2. T ORONTO S ARNIA S AULT S TE. M ARIE Presentation to: ACSESS Spring Symposium Thursday, May 31, 2007 Presented by: H. P. Rolph Barrister & Solicitor Mathews, Dinsdale & Clark LLP One Queen Street East, 25 th Floor Toronto, ON M5C 2Z1 Tel 416.862.8280 Fax 416.862.8247 Legal Update – Labour & Employment Law and the Staffing Industry

3. T ORONTO S ARNIA S AULT S TE. M ARIE This is not intended as legal advice

4. T ORONTO S ARNIA S AULT S TE. M ARIE Setting the Terms of the Relationship Whatever the terms, the relationship is contractual Contracts are enforceable by legal action Paper is important

5. T ORONTO S ARNIA S AULT S TE. M ARIE Offer of Employment Letter Make it clear that certain conditions must be satisfied before hiring –i.e., medical testing, reference checks and possible immigrations matters

6. T ORONTO S ARNIA S AULT S TE. M ARIE Setting the Terms of the Relationship What are the terms? –Pay rate (may be variable) –Hours of work (may be flexible) –Overtime requirements –Days of work –Vacation entitlement –May be required to sign client confidentiality agreements

7. T ORONTO S ARNIA S AULT S TE. M ARIE Temporary or Contingent Nature of Work or Assignments Very important to spell out that there is no guarantee of work or duration of work Make it clear that the client requirements will determine both quantity of work and duration of work

8. T ORONTO S ARNIA S AULT S TE. M ARIE Termination Provision Will employee be subject to probation period If it is intended to mean that employee can be terminated without notice or any compensation in lieu during probation period, state it in offer letter

9. T ORONTO S ARNIA S AULT S TE. M ARIE Termination Provision State that the employee can be terminated at any time without notice or compensation for cause Consider providing that the employee can be terminated with notice or termination pay or combination of notice and termination pay required under the Employment Standards Act, 2000 (or equivalent in provinces outside Ontario) and have no additional entitlements to notice of termination or compensation in lieu at common law

10. T ORONTO S ARNIA S AULT S TE. M ARIE Termination Provision Added proviso : “In no event will you receive less than your minimum entitlements on termination under the Employment Standards Act, 2000.” If it is intended that the employee be “term or task” employee within the meaning of the Termination and Severance Regulation under the Employment Standards Act, state it See sections 2(1)10 and 9(1)9

11. T ORONTO S ARNIA S AULT S TE. M ARIE Other Terms Regular staff: Provisions regarding benefits, bonus or commission payments Right to relocate to different offices Right to re-assign clients and territories

12. T ORONTO S ARNIA S AULT S TE. M ARIE Restrictive Covenants Non-Competition Clauses Non-Solicitation Clauses Confidentiality Clauses

13. T ORONTO S ARNIA S AULT S TE. M ARIE Restrictive Covenants Non-Competition Clauses Very difficult to enforce in Ontario where between employer and employee At a minimum must be restricted as to geographic scope and duration

14. T ORONTO S ARNIA S AULT S TE. M ARIE Restrictive Covenants Non-Solicitation Clause Courts are much more likely to enforce Must be reasonable in terms of scope and duration Narrower and shorter is better in terms of likelihood of enforcement

15. T ORONTO S ARNIA S AULT S TE. M ARIE Restrictive Covenants Non-Solicitation Clause Example: “For a period of 6 months following the termination of your employment, you will not directly or indirectly for any reason seek to provide temporary workers or any other services competitive to those of X Corporation to any client or prospective client of X Corporation with whom you have dealt during the last 18 months of your employment with X Corporation or your entire term of employment with X Corporation, whichever is the shorter”

16. T ORONTO S ARNIA S AULT S TE. M ARIE Restrictive Covenants Confidentiality Clause Properly drafted confidentiality clause that deals with confidential business information will be enforced

17. T ORONTO S ARNIA S AULT S TE. M ARIE Restrictive Covenants General If contract is to contain non-compete, non- solicitation and confidentiality clauses, put clauses into separate paragraphs Also have a severability clause

18. T ORONTO S ARNIA S AULT S TE. M ARIE Important Rules for Employment Contracts 1.Do not offer employment with “contract to follow” 2.Do not allow the employee to work or refer the employee to a client until the employee has signed contract or offer letter

19. T ORONTO S ARNIA S AULT S TE. M ARIE Terminations for Cause Cause is serious misconduct that goes to the root of the employment relationship Supreme Court of Canada has indicated that misconduct must be examined in context of the specific employment relationship

20. T ORONTO S ARNIA S AULT S TE. M ARIE Terminations for Cause Some types of dishonesty or clearly outrageous conduct like engaging in a drunken brawl with a client may not constitute cause in the case of a long service employee with an otherwise good employment record Very important to let the employee have the opportunity to explain his or her actions before terminating

21. T ORONTO S ARNIA S AULT S TE. M ARIE Termination for Cause Do not make a “snap” decision to terminate for cause Terminations for cause where the employer cannot prove cause will likely be very expensive for the employer “Hardball” approach can be hard on the employer too

22. T ORONTO S ARNIA S AULT S TE. M ARIE Terminations for Cause Damage to an employee’s reputation The Wallace factor Punitive Damages award against employers for arbitrary and callous conduct

23. T ORONTO S ARNIA S AULT S TE. M ARIE Keays v. Honda case Wrongful dismissal of an employee diagnosed with Chronic Fatigue Syndrome Employer argued just cause for failure to obey an order to see the Company doctor Courts found no just cause due to discriminatory and harassing treatment Courts relied on breaches of Human Rights Code to award punitive damages

24. T ORONTO S ARNIA S AULT S TE. M ARIE The Price for Honda’s Mistakes… Finding of no just cause for termination 15-months notice, + 9 months due to “egregious bad faith” conduct by Honda $100,000.00 punitive damages due to “discrimination and harassment” contrary to Human Rights Code by Honda Payment of employee’s legal costs with a premium! Leave to appeal to Supreme Court of Canada granted We have not yet heard last word

25. T ORONTO S ARNIA S AULT S TE. M ARIE Human Rights A lot is happening in Ontario

26. T ORONTO S ARNIA S AULT S TE. M ARIE Prohibited Grounds of Discrimination in Ontario Race Place of origin Ethnic origin Creed Sexual orientation Record of offences Marital Status Ancestry Colour Citizenship Sex Age Disability Family Status

27. T ORONTO S ARNIA S AULT S TE. M ARIE Mandatory Retirement Mandatory retirement at 65 abolished in Ontario as of December 12, 2006

28. T ORONTO S ARNIA S AULT S TE. M ARIE Mandatory Retirement Age 65 cut-off in pension, LTD plans and other benefits plans still permitted where allowed under Employment Standards Act, 2000

29. T ORONTO S ARNIA S AULT S TE. M ARIE Mandatory Retirement Where there are concerns about older employee’s performance, they should be brought to employee’s attention and documented Where a client is unhappy with employee, it may be prudent to find out why and document that as well

30. T ORONTO S ARNIA S AULT S TE. M ARIE Guide to Releases with Respect to Human Rights Claims OHRC has published guide with respect to releases Available at http://www.ohrc.on.cahttp://www.ohrc.on.ca Commission takes aim at “Standard Form Releases”

31. T ORONTO S ARNIA S AULT S TE. M ARIE Ontario Human Rights Commission Tips “An employer should, at the time of termination, ask the employee orally or in writing whether there are any outstanding human rights issues or concerns It is important to give the employee a reasonable opportunity to consult with independent counsel or an advisor before being required to answer the above question or to sign a legal release Reasonable requests for an extension of time should be granted”

32. T ORONTO S ARNIA S AULT S TE. M ARIE Ontario Human Rights Commission Tips “Where the answer is "yes," it is optimum to also prepare Minutes of Settlement, in addition to the release, which will expressly deal with the human rights issue In addition, where the answer is "yes," the text of the standard form of release should be altered to include a clause that separately recognizes that there is a human rights issue or complaint that has been fully and finally resolved between the parties”

33. T ORONTO S ARNIA S AULT S TE. M ARIE Ontario Human Rights Commission Tips “To avoid claims of unwarranted pressure or duress, it is optimum that an employer not accept a signed release on the same day as termination (even where the employee offers to sign it on that day) Employers wishing to guard against a claim that they have not compensated a complainant for the human rights issue should consider demarcating in the settlement specific sums for each “head” of damages, such as severance, termination, vacation pay and wages, as well as a set amount in compensation for any alleged human rights concern”

34. T ORONTO S ARNIA S AULT S TE. M ARIE Ontario Human Rights Commission Tips “The employer should state that the employee will receive his or her statutory entitlements (wages owed, vacation pay, statutory termination or severance payments) regardless of whether he or she signs the release The release itself should contain a clause which makes it clear that the signing of the release was not a precondition for the payment of these statutory entitlements”

35. T ORONTO S ARNIA S AULT S TE. M ARIE Ontario Human Rights Commission Tips “Termination meetings should be conducted with dignity, ensuring privacy, and with the employer exhibiting professionalism If an employee has allegedly engaged in criminal wrongdoing, such as theft or fraud, the employer should not promise to refrain from contacting the police in exchange for a release Where the employer has a reasonable basis to believe that an employee is experiencing a mental disability that could impair his or her judgment, he or she should request the employee to obtain medical clearance before signing the release"

36. T ORONTO S ARNIA S AULT S TE. M ARIE Minimum Requirements for Release The employee must receive more than his or her minimum statutory entitlements under the Employment Standards Act Signing the Release must not be a condition for receiving minimum statutory entitlements Employee must specifically acknowledge that, having knowledge of his or her rights under the Human Rights Code, the employee has no claims under the Code arising from employment or termination thereof as of the date on which the Release is executed and undertakes not to bring a complaint based on anything that has occurred on or before the date on which the Release is executed

37. T ORONTO S ARNIA S AULT S TE. M ARIE Minimum Requirements for Release The employee is given and acknowledges in the Release being given the opportunity to obtain independent legal advice The employee is given at least 7 days to consider termination settlement being offered before being required to accept the settlement and sign the release

38. T ORONTO S ARNIA S AULT S TE. M ARIE Ontario Human Rights Code Amendments Background on Bill 107 Received Royal Assent on December 20, 2006 Many key provisions not yet in force Significant amendments

39. T ORONTO S ARNIA S AULT S TE. M ARIE Ontario Human Rights Code Amendments The Role of the Ontario Human Rights Commission will be changed The Commission will no longer be a “gate keeper” on complaints being referred to a Tribunal Complainants have the right to push their claim to a hearing The Commission will play a more general, broader role in addressing human rights issues

40. T ORONTO S ARNIA S AULT S TE. M ARIE Human Rights Legal Support Centre Provisions added to final version of Bill 107 to set up new Human Rights Legal Support Centre Role is to provide publicly funded legal advice to complainants To date, little detail…

41. T ORONTO S ARNIA S AULT S TE. M ARIE Some Other Key Changes to Note Human Rights claims can be incorporated into a wrongful dismissal action The Court may now order for breach of Code: –Monetary compensation –Restitution other than monetary compensation for breaches of Human Rights Code Expect to see more cases relying on Keays v. Honda

42. T ORONTO S ARNIA S AULT S TE. M ARIE Some Other Key Changes to Note Orders the Tribunal may make: –Monetary compensation –Restitution other than monetary compensation –Other orders –$10,000.00 “cap” on damages for mental anguish gone

43. T ORONTO S ARNIA S AULT S TE. M ARIE Interim Measure Commission has undertaken a pilot project to expedite the mediation and investigation of human rights complaints