T ORONTO S ARNIA S AULT S TE . M ARIE

2. TORONTO SARNIA SAULT STE. MARIE Legal Update – Labour & Employment Law and the Staffing Industry Presentation to:ACSESS Spring Symposium Thursday, May 31, 2007 Presented by: H. P. Rolph Barrister & Solicitor Mathews, Dinsdale & Clark LLPOne Queen Street East, 25th FloorToronto, ON M5C 2Z1 Tel 416.862.8280Fax 416.862.8247

3. TORONTO SARNIA SAULT STE. MARIE This is not intended as legal advice

4. Setting the Terms of the Relationship TORONTO SARNIA SAULT STE. MARIE • Whatever the terms, the relationship is contractual • Contracts are enforceable by legal action • Paper is important

5. Offer of Employment Letter TORONTO SARNIA SAULT STE. MARIE • Make it clear that certain conditions must be satisfied before hiring • i.e., medical testing, reference checks and possible immigrations matters

6. Setting the Terms of the Relationship TORONTO SARNIA SAULT STE. MARIE • What are the terms? • Pay rate (may be variable) • Hours of work (may be flexible) • Overtime requirements • Days of work • Vacation entitlement • May be required to sign client confidentiality agreements

7. Temporary or Contingent Nature of Work or Assignments TORONTO SARNIA SAULT STE. MARIE • Very important to spell out that there is no guarantee of work or duration of work • Make it clear that the client requirements will determine both quantity of work and duration of work

8. Termination Provision TORONTO SARNIA SAULT STE. MARIE • Will employee be subject to probation period • If it is intended to mean that employee can be terminated without notice or any compensation in lieu during probation period, state it in offer letter

9. Termination Provision TORONTO SARNIA SAULT STE. MARIE • State that the employee can be terminated at any time without notice or compensation for cause • Consider providing that the employee can be terminated with notice or termination pay or combination of notice and termination pay required under the Employment Standards Act, 2000 (or equivalent in provinces outside Ontario) and have no additional entitlements to notice of termination or compensation in lieu at common law

10. Termination Provision TORONTO SARNIA SAULT STE. MARIE • Added proviso: “In no event will you receive less than your minimum entitlements on termination under the Employment Standards Act, 2000.” • If it is intended that the employee be “term or task” employee within the meaning of the Termination and Severance Regulation under the Employment Standards Act, state it • See sections 2(1)10 and 9(1)9

11. Other Terms TORONTO SARNIA SAULT STE. MARIE Regular staff: • Provisions regarding benefits, bonus or commission payments • Right to relocate to different offices • Right to re-assign clients and territories

12. Restrictive Covenants TORONTO SARNIA SAULT STE. MARIE • Non-Competition Clauses • Non-Solicitation Clauses • Confidentiality Clauses

13. Restrictive Covenants TORONTO SARNIA SAULT STE. MARIE Non-Competition Clauses • Very difficult to enforce in Ontario where between employer and employee • At a minimum must be restricted as to geographic scope and duration

14. Restrictive Covenants TORONTO SARNIA SAULT STE. MARIE Non-Solicitation Clause • Courts are much more likely to enforce • Must be reasonable in terms of scope and duration • Narrower and shorter is better in terms of likelihood of enforcement

15. Restrictive Covenants TORONTO SARNIA SAULT STE. MARIE Non-Solicitation Clause • Example: “For a period of 6 months following the termination of your employment, you will not directly or indirectly for any reason seek to provide temporary workers or any other services competitive to those of X Corporation to any client or prospective client of X Corporation with whom you have dealt during the last 18 months of your employment with X Corporation or your entire term of employment with X Corporation, whichever is the shorter”

16. Restrictive Covenants TORONTO SARNIA SAULT STE. MARIE Confidentiality Clause • Properly drafted confidentiality clause that deals with confidential business information will be enforced

17. Restrictive Covenants TORONTO SARNIA SAULT STE. MARIE General • If contract is to contain non-compete, non-solicitation and confidentiality clauses, put clauses into separate paragraphs • Also have a severability clause

18. Important Rules for Employment Contracts TORONTO SARNIA SAULT STE. MARIE • Do not offer employment with “contract to follow” • Do not allow the employee to work or refer the employee to a client until the employee has signed contract or offer letter

19. Terminations for Cause TORONTO SARNIA SAULT STE. MARIE • Cause is serious misconduct that goes to the root of the employment relationship • Supreme Court of Canada has indicated that misconduct must be examined in context of the specific employment relationship

20. Terminations for Cause TORONTO SARNIA SAULT STE. MARIE • Some types of dishonesty or clearly outrageous conduct like engaging in a drunken brawl with a client may not constitute cause in the case of a long service employee with an otherwise good employment record • Very important to let the employee have the opportunity to explain his or her actions before terminating

21. Termination for Cause TORONTO SARNIA SAULT STE. MARIE • Do not make a “snap” decision to terminate for cause • Terminations for cause where the employer cannot prove cause will likely be very expensive for the employer • “Hardball” approach can be hard on the employer too

22. Terminations for Cause TORONTO SARNIA SAULT STE. MARIE • Damage to an employee’s reputation • The Wallace factor • Punitive Damages award against employers for arbitrary and callous conduct

23. Keays v. Honda case TORONTO SARNIA SAULT STE. MARIE • Wrongful dismissal of an employee diagnosed with Chronic Fatigue Syndrome • Employer argued just cause for failure to obey an order to see the Company doctor • Courts found no just cause due to discriminatory and harassing treatment • Courts relied on breaches of Human Rights Code to award punitive damages

24. The Price for Honda’s Mistakes… TORONTO SARNIA SAULT STE. MARIE • Finding of no just cause for termination • 15-months notice, + 9 months due to “egregious bad faith” conduct by Honda • $100,000.00 punitive damages due to “discrimination and harassment” contrary to Human Rights Code by Honda • Payment of employee’s legal costs with a premium! • Leave to appeal to Supreme Court of Canada granted • We have not yet heard last word

25. Human Rights TORONTO SARNIA SAULT STE. MARIE • A lot is happening in Ontario

26. Race Place of origin Ethnic origin Creed Sexual orientation Record of offences Marital Status Ancestry Colour Citizenship Sex Age Disability Family Status Prohibited Grounds of Discrimination in Ontario TORONTO SARNIA SAULT STE. MARIE

27. Mandatory Retirement TORONTO SARNIA SAULT STE. MARIE • Mandatory retirement at 65 abolished in Ontario as of December 12, 2006

28. Mandatory Retirement TORONTO SARNIA SAULT STE. MARIE • Age 65 cut-off in pension, LTD plans and other benefits plans still permitted where allowed under Employment Standards Act, 2000

29. Mandatory Retirement TORONTO SARNIA SAULT STE. MARIE • Where there are concerns about older employee’s performance, they should be brought to employee’s attention and documented • Where a client is unhappy with employee, it may be prudent to find out why and document that as well

30. Guide to Releases with Respect to Human Rights Claims TORONTO SARNIA SAULT STE. MARIE • OHRC has published guide with respect to releases • Available at http://www.ohrc.on.ca • Commission takes aim at “Standard Form Releases”

31. Ontario Human Rights Commission Tips TORONTO SARNIA SAULT STE. MARIE “An employer should, at the time of termination, ask the employee orally or in writing whether there are any outstanding human rights issues or concerns It is important to give the employee a reasonable opportunity to consult with independent counsel or an advisor before being required to answer the above question or to sign a legal release Reasonable requests for an extension of time should be granted”

32. Ontario Human Rights Commission Tips TORONTO SARNIA SAULT STE. MARIE “Where the answer is "yes," it is optimum to also prepare Minutes of Settlement, in addition to the release, which will expressly deal with the human rights issue In addition, where the answer is "yes," the text of the standard form of release should be altered to include a clause that separately recognizes that there is a human rights issue or complaint that has been fully and finally resolved between the parties”

33. Ontario Human Rights Commission Tips TORONTO SARNIA SAULT STE. MARIE “To avoid claims of unwarranted pressure or duress, it is optimum that an employer not accept a signed release on the same day as termination (even where the employee offers to sign it on that day) Employers wishing to guard against a claim that they have not compensated a complainant for the human rights issue should consider demarcating in the settlement specific sums for each “head” of damages, such as severance, termination, vacation pay and wages, as well as a set amount in compensation for any alleged human rights concern”

34. Ontario Human Rights Commission Tips TORONTO SARNIA SAULT STE. MARIE “The employer should state that the employee will receive his or her statutory entitlements (wages owed, vacation pay, statutory termination or severance payments) regardless of whether he or she signs the release The release itself should contain a clause which makes it clear that the signing of the release was not a precondition for the payment of these statutory entitlements”

35. Ontario Human Rights Commission Tips TORONTO SARNIA SAULT STE. MARIE “Termination meetings should be conducted with dignity, ensuring privacy, and with the employer exhibiting professionalism If an employee has allegedly engaged in criminal wrongdoing, such as theft or fraud, the employer should not promise to refrain from contacting the police in exchange for a release Where the employer has a reasonable basis to believe that an employee is experiencing a mental disability that could impair his or her judgment, he or she should request the employee to obtain medical clearance before signing the release"

36. Minimum Requirements for Release TORONTO SARNIA SAULT STE. MARIE • The employee must receive more than his or her minimum statutory entitlements under the Employment Standards Act • Signing the Release must not be a condition for receiving minimum statutory entitlements • Employee must specifically acknowledge that, having knowledge of his or her rights under the Human Rights Code, the employee has no claims under the Code arising from employment or termination thereof as of the date on which the Release is executed and undertakes not to bring a complaint based on anything that has occurred on or before the date on which the Release is executed

37. Minimum Requirements for Release TORONTO SARNIA SAULT STE. MARIE • The employee is given and acknowledges in the Release being given the opportunity to obtain independent legal advice • The employee is given at least 7 days to consider termination settlement being offered before being required to accept the settlement and sign the release

38. Ontario Human Rights Code Amendments TORONTO SARNIA SAULT STE. MARIE Background on Bill 107 • Received Royal Assent on December 20, 2006 • Many key provisions not yet in force • Significant amendments

39. Ontario Human Rights CodeAmendments TORONTO SARNIA SAULT STE. MARIE • The Role of the Ontario Human Rights Commission will be changed • The Commission will no longer be a “gate keeper” on complaints being referred to a Tribunal • Complainants have the right to push their claim to a hearing • The Commission will play a more general, broader role in addressing human rights issues

40. Human Rights Legal Support Centre TORONTO SARNIA SAULT STE. MARIE • Provisions added to final version of Bill 107 to set up new Human Rights Legal Support Centre • Role is to provide publicly funded legal advice to complainants • To date, little detail…

41. Some Other Key Changes to Note TORONTO SARNIA SAULT STE. MARIE • Human Rights claims can be incorporated into a wrongful dismissal action • The Court may now order for breach of Code: • Monetary compensation • Restitution other than monetary compensation for breaches of Human Rights Code • Expect to see more cases relying on Keays v. Honda

42. Some Other Key Changes to Note TORONTO SARNIA SAULT STE. MARIE • Orders the Tribunal may make: • Monetary compensation • Restitution other than monetary compensation • Other orders • $10,000.00 “cap” on damages for mental anguish gone

43. Interim Measure TORONTO SARNIA SAULT STE. MARIE • Commission has undertaken a pilot project to expedite the mediation and investigation of human rights complaints