Ottawa Employment Lawyers

LEGAL ADVICE FOR EMPLOYEES AND EMPLOYERS

The end of an employment relationship involves a complex combination of contract, statute and common law duties and entitlements. Whether an employee or an employer, you need knowledgeable assistance and quick response to successfully navigate to a successful conclusion. Allan Snelling LLP provides that assistance. We have a team of experienced employment Lawyers – Ottawa based but serving all Eastern Ontario – who are familiar with the Ottawa employment environment and the resources available to you.

At Allan Snelling LLP, our Ottawa employment Lawyers offer timely, efficient, and valuable service in a fashion that sets us apart. Contact our Kanata law office for a no obligation consultation. Our Dedicated Employment Lawyers are Ready to Help You.

What are my legal obligations as an employer under the Employment Standards Act?

Employers in Ottawa, Canada must adhere to the Employment Standards Act (ESA) when hiring and managing employees. The ESA sets forth several rights and obligations that employers must follow. These include standards for hours of work and overtime, vacation entitlements, recruitment practices, termination of employment, and more. 

Hours of work are restricted by law - employees may not be asked or expected to work more than 48 hours per week without written agreement. Overtime must be paid at 1.5 times the regular rate and cannot exceed 44 hours per week unless otherwise specified in an employment agreement. The ESA also ensures that employers provide reasonable notice of how long it will take to complete each job before asking an employee to perform overtime work or any additional tasks. 

Employees are entitled to two weeks of paid vacation time after 12 months of employment, or 3% in place of pay if the employee has been employed less than 12 months. Employees must also be allowed at least 8 public holidays with a minimum payment of the greater of their average daily wage or statutory holiday rate.

Finally, employers must provide employees with reasonable notice before termination and cannot terminate an employee without just cause. If an employee is terminated without just cause, they are eligible for compensation which may include reinstatement back into their job position as well as unpaid wages for lost work hours and other damages incurred due to the violation. 

Ottawa employers must adhere to these obligations outlined in the Employment Standards Act to ensure their employees are treated fairly and with respect. Failure to comply can result in fines and other legal actions. 

Harassment In the Workplace

Harassment in the workplace can come in many forms. In Ottawa, Canada, these can include verbal or physical conduct such as threats, name-calling, intimidation, and insults of a sexual, racial, or religious nature. It can also include unwelcome comments about an individual's appearance or lifestyle; making jokes or spreading offensive rumours; displaying inappropriate images; distributing emails with derogatory content; and any other form of behaviour that creates a hostile work environment.

In addition to this type of harassment, "psychological harassment" is also illegal in Ottawa and describes ongoing patterns of behaviour that have been deemed detrimental to a person's psychological well-being. These behaviours may include isolating someone socially within the workspace by ignoring them or excluding them from conversations or activities, constantly criticizing their performance, or spreading rumours about them.

It is important to note that the Canadian Human Rights Act makes it illegal for employers to discriminate against workers based on race, national or ethnic origin, colour, religion, age, sex, sexual orientation, or disability. This includes any form of harassment based on these factors. 

Harassment in the workplace can have serious consequences and as such anyone who experiences this type of behaviour should report it immediately. Depending on the severity of the situation several steps can be taken including mediation between employees and employers; disciplinary action; policy changes; or even dismissal in extreme cases. It is also worth noting that victims of workplace harassment may also be able to pursue legal action if necessary. 

In Ottawa, Canada, employers, and employees alike must be aware of the seriousness of workplace harassment and take measures to create an environment free from discrimination and unfair treatment. Everyone has the right to feel safe and respected in their place of work. If any type of behaviour is suspected or witnessed, it should be reported immediately to protect everyone's rights. 

FAQs

I was just let go "without cause", what does this mean?

Prior to engaging in any litigious action, clients should have a grasp of not only their rights but those of the employer as well. What may not appear fair, maybe either contractually or legally legitimate. The term "without cause" is seen in most termination letters. There's a very clear reason for this.

The threshold for cause is high and, if the employer is unsuccessful in meeting that threshold, they then risk being subject to damages for wrongful termination inclusive of not only proper notice, but aggravated and punitive damages as well.

A prime example of this risk coming to fruition is seen in Ruston v. Keddco MFG. (2011) Ltd., 2019 ONCA 125. Ruston, former president of Keddco, was fired for cause. Keddco alleged that Ruston committed fraud. When Ruston indicated that he would be retaining legal counsel, Keddco advised him that, if he hired a Lawyer, it would counter-claim against him. They warned that the costs of litigation would be extreme to both parties.

Ruston ignored the threat and filed a claim against Keddco. Keddco followed-up on their promise and brought a counterclaim for $1.7 million. The lower court found that the allegations of fraud could not be proven. It was held that Ruston was wrongfully dismissed. He was awarded 19 months termination pay, in addition to $100,000 in punitive damages and $25,000 in moral damages. The cost was $546,684. The total award, including payment in lieu of notice, was just below $1 million. The Ontario Court of Appeal dismissed the employer's appeal and withheld the lower court’s ruling on these matters. Keddco's total losses would have far exceeded $1 million with their legal costs included.

Had Keddco simply terminated the employment without cause and relied on a properly drafted termination provision, Ruston's damages could have topped out at the Employment Standards Act entitlements. Without a contract, common law notice would have been subject to the soft cap of 24 months and early settlement would have been possible. Without the allegation of fraud and the subsequent counterclaim, Keddco's worst-case scenario would have likely been much better than the current result.

This is an example of why employers are often advised to dismiss without cause, asserting the employer's right to do so and relying on properly drafted contract provisions to navigate the employees' entitlements upon termination.

So, what does this mean for employees? Firstly, do not assume that your performance can no longer be factored into an award for termination pay. The employer can always argue "near cause" which has reduced awards in past decisions. Understand, however, that the most prevalent dispute in a without cause dismissal is the employee's entitlement, by contract and by law.

Employees who are terminated without cause need to acknowledge that the employer has the right to do so. Nonetheless, they must do so while preserving your entitlements. Those entitlements should not be assessed by yourself or your employer. All aspects governing the employment relationship should be forwarded to a competent employment Lawyer. The employment Lawyer will indicate your entitlements and provide an honest opinion on the viability of disputing the package that was offered.

What does this mean for Employees and Employers?

Employees: Once terminated without cause, do not sign a full and final release without having a Lawyer review the employment relationship and confirm your actual entitlements.

Employers: Asserting cause is a risky position to take. Cost-benefit might weigh in favour of dismissing the employee "without cause." The allegation of cause cannot be retracted. Counsel should be sought prior to alleging cause.

Sources:

Ruston v. Keddco MFG. (2011) Ltd., 2019 ONCA 125 (CanLII)

Ruston v. Keddco Mfg. (2011) Ltd., 2018 ONSC 2919 (CanLII)

Can an employee be forced to forfeit their unvested shares on a termination without cause?

I was fired without cause. What happened to my company shares or stock options?

Your job was just terminated "without cause" and as if it's not bad enough that you just lost your job, you also find out that your shares in the company are no longer yours. Just like they never existed; any unvested shares are forfeited the day you're terminated. For some, this could mean hundreds of thousands of dollars in expected income gone.

So, what does "vesting" mean and why is it important in this context? An unvested share simply means that the shareholder's rights to that share are subject to specific conditions. Companies will typically create vesting schedules for the shares they give their employees. The shares are provided to the employee subject to a share agreement which sets out the vesting schedule. That schedule will tell the employee when his/her shares will vest. Once the shares vest, the employee has an absolute right to these shares. They can be sold or kept at the discretion of the employee.

Vesting schedules are extremely useful and can be justified. The logic behind a vesting schedule holds that employees must earn shares that are available to them. The longevity of their employment should be correlated to their performance. If they perform well, their job will remain secure, and their shares will vest with time. The vesting schedule dangles the possibility of added income in front of the employee to motivate good performance.

Employers should have the right to motivate their employees in this manner and an underserving employee should not be rewarded with income that was subject to him or her deserving it. Any employee who has justified a termination for cause should not benefit from the vesting of unvested shares.

The dispute arises when the employee's performance is not at issue. The employee worked hard for the company and did nothing to jeopardise his or her rights to the unvested shares. We know that the employee can still be terminated without cause since no employer is handcuffed to their employees. The dilemma is whether that employee should have some right to his or her unvested shares.

Companies can squash any right the employee might have to unvested shares by contracting accordingly. Provisions in the share agreements or long-term incentive plans, if they are sufficiently clear, can restrict the rights of the employee to unvested shares no matter if the employee is terminated for cause or without cause. Think of the following scenario:

Your employment is going extremely well. You've just received a promotion and your performance reviews are great. You're then terminated without cause. You're terminated in August. Before being terminated, you held 500 unvested shares in the company valued at $400.00 a share. Based on your vesting schedule, 50% of those shares were to vest in October that same year.

The shareholders’ agreement holds that all unvested shares once terminated, notwithstanding cause, would be forfeited immediately. Remember you did nothing to merit your termination. Notwithstanding, your company has terminated you. Had they kept you for another two months, you would have had access to $100,000 worth of shares on top of your current income.

This does happen and, with the rise in e-commerce and proficiency in which new companies make public offerings, courts are now seeing a rise in cases where these types of employee shareholder agreements are in dispute.

The Ontario Court of Appeal (ONCA) has recently addressed a similar scenario in O'Reilly v. IMAX Corporation, 2019 ONCA 991. O'Reilly brought a wrongful termination claim alleging that he was not provided sufficient notice and that his unvested shares were unlawfully forfeited. On a summary judgement motion, O'Reilly was awarded 24 months' reasonable notice. The main issue before the ONCA was whether the motions judge was correct in awarding damages for shares that would have vested during the notice period.

The ONCA looked closely at the relevant provisions within the employer's long-term incentive plan and stock option grants. The following provision was highlighted:

(5) Termination of Employment Generally. If the Participant’s employment with the Company terminates for any reason other than death, Disability or for Cause, the Options shall cease to vest, any unvested Options shall immediately be cancelled and revert back to the Company for no consideration and the Participant shall have no further right or interest therein. Any vested Options shall continue to be exercisable for a period of thirty (30) days following the date of such termination; … To the extent that any vested Options are not exercised within such period following termination of employment, such Options shall be cancelled and revert to the Company for no consideration and the Participant shall have no further right or interest therein.

The Court set out to determine whether the words "terminates for any reason" included termination without cause. The ONCA emphasized the need for clarity in these types of provisions. It agreed with the motion judge "that the reference to terminates for any reason in the plans could not be presumed to refer to termination without cause."

O'Reilly was awarded the entirety of his shares throughout his notice period, valued at what they would have been had he sold them immediately upon vesting. O'Reilly had upwards of 30,000 shares valued between $20-$30 that would have vested during the 24 months' notice. The motion judge's decision on the unvested shares and the ONCA's subsequent dismissal made a difference of upwards of half a million dollars in the overall damages awarded to O'Reilly.

WHAT DOES THIS MEAN FOR EMPLOYEES AND EMPLOYERS?

FOR EMPLOYEES: Do not walk away from your unvested shares without consulting an employment, Lawyer. You could be leaving significant entitlements on the table.

FOR EMPLOYERS: Any attempt to limit the common law entitlements of an employee should be clear and unequivocal. Do not assume that general language, meant to encompass all, is sufficient to address one specific scenario. It is best to identify the entitlement within the provision and address it accordingly. Contracts must be drafted with specific consideration for the employer, their employees, and the market. Boilerplate contracts leave unintended openings to employees and may significantly hamper the economic status of a company when it attempts to restructure and terminate employees.

Sources:

O'Reilly v. IMAX Corporation, 2019 ONCA 991.

O’Reilly v. Imax Corporation, 2019 ONSC 342.

Veer v. Dover Corporation (Canada), 1999 CanLII 3008 (ON CA)

Are temporary layoffs permitted?

Work at my business has slowed down quite a bit this year. I currently have 11 employees but there is not enough work to go around. I should be getting a set of new contracts that will keep everyone busy this spring, but I’d like to make some temporary layoffs in the meantime to avoid having to let anyone go for good. I’ve discussed this with business colleagues who told me that temporary layoffs are not permitted for non-unionized employees. What are my options?‍

The law applicable to temporary layoffs in Ontario can be confusing. The Employment Standards Act does allow temporary layoffs of up to 13 weeks in a 20-week period. In certain seasonal industries, such as construction, temporary layoffs over the winter months are common. However, in other workplaces courts in Ontario have treated temporary layoffs as constructive dismissals and have ordered employers to provide termination and severance pay.

In recent years, some Ontario court decisions have allowed temporary layoffs provided employers comply with both the Employment Standards Act and the terms of the employee’s contract. Depending on the nature of the work, such layoffs may even be permitted when an employee is working with an unwritten contract. A temporary layoff is also more likely to be permitted if an employee remains entitled to benefits and can access Employment Insurance during their time off. During any such layoff it is important to inform the employee that the layoff is temporary and to provide them with a return-to-work date. Finally, a temporary layoff should not be used as a form of discipline to punish an employee for misconduct – that will most certainly result in a claim for constructive dismissal.

What should I do if an employee files a complaint against my company?

If an Ottawa business owner receives a complaint from their employee, they should take it seriously and act swiftly. The first step is to review the complaint and understand the facts of the case. After assessing the situation, it's important to reach out to the employee in question and discuss their concerns before attempting to resolve the issue. During this conversation, both parties can work together to identify potential solutions or compromises that could address any grievances. 

At this stage, it’s wise for business owners in Ottawa to consult legal counsel as soon as possible so they can make sure they are following proper procedures throughout the resolution process. It’s also advisable that employers document everything related to the complaint for their records. This includes actions taken by both parties, conversations, and other relevant information. 

If mediation proves unsuccessful, the employee may choose to take further legal action against the company. In this case, it’s beneficial for business owners in Ottawa to have an attorney who can help them manage the situation. An attorney can provide valuable guidance regarding how best to proceed and protect their interests going forward. 

Ultimately, Ottawa business owners need to remember that employee complaints are serious matters and require attention as soon as possible. Taking proactive steps such as consulting with legal counsel can help ensure that any issues are resolved quickly and effectively with minimal disruption to the workplace. With the right approach in place, employers can minimize the potential risks associated with managing employee complaints. 

How can I protect my company from wrongful dismissal claims?

To protect their Ottawa business from wrongful dismissal claims, Ottawa business owners should ensure that all their business operations adhere to the principles set out by the Canadian Human Rights Act. This includes providing employees with a safe and respectful work environment, implementing policies that do not discriminate against any group or individual based on gender, race, religion, sexual orientation, or disability, and adhering to local labor laws. 

Additionally, they should create a written employment agreement between themselves and each employee they hire. This agreement should include details regarding the length of employment (if applicable), job description, salary/wages, vacation time, and other benefits. 

Ottawa business owners can also take further steps to protect their company from wrongful dismissal claims by documenting any disciplinary or performance-related issues that occur with their employees. 

This allows them to provide evidence of misconduct in the event of a legal challenge. They should also document the process for terminating someone, including explaining why their employment was terminated and a signed release from the employee confirming their acceptance of the termination agreement. 

Finally, Ottawa business owners should be sure to consult with a lawyer before taking any action against an employee regarding wrongful dismissal. Doing so can help protect them from potential liabilities down the line and ensure that they are following all relevant laws and regulations. By taking these steps, Ottawa business owners will be better prepared to handle any wrongful dismissal claims they may face in the future. 

How can I ensure my company is compliant with human rights laws?

As an Ottawa business owner, it is essential to ensure your company is compliant with human rights laws. To accomplish this, the first step is to educate yourself and your employees about basic human rights concepts and principles. This can be done by taking training courses on Canada's Human Rights Act or reading up on relevant legal documents such as the Canadian Charter of Rights and Freedoms. 

It is also important for Ottawa businesses to have a system in place for dealing with any potential human rights violations that may occur in the workplace. This includes establishing policies around equal opportunities or prohibiting discrimination based on gender identity, age, race, sexual orientation, etc. These policies should be clearly outlined in employee contracts and company handbooks. Additionally, employers must investigate any complaints of discrimination and take prompt action to address them.

Finally, Ottawa businesses should regularly monitor the human rights situation in their work to ensure it is compliant with local laws. This can be done by conducting an audit or having a third-party review of their policies and procedures. 

Furthermore, having an internal ombudsperson or mediator available to employees could help resolve any potential issues before they become serious problems. In addition, employers can benefit from staying up to date on changes to Ontario's Human Rights Code as well as federal regulations that govern employee treatment in the province. 

With these steps, Ottawa business owners can work towards creating a safe and respectful environment where everyone’s rights are respected and protected. By doing so, employers can ensure their company is compliant with human rights laws and take proactive steps to promote a culture of fairness and equality in the workplace. 

How can I avoid discrimination in the hiring process?

To avoid discrimination in the hiring process, an Ottawa business owner should take several steps. First, the business should make sure the job listing is open and accessible to everyone by distributing it widely and using language that does not limit candidates based on their gender, race, religion, or other characteristics. 

Second, employers should implement a standardized interviewing process for all candidates to ensure fairness during interviews. Business owners should also create a timeline for when decisions are made and communicate this timeline with each candidate so that no one gets left behind or forgotten about. 

Finally, employers must pay attention to any unconscious bias they might have when selecting candidates; if needed, additional measures such as blind reviews of resumes can be taken to help reduce this effect. With these steps, an Ottawa business owner can create a fair and equitable hiring process that avoids discrimination. 

Additionally, business owners need to develop a diversity and inclusion policy. This should address topics such as anti-discrimination and anti-harassment policies, ways to ensure equal pay for employees of all genders and backgrounds, and strategies for recruiting diverse candidates in the first place. 

Business owners should also work with their staff to make sure that everyone understands the importance of creating a respectful and inclusive workplace culture where everyone is accepted regardless of differences. By taking these steps, Ottawa business owners can create an environment that avoids discrimination in the hiring process. 

Finally, Ottawa business owners should stay up to date on any new laws or regulations related to employment discrimination, so they know their legal obligations when it comes to avoiding discrimination in their hiring practices. Working with a legal professional can help ensure that the business is meeting all the requirements and staying compliant with local laws. 

Can I require employees to sign non-compete agreements?

Non-compete agreements can be an effective tool for Ottawa business owners to protect their interests. However, in Ottawa, it is important to note that non-compete agreements must meet certain criteria to be considered enforceable. 

The key requirements of a legally binding non-compete agreement are the agreement must not cause undue hardship to the employee; it must be reasonable in scope and duration; and it must be in writing, and signed by both parties. It is also important to note that an employer cannot require a non-compete agreement from any employee who makes less than $20 per hour or earns commissions less than 25% of their earnings. 

When considering whether to use a non-compete agreement, employers should be aware that they are not unlimited in their scope and can't be used to restrict an employee’s ability to find future employment. Employers must also ensure that any non-compete agreement is reasonable concerning geographic area, duration of the restriction, and the types of activities restricted. 

Ultimately, Ottawa business owners should seek legal advice before requiring an employee to sign a non-compete agreement. A qualified lawyer can help review the specifics of any proposed agreement and advise on its enforceability under Canadian law. This can help protect businesses from potential legal complications down the line. Non-competes can be a beneficial tool for Ottawa businesses when used properly, but it's important to make sure you understand the relevant laws and consult a lawyer before acting. 

With this information in mind, Ottawa business owners can make an informed decision on whether they should require employees to sign non-compete agreements. 

It is also important to note that any enforceable non-compete must be reasonable for it to be legally binding, meaning it cannot restrict activities too broadly and must have a reasonable duration based on the nature of the business. Employers should also consider if there are other ways of protecting their interests without requiring a non-compete agreement, such as implementing confidentiality clauses or restrictive covenants. 

Employers should keep in mind that courts may consider factors like an employee’s age, education, length of service, and the nature of the employment when considering whether or not a non-compete agreement is reasonable.