Human Resources Associationof New Brunswick

Jamie EddyCox & Palmer

Labour and Employment GroupOctober 25, 2007

The Seven Most Influential Employment Decisions of 2006/2007

• TREND #1 – MISTREATMENT OF DISABLED EMPLOYEES = PUNITIVE DAMAGES

• Keays v. Honda Canada (2006 – Ontario Court of Appeal)

• DAMAGES:

• 15 months pay in lieu of notice = $100,000.00 (estimate at $80,000/year)

• 9 months additional pay in lieu of notice (Wallace)= $60,000.00 (estimate)

• Punitive damages = $500,000

• Solicitor & Client Costs = $610,000.00

• TOTAL: $1,270,000.00

• TREND #2 – HARASSMENT OF AN EMPLOYEE = WCB COMPENSABLE INJURY

• Logan v. Nova Scotia Workers Compensation Appeal Tribunal (2006 – Nova Scotia Court of Appeal)

• The Workers Compensation Act defines “accident” as:

“accident” includes a wilful and intentional act, not being the act of a worker, and also includes a chance event occasioned by a physical or natural cause,

as well as a disablement caused by an occupational disease and any other disablement arising out of and in the course of employment, but DOES NOT INCLUDE THE DISABLEMENT OF MENTAL STRESS OR A DISABLEMENT CAUSED BY MENTAL STRESS, OTHER THAN AS AN ACUTE REACTION TO A TRAUMATIC EVENT”

• TRADITIONAL APPROACH

• End of the Employment Relationship

• 1. Harassment

↓• 2. Employee Resigns

↓

• 3. Wrongful Dismissal Action

↓ and/or Human Rights Complaint

• MODERN APPROACH

• Continuation of Employment Relationship

• 1. Harassment

↓• 2. WCB Coverage

↓

• 3. Leave of Absence

↓

• 4. Return to Work

↓

• 5. Potential Accommodation/Modification of Workplace

• TREND #3 LIABILITY EXPOSURE TO TERMINATED EMPLOYEES BECOMING DISABLED

• Egan v. Alcatel Canada Inc. (2006 – Ontario Court of Appeal)

• EXAMPLE

• 20 years x $66,000 per year ($100,000) = $1.32 million

• TOTAL: $1.32 million

• RECOMMENDATIONS

• 1. Check for “actively working clause” in disability contract.

• 2. Check for “continuation clause” in disability contract.

• 3. Do not self-insure.

• 4. Consider transition disability coverage.

• 5. Employment standards.

• TREND #4 – PROGRESSIVE DISCIPLINE

• Carscallen v. FRI Corporation, (2006 – Ontario Court of Appeal)

• Progressive Discipline – the implementation of incrementally more serious warnings and disciplinary action prior to dismissal

• PROGRESSIVE DISCIPLINE

• Verbal reprimand• Written reprimand• Short term suspension• Long term suspension• Termination of employment for cause

• EMPLOYER IS ABLE TO SUSPEND IF:

• Contained in contract or policy• Fair and reasonable• A right of review exists

• TREND #5 – DON’T MESS WITH A REVEREND

• Reverend Gael Matheson v. Presbytery of PEI (2006/2007 - PEI HR Panel)

• DAMAGES:

• General Damages - $50,000.00• Past Loss of Income - $425,058.00• Loss of Employment Benefits -$25,000.00• Costs - $102,310.00

• TOTAL: $602,000.00

• TREND #6 – MITIGATION IS DEAD

• Marge Fraser v. Brookville Carriers Van LP Inc. (2007 – New Brunswick Court of Queen’s Bench)

• A terminated employee has an obligation to lower the damages owed by the employer following termination by actively pursuing comparable, alternative employment.

• However, in practice, courts are hesitant to strictly hold a wrongfully dismissed employee to the stringent rules of mitigation that govern regular commercial contracts.

• Consequently, the defence of failure to mitigate in the employment context seldom results in a deduction of the damages otherwise due to a wrongfully dismissed employee.

• #1. The duty to act “reasonably” does not require the employee to conduct an over-the-top or unusually aggressive job search.

• #2. There is no obligation on an employee to accept employment which is not similar, nor any obligation to accept a significant demotion in status or salary.

• #3. Employees are normally entitled to a “breathing space” of one or two months following the date of dismissal before they are required to mitigate their damages.

• #4. If the dismissal was particularly “traumatic”, the “breathing space” may be lengthened.

• #5. In most circumstances, the employee can wait and accept only a substantially comparable position.

• #6. Restricting one’s search for employment to the same income level does not generally violate the duty to mitigate.

• #7. An employee is only obligated to apply for positions in other locations if doing so is reasonable in all of the circumstances, having regard to the employee’s profession, position, work background, and the available jobs in the area.

• #8. It is relevant to consider the employer’s conduct following the dismissal in determining whether the employee took reasonable steps to mitigate (i.e. lack of letter of reference).

• #9. The duty to mitigate is relaxed in cases of employees who, following dismissal, continue to be bound by non-solicitation and/or non-competition clauses.

• #10. If an employee is dismissed in a callous manner, his or her ability to find alternate employment may be hampered.

• #11. The particular employee’s specific knowledge of how to “hunt” for work will be considered in determining whether he or she fulfilled the duty to mitigate.

• The difficulty in establishing this defence is also clearly illustrated by the sheer statistics of its failure.

• New Brunswick - since 1995 • pleaded 16 times• defence has been accepted by the Courts

a mere 3 times

• Ontario - since 2002 • pleaded 51 times• defence has been accepted by the Courts

a mere 14 times

• TREND #7 – ELIMINATION OF MANDATORY RETIREMENT – ACCOMMODATION OF EMPLOYEES - AGE