Labour and Employment Law Blog

On March 23, 2020, the British Columbia government passed two amendments to the B.C. Employment Standards Act, RSBC 1996, c. 113. There are now two new unpaid, job-protected leaves of absence for eligible B.C. employees: sick leave and COVID-19 related leave. Unfortunately, the changes do not provide much relief to B.C. employers. In particular, B.C.’s inflexible ...

There have been several developments across the country since our previous blog post (Keeping Cool: An Employer’s Guide to COVID-19 in the Workplace). On March 17, 2020, British Columbia declared a state of emergency. It is initially in effect for 14 days, but may be extended or rescinded as necessary. Other provincial governments across the country are taking similar ...

COVID-19 has now been characterized as a pandemic by the World Health Organization. Although the number of reported cases in Canada is currently low in comparison to some other countries, public health authorities have cautioned that this situation may change rapidly. As part of this quickly changing situation, employers need to be prepared to address related workplace ...

A recent decision of the British Columbia Human Rights Tribunal (the “Tribunal”) held that a professor telling a subordinate employee (the “Complainant”) that “you will have to let me know if this is a misstep but I am crazy about you” (the “Comment”) did not constitute sexual harassment pursuant to the B.C. Human Rights Code.

Background Facts

The ...

In the recent case of Quach v. Mitrux Services Ltd., 2020 BCCA 25 (CanLII), the British Colombia Court of Appeal clarified how mitigation applies to fixed-term contracts, commented on when aggravated damages may be awarded in wrongful dismissal cases, and mused about the necessity of fresh consideration to ensure the enforceability of new contractual terms.

In this case ...

Valentine’s Day is almost here. This is not intended to remind you to love your employees and coworkers. You shouldn’t “love” them anyways. Just do your job, be professional and go home happy, which is what some of the employees I dealt with over Halloween and Christmas should have done. There are times, however, when people choose to express their creative side at ...

Employment agreements frequently contain saving provisions, also known as fail-safe provisions. These provisions are meant to ensure that if an employee’s employment agreement provides for less than the statutory minimums upon termination, the employee will receive the statutory minimums instead.

Employers should be wary of putting too much faith in saving provisions’ ability to uphold illegal termination clauses. The Ontario Court of Appeal’s recent decision in Rossman v. Canadian Solar Inc., 2019 ONCA 992 confirms that a saving provision will not fix an employment standards violation.

Background

Mr. Rossman’s employment agreement termination clause contained a saving provision that stated:

In the event the minimum statutory requirements as at the date of termination provide for any greater right or benefit than that provided in this agreement, such statutory requirements will replace the notice or payments in lieu of notice contemplated under this agreement.

However, the termination clause ended with the phrase “Benefits shall cease 4 weeks from the written notice.” This statement would violate the Ontario’s Employment Standards Act, 2000 (the “ESA”) after Mr. Rossman completed five years of service. Canadian Solar Inc. terminated Mr. Rossman without cause just under two years after he signed his employment agreement. Mr. Rossman brought a wrongful dismissal claim. The lower court found that the termination clause was void and unenforceable, and awarded Mr. Rossman common law reasonable notice.

The Decision

The Court of Appeal dismissed the appeal.

The court rejected Canadian Solar Inc.’s argument that the clause did not violate the ESA because it gave Mr. Rossman greater benefits than the statutory minimum if he was terminated in the first three years of his employment. The court held that it did not matter that the clause accorded with the ESA in certain circumstances. As the clause was offside of the ESA notice requirements at the outset, it was void and unenforceable. The court could not save the clause with the benefit of hindsight.

The court held that the termination clause was void and unenforceable because it was ambiguous. On termination, an employee is presumed to be entitled to common law notice of termination, unless the employee’s employment agreement clearly specifies some other period of notice. The parties’ intention to displace common law notice must be clearly expressed in the contract language used by the parties. When a termination clause could reasonably be interpreted in more than one way, courts choose the interpretation that gives the greater benefit to the employee.

In this case, the court found that the termination clause was ambiguous and the ambiguity was not erased by the saving provision. The initial 'ESA trumps' language and the concluding 'but nothing above 4 weeks' language were at odds. The court held that a saving provision cannot be used to rewrite a termination clause that attempts to contract out of employment standards legislation.

The court explained the policy rationale behind its decision: employees need to know the conditions of their employment with certainty and employers must have an incentive to comply with the ESA's minimum notice requirements. As such, employers cannot be permitted to draft provisions that take advantage of the fact that many employees are unaware of their legal rights.

Takeaway

Western employers can take the Ontario Court of Appeal’s comments regarding termination clauses with a grain of salt, as courts in Ontario tend to be stricter in their interpretation of termination clauses. However, the Rossman decision does follow Shore v. Ladner Downs, [1998] B.C.J. No. 1045 (B.C.C.A.), a seminal B.C. case that stands for the proposition that for a termination provision to be valid, it must be valid at all times. Ultimately, employers are always better off ensuring that their termination clauses are enforceable so as not to depend on saving provisions. Employers who have questions about the enforceability of termination clauses in their employment agreements may contact members of our Labour and Employment Group.

Whether you are looking for reasons to celebrate something with your employees, Data Privacy Day on January 28 is a good excuse.

It is well recognized that employees are a leading cause of data breaches.  It often occurs as a relatively innocent email sent to the wrong address, or an email with the wrong attachment.  It could be a lost or stolen USB storage device or laptop without ...

On January 1, 2020, changes to the Northwest Territories Employment Standards Act (the “Act”) and the Employment Standards Regulation (the “Regulation”) came into force. The substantive changes include new job-protected leaves of absence, additional restrictions on youth employment, and new protections for domestic workers. These amendments follow ...

Continuing our seasonal theme of “legal gifts” for employers, a recent decision of the British Columbia Provincial Court provides a glimmer of hope for employers with respect to notice of termination of employment for short service employees. 

In Brash v. Gustafson’s Auto Service Ltd., 2019 BCPC 259, the plaintiff, William Brash, accepted employment as Sales ...