In a recent decision, the Federal Court of Appeal conclusively determined that federal public service adjudicators may hear and decide on cases where the Federal Government revokes an employee’s reliability status and then terminates her for the loss of that status.

The adjudicator in the case at hand had found that the employer did not have a legitimate concern that the Grievor posed a security risk when it decided to revoke her reliability status and then terminate her. He therefore found that the Grievor’s termination had been without cause and ordered her reinstatement.

Before the Federal Court of Appeal, the Government argued that this decision should be overturned. The Government took the position that federal public service adjudicators could only consider whether an employee was terminated for cause and did not have the power to consider whether the Government’s decision to revoke an employee’s reliability status was justified.

The Federal Court of Appeal squarely rejected this claim, finding that the adjudicator’s approach was “the only reasonable approach to be taken.” In doing so, the Court overturned a number of cases which had limited employees’ right to grieve where they were terminated due to the loss of reliability status. The Court concluded that these cases were “no longer valid,” cementing the right of employees to bring forward grievances in these circumstances and for public service adjudicators to determine whether a revocation leading to termination is, in fact, justified.

The employee was represented by Andrew Raven of RavenLaw.

On October 31, 2017, RavenLaw appeared before the Supreme Court of Canada to argue in support of a Charter challenge to certain restrictive portions of Québec’s pay equity legislation.

In particular, in 2009, the Québec government made changes to its pay equity law which required employers to review their wage rates every five years to determine whether changes to wages had resulted in wage discrimination. However, the 2009 amendments to the Pay Equity Act also prevented affected employees from claiming any remedy for discrimination that occurred in between the five-year reviews.

Before the Supreme Court, unions, workers, and pay equity and women’s organizations joined together to argue that these amendments resulted in ongoing discrimination against women and breached their Charter rights.

Andrew Raven, Andrew Astritis, and Morgan Rowe from RavenLaw appeared on behalf of the intervener, the Public Service Alliance of Canada.

For the second time, a decision of the Canadian Human Rights Commission to dismiss a complaint regarding discrimination related to medicinal marijuana has been set aside by the courts. In McIlvenna v Bank of Nova Scotia, the Federal Court found that the Commission breached its duty of fairness and ignored obviously crucial evidence supporting a complaint that Scotiabank had called in a mortgage because of the presence of medicinal marijuana on the mortgaged property.

Background

The Applicant, Robert McIlvenna, had a mortgage with the Bank, and had applied for an additional line of credit to perform renovations on the mortgaged house, which was occupied by his son and daughter-in-law. The Bank refused the line of credit and called in Mr. McIlvenna’s mortgage, and he alleged the Bank took this action because it had learned that medicinal marijuana was being grown in the home under a Health Canada license. The Bank maintained that the reason for its actions was a violation of the terms of the mortgage.

The Canadian Human Rights Commission initially rejected the complaint without an investigation. That decision was overturned by the Federal Court of Appeal, which found it unreasonable for the Commission to refuse to investigate, when there was a live factual dispute between the parties as to whether the Bank made its decision on discriminatory grounds. (See the Federal Court of Appeal’s decision here.)

The complaint was returned to the Commission for investigation. Following its investigation, the Commission again dismissed the complaint, finding that further inquiry into the complaint was not warranted. Mr. McIlvenna again sought judicial review of the decision in Federal Court. Among his arguments, he raised the fact that there were internal Bank emails in the Commission’s investigation file, which clearly supported the McIlvennas’ allegation that the mortgage was called in because of the presence of medicinal marijuana.

Judgment of the Federal Court 

In his judgment, dated July 19, 2017, Justice Boswell of the Federal Court allowed the Application for judicial review. He found that the Commission failed to investigate obviously crucial evidence before it—specifically, the internal Bank emails. The Court held:

“The content of these two emails, in particular the email sent July 15, 2010, is obviously crucial evidence given the relevant allegations in the Applicant’s human rights complaint and the contradictory statements by the Applicant and his son. A reasonable person would agree that this evidence was crucial because it lends credence to the Applicant’s position that his son’s growing of medical marijuana may have been a factor in the Bank’s decision to call in the mortgage. Although the July 15, 2010 email is certainly not conclusive of exactly what was said during the July 15th meeting, at the very least it tends to corroborate the Applicant’s claim that Ms. Joliat discussed the Bank’s policy on grow-ops during their meeting and is crucial in determining the merits of the Applicant’s claim.”

Justice Boswell found that the Investigator “glossed over this evidence”, and failed to investigate the Bank’s policy on marijuana “grow-ops” in determining whether the Bank had a reasonable, non-discriminatory explanation for calling in the mortgage. The Court went on to find the ultimate decision unreasonable, because the Commission’s analysis “essentially ignores the evidence contained in Ms. Joliat’s two emails”, despite the fact that these emails supported the McIlvennas’ version of events. The complaint was referred back to the Commission for re-determination and, if necessary, further investigation.

The Applicant was represented in the Federal Court by Andrew Astritis and Amanda Montague-Reinholdt of RavenLaw.

On November 4, 2017, RavenLaw participated in the 6^th annual Workers’ Bowl, an annual fundraiser in Toronto for the Workers’ Action Centre, a worker-based organization that advocates for fair working conditions for vulnerable workers. The Workers’ Action Centre has a Workers’ Rights Info Line that workers can call for support, offers workshops on workers’ rights and is part of the campaign to raise the minimum wage to $15.

The bowling tournament is hosted by the Ontario Employment Education & Research Centre (OEERC), a non-profit that works with community partners such as the Workers’ Action Centre to educate workers on their rights and provide supports to workers whose rights have been violated.

This is the second year that the RavenLaw team – Wassim Garzouzi, Morgan Rowe, Anna Lichty, and Marlee Olson – has joined bowlers from unions and union-side labour firms, among other supporters, to help raise funds for these important initiatives.

In a recent decision, the Ontario Superior Court affirmed that departing employees can owe a duty of good faith and a fiduciary duty to their former employer, and a violation of those duties can give rise to a significant damages award. This decision marks an important reminder to employees regarding their obligations when leaving their employment.

Background

The Prim8 Group Inc. is a communications agency who hired Richard Tisi, initially on a contract basis and then as a one-third shareholder, director and officer of the agency, to develop websites for Prim8 clients. Tisi, together with an employee, Ian MacArthur, developed customized management software for Prim8.

A dispute arose between Tisi and Prim8, and Tisi left his employment. When he left, he took his computer equipment, including access to the customized management software. Shortly thereafter, MacArthur also left Prim 8, and he and Tisi began working on a competing business. Prim8 sued for inducement to breach contract, as well as conversion and breach of fiduciary duty.

Judgment of the Ontario Superior Court

In The Prim8 Group Inc. v. Tisi and MacArthur 2016 ONSC 5662, Prim8 was successful in its action against Tisi and MacArthur. The Court found that Prim8 had established its claims for breach of duty, conversion and inducing breach of contract, and awarded approximately $100,000 in damages, together with costs, against the Defendants.

The Court found that “employees owe their employers a general duty of good faith and loyalty (or fidelity) as an implied term of their employment contract.” The Court further held that, as a senior officers of the corporation, Tisi owed a fiduciary duty of “loyalty, good faith and avoidance of conflict of duty and self-interest.” The Court held that Tisi had breached his fiduciary duty in taking the computer equipment and customized management software assets of Prim8, and converting them to his own use. The Court also found that Tisi actively impeded Prim8’s ability to make changes to its client websites. The Court assessed damages for the replacement of the assets taken by Tisi, together with damages for lost billings to Prim8’s former clients.

Both Tisi and MacArthur were also held liable for a failure to give proper notice of their departure. Tisi was also found to have induced MacArthur to breach his contract with Prim8.

Discussion

Tisi and MacArthur found themselves in a position that no employee wants or expects to be in—having moved on to new employment, they were taken to court by their former employer because of breaches of their obligations upon departure. This case stands as an important reminder to employees, particularly senior employees, that their duties to their employer do not necessarily end at the moment they tender their resignation. All employees should seek legal advice concerning notice and fiduciary obligations to their former employers, if they are planning to leave their employment.

[This article is for informational purposes only and does not constitute legal advice, which cannot be given without consideration of your individual circumstances.]

On November 8, 2017, Michael Fisher spoke as part of the panel “Fitness to Work: Ensuring a Safe Work Environment in an Era of Marijuana, Opioids, and Other Drugs,” at Lancaster House’s Human Rights and Labour Law Conference in Ottawa. The panel focused on the common misperceptions on the use of medical marijuana and other drugs, impairment testing in safety sensitive workplaces, an employee’s duty to disclose their use of medical marijuana and other prescription drugs, and balancing accommodation and safety obligations.

In a pair of recent decisions, the Federal Public Sector Labour Relations and Employment Board confirmed the broad and purposive approach to the statutory freeze on terms and conditions of employment during collective bargaining. In Public Service Alliance of Canada v Treasury Board (Correctional Service Canada) and Public Service Alliance of Canada v Canada Revenue Agency, the Board found that the employer had violated the freeze by altering terms and conditions of employment without the union’s consent.

The Federal Public Sector Labour Relations Act, like labour law in most jurisdictions, contains a prohibition on altering the terms and conditions of employment while a union and employer are engaged in collective bargaining. The provision states that, unless the parties otherwise agree, “each term and condition of employment applicable to the employees in the bargaining unit to which the notice relates that may be included in a collective agreement, and that is in force on the day on which the notice is given, is continued in force and must be observed by the employer, the bargaining agent for the bargaining unit and the employees in the bargaining unit” until either a collective agreement is reached or a strike could be commenced. This is referred to as a “freeze” on terms and conditions of employment. The purpose of the statutory freeze is to maintain the status quo, and provide stability during the collective bargaining process.

In the Correctional Service Canada case, the Union argued that the employer had violated the freeze by reducing the hours of work of full-time term employees to four days per week, contrary to its longstanding practice. The Board agreed, finding that there was “no evidence that the respondent had made any reductions to the hours of work of the affected employees before the freeze period”, and therefore there was an established pattern of full-time employment for term employees, which created a reasonable expectation that hours would not be reduced during the freeze period.

In the Canada Revenue Agency case, the Union argued that the employer violated the freeze by eliminating the ability of employees to select variable and flexible work hours commencing before 8:00 a.m. The Board agreed, holding: “It was demonstrated that before September 2014, employees had been able to request flexible and super-compressed work schedules for years and that their requests had been approved. Thus, a pattern had been established. Once notice to bargain was given, it was reasonable for the employees to expect that it would continue.”

Both decisions endorse the “business as before” approach to statutory freeze complaints, which requires consideration of the entire pattern of the employment relationship prior to the freeze, in order to determine whether there was a violation. The Board rejected the narrower approach advocated by the employer in both cases, and also rejected the claim that the employer retained discretion to modify hours of work pursuant to legislation. As the Board stated in Canada Revenue Agency, to accept that argument “would render the protection conferred under the statutory freeze provision meaningless and it could lead to an absurd interpretation of the Act.”

The Public Service Alliance of Canada was represented in both cases by Amanda Montague-Reinholdt of RavenLaw.

Morgan Rowe is honored to be a “Featured Volunteer” on the REACH Canada website.  Morgan has volunteered with REACH as part of its pilot project providing legal information clinics to individuals with disabilities in Ottawa.  Morgan also provides pro bono legal services through REACH’s lawyer referral service.  REACH has provided this service and public education for individuals living with disabilities since 1981. RavenLaw is a long-term, proud supporter of REACH.

On October 18, 2017, James Cameron will present at the Canadian Institute’s Disability Insurance Conference. James will be discussing litigation strategies in LTD benefit claims, specifically addressing strategies for streamlining the litigation process and how to present your case to achieve best outcomes in a timely and cost-effective manner.

For more information or to register for the conference, please visit the Canadian Institute’s conference website.

Please note our office will be closed from December 23, 2017 until January 1, 2018. We will reopen for regular business hours on Tuesday, January 2, 2018 at 8:30 am.

Warmest wishes for a happy holiday season and a wonderful new year.