Canada: Top 10 Employment And Labour Law Cases In 2013

As 2013 wraps up, we take this opportunity to revisit the most significant cases that altered the Canadian employment law landscape this year. Here are our top 10:

1. Communications, Energy and Paperworkers Union of Canada, Local 30 v. Irving Pulp & Paper, Ltd., 2013 SCC 34

(Read our e-Lert here and the decision here)

The Supreme Court has had the final word on alcohol testing. Random alcohol testing in the workplace is prohibited unless the employer can prove that, in addition to having a dangerous workplace, there are other pressing factors such as an overt substance abuse problem in the workplace.

2. Pate Estate v. Harvey (Township), 2013 ONCA 669

(Read the decision here)

Highlighting that harsh tactics in dealing with dismissed employees can backfire in a major way, in 2009, the Ontario Superior Court of Justice awarded a wrongfully dismissed employee an unprecedented $550,000 in punitive damages. The Township had dismissed the employee on the basis of alleged discrepancies in building permit fees and then exerted pressure on the OPP to lay criminal charges, which resulted in a four-day criminal trial and ultimate acquittal. The employee sued the Township for wrongful dismissal and malicious prosecution and was awarded damages for both. In November 2013, the Ontario Court of Appeal slightly reduced the amount of punitive damages awarded by the trial judge to $450,000 but still found that the Township had severely mistreated the employee.

3. 1392644 Ontario Inc. (Connor Homes) v. Canada (National Revenue), 2013 FCA 85

(Read our e-Lert here and the decision here)

In the ongoing quest to define who is an employee, the Federal Court of Appeal took a crack at reconciling the competing tests for who is an employee vs. independent contractor. This was a tax law related decision so we wait to see if other adjudicators will follow this test, which places a new focus on the intent of the parties in forming the relationship; a factor not generally considered by the Court in employment law cases.

4. Wilson v. Solis Mexican Foods Inc., 2013 ONSC 5799

(Read the decision here)

This was the first Ontario court decision to award damages under the Human Rights Code. The Ontario Superior Court awarded $20,000 to the employee after finding that her ongoing back problems and related requests for accommodation were a factor in the employer's decision to terminate, despite the employer's argument that her termination was part of a corporate reorganization. The case serves as a reminder that discrimination and accommodation cases are not limited to the Human Rights Tribunal, but can be raised in wrongful dismissal cases, as well.

5. Alberta (Information and Privacy Commissioner) v. United Food and Commercial Workers, 2013 SCC 62

(Read the decision here)

In 2006, during a lawful strike, a union recorded and photographed individuals crossing its picket line. The union also posted signs in the picketing area stating that images of individuals crossing the picketline would be placed on a website. Several individuals who were recorded crossing the picketline filed complaints with the Information and Privacy Commissioner of Alberta under its Personal Information Protection Act ("PIPA"). The Supreme Court of Canada ruled that the scope of PIPA infringed on the union's right to freedom of expression and declared PIPA to be invalid, giving the Alberta legislature 12 months to rewrite PIPA to make it compliant. The Supreme Court emphasized the importance of a union's freedom of expression in the context of labour disputes, noting that it is through expressive activities, such as picketing, that unions attempt to persuade their employer as well as bring the disputed issues to the attention of the general public. The Court also cautioned that a union's freedom of expression is not absolute and must be balanced with the other interests at stake. The case is a reminder that a union's right to picket and use of picketlines will be strongly protected by the courts, so long as the form of expression does not unlawfully infringe on other protected rights such as privacy.

6. Payette v. Guay Inc., 2013 SCC 45

(Read our e-Lert here and the decision here)

In a refreshing decision, the Supreme Court of Canada upheld the non-competition and non-solicitation restrictions contained in a purchase and sale agreement which restricted the vendor employee from competing or soliciting for a 5 year period following the termination of employment. The Supreme Court held that restrictive covenants entered into in the context of a sale of a business, as opposed to in the employment context, are generally lawful unless the scope is unreasonable; a significant departure from the employment context which starts from the premise that restrictive covenants are unlawful unless proven reasonable. Further, the Supreme Court held that given today's modern economy, non-solicits in respect of clients do not need geographic scopes if the provision specifies a specific type of client. The case is a positive development for employers.

7. Globe and Mail v. Communications, Energy and Paperworkers Union of Canada, Local 87-M, Southern Ontario Media Guild (Jan Wong Grievance)

(Read our e-Lert here and the decision here)

In this labour arbitration case, the arbitrator ordered a former employee to repay the full amount of a settlement after finding that she breached the confidentiality obligation contained in the settlement agreement. The settlement agreement specifically contained a pay-back clause. Several years after the settlement, the employee published a book which contained numerous statements that alluded to a payout, such as "I can't disclose the amount of money I received", "I'd just been paid a pile of money to go away", and "Two weeks later a big fat check landed in my account." The arbitrator ruled that the statements did not have to contain the amount of the settlement; simply stating that there had been a payment of some kind was sufficient to breach the agreement. The outcome here suggests that employers should consider pay-back provisions in settlement agreements, particularly where the terms of settlement are large or high profile.

8. Saturley v. CIBC World Markets Inc., 2013 NSSC 300

(Read our e-Lert here and the decision here)

Just cause does exist. The Nova Scotia Supreme Court held that CIBC had just cause to terminate a prominent Halifax investment advisor because he had engaged in unauthorized discretionary trading on behalf of his clients. The Court rejected the advisor's argument that he had been wrongfully targeted for being the whistleblower of a CIBC error that resulted in $38 million in losses to his clients alone. The Court was persuaded by the fact that the advisor's discretionary trading was substantial and ongoing, and that he had lied when the employer confronted him about it. The decision demonstrates that the Court will support a just cause finding where the employee's conduct is egregious and where the employer has conducted a thorough and well-documented investigation.

9. O'Neill v. General Motors of Canada, 2013 ONSC 4654

(Read the decision here)

The Ontario Superior Court ruled that employers have the ability to alter benefits after retirement if the right is drafted in a clear and unambiguous agreement. However, in this case the Court ruled in favour of the retired employees, finding that the language in GM's plan was not sufficiently clear so as to permit the alteration of benefits after retirement. The case demonstrates that employers who wish to reserve the right to change their benefits plans and for such changes to apply to retired employees can do so, but the plan must make clear that the changes will apply to retirees. If it does not, the Court may consider the retirement benefit to be a form of deferred compensation that cannot be altered, as opposed to a gratuitous benefit.

10. Fair v. Hamilton-Wentworth District School Board, 2013 HRTO 440

(Read our e-Lert here and the decision on remedy here)

In one of the more controversial cases of the year, the Human Rights Tribunal of Ontario reminded us of the extent of its remedial powers. The Tribunal ruled that the employer school board failed to accommodate the employee's disability and reinstated the employee to her position nearly 9 years after her termination. In addition, the Tribunal awarded nine years of back pay including lost wages, restoration of seniority, banked sick days, pension, and CPP contributions. The Tribunal also ordered the employer to calculate the tax consequences arising from receiving multiple years of wages in a single lump sum and to compensate the employee accordingly, as well as out-of-pocket medical/dental expenses. Finally, the Tribunal ordered $30,000 as compensation for the injury to the employee's dignity, feeling and self-respect. This case is under judicial review and we expect the Court to rule on it early in the 2014. Be on the lookout for a follow-up E-lert.

BONUS:

Telus Communications Inc. and Telecommunications Workers' Union 2013 ABQB 355 (Read the decision here)

The Alberta Court of Queen's Bench found that Telus was justified in firing an service technician for just cause who claimed to be too sick to work yet pitched in a softball game the same day. The employee had originally requested the day off to play in the softball tournament but was denied because no other technicians were available to complete the scheduled work. The employee then called in sick and the employee's manager, who was suspicious about the illness, went to the location and observed him playing in the game. When questioned about it, the employee admitted that he pitched in the game but insisted that he had had a severe case of diarrhea the night before that he could manage on the softball field but not at customers' homes. The Court overturned the arbitrator's decision of reinstatement and found that Telus had just cause to terminate the employee. The Court found that the conclusion that an employee is too sick to work yet can still pitch in a softball game defied logic and common sense, noting that it would be unreasonable that the diarrhea could be so severe as to merit missing work yet be manageable on the pitcher's mound. The decision in this case should be reassuring to employers confronted with highly questionable employee absences.

Happy holidays from the Cassels Brock & Blackwell's Employment and Labour Group

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