Elisa: Good morning, everyone. My name's Elisa Scali. I'm a partner with Gowling WLG, practicing in the Ottawa office as part of the Employment Labour and Equalities group. I'd like to welcome you today to the sixth webinar of our 6 part webinar series that's being presented by the Employment Labour and Equalities group. If you missed our previous webinars the recorded sessions are available online and the link to the sessions will be posted in the chat today. So for our grand finale we'll be ending our webinar series with the 'Year in Review'. During this session we'll discuss the cases and the legal developments that most impacted employers in the last 12 months. I'd like to introduce you to our distinguished panel of speakers today, all Gowling WLG partners practicing in the Employment Labour and Equalities group. They all advise on topics related to employment law and the employment relationship from A to Z.
Andrew Bratt is the National Practice Group Leader of our Employment Labour and Equalities group. He is located in Toronto. In addition to Andrew's day job as a lawyer, he says he moonlights as a professional puppeteer for his two daughters, age 4 and 7. They now insist on a puppet show involving all of their stuffed animals on a nightly basis. Andrew puts on a pretty good show but I don't think he's going to be quitting his day job anytime soon.
Mark Josselyn is the Leader of the Ottawa Employment Labour and Equalities group, in Ottawa. After empty nesting for some time Mark and his wife, Susan, have become new parents again. Teigen is a 14 week old petite Goldendoodle who has her parents partially trained. Teigen has made an appearance on one or two Zoom calls and she is quite adorable.
Neena Gupta is a partner in our Waterloo office and she is the co-Chair of the firm's Equity, Diversity and Inclusion council. Neena, her husband and her horse obsessed son moved to a 20 acre horse farm at the beginning of the pandemic. Lucky her. She set up her office in the new to her 1882 stone country home and learned to relax by watching gorgeous horses playing in the paddocks, which sounds amazing.
After the presentation we will have a Q&A session. If you have any questions please post them in the Q&A and we will do our very best to answer those questions for you and, rest assured that the PowerPoint presentation that you'll be seeing today, a link will be provided after the session. So before we begin just a little legal disclaimer. We're providing you with a very high level overview today so this is not really intended to be legal advice. We always advise you to seek counsel from your Gowling lawyer, or any lawyer, before making any decisions or taking any action. So just keep that in mind for today. So let's get started.
As you can expect the pandemic will be a dominant theme during this Year in Review. As a result of the pandemic many of us have been working from home, and in fact most of us, and you would assume that working from home offers better opportunity for work life balance. However, interestingly, many employees experienced the exact opposite during the pandemic, feeling like there was no real separation between work and personal life. The pandemic has certainly highlighted the need to give employees the ability to disconnect and this became a bigger priority for the government, resulting in the introduction of Bill 27, the Right to Disconnect. Neena, can you provide us a general overview of what we know so far about this potential new law?
Neena: Yes, Elisa. I was thinking when you were saying about the work life balance, one of a tired associate told me that sometimes she felt that she wasn't working from home, but rather sleeping in the office because there was really no separation. What we know so far, quite frankly, isn't much. Bill 27 requires employers with 25 employees or more to create, once it becomes law, to create a policy regarding that employer's policies regarding the right to disconnect and to provide a copy of that policy to their employees. Most interestingly it provides no guidance as to what should be in that policy and I want to remind you that it's quite possible that certain sections, or segments, of your workforce might be exempt. Now, we all know that sometimes a devil will be in the details. It might be in regulations but we don't have the details of what should be in the policy. I recommend that employers start thinking about it and look to France and Europe for guidance as to what should be in a duty to disconnect. Quite often there's guidance about response times on e-mails, or texts or voice mails that are sent after hours and the fact that they don't have to be responded until the employee's next scheduled day of work. I also recommend that you start talking to IT about whether there are ways of delaying or sequestering routine emails, or group emails, unless they are very urgent and also thinking about how you're going to educate your managers and supervisors about the practical implications of duty to disconnect in your workplace. We don't know much, Elisa, except that it was announced with a lot of fanfare and I suspect that once the legislation comes we may get some more guidance from the Ministry of Labour of what they're expecting in those right to disconnect policies.
Elisa:Thank you, Neena, and we will stay tuned for more information on that. Now, keeping with the theme of the pandemic, as a result of the pandemic we know thousands of employees unfortunately were laid off and we've also seen some employees that are claiming that those layoffs were in fact dismissals. Andrew, can you tell us if we have any guidance from the courts regarding whether employers are truly at risk for termination claims arising from those layoffs?
Andrew:Yeah for sure. Thanks, Elisa, and thanks everybody for being here today. I actually can't believe that we're presenting our Year in Review presentation already. It doesn't feel like it's the end of the year. It feels like yesterday that we were all saying good riddance 2020 and welcoming 2021. But anyway here we are. We do have some guidance. I'm not sure we have a great degree of clarity just yet. But just to sort of set the context, Ontario Regulation 228-20, the Infectious Disease Emergency Leave, which we colloquially refer to as IDEL, provides temporary relief measures from the termination and severance provisions of the Employment Standards Act. So at some point in May or June of 2020, the Ontario Government realized that if they didn't do something very quickly then all of these layoffs, that happened as a result of the pandemic, were going to automatically convert into deemed terminations under the Employment Standards Act and obviously would leave a great number of people out in the labour market and employer's with severance obligations. Regulation 228-20 was implemented and it provided temporary relief from those layoff provisions by effectively deeming anybody who was laid off during what is referred to as the 'COVID period'. As a result of COVID they were deemed to be on an infectious disease emergency leave as opposed to a layoff. The problem is that IDEL amends only the Employment Standards Act rules related to layoffs and really has no impact on a common law constructive dismissal claim. So the interaction between IDEL and the common law is complex and uncertain. So far we have seen three decisions, to my knowledge, out of the courts addressing this particular issue. Two which have effectively held that a layoff, even in the face of a global pandemic, is in fact a constructive dismissal and one which said the exact opposite.
So the very first decision, we can just move to the next slide, please. One more slide. So the very first decision was Coutinho versus Ocular Health Centre. It involved an office manager who had received written notice that she was being temporarily laid off, without pay, as a result of the COVID-19 pandemic. In that decision Justice Broad found that the written notice that had been provided to the employee, that she was being laid off, did in fact amount a constructive dismissal because the employer did not have the contractual right to impose a layoff. So we know that just because the Employment Standards Act references a temporary layoff, doesn't provide the automatic right to make use of that recourse. So the starting point of Justice Broad's analysis was section 8(1) of the Employment Standards Act which states that subject to section 97, no civil remedy of an employee against his or her employer is affected by this Act. In other words there's nothing in the Employment Standards Act that is intended to prohibit you from filing a claim for constructive dismissal before the courts. So it was found that the scope of the IDEL regulation is constrained by this section of the Employment Standards Act and, as a result, Coutinho was not barred by the IDEL regulation from bringing an action, at common law, for constructive dismissal. One nothing in favour of employees, so far.
Days after the Coutinho decision, we can just move forward to the next slide, please, the Court released its decision in Fogelman versus IFG. Now the decision in Fogelman was virtually identical to the decision in Coutinho, even though it makes absolutely no reference to Coutinho, but the Court found that the IDEL regulation does not affect an employee's right to pursue a civil claim for constructive dismissal at common law, and again, as a result of section 8(1) of the Employment Standards Act. So by this point we have two decisions now that are effectively saying, we appreciate that there was a global pandemic, government mandated restrictions, nonetheless the law hasn't changed. You cannot, in the absence of a contractual provision to the contrary or an implied term, temporarily layoff an employee without pay. So employers across the country are not particularly pleased at this point but at least we think we've got some degree of clarity.
Then we get the Ontario Superior Court's decision in Taylor versus Hanley Hospitality, where Justice Ferguson comes to the exact opposite conclusion, and even goes so far as to state that Coutinho was wrong, in law. So this is not a situation where there are a different set of facts and the Judge is differentiating this case from Coutinho or Fogelman. In this particular decision Justice Ferguson specifically states that the Court got it wrong in Coutinho and Justice Ferguson states that Coutinho's interpretation, section 8(1) of the Employment Standards Act, offends the statutory interpretation as it would effectively render IDEL meaningless. He says that no matter which authority one wants to consider on this point, it offends the rules of statutory interpretation to give an interpretation that would render legislation meaningless. In other words it would create an unreasonable and an absurd and untenable result if we were to apply the reasoning from Coutinho. Taylor also referred to a previous Appellate Court decision which stands for the proposition that the Employment Standards Act can displace the common law in certain circumstances. What's interesting to note is that Taylor is currently being appealed to the Ontario Court of Appeal and so unless the government decides to introduce new legislation providing clarity on this point, between now and then, we'll simply have to wait for the Court of Appeal to weigh in and solve this issue once and for all. So I think that's good news because regardless of which way the Court decides, at least we'll have clarity at that point, as the Court of Appeal case will be binding on our lower courts and should, in theory, resolve this dispute. So that's sort of where we're at right now but I think the takeaway from what we've seen thus far is, that for the time being, employers continue to face substantial risk for breach of contract and/or constructive dismissal claims as a result of layoffs that may have been used during the course of the pandemic.
Elisa:Thanks, Andrew. I guess we'll just have to wait for that Court of Appeal decision to get that further clarity. Keeping with the theme of terminations, we often have to determine what must be included in a termination package, specifically the issue of whether stock options and bonus must be included is an issue that has been before the Courts recently. Mark, how did the Court grapple with this issue and what can we learn from these decisions?
Mark: Thanks, Elisa. We're going to start with the Supreme Court of Canada decision in Matthews and Ocean Nutrition. We got guidance from the Supreme Court of Canada, as to the entitlements of employees on a termination of employment, when it comes to various aspects of incentive compensation. For years we dealt with the Veer Presumption and Veer was the leading Ontario Court of Appeal decision on point but now we have Matthews and Ocean Nutrition. You'll see from the slide this was a case involving a senior executive with 14 years of service, earning $142,000.00 but he also had, as part of his compensation, bonus and he participated in their long term incentive program. There was a bit of a donnybrook. He resigned. Alleged constructive dismissal and then 13 months after this departure the defendant was sold for 440 million dollars. It came to the Supreme Court of Canada through the Court of Appeal and they had to determine whether the quantum of damages, for breach of the implied term to provide reasonable notice of termination, should include any entitlements under the LTIP. The Courts asked whether, but for the termination, the employee would have been entitled to such benefit as part of the compensation during the period of reasonable notice, and if so, do the terms of the employment contract or bonus plan unambiguously limit that common law entitlement? So here we have a realization event, which was the sale of the company, and it took place during the period of reasonable notice which was not in dispute at this point. It was a 15 month period. The claim was not actually for the LTIP itself, but rather the value of the benefit that would have been earned by the plaintiff had the employee received reasonable notice, and it's a big number as you'll see. The question is not whether the bonus plan is ambiguous but whether the wording of the plan unambiguously alters or removes the employees common law rights. The Court also suggested here that in certain circumstances it may be appropriate to examine whether the clause is purporting to limit, or takeaway, an employee's common law rights were adequately brought to the attention of the employee. But here the value of the lost LTIP was over a million dollars, and it's fair to say that employers have been busily redrafting employment agreements since Matthews, when it comes to bonus, LTIP, commission, pension, stock options in light of this decision.
I want to talk very briefly about another case. Those of you who have attended our other ELE seminars will know that very recently, October 18, 2021, the Ontario Court of Appeal dealt with a plaintiff's entitlement to unvested stock awards post termination. That is the now famous Battiston versus Microsoft case. Time does not permit me to provide you with a detailed analysis case, where the trial Judge awarded damages, including compensation for bonus and stock options. In a nutshell, the Ontario Court of Appeal and the trial Judge both agreed that the stock option award agreement unambiguously excluded the plaintiff's right to invest in stock options, post termination. However, the trial judge found that the provisions were harsh and oppressive and that they were not sufficiently brought to the plaintiff's attention. The Ontario Court of Appeal disagreed and overturned that decision noting that the plaintiff, Battiston, had each year for 16 years confirmed that he had read, understood and accepted the terms of the stock option agreement. The Court of Appeal held that Mr. Battiston could not, through such misrepresentation, put himself in a better position than an employee who had in fact read the agreement. So as a result of that we are recommending that all termination and forfeiture provisions be brought to the attention of the employees by having them initial all set provisions. That's all I have to say on that topic, Elisa.
Elisa: Thanks, Mark. Contractual interpretation is always a big issue and when we never know in what direction the Courts will lead us on those issues and keeping with that theme of contractual interpretation, I'd like to turn to fixed term agreements. We've got a lot of questions about terms and fixed terms and, Andrew, I understand that you were dealing with fixed term agreements this year quite frequently. What have the Courts told us about the interpretation of the fixed term agreements?
Andrew: Yeah. So just to be clear here, there hasn't really been any significant developments or changes in the law, as it relates to fixed term contracts. But we do have a decision from the Court this year that, in the last 12 months, that sort of reiterate the challenges and the dangers of using fixed term contracts. I like to say that employer's have a low paid relationship with fixed term contracts and that's because when they're used properly it can be a really effective tool in terms of limiting or mitigating all together severance exposure. That's because the very nature of a fixed term contract is such that you are actually providing, in theory, notice of termination from the outset of the relationship. Both parties know exactly when the agreement is going to come to an end. The danger, however, is that if you don't use, or include, an early termination clause in the fixed term contract, or if you do include one but you don't get it right which it's easy to get it wrong these days with the way our Courts are ruling in favour of individuals, then the damages are not akin to common law reasonable notice but rather the balance of the fixed term. So imagine a scenario where you give somebody a 3, or a 4 or 5 year fixed term contract and a few months into that relationship you realize this isn't a good fit. It's not working out and you want to terminate that agreement. In the absence of that enforceable early termination clause you owe that person the balance of that fixed term which, of course, can be extremely costly. I personally am not a preponement of fixed term contracts. They're extremely dangerous for that reason, and we've seen a plethora of examples in the case law on this point, most recently being the decision in McGuinty versus the numbered company that you see up on the slide.
In McGuinty the Ontario Court of Appeal upheld a lower court decision awarding a former employee 1.27 million dollars in damages, which to my knowledge is one of the highest damage awards ever granted in Canada for constructive dismissal. Without getting into great detail the employee was the owner of a funeral home located in North Bay. The funeral home was a family run business and the employee had operated the funeral home with his brother for the better part of 22 years before they decided that they would sell. The business was sold to the appellant company with a term of the sale being that the plaintiff would be allowed to continue to work at the funeral home, as the general manager, for a fixed term of 10 years. Not surprisingly, or notably I should say, the agreement did not contain any terms dealing with its early termination and a few months into the relationship, or into the agreement, the relationship soured. Eventually Mr. McGuinty went on a brief leave of absence and, before ever returning to work, ultimately alleged constructive dismissal as a result of the way in which he was treated by the appellant company. Ultimately the Court found that he was in fact constructively dismissed and awarded Mr. McGuinty 1.27 million dollars worth of damages. Again, the Court of Appeal was asked to determine whether or not it was in fact a constructive dismissal. Beyond the scope of our discussion today the Court did uphold that decision, but the point is and the reason we're bringing this to your attention is to demonstrate, yet again, that the courts will not apply a common law reasonable notice analysis in the event of an early termination of a fixed term contract. They will simply award the balance of the term regardless of how many years are left. Regardless of how significant the exposure might be. We've seen examples in the case law of 4, 5, 6, 7 years of notice being awarded and here's an example of 9 years and more than a million dollars. Moral of the story, it's an important reminder that while fixed term contracts are appropriate in certain circumstances I would strongly recommend that you exercise a great deal of caution before making use of these agreements, and if you are going to make use of them, you have to be sure to include a properly drafted enforceable early termination clause. So don't take these agreements lightly.
Elisa: Thanks, Andrew. That's definitely an important reminder because I think a lot of employers like to use fixed term contracts in order to limit the length of the relationship but sometimes there are definitely some risks to those fixed term contracts. So now we're going to move on to post-termination. Many employers do worry about what their employees are doing after termination. Whether they're competing, whether they're soliciting and Neena mentioned Bill 27 earlier. This same Bill does include proposed legislation that purports to ban non-competes. It's a part of what some of us are calling the Californization of Canadian employment law. Neena, what impact do you think this legislation will have if it's passed?
Neena: It's really hard to say. So first thing is those of you who have attended prior seminars know that in Canada real non-competes post-termination are very hard to enforce. I've had lawyers say almost impossible. What a pure non-compete is, is something like you will not engage in this business for a period of X months, or years, in a territory or geography that is defined. So except in the situation of where there is a purchase or sale or a lease of a business, pure non-competes are hard to enforce. So not sure how much this legislation actually adds to the current state of the law that it makes it clear that it is wrong. It is actually a violation by an employer to include a non-compete clause in an employment agreement, and the remedy is prescribed that it will not be enforced, which the courts weren't doing anyway. One of the things that really worries me though is when this legislation was presented, Elisa, it was suggested that non-solicitation clauses, so clauses which say the employee will not solicit the client's he or she serviced while an employee of the company, would in fact be enforced. But when I looked at the actual somewhat loose wording in Bill 27, it proposes to ban language that prescribes any activity that is competitive with the employer. I don't think I'm telling tales out of school, quite frankly, which when I say that even in our own firm we don't have a consistent opinion about how the courts or the Employment Standards Branch will interpret this provision. Non-solicitation clauses, in my opinion, are a necessary tool. If you're going to hire a new salesperson, and you open up your entire customer relationship data base to that person, and you introduce that salesperson to all your best clients in the hopes that they will service it well, the last thing you want after you've spent 5, 10 years building up your customer base is having that employee start their own business, or go to your competitor, with all of those customer relationships without having any time to introduce your customers to another salesperson, in my example. So we will find out whether that is fixed.
The commentary to the regulation suggests it was not intended to capture properly drafted non-solicits, but I will tell you, the language in the section itself is so broad that I'm not entirely optimistic about that interpretation and we can only see. One thing that I sometimes recommend, and I don't know if everyone's prepared to do it, is to see if there is some kind of carrot, some kind of reward that we can give an employee who refrains from competing. Now in Britain we have this idea of garden leave. You terminate somebody and you will pay them a period of time to garden, hence the word garden leave, but not be engaged in competition. But I'm thinking of can you have we'll continue to pay you commissions for a certain period of time if you don't compete. You will still be eligible for benefits. You will still be eligible for consideration under the long term incentive plan. Things that incentivize people to behave well. One other thing is, it is clear that the legislation does not act retrospectively. So if you have non-competes and non-solicits already in your agreement, assuming that they are enforceable in accordance with the common law, Bill 27 will not impact upon them. But this is why it's so interesting to be an employment lawyer because the law keeps changing and we keep running to catch up with it.
Elisa: Thanks, Neena. So, again, we'll stay tuned and we'll see where that legislation takes us. Hopefully it is the interpretation that would limit it to non-compete and would exclude non-solicits but we'll see. So back to the theme of terminations. Another issue that seemed to come up this year is who is the employer and the potential that could there be more than one employer? Who ends up being liable for the cost of a termination if you do have this issue? So, Mark, what's the most recent word from the court on this issue?
Mark: Thanks, Elisa. If we can go to the next slide, please. I appreciate that this isn't the sexiest topic. It's pretty dry, but I have to tell you, it comes up surprisingly often. June of this past year, the Ontario Court of Appeal gave us some guidance on the issue of common employer in the O'Reilly and ClearMRI case. You should understand that a common law and employee may simultaneously have more than one employer. One or more corporations can in fact, within an inter-related group, be responsible for employment obligations. If you look at this slide, and the org chart here, you'll see that the parent, or the majority shareholder Tornado, had the majority shares of a company under them called ClearMRI Canada which was the parent of ClearMRI US. In this case Mr. O'Reilly was the plaintiff. He was the CEO of both ClearMRI Canada and ClearMRI US. The companies experienced cashflow problems, if we can go to the next slide. Eventually the employment relationship ended. At the point in time where it ended the plaintiff had lent $50,000.00 US to ClearMRI Canada and was owed back salary of $281,315.00 US. Initially it came to fault judgment against both ClearMRI Canada and ClearMRI US for the $381,000.00, in all manner of things, including salary, vacation, performance bonus and the unpaid loan. So the plaintiff then moved for summary judgment against Tornado and various corporate directors. We can go to the next slide, please. Originally, the Motion Judge set out three factors that had to be examined with respect to this issue. The first was the employment agreement. Secondly was where the effective control resided over the employee and then thirdly, according to the Motions Judge, whether there was common control between the legal entities.
The Ontario Court of Appeal disagreed, overturning the Motions Judge, and confirmed that the doctrine of corporate separateness provides that a corporation is a distinct legal entity and a parent company is not, ordinarily, liable for the debts and obligations of the subsidiary. Corporate separateness has exceptions, of course, and courts can pierce the corporate veil if the subsidiary's just a mere facade. So where there's complete control by the parent over the sub, and the sub is a puppet, and the sub is incorporated for either a fraudulent or improper purpose and used as a shell, then courts will pierce the corporate veil. But the common employer doctrine is different from piercing the corporate veil. A corporation related to the nominal employee will only be found to be a common employer where there's evidence of an intention to create an employer/employee relationship. This intention is key. The subjective thoughts of the parties are irrelevant. You can find an intention to contract sometimes in a contract, but it's an objective test, and you have to look for evidence. Conduct which reveals where the effective control resides is the most germane. So when I say control I mean control over things like the selection process, hiring, compensation and ultimately termination of the employee. A written employment agreement specifying another employer can be a relevant factor, especially if that contract contains an express release against affiliates. But in this case, the arriving decision, the Court of Appeal found that Tornado did not exercise control over the plaintiff as an employee. There was no evidence indicating an intention that Tornado was one of the plaintiff's employers. So a sheer business objective is insufficient on its own to establish a common employer while corporate inter-relationships are a requirement of the common employer doctrine, they are not sufficient alone without evidence of intention to contract. So that leads us into the next case. Next slide, please. We're going to start talking about severance obligations. Next slide, please.
At slide 27 you'll see the statutory reference and you'll know that severance under the Employment Standards Act is payable to employees who have 5 or more years of service. In either case, where an employer either terminates 50 or more employees within a 6 month period, or the employer has a payroll of 2.5 million or more. The intention of the legislation there is to tag larger employers with this obligation to pay severance pay under section 64. So if we can move to the next slide, please. Previously, before this next case, we had only one Ontario Superior Court decision and it went all the way back to 2014. It's the Quadraspec decision of Justice Kane and in 2014 when Justice Kane gave us the Paquette decision it was thought to be a bit of an outlier, because it ran contrary to all of the OLRB decisions at the time and, in fact, it ran contrary to the position being taken by the Ministry of Labour in their ESA policy and interpretation manual. That was a case where Quadraspec's Canadian payroll, including Quebec, was over 3 million but the Ontario payroll was about 1.5. Justice Kane disagreed with all of the previous OLRB decisions holding that the definition of payroll should not be interpreted to add the word 'Ontario', given that section 64(2) of the ESA speaks of the total wages earned by all of the employer's employees. So if we go to slide 29, please.
Then in June of this past year the Ontario Divisional Court released its decision in Hawkes and Max Aicher. This is at slide 29. This was a defendant which was a wholly owned subsidiary of a German parent. and while the Ontario payroll was less than 2.5 million, the global payroll of the parent far exceeded the threshold. We need to take a slight detour here and look at section 4 of the Employment Standards Act which provides that where associated or related activities or businesses are carried on by, or through an employer and one or more other persons, the employer and the other persons are to be treated as one employer for the purposes of the Act. Next slide, please. So, this entitled the Ontario Divisional Court to treat the global enterprise as a single employer, for the purposes of the Act, and relying on the global payroll they awarded this employee severance pay. He had 38 years of service so he got 26 weeks which is the maximum. In reversing the OLRB decision, the Divisional Court said that while section 3.1 of the Employment Standards Act has a geographical limit with respect to its scope and who it applies to, section 64 has no such limitation. There are no jurisdictional impediments to Ontario legislating with respect to the definition of size when assessing an employer's ability to pay severance pay. So they're not trying to have reach beyond the Province. They're simply saying when assessing how big the employer is we can look at their global payroll. So the bottom line here is that employment outside of Ontario, including outside of Canada, now must be included in the calculation of payroll for the purposes of section 64. Thanks, Elisa.
Elisa: Thanks, Mark. That issue has been grey for so long. It's nice to get some clarity from the court whether we like the decision or not. So another area that we would love to get some more clarity on the court from is the impact of COVID-19 on notice periods. We've seen some demand letters already for that COVID bump up in terms of notice and, Andrew, I'm going to turn it to you. Do we have a better idea of what the courts are going to do in these circumstances?
Andrew: We do. So there's been a number of decisions thus far, but I'm going to speak about four of them today, and I have to say that I think almost every single demand letter I've received from my client's have received since the onset of the pandemic has made this allegation about the notice period bump, the COVID bump, which I thought was sort of a fictious concept at the beginning, but I think we're starting to realize that it is a real thing. It's just a matter of how significant it will be depending on the circumstances. The first decision that we saw out of the courts on this issue was from January of 2021, of this year, and that was Yee versus Hudson's Bay Company. It was, again, the first COVID notice period case following the onset of the pandemic. The plaintiff, Mr. Yee, sought damages arising from the termination of his employment with Hudson's Bay in August of 2019. So that's the critical factor, is that he was actually terminated several months before the onset of the pandemic, but made the argument that as a result of what transpired in March of 2020 it was going to be that much more difficult for him to secure other employment and therefore, he should be given an advance notice period or a longer than normal notice period as a result of the impact that the pandemic was going to have on his ability to find other work. At the time of his termination Mr. Yee was 63 years old. He had about 12 years of service and his contract did not specify what his entitlements would be upon termination. So as I mentioned, at trial Mr. Yee made the argument, or his lawyer made the argument, that the notice period ought to be extended as a result of the impact of the pandemic. Mr. Yee asked the court to apply the reasoning of Justice Perell in the Paquette versus TeraGo Networks case, which we looked at a few moments ago, where Justice Perell noted that economic factors like a downturn in the economy, or in a particular industry or sector of the economy, that indicate that an employee may have difficulty finding other employment can justify a longer notice period. So we see in Paquette, Justice Perell saying that economic factors are part of the assessment of the availability of similar employment and the difficulty the plaintiff will experience in securing work. Based on that Mr. Yee made the argument that the economic factors have existed during what would be my notice period, or of course, related to the COVID pandemic. But in the Hudson's Bay case Justice Dow found that the principle cited in Paquette have to be considered in the context of the statement the Ontario Court of Appeal made in the Holland versus Hostopia.com case, where they said that reasonable notice of termination is to be determined by the circumstances existing at the time of termination. So that's the critical fact here is that you don't look at the notice period with the benefit of hindsight, but you look at what are the circumstances that existed at the time the termination took place, and where those circumstances have had an impact on the plaintiff's ability to secure other employment. So ultimately because the pandemic was not yet in effect at the time of Mr. Yee's termination in August of '19, it was not to be taken into account in calculating his entitlement to reasonable notice of termination. So when we got that first decision you had a lot of employers that were relieved but at the same time the court also left open the possibility, they left that door slightly ajar, for an argument that there should be a notice period bump where the circumstances were such that the termination took place after the onset of the pandemic.
So let me fast forward to February of 2021. In fact, just a few weeks after the decision in the Hudson's Bay case, and we see the court rendering a decision in Iriotakis versus Peninsula Employment Services Limited. In this instance you had a 56 year old business development manager, had about 2 years of service at the time of his dismissal on March 20, 2020, about 1 week after Ontario declared a state of emergency due to the COVID-19 pandemic. So different set of facts. Unlike Mr. Yee who was let go in August of '19, this plaintiff had been terminated just as the pandemic was unfolding. The central issue in front of the court, of course, was to determine whether or not the notice period ought to be bumped as a result of COVID and the court was asked to make findings specifically about the impact of the pandemic on the plaintiff's ability to secure other employment. While the court opined that uncertainties in the job market did tilt the reasonable notice period away from the short end, so it necessitated a notice period on the higher end, ultimately the Judge refused to put much weight, or any significant weight, on the impact of the pandemic because at the time, again we're looking at the circumstances that existed at the time of termination, the impact was highly speculative uncertain. Like many of us, admittedly I thought naively, that when the pandemic hit it would be a 2, 3 maybe a 4 week thing and we'd all go back to living life as normal. Clearly now with the benefit of hindsight that didn't happen but, again, if we're looking at the circumstances that existed at the time nobody could have predicted, or very few people could have predicted with any degree of certainty, how the plaintiff's ability to secure other work would have been impacted by the pandemic when he was literally terminated as it was unfolding. So in this decision Justice Dunphy noted that we need to be alert to the dangers of applying hindsight to the measure of reasonable notice at the time the decision to terminate was made. So the decision will be made months later, with the benefit of hindsight, but we better be very careful not to apply that hindsight when assessing of the notice period ought to have been at the time the termination took place. In this decision he ultimately concluded that 3 months was an appropriate notice period for Mr. Iriotakis.
July 2021, we get the decision in Kraft versus Firepower Financial Corp. In this case you had a 34 year old salesperson in the financial industry, about 5 and a half years of service, also terminated in March of 2020, the same week that Ontario declared the state of emergency. So very similar timing to the decision that we just looked at. Justice Morgan ultimately awarded a 10 month notice period, so quite a bit more significant of a notice period than in Iriotakis, and in doing so he applied the 3 step process. So first he looked at what the range of cases were, based on the case law, and concluded that given the relevant bardal factors, age, length of service, etcetera, the range of notice was 4 to 12 months. He then determined that the average for similar cases was 9 months and then finally, as a third step, decided to bump the notice period by 1 month, to 10 months, as a result of the impact of the pandemic and specifically because there was evidence that the pandemic actually did impact on the plaintiff's ability to secure new employment. In doing so Justice Morgan differentiated this case from the Hudson's Bay case, again based on the timing of the termination so not surprising, but also agreed with Justice Dunphy's comments that I just referred to a moment ago about being very careful about applying hindsight to the assessment of reasonable notice. But ultimately Justice Morgan concluded that the uncertainty that existed at the time was one of the many factors that he considered in ultimately deciding to award 10 months. So an interesting decision because, again, the timing was such that the pandemic had already started but it was very uncertain at the time what the impact would be and yet, nonetheless, Justice Morgan still decided to bump the notice period, although only by a month. So that's Kraft versus Firepower.
Then the most recent decision that I'm aware of on this point was actually rendered a few weeks ago, November 5, 2021, and that's the decision in Pavlov versus The New Zealand and Australian Lamb Company Limited. The plaintiff was a 47 year old director of marketing and communications, with about 3 years of service, and was terminated on May 28, 2020. So about 2 months into the pandemic. On the issue of the availability of similar employment, which of course is one of the important bardal factors the court will look at when assessing reasonable notice, the court said at the time of Pavlov's dismissal the initial effects of the global pandemic were being experienced by industries of all sorts, including those associated with international importing and distribution. It is a reasonable inference to draw from the evidence and the timing of the dismissal that the effects and uncertainties of the pandemic were obstacles to Pavlov's efforts to obtain alternate employment. These obstacles would, or should have been, known to the company at the time of Pavlov's dismissal. The problem with this case is that it's actually, in my estimation, it could have been the most helpful decision on point because it's the only one, so far that I'm aware of, that involves an individual who was terminated after the onset of the pandemic, not right at the outset, and where we probably would have been able to appreciate what the real impact was going to be. Unfortunately, although Justice Stewart made those comments that I just referred to, he didn't indicate how much of a bump was actually attributed to the pandemic. So we've got the 10 month notice period award for a 3 year employee, which is quite significant, but we don't know how much of that was specifically related to the COVID bump per se.
So where does that leave us? It leaves us with the realization that, despite what we might have thought initially, the COVID bump is real and the courts will absolutely take it into account. But like everything it really is fact specific. I think we all realize that in some industries COVID has actually been a real, maybe I shouldn't say a blessing in disguise, but a lot of industries have really been booming as a result of COVID, and I've received a ton of demand letters that say there should be a notice period, or a COVID bump applied, to the notice period, when in reality it's in an industry that's suffering record breaking shortages. So it really does depend but I don't think we can discount the notice period bump and it does need to be taken seriously at the time of termination, when assessing what the reasonable notice period ought to be. So that's where we're at as of 3 weeks ago.
Elisa: Thanks, Andrew. I expect that we'll probably be seeing more and more decisions on that issue. Now as Andrew said, no one could have predicted that the pandemic would be going on for this length of time, and the impact that it would have, especially on the employment relationship. One of the issues that a lot of employers have been grappling with recently are vaccinations. Mandatory vaccination policies. Can we have a mandatory vaccination policy? What if the employee doesn't comply with it? Can we terminate the employee? So we dealt with mandatory vaccinations on an earlier webinar in May of 2021 but this topic has evolved. Where are we now on this topic, Neena?
Neena: So first of all I think it's really important to know that we don't actually have a court opinion that actually says you can have mandatory vaccination policies or vaccination policies are appropriate. What we have is a handful of labour arbitrators rendering decisions based upon the unique language in the collective bargaining agreements. Now, I still want to go through them because some of our attendees are unionized, but more importantly the rationale in these decisions, I think, could really help courts decide what they want to do. So a very recent one is the UFCW decision regarding Paragon Protection and Paragon, and you may have seen them around, provides security services to third party clients. Many of Paragon's clients were hospitals, long term care and other venues having mandatory vaccination requirements for subcontractors and visitors. So, Paragon had a policy that personnel needed to be vaccinated and if they wouldn't, or couldn't, be vaccinated Paragon would try to find them a job in a venue that didn't require vaccination. But if they couldn't find that the person could actually be laid off, ultimately perhaps, even lose their job if there was no position available for them. Now interestingly, somebody in the UFCW, it's a unionized workplace, grieved Paragon's policy. While the Paragon decision got a lot of press coverage it's important to note that it had a robust provision in the collective agreement indicating that the employer had the right to impose vaccination policies. That language is not in every collective bargaining agreement. The grievance, there was a breadth of arguments and some of which I'm not quite sure really were germane to the legal issues, but they tried to argue that Paragon's policies actually violated various provisions of the Ontario Human Rights Code and also privacy rights under PHIPA legislation, which is Personal Health Information Protection Act, and the Occupational Health and Safety Act. The arbitrator actually found that the policy was consistent with the employer's obligations under the Occupational Health and Safety Act. That it did actually have exemptions for code related grounds and therefore was not violative of the Code, and as the employer was not a healthcare practitioner or a healthcare provider, it was not caught by the health privacy legislation that governs in this Province. So Paragon is probably the most, or the strongest, pro-vaccination mandatory policy decision that any labour arbitrator has rendered. Next slide, please.
So then we have a very interesting decision and I think this is probably based on the collective agreement that is similar to others. This is the Electrical Safety Authority and the Power Workers' Union. Now, the Power Workers' Union and the Electrical Safety Authority essentially collaborated or agreed upon a vaccination or test. So this is the rapid antigen testing. We've spoken about it at other seminars and essentially it has a cadence of two times a week. You essentially do a rapid antigen test if you're not vaccinated. This policy was not challenged, however, the Electrical Safety Authority then wanted to have a stricter policy, which was mandatory vaccination, unless somebody had a valid exemption, and that would mean a code protected, a Human Rights Code protected, reason for not being vaccinated. Just by way of quick review and you may have heard this before, Code related reasons tend to be medical reasons or, in some narrow instances, religious or creed related reasons. What is not protected, and I'll go through this in some detail later on is, if you will, vaccine hesitancy or vaccine skepticism. Somebody who prefers to deal with, if you will, natural immunity. So when the Electrical Safety Authority decided to ratch it up, or make the policy more strict, it said unless you had a valid exemption you weren't going to be tested anymore, but rather you were going to be put on an unpaid administrative leave and, ultimately, possibly discharged for failing to get fully vaccinated. The stricter policy was challenged in a grievance and Arbitrator Stout agreed that the mandatory policy, or the stricter policy, was unreasonable and essentially directed the Electrical Safety Authority to revert back to its vaccination or test policy. Arbitrator Stout acknowledged that true mandatory vaccination policies may be necessary in workplaces where the risks are higher, or where there was a vulnerable population, but that did not apply to the particular circumstances of these Power Workers. So effectively we've gotten some good support for mandatory vaccination or rapid antigen testing policies. That's not surprising because it allows people who are not willing to get vaccinated, as a personal medical decision, an opportunity to remain in the workforce. Next slide, please.
Then we had, and again it's interesting, it's again the Power Workers' Union and Ontario Power Generation. So the issue arises who must pay for this twice weekly test. Should it be the employee who's refusing, unless they have a Code related reason, or should it be the employer? Now many employers were actually given access to subsidized testing kits. So the Federal Government essentially paid for rapid antigen testing for smaller employers but, of course, if you're a big employer you're paying for those tests out of pocket. Ontario Power Generation essentially had a policy saying fine, if you don't want to get vaccinated and you don't have a Code protected reason, then you should pay for the rapid antigen test. I'm not doing a commercial but many pharmacies, including Shoppers Drug Mart, will do a rapid antigen test for approximately $40.00, last time I checked. OPG wanted the money for the cost of the test and the whole policy was then challenged by the Power Workers' Union. Arbitrator Fisher I believe said, the OPG has to bear the cost of the actual test but, interestingly, the employee must do the test on their own time and that would not be considered to be work or compensable time. You should note, however, there are, and I would say a very small number of employees, who both refuse to get vaccinated and refuse to get tested. Those employees, under the policy, would be put on an unpaid leave of absence and if the refusal continued, ultimately terminated. Arbitrator Fisher found that policy to be reasonable. So if you have an employee who refuses to get tested, and refuses to get vaccinated, ultimately they could be terminated with just cause with no compensation. This is a little bit of an aside but OPG actually had an indoor gym for exercise, and that was restricted only to those who were fully vaccinated, and that was also grieved and Arbitrator Fisher said, that policy is completely reasonable. Unvaccinated people could still take an hour of paid time to exercise outside and they didn't need access to the indoor gym. So interesting how the nuances of mandatory vaccination policies are being litigated in grievance arbitrations. Next slide.
I think this was certainly covered in some of our newsletters but this is really important. Many of us, and I suspect many of our clients and people who are listening on this call, have received fairly significant and aggressive demand letters indicating that a requirement to vaccinate is against their human rights. In Ontario, the Ontario Human Rights Commission, issued a statement that mandating and requiring proof of vaccination to protect people at work, or while receiving services, is generally permissible. Of course, there has to be measures to accommodate people who have genuine Code related reasons for refusing to get vaccinated. The Human Rights Commission is supportive of COVID testing as an alternative to mandatory vaccinations, or as an option for accommodation for people who are unable to receive a vaccine for medical reasons, and recommends that the organization who is accommodating pay the cost of COVID testing. Next slide, please.
What is very important is personal preferences and singular beliefs are not protected. I have received a number of self-professed I don't need to get vaccinated because my body, I'm very healthy and therefore I don't need to get vaccinated and it's unnecessary, but there's no medical support for that. That is considered to be a personal preference. Many beliefs, saying I believe in natural foods and this is not natural. That can be possibly protected but you have to look at whether that is a singular belief related vaccination or a whole lifestyle or ethical system of belief that informs the person. That's often very difficult when we're not talking about organized religion. It's much easier if there's a tenant of a religion that says you cannot get vaccinated because then at least you have some objective, if you will, grounds for saying yes, if you're adherent of that religion than that is part of your belief system. The closest analogy I can think of are Jehovah Witnesses that have a long known and long standing objection to receiving blood transfusions. Most mainstream religions, and I don't want to say that disrespectfully, have been either supportive of vaccination or have essentially been neutral about vaccination. So the creed or belief system objections are often very difficult to deal with. Next slide.
I get asked a lot and I thought it would be useful to talk about what medical exemptions are now being given. In the early parts of vaccination I would get these cryptic notes which would say, the patient is exempt from vaccination. You were never sure if the doctor was just humoring the patient or if there was a significant medical diagnosis. I even got one which said, based on what the patient advises me, patient should not be vaccinated. Well that's a very hard note to decipher. The College of Physicians and Surgeons of Ontario, various medical associations in Canada, have made it clear that the medical exemptions to vaccination are indeed very narrow. Therefore the exemption notes that we are getting ought to be very infrequent and, in fact, in 2021 I've really only received three that actually meet The College of Physicians and Surgeons guidelines and the exemptions were obviously granted. Many people who have some form of allergy or severe allergy are being told go to your allergist and get your shot there but you can still get vaccinated. Next slide, please.
So what don't we know? This is really the scary part. We don't know whether general employers, like just the regular workplace; an office based environment, insurance company, a law firm, a retail store, automotive shop can actually ultimately terminate people for cause for refusing to be vaccinated. We don't know what the law will be in the un-unionized workplace and that's kind of scary for a lawyer. What we do know is that cases are in the court system and those cases are going to be optimistically, if they are not settled in advance, if they go to some kind of trial decision or summary judgment, those are going to get resolved 12 to 36 months from now and my fear, quite frankly, is the courts will forget the real impact of the pandemic. I do think there's going to be differences in workplaces where employers can show that there is a high risk of vulnerable population. I note that in New Zealand, the Ministry of Labour there is trying to create some kind of guideline of workplaces where there is a higher risk of transmission. This morning I read about a Botswana virus that apparently is anywhere for 500 or 600 times worse than the original Corona virus. So perhaps that will make the impetuous of vaccination more real. My recommendations are that if you do want to have some kind of vaccination policy in your workplace, use education and persuasive tools first. If you still don't feel like you want people who aren't vaccinated in your workplace, and there's no other way of accommodating them to keep them working, I'm recommending that you consider options to termination without cause, including working notice. and sometimes, you know, a little bit of astute money, or bribery. There's a great bumper sticker that 'parenting is the judicious blend of bribery and threats' and since all of the speakers here are, I think, are parents they will chuckle at that. But I call out, call out is probably the wrong word, but I wanted to remind people that Chapman's, Chapman's Ice Cream, made a decision that if it was going to pay roughly $40.00 a week to test people who refused to have vaccinations, it was going to reward people who chose to have vaccinations by paying them $40.00 a week extra. Now this has caused a great kerfuffle in the social media world where people want to ban Chapman's Ice Cream. Other people are standing up with Chapman's but the point is even though Chapman's did not use that as incentive, they said this is just trying to be fair between the cost of vaccinated versus unvaccinated people, it is a powerful tool to be used. As well, other companies have given bonuses and gift cards to reward people who are vaccinated.
So, stay tuned and I hope that you keep joining us on our various webinars because I am convinced that by maybe next year, early next year, we will get some early judicial indications about vaccination, terminating people for cause. One final reminder, of course, is except in a unionized workforce you can terminate people for any reason that is not against the Human Rights Code, provided that you provide them an adequate package. Andrew and Mark have talked about some of those considerations. So I have seen employers choose to do that as well, but that can be a very expensive option, particularly if the person refusing to have the vaccine is an employee of some seniority or a high compensation package. Elisa, I don't know. I did promise to try to keep to time so I hope I have done that. I'm happy to take questions but that's kind of a snapshot of where we are on the vaccine front.
Elisa: Thank you, Neena. So we are going to be moving into the Q&A portion of the session and we do have some questions on vaccine so I'd like to just direct those to you, Neena. One of the first questions we received were, if you do have a mandatory vaccine policy, what documents would an employer need to obtain or could they obtain to verify, and someone's asking for an exemption, what documents would they need to verify the exemption from vaccination? Whether it's medical or religious.
Neena: So for the medical one is an easy one. You will get a note from a licenced physician. One caution. Earlier on in the pandemic I was seeing notes from naturopaths, registered dieticians, chiropractors attempting to exempt people from vaccination. Please note that immunology and virology are not within the scope of practice. The colleges that licence these regulated healthcare professionals, in general, said vaccination, chiropractic in particular have said it's not within our scope and chiropractors shouldn't be giving those notes. So as long as it's a registered doctor or specialist, nurse practitioner, that would be appropriate. Much more difficult on the religious side. I have asked employee to essentially sign a sworn statement saying that lying on it is may give rise to discipline or termination. I have asked for them to provide, if it's part of a religion, a note from their Pastor or Cleric. I have received some that are really suspect, Elisa. You know some that kind of look almost like you pay 20 bucks, and they'll send you a note, and those I've disregarded because I don't think that's sincere belief. But I've also received very thoughtful notes from some Christian churches, and those probably you have to look at very seriously, and make a decision about they may have a legitimate religious belief that is important to them so they may be exempt from the vaccine requirement, but can you actually accommodate the, because that's the next question. Can you accommodate them without undue hardship? Now, if they can continue to work from home, I'm working from my lovely horse farm. I could probably do that for the rest of my life. I suppose you could accommodate me but what if they're a personal care worker, or a childcare worker, or a frontline healthcare worker or even frontline retail. Some retail there's a lot of contact with the public. Maybe you can't accommodate them beyond putting them on a infectious disease emergency leave. So it's not an easy way but that's often what you have to do.
Elisa: Great. In keeping with this vaccination theme, hopefully we see the light at the end of the tunnel and we will come out of this pandemic, and the health and safety measures that are mandated are going to be lifted. So masking mandates and even proof of vaccines to enter certain establishments. Once that happens, what's your opinion on whether the employer can continue to require proof of vaccination as a term of employment, or enforce their mandatory vaccine policies?
Neena: First of all I would love to be as optimistic as you are. From your lips to God's ears as the old adage goes. I was like Andrew, a naive belief that we would all be back in our offices in 4 weeks. How stupid was I? Honestly, just Pollyanna-ish. I do think that employers can impose health and safety requirements that are in excess of the Government of Ontario's requirements. I actually have thought that in many cases the Government of Ontario's pulled its punches because of political reasons and the fear of backlash. But if an employer wants to have a more stringent policy, whether it's requiring all new employees be fully vaccinated or continue to enforce its vaccination policy, we can have more stringent standards. Elisa, I remind you that we're old enough to remember sexual harassment. There were many companies that were ahead of the governments in terms of prohibiting sexual harassment and requiring training on sexual harassment. In an non-unionized workplace, employers essentially can set the terms and conditions of employment, subject to the Ontario Human Rights Code.
Elisa: If we have no one else joining in on comments on that I'll move to the next question. So we're going to shift gears to Bill 27 again. With the proposed changes to non-competition clauses, will there be any impact on conflict of interest policies? For example, employees working for multiple employers. Mark?
Mark: I think the answer to that question is found in the actual Schedule. So Schedule 2 to the Bill 27, that's the one that deals with the Employment Standards Act. There's a new part 15.1 and it prohibits employers from entering into employment contracts for other arenas with an employee that are, or that include, a non-compete agreement. So if you drill down and you look at section 67.1, the magic language in there at the end of that, it starts non-compete agreement means an agreement, or any part of an agreement, between an employer and employee that prohibits the employee from engaging in any business, work, occupation, profession, project or other activity that is in competition with the employer's business. Here's the magic language at the end of the sentence, after the employment relationship between the employee and the employer ends. All that to say the new legislation will not impact the employer's ability to enforce certain restrictive covenants during the period of employment. Now you've heard Neena confess to all 500 people on this call that we don't even have agreement within our own ELE as to whether or not restrictive covenants are covered by that. I am on the other side of that. I think that a well drafted balanced non-solicitation provision is not a non-competition provision. I think there's lots of case law, decades worth, distinguishing them. But the answer to this specific question is after the employment relationship between the employee and the employer ends. So anything that happens during, I say, is not caught by Bill 27. I would just add, parenthetically, that we have in our standard employment agreement what I call a moonlighting provision that says, basically, we want your fulltime attention during office hours. We don't care if you're running a garage band but in terms of gainful activity our provision says, during the currency of the agreement you're not going to be engaged in any other employment, or any other activity, that interferes with the provisions of the services contemplated or, if it's for the benefit of any person, corporation or enterprises business interests are either competitive or in conflict with those of the employer. So, again, running a garage band. Not in conflict unless you're up half the night and you're dragging your butt into the office with 3 hours of sleep. So you can do two jobs. The second job can't interfere with the first job, in terms of how sleepy and tired and focused you are, but it also can't be for, so if you're working for one pharmaceutical company, you can't be selling a competitive product at the same time for another pharmaceutical company.
Elisa: Thanks, Mark. So we have another Bill 27 related question and I think this question might stem from your discussion, Mark, on the severance pay obligations and the fact that they will take into account the global operations of the employer. This question is, when we talk about Bill 27 applying to organizations with 25 employees or more, is this 25 or more employees in Ontario, or would that be across Canada?
Neena: I actually think that we don't know whether or not, it isn't actually defined, and so I'm taking the conservative view of 25 employees, start drafting your right to disconnect policy, just because I don't want to be the example case that is brought, said you should have had this policy and you didn't.
Mark: I'd agree with Neena that words 'Ontario' are not in that provision. You go back to Quadraspec. You go back to Justice Kane and now Max Aicher and it's not reaching beyond the jurisdiction to say that those other employees are caught by this. But the Ontario employees are caught if they are part of a group which, together, is more than 25. So I think you look at all of your employees, not just the ones in Ontario, but only the ones in Ontario are caught by Bill 27.
Andrew: Yeah, I think that the rationale being that if your organization has less than 25 employees, combined across all jurisdictions, then it may be overly burdensome or cumbersome for you to have a policy of this nature. But clearly they've decided that for 25 or more employees, not just in Ontario but across the country, then it wouldn't be that a big of a deal for you to have the policy. Especially given that we don't really know what the policy has to say other than, you have the right to disconnect, period. That could be the policy.
Elisa: This is evolving so hopefully we'll get some more guidance on this but thank you everyone for your comments. We have a question, COVID related not surprisingly, has COVID had any impact on accommodations requests and the accommodation process? I'll throw that one to you, Andrew.
Andrew: Sure. I think, in a nutshell, I don't think that COVID has changed the accommodation process, per se. There still needs to be Human Rights related reason why an accommodation is required in order to trigger the duty to accommodate. So there has to be something that's interfering with your ability to perform the essential functions of your job, and that something has to be connected to a protected ground of discrimination, be it disability, religion, age, etcetera. I think what's changed, in my mind anyway, is the employer's ability to credibly argue undue hardship. It will be industry specific, of course, but in the event that the duty to accommodate is triggered and the requested accommodation is a work from home arrangement, for example, I think it's going to be incredibly difficult for an employer to justify, or to argue, that it amounts to undue hardship to allow someone to work from home when they've been doing so quite successfully for the better part of 20 months. Now I appreciate that that's not going to apply to some of the folks that Neena mentioned earlier; frontline healthcare workers, personal support workers, etcetera. But if you were to take a lawyer, for example, or anybody in the professional services firm or a corporate environment, it may have been that 20 months ago employers would have really pushed back against work from home arrangements, be it as an accommodation or otherwise, for a whole slew of reasons. Confidentiality and employee morale, team bonding, etcetera, I think it's going to be much more difficult to persuade an adjudicator now, than allowing somebody to work from home indefinitely or temporarily, would amount to undue hardship when clearly you've been doing that for, again, the better part of 20 months. So that, in my mind, is what's changed but, again, you only get to that analysis if there is in fact a duty to accommodate, which is only triggered if there's a protected ground of discrimination.
Elisa: Thanks, Andrew. So we're going to switch gears now to the topic, Mark, that you discussed regarding forfeiture clauses. So the question, and I think you touched upon this but maybe we can elaborate a little bit, what steps can we take to protect ourselves from being challenged in these circumstances? Do we have to have a face to face meeting and point the clauses out to the employee that are in the agreement? Should we have contracts reviewed? Obviously that's a given, have them reviewed by legal, but what else can we do to mitigate that risk associated with those clauses in our contracts and bringing them to the attention of the employees?
Mark: Are you throwing that to me?
Elisa: Yeah, I'm throwing that to you, Mark. Back to you.
Mark: The easy one is to have initials next to the difficult provisions or the ones that might be perceived as pernicious, unreasonable. So the forfeiture provisions, so anybody who was on our last ELE seminar, we talked a lot about termination provisions and forfeiture provisions. So where you're giving up a right or an entitlement to incentive compensation. I think that best practices are evolving to the point that those provisions are now requiring a separate set of initials. The other thing I would say, which I said before always, don't stick an employment agreement under somebody's nose and let them sign it on the spot. You've got to let them take it away, give them a reasonable period of time to review it and/or seek independent legal advice, should they so choose. We normally say 5 business days, or a calendar week, as a minimum and I know those of you on the call who are HR folks are constantly being told by the operations people, I've got to have Janet. I've got to have her today. My world will end if I don't have Janet today. Well, don't let Janet start today. Push them off and make Janet have a reasonable opportunity to review the agreement before she signs it. Or you're going to get all kinds of demand letters and excuses with Latin expressions that mean I didn't know what I was signing. Non est factum, duress, all kinds of things.
Neena: Can I add one thing, Elisa, if we have time? One thing that's really effective is I notice when people have incentive plans, there's often a lot of slide decks and rah, rah, look at how great our bonus policy is. I'm going to encourage anybody who creates those slide decks on this call, to have provisions in clear language saying, when don't you get your bonus, LTIP, variable compensation, rah, rah, rah stuff. When you're terminated. When you quit. When you do X, Y and Z. That learning deck is very clear that you do not get the icing on the cake, if you will, if you happen to be terminated, or if you resign and claim constructive dismissal, or if you just resign. That deck becomes an important piece of evidence because in the Ocean's Nutrition and Matthews decision, as well, these are horrible clauses and there is no proof that this was brought to the attention of Mr. Matthews. If you have a slide deck, and the Mark Josselyn initials, you pretty well have that proof.
Elisa: That's all great advice and I think that some employers are still feeling a little weird and thinking, why should we even have these agreements? It seems like it's almost impossible to have the terms of these agreements enforced. So, what do you have to say about that? Is it even worthwhile anymore to have these agreements in place?
Mark: I would say it's a bit of a chess game. You've got the courts that keep trying to make their way back to common law entitlements during a period of reasonable notice and with the assistance of plaintiff's counsel, they keep trying what I call new and interesting ways to knock down our contractual provisions in employment agreements, and we keep drafting around each new piece of jurisprudence to build a better mousetrap. So both sides are trying to get ahead of the other but we're not giving in and nor should you. I think you need legitimate business tools, balanced business tools, to help manage your workforce and you also need the ability to estimate certain business decisions with some degree of accuracy. So don't give up.
Andrew: And there are examples in the case law, albeit few and far between, where clear language is enforced. So there are examples of where it's happening and if it's for nothing else it at least provides leverage in a negotiation. So I'm with Mark. Don't give up. Keep doing what the courts have told us to do and hope for the best. But it is a challenge. There's no doubt.
Elisa: Okay. So I think that's our time for today. We thank everybody for attending. It's been a pleasure. I thank the speakers for their insight. Very informative. These webinars came as a result of the pandemic because we couldn't meet in person, although we love to do that, we've loved preparing this webinar series for you. We will be doing it again so we hope you will join us. Until next year, everyone have a great day.