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wrongful dismissal

3 tax tips for employers: Negotiating a settlement

Given the majority of legal disputes that settle before going to trial, the role of a modern civil litigator has shifted from not only being a courtroom specialist, but also being an expert in negotiation. The main goal in almost all negotiations for an employee is to extract a large payout, while the goal for the employer is to settle the claim while paying out as little as possible. Though lawyers use different techniques for extracting these results for their clients, I wanted to share three simple tips that are often overlooked when employers are negotiating a settlement.

 

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Wrongful dismissal update: More kinds of damages being ordered

Once upon a time, employees did not sign employment contracts with termination clauses and employment lawyers fought over the appropriate “reasonable” notice period. In 2017, however, employees now claim in addition to wrongful dismissal damages, human rights damages, moral or Wallace damages, punitive damages, and damages for the intentional infliction of mental stress.

 

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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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Three popular articles this week on HRinfodesk

The three popular articles this week on HRinfodesk deal with: Meal and vehicle rates used to calculate travel expenses for 2016; important changes to form RC59 coming; and case about employee who was awarded punitive damages in dismissal claim.

 

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I take it back: Withdrawing resignation

What should you do if an employee asks to rescind his or her resignation? If you really love that employee, you say “Great! Welcome back.” But if this isn’t your favourite employee, you may have an obligation to undo the resignation anyway. In order to decide whether or not to allow them to withdraw the resignation, there are a few factors that you should consider.

 

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Just cause termination: Employers need “reasonable basis”

The Court acknowledged that an employer may allege just cause, and later abandon that claim at any time. The Court held that it wouldn’t be appropriate to penalize an employer for changing its mind if it initially had a reasonable basis to believe it had just cause to terminate an employee. As such, it is important to investigate and document any evidence of employee misconduct, and to act accordingly.

 

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Three popular articles this week on HRinfodesk

The three popular articles this week on HRinfodesk deal with: A matter where the court had to determine the enforceability of a promoted employee’s new employment contract, particularly the termination clause; current and 2017 payroll rates; and PRPP legislation that is now in force in Ontario.

 

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Dependent contractors: Entitlement to reasonable notice

The recent decision of Keenan v. Canac Kitchens, confirms that dependent contractors are entitled to reasonable notice of employment termination. The required notice period can extend to years, and such as in this case, amount to 26 months.

 

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Three popular articles this week on HRinfodesk

The three popular articles this week on HRinfodesk deal with: 2017 payroll rates; a survey indicating that many employees are not using their vacation time; and a case where an employee’s dismissal without notice was justified.

 

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Discretion is the better part of bonus plans – Limiting employee entitlement to post-termination bonus payments

Employees who are terminated without notice can sue employers for the total compensation, including bonus payments, which they would have otherwise received during the notice period if reasonable notice had been given.

 

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Refusing a 50 km commute not a failure to mitigate

In wrongful dismissal litigation, one of the key issues is always the dismissed employee’s duty to mitigate. When an employee is terminated or constructively dismissed, he or she has a positive obligation to minimize his or her damages by seeking out comparable, alternate employment. Anything the employee earns in the common law notice period is subtracted from what the company owes. An issue that often arises is whether or not it was reasonable for an employee to refuse exploring a potential new job because of the length of the commute.

 

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Using summary trials in a wrongful dismissal action

The high costs of litigation and the long delays to have a matter heard in court have raised serious concerns with respect to access to justice in Canada. This challenge can be felt particularly acutely with somebody who has recently been wrongfully dismissed from their employment. While the common law may tell us that a terminated employee may be entitled to receive several more months compensation for their termination than what their employer is offering, often the high cost of litigation require the worker to accept less than they deserve. The high costs of litigation and the long delays to have a matter heard in court have raised serious concerns with respect to access to justice in Canada. This challenge can be felt particularly acutely with somebody who has recently been wrongfully dismissed from their employment. While the common law may tell us that a terminated employee may be entitled to receive several more months compensation for their termination than what their employer is offering, often the high cost of litigation require the worker to accept less than they deserve. But what if someone can have their day in court without the time and expense of trial and discoveries? In many wrongful dismissal cases, a summary judgment application may provide just that.

 

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Court ruling making it harder for employers to avoid paying bonuses to workers dismissed without cause

Employees often rely on bonuses as a big part of their income and work hard throughout the year with the understanding that the efforts will be rewarded with a well–earned bonus. Employers on the other hand often attempt to limit the employee’s entitlement to bonuses and other incentives after termination, by including special contractual limitations in the employment and benefit plan contracts of the employee. In two recent decisions by the Ontario Court of Appeal the court has made it significantly more difficult for employers to avoid paying bonuses to wrongfully dismissed workers.

 

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Employment contracts may need to be amended because of a recent Court of Appeal decision

Bonus plans in employment contracts are a great way to motivate, reward and retain employees. Many of these bonus plans have built–in conditions that must be met before these bonuses are paid out. For example, an employee must be actively employed at the time the bonus is paid. Increasingly, the courts are being asked to determine whether these conditions have to be met and whether a bonus is owing. A recent decision by the Ontario Court of Appeal will come as a surprise to many of you.

 

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