Employment Law l Emerging Law

Employment law is forever shifting and adapting as new cases come to trial. Landmark decisions provide the foundation by which similar issues will be judged in the future. A very good example of this principle is the Supreme Court of Canada decision in Keays and Honda, referenced below, which made dramatic revisions to its earlier decision in the 1997 decision of Wallace and United Grain Growers.

Ontario claims involving alleged human rights violations, often used in the past to argue for higher severance as in Wallace, will be subject to new claims as of July 1, 2008 with the passing of the new Ontario Human Rights Code, section 46.1, which states:

If, in a civil proceeding in a court, the court finds that a party to the proceeding has infringed a right under Part I of another party to the proceeding, the court may make either of the following orders, or both:

1. An order directing the party who infringed the right to pay monetary compensation to the party whose right was infringed for loss arising out of the infringement, including compensation for injury to dignity, feelings and self-respect.

2. An order directing the party who infringed the right to make restitution to the party whose right was infringed, other than through monetary compensation, for loss arising out of the infringement, including restitution for injury to dignity, feelings and self-respect. 2006, c. 30, s. 8.

Listed below are are recent cases which have had significant impact on employment law issues in Canada. Trial decisions pre 2004 are not web based. Court of Appeal decisions in Ontario are web based from 1997 forward.

  Wallace vs United Grain Growers

 The Supreme Court of Canada in Wallace determined that "normal notice periods" will be enhanced when the employer's conduct falls short of the implied duty of fair dealing.
Many trial examples later Wallace in increasing notice periods due to (1) arguments made of just cause which had been later abandoned shortly before trial; (2) a breach of a public statute such as the Ontario Human Rights Code (3) and such as the Ontario Employment Standards Act requirement to make minimum payments on termination. In addition the failure to pay commissions owing on termination, and failure to provide a letter of reference have also allowed for an increase to the notice period.

This decision dramatically altered the remedy available on termination, where the employer acted unfairly at the time of termination.

The Honda case decided in June of 2008 again revised the remedy in cases based on emotional distress suffered due to such unfair conduct by basing such a claim on the extent of proven damages for such a claim, rather than an increment to the severance award.

Honda did not deal with tangible losses, due to such conduct, such as an increased economic loss, which still may be based on an increased severance award.

 
  Whiten vs Pilot Insurance Company

When the Whiten house burned down in Renfrew Ontario, the insurer denied liability, asserting that the Plaintiff Daphne Whiten was the cause of the fire herself and had committed arson.

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  Sylvester vs. Province of British Columbia

Before Sylvester, the Ontario Court of Appeal decision in , determined the law with respect to an employee who was fired and suffered a medical illness in the notice period. This case should be followed with caution give the Ontario Court of decision in Egan v Alcatel.
  New Cases on Restrictive Covenants

Restrictive covenants tend to be common in the dentistry profession. Quite often professionals are governed, however, by an obligation to look after the welfare of the patient.

 
  McKinley vs. BC Tel

The Supreme Court has set new rules on dismissal for performance reasons. Both employers and employees should be aware of this decision. Essentially this case stands for the proposition that arguments of just cause must be weighed in the context of the length of the relationship, the gravity of the alleged offence and other prevailing factors. None of this should really be startling news, but this case does show that there should be any dogmatic principle such as every act of dishonesty must mandate summary dismissal without compensation.

 
  Prinzo vs. Baycrest

The Ontario Court of Appeal contemplates a Wallace extension with no mitigation offset.

 
   

Keays vs. Honda The Supreme Court of Canada has made significant revisions to the Wallace decision referenced above. Although the same duty of good faith remains in place, the plaintiff is now required to sue for emotional distress damages to recover for intangible injuries. The Court also rejected factually the award of punitive damages made by the trial judge, initially of $500,000, later reduced to $100,000 by the Ontario Court of Appeal. It remains arguable that unfair conduct which makes the task of seeking alternate employment more difficult  ( tangible damages ) will cause an incremental severance award.