Legal Update on Managing HR Exposure: Key Cases & Compliance Tips

1. Presentation to Financial Executives International (FEI)Tuesday, January 20, 2009, Winnipeg Winter Club, 8:00 - 9:15 a.m.Legal Update: "Managing Human Resource Exposure"Human Rights, Employment Standards,Recent Important CasesGrant Mitchell, Q.C.

2. Issue #1: Overtime • Exemption — standard hours of work and overtime • 2(4)    Division 2 (standard hours of work) and Division 3 (overtime) of Part 2 do not apply to any of the following: • (a) an employee who performs management functions primarily;

3. (b) an employee who has substantial control over his or her hours of work and whose annual regular wage is at least two times the Manitoba industrial average wage, as defined by regulation. • - note absence of word “unfair” from (a) • - Labelle v. Fairmont Hotel (Dec. 15/08) • - Koropeski v. American Biaxis Inc, [2008] MJ 396

4. SCC cases: • - Evans v. Teamsters, Local 31, [2008] SCC 20 • - employee terminated, then invited to return to work • - refused to come unless his wife got a job too • - and if the termination notice were rescinded • - trial judge agreed and gave 22 months notice • - SCC said he should have gone back to work to mitigate his damages

5. - difference between “severance” and “notice” • - must return to work unless unreasonable to do so • - look for embarrassment, humiliation, hostility • - if working conditions similar and if work not demeaning • - if personal relationships are not acrimonious

6. Keays v. Honda Canada Inc., [2008] S.C.C. 39 • trial judge awarded $500,000 in punitive damages - 14 year employee developed Chronic Fatigue Syndrome - got 15 months basic notice + 9 months of Wallace damages - Ont CA upheld the Wallace damages, but reduced punitives to $100,000 - SCC removed both Wallace damages and punitives, altogether

7. - Wallace damages gone, replaced by “aggravated damages” – a lot harder to get - punitive damages reserved for most extreme cases - look for independent actionable wrong

8. Aggravated damages where: • - apply when employee's reputation attacked in bad faith • - or when reason given for decision is false • - or when termination is to avoid an employee entitlement such as pension • * also note that aggravated damages are arguably not taxable (same as punitives) – Wallace damages taxable

9. Hydro Quebec, [2008] SCC 43 - duty to accommodate scaled back • - employee missed 960 days in a 7.5 year time span (1994 - 2001) • - various accommodations provided over the years • - many graduated returns to work after depressive episodes • - personality disorders made relations with various supervisors difficult

10. - her doctors put her off work for an indefinite period of time which had reached 5 months at the time of the termination of her employment for frustration of contract • - arbitrator dismissed the termination grievance, but Court of Appeal reversed that, saying that the employer had not shown that it was impossible to accommodate her • - SCC says test is not "impossibility", but undue hardship

11. "If the characteristics of an illness are such that the proper operation of the business is hampered excessively or if an employee with such an illness remains unable to work for the reasonably foreseeable future even though the employer has tried to accommodate him or her, the employer will have satisfied the test.“ - decision is also consistent with the SCC's decision in January, 2007 in McGill Hospital, [2007] 1 S.C.R. 161

12. - Court also found that accommodation efforts are to be evaluated based on the entire period of employment, not just a snapshot at the point of termination • - some hope for employers that employment relationships can be terminated for frustration without violating the dutyto accommodate