If you have a potential legal issue related to your employment, the first question you must ask is: what are my rights as an employee? Put another way: what are the terms and conditions of my employment? Those terms and conditions will determine what you are entitled to if you are fired, or whether the employer can change your working conditions without your agreement. The terms of your employment come from three general sources: your employment contract; the common law; and employment-related legislation.

Your Employment Contract Terms and Conditions 

The foundation for the employment relationship between you and your employer is your employment contract. This contract can be verbal or written—as long as there has been an offer of employment on certain terms, and an acceptance of that offer, a contract of employment will be formed. No matter the form of your employment contract, you should review its terms and conditions carefully to ensure you understand them.

In some circumstances, the terms in an employment contract may be found invalid by the courts. For example, if the terms in the contract violate employment standards legislation, discussed below, those terms will be considered void. In rare cases, courts may also find that a term in an employment contract is unconscionable (grossly unfair to the employee, and agreed to as a result of an overwhelming imbalance in bargaining power). When interpreting an employment contract, if a term in the contract is ambiguous and open to multiple interpretations, courts will favour the interpretation that is more favourable to the party that did not draft the contract (usually, the employee).

If you are unsure about the terms and conditions of your employment contract, or their validity, you should seek legal advice from an employment lawyer.

The Common Law

In addition to the terms and conditions that are “expressly” set out in your employment contract, there are also terms and conditions that are “implied” under the common law (a set of legal principles developed through court decisions). If a certain employment right is not addressed through an express term in your contract, it may nonetheless be implied under the common law.

The most common example of an implied term of employment is the requirement for employers to give reasonable notice to employees upon termination. It is possible that your employment contract states how many weeks or months of notice you are entitled to in the event you are terminated; however, if your contract is silent on that point, then your entitlement to notice of termination is determined through common law legal principles. (See our article on “What is Reasonable Notice?”  for more information.)

There are many implied terms in the common law, which impose obligations on both employees and employers. The primary implied obligations for employees are to attend at work and perform the work assigned to you. Employers also have implied obligations, such as the duty to pay employees for work performed, and, as mentioned above, the duty to provide reasonable notice of termination.

It is important to remember, however, that it is possible for you and your employer to agree to terms and conditions in your contract that differ from the common law principles. In order for those different terms to be accepted by a court, they must be clearly stated.

Employment-Related Legislation

Both of the above sources of rights and obligations—the employment contract, and the common law principles—are subordinate to legislation (written laws passed by the federal Parliament or provincial legislature). Unlike common law principles, employers and employees cannot agree to terms of employment that violate legislation.

The main legislation that relates to your employment is employment standards legislation: for employees regulated under Ontario law, the relevant legislation is the Employment Standards Act. This legislation establishes a “floor”, or a minimum set of employment standards, which your employment contract cannot fall below. This legislation addresses many terms of employment, including wages, hours of work, holidays, and the minimum required notice of termination. As mentioned above, if a term in your employment contract falls below the minimum employment standards, it will be considered void by the courts.

It is important to note that certain types of employees, and certain industries, are excluded from employment standards legislation, which means its terms do not apply to those employees. Some employees are subject to federal employment standards legislation, because they work in an industry that falls under the federal Parliament’s jurisdiction. Advice from an employment lawyer should be sought to determine which legislation applies to you.

Other legislation is also relevant to your employment, including legislation in the following areas: occupational health and safety; privacy; workers’ compensation; and human rights. An employment lawyer can help you understand which legislation applies to you, and how it may impact your employment issue.

Conclusion

Your rights as an employee come from many sources, and as a result understanding your rights is no easy task. These rights will impact a claim you may have for wrongful dismissal, constructive dismissal, or other breaches of your employment contract. The best way to fully understand the terms and conditions of your employment is to review them with an employment lawyer, and obtain advice on how your contract, the common law, and legislation all interact to determine your rights as an employee.

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

[The following information applies to non-unionized employees. Unionized employees should consult their union representatives to review questions regarding the terms of 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.]

Kim Patenaude will be presenting a Post-Conference workshop on “Dealing with Discharge and Discipline: Progressive discipline, mitigating and aggravating factors, disability-related issues, union representation, post-discharge rehabilitation” for Lancaster House on Friday, December 12 at the Westin Harbour Castle in Toronto.

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.