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Contracts and employment agreements

All employment relationships in Ontario are deemed to be contractual, whether or not a written contract is in place between the parties. When there is no written contract, the common law (judge-made law) imports a number of obligations into the contract that will bind the employer and the employee.

 

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Employment contract law changed in 2015. Have you reviewed yours?

Recent court decisions changed how the law applies to employment contracts, most importantly terminations, but also off-duty conduct, consideration and restrictive covenants. Important lessons from the changes are that employers need to review their employment contracts, you can update them or change their terms while complying with the law, and failing to do so can damage your organization’s finances and reputation.

 

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Ontario Employment Law Conference wrap-up: We learned the latest!

Last Tuesday, over 100 businesses from across Ontario joined us and the employment law team from Stringer LLP to discuss pressing employment issues like avoiding occupational health and safety penalties, accommodating employees’ family status, getting ready for the new Employment Standard, using employment contracts to protect your business, and the perils of employee benefits.

 

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The latest Ontario defeat for non-competition covenants

Readers of this blog have read of the difficulty encountered by employers in Ontario in drafting and enforcing non-competition covenants. The obstacles to enforcing such covenants were highlighted in a decision of the Superior Court released on April 5, 2013, the employer was faced with a concerted effort by three of its employees to open a competitive business within its market…

 

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Deferred compensation: You can take it with you (sometimes)

Deferred compensation in the form of future bonuses, retention payments, and stock options has become a standard element of executive compensation. While there are countless variations of such plans, they are all designed to incent employees to remain with their employer, and to perform to the employee’s highest capability while he is there. In order to meet these goals, such plans will often include a deferral of the benefit once it is earned, in order to create an incentive to remain with the employer.

 

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Learn the latest! — Specific termination provision upheld after sale of business

When a company purchases another business, it is important to consider the legal implications respecting the status of employees. The Ontario Superior Court recently decided a case regarding the validity of an employment contract where an employee had signed an agreement with his former employer but never executed a new agreement when the company was purchased by another business. The plaintiff argued that the employment contract only governed the previous employment relationship. The Court disagreed, finding that the terms of the employment contract still applied.

 

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Impact on employees in company mergers can be significant

Anyone following the financial news over the last number of years has no doubt noticed the increasing frequency with which corporations are merging, or being bought out by other corporations. This often results in efficiencies for the corporations, hopefully leading to greater profit. However, the impact on the employees is often overlooked. Whether the transaction is a share purchase, asset purchase, or other type of structure, the impact on the buyers and sellers is clear. However, the impact on the employees is often less certain.

 

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Unexpected impact of share buyout of senior management

When one corporation “buys out” another (by asset purchase, share purchase, or other transaction), the impact on the buyers and sellers is clear. There are clearly winners and losers which is what presumably drove the transaction to begin with. While the employers of the purchasing and selling companies. The structure of the transaction can have a significant impact on their futures. Fortunately, the Ontario Employment Standard Act does provide certain safeguards for employees in the circumstances. For example the Employment Standard Act imposes a requirement for payment of up to one week per year of service.

 

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Slaw: Saskatchewan employer successful in enforcing non-compete clause

The Queen’s Bench for Saskatchewan just granted an injunction restraining a former employee from competing against his former employer, soliciting the employer’s clients, and using any of the employer’s confidential information he garnered while working with the employer.

 

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The increasing internationalization of employment has resulted in greater complexity for employers

The increasing internationalization of employment has resulted in greater complexity for employers in determining which country’s laws will apply to the employment relationships they enter. While the general presumption is that the law of the province, territory or state in which the employee works will apply, the appropriate locale is not always easy to determine. The employee may work in a number of jurisdictions, or be hired in one jurisdiction and placed to work in another. In order to avoid the potential pitfalls in such relationships…

 

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Court confirms high threshold to enjoin a former employee from engaging in competition

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In Survival Systems Training Ltd. v. Survival Systems Ltd., the Nova Scotia Supreme Court recently dismissed a company’s motion for a injunction to prevent former employees from engaging in competitive activities. The Court confirmed that employers must meet a high threshold in order secure an injunction which would effectively prevent a former employee from working in their chosen vocation.

 

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The enforceability of termination provisions within contracts of employment

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The employment relationship is a contractual one whether or not a contract of employment was signed. Contracts can be express or implied contracts, i.e., you agree to work and I agree to pay you. Verbal bargains are nearly always upheld as long as those implied contracts are governed by particular employment standards and obligations established by the common law.

 

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How to craft an enforceable non-solicitation clause

Generally speaking, a restrictive covenant acts to restrict the activities of a former employee after their employment has ended. They usually come in one of two forms: non-competition clauses and non-solicitation clauses. The law on restrictive covenants is that they are prima facie unenforceable as they are in restraint of trade and therefore against public policy. In order to be enforced, they must be proven by the party that seeks to enforce them to be a reasonable limit on trade.

 

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Can employers protect business contacts acquired by employees’ use of social media?

Consider this: you have encouraged your employee to use online social media during work time to build professional contacts to grow your business. The employee goes ahead and invests time during the workday visiting sites like Linkedin, Twitter and Facebook. This strategy proves to be positive; the contacts have been part of the business growth you have experienced. Then, your employee wants to leave the company and move on to another job. Can you, as the employer, ask for the contact information the employee accumulated during his or her employment?

 

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Superior court refuses employer’s request for injunction

In yet another example of the reluctance of the Ontario Superior Court to restrict competitive activities of former employees, the Court rejected an employer’s request for an injunction…

 

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