New decisions come out of the Courts all the time, but some of these are big enough to change where the law stands.
The following top employment cases of 2016 have either made it clear where the law stands on a legal issue or is a reminder of important legal principles within employment law. Generally, this means precedent value, so we end up with more appeal level cases and you wouldn’t see, for instance, cases from tribunals or the small claims court, even if interesting fact-wise.
To get on this list the case had to be changing a law in a fundamental way and affecting employees in Ontario. Generally, while we did not rule out cases of Unionized employees it was taken into account that they affect a much smaller percentage of employees, and so none made the list this year.
Read more about our top 5 cases for Employment Law in 2015, shockingly we ended up with the same two repeats this year, on surprising appeals.
But first, the runner-ups:
It was hard to only choose 5 cases when 2016 was a big year and many important and influential decisions were made. So, we have named two runner-up top employment cases of 2016 which have also made some waves in employment law.
Runner Up#1: Oudin v. Le Centre Francophone de Toronto, 2016 ONCA 514
In Oudin, the Court of Appeal upheld a decision enforcing a termination clause that did not include any references to severance pay or the continuation of benefits. This would usually be argued by employees that failing to reference such things renders a termination provision to be illegal and therefore invalid. However, the Court upheld the decision that permitted the employer to terminate the Plaintiff’s employment by providing only the minimum requirements under the Employment Standards Act. Unfortunately, this case cannot make our list since the Court of Appeal did not meaningfully help with the lack of clarity on ‘ESA minimum’ clauses.
Runner up #2: Strudwick v. Applied Consumer & Clinical Evaluations Inc., 2016 ONCA 520
In Strudwick, the Court of Appeal upheld the decision that the Plaintiff was entitled to the award for damages that had been awarded by the trial Judge. The Court awarded an even larger amount in damages to punish the bad behaviour of the Defendant, nearly doubling the original award in the amount of $246,049.92. This case shows that Courts will not shy away from ordering a large amount of damages for bad behaviour.
However, the case is not fair to have on the list considering that it was a default judgment initially and so the Defendant was not able to meaningfully able to advocate on its own behalf.
And now for the top five cases of 2016:
5. Hamilton-Wentworth District School Board v. Fair, 2016 ONCA 421
While it is rarely ordered, the Human Rights Tribunal of Ontario (HRTO) has the remedial power to reinstate employees and given their specialized expertise the remedy provided by the HRTO is given a high degree of deference. Whether reinstatement is ordered depends on the context of the situation.
In Hamilton-Wentworth, the Ontario Court of Appeal upheld a decision of the HRTO that ordered the employee who had been terminated to be reinstated with her full seniority even though almost a decade had passed since she left the workplace for medical reasons.
4. Keenan v. Canac Kitchens Ltd., 2016 ONCA 79
Generally, courts tend to put a maximum cap on the reasonable notice period that an employee can receive, and only exceptional circumstances will support a notice period in excess of 24 months.
In Keenan, the Ontario Court of Appeal upheld that the Plaintiffs had been characterized as “independent contractors” but were actually dependent contractors and therefore were entitled to reasonable common law notice the same as an employee, which in this case was 26 months’ notice. This case affirms a prior principle set out by the same Court in McKee v. Reid’s Heritage Homes Ltd., 2009 ONCA 916. The principle that dependent contractors are entitled to the same protection with respect to termination entitlements as an employee, including the requirement for reasonable notice upon termination. Although it was not a case that would be considered of “exceptional circumstances” the Court awarded above the 24 months’ notice cap.
Such a large notice period for a contractor deserves a solid place on the list given the amount of people in Ontario incorrectly called ‘contractors’ and told they do not deserve notice.
3. Wilson v. Atomic Energy of Canada Limited, 2016 SCC 29
A repeat from our 2015 list which was at the federal court of appeal level. In this case, the Supreme Court dramatically reversed the appeal and federal court to set the law of the land for Federally regulated employers.
In accordance with Section 240 of the Canada Labour Code (“CLC”), employees with more than one year of service can only be terminated under the following circumstances: 1) for just cause or 2) as a result of the discontinuance of their function. When neither of these applies, the employee is considered to be unjustly dismissed and is entitled to reinstatement with back pay under the CLC pursuant to section 242(4).
In Wilson, the Supreme Court of Canada held that, under the CLC, non-unionized and non-managerial, federally-regulated employees are unjustly dismissed if they are terminated without cause and not on the basis of discontinuance of function or lack of work. In other words, the CLC only allows federally regulated employees to be dismissed with cause. This is even if reasonable notice pay in lieu is provided by the employer.
2. Paquette v. TeraGo Networks Inc., 2016 ONCA 618
Another repeat from 2015 and one where Monkhouse Law was happy enough to have been successful for our client, Paquette.
In our 2015 review, Paquette was cited for Summary Judgment ‘trust and accounting’ approach which assists with final resolutions for Summary Judgment. In 2016 there was a further appeal on a single issue, whether Paquette was owed his bonus during the notice period.
Many times, upon termination, employees are told that they are not eligible to receive their bonus because they will not be “actively employed” to the end of the fiscal year or on the date of the bonus payout.
In Paquette, the Ontario Court of Appeal confirmed and made clear that employees are not required to be actively employed during the notice period in order to be entitled to receive their bonuses or other similar payments. This is based on the principle that had an employee been given working notice, instead of pay in lieu of notice, he would have received his bonus. At paragraph 35:
In the present case, as in Taggart, Schumacher, and Bernier, the requirement for active employment does not prevent the appellant from receiving, as part of his wrongful dismissal damages, compensation for the bonuses he would have received had his employment continued during the period of reasonable notice.
1. Howard v. Benson Group, 2016 ONCA 256
Fixed-term contracts can be beneficial to employers if they are used correctly. However, employers must keep in mind that there are liabilities that can come with using such contracts. The following case provides employees under fixed-term contracts with more protections.
In Howard, the Ontario Court of Appeal upheld a claim for wages for the unexpired term of the employment contract after finding the termination provision in the employment contract was unenforceable due to the termination clause being ambiguous.
At paragraph 29:
If an employer does not use unequivocal, clear language and instead drafts an ambiguous or vague termination clause that is later found to be unenforceable, it cannot complain when it is held to the remaining terms of the contract.
This major change in the law, and potential liability for both sides, earn Howard & Benson our top spot for 2016.
Well, that is our run-down of the top cases of 2016. We will have to see what 2017 brings. If the last two years are representative we might estimate at least one of these cases to be appealed into 2017 (although not the Supreme Court case of Wilson, and we can assure you that Paquette is not under appeal).