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reasonable notice

What happens to employment contracts when an employer sells the assets of its business?

The Court of Appeal for Ontario has confirmed that in an asset sale, a purchaser’s offer of employment to a seller’s employee can constitute consideration for changes in an employment contract — including a new termination clause.

 

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26 is the new 24 (Reasonable Notice)

The result of the Ontario Court of Appeal’s January 2016 decision of Keenan v. Canac Kitchens Ltd., which established, at this court level, for the first time that 26 months was reasonable notice in exceptional circumstances, thus confirming to the lower courts that there is no 24-month cap on notice.

 

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British Columbia Supreme Court rules on reasonable notice when an employee is terminated before their first day of work

In Buchanan v. Introjunction Ltd., 2017 BCSC 1002, the Court considered a case where the employer terminated the plaintiff’s employment before he commenced work. The Court rejected employer’s argument that the probation period clause applied to limit its liability to provide notice of termination of employment.

 

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Short service employee gets four months’ pay in lieu of reasonable notice

Some employers erroneously believe that there is a “rule of thumb” in the common law that employees are entitled to a month of notice per year of service. The Ontario Court of Appeal has held that there is no such rule, and that determinations of reasonable notice must be based on an assessment of all relevant factors.

 

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Dependent contractor receives 12 months pay in lieu of notice

The recent Supreme Court decision of Glimhagen v. GWR Resources Inc., 2017 BCSC 761, illustrates how an independent contractor can become a dependent contractor – an intermediate category on the spectrum between employee and independent contractor.

 

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Update on probationary clauses from Ontario Court of Appeal

Recently, the Ontario Court of Appeal affirmed that the probationary clause, which provided, simply, “Probation…six months”, was enforceable, and that the employee was not entitled to anything more than the one week of pay in lieu of notice of dismissal pursuant to the Ontario Employment Standards Act, 2000 (“ESA”).

 

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Must you include bonuses when calculating lost wages?

In the case, Bain v. UBS, the Ontario Superior Court of Justice tackled the issue of whether bonuses are too be included when calculating the income that an individual would have earned during a period of reasonable notice.

 

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Fishing for notice: British Columbia Supreme Court addresses inducement and contingency factors in wrongful dismissal suits

Care is required when recruiting a potential employee, but not all active recruitment activities qualify as inducement. More than giving the employee the impression there is room to grow or job security is required. Actual evidence of promises made by the company and the employee’s reliance upon those promises is necessary to sustain a determination of inducement. Nevertheless, employers can avoid claims of inducement by using written employment agreements that contain “entire agreement” clauses and confirm that the employee has not been induced by any promises.

 

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Long-term construction employees may be entitled to reasonable notice of termination

Generally, construction employees are not entitled to termination or severance pay under the Employment Standards Act (the “Act”). Section 1 of Ontario Regulation 288/01 of the Act explicitly exempts them from such minimum employment standards. However, a long-term construction employee may still be entitled to common law reasonable notice, which is much more lucrative than what the Act provides for anyway. Nevertheless, how much notice a construction employee is entitled to under the common law remains an unsettled test in Ontario.

 

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Departing employees gone rogue

The business consequences of departing employees gone rogue were recently highlighted in Prim8 Group Inc. v Tisi. In that case, an officer and director of Prim8 Group Inc. (Tisi) resigned from his employment to set up a competing business. Two days before his resignation, Tisi removed electronic equipment from Prim8’s premises, some of which contained proprietary information, and refused to return it. Shortly thereafter, another employee resigned from Prim8 without notice to join Tisi’s competing business.

 

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Important decision regarding mitigation of damages following termination

The Ontario Court of Appeal, in Brake v. PJ-M2R Restaurant Inc., recently clarified the law of mitigation.

 

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Probationary clauses: A double-edged sword for employers

Many employers find it necessary to assess new employees’ performance on the job before making a final determination about whether an individual is suitable for a position. In the absence of an express term in an employment contract, employees in Canada are entitled to reasonable notice of termination at common law when they are dismissed without just cause. Many employers put terms in their employment contracts, such as probationary clauses, which limit this entitlement. However, employers may not always be clear on the implications of such clauses.

 

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Employment contract oversight proves costly

As an employment lawyer, my consistent advice to employers is, whether you have one employee or one hundred employees, every employer needs to have written employment contracts. There are a number of ways that employment contracts can avoid or reduce liability, but the single most valuable term to include is a termination clause. In a written employment contract, employers have the opportunity to limit what can otherwise be a significant liability to their employees for termination pay, also referred to as severance or reasonable notice of termination.

 

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Termination provisions in employment contracts

As an employee, by law, you are entitled to reasonable notice of termination of your employment. Employers however, often attempt to limit your legal entitlements by explicitly defining your rights upon termination in the employment contract. In the recent case of Singh v Qualified Metal Fabricators Ltd. an Ontario Court adopted an employee–friendly interpretation of these termination provisions, resolving the potential ambiguities in favour of the employee. While employers are allowed to contractually limit employees’ common–law reasonable notice requirements, they are required to do so with complete precision.

 

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Employees must give reasonable notice before quitting

While we often help employees who did not receive reasonable notice of termination from their employer, it is often forgotten that employees also owe a similar duty to provide notice to the employer before resigning. This common law duty was the subject of the recent case of Consbec Inc. v Walker. In this case, the BC Court of Appeal reaffirmed the existence of the duty owed by employees to the employer.

 

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