If you have brought, or are considering bringing, a claim against your employer for wrongful dismissal, you may believe that you can sit back and watch daytime TV, waiting to recover your damages from the employer. That is not the case: you have a duty to “mitigate” your damages.

 Mitigating or reducing your damages by seeking alternate work

Mitigation means reducing the damages you have sustained by reason of the wrongful dismissal. Specifically, it means looking hard for new gainful employment.  The failure to properly mitigate your damages can result in your reasonable notice period damages being reduced.

Tips for mitigating your wrongful dismissal damages

• Look for reasonably comparable employment: You do not need to accept any job on offer. Your duty is to make reasonable efforts to find comparable employment.
• Keep records: It is important that you keep a record of your efforts, both in a hard copy and electronic file.  You should keep track of everything, including on-line searches, interviews, letters sent out and received, coffee and lunch meetings, etc.  At some point you may well be asked by a lawyer for your former employer what you have done to mitigate your damages.  These steps will ensure that have a complete answer.
• Keep track of any expenses incurred: As part of mitigation, you may incur some expenses—for example, to obtain training or to start a small business.  It may be possible to claim certain of these costs from your former employer.

Mitigating by continuing to work for the employer

Issues of proper mitigation also arise in constructive dismissal cases.  If, for example, the employer significantly reduces your salary or demotes you to a lower position, your employer may claim that the most effective form of mitigation consists of remaining in your former lower position for the length of the reasonable notice period.  When an employee is entitled to walk away in a constructive dismissal matter is a difficult one, requiring specialized advice from an employment lawyer.

We are here to help: Consult one of our experienced employment lawyers at Raven, Cameron, Ballantyne and Yazbeck LLP if you are considering making a claim for wrongful dismissal. 

 [The following information applies to non-unionized employees. This article is for informational purposes only and does not constitute legal advice, which cannot be given without consideration of your individual circumstances.]

On December 11, 2014, Lancaster House is holding its annual Toronto Labour Arbitration conference, with workshops taking place before and after. David Yazbeck will be acting as the Union-side Co-chair for the conference and will participate as a moderator on a number of panels. Andrew Astritis will be speaking as union counsel on the panel dealing with family status discrimination.

Lancaster House is a leader in providing information on labour, employment and human rights law. Both Mr. Yazbeck and Mr. Astritis have participated in Lancaster House activities before. 

No matter what kind of employment problem you are facing—e.g. a claim for wrongful dismissal, constructive dismissal, or a human rights complaint—you may ultimately decide to settle your case for some form of compensation, rather than proceeding to a hearing. In that case, it is worth taking the time to think about the best way to structure your settlement agreement because different kinds of agreements and different kinds of compensation can lead to a wide range of tax consequences.

Seven key considerations in structuring a settlement agreement:

1. Compensation for lost income is fully taxable under the Income Tax Act because it is treated like any other employment income.
2. Compensation for the loss of employment, such as severance pay or reasonable notice (see: What is reasonable notice? ), is also fully taxable under the Income Tax Act. Unless certain limited exceptions apply, these kinds of compensation are considered “retiring allowances” under the Income Tax Act.
3. If part of your employment with your employer took place prior to 1996, you can roll a portion of a retiring allowance payment into an RRSP. The roll-over is tax-free, and you do not need existing room in your RRSP to roll-over eligible amounts. Similar rules exist for any part of your employment that took place prior to 1989.
4. Compensation for damages, such as for mental distress or pain and suffering, are not subject to tax. Damages must be reasonable, however, and there must be some proof to support the claim for damages. The claim for damages also has to be independent from the loss of employment. If the mental distress was caused by the loss of employment, then any damages for mental distress will be considered part of employment income or a retiring allowance and will be taxable.
5.  Damages for human rights violations are also non-taxable. Like damages for mental distress, they must be reasonable and similar to what a human rights tribunal might award. Be especially careful because, in some jurisdictions, legislation puts a maximum cap on damages for human rights in a tribunal’s award. In those cases, the amount characterized as human rights damages in the settlement agreement cannot go over the cap.
6.  Compensation for counselling services is not subject to tax. “Counselling services” have been defined to include job placement, re-employment, and retirement counselling services.
7.  Compensation for legal fees is deductible for employees. Where the payment is made directly from the employer to the employee’s legal adviser, this amount is non-taxable.

Conclusion

Both employees and employers need to take time to consider the structure of the settlement agreement and how to characterize any compensation changing hands. While the parties can reach agreements that maximize the benefits of the settlement for both sides, any settlement must be reasonable and grounded in the facts of the case. An unreasonable settlement agreement may be reviewed by the Canada Revenue Agency. For help determining the best structure of your settlement agreement, you should seek advice from an employment lawyer.

We are here to help: Consult one of our experienced employment lawyers at Raven, Cameron, Ballantyne and Yazbeck LLP to assist you in developing or reviewing a settlement agreement for your employment claim. 

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

On December 17, 2014, David Yazbeck will be moderating the Lancaster House Panel on Harassment and the Toxic Work Environment: Examining Rights and Remedies. This is one of a series of audio conferences presented by Lancaster House on a variety of topics affecting the workplace. Mr. Yazbeck has often acted as a moderator and speaker on these conferences.

For more information about this particular audio conference, visit the Lancaster House website here.

The process for successfully claiming long-term disability (“LTD”) insurance benefits can be complex and lengthy (See our article on “Navigating your Claim for Long-Term Disability (LTD) Insurance”). Unfortunately, part of that process often includes responding to a denial of your claim by the insurance company. This article summarizes the key steps to take if your disability claim has been denied.

When are you likely to be turned down for LTD insurance benefits? 

LTD policies usually have two different kinds of coverage.  For the first two years, the coverage provided is commonly known as “own occupation” coverage, meaning that if you can’t do the primary functions of your job, you are entitled to benefits.  After this period, the coverage often changes to “any occupation” coverage, meaning you will only continue to receive benefits if you cannot perform any job for which you are suited because of your background and not just your old job.  Claims for LTD benefits can be denied either before coverage starts, or after two years, when the definition changes.

Key Tips for Responding to a Denial of a Claim for LTD insurance benefits:

1. Don’t give up!

Many people are discouraged when they are turned down for LTD benefits.  They should not take it personally.  Refusals are often a part of the process, and are not necessarily an indication of whether your claim for LTD benefits will ultimately be determined.

2. Internal Appeals

It is possible to appeal internally to the insurance company.  The insurance company may alter its decision and provide LTD benefits, if new medical evidence is provided.  Unfortunately, in many cases, the internal appeal does not change the initial refusal.

3. Suing the insurance company for your LTD benefits

Often the only way to obtain benefits from an insurance company after your disability claim has been refused is to sue.  For many people, the prospect of litigating with an insurance company, particularly when you are disabled and without income, seems impossible.  We recommend that disabled people seek good advice from competent, experienced lawyers, who can properly advise you on your rights.  With the help of good counsel, you can enforce your rights and obtain the benefits for which you have paid.

Counsel work either on an hourly basis, or on a contingency basis (a percentage of the amount recovered).  Many people prefer to hire counsel on a contingency basis, because there is no payment of legal fees unless and until there is recovery from the insurance company.

In all cases, it is strongly advised that you seek advice as quickly as possible after benefits are refused, as there are time limits which may cause you to lose the right to sue the insurance company.

4.  Opportunities for Mediation

Although it may be necessary to start legal proceedings to enforce your legal rights, it is important to know that most cases settle at mediation.   Mediation is a negotiation session conducted by an experienced neutral facilitator.  The mediator will explore with the parties whether it is in their best interests to settle the claim for a lump sum or by reinstating the insured worker’s benefits.  The mediator will have the parties explore the risks and costs of litigation and help them to determine whether a settlement is preferable to carrying on to Trial.

Conclusion

If you have been turned down for LTD benefits, please do not give up.  If you retain good, experienced counsel and follow their advice, you stand a good chance of obtaining a satisfactory solution.

We are here to help navigate the LTD application process. Consult one of our experienced Long Term Disability lawyers at Raven, Cameron, Ballantyne and Yazbeck LLP if you are considering making a claim for disability benefits or if your claim for benefits has been denied. 

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

Our office will be closed on Monday, December 15th from 1:30 pm  to 5:00 pm. We will return to regular office hours on Tuesday, December 16th.

The Federal Court of Appeal has overturned a decision of the Canadian Human Rights Commission, in which the Commission rejected a human rights complaint against the Bank of Nova Scotia at the pre-investigation stage. The Appellant, 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 Commission rejected the complaint under section 41 of the Canadian Human Rights Act, which authorizes the Commission to refuse to deal with a  complaint without an investigation in certain circumstances. In its unanimous decision granting the appeal, the Court held that it was unreasonable for the Commission to have dismissed the complaint without an investigation, because there was a live contest between Mr. McIlvenna and the Bank as to whether the Bank made its decision on discriminatory grounds. Justice Stratas wrote on behalf of the Court: 

“At this point in its process, the Commission cannot acceptably or defensibly resolve the live contest between Mr. McIlvenna and the report of the Bank’s in-house counsel in favour of the latter, at least until it investigates further under section 43. But here, nonetheless, it purported to do so. In so doing, it must have engaged in some sort of weighing process that led it to favour the report of the Bank’s in-house counsel. This it cannot do. During the section 41 stage, a weighing process of the sort conducted here is no part of its task.”

This decision provides important clarification of the proper scope of the Commission’s decisions at the section 41 stage of its process, and confirms its duty to investigate when there is a live dispute regarding the material facts of the human rights complaint.  

Mr. McIlvenna was represented by Andrew Astritis and Amanda Montague-Reinholdt from our firm. A copy of the Court’s reasons for judgment can be found here.

On November 27, 2014, Arbitrator Frederick von Veh issued a decision reinstating a Canada Post motorized letter carrier after he was terminated for working with an expired driver’s license. The Arbitrator found that the employee had not acted deliberately and that he had simply forgotten to renew his license – “he made a mistake”.  Arbitrator von Veh concluded that inadvertent errors do not constitute “major misconduct”, a term often used by employers to justify discipline. As a result, the employee was reinstated.

At the hearing, the employee was represented by his union representative, Don Foreman of the Canadian Union of Postal Workers (“CUPW”), and Wassim Garzouzi and Dayna Steinfeld from our firm.

The right to work in a safe and healthy environment is a cornerstone of modern employment rights. One of the ways that governments ensure and promote the health and safety of workers is through legislation. For employees who work in federally regulated workplaces, the applicable legislation is the Canada Labour Code. The purpose of the occupational health and safety provisions of the Code is to prevent accidents and injury to health arising out of, linked with or occurring in the course of employment.

On October 31, 2014, changes to the occupational health and safety provisions of the Code took effect. These changes have the potential to erode some of the key rights that workers had under the old version of the Code and may work against the Code’s stated purpose of preventing accidents and injury to health.

Application of the Canada Labour Code

The provisions of the Code apply to workers who are employed in federally regulated industries, including banks, railways, highway and air transport, radio and television broadcasting,  and (for some purposes) employees of the federal government as well as Crown corporations and agencies.

Occupational Health and Safety under the Canada Labour Code

The occupational health and safety provisions are contained in Part II of the Code. These provisions impose duties on employers and employees to ensure the health and safety of everyone in the workplace. The Code establishes three basic health and safety rights for employees:

1. The right to know about hazards in the workplace and information that will help protect employees’ health and safety;
2. The right to participate in health and safety processes in the workplace; and
3. The right to refuse unsafe work.

Amendments to the Canada Labour Code

The recent Code amendments contain a number of significant changes to the health and safety provisions. Perhaps the most significant changes are those which limit an employee’s ability to refuse unsafe work.

Definition of a workplace “danger” amended

The definition of danger is significant for accessing many of the rights contained in the Code, including the right to refuse unsafe work. Previously, “danger” extended to situations involving exposures that could result in chronic illness, disease or damage to the reproductive system. Under the new definition, for a situation to be a “danger”, there must be serious or imminent risk to life or health.

Increased powers to Minister to investigate, dismiss work refusals

Previously, if an employer investigated a work refusal and determined that there was a danger, it was mandatory for a health and safety officer to investigate the matter in the presence of the employee. The amendments create two significant changes to this process: first, it is now the Minister of Labour or the Minister’s delegate that performs the investigation. Second, and perhaps more significantly, the investigation is not mandatory—rather, the Minister can dismiss complaints without investigating if he or she is of the view that the matter can be dealt with under another procedure of the Code. The Minister can also dismiss a complaint without investigation if he or she is of the view that the matter is trivial, frivolous or vexatious or if the refusal to work is made in bad faith. If the Minister does not proceed with an investigation, the employee can no longer refuse to work.

The amendments may erode the right of workers to refuse unsafe work

The new provisions of the Code only recently came into effect and it is difficult to say exactly how workers will be affected. It remains to be determined whether the changes to the definition of danger will limit the circumstances in which workers can refuse work on the basis of a dangerous situation in the workplace, or whether courts will interpret “danger” in essentially the same way as under the old definition. While the implications of the change to the definition of danger are uncertain at this point in time, it does seem clear that the new powers of the Minister to dismiss complaints without investigation bestow wide-ranging discretion on the Minister. As an employee cannot continue to refuse to work if the Minister does not proceed with an investigation, the Minister’s ability to dismiss complaints without investigation could result in workers returning to unsafe conditions.  Worker advocates will be closely following how these amendments are interpreted and applied by employers and the courts.

[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 26, 2014, the Federal Court rendered its judgment overturning a decision of a grievance adjudicator under the Public Service Labour Relations Act. The Applicants were a group of employees who alleged they had been denied overtime opportunities contrary to their Collective Agreement. The adjudicator of their grievances rejected the arguments presented by the employer, but nonetheless dismissed the grievances on grounds that had never been argued or discussed during the hearing.

In its judgment (2014 FC 1136), the Federal Court held that the adjudicator had violated the Applicants’ rights to procedural fairness by denying them an opportunity to present evidence and arguments on the issue that formed the ultimate basis for the adjudicator’s decision. This decision confirms that, where an administrative decision-maker wishes to depart from the case as argued by the parties and render a decision on the basis of a new issue or argument, the decision-maker is obligated to give the parties an opportunity to make submissions on that new issue.

The Applicants were represented on the judicial review by Amanda Montague-Reinholdt of our firm.