view of work that is now out of step with reality
2. No principle difference between who should get EE benefits and who should not
The erosion of the standard employment relationship .
 Tests on who is an EE were developed when there was the "standard employment relationship" meaning
"continuous, full time employment relationship, where the worker has one employer and normally works on the
employer's premises or under
their supervision." (p. 40).
 In this standard relationship we have a single ER, stable wage, perhaps unionised, indeterminate EMP contract
duration, many fringe benefits like pensions.
 Two causes for the loss of the standard employee
1. Disintegration of vertically integrated fIrms
2. Proliferation of non-standard work
 In the 1970s this type of work started to disappear because ER who were "vertically integrated manufacturing
firms" that did everything (make the screws, windshields, mirrors, tires to make a car) fell apart during
downsizing.
 The big winner has been the small business firms who have increased in number where half of Canadians in
private sector are working in small business or are self-employed.
 Big losers are EEs who get paid less, less stable work, less fringe benefits in the smaller fIrms. Unionizing small
firms is quite hard because the numbers are too small for unions.
 In non-standard work, ER use subcontractors and temps and casual EE. ERs like this because it gives them
flexibility and lower EE costs.
The proliferation of non-standard employment relationships
 Non-standard work range from part time, temp, contract work TO self-employment. All forms of non-standard
work have a degree of income insecurity and lower level of benefits and less coverage in labour and
employment laws.
 Women tend to be in non-standard work more than men . People with non-standard work more likely to hold
more than one job. This means that they have less pay and benefits than single job earners
 Women have recently climbed in numbers in self-employment
 Temp agencies have a triangle of workers-temp agency-client employer
 Oddly, despite benefits and the inherent insecurity in temp work, temp EE have high job tenures
 As of 1997, only 33% of Canadians hold normal jobs and the gap between _ch and poor is widening
 Non-standard work does not fit within the legal work paradigm with result that some ER are structuring work to
avoid standard workers
The inadequacy of the legal tests of employment
 With increase in non-standard work there has been an increasing irrelevance of legal tests on who is an EE.
Fudge says that we as lawyers cannot make a definition that will clearly differentiate between an EMP contract
and a contract
 We have tried the CONTROL TEST which arises from old master/servant law. It is out of step with current
EMP reality
 (e.g. professionals and control). Fudge notes that the test offers no principled basis to see a difference between
different ways of organizing work
 Fudge also sees no principled difference between an economic dependence test for EE as it again does not see a
difference between IC and EE
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Courts have taken a functional approach to seeing who is an EE. They look at the purpose of statutes. If this is
the case then some say that the difference between IC and EE be abandoned and replaced with a "contract for
work"
Yet, in Canada we still look to EE vi; IC as the test in statutes for its application to a person and thus it reaffirms
the common law position on EE
Benefits of a broader definition of EE would be
 Stop ER from structuring work to avoid having EE as its sole motivation
 Reduce litigation on time consuming question of who is an EE or an IC
 Bring law in step with social reality of work
 Allows flexibility in work arrangements
 Promotes horizontal equality as it would treat IC and EE the same.
Identifying the employer
 An additional problem is trying to find out who is the ER.
 There is no problem in the traditional binary situation of ER and EE
 Problems arise in situations of temps, contracting out, franchising, labour contracting etc
 At times the law will recognise multiple ERs see Sinclair v Dover Engineering Services (BCCA).
 In a successorship situation we can have multiple ERs as one ER sells to another ER.. Yet not all business sales
fall within the meaning of succesorship (a legal sale between ER X and ER Y).
 In the context oftemp agencies, the SCC sees that it does not fit within the current moulds in EMP law (see
Pointe Claire). Not knowing who the ER is in these situations also creates uncertainty for client ER
 Fudge calls for a joint and several liability in EMP law to deal with multipltJ ER
WHO IS AN EMPLOYER?
MORE THAN ONE COMPANY
Who the ER is can be a tough question when
 EE is temporarily transferred from X to Y, even if it is in the same corporate family
 Co X is sold or transferred to a new Co Y in a successorship situation
General rule: EMP contract cannot be transferred to a new ER unless EE and new ER end the old contract and put in a
new one.
 This avoids the problem for EE of loss of seniority without compensation.
 Also avoids "slavery" in being forced to work for new ER
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Courts are reluctant to find an EE has ended contract of service with X when working with Y unless there is
clear evidence to show such a thing (Bodnarus)
To protect EE from corporate families exchanging EE to screw EE, many Employment Standards Acts (ESA)
will have provisions covering this. But courts seem to be making a CL rule to cover ESA provisions too.
(Downtown Eatery)
Other rules helping EE at CL
Notice: Time with a successor company will be used to determine notice.
A successor company is taken to agree to seniority of buying a new company unless otherwise noted (Bodnarus)
TEMP AGENCY
The narrow view: who ever signs the paycheque is the ER, likely the temp agency would be ER
The broader view: who carries the economic burden of paying EE? Likely the ER and not temp agency. See PointeClaire v. Quebec (SCC) where we can also look at daily control of EE, who hires/fires/disciplines EE.
Note that when we look to ESA etc then the EE may want the temp agency to be the ER to get good seniority
Pointe-Claire v. Quebec (Labour Court) (1997) SCC
The City hired a temporary employee through an agency. The employee was paid by the agency but her work was
directed by a manager working for the City. The Union for city employees successfully applied to the Labour
Commissioner to have the employee included in its bargaining unit. Labour Court said ER was the city because the temp
EE had same working conditions as the regular EE (hours worked, breaks, statutory holidays). Also found a legal
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subordination between city and L to make city the ER. Wages paid by Agency were determined by city thus city is ER.
(this not given too much weight due to lack of definition ofER including the need to pay EE). City involved in discipline
by notifying the A who would remove EE, thus no progressive discipline. Court gave this little weight. EE felt though
she worked for the city not temp agency. …The Labour Court correctly considered not just legal subordination,
but other relevant factors such as the selection process, hiring, training, discipline, evaluation, supervision,
assignment of duties, remuneration and integration into the business..
 The test to be used to determine who is an ER in a tripartite (Agency-client ER-EE relationship) is the
fundamental control test, per York Condominium:
1. who has control over the EE when doing the work
2. who pays EE
3. who disciplines EE
4. who hires
5. who fires
6. who does the EE see as its ER
7. intention to make an employment relationship
Dissent (L'Heureux-Dube): thinks that step ONE has overtaken the test and is not determinative of the EE question.
She thinks it is absurd that the EE would be intended to fall in the C/A and now the EE serves two masters for the same
work. She sees several problems
1. EE is confused as to who is ER
2. Now there is an inconsistency between labour and EMP law
3. CIA would not be enforceable against the temp agency
4. Conditions of work for temps are not included in C/ A
5. EE cannot collectively organise the temp EE
6. EE denied minithal standards ofEMP.
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The factors relevant to the employer-employee relationship, include: the selection process, hiring,
training, discipline, evaluation, supervision, assignment of duties, remuneration and integration into
the business (inc sense of belonging).
Consider policy context, and the courts' seeming interest in helping to protect the best interests of the employee. PointeClaire was decided in the context of collective bargaining rights, in which case it was in the employee's best interests
to find that the city was the employer. But in the context of the employment standards statute, or a contract of
employment, the employee may be better off with having the agency as employer, since that enhances seniority
entitlements (e.g. with dismissal).
MULTIPLE EMPLOYERS, OR TRANSFER TO NEW EMPLOYER
Downtown Eatery v. Alouche (2001) Ont CA
Appeal by an employee, Alouche, from the dismissal of his counterclaim against several individual and corporate
respondents. Alouche worked in a night club operated by the respondents, Grad and Grosman, through a complex
corporate structure. He was wrongfully dismissed and brought an action against Best Beaver Management, who had
issued his paycheques. As a result of a reorganization, Best Beaver was left as a non-operating entity. HELD: Alouche
was entitled to recover his judgment from all of the individual and corporate respondents.
 If there is a "sufficient degree" of relationship between the legal entities involved, they all can be seen as the
ER. We can look at individual shareholdings, corporate shareholdings, interlocking relationships to find a
relationship.
 To distinguish another case, note that in Downtown Eatery, the consortium needed to act together in order for
all to survive. There was interdependence, e.g. one company held trademark rights, the other lease land to
another corporation etc.
EMPLOYER'S BUSINESS IS SOLD
Bodnarus v. McGregor Centre Holdines Ltd (2000) Man CA
A nurse is hired by 2 doctors. 6 years later, the Doctors make a corporation and pay the nurse out of it for 21 years, then
Drs pay the nurse personally again. This lasted for 4 years. The clinic was sold to outsiders who then started to pay the
nurse less and she quit and sued for constructive dismissal. She sues the Drs individually. Result: the Drs are personally
on hook for the constructive dismissal. She did not consent to the change in the EMP contract. She gets 18 months notice
less wages earned as mitigation with new ER. Issue: Was there a novation in 1995 to change the ER to the corporation?
 A novation (or substitution of prior contract for a new one) can vitiate designation of who is the employer, but it
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is only found when there is offer/acceptance, valid consideration, etc., i.e. the parties must agree to the
change.
Where there is no novation, any time spent working with the new employer is to be deducted from the notice
obligations of the previous employer.
Section 3 - Formation of the Employment Contract
England, Chapter 3:
A. Legal Capacity to Enter Into an Employment Contract
It is imperative to remember that an employment agreement is governed by the basic tenets of contract law. As such
issues like capacity to enter into contract considered when determining whether an employment arrangement is valid.
 Under common law, lack of mental capacity renders the employment contract voidable at the option of the
incapacitated party. This puts employers into a difficult position, for they cannot, as a matter of policy refuse to
hire someone who lacks mental capacity. They must show that, by reason oftheir mental incompetence, the
applicant will be unable to perform the job, and the employer has attempted to reasonably accommodate the
employee.
 At common law, people below the age of eighteen are also precluded ftom signing binding employment
contracts unless the contract "as a whole is in his or her best interests". In determining best interests, the courts
will look at educational and career development opportunities as well as the impact of the job on their school
life and leisure activities.
 Under the Immigration Act, no person other than a Canadian citizen or a permanent resident of Canada can
enter into a binding employment relationship without a work visa. Any contract that offends this Act is a
criminal offence, and will render the contract void ab initio. There is some controversy over this, for while the
rule is intended to disentitle the illegal employee ftomrecovering wages under an illegal contract, it usually ends
up punishing the relatively innocent immigrant while rewarding the employer who is usually in a better position
to understand the illegality of the contract.
B. Formation and Modification of Employment Contracts:
 Under basic contract law, an employment contract will not be created Until the acceptor has communicated to
the offeror that he or she accepts unequivocally all the terms in the offer. Once the communication of
acceptance is given, the employment contract comes into existence, even if the employee does not start work
right away.
 Like ordinary contract law, if there is a condition precedent to contract, like the employee completing a course,
once the condition is met, the contract is enforceable on both parties.
 The greatest problem with employment contracts is the uncertainty of terms. Because the nature and exact terms
of employment are often unpredictable, employment contracts are often short on express terms. Employment
contracts are, however viewed as relational contracts, and as such the court is quite willing to imply terms of the
contract.
 The court is usually quite willing to imply terms that are standard within the industry, or a recognized custom of
the employer. The implied term is also the court's main tool to insert terms for public policy reasons.
 Both employers and employees are potentially liable in tort for mis-statements, either fraudulent or negligent.
This tort
 occurs when two parties are in a "special relationship" (i.e. employer/employee) and one party makes a
statement of fact to the other knowing that it is false, or without taking reasonable care to verify its accuracy,
and the other party relies on that statement to its detriment. The tort remedy is mainly used by employees for
false representations as to the nature of the work, the conditions, the pay, or even the effect of taking a buy-out
or early retirement package. It is important to
 note that the employer will not be liable for expressions of opinion, only their statements of facts. The
advantages of bringing a claim in tort are the broader remoteness of damages rules, favourable limitation
periods, as well as the
 compensatory nature of tort versus the "value of the promise" compensation from contract.
 Any amendment or change in terms of the employment contract must be supported by fresh consideration over
and above the performance of existing contractual obligations. For example, if an employer reduces the work
week by one day with no other changes to the contract, that new term is not legally enforceable by the
employee, for no consideration has been given.
 To get around this point, courts will often use the legal fiction of a mutual rescission of the contract and
the issue of a new contract on the new terms. It seems that the courts are only willing to do tbis, however,
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9
if tbere bas been substantial changes to the employment arrangement.
An additional consideration here is promissory estoppel. If one party changes the terms of the employment
contract and the other party continues on without protest, thereby inducing the fITSt party to incur a detriment
in the belief that the second party is relinquishing their contractual rights, the aggrieved party is estopped from
claiming a breach of the employment contract.
For any change in the employment contract to be valid, it must be clear that both parties have full knowledge of
the scope and nature of the changes in question, and the must voluntarily assent to it without duress or coercion.
The employment contract can be rendered void if it was signed under duress or if the terms of the contract
render it unconscionable. Duress is most often present in the modification of contracts, and it can render a
term of the contract void without rendering the entire contract void. Duress would include tbe threat of
breaching another term of the contract. (eg. If you don't consent to the change we will dismiss without
notice!!!) England argues that while the courts have paid lip service to the unconscionability of employment
contracts and the power dynamics between employers and employees, they have been unwilling to tamper with
most contracts, and would rather let market forces determine the basic working terms of contracts. (use in
essay) An unconscionable agreement would most likely be found in the form of the contract signing, not
in the substance of the contract itself. For instance, England cites a case in which an employer fired a worker,
and then immediately got him to sign a separation agreement that was unfair. The court ruled that taking
advantage of the worker in his traumatized state was unconscionable; NOT the terms separation agreement.
C. Statutory Restrictions on the Employers Freedom to Hire:
 Employers are restricted in their hiring practices in the sense that they must comply with Human Rights
standards in each province. While each provincial regime is different, they all feature a group of "protected"
persons which employers may not discriminate against. It is important to note that this includes both direct
discrimination, as in clear prejudice, and indirect discrimination, such as having policies and procedures that
indirectly discriminate.
 Discrimination is allowed, however, if there is a bona fide reason for the discrimination. However, the employer
must prove that they have made reasonable attempts to accommodate the employee, up to the point of causing
an undue hardship on the enterprise.
Francis v. CIBC (1994) 120 D.L.R. (4th) 393
The plaintiff accepted an offer of employment from the defendant on June 9t\ 1978. When the plaintiff reported for his
flfst shift on July 4, 1978, he was required to sign an "employment agreement" which included a termination on three
months notice clause. Plaintiff was fired, and the defendant wants to payout only three months, despite the employee's 13
years of service. Held: The employment contract was formed when the plaintiff accepted the offer of employment. Any
variation of the contract after that, (Le. the "employment agreement" signed on July 4th) would require fresh
consideration. There was no such consideration in this case. Therefore, the three months notice clause was void.
 Any variation in an employment contract requiresfresh consideration.
 For a valid quashing ofCIL entitlements, the employer must inform employee of the term before the employee
 agrees to the contract, or the employer makes the offer of employment contingent on the employee's acceptance
of terms which will be provided at a later time.
 To distinguish another case, not that in Francis, the terms were part of the employer's standard contract of
employment.
o Note such factors as: was there a variation o/the template; did the employee make a commitment and
repudiate other offers, did employee know she was giving up rights. Also: whether employer has a
lawyer,but employee does not
o Also consider acquiescence/reliance (American concepts), or unconscionability.
Grossman article: Best practices for variation of common law minimum standards: Independent legal advice
1. Employer must not minimize importance of the document.
2. Employee must have time to consider.
3. There must be an explanation of terms.
4. There must be notice of provisions.
NEGLIGENT MISREP
Queen v. Cognos [1993] 1 S.C.R. 87
Employer lied about financial status of the project the employee was hired on a 2-year contract for. He quit after a year.
The Yak's (Iaccobucci) 5 step test for negligent misrepresentation:
10
(a) duty of care based upon "special relationship" (can be negated by explicit provision denying such); (note, in
degroot, there was a duty of utmost care and frankness.)
(b) representation made must be untrue, inaccurate, or misleading;
(c) representor must have acted negligently in making the representation (well, 400); (no duty of FULL disclosure,
but indication of financial status if known to be an issue is required. Knew or ought to have known?  liable.)
(d) the representee must have relied upon the representation;
(e) reliance must have caused some damage. (although note that there is a duty to mitigate.)
Note: the issue re: statements about the future was left open. However, you could emphasize the "ought to have known"
aspect of this decision to make that case. (On the other hand, can cite Grant v. Oracle, which sd projections are not
statements of fact.) But note policy: it would not be constructive to allow employers to make exaggerated claims about
the future, given the assumption an employee might make that the employer knows the business environment better.
Another aspect of this case worth noting: If the pre-contractual statement was an express term of the subsequent
contract, then the only remedy will be in contract, not in tort.
What if contract excludes liability for "statements"? Employer is only off the hook if he said "incorrect statements. "
(honesty assumed)
MISREPRESENTATION BY OMMISSJON
DeGroot v. St. Boniface Hospital [1994] M.J. No. 290
A doctor from South Africa sought employment at the St. Boniface Hospital. His application was granted for full general
surgical privileges. The hospital later reviewed the decision and the good doctor's general surgical privileges were
removed from the terms of his appointment.
Held: The misrepresentation meets all five of the Yak's factors. The fact that the hospital did not keep the plaintiff
informed of any changes in the conditions of his employment constituted a misrepresentation. Misrepresentation by
omission.
(contrast with Adams, below)
Grant v. Oracle Corp. [1995] MJ. No. 12 (Man c.A.)
Facts: The appellant was a computer salesperson who was recruited by Oracle to sell products in Manitoba. In recruiting
Grant, Oracle used sales projections to show how successful they were about to become in Manitoba. Grant took the
position, but the sales quotas proved to be unrealistic, and he was under pressure to produce impossible results. He
eventually quit, as he felt that he would soon be ftred anyway. He claimed constructive dismissal and misrepresentation.
Held: The appeal was dismissed. The inducements used to recruit Grant were sales projections, and not statements of
fact. There is no tortuous liability for opinions of the employer. In addition, the court found that Mr. Grant's level of
expertise and his independent investigation into the sales prospects of Oracle were evidence that he did not join the
company simply because of the sales figures quoted to him.
 Projects of sales figures are not facts, and reliance does not create an implied term. (But, if you are induced
awl{V from a stable job to a less stable one, courts will hold company to a high standard. Wallace v. UGG)
ADDING IMPLIED TERMS SUBSEQUENT TO FORMATION OF THE CONTRACT
Adams v. Comark [1992] 5 W.W.R. 306 (MbCA)
Pl dismissed after he refused to sign a code of business conduct. As part of the code he would not be able to keep air
miles points accrued from business travel. The old policy of the company was to allow employees to keep the points for
personal use. Held: The old policy of giving the air miles points to employees was a part of the compensation package
of employees, and as such a term of the employment contract.
 A unilateral cancellation of a policy that benefits employees is a breach of the employment contract.
 New implied terms can be added to a contract, but only according to the circumstances and conduct of the
parties. Court will look for long-standing practice that both parties relied on. Intentions important.
 (Note that implied terms are often policy driven.)
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Section 4: Employee's Obligations
RESTRICTIVE COVENANTS
Limitation: Covenants cannot be used simply to eliminate unwanted competition. ERs have to establish that there is a
demonstrable threat that must be countered and that the covenant goes no further than necessary to protect the interest at
stake.
The employer must establish that there is a legitimate proprietary interest that needs protection.
 With clauses that restrict solicitation of other employees, for example, it must show that there is a genuine
need for this type of protection, and that they are not being used to prevent voluntary departures of
employees.
 Where information is at issue, it must be information "peculiar" to the employer, such as customer lists,
trade secrets, pricing information or marketing strategies.
 Skill and general business knowledge obtained on the job, and information readily available outside the
business are less likely to be seen as confidential information.
The geographic scope and duration of the restriction must also be reasonable.
 should be no greater than is required to protect the employer's interest, and probably no greater than the
area of operation assigned to the former employee.
 With respect to duration: the time it would take to train a new employee to replace the departing one, or
the time the departing employee's influence over the employer's customers might reasonably be expected to
endure.
England, Chapter 4
A. Express Contractual Obligations: Restrictive Covenants
 A restrictive convenant is "a contract intended to prevent an employee from exploiting trade secrets,
confidential product info, sales lists, incentives, and business good will." Employee breach?? Then seek an
interlocutory injunction.
 Court treatment of restrictive covenants looks at the balance between the employer's interest in safeguarding
the investment it has made in its confidential information or business goodwill and the employee's interest in
securing other employment in his or her area of choice, AND the general public interest in facilitating labour
mobility and promoting competition.
 The Courts have held that for a restrictive covenant to be upheld the proprietary interest the employer is attempting
to protect must be confidential information, trade secrets, or business goodwill.
 If a restrictive covenant is found to be an unreasonable restraint of trade, the courts will not necessarily void the
entire provision. If the offending section can be severed or edited out, it will be.
B. The Employee's Implied Obligations
 England goes through several implied duties that we did not cover: Residual duty to advance employer's business
interests; the duty to obey orders given; the duty to attend work on time; the duty to be honest with the employer;
the duty to perform the work competently.
England on Drunkenness, Sexual Harassment and Moral Impropriety
 The employee has an implied duty to come to work "sufficiently" sober to perform the job effectively and
without endangering others. This is important (as well as amusing) because it shows that the emphasis is not on the
moral take on drunkenness or drug addiction, but the potential damage to the workplace. England goes on to talk
about alcoholism and drug abuse as protected handicaps under Human Rights legislation.
 I'm sure it will be dealt with in more detail later, but England also talks about the implied duty not to sexually
harass other employees. England talks briefly about the procedural fairness owed to an employee who has been
alleged to have harassed another employee.
 Finally, England refers to the duty not to act in a way that would diminish the employer's reputation in the
community. England talks about how this duty has moved from a general duty to act with moral propriety to the
modem day version of the duty - don't do anything that would hurt the company financially. He provides as an
example a business school professor who cheated on his taxes. That behaviour undermines the credibility ofthe
school, and therefore the implied duty is breached.
England on Obligation Not to Wrongfully Exploit Employer's Business Interests
This is the largest section of England's Chapter, and he identifies several implied employee duties:
(a) not to make a secret profit from his or her employment;
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(b) employer's presumptive right to ownership of copyrights or inventions made by the employee;
(c) duty not to compete with employer's business;
(d) duty not to misuse confidential information or trade secrets;
(e) fiduciary duty for those employees in a fiduciary relationship with their employer.
The presumption in favour of employer owner of inventions and copyrights has been corroded somewhat by the case
of Comstock Canada v. Electric Ltd. in which the trial judge introduced a whole series of new factors in determining
who owned the invention. For a complete listing see p. 56 England text.
The implied duty of loyalty prevents an employee from taking another job, even in their spare time that competes
with their other employer. This duty is seen as a psychological duty, and thus even the attempt to secure a
supplementary position with a competitor can be seen as a breach ofthe implied duty ofloyalty to the employer.
The duty not to misuse confidential information is a strictly applied doctrine, with the only real controversy
coming as to what is considered "confidential information". England provides a non-exhaustive list that includes:
client lists and information, details on manufacturing processes, suppliers and costs of material, lists of employees...
etc. Additionally, problems can arise as to how the information is used. For example courts have ruled that it is OK
for an employee who is leaving to go to another firm use the employer's information to contact all of their clients
and inform them about the transition. However, it would be a breach of the implied duty if the list was used to entice
clients to switch firms.
Employees who are in a fiduciary relationship with their employers find themselves subject to a far greater duty of
loyalty than a regular employee. Preconditions for a fiduciary relationship:
(a) exercise a broad and independent discretion in handling the critical aspects of an employer's business; and
(b) the employer's business must be especially vulnerable to the actions of the fiduciary.
Forbidden activities of fiduciaries:
(a) Cannot quit their position to take advantage of a business opportunity that he or she discovers in the course
of employment;
(b) Must disclose all relevant information that can reasonably be expected to impact on the employer's business
interests;
(c) Cannot compete with a former employer for a reasonable period of time after the employment has ceased.
BROADLY DEFINED RESTRICTIVE COVENANT UPHELD
J.G. Collins Insurance Agencies Ltd. v. Elsley Estate [1978] 2 S.C.R. 916
Facts: JG bought out Elsley in 1954. As part of the buyout, Elsley started to work for JG. Part of the employment
agreement was a restrictive covenant that Elsley would not start his own insurance business while in lG's employ or 5
years after he ceased to be in lG's employ. After 17 years in lGs employ, Elsley set up his own shop, and took a great
deal of business from lG. In this case the insurance business was only a few kilometers away, and relied on many of the
same clients for business. Held: Restrictive covenant was operative, and Eisley was liable for breach of contract.
 RC 's are prima facie unenforceable as restraints on trade, unless they are reasonable, given the parties and the
public interest. 3-step test:
1. Does employer have proprietary interest and is employer entitled to protection.
2. Is the RC reasonable as between the parties with regard to breadth, scope, and duration.
3. Is it not otherwise contrary to the public interest.
 Restrictive covenants will only be allowed to the extent that they are needed to protect the plaintiff, and so long
as they are not an unreasonable restraint on trade and competition.
 The test is more rigorous if the employee is dealing directly with the customers, or with sensitive information or
trade secrets.
(this is now described as an exceptional case. The PI lost 1/2 of its client base, and court found a proprietary interest in
the client base, so non-solicitation, while usually sufficient, was not enough here. To distinguish another case, note that
the court sd it wd be difficult to find someone in a better position that Elsley to have knowledge of, and influence over,
the customers.)
PARTNERSHIP CONTEXT/ OVERLY BROAD RC
Ernst &: Young v. Stewart [1993] B.C.J. No. 1043 (BCSC)
Stewart was a partner with E&Y in Vancouver. He had started his career in Winnipeg, but was required to move to
Vancouver to make partner. He agreed to the move and was soon thereafter promoted. As part of the promotion, he had
to sign a partnership agreement which contained a restrictive covenant (common). Stewart became disaffected with E&Y
and decided to move to Andersen Consulting. E& Y sued both Stewart and Andersen for breach of contract and
inducement to breach respectively. The sole issue in the case is whether the covenant, which included a one-year notice
requirement, and one-year prohibition on similar work within 50 miles were necessary to protect E& Y's interests.
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Held: The court examined several factual areas in determining whether or not the prohibition was too broad. In the
process they made several findings in different areas:
 They quoted a legal test called the "Nordenfelt doctrine" which called for afour-stage inquiry:
(a) Is covenant a restraint of trade?
(b) Is restraint against public policy?
(c) Can restrain be justified as reasonable between the parties?
(d) Can it be justified as reasonable with reference to the interests of the public?
 .An imbalance of bargaining power is a significant factor. Look to see whether the employee had a chance to
"bargain out" of the restrictive covenant.
 RC provisions should not be taken alone, but must be read within the context of the partnership agreement as a
whole.
 Restrictive covenants will only be allowed to the extent that they are needed to protect the plaintiff.
 The interpretation of restrictive covenants should be read with a view as to what the employer is entitled to
protect, NOT what they are entitled to restrict.
SHORT-TERM OF EMP, LITTLE CUSTOMER CONTACT
Williams Restaurant Supply v. Leadly (1994] M.J. No. 474 (Man Q.B.)
Leadly worked for Williams for three years as an assistant to the manager of the bakery division. Williams is a company
that supplies restaurants and bakeries. 90% of its business comes from restaurants and 10 % from bakeries. As part of his
employment he was required to sign a non-competition agreement for one-year after termination of employment.
Leadley became disaffected with Williams and took a job with a competing supplier of bakeries. At the time there was
some evidence that the competitor was going to increase in size and become more competitive with Williams.
Held: The non-competition agreement was unenforceable. The court looked at the proprietary interest that Williams was
attempting to protect. As findings of fact they discovered that while Leadly did have direct contact with Williams'
customers, and that the time period of a 12 month prohibition was a reasonable one, they found that restriction itself was
unreasonable. They looked at the fact that the bakery division only accounted for 10% of sales, that while Williams had
direct contact with clients, there is no evidence of a special ongoing relationship, and the fact that he had only worked for
Williams for 3 years. NOTE: This was not a trial of the action in full, but an application for an injunction where the court
also took into account the balance of convenience between the parties.
 Lack of special ongoing relationships with customers, or long service, weigh against enforcement of RC
FIDUCIARY DUTY
Canadian Acro Service v. O'Malley et al (1973) 40 D.L.R. (3d) 371 (S.C.C.)
A group of execs from CanAero planned to quit and start a new corporation on their own. Before they left, they used
their roles in the company to plan proposals for contracts for the new company. Def held liable for being "faithless
fiduciaries" of the corporation. As the top management of the corporation, they had a fiduciary duty to work on its behalf
and for its best interests. Their actions constituted a breach of that duty.
 A fiduciary duty to the company is held by senior managers.
 In some circumstances, especially in the case of a corporate opportunity, an employee will owe a fiduciary duty
to its employer that extends beyond the termination of employment.
 A former employee has no right to use materials obtained in the course of employment against the interests of a
previous employer.
Consider:
1. Are they fiduciaries?
2. Who initiated contact with new company?
3.Were employees liked and trusted? (Employer has to be uniquely vulnerable to meet this condition.)
4. Was there a maturing business opportunity?
CHS Air Conditioning Ltd. v. Environmental Air Systems Inc. (1996) O.J. No. 1316 (Gen Div)
3 employees left company and set up company on their own. Sales rep the highest position held at CHS. 95% of business
former contracts of CHS. Didn't sign RC. Contact with one major client only after resignations, therefore didn't act in a
disloyal manner while employed. It was the client who pushed for a mtg. New contract was one that was not known
about before
 A former ordinary employee may use the knowledge and skills previous acquired in employment to compete
against a prior employer.
 Cites case noting that with people several levels below top management, employer may have to accept the risk
as well as the benefits of employees having exclusive contact with clients. (Alberts v. Mountjoy)
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PARTNERSHIP
Chang v. Bhandar
Two dentists, oral surgeons, worked in partnership, although Chang paid Bhandar a base salary and took a cut of work in
excess of amount required. Contract sd "protective covenant. 3 years, 5 miles." Bhandar left after 17 months, and then set
up shop 3.5 miles away.
Topic 5 – Employer Duties at Common Law
Includes: duty to pay for work, to provide work (significant with sports and entertainment employees), to provide sick
pay, to provide safe workplace (although some workplaces excluded from Workers Comp, e.g. banks), to provide
testimonials (although not acknowledged in Cdn courts).
A. IMPLIED DUTY OF FAIRNESS:
DUTY OF STATUTORY OFFICE HOLDER
Knight v. Indian Head School Division (1990) SCC
K was director of education which is a statutory office position. courts have dealt with public office holders differently
than regular employees. In the emp contract, stated that there could be: (1) termination by either party with 3 months
notice; (2) termination for cause by hearing. He was terminated on 3 months notice. Brings action that he is entitled to
procedural fairness .
 All public office holders are entitled to procedural fairness.
 There is no duty to act fairly in regular employment contract.
England thinks there should be duty to act fairly b/c:
 enhances morale and productivity
 employees owe their employers a duty to act reasonably and advance interests offmn so why shouldn't there be
a reciprocal duty on employers
 mirror the long standing practice of implying into commercial contracts a reciprocal duty to act in good faith,
etc. contemporary public opinion expects employers to treat employees fairly
 would be consistent with the trend in other doctrines to act fairly-torts, summary dismissal, reasonable notice
for termination, etc.
Risks of implying a duty to act fairly:
 employers fear the uncertainty and unpredictability of such a legal standard
 don't like the judicial second guessing of the fairness of their decisions
 clash with common law principles that the employer need not show just cause if it terminates an employee by
giving due notice or wages in lieu.
Wallace v. United Grain Grower Ltd. (1997) SCC
W summarily dismissed after 15 years of service with company. No explanation except vague "inability to perform
duties". When W took this job, he left secure employment to do so. United Grain Growers actively recruited him. He had
discussion about his concern over job security. W had been complimented by his seniors just before dismissal. Employer
played "hardball" (accused him wrongdoing, etc. up until day of trial to force him to drop suit). W suffered from mental
distress blc of the bad way he was treated
 heavy-handedness in the manner of dismissal cannot, by itself, lead to punitive or aggravated damages against
the employer, but may be considered when determining the length of the notice period. To win aggravated or
punitive damages, an employee must show that the employer's objectionable conduct amounts to a cause of
action separate and distinct from the wrongful dismissal itself.
o Employers ought to be held to an obligation of good faith, which will be breached by untruthful, or
unduly insensitive treatment.
o But otherwise the power to execute a bad faith dismissal, in the sense of not being for legitimate
reasons, should lie with employers on efficiency grounds.
o Bad faith dismissal can increase the required notice period, since it makes it harder for employee to
recover and find a job. Known as "Wallace damages" (amounting to a de facto form of aggravated
damages).
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Degree of compensation is determined by salary - in the sense that the period of notice is extended, extending
the period one can get a salary.
McLachlin (important dissent) sd manner of dismissal shd only be relevant if it does result in a longer time to find a
job. But, OTOH, she says the law has evolved to permit recognition of an implied duty of good faith as an implied term
of the employment contract (which is sensible given that it would reflect the reasonable expectations ofthe parties at
formation of contract).
 Majority and minority all affirm underlying importance of the contract.
 The court is showing a desire to give some form of compensation for bad faith dismissals, whether the minority
or majority prevails in future.
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Attempt to distinguish exam scenario on the facts, and show that good faith was an implied term of the contract. One
basis on which to distinguish is that Wallace's employer sd if he did the job he was hired for, "there's no reason he cdn't
stay to 65." Expressed, as it was, in negative terms, it did not affirm a positive intention of fair treatment. In addition, it
would be a helpful development of the law for a court to layout the basis for an award that recognizes bad faith in a
dismissal, since Wallace simply restored the TJ's award of 24 mo's. OTOH, could argue simply that the court has been
moving in the direction of recognizing such conduct as warranting damages, and that, as McLachlin points out, it would
be an imperceptible evolution of the law to make the duty of good faith in employment contracts an implied term in all
situations.)
Conundrum of majority decision: will only grant punitive or aggravated damages if there is egregiously malicious
conduct that would warrant a separate tort, but it is not clear whether you could get both increased notice PLUS
aggravated damages. The court seems not to have considered this.
LEGISLATIVE ACTION TO REMOVE EMPLOYEE
Wells v. Newfoundland (1999) SCC
This was an appeal by Wells from a judgment dismissing his claim for damages after his position with the Board of
Commissioners of Public Utilities was terminated on December 18,1989. Wells was appointed on September 19, 1985
under the then-current Public Utilities Act when he was in his early 50s. The Act provided that he could hold the office
until the age of 70. A new Public Utilities Act was proclaimed in force on February 16, 1990. Under section 120 of the
new Act, commissioners ceased to hold office but were eligible for reappointment. Wells was not reappointed. He was
offered a position at a lower salary but declined. The trial judge found that Wells appointment was equivalent to an “at
pleasure” appointment and that once the legislation ended that was the end of Wells position. HELD: Appeal allowed.
Wells was awarded two and one-half years salary. Even if the right to dismiss at pleasure existed, this did not give the
Crown immunity from the financial consequences of the exercise of that right. Wells position was not an at pleasure
appointment. While the government had the power to abolish the position by changing the legislation, it did not take
away Wells rights to sue for damages as a result. The government breached its duty of fairness to Wells. The award was
based on the amount of time Wells would have held this appointment if not for the legislative change.
 A legislature may remove an employee holding office under a statute, but will be liable for reimbursement (or
notice possibly?), unless it removes that right explicitly in the legislation.
 This decision indicates a new willingness on the part of the SCC to find an obligation offairness based on the
reasonable expectations of the parties. (England text).
 Prof says if someone holds public office "at pleasure", not clear this standard will apply, but it probably will.
DISHONEST EMPLOYER
Malik v. Bank of Credit and Commerce
 An employer has a duty not to engage in dishonest or corrupt business, as it would taint the reputation of the
employee.
 An employee is entitled to have trust and confidence in his employer, and engaging in dishonest conduct is a
breach of the implied term of trust and confidence. A breach is a repudiation of the contract.
 More broadly: An employer will be liable for any form of conduct with is unacceptable today as falling below
the standards set by the implied trust and confidence term.
OTHER DUTIES
B. IMPLIED DUTY TO PAY FOR WORK ACTUALLY PERFORMED BY THE EMPLOYEE
 statute requires employers to pay employees wages for work done so the C-L comes into play in determining the
threshold question of whether the employee is legally entitled under the employment contract to be paid for the
work in question
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 parties to an employment contract are presumed to intend that services performed by the employee are to be
compensated.
 right to receive payment is subject to condition precedent that the quality of services satisfies the minimum level
for acceptable performance.
 employer's implied obligation to pay wages extends to tips and other gratuities.
 England and Australia have held that obligation also extends to reimbursing the employee for reasonable
expenses
C. IMPLIED DUTY TO GIVE NOTICE ON TERMINATION
 in Canada, the default position is that the employer must, in the absence of a clear mutual agreement to the
contrary, provide the employee with reasonable notice to terminate the relationship.
D. IMPLIED DUTY TO PROVIDE ACTUAL WORKING OPPORTUNITIES
 traditionally courts have not implied this term into the contract, EE has no fallback pay during layoffs at C/L
BUT...
 exceptionally, the court will imply an obligation on the employer to provide the employee with actual working
opportunities where the nature of the employment in question, or other surrounding circumstances, clearly show
that such opportunities are a core part of the consideration for which the employee bargained
 no implied term that employee is entitled to derive satisfaction from their job (sorry Sash)
E. IMPLIED DUTY TO PROVIDE SICK PAY
 old Canadian authorities say that employers presume to intend to provide sick pay at least for absences of short
duration
 recent English authorities have said that the employer does not intend to make sick payments--employees have to
prove a reliable past practice of providing sick pay in order to rebut the presumption
 Canadians are warned to bargain express contractual terms regarding sick pay
F. IMPLIED DUTY TO PROVIDE REASONABLY SAFE WORK PLACE
 Worker's compensation legislation eliminates the employee's right to bring a C-L action for damages for illnesses
and injuries occurring during the course of employment
 C-L only applies to the employees who are disqualified from receiving compensation (very narrow field)
 Note: occupational health and safety legislation in all provinces have really taken this area over. These acts entitle
the employee to refuse work if he or she genuinely and reasonably believes will endanger him or herself or any
other person on the worksite
G. IMPLIED DUTY TO PROVIDE TESTIMONIALS
 Canadian authorities have not implied obligation that employer must provide employee with reference for use in
seeking alternate employment BUT.
 English House of Lords in a 1994 decision held there is an implied contractual obligation on the employer to
provide employee with references where the field employee is working in is one where a new employer
customarily requires such a testimonial. Reference must be fair in its contents and must be given within a
reasonable period of the employee quitting or being fired.
 Canadian courts have found that if the employer withholds such a reference or gives an unfair one that results in
employee's job search being impeded, the length of reasonable notice of termination will be extended to reflect
the increased period of employment.
Topic 6 – The Employer's Statutory Obligations to its Employees
Rights most useful to employees have come through statute. These statutes encompass an employee's floor of rights –
protections for the employee that the parties cannot contract out of in employment contracts but they are free to improve
upon. These include:
 employment standards legislation
 equal pay legislation
Unionized workers usually have a higher floor of rights but there are some instances where statutory regime offers better
protection.
First question ask with statute: Is it a provincially or federally regulated employee?
Need floor of rights because of the inequality of bargaining power, lack of info about rights, don't have full union
representation for all employees (union density in Canada is only 37%), etc.
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Employment Standards Act
 All provinces and federal jurisdiction have adopted employment standards leg that establishes a "floor of rights"
 Note: the England textbook provides a general view on employment standards leg but have to look at our own
act (in volume 3 of materials) to know exactly what our statutory rights in Manitoba are
Background on legislation:
1. Donner Commission (Ontario) (1987):
 said that employment standards should reflect community standards
 shouldn't be about break-throughs, or pushing the envelope
 floor of rights is a safety net for employees who need it
 wouldn't say that terms in collective bargaining should be codified because said that collective bargaining is
result of all kinds of factors going on in workplace
 contentious b/c many believe collective bargaining terms should be codified such as unjust dismissal, and some
areas should be about pushing the envelope (e.g., pregnancy cases)
2. Thompson Commission (Be) (1994):
 floor of rights is about shielding workers with unequal bargaining power from gross exploitation
 focus should be more on atypical workers
 standards should be re-evaluated in light of current economic and trade conditions.
Arguments against floor of rights say that the more you raise floor, the more you inhibit employers from reorganizing the
work force which leads to increased admin and legal costs which lead to a disemployment effect.
Unions and others argue for higher floor to counteract the market inefficiencies and say can gain efficiencies by having
happier employees who increase productivity and society doesn't have to bear other costs form ill treated, unhappy
workforce (e.g., crime, illness, etc.)
Compliance with the act:
 difficult for atypical workers (part-timers, casuals, homeworkers) to get employers to comply with leg
 enforcement process begins with aggrieved employee filing a personal complaint of breach of the act with
provincial department of labour, they investigate the complaint
 government department can also do spot checks
 try to get employer and employee to work it out through conciliation especially in cases where employer doesn't
understand the full extent of their obligations but if are repeat offenders or are acting wilfully then can also
deploy formal adjudication and even criminal sanctions.
 administrative law principles affect the decision of these tribunals
 leg contains "special machinery" to enable an employee to recover unpaid wages and benefits against his or her
employer-this process is much faster and cheaper than the traditional civil law methods for enforcing unpaid
judgments.
 problem with this leg is that employees are afraid to file complaints blc fear of retaliation
Some suggestions for improvement of the system include: (From England, p. 87-89).
 greater emphasis on deterrence by increasing frequency of criminal prosecutions
 automatically imposing fines for all violations, and make officers of a company personally liable, subject to
a defence of due diligence.
 graduated fines for repeat offenders
 preserve complainant's confidentiality
 more education for employers and employees about rights and duties under leg
 more spot checks
 safeguards against discharge without just cause (as in NS, Quebec, and federal jurisdiction).
 joint employee/employer parity committees in workplaces to enforce standards
Coverage of Legislation
 not universal coverage, some people are excluded such as: persons attending school; persons with jobs financed
by deemed government job creation funding programs; prison inmates engaged in cooperative or rehabilitative
work programs; deemed professional occupations (e.g., law!), etc. (page 89 for whole list)
 courts have held these exclusions should be construed narrowly
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Rights under Legislation
 section 3(1) of our Manitoba Employment Standards Code: This Act doesn't affect your other rights (only
provides employee with a floor of rights)
 s. 4: agreement to work for lower standards is no defence.
 S. 133(1) prohibition on ULP's.
1. Minimum Wage:
 Every province has enacted a minimum wage
 Employees in the federal jurisdiction are entitled to receive the minimum wage that applies in the province in
which they work
 lively debates over whether a legislated minimum wage is good or a bad thing. On one side some people
believe that employees are morally entitled to receive wages that allow them to live a decent lifestyle. On the
other side some people argue that minimum wage has a disemployment effect because an increase in min wage
results in decrease in employment; only people who really win from leg is adult females at the top of the wage
scale; disincentive for employers to train the employees who then never advance out of min wage paying jobs.
 each province has own exclusions for min wage, typical exclusions are: defined agricultural workers; domestics
who work in private residence; caregivers in private home; handicapped persons who wok in sheltered
workshops as part of a rehab or care program; employees performing managerial functions; noon hour school
supervisors; etc
 in some provinces the min wage varies depending on industry, occupation or age of person (e.g., person under
18) graduated minimum wage.
In Manitoba:
 19,000 people in MB earning min wage
 s.7(2) of code: A minimum wage board shall be created...
 in 2001, MB Min Wage Board had 3 employee reps, 3 employer reps and one chair
 Board disagreed heavily but in end government decided on following: April 1, 2002-min wage increased to
$6.50 from $6.25; increased in April I, 2003 to $6.75
 government didn't intervene on graduated min wage or tipping/training wages
2. Hours of Work and Overtime Pay:
 all provinces and the federal jurisdiction legislate the number of hours that an employee can work during a
specified period at straight time before an overtime premium is payable and there is also a ceiling on the total
number of hours that can be worked during a specified period
 overtime rules are there to create employment opportunities as well as for safety and health reasons
 leg takes 2 approaches to curtail working hours and the use of overtime:
1. employers have to pay overtime premium of 1.5 or 2 times the regular rate of pay of any hours it chooses
to assign in excess of the "standard working hours" defined in the act---extra money is disincentive
2. some statutes place a cap on number of hours employee is allowed to work in a defined period
 some places combine 2 approaches by triggering overtime hours after a certain number of hours have been
worked
 leg provides for flexibility for employees who need it b/c of the nature of their work, emergency situations, and
for employees who would rather "bank" time off than be paid extra
3. "Atypical" Work
refers to working arrangements that do not fit the traditional pattern of 40 hours of work, 52 weeks per year with same
employer . examples of atypical work include:
A. Part-Timers: usually receive less remuneration than full-time workers doing same job, generally not entitled to
benefits and have less security of tenure, fewer career advancement opportunities, and fewer seniority protections. In MB
some part-timers are excluded from protection of Employment Standards Act. Sask ahead of game with legislating same
medical, dental, life insurance benefits as full-timers.
B. Casual: Many casuals work part time so fit into both categories. They work for short time periods which creates even
more disadvantages under employment standards acts (e.g., unable to accrue seniority benefits which affect their rights
to notice of termination, parental benefit, vacations, etc.). Some provinces have sought to fix this problem by deeming
successive periods of employment with the same employer to be "continuous" as long as hiatus is under a specific
period.
C. Homeworkers: Major growth is data processing on a home-based computer (e.g., telecommuting). Main
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disadvantage is difficulty in enforcing the employee's rights under the employment standards and other protective
legislation. Ontario and MB (s. 80 ofMB code) have tried to fix this problem establishing a government-maintained
homeworkers registry. This forces employers to register in order to become licensed to engage a homeworker and
prohibited from using the services of a non-registered homeworker. Can have license revoked if don't follow the rules as
set out by gov't.
4. Payment of Wages
 Employment standards acts commonly require that the employee be paid in cash, with a defined negotiable
instrument, or by an order to pay to the employee's bank account
 Certain occupations are excluded from this section of act
 Employer also can't make deductions from wages of employee if employee owes them money or to indemnify itself,
employer has to sue the employee to get monies owed to it. Exception: Certain deductions may be permitted by the
act if the employer and employee have agreed in their employment contract to hold monies (e.g., shortages in the
till).
 Act contains detailed regulation on what constitutes "wages" for statutory purposes (e.g., tips and gratuities)
Employer can factor into the calculation of wages an amount for room and board (in some jurisdictions, there is a
maximum value that can be given in this category)
 Breach of obligations can lead to fine or imprisonment for employer but employee's best remedy for wage payment
breaches are the "special wage collection machinery" contained in the act.
5.
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Dailv and Weeklv Rest Periods
Most provinces establish minimum rest or meal breaks
Complement the statutory limit on number of hours that can be worked in a day
There is some flexibility with daily rest periods depending on the particular circumstances of employee
In all provinces, the worker is entitled to some minimum continuous period of rest, usually 24 hours over a seven
day period
In MB, Ontario, New Brunswick, people in retail business can refuse to work on Sunday (Division 12 ofMB code)
Weekly rest provisions are modified for employers who operate on continuous work cycles
In some jurisdictions, employer can apply to be excused from the weekly rest provision in exceptional circumstances
(e.g., in MB if provision provides "undue hardship" blc of remote location of work site or seasonal nature of work.)
Employers can also postpone the weekly rest period, which then accumulates and becomes due later.
Statutory Holidavs
Employers must, in all jurisdictions, designate a number of days upon which employers are obliged to grant their
employees a holiday or where the employees do work, to pay them at a designated premium rate
holidays include: New Year's, Christmas, Good Friday, Victoria Day, Canada Day, Labour Day, Thanksgiving,
Remembrance Day, Christmas Day and Boxing Day (in MB also have "any other day designated by regulation as a
general holiday")
employees asked to work on these holidays must be paid wage premiums (l1f2 or 2X normal wage)
provision is aimed at giving employee time off from stress of work and to generate employment opportunities for
the unemployed and underemployed
some argue that this problem would be better tackled by going after the root cause of
unemployment/underemployment-the excessive costs of hiring employees under employment protection legislation
and social welfare legislation
this provision can be flexible-employers can assign work to employee if pay wage premium; give banked time off
and extra pay; or with gov't approval substitute days off
prerequisites that employee must satisfy in order to qualify for statutory holiday (e.g., min period of continuous
employment with same employer, must have worked min number of hours in specified period proceeding the
holiday, worked last before and first day after, etc.)
defined industries and occupations may be excluded from the statutory holiday provisions (e.g., in Ontario, fishing
and hunting guides; full-time firefighters; taxi drivers; seasonal employees of hotels, tourist resorts, etc. are
excluded)
7. Annual Vacations
 Leg entitles qualified employees to an annual vacation
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Usually 2 weeks, but in some provinces increases with the employee's period of contmuous employment
In order to qualify, employees must generally have ac<:rued at least 12 consecutive months of continuous
employment with the employer (suffices that a contractual nexus remains intact for the duration of an absence ftom
work such as a disciplinary suspension, a sickness, or a layoft)
MB requires the employee to perform a minimum amount of actual work (95% ofthe regular working hours) during
a year in order to qualify for a full vacation or else employee can get reduced vacation allowances Employer decides
when employee can take vacation as long as this occurs within a designated period of the vacation having been
earned (usually 10 months)
In some jurisdictions, employees can take his or her vacation in two periods of one week each instead of two weeks
together
Advance notice must be given by the employer to the employee of when they can take a vacation
How much vacation pay should be paid and how it is to be calculated is also included in act
Pay must be given within a specified period before the vacation period conunences
Only 4 jurisdictions allow employee to forgo vacation for pay in lieu (subject to approval of a designated gov't
official) Leg deals with the effect oftermination of employment on annual vacation entitlements
Rule of statutory holidays falling within a vacation period is dealt with by adding an extra day to the employee's
vacation or to give him or her an extra day's pay
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Most provinces have detailed but differing exemptions ftom the annual vacation provision for designated industries
and occupations
8. Leaves of Absence
A. Maternity
 Leg entitles women to a leave of absence for childbirth and safeguards them from being penalized by their
employer with respect to their job tenure and other terms, conditions and benefits of employment by reason of
their pregnancy
 not about getting paid for leave b/c that is really in the federal jurisdiction under EI but more about not having
to incur penalties b/c absent from work.
 4 kinds of protective legislation can come into play: (l ) employment standards; (2)employment insurance;
(3)health; and (4)general human rights statutes
important issues include:
 how much maternity leave is worker allowed?-depends upon jurisdiction, mother and baby's medical condition,
mother can top up her leave by adding it to the parental statutory leave period 0 in MB mat. leave is 17 weeks
 maternity leave with pay? Leg does not oblige employer to grant maternity pay blc believes state, not the
employer is responsible for ensuring financial security of employees during maternity leave. EI will pay mother
55% of her insurable earnings for up to fifteen weeks. EI also allows the parents of child to share the statutory
parental benefits of 10 weeks pay.
 When does maternity leave begin and end? Must commence within a stated time before the anticipated
 date of delivery and must include a period of at least 6 weeks immediately following the birth unless the mother
gets a certificate saying that she can work before the 6 week deadline (mat leave is 17 weeks in MB so s.54(2)
states that mat lave must being not earlier than 17 weeks before the date of delievery estimated in the medical
certificate and not end later than 17 weeks after the date of delivery). If the' employer determines that the
mother's pregnancy or pregnancy related sickness incapacitates her from performing the duties of her position
and there is no alternative method for accommodating the employee short of causing employer undue hardship,
it can lay off the employee
 Which employees qualify? Almost all jurisdictions require a minimum period of continuous employment with
the employer in order to qualify. Casual workers may be prejudiced by this requirement. Sask gives casual
working mothers more protection than other provinces
 Is the employee safeguarded against penalization with respect to job security. etc.? employment standards
and human rights leg afford extensive protections for the employee.
(a) Employee entitled at the end of leave to be reinstated to her former position or to be reengaged in a
"comparable position with no less favourable wages and benefits."
(b) Employers have onus to show that did not penalize worker blc was pregnant. Some provinces'
employment standards acts say that dismissal, suspension or layoff is unlawful where the employer's
reasons "SOLELY" relate to pregnancy. (Manitoba s. 60 (1) uses "solely") (Good area for a Charter
challenge.) What about mixed motive situations? Still have a remedy under human rights leg but that is
slower acting than emp stand leg. BUT can refuse to reinstate an employee for legitimate business
reasons (e.g., job has been eliminated for bona fide economic reasons;
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(c) Prevents employer from penalizing an employee in regard to other terms and conditions of
employment by reason of her pregnancy so where a pregnant woman comes back to work, she is
entitled to any increases in payor benefits that were applied to the position during her absence
(d) Role of occupational health and safety leg? If employee honestly believes that performing a work
assignment may endanger the health and safety of herself or her baby, she can refuse to perform the
assignment, AND if the employer reasonably and honestly believes that the health and safety of the
employee, or anyone else at the workplace is endangered, it can unilaterally reassign or lay her off.
(e) Employer cannot treat maternity leave as rupturing the accrual of continuous service for the purpose of
seniority related benefits
Some discrimination occurring in treatment of pregnant women under sickness and disability insurance plans:
Brooks v. Canada Safeway (1989) SCC:
Brooks B was a Safeway cashier, who got pregnant. She scheduled her maternity leave one month before her due date.
She contracted Toxemia (high blood pressure condition, often related to pregnancy) two months before her leave started.
Het doctor forbade her from working. She applied for sick leave until her maternity leave started. Her application was
denied, and was told that because it was a pregnancy disorder, she would have to start her mat. leave early. Held: Only
women get pregnant, and thus denying her sick leave based on a related illness is discrimination based on gender.
Secondly, Toxemia is high blood pressure, and anyone can get that. If a man got Toxemia, he would get sick leave, yet a
woman (who was pregnant) could not. Therefore, the decision was ruled to be discriminatory. NOTE: The code was
changed to include pregnancy as a prohibited ground for discrimination.
B. Parental
 All jurisdictions except Alberta provide for parental leave.
 Provisions are equal to maternity provisions except length may be shorter or longer
 parental leave is 37 weeks in MB (s.58(1»
 Any person who is caring for child can qualify except in NS an NB where only natural parent or parent who are
legally adopting child qualify
 Either parent can use it or share it
 Unpaid under employment standards act but may claim benefits under the EI
C. Adoption
 Most jurisdictions allow this leave, some cover it under parental leave and some have separate provisions that
are virtually the same
 Alberta allows significantly less time than for maternity leave
D. Family
 Only Quebec and BC allow for unpaid leave for "obligations relating to the care health or education of minor
child in cases where the parent's presence is required due to unforeseeable circumstances beyond parent's
control" but employee has to take reasonable steps within her control to limit duration of the leave Other
jurisdictions are advised to follow BC and Quebec to allow moms and children this badly needed flexibility but
so far nothing.
E. Bereavement
 Usually 3 days upon death of defined relatives
 "Relatives" definition now broadening defined blc of a changing society with common law partners and samesex partners usually unpaid except in federal jurisdiction and Quebec and NFld where payment is in relatively
narrowly deemed circumstances
F. Sickness
 Entitled to an unpaid sick leave under the employment standards acts in the federal jurisdiction, Nfld and Sask
 Even in other provinces where sick leave is not expressly talked about in acts, an employee who is dismissed or
otherwise penalized for being absent from work because of sickness may have legal recourse under other
legislation
G. Voting in elections
 All jurisdictions allow employees time off work to vote in federal, provincial and municipal election . Employer
can decide when requisite time off must be taken
 Breach of this leg is a criminal offence
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9. Wage Discrimination: Equal Pay Legislation
 Three basic models of equal pay legislations
1. Equal Work model
 S. 82(1) Prohibits employer ftom paying female employees less than male employees "for substantially the
same work performed in the same establishment, the performance of which requires equal skill. effort and
responsibility and which is performed under similar working conditions"
 Legislation provides list of factors which justifies wage differential (e.g., seniority system, merit system, etc.) .
Usually imposes a maximum retroactive period of one year during which compensation is recoverable and a one
year limitation for commencing an action
 Drawbacks: depends on a male occupying the same or substantially similar position as a female, thereby
ignoring positions exclusively staffed by women; also depends on female plaintiff having knowledge and
fortitude to file a complaint
 Model has virtually no effect in reducing the wage gap
2. The Equal Value model
 Involves determining the value to the organization of a given job that is currently occupied by a female and
ensuring that other jobs of equal value to the organization occupied by males receive identical pay
 Value is determined by the degree of skill, effort, and responsibility involved in performing the job and the
physical and psychological conditions under which it is carried ou
 Disadvantages: result in females being awarded wage increases above the market rate; resulting in labour costs
for the employer; increased legal and administrative costs to the employer, thereby decreasing employment
opportunities; process too subjective; reduced morale among employees; and equal value legislation will only
affect a small part of the wage gap (portion that is attributable to the under evaluation of female jobs) but
doesn't affect the other reasons, conditions that cause the wage gap.
 Advantages. Proponents say such criticisms are exaggerated, and that the principle is worth the effort. It is a
valuable part of an overall effort to raise the social and economic status of women, although it is just a part.
(Most also get women into highe-skil1ed jobs, b/c they tend to crowd the lower-skilled categories.) The fact that
it doesn't solve the entire problem is no reason to reject it. In fact, it is a reason not only to accept pay equity as
a valid principle, but to find other ways to reverse sexist and discriminatory influences in the workplace.
 Issues under this legislation involve defining "employer"
o courts have decided that acts should be interpreted purposively - definition of employer should
facilitate the achievement of pay equity; if organization consists of two separate establishments, it must
be determined which are relevant for job evaluation purposes
 Legislation also describes how an employer must determine which male jobs to compare with which female
jobs, employers are allowed to compare female-dominated classes of jobs with male-dominated classes of jobs
(S. 1 definitions: "female dominated class"; where there are 10 or more employees 70% or more of whom are
women.)
 Legislation describes how work is to be accorded "value" for the purpose of wage comparison - subjective,
should be gender unbiased. S. 6(1) apply "the composite of the skill, effort and responsibility normally required'
in the performance of the work and the conditions under which the work is performed."
 Legislation deals with how equality should be implemented in the pay structure, once male and female jobs
have been evaluated. Involves making initial determination of "pay". Pay is defined broadly in the legislation to
include all monetary benefits derived trom employment
 Two methods to determine exactly how equality is to be implemented: (1) job-to-job; (2) proportional value
method.
 Role of employees in the pay equity process also dealt with in the statutes
 Legislation must address what government services are available to help employers implement pay equity
because legislation is complicated and expensive. All jurisdictions provide the services of specialized
government officials for tree.
 Legislation must state which employers or employees are excluded trom equal pay provisions
3. Proactive Pay Equity Legislation Model
o Employers are bound to proactively achieve defined pay equity goals within specified time limits and to
regularly report their progress to a government appointed pay equity commission
o Proactive statutes endorse equal value method
Key issues in employment equity:
Who is the employer?
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Can only compare workers with the same employer. Nurses wanted to be compared with police officers
in Ontario. Court found that the municipality as a whole was the employer, for purposes of the legislation.
(similar
o to the CIL standard in Downtown Eatery).
o The broader the definition of employer, the greater the no of classes of employees available for
comparison.
o Remember the purposive approach in interpreting employment law (Imperial Taxi). The purpose is to
facilitate the achievement of employment equity.
What is the class?
 S. 1 (definitions) "female dominated class": where there are 10 or more employees 70% or more of whom are
women. Thus, it applies only to workplaces with 10 employees or more.
 How do you accord value? : (1) job-to-job; (2) proportional value method.
 S. 6(1) apply "the composite of the skill, effort and responsibility normally required in the performance of the
work and the conditions under which the work is performed." Proportional value used. Ask what is being paid
for? i.e. what is compensable.
o
Baines article
 ConfIrms the subordinate position of women in the workplace.
 There are three legal regimes in Canada for employment equity: voluntary, remedial and pro-active. P. 82 of CB
Shortcomings of a pro-active employment equity model:
 Scope narrow - applies to less than a million employees (8% of the labour force)
 Resource intensive. Difficult in an era of scarcity.
 Vulnerable to delays and reversals from legal challenges.
 Few studies have done a comparative analysis of such laws with other laws addressing the inequality of women
in the workplace.
 Impossible to know at this point whether the shortcomings are the in the design or the implementation.
 Don't know what its effect has been.
 Occupational segregation by sex continues to be a problem. No viable alternatives, other than quotas (which
tend to offend many).
 It would be better to have implemented such policies before industrialization, than to try to refonnulate the
makeup ofthe workforce in an already-industrialized society. Other countries, on the verge of industrialization,
can learn from this experience.
Topic 7 - Human Rights in the Workplace
England Chapter 7
All Canadian provinces and the federal jurisdiction have enacted HR statutes designed to eliminate discrim on proscribed
grounds from all walks of life, including emp.
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"Discrimination" in HR leg includes both direct and indirect discrim (Man HRC s. 9(1)).
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A central feature of modern HR acts is the duty of "reasonable accommodation." Conceivably, this will influence
courts to develop a general duty of fairness on ers, possibly under the rubric of est doctrines such as "constructive
dismissal," "reasonable notice," and "just cause," or even as an independent implied tenn in the emp contract.
Question is one of balance between ee and er rights.
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Remember in assessing HR's legis that it is VERY slow, affecting both on ee's and er's rights as a result.
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Prohibited grounds vary slightly from juris to juris, in Man HRC we see- age, ancestry/race, disability (mental and
phys), marital/family status, national origin, political belief, religion, sex, source of income and sexual orientation.
[Note It has been held that alcohol/drug dependency constitutes a "disability": e.g., Entrop]. The above-mentioned
grounds may overlap and are not exhaustive.
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The courts have held that human rights acts must be given a broad and liberal meaning in favour of protecting the
individual's interests.
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The concept of "intent" has been applied purposively by courts and tribunals in order to further the policy goal of
eradicating discrim from the workplace. Accordingly, an illegitimate intent will be found not only where an er
penalizes a worker out of personal hatred for his or her minority characteristics, but also where an er acts on
the basis of a nonmalicious stereotypical assumption about that person's capabilities and characteristics, if an
er acts on the basis of a combination of several factors, some of which are legit and others not,  liability.
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The onus of proof rests with the claimant. However, must only est a prima facie case whereupon the onus
shifts to the er to adduce a credible and convincing reason for its actions that bears no discrim taint. To show
a prima facie case the complainant need only prove that he or she is a member of a protected group; that he
or she was denied an opportunity, such as a promotion, or suffered an injury, such as being laid off; and that
a nonprotected person was treated differently in the same circumstances.
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the concept of indirect discrim can lead tribunals to fashion affmn action remedies that are designed to eradicate the
discrim consequences of the ers practices and policies.
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One especially important way of establishing indirect discrim is to adduce statistics showing that a firm's emp
practices, such as hiring or promotion, result in an under-representation of protected groups. Stats are one factor and
not determinative in and of themselves.
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The duty of reasonable accommodation reflects the notion of proportionality, namely that an er must make
reasonable attempts to accommodate the ee's protected characteristics prior to causing him or her any disadvantage,
up to the point of causing the fmn undue hardship. The burden of proving that it has discharged its duty of
reasonable accommodation is on the er. In order to discharge this burden, the er must furnish concrete evidence of
any financial or production losses it asserts will result from accommodating the ee; mere subjective assertions of
such losses will not suffice.
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The HR statutes typically exempt from coverage defined industries or occupations, the details of which vary
among the provinces. E.g. domestic workers engaged in the er's private residence; [Note: Man. HRC, s. 14(8) and
(9)] Any such exemption must pass the muster of a constitutional challenge under s. 15 of the Charter if a protected
group comprises the majority of the exempted occupation or industry - for example, domestics, most of whom are
probably women. [Note: See an analogy, Fenton v. British Columbia (Forensic Psychiatric Services Commission)]
No such challenge has been launched.
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The HR acts typically provide an exception to the general no- discrim prohibition in regard to the operation of a
bona fide pension or medical/disability insurance scheme. [Note England did not list Man among them.] But,
specialized pension benefits legislation may come into play - in Man, the Pension Benefits Act disallows
differentiation by sex in determining the amount of pension contributions to plan members, the variety of options
available to members, the amount of benefits payable, and the eligibility for coverage. [Note: Manitoba, Pension
Benefits Act s. 21(18).]
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All aspects of decision-making power are affected by these doctrines. E.g. how to advertise vacancies and
conduct job interviews; how to administer pre-emp intelligence, aptitude, integrity, and medical tests; how to set
minimum qualifications for the job; how to avoid discrimination in performance appraisal and job evaluation
processes; how to structure the compensation and benefit package to avoid discrimination in insurance and other
emp-related benefits; how to structure compulsory retirement policies; how to organize work schedules and job
assignment; and how to sensitize its ees, and even its customers and clients, to avoiding discrimination in the
workplace.

Sexual harassment. A 1990 study found that there was a probability of between 30 and 60 per cent that female ees
would be sexually harassed at work. HR statutes combat sex harass in two ways. Firstly, some acts have express
sections specifically defming and outlawing sex harass. These provisions should be checked carefully because,
depending on the' jurisdiction, they may not include certain forms of conduct that would normally be understood as
constituting sex harass. [Note Man. HRC, s. 19(2)(b), (c)] Secondly, the general statutory prohibition against
"sex" discrim common to all jurisdictions was held to include sex harass in Janzen v. Platy Enterprises Ltd.

Sex harass may involve breach of the occupational health and safety legislation if, as is probable, the consequences
to the victim include psychological and possibly even physical harm. Indeed, an ee who is subjected to sex harass
25
has a statutory right to refuse to perform work that he or she honestly and reasonably believes will endanger his or
her psychological and/or physical safety. From the eels viewpoint, the main advantage of using this route is that
complaints are processed much more quickly than under the notoriously slow machinery in the HR acts.

Regarding the definition of proscribed sex harass, the main difficulty has proven to be drawing the line between, on
the one hand, socially acceptable flirtation and jocularity, and on the other hand, unjustifiable intimidation and
oppression. Plainly, if an overly censorious defmition is adopted, the result could be to bring the law into disrepute,
with possibly serious repercussions for the legitimacy of human rights legislation in general.

There are two wings to the current definition. [Note Janzen] The fIrst outlaws conduct that involves one ee
granting or withholding an emp benefit to another ee in return for sexual favours. This is often called "quid pro quo"
sexual harassment. The second wing of sexual harassment proscribes sexually related conduct that makes the
workplace oppressive or intimidating for the victim. This is often referred to as "poisoned work environment" sexual
harassment. and it can sometimes be difficult to define exactly when the line is crossed.

.In order to constitute proscribed sex harass, the conduct in question must be unwelcome. This means either that the
victim must have actually informed the harasser that the conduct is unwelcome or that the harasser, as a
reasonable person, ought to have reasonably foreseen that the conduct would be unwelcome to a reasonable
person in the victim's position.

.The harass must occur during the course of emp, for the er cannot be expected to control what its workers do in
their private time. However, the course of emp is not restricted to actual working hours, but can include off-duty
time when the ee is going about the er's business in circumstances in which it would be reasonable to expect the er to
be able to control the behaviour of its workers.

.An er may be held responsible for sex harass committed against one of its ees by its clients and customers.

The policy of the legislation is to eliminate sex harass from the workplace, the SCC held in 1995 that ers are
automatically liable for acts of harassment committed by their workerS' or by their clients and customers, even
though top management may be completely innocent of what is going on. [Note: Robichaud.]

HR tribunals may award special remedies to make whole the victim's losses where his or her employer is found
liable for sex harass. The following factors have been held to be relevant in determining the amount awarded:
(a) The nature of the harassment, that is, was it simply verbal or was it physical as well.
(b) The degree of aggressiveness and physical contact in the harassment.
(c) The ongoing nature, that is, the time period of the harassment.
(d) The frequency of the harassment.
(e) The age of the victim.
(f) The vulnerability of the victim.
(g) The psychological impact of the harassment upon the victim.

HR tribunals in Man can award punitive damages for sexual harassment in defined circumstances - typically where
the perpetrator has acted maliciously or recklessly - and up to a specified maximum. [Note:Man. HRC,s. 43(2)(d) broad remedies]

The usual common law duty of mitigation applies under the HR legislation.

Reinstatement and re-engagement orders have traditionally been unavailable at common law. Nevertheless, they are
clearly pivotal to the make whole approach under the HR legislation.

Compensation for mental distress must be distinguished from compensation for the personal humiliation and loss
of self-respect that victims of discrimination are presumed to suffer. The latter need not be specifically proven by a
claimant, but the former must.

"Affirmative Action" Remedies can be ordered, including preferential hiring and promotion quotas. 43(2)(e)

"no-reprisal" provisions prohibit ers from penalizing an ee in regard to terms and conditions of emp because he or
26
she has filed a complaint, or otherwise participated in proceedings under the act in question. The test for liability
is whether a "reasonable person" in the complainant's position would "reasonably perceive" the er's conduct to be
retaliatory in nature. [Note: Entrop]
Parkes
 Human rights Acts are remedial not punitive, meant to remedy discrimination Therefore the Charter S. 7 does
not apply. (Blencoe)
 Man H.R Code- s.43(2) orders that can be made -includes afflTIDative action programs as remedy.
 S.14(13)- scope of what is "employment"- broader approach under the code. Includes unpaid.
 There is movement afoot to protect "social condition"- where it is protected in Quebec- but may be difficult to
make the case (Gosselin is before SCC as we speak). Gender identity is anotber ground that has been
recommended to add (B.C. Human rights decisions have included gender identity as analogous to sex to provide
protection to transgendered).
 Enforcement- there are multiple forums of resolution, but do not have a great record of timely resolution of
complaints. . Man H.RC. no-reprisals provision- s.20
 Section 51- offense creating provision.
 Blencoe- extreme delay issue in resolving that case- the SCC denied this was a violation of the Charter.
1998 Statistics from Man Human Rights Commission- show that half of the formal complaints involve "employment"
issues. The grounds of complaints show that sex, disability, ancestry/race, religion, and marital/family status make up the
majority (in that order). A relatively small number come under age, national origin, source of income and political belief.
(However, it is not clear from the stats she gave us whether any of the claims were based on more than one ground or
whether a claim under ancestry could have also been considered under national origin.)
The vast majority of claims are dismissed or withdrawn/abandoned, a little over a quarter are resolved early and
about 1 % are referred to adjudication.
PRIMA FACIE CASE OF DISCRIMINATION?
Onus - on employee or one alleging discrimination.
Step 1: Is the employee part of a protected group in s. 9(2)1
(per Entrop: disability includes substance abuse.
Note: in 9(1) disabilities include real and perceived attributes.)
Step 2 - Has employee been discriminated in employment per s. 14? E.g. participate or continue in employment,
seniority not respected, compensation scheme affected. Note: in the context of slurs, one is not enough. Must have a
saturation of slurs as they then become part of the employment. (Naraine)
DEFENCES
There are four main defences to discrim.
I. bona fide occupational requirement (BFOR or BFOQ).
 Provisions in the Ontario and Manitoba acts expressly state that the defence ofBFOR cannot apply "unless the
er has discharged its duty to reasonably accommodate the special needs ofthe ee up to the point of the firm
sustaining undue hardship." [Note Man". ss. 9(d), 12]
 Should be applied narrowly, to achieve the intent ofthe act - eliminate unwarranted discrimination.
 There are two aspects to this test - objective and subjective.
(a) Objective: further's the legitimate goals of the employer. The standard of proof is rigorous:
authoritative and updated empirical evidence is normally required, not unsubstantiated assertions of the
errs personal opinion. It has been held that if an accurate personal testing mechanism is available at an
affordable cost to the er, then the er cannot rely on generalized standards in order to establish a BFOR,
but must conduct an individual assessment of each ee.
(b) Subjective: motive for decision is a genuine desire to advance legitimate goals.
2. Meets the statutory definition of a non-profit fraternal or social organization.
3. Exempt industries: some provinces exempt ees engaged in defined industries or occupations, such as domestics
employed in a private residence (Man - S. 14(8) - "personal services in private residence", 14(9) personal services
defined).
4. S. 14(7) employee benefits. In most jurisdictions, discrim on the grounds of sex, age, and/or disability in the
operation of pension or insurance plans is permitted in defmed circumstances.
27
DUTY TO ACCOMMODATE
Man H.R.C. s. 9(1)(d) and 12: duty to accommodate. Failure to accommodate someone with special needs, if those
needs are based on one of the listed Characteristics, is prohibited discrimination.
DOES A BFOQ EXIST?
Meiorin (BC v. BCGSEU) Is there a prima facie case? Then burden shifts to employer. SCC devised a 3 step test to
determine whether a BFOQ- (page 36 vol II).
1. purpose of rule/action is rationally connected to the performance of the job; (objective and subjective, see
above)
2. adopted for good faith reasons;
3. standard is reasonably necessary to accomplish the work- related purpose. For the standard to be reasonably
necessary, the employer must demonstrate that it is impossible to accommodate short of undue hardship on the
employer.
Questions to ask:
a) has the E’er investigated alternative approaches that do not have a discriminatory effect, such as
individual testing against a more individually sensitive standard?
b) If alternative standards were investigated and found to be capable of fulfilling the er's purpose, why
were they not implemented?
c) Ii it necessary to have all ees meet the single standard for the er to accomplish its legitimate purpose or
could standards reflective of group or individual differences and capabilities be established?
d) Is there a way to do the job that is less discriminatory while still accomplishing the er's legitimate
purpose?
e) Is the standard properly designed to endure that the desired qualification is met without placing an
undue burden on those to whom the standard applies?
f) Have other parties who are obliged to assist in the search for possible accommodation fulfilled their
roles? (e.g. union and ee) [Meiorin]
(similar to those in the oakes test: worthy purpose, the infringement does not outweigh the benefit, the rights are
impaired as little as possible, and there is a rational connection.)
 If individual differences may be accommodated without imposing undue hardship on the er then the standard in
not a BFOQ.
 Undue hardship is not mere inconvenience. Factors that may influence; cost, disruption of a collective
agreement, problems with morale of other ees, interchangeability of workforce and facilities. Size of the
operation- will be of importance regarding amount of financial hardship that can be borne and the ease of
adaptation. Safety and magnitude of the risk to self and others also considered. Costs is the big one- Ontario
study has shown, however, that two-thirds of accommodation cost ers under $500.00- plus may be eligible for
gov. grants for accommodation.
HEAVY BURDEN ON EMPLOYER TO ACCOMMODATE
Conte v. Rogers Cablesystems Ltd. [1999] C.H.R.D. No. 4
C. was employed as a part-time customer service consultant with Rogers who was dismissed because the er said she had
an on-going, persistent voice problem that prevented her from doing her job. She was terminated. She argued for
accommodation. Rogers argued she was not suited for the job.
Results: The ct. found the job standards were rat. connected to the job, and were adopted in good faith with the honest
belief of their necessity. The ct also found that Rogers has accommodated ee's with physical dis and ee's with temporary
medical problems. However, in this case, Roger's fell short of determining C's current situation and prognosis or
whether alternative work was available to her. Despite the court finding that C was less than forthcoming with the er
about her medical condition and limitations to do the work or advising the er of her prognosis or enquiring about
alternative work- the er did not meet its duty to accommodate, thus did not establish a BFOQ. Remedy to be determined
in subsequent hearing.
 Where an employee has a medical problem that amounts to a disability with regard to the specific job, It is the
employer who is expected to initiate the process of accommodation.
 Heavy burden even on employer who acts in good faith. Not necessary for employee to be completely
forthcoming.
DRUG-TESTING // HOW TO FAIL THE THIRD PART OF THE TEST // REPRISALS // PERCEPTION OF
DISABILITY
28
Entrop v. Imperial Oil
Facts: Case involved drug and alcohol testing in the wk place by Imp Oil. EE's working in safety sensitive areas were
required to disclose past or present abuse. These ee's, if they test pos, must do 2 yrs rehab and remain sober/abstain for
5yrs. Automatic dismissal if test pos a 2nd time. Entrop disclosed past alc abuse and that he had been sober for 7 yrs, he
worked in the safety sens area. He was reassigned because of this disclosure- so he brought a complaint. Result: At the
bd of enquiry level he was successful. Addictions were considered a disability - a prohib ground under the Act. They
also found there were reprisals for bringing the complaint by the er and he was awarded 10,000 for mental distress.
Upheld at QB (I assume). Case failed at minimal impairment, and rational connection.
How to fail the third part of the Meiorin test:
 Arbitrary rule, not linked to or furthering employer’s purpose.
 Too broad, or stricter than reasonably necessary to achieve employer’s purpose.
 No opportunity for individual assessment.
 Other less intrusive means are available to achieve the purpose.
3 things to take from the case re: drug testing in wk place:
1. must be a reliable indicator of present impairment;
2. there must be advance notification of testing ees;
3. flexible accommodation to individual ee's is necessary to the point of undue hardship
(consider less severe sanctions, and provide support to permit the employee to undergo
treatment.).
No reprisals: s. 20 HRC
Perception of disability is grounds for discrimination. (also in Mb Code – s. 8)
There is a broad scope to the concept of disability
AGE DISCRIMINATION -- Mb HRC S. 9(2)(e)
Winnipeg School Division No. 1 v. Craton [1985] 2 S.C.R. 150
Facts: Mandatory retirement. C was a teacher and her collective agreement (c/a) provided for mandatory retirement.
She challenged this under Man HR Code, which prevents discrim based on age. (The Public Schools Act also had
provision that permitted man retire policies). Other provincial H.R.Codes provide exceptions re: age- e.g. NS has man
retire and pension plan exceptions and Ont has an exception to age discrim if under 18 or over 65. Man and Nfld do not
have such exceptions.
Issue: Can a private contract avoid the Man H.R.C.- can you bargain out of the Code?
Result: SCC found that man retire policy violates the Code and so the provisions were struck (note: they have been
upheld in other circum- e.g. firefighters where physical issues may be impacted by age- so BFOQ).
 HR Code cannot be avoided by a private contract- can't bargain out of the code
 HRC is fundamental, quasi- constitutional. If 2 laws are in conflict, go with the one consistent with the code.
McKinney (SCC) Age discrimination is a violation of the Charter, but upheld under S. 1 as a reasonable limit. (applied
to private sector.)
GVRDEU v. Greater Vancouver Regional District (2001) D.L.R. (4th) 220 (BCCA)
Municipality fired worker it had just hired when it learned he was over 65.
 Mandatory retirement in public sector contravenes HRC, and prohibition on age discrimination..
 Court encourages SCC to reconsider its view that mandatory retirement is reasonable limit under S. 1. Says the
demographics of the workplace have changed considerably.
 There is now some doubt about whether the courts should defer to decisions made over a decade ago by
legislators regarding mandatory retirement, in light of the current social realities.
 Age discrimination is an issue of national importance.
IN MANITOBA
Mb HRC S. 9(2)(e) offers explicit protection against discrimination on basis of age, without limiting it to only those
between ages of 18 and 65, as Ontario does. But paramountcy clause (S. 58) allows legislature to override, by making
explicit its intention to do so in any legislation that infringes on this right.
“Time for Action: Advancing Human Rights for Older Ontarians” (Ontario Human Rights Commission)
29
Mandatory retirement is age discrimination. A form of unequal treatment. Significant public policy reasons exist to
re-examine mandatory retirement. It can have a particularly serious financial impact on some persons.
 Women especially disadvantaged: start FT work later if they have kids. Work PT and in areas where there are
no pensions. (Lower wages  smaller pension benefits.)
 Recent immigrants also have a shorter period of employment (in Canada).
 Age 65 is an age that is highly arbitrary. (Chosen by Count Bismarck , the president of Germany in 1870, when
he learned that age 65 was the age at which most people then died.)
 Likelihood of future labour shortages.
 International trends. In US, NZ, Australia.
Consider fairness. Some people have to retire, others don’t. (me: Odd that judges, who don’t have to retire until 75,
might uphold forcing people ten years younger than them to retire.)
Justifications
Facilitate planning, promote job opportunities for youth, ensure workers leave with dignity (shouldn’t that be left to the
worker to decide), control costs.
Based on myths:
Job productivity declines with age. (Can increase in some areas.)
Physical capacity declines with age. (but absentee rates and accidents may be less.)
Older people can’t learn as easily. (this can be addressed with appropriate training methods.)
WORKPLACE HARASSMENT
Code, s. 9 13, 14.
Er liability: Note: Man HR Code s.19(1)(2) (definition of harassment)- provision that puts an obligation on er to take
reasonable steps to end harassment that they know or ought to know of- applies generally- shows er duty to eradicate
harassment]. Although, it refers to an employers who “knowingly permit, or fail to take reasonable step to terminate”
harassment. What if employer didn’t know?? (knowledge if sometimes inferred, if “ought to have known.”
Constructive knowledge.)
RACIAL SLURS
Naraine v. Ford Motor Co. (July)
Facts: N. was an electrician in Windsor Ford plant from '76-'85. Egregious racial harassment – virulent slurs, graffiti,
etc.
He was dismissed in '85 after a fight with a co-worker. Supervisors present. Filed a HR complaint, then dismissed after
a fight.
Issue: Whether racial slurs and graffiti are actionable under the Code?
Result: Once is likely not enough, however, the bd. Found Ford to be "saturated" with racist graffiti and slurs.
 Where racial slurs are so widespread and continuous as to become a "term or condition of employment" there is
discrimination. Reasonable person standard.
 The er must take reasonable steps t end racism – prompt and effective.
 Expert evidence on racism can be used as a framework within which to judge the nature of the work, but are not
irrefutable evidence that racism existed in the particular instance.
 Where there is termination – look for whether there is a nexus, or causal connection, between the harassment
and termination.
.
Naraine v. Ford Motor Co. (Dec) (remedy after long delay??)
Issue: what is the proper remedy in a case of a poisoned work environment do to racism where the aggrieved person was
terminated about 11 years ago?
 The available remedies after a long delay in HR proceedings are back pay and benefits, restoration of seniority,
20,000 gen damages, 10,000 mental anguish, pay for counseling. Not reinstatement.
SEXUAL HARASSMENT
Mb HR Code s. 19(2) – 2 category approach (quid pro quo, and threat of reprisal – a dichotomy rejected by SCC in
Janzen, but it can be interpreted broadly to prohibit all forms of sexual harassment.)
Janzen v. Platy (1989) SCC
J made a complaint to the Man HRComm alleging the restaurant cook continuously sexually harassed her. She resisted
him, and the then he started verbal harassment. The owner who said he couldn't do anything about it.
30
Issue: C.A. - Whether sex harass in the work place is discrim based on sex and therefore prohibited by s.6 (1) of the
Man H.R.Act (before amendments that include harassment). Held: harassment found. $3500 plus $3000 for punitive
damages.
 sexual harassment is discrimination based on sex.
 Definition of sexual harassment in the wk place:
o it may be broadly defined as (1) unwelcome (2) conduct of a sexual nature (3) that detrimentally
affects the wk environment or leads to adverse job-related consequences for the victims of
harass.
 Three factors must be shown on a bal of prob;
1. that they are an ee of the co and the conduct took place during the course of employment;
2. conduct detrimentally affected the wk environ or led to some detriment (so do not have to prove
intention to harass, rather effect was to);
3. conduct is unwelcome- person did not willingly consent.
Then onus shifts to employer.
Er's liability: discrimination "in the course of employ" to be interpreted broadly. Due diligence defence is available to
ER's- not made out here. (Note again lang of current Man Code- "failed to take reasonable steps to terminate harass").
Parkes – problem with seeing sex harassment as sexual discrimination and the concern that this would potentially leave
some sits with no recourse, e.g. same-sex harass or female superior harassing males, etc. The point is a little mute in
Man because our Code recognizes sex harass now and do not have to characterize it as sex discrim- but the point she was
making was really that even when sex harass is recognized in an Act one should also take a substantial equality approach
in the determination of what is harassment and in examining "unwelcome".
North Vancouver v School District
Sometimes comments are sexual, but based on a misconception of a person’s sexuality (in this case a deliberate one).
This does not fit with the definition of sexual harassment, so no discrimination found.
Re Canadian Pacific (Cruel taunting of a sexual nature.)
If there is no sexual content or gratification involved in the harassment, then it is not discrimination based on sex.
“unwelcome conduct of a sexual nature” from Janzen should be interpreted broadly, in order to capture such incidents,
which are about feminizing men – an indirect way of denigrating female characteristics, which is a kind of
discrimination based on sex.
REMEDY FOR SEXUAL HARASSMENT
Thorvaldson Care Homes (Mb HRC decision – on website)
Male staff person, relative of owner, sexually harassed women who were fired if they complained. Employer liability
was addressed at length:
1. Supervisors must be aware
2. Must be dealt with as a serious matter
3. Employees must be warned of adverse consequences
4. Complaints must be addressed.
Remedy: monitored employer for 2 years – re all female employees hired or leaving employer. 12 weeks compensation.
$4000 damages for loss of dignity and self-respect. Exemplary damages denied.
DELAY
Blencoe v. BC (Human Rights Commission) (SCC)
Hearing against B into sexual harassment complaint delayed for 30 months. CA granted stay of proceedings. SCC
overturned, but sd HRC had to pay costs of B and complainants.
 Charter applies to actions of HRC’s
 HR legislation is primarily remedial, not punitive.
 Must have proof of significant prejudice to get a stay of HR proceedings. Consider
o Nature of case/proceedings
o Complexity
o Did respondent contribute to or acquiesce to delay
o Does delay offend decency and fairness
 Stays will be rare, unless there is gross or shocking abuse
31
CONSIDER CIVIL ACTION FOR HARASSMENT
Seneca College v. Bhadauria
Highly educated women of East Indian origin applied ten times for positions with the College, alleged jobs filled by
others without her qualifications and claimed discrim based on origin. She claimed College was in breach of a duty not
to discrim against her and also in breach of Ont HR Code. She claimed dam for deprived of opportunity, mental distress,
frustration, loss of self-esteem and dignity, lost time in repeatedly applying.
Issue: Is there an independent tort of discrimination? Whether a breach of the Code could itself be sufficient to est civil
liability without calling in aid common law principles relating to intentional invasions of legally protected interests?
 No tort of discrimination because the Code was meant to be a comprehensive scheme.
 Applying Bhadauria: this case has not meant a rigid refusal of civil action claims involving a HR complaint.
Galea v. General Motors
Unionized ee of GM had brought concurrent proceedings - a grievance, a civil action of intentional infliction of mental
distress as well as a HR complaint. Issue: Are you required to go to the HR Comm rather than bring the civil action?
Result: Ultimately decided under the collective agreement grievance proceeding.
 In obiter the ct said despite HR Act, if you have an independent tort you can bring a civil action (If no C.A.).
 Intentional infliction of mental distress is a tort independent of the HRA and Code. Overlap (e.g. sexual
harassment) does not preclude action.
L'Attiboudeaire v. Royal Bank
L’A alleges he was construc dis, subjected to "differential treatment" by the df consisting of physical and verbal harass including racist dehuman, derogatory, and sexist comments.
 Constructive dismissal as a cause of action stands alone, separate from the HRA, and is not constrained by the
Act.
 Nonetheless, the Act can be used as an indication of community standards related to harassment, as a basis on
which to allege unjust treatment leading to constructive dismissal.
LaJoie v. Kelly (c.o.b. as Swayzee's Restaurant)
Facts: A claim based on the tort of sex harass was allowed and damages awarded- no classic tort or contract claim
here. HR Comm did not have exclusive jurisdiction - thus limits Bhadauria by recognizing a tort of sex harass.
SUMMARY ON CIVIL ACTIONS
 No cause of action for discrim per se- use HR Code.
 If a collective agreement applies - ct will probably decline jurisdiction.
 If non-union- as long as a contract of emp or tort claim - can bring an action- usually wrongful dismissal,
intentional infliction of ment distress. Also can complaint of a HR Code violation.
o If pursuing both actions concurrently, ct may stay the proceedings- to avoid dbl recovery or
inconsistent rulings. (see Danlyluk on last page.) Cts decide on a case by case basis.
o If looking for reinstatement go the HR route- cheaper and the Commission has carriage.
o Civil lit is a bit faster but more expensive.
Topic 9 – Termination of Employment
a.
"With Cause"
SUMMARY DISMISSAL FOR MISCONDUCT OR INCOMPETENCE
England p. 256-273

The general principles of contract law provide the legal framework governing summary dismissal without
notice or wages in lieu thereof. Thus, repudiatory breach (misconduct or incompetence) of the contract 
no notice for termination.
Grounds for summary dismissal based on “just cause”
 Deliberate misconduct (disobedience, insubordination, refusal to work as directed.
 Non-culpable conduct (e.g. negligence, incapacity, absenteeism, lateness).
32
Common law doctrine of "just cause" has the following main features:
1) the decision to dismiss must be taken in good faith, non-arbitrarily, and without discrimination,
2) a requirement of proportionality, which means that the ultimate sanction of dismissal can only be
invoked for conduct on the ee's part that causes a substantial harm to the er's interests,
3) stringent standards of "procedural fairness" on the er as a precondition to dismissal (where required)
4) the non-unionized ee have roughly equal protections under the common law doctrine of just cause as
are available to unionized workers under the just cause provision found in most collective agreements
(but non-unionized ees cannot obtain reinstatement at common law, unlike in the unionized sector
where reinstatement is the common remedy for wrongful dismissal. Nevertheless, the components of
just cause under the two regimes are now remarkably similar, with few exceptions.)
 Often the following prerequisites must be satisfied before dismissal will be warranted:
(1) the rule in question must have been made known to the ee,
(2) the rule must have been consistently applied in the past,
(3) clear order must have been communicated to the ee,
(4) the order must be within the scope of the worker's duties under his or her emp contract,
(5) the ee must have been clearly informed that dismissal is the penalty for disobedience,
(6) the rule must be lawful and reasonable in content, and
(7) the ee must not have a reasonable excuse for disobedience.

Just cause for dismissal can also exist outside of working hours if the employee's off-duty misbehaviour
substantially injures the er's legitimate business interests - including undermining public confidence in the
er's business or service [Note: E.g., Smith v. E Fry Society]. But courts require clear evidence of substantial
harm to the er's interests in order to ground cause.

Incapable of performing job? The ee's quality of performance must demonstrably fall below the average
level for the firm; an er cannot sum dis an ee for not being an above-average performer. There must be
objective evidence substantiating an allegation of "gross" incompetence; the er's subjective perceptions will
not suffice.

Corrective measures for incompetence are required, BUT, If the degree of incompetence on the ee's part is
extremely serious, the er is allowed to safeguard its business interests against such harm by dismissing the ee
for a first offence. This exception simply reflects the notion of proportionality, which lies at the heart of just
cause. In addition, corrective measures can be dispensed with if it is clear from the employee's attitude that he
or she would not take the opportunity to self-correct.

On the other hand, account must be taken of the potential costs to ers of providing ees with relatively generous
safeguards against unjust dismissal.

The burden of proof in termination is on the employer.
How Serious must the actions be?
 Misconduct or incompetence must cause the ER "substantial" harm in order to justify the penalty.
Exceptions:
 Actions cause ER severe economic harm
 Action are intrinsically serious or unsafe in nature.
 EE holds a relatively high position of trust, if he or she is expected to be a role model to other
workers
 The nature of the industry in question entails an especially rigorous standard of public confidence.
 openly flaunt the er's authority in the workplace
 insolence towards the er;
 engaging in competition with the er's business, whether during the ee's private time or not
 making an aggravated assault against fellow workers or members of management
 verbally abusing managers; and sexually harassing fellow ees.

Traditionally, there is no duty on ers to comply with the requirements of procedural fairness in dismissing ees
for willful misconduct.
33
OTHER FACTORS AFFECTING OUTCOME OF WRONGFUL DISMISSAL SUIT
Mitigating Factors
 provocation or other mistreatment of the ee by the er,
 physical or mental trauma in the ee's personal life,
 a lengthy record of satisfactory service, (such a record shows that the ee is unlikely to misbehave again),
 lack of premeditated intent to harm the er on the ee's part,
 a mistaken belief on the ee's part that he or she was acting in the er's best interests, or some other reasonable
excuse.

At common law, reinstatement is normally unavailable and the determination of whether or not an ee's conduct
is repudiatory in nature such as to warrant summary dismissal is "all or nothing"; the courts will not find that
dismissal is wrongful and then reduce the ee's damages to reflect his or her contributory blameworthiness.
[Note: Some courts experimented with this practice in the 1980s under the so-called near cause doctrine, but
today this doctrine has been unequivocally rejected by the Supreme Court of Canada in Dowling.]
Condonation
 The courts apply the doctrine of condonation, or waiver, under which the er is deemed to have relinquished the
right to dismiss an ee for an act of misconduct or incompetence that the er becomes aware of but fails within a
reasonable time to inform the ee is unacceptable. Worker has the onus. If the ee commits a further act of
misconduct or incompetence, this revives previously condoned misdeeds for the purpose of establishing just
cause. Accordingly, at common law the er is merely precluded from relying on the condoned misbehaviour as
the sole ground for dismissal.
Procedural fairness (pre-conditions for)
 The er is bound to a duty of procedural fairness in the following situations:
(1) where the employment contract expressly or impliedly incorporates a disciplinary procedure
containing such requirements;
(2) where a statute imposes a disciplinary procedure,
(3) where the ee is also an office holder, in which case natural justice or a duty of procedural fairness must
be observed; and
(4) where a particular province's employment standards legislation requires the employer to provide
written reasons to ees who are being dismissed for cause.
 Courts also appear to be going to great lengths to ensure procedural fairness is where the ee is summarily
dismissed for sexual harassment. This is presumably because the stigma of this offence will make it very
difficult for the ee to find another job, to say nothing of the social ostracism he or she will experience.
No PF
 In Wallace v. United Grain Growers Ltd., the SCC held that, while there is no independent implied contractual
term requiring the er to act fairly in dismissal situations, the period of reasonable notice of termination will be
extended to take account of bad faith, callousness, or insensitivity on the er's part in handling dismissals.
 The courts try to minimize the effect of unduly harsh express termination provisions. For example they may
imply into clauses that give the er a broad discretion to dismiss, a duty to exercise such discretion fairly and in
good faith.
Culminating incident
 An er can take into account previous instances of misconduct or incompetence. At common law, the courts will
generally allow an ee to explain any previous offences that an er seeks to rely on. This is an important safeguard
for the non-unionized ee because, unlike in the unionized sector, there is no griev or arb process available to
challenge the fairness of a disciplinary warning or suspension at the time of its imposition. At common law the
er can revive previously condoned offences pursuant to a new culminating incident. In addition, the cts permit
ers to introduce new grounds ex post facto in order to justify a dismissal, even though they knew of those
grounds at the time of dismissal (diff in union situation).
Economic difficulty of ER
34


Does not justify the sum dis of ees who are in no way to blame for these circumstances.
Exceptions:
1) the contract of employment expressly gives it that right, or
2) if there is a reliable custom and practice in the firm from which such a right can be implied.
DISHONESTY
McKinley v. B.C. Tel (SCC) (Be sure to use both aspects of the test – 2-step, and proportionality)
High level employee for 17 years terminated after LOA for high blood pressure. Had expressed desire to work in a
position with less pressure. BCTel refused to accommodate, although an alternative job was available. In court, BCTel
noted in McK’s letter to doctor a reference to a drug that would enable him to return to work. Accused him of
dishonesty. Argued just cause. Issue: Is dishonesty always cause for dismissal?
 Where there is dishonesty, use a two step approach:
1) Was there dishonesty?
2) Was it of a nature and scale that made it incompatible with the employment relationship?
(Examples: honesty was an essential condition of the contract, a breach of faith inherent to the work relationship, or the
dishonesty was directly inconsistent with the employee’s obligations to the employer.)
 For dishonesty to be grounds for dismissal, there must be proportionality- a balance between the severity of the
misconduct and the sanction (b/c of importance of employment to employee, and the imbalance of power).
(Must take care not to augment the already disproportionate degree of power held by the employer.)
REPUDIATORY BREACH
CULPABLE // HARM TO ER’S REPUTATION // WHAT IS FUNDAMENTAL BREACH
Smith v. Kamloops and District Elizabeth Fry Society
Social wkr for E. Fry for 20 yrs, clean record, good job performance, started dating a past sex offend who shortly after
started attending a program that was run by another s wkr who was on contract with E.Fry. She disclosed her
relationship to this counselor but not to her er. Er found out, bd suspends, asks her to make a choice between b friend
and job, she says no conflict and they say buh bye. Issue: Was there just cause? Result: C.A.split: majority agree dissent said no just cause
 A breach of professional ethics can be a fundamental breach of the EE’s contract, i.e. a repudiatory breach.
 conduct outside the wk place which is likely to be prejudicial to the business of the er can constitute grounds
for sum dis. The ER need not prove actual prejudice in order to justify the dis.
 An implied duty of loyalty breached in a substantial way is a fundamental breach.
NON-CULPABLE MISCONDUCT // CONDONATION // CULMINATING INCIDENT
Cain v Roluf's Ltd.
C worked at the camera co for 11 yrs and had a pattern of incompetence. She was often late (65x) and left early (30x).
There had been no clear warnings given by the er. Mixed messages- e.g. warning followed by a raise. No deadlines
were given in her warnings for change to take place. Issue: 1) was there just cause- incompetence? 2) did the er
condone the behaviour? -Ee onus. Result: Yes there was incompetence, but the ee proved condonation. 10 mo’s notice
 6 mo’s for failure to mitigate.
 You cannot lull ee's into thinking their behaviour if OK then summarily dismiss them.
 A dismissal for cause should be preceeded by progressive discipline, deadlines, and clear warnings.
 Length of emp can influence expectation.- here 11 yrs.
 “absenteeism will not be tolerated” is not sufficient. (must set out penalty: up to an including termination)
 It is tougher to prove cause for non-culpable conduct.
England: What to do when dismissing for incompetence
Theory of corrective discipline  chance to improve performance, rehabilitation.
1. Standards of job performance are communicated clearly.
2. Employee warns EE at the time of delinquent behavior exactly how the EE failed.
3. The warning must indicate the EE’s job is on the line, unless there is improvement.
4. The EE is given a reasonable opportunity, and assistance, to meet the required standard.
Boulet v. Federal Co-operatives [2002] M.J. No. 357 (MbCA)
Warehouse supervisor fired after 20 years on the job. Was given numerous warnings, penalties were laid out,
performance reviews were conducted. Parkes says it’s an example of good employer practices, as above, but I note that
35
the guy was given no training or assistance in becoming a better supervisor. You could argue that based on this the
threshold for a valid dismissal for cause is slightly lower in Mb than elsewhere.
NEAR CAUSE
Dowling (SCC)
Court rejects the “near cause” principle, which would permit a court to reduce the damages of a wrongfully dismissed
employee in cases where the employee’s work record was not ideal but not enough to justify dismissal.
MISUSE OF EMAIL/INTERNET
Janice Payne article (2001) on Termination for Cause
DeVito v. Macdonald (1996) BCJ: use of email to distribute a vulgar joke about a fellow employee, then lies about the
distribution  dismissal. Court found serious misconduct.
Smyth v. Pillsbury Co.914 F. Supp., 97(e.d. Pa., 1996): EEs told the emails were confidential, wd not be monitored or
used as grounds for discipline. Smyth use of email included a threat to “kill the backstabbing bastards”. Co read it, and
fired him. Court upheld, saing “co’s interest in preventing inappropriate and unprofessional comments or even illegal
activitity over its email system ouweighs any privacy interest the employee may have in those comments.” US case.
Argue entrapment?
Canadian Pacific Railway: use of company mainframe to cheat on a test, and send inappropriate emails, not sufficient
for termination.
Payne notes that the CCC prohibits the interception of “private communications” and “telecommunications”. She
questions whether email monitoring is an interception, and says there is no reasonable expectation of privacy in such
emails, therefore they can be used as grounds for termination.
Petruzzi case: guy who spent 4 hours a day for four months visiting adult porn sites terminated. Upheld.
Note: if you really want to go out on a limb, argue ADDICTION TO PORN, part of which is a propensity to exist in
denial of one’s actions, and to hide one’s addictive behavior. (cite Entrop – broad scope for disability.)
Remedy cd include: reinstatement with mandatory counselling, apology, internet access be cut off. Review progress
periodically.
England: Ch. 9: Termination of Employment
- Ways to terminate employment relationship:
1) by agreement of the parties
2) ER can terminate by giving ee requisite notice or wages in lieu thereof
3) Dismissed for just cause
4) ee resignation (including constructive dismissal)
5) breach of special legislation (eg. Human Rights or health and safety legislation)
6) wrongful dismissal – common law remedies
7) frustration of contract
Need balance between ee’s interest in fair termination and adequate severance pay; and ER’s interest in minimizing cost
of terminating ee’s
England: Termination by Agreement of the Parties
- employment contract can be ended by express consent of both parties
- but ee must genuinely consent to termination settlement – courts will strike if ER imposed unfavourable settlement
- where contract expressly states that terminate after expiry of fixed term or completion of project then no wrongful
dismissal (must be unequivocal)
- if ER terminates relationship before the term expires or project is completed – then wrongful dismissal
- ee has duty to mitigate unless contract expressly states ee entitled to receive identifiable severance payment for
early termination
- parties can make employment contract where ee works for specified period and then laid off, without severing
contractual nexus, until recalled for work (eg. snow remover) – ER has to give reasonable notice if intends not to
recall ee; need strong evidence that parties intend to create ongoing employment relationship for short-term work
(see also employment standards provisions, infra)
- Statutes of Frauds – employment contracts for term in excess of 1 year must be in writing to be enforceable; if
unenforceable then common law reasonable notice period applies
- Most common termination of employment by mutual assent is when ee attains age of retirement mutually agreed
upon by the parties:
36
1) at c. law, the ee reaching the retirement age does not ipso facto give ER cause for dismissing ee without
due notice/wages in lieu thereof
2) to excuse ER from giving such notice the contract must expressly/impliedly contain a term re this or the ee
must expressly agree to waive her rights to due notice in a separate termination agreement
3) if ee continues to work beyond the agreed retirement date – the employment relationship is deemed to be
for indefinite term – ER can’t rely retroactively on the retirement provision
4) legislative regulation of retirement is extensive under human rights statutes (see Human Rights section and
MB. Human Rights Code, ss. 9 & 14 – prohibits discrimination on the basis of age – so discrimination only
excused where BFOR)
5) less extensive under employment standards acts – most provinces expressly exempt ER from giving
minimum notice of termination required by statute when ee retires
B. Without Cause
England: Ch. 9 - Termination with Notice or Wages in Lieu
- ER must give ee due notice of termination or payment in lieu thereof
- tension between 2 perspectives of employment relationship: 1) sees employment relationship as economic exchange
-–contract principles should apply; thus intention of parties should determine notice period; 2) determination should
be based on fairness as opposed to intention to prevent ER exploitation (Bardal)
- trend towards generous notice periods under reasonableness test; although some courts concerned re: excessive
notice periods
- to qualify as valid notice of termination, ER’s communication must clearly make it know to ee that cessation of
employment as of certain date
a) Express Notice of Termination Clauses
- express terms trump implied terms
- most courts circumvent harsh termination clauses and imply reasonable notice periods by:
i) interpreting ambiguous language in favour of ee;
ii) by finding that ee didn’t freely agree to be bound by the clause – to be binding ER must draw it to ee’s
attention and explain legal significance and ee must positively consent (informed consent)
iii) finding no new consideration where termination clause is introduced to pre-existing contract
iv) declare it as unconscionable where ee’s status has risen significantly so that original contract no longer
applicable (unless brought to ee’s attention on date of promotion)
v) where provision giving ER broad discretion to terminate relationship courts find implied term that ER will
act in good faith and fairly (but remember majority in Wallace)
vi) where express clause provides for less notice than minimum statutory requirement it is null and void
(Machtinger) and reasonable notice period applies
b) Implied Terms Reflecting the Parties’ Factual Expectations about the Notice Period
- most courts go with reasonable notice periods rather than factual intention of parties (implied term)
- but some courts using factual intention of parties at date of contract: eg.: Yosyk (MB. C.A.) – predates Wiebe
- some courts attempt to blend factual intent as a factor of reasonableness test –eg. Wiebe – Kroft J.A.
c) “Reasonable” Notice of Termination at Common Law
- leading case: Bardal (infra)
- most judges apply this test – test is a vehicle for effectuating broad range of policy concerns – mostly to protect
ee
- general trend since 50s is to lengthen period of reasonable notice – to help ee’s with financial blow of
unemployment
- Bardal – 12 months was a breakthrough case; today 24 months are not uncommon for older, high status
(remember MB is less than Ontario)
- But some courts concerned re excessive notice periods (eg. MB. C.A.)
- Courts will always make own determination as to what is reasonable notice (may interfere even where ER’s
severance offer is within common law range)
- No rule of thumb that one month pay for each year of service. Factors for assessing reasonable notice::
i)
Availability of Replacement of Work: The Cushion Rationale
- state of labour market for persons with pl’s skills; also look at pl’s characteristics that would help
or hinder him from getting work (eg. age)
- where ER’s dismissal impairs pl’s chances of finding work – courts take this into account
37
where ER has tough economic times, some courts balk at increasing length of notice period to
cushion ee from tough economic times (eg. Bohemier) (ER has burden of proof to show economic
difficulties) – but note most courts go with cushion rationale
Status of the Job (Cronk is the case)
- traditionally courts increase length of notice period for high-status ee’s
- main yardsticks of occupational status are: qualifications, education, responsibility, training,
experience, and especially salary
Length of Service
- the most important predictor in reasonable notice (Canadian study showed: approx 3 months
notice for every 10 yrs of seniority with ER)
- in determining seniority most courts avoid strict analysis that would result in severance of
contractual nexus (eg. part-time employment with same ER counts toward seniority accrual – prorate it; resignations of short duration don’t interrupt seniority; absences for child-rearing – prior
service will count)
ee's Age
- is important factor; elderly workers are finding it increasingly more difficult to find work
Quality of ee’s Work Record
- near cause doctrine – Dowling – SCC ruled that it is not part of common law (England warns that
danger of this is that courts may take “all or nothing” approach to misbehaviour – in borderline
situations either finding just cause or no cause)
Residual Factors
examples include:
a) increased notice where ee sustained detrimental reliance b/c of ER’s conduct (eg. induced ee
to resign from secure job or immigrate)
b) reduced if ee knows or ought to have known that new job with ER is insecure
c) extended so ee can qualify for vested pension (a short extension will be granted)
d) taking account of severance payments to other workers by ER
e) increase if ER’s conduct makes it difficult for ee to get replacement work
f) increased if ER handles dismissal in bad faith manner (Wallace)
-
ii)
iii)
iv)
v)
vi)
REASONABLE NOTICE AT TERMINATION
ESA: S. 61: minimum of one pay period. (only province w-out graduated standard) s. 64: permanent position, wages
paid less than once/mo, then 30-day minimum.
S. 62. Exceptions (Vol 2 of CB, page 18). 62(b) Can contract out of minimum.
Bardal v. The Globe & Mail Ltd. (1960), 24 D.L.R. (2d) 140 (Ont. High Crt) Pl worked for Df for 17 years and had top
management position. Company asked him to resign due to cost concerns; plaintiff refused so was dismissed without
cause; brought wrongful dismissal action. Few comparable jobs in Canada. Court gave him one year’s notice.
(so gets the lost of salary - difference between salary would have received and salary actually received from new job;
pension; but no loss of Xmas bonus, participation of profit-sharing plan or loss of director’s fees)
Principles: in wrongful dismissal - the measure of damages must be considered in the light of the terms of employment
and the character of the services to be rendered.
- there is implied in the contract of hiring an obligation to give reasonable notice of an intention to terminate
employment
- 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
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.
(Not a closed list. None is determinative.)
So: NO CAP on reasonable notice period
CONTRACTING OUT OF REASONABLE NOTICE
S. 62 of ESC says the parties can contract out of the minimum notice period.
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There is a presumption of reasonable notice. ESC sets minimums where the parties contract out of reasonable notice.
Machtinger v. HOJ Industries, [1992] 1 S.C.R. 986 (SCC)
Appellants with 8 years of service were dismissed without cause; each ee was paid 4 weeks salary upon dismissal; both
ee’s had signed contracts - which provided that the ER could terminate employment with no notice or salary in lieu of
notice, or in one case on 2 weeks notice.
Issues: Where terms of employment contract do not comply with the minimum notice requirements of the Act, are the
terms capable of displacing the c. law presumption of reasonable notice? Held: No
 where employment contract fails to comply with the minimum notice periods set out in the Act, the ee can only
be dismissed without cause if he or she is given reasonable notice of termination. (otherwise ER’s wd hv no
incentive to comply with legislation).
 presumption at c/l of reasonable notice is rebuttable if the contract of employment clearly specifies some other
period of notice, either express or specifically implied.
 Waiver of statutory rights must be clear and unambiguous.
 If a term is null and void, it cannot be used as evidence of the intentions of the parties.
Possibility: argue that the ESC in Mb is in breacb of S. 7 of the Charter, b/c it effectively guts any right to notice on
termination, leaving employees highly vulnerable to arbitrary actions of employers. An employee can be induced to
contract out of her rights, without even being told that she has such rights. The act, at minimum, ought to require that
the employee be informed that she is relinquishing minimum standards in leg.
AVAILABILITY OF SIMILAR EMPLOYMENT (PART OF THE CUSHION RATIONALE) // PARTIES
EXPECTATIONS
Wiebe v. Central Transport Refrigeration (Man.) Ltd., [1994] M.J. No. 279 (C.A.)
W was salesperson for 9 years; was dismissed; 51 years old w- Gr 10 ed’n; initially ER argued that “with cause” because
he had alcoholic beverage during work hours; no evidence of intoxication; the policy was never part of his employment
contract so dismissal was “without cause”; t.j. ordered 12 months notice period Issues: reasonable notice period? Is the
intention of the parties to the contract relevant? Held: 6 months and car allowance.
 The parties expectations re: severance pay are just one factor in the broader test of reasonableness for
assessing the notice period. Evidence of expectations can be based on understandings, past practices, and
personnel documentation.
 CA concerned that notice periods for wrongful-but-not-in-bad-faith dismissals are becoming too long. (Mb
known for giving shorter notice periods than courts in other provinces.)
LENGTH OF SERVICE // BREAK IN SERVICE // CLERICAL VS. MANAGEMENT ENTITLEMENTS
Cronk v. Canadian General Insurance (1995), 128 D.L.R. (4th) 147
Cr employed in clerical position for 28 years; 6-year interruption for kids but worked pt-time then; given notice of
dismissal at age 55; action for wrongful dismissal; 8 mo after the dismissal still no job; motions judge awarded 20
months. Issue: Are clerical employees entitled to shorter notice period than managerial employees? Held: 12 months;
while the character of respondent’s employment will restrict her to clerical work, her age and lengthy service qualify her
for the maximum notice in her category
 where work pt-time - the notice period should be reduced on a pro-rata basis to reflect the part-time work.
 clerical employees are generally entitled to a shorter notice period than senior management or specialized
employees with high rank in organization (motions judge wrongly departed from this (principle). But ask
whether position in hierarchy correlates with ability to find new work.
 Court seems to buy appellant’s argument re: why the longer notice period for management:
1) work skills -- more general and likely to be relevant to broader range and greater no of available
positions; managerial ee’s skills - narrower range of industries
2) greater range and no. of available positions for which clerical ee is qualified
3) where economic downsizing - mere fact of dismissal without cause unlikely to affect subsequent ER’s
assessment of clerical worker; whereas management ee - greater responsibility for success of business
and so implicated in its failure/downsizing - so tougher to get new employment
4) for older ee’s - the more specialized the skills of the ee, the more likely they will be perceived as
outdated
5) management ee’s are in better position to negotiate contractual notice provisions than unskilled ee’s; so
reflects the reasonable expectations and intentions of the parties arising from that fact
Dissent: agreed with motions judge - there should be no rule that clerical ee automatically gets less than management ee
39
By singling out “character of employment, which is one of the factors in Bardal, and holding that the upper limit of
notice for clerical ee’s must always be less than for executives, the court is sanctioning a limitation period with a scale
that should be adjusted downward when applied to clerical ee’s. Acceptance of this argument gives undue weight to
character of employment instead of permitting all the factors to be weighed (clerical ee’s - would get approx 40%
less)
- rebuts the five factors:
1) although more clerical positions - also more clerical people seeking those jobs; and computerization means less
people needed; senior management ee’s - make more contacts which help them find re-employment; management
ee’s - are better educated and can more readily learn new ways to manage
2) economic downsizing - may bear no relationship to profitability - so no stigma
3) re: management ee’s in better position to negotiate notice provisions so that longer notice periods would reflect the
intentions of the parties at time of hiring - intention of parties is not to be examined in determining reasonable notice
Note: post-Cronk there was controversy as to whether Cronk had held that there was a 12 mo. ceiling for clerical ee’s; in
Minott (1999) - the C.A. held that there is no ceiling; have to apply the Bardal factors but generally clerical ee’s will get
less.
Successorship issues - Employment Standards - companies are bound by successorship - deemed to continue at common
law.
In Ontario guidelines have developed generally 1 month per year of service (although England disagrees with this). In
MB, generally lower notice periods than Ontario
BAD FAITH DISMISSAL
Wallace v. United Grain Growers Ltd. (c.o.b. Public Press), [1997] 3 S.C.R. 701 (SCC) (see also: duty to act fairly)
He got 24 mo. for 14 years of service (today would get more). ER had made conscious decision to play “hardball”.
Issue: is there an implied term that ER’s must act in good faith regarding dismissal.
 No independent implied term of good faith, but bad faith is a factor to take into account with regard to
calculation of reasonable notice
 (McLachlin - would have found implied term to act in good faith in dismissals)
Stuesser article: he argued McLachlin’s position is the better one - more consistent results; whereas majority view inconsistent, unfair results because exact same wrong behaviour by ER will result in substantially different awards for
ee’s. Unprincipled. Flouts the principled basis of damages, which is that they reflect the loss suffered.
Try to prove that good faith was an implied term of the contract. One basis on which to distinguish is that Wallace’s
employer sd if he did the job he was hired for, “there’s no reason he cdn’t stay to 65.” Expressed, as it was, in negative
terms, it did not affirm a positive intention of fair treatment. In addition, it would be a helpful development of the law
for a court to lay out the basis for an award that recognizes bad faith in a dismissal in quantitative terms, since Wallace
simply restored the TJ’s award of 24 mo’s.
OTOH, could argue simply that the court has been moving in the direction of recognizing bad faith conduct as
warranting damages, and that, as McLachlin points out, it would be an incremental evolution of the law to make the duty
of good faith in dismissal an implied term in all employment contracts.
Conundrum of majority decision: if there is egregiously malicious conduct that would warrant a separate tort, it is not
clear whether you could get both increased notice PLUS aggravated damages. The court seems not to have considered
this.
Requirement of separate actionable wrong: libel is a complex and difficult tort to prove, and to defend against. The
court overlooks the onerous requirements of proving the tort – simply saying that a separate cause of action has to exist.
Complicates the law unnecessarily.
WALLACE APPLIED
Whiting v. Winnipeg River Brokenhead Community Futures Development Corp. (1997), 159 D.L.R. (4th) 18.
Pl was manager of the co; 40 years old, 6 years of service; the co amalgamated with another co; another ee disliked her,
started rumours; plaintiff put on probation; the stress resulted in sick leave for the plaintiff; then was informed her sick
leave would be terminated - wrongful constructive dismissal; at trial 2 yrs later - still psychologically unemployable; t.j.
awarded 6 mo, plus $15,000 for mental stress plus damages for loss of income due to mental stress.
40
Issues: reasonable notice where bad faith by ER?
Held: reasonable notice is 12 months - 1/2 of what Wallace got; not as old as Wallace, not employed as long as he was,
and not induced to leave an ER of 25 years; no damages for mental stress can be awarded (cut t.j.’s overall award of
$72,000 to $42,000)
 Bardal and Wallace factors apply when assessing reasonable notice. No formula for the Wallace component.
 Court doubled the notice from 6 (bardal) to 12 months (w- Wallace) because of the bad faith, and the effect that
it had.
EMPLOYEE GETS A JOB RIGHT AWAY
Frank v. Federated Corp
Employee got a job right after being fired in bad faith, and was found to have mitigated damages.
 Duty to mitigate offsets Wallace damages.
If an EE gets a job right after being fired in an egregious bad faith dismissal, he has mitigated all damages, and is entitled
only to compensation for the briefest period. Therefore, there is no monetary recognition of the bad faith actions,
even though they may have caused great suffering.
Near Cause Doctrine: the notion that ee misconduct not bad enough to constitute grounds for dismissal can be
considered so as to discount the ee’s reasonable notice period
Dowling v. Halifax (City), [1998] 1 S.C.R. 22 (SCC)
Facts: city dismissed a works supervisor; ee had interfered with process of awarding waste removal contract; t.j. applied
moderated damages/near cause principle - awarded damages on basis of 6 month notice period instead of 24 months;
C.A. agreed
Issues: whether “near cause” doctrine exists?
Held: rejection of the “near cause” doctrine
SUCCESSIVE ONE-YEAR CONTRACTS
Ceccol v. Ontario Gymnastic Federation (2001), 204 D.L.R. (4th) 688 (Ont. C.A.)
C worked for 16 years on a series of one-year contracts, renewable for good service. Term of 12 mo’s was flexible.
Contract contained vague terms, e.g. the contract may operate for 12 months, “unless sonner terminated or extended as
hereinafter provided.”
Successive contracts
 employers cannot avoid their obligation to pay reasonable notice by having their employees work on a series of
short-term contracts.
 Nominal reliance on a fixed-term contract will not evade application of the C/L or statute.
Mitigation
 Starting your own business can be a reasonable way to mitigate damages, to be assessed on a case-by-case
basis. Here, she was given the benefit of the doubt.
Ambiguous terms
 If there is more than one interpretation that can be made of a term, then look at the reasonable expectation of
the parties. Remaining ambiguities to be interpreted against employer’s interests. (contra preferentum)
 Provisions for termination without cause must be clear and explicit.
C. Employment Standards Provisions
England: Ch. 9
1) Individual Notice Requirements under the Employment Standards Legislation
- employment standards statutes in all provinces provide for minimum notice periods for ee’s
- typically the length of notice period increases with ee’s period of continuous employment with ER
- MB is the only province where notice does not increase with seniority (s. 39)
- Common features in the provisions for individual notice throughout provinces are:
1) ER usually allowed to give ee wages in lieu of actual notice of termination
41
2) ER usually prohibited from reducing ee’s wages or changing terms once notice has been served
3) Circumstances where ER excused from notice obligation typically are:
i)
where just cause
ii)
ER’s in cyclical or seasonal industries with fluctuating labour needs (eg. construction)
iii)
ee's who are temporarily laid off from work (the statutes define “temporary” layoff) (note that ER has
no inherent right to layoff – ee can sue for constructive dismissal; ER can layoff without constructive
dismissal if express/implied term of the contract)
iv)
if layoff is caused by unforeseen events such as would normally frustrate the contract at common law
(eg. fire destroying business)
v)
where worker retires at firm’s normal retirement age (only in some provinces)
vi)
where ee’s work system such that can elect to work or not for a temporary period when requested by
ER (in some provinces)
vii)
where ee’s are hired for a fixed term or to complete defined task (in MB, s. 39)
viii)
where ee’s are laid off b/c of strike or lockout
ix)
where ee refuses an offer of “reasonable” alternative employment from ER
Interruptions in service that will rupture the accrual of continuous employment:
1) absence from work, such as sabbatical or layoff, unless the contract expressly/impliedly suspends rather
than terminates contract
2) at common law: changes in corporate identity of ER will terminate contract; but courts have responded by
presuming that if EE’s remain in the employ of the new company, the EE’s seniority will carry over unless
ER clearly states otherwise. Some provinces have successor rights legislation.
2) The Group Termination Provisions in Employment Standards Legislation
- provinces have enacted broad range of measures designed to facilitate the readjustment of displaced labour –
including group termination provisions
- MB legislation: expressly allows ER to terminate ee without notice by paying him a sum equal to the wages required
under the mass termination provisions
- Notice need not be given until ER has finalized its decision
- ER must cooperate with govt, the affected ee’s and their union (if applicable) in ameliorating the effects of the
layoff
- MB: establishes joint ER-ee planning committees – Minister of Labour has discretion to order the establishment of
the committees; committee’s mandate is to develop plan to minimize scope of the layoffs and assist ee’s to find
replacement work; members have duty to cooperate but no machinery provided for resolving impasses
- Legislation common specifies exemptions for ER regarding notice requirements (like individual notice exemptions)
- MB: Minister of Labour can waive ER’s statutory obligations if s/he believes ER’s business or other ee’s would be
seriously harmed by compliance
- no province has enacted a right to recall for displaced workers
D. Constructive Dismissal
Three main questions:
1. Was employee dismissed?
2. Did employee condone the ER’s repudiation of the contract?
3. What is reasonable notice.
Also: Mitigation
Courts try to balance:
1. ER’s need for flexibility, and ability to restructure
2. EE’s need for stability and fairness.
England: Termination by Act of the Employee: Quitting and Constructive Dismissal
Constructive Dismissal, or Quitting for Cause
- constructive dismissal: when ee quits in response to repudiation of the contract by the EE, ee has been constructively
dismissed; can sue for damages for wrongful dismissal
- courts must balance: ee’s interest in security and ER’s interest in efficiency
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Determining the ER’s contractual obligations: the obligations of the ER that are most commonly litigated are:
compensation, reassignment of job duties, reassignment of geographical location, and residual assertions of
unfair treatment
i)
Amending the Compensation Structure:
- traditionally, courts have disallowed unilateral modifications to the compensation structure that
would result in any diminution of the ee’s wages or benefits; would disallow constructive
dismissal only where the financial losses were relatively minor
- see Farber (below): SCC did not relax this
- but in Otto v. Hamilton & Olson (1993) (Alta. C.A.) – ER suffered heavily in economic downturn
and withheld its contributions to RRSP’s and shortened paid vacations; ct declined to find
constructive dismissal because of external economic pressures – reasonable to take rollbacks in
tough times - no fundamental breach
ii)
Modifying Work Assignments:
- ER can unilaterally impose incidental changes in ee’s work assignments but ER can’t reassign
work duties so as to transform essential nature of the ee’s position
- Where ee is demoted so that status is significantly diminished – constructive dismissal even
though no loss of income – test is: would reasonable person think status is reduced
- Some courts have found constructive dismissal where ee’s job duties were substantially changed
even though no loss of status (eg. Wilkinson v. T. Eaton Co – ee from secretary to salesperson was
constructive dismissal)
- But courts have also recognized ER’s interest in flexibility re changing assignments and ER can:
transfer a worker laterally within classification with no loss of pay as long as fundamental
nature of job stays intact;
- modify ee’s duties where it’s industry practice to do so
- alter job duties in low-level positions where no detailed job descriptions
- courts more likely to allow reassignment where good faith by ER; also where ER has severe
economic difficulties
- where contract has express clause allowing ER to modify work assignments courts give effect to
it; but some courts hold that ER must exercise discretion in good faith for legitimate business
reasons; some hold that ER must act reasonably.
iii)
Relocating the ee’s Place of Work:
- generally, there’s implied term that ee will remain employed within reasonable commuting
distance of her residence; to relocate need express term or implied term based on intention of
parties
- where implied term – courts require ER to act reasonably in good faith and not undue hardship for
ee
iv)
Treating the ee Unfairly:
- Wallace – no implied term that ER has duty of fairness and reasonableness to ee’s
- But: some courts have grounded constructive dismissal on breach of ER’s implied duty of
procedural fairness (eg. Lindsay v. Toronto Transit Commission- constructive dismissal b/c ER
failed to fairly investigate allegations of theft against pl and changed pl’s job duties)
- Unlikely that Wallace is meant to preclude ee exposed to callous mistreatment by ER from
quitting and suing for damages
b) Is the ER’s Breach Sufficiently Serious to be Characterized as Repudiatory in Nature
- the ER’s breach must be sufficiently serious – fundamental
- ee has onus of proof
c) Continuing to Work Under Altered Terms: Condonation and the ee’s Duty to Mitigate:
- Condonation: where ee continues to work under the changed terms, he may lose right to sue for
constructive dismissal –
- Test: objective intention of the ee – would reasonable person in position of the ee believe ee intends,
voluntarily and without coercion to agree to changed terms
- ee has reasonable amount of time to make decision and/or look for new work before condonation will be
found
- no condonation where: ee continues to work while explicitly protesting to ER; ee commences litigation
- recently the duty to mitigate – some courts have held that ee must continue working under changed terms
while seeking replacement work (but note that court rejected this in Farber)
- note also: where ee consents to changed terms contract law issues arise: 1) modification of the contract
requires fresh consideration – cts sometimes find “fictional” consideration in the forebearance of exercising
a)
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lawful right to terminate the contract; 2) or parties may be said to have consensually rescinded their old
contract – and replaced it with a new one
WHAT IS CONSTRUCTIVE DISMISSAL // WHAT ARE FUNDAMENTAL TERMS
Farber v. Royal Trust Co, [1997] 1 S.C.R. 846 (SCC)
Appellant was regional manager for the real estate company; company restructuring - and eliminated his position;
offered him a branch manager position elsewhere - but with lower potential salary; appellant estimated his income would
be cut in half if he accepted; appellant sued for damages - constructive dismissal.
 Unilateral imposition of new term of employment, where that term is fundamental to the contract amounts to a
breach of the contract and constructive dismissal.
 Fundamental terms include
o location,
o total remuneration,, basis of payment change from salary to commission.
o Demotion, loss of prestige
o Sexual harassment
LOSS OF SALARY
Black v. Second Cup
Reduction in salary to $85,000 from $95,000 not a breach of the term.
Otto
Salary reduction not a breach, when it happens in tough economic times.
UNFAIR STANDARDS CAN’T BE MET
Grant v. Oracle Corp. Canada Inc. (supra)
Grant took position with Oracle knowing of the $2 million sales quota for 1989 and the projected $3 million quota for
1990; Grant didn’t meet the quota but received praise form the co and a promotion and a raise; still pressured to meet the
$3 million quota for 1990 although Grant tried to show that it was unrealistic; Oracle rejected Grant’s comments - said if
he couldn’t meet them he’d find someone who could; Grant resigned - claimed the work atmosphere so oppressive that
forced to resigned; argued constructive dismissal.
 Resignation b/c of unfair standards is not constructive dismissal, if those standards were known in advance.
CONDONATION
Swanwick v. Desautels [1999] MJ. 540
 An employee accepts the new terms if she continues in the job without expressing displeasure at the terms, but
only starts to look for new work.
MITIGATION
Farber v. Royal Trustco (regional to branch manager)
 Don’t have to accept offer of employer for lesser position in order to mitigate.
 If an offer for lesser employment is accepted, it is only condonation if the reasonable person would think the EE
had relinquished the right to sue. Courts will allow a reasonable time for EE to look for other work.
Mifsud v. MacMillan Bathurst (1989) Ont CA
 Where there is no acrimony between EE and ER, and the EE offers ER a demotion at the same rate of pay, the
EE may be required to take it or be penalized for failure to mitigate.
Adams v. Comarck (1991) Mb
(frequent flyer points) EE not required to stay in job in order to fulfil duty to mitigate.
 there is no obligation to save the employer's bacon by continuing to feed his pig.
Payne on constructive dismissal.
CD is where the conduct of the employer indicates he no longer wishes to be bound by the contract.
Failure to deal with sexual harassment is CD.
E. Issue Estoppel and Multiple Forums for Employment Claims
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Danyluk v. Ainsworth [2001] SCC
What happens when an employment standards tribunal makes a ruling in an area that overlaps with a wrongful dismissal
case?
3 conditions to issue estoppel
1) same issue decided
2) earlier decision final and judicial, from which there is no appeal.
3) the parties have not changed.
Question: isn’t this at odds with Galea?