Canada: Alberta Employment Law Update: Fall 2013

Last Updated: October 8 2013
Article by Timothy P. Chick

IN THIS ISSUE:

  • Placing restrictions on departing key employees
  • Constructive dismissal and fixed term contracts: when "not renewing a contract" is really a termination
  • The dangers of calf-roping simulators at a Stampede Party

Placing Restrictions on Departing Key Employees

Jardine Lloyd Thompson Canada Inc v Harke-Hunt, 2013 ABQB 313, ("Jardine")

In Jardine, the employer sought and obtained an injunction against the former employer, preventing her from: (1) soliciting present employees to leave their employment; (2) soliciting business from the employer's present customers and (3) divulging confidential information acquired through employment. The injunction was imposed for one year or until the end of litigation.

The Court granted an injunction against the employee, finding that she was a "key employee."

The Court considered the following in finding that Harke-Hunt was a key employee:

1. She was top management and Managing Director of a corporate department;

2. She was a "key person to the corporation";

3. She established a substantial 'Book of Business';

4. She had long-standing personal and trust relationships with corporate clients;

5. She had some decision-making authority and the power to exercise discretion and bind the corporation.

Given the employee's close connection with current clients, her knowledge of the Book of Business and the value of that Book, the Court found that the employer would suffer irreparable harm if the injunction was not granted. The Court also found that the employer, and not the employee, would suffer greater harm if the injunction was refused pending a decision of the case on its merits. The Court decided this point in favour of the employer due to the employee's potential inability to pay damages at the end of the day.

Although the Court conceded that it was difficult to balance whether or not to grant the injunction, the employee's designation as a "key employee" tipped the balance in favour of the employer. Generally speaking, when a fiduciary employee leaves, she will be prevented from, among other things, soliciting former clients for a 'reasonable time after departure'.

The Court of Queen's Bench has made it clear that if employers seek to impose interim restrictions on employees during the course of litigation, they must make a strong case that the employee is a fiduciary by proving they are a 'key employee'. On the other hand, the Court recognized that the employee was still free to do business with other companies, provided that those companies seek out the employee, and not the other way around.

The Court's decision reinforces the long-held notion that high-ranking, fiduciary employees who occupy positions of trust and confidence can be subject to much more onerous post-employment obligations than regular employees.

Constructive Dismissal and Fixed Term Contracts: When "Not Renewing a Contract" is Really a Termination

Thompson v Cardel Homes Limited Partnership, 2013 ABQB 353, ("Thompson")

In Thompson, the Court analyzed whether or not a former senior employee was terminated or whether his contract was simply not renewed. If the contract were simply not renewed, then the employee would not be entitled to his contractual one year's pay in lieu of notice.

Mr. Thompson (the "employee") was employed as a full-time Regional President under a written, fixed term contract that included both a severance clause and a termination of employment clause. In the event that the employee were to be terminated, he would be entitled to 12 months' pay in lieu of notice. However, another clause also stated that the employer had the ability to provide notice that it was not renewing the contract.

The employee was given notice in September 2011 that his contract was not being renewed for October 2011. The employer advised the employee that he no longer had any work responsibilities, ordered him to clean his desk out and withdrew access to his email and computer. The employer advised the rest of the company that the employee was no longer working there. Prior to this, there was no indication that the employer would not continue the relationship and the employee expected to work beyond October 2011. The employer took the position that notice had been given, the contract was not being renewed and paid the employee until late October 2011.

The Court framed the question to be decided in terms of repudiation of the employment contract and constructive dismissal. Repudiation occurs where an employer makes a unilateral change to a fundamental term of an employment contract, leaving the employee to accept or reject the repudiation. Constructive dismissal is assessed by determining whether a reasonable person in the same situation as the employee would have felt that the essential terms of the employment contract were being substantially changed.

The Court applied these tests and determined that the employee had been terminated, and not merely been given notice that the contract would not be renewed, the Court applied the tests for repudiation and constructive dismissal, holding that the employee was in fact constructively dismissed, despite the terms of the employment contract. Consequently, the employee was entitled to treat the employer's actions as a repudiation of the employment contract and receive damages contracted for him in his employment agreement.

Employers should be aware that the principles of repudiation and constructive dismissal will influence the interpretation of employment contracts and provide the employee with different legal options upon termination. Inserting clear "renewal/non-renewal" clauses in the employment contract may assist employers in proving that non-renewal, and not termination, was the option contemplated by the parties upon signing the agreement.

The dangers of calf-roping simulators at a Stampede Party

Alberta v XI Technologies Inc, 2013 ABCA 282, ("XI Technologies")

In XI Technologies, the employer was charged under the Occupational Health and Safety Act with (1) failing to ensure the health and safety of its employees and (2) failing to ensure all equipment used at a work site would safely perform the function for which it was intended or designed, after one of its employees was killed while attempting to operate the calf-roping machine without the use of an instruction manual. The trial judge acquitted the employer, but the summary convictions appeal judge overturned this and entered convictions. The Court of Appeal confirmed those convictions.

Although this was a customer-appreciation Stampede Party, the trial judge found as a fact that the employee who died was still both (a) engaged in an 'occupation' at the Stampede Party and that he was (b) assisting the employer in carrying out a 'business purpose' when operating the machine throughout the day. The calf-roping machine allowed users to sit on top of a fake horse, under which a mechanical calf was inserted and spring loaded. The calf would spring out of the machine when the rider pushed a release button.

On the day of the party, the machine was delivered late, the delivered machine was not the one initially ordered and further there was no operator, operating manual or safety guidelines. The employer was merely left to use the device as the employees saw fit.

The employees worked out a system of loading the calf into the machine so that the calf would shoot out of the machine so party-goers could attempt to rope it. Although the employees operating the machine developed ad hoc safety procedures, nobody knew what they were doing and there was no evidence that any of the employees were familiar with the machine prior to the day of the party. In order to make the machine work, one employee had to physically reach inside of the machine to ensure its operation.

At all times, there was a likelihood of premature release due to the sensitive 'release' plate. Eventually one employee had to reach far into the machine to disengage a hook when he was struck by a lever attached to the machine because the person riding the horse had pushed the release button too early. The Court of Appeal commented that "In this instance, once the hazard was detected, a reasonable employer would have simply placed the [machine] off to the side and hung an 'out of order' sign on it." The Court also upheld the summary appeal judge's finding that the danger was "reasonably foreseeable."

The Court concluded: "That XI Technologies would even consider operating a machine that no one had any familiarity with and without either its own operator or a proper set of written instructions in itself speaks volumes as to the lack of due diligence in this matter. This is particularly so given that the machine was going to be used by party goers who would be consuming alcohol." Employers should be aware of the dangers involved with renting simulator machines at official business functions and should ensure that they offer proper instructions regarding their use and operation. More importantly, customer-appreciation parties are not beyond the scope of employment and employers may become liable for mishaps or injuries that occur during those events.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Authors
 
In association with
Related Topics
 
Related Articles
 
Related Video
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
 
Email Address
Company Name
Password
Confirm Password
Position
Mondaq Topics -- Select your Interests
 Accounting
 Anti-trust
 Commercial
 Compliance
 Consumer
 Criminal
 Employment
 Energy
 Environment
 Family
 Finance
 Government
 Healthcare
 Immigration
 Insolvency
 Insurance
 International
 IP
 Law Performance
 Law Practice
 Litigation
 Media & IT
 Privacy
 Real Estate
 Strategy
 Tax
 Technology
 Transport
 Wealth Mgt
Regions
Africa
Asia
Asia Pacific
Australasia
Canada
Caribbean
Europe
European Union
Latin America
Middle East
U.K.
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.

Disclaimer

The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.

General

Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions