Author Archives: Michael Coyle

About Michael Coyle

Michael V. Coyle JD is an experienced lawyer and a neutral mediator and arbitrator based in Kentville, Nova Scotia. He provides strategic legal advice, negotiation services and private dispute resolution throughout Atlantic Canada. For more information, please visit his website at http://www.mvc-private-law.ca

The Duty to Accommodate Child Care Responsibilities

slide2new-640x226

by Michael V. Coyle. JD*

Under federal and provincial Human Rights law it can be illegal for an employee to refuse to an employee’s reasonable request for child or elder care accommodation.

Two very recent cases from the Federal Court of Canada illustrate the current state of the evolving law of “family status” claims.

In one case, a freight train conductor was fired by Canadian National Railway when she refused a temporary work assignment in another province (required under the Collective Agreement) because she could not find anyone to look after her two and six year-old children after normal working hours while she was away. The children’s father also worked for CN as a locomotive engineer and he was away working for periods of 14 to 24 hours.

In the other case, the Canadian Border Service Agency refused the employee’s request for fixed shifts so she could arrange for the care of her two young children upon her return from maternity leave. Her husband also worked for CBSA on rotating 24/7 shifts. CBSA had an unwritten policy that fixed shifts were reserved for part-time workers and told this woman that she would have to give up her full-time status if she wanted fixed shifts, with the resulting loss of pension and other benefits.

Each case went before the Canadian Human Rights Tribunal and in each case the Tribunal held that the employer had illegally discriminated against these women on the basis of their “family status”. The Tribunal found in both cases that the employer had failed to discharge its duty to accommodate.

In the CN case, the Tribunal ordered the worker’s reinstatement without loss of seniority with reduced compensation for her lost earnings (due to failure to mitigate), plus damages for pain and suffering and the employer’s “wilful or reckless conduct” totalling $35,000, plus interest. CN was ordered to amend its policies and provide corrective training for its managers.

In the CBSA case, the Tribunal ordered the employer to cease its discriminatory practices and to compensate the employee for her lost wages and benefits, including overtime and pension contributions. That Tribunal also ordered CBSA to pay damages amounting to $35,000 plus interest at the Canada Savings Bond rate.

Canadian National and the federal government each sought judicial review of their respective cases before the Federal Court of Canada. The Court agreed with the Tribunal in separate decisions (with minor variations in CBSA case) written by the same judge and released a day apart in late January and early February, 2013.

Significantly, the Federal Court judge rejected the more stringent test to be applied to employee claims under family status that the British Columbia Court of Appeal used in the “Campbell River” case (2004) under which the employee is required to prove that there has been a “serious interference with parental or other family obligations”, which the BC appeal court said would usually be “difficult to make out”. In these cases the Federal Court opted for a more moderate test that requires the employee to prove simply that she had taken appropriate steps “to reconcile family obligations with work obligations”.

It is of interest that both of these cases involved unionized employees under Collective Agreements. Presumably, the Union could have proceeded to advance these family status claims before a grievance arbitrator but the employees involved (apparently) chose to go to the Canadian Human Rights Tribunal. It is impossible to know from the Court decisions what role the unions involved played in the proceedings, if any. But unions cannot  be mere bystanders in these cases. Unions not only owe a duty of fair representation to their members but they also have a positive legal duty to oppose discrimination in all forms in the workplace. In the CBSA case, the federal government made a formal motion to add the Union as a party before the Tribunal but that motion was opposed by both the Human Rights Commission and the complainant and the motion was dismissed by the Tribunal in separate reasons.

Of course, it makes no difference from a legal standpoint whether the affected employee is in a union or not. These rulings apply with equal force to non-union employees.

While both of these cases dealt with child care situations, it must be noted that the principles involved would apply equally in “elder care” situations as well. Elder care is, of course, of increasing concern to many families.

It is unlikely that these two recent Federal Court rulings will be the last word on the subject of family status claims. These rulings may be appealed, of course, and if they are not, other cases likely will be. Eventually, the Supreme Court of Canada will have to provide guidance on this very significant issue.

In the meantime, lawyers, tribunals, arbitrators and judges will struggle on a case-by-case basis to determine when the duty to accommodate is triggered by child (or elder) care obligations.

The message to employers, large and small, is quite clear: the law recognizes a duty to accommodate your employees’ family obligations. While the exact point at which that duty might be triggered may still be in some doubt, it would be foolish (not to mention potentially very expensive) to ignore your employees’ family care obligations. This is a very specialized area of law and employers (and employees) would be wise to consult with knowledgeable counsel should these issues arise in your workplace.

*Michael Coyle is an experienced employment-labour relations lawyer and a neutral mediator and arbitrator based in Kentville, Nova Scotia. Information provided in this article is meant for general interest only and is not a substitute for legal advice about your own situation. Michael can be reached by email at michael@mvc-private-law.ca  For more information and tips on employment and labour law issues, visit his website at www.michaelcoyle.ca

©Michael V. Coyle, 2013

Employment Termination Settlements and Taxes

slide2new-640x226

by Michael V. Coyle, JD*

Both employers and employees often have questions for me about income taxes when there is a lump sum payment made to employee for ‘pay in lieu of notice’ and about when legal fees can be deducted from their taxable income.

This article briefly covers the general situations and rules. For more complete, accurate and up to date information please consult the relevant current tax circulars and CRA bulletins or consult a tax professional.

Pay in lieu of notice of termination

An employer may voluntarily decide to pay an employee an amount of money as ‘pay in lieu of notice of termination’ to avoid a dispute. Or the employee may advance a claim for pay in lieu of notice on grounds of wrongful dismissal and the parties might agree to settle out of court for a certain amount of money. Or a Court might award pay in lieu of notices as ‘damages’ in a wrongful dismissal lawsuit.

In any of these cases the lump sum amounts paid to the employee are considered to be taxable employment income. In all of these cases the employer must withhold and remit to CRA a minimum percentage based on the amount to be paid. Currently, those percentages (outside of Quebec) are: 10% up to and including $5,000, 20% up to and including $15,000 and 30% on amounts over $15,000.

The employee may ask the employer to deduct and remit additional tax. If requested, the employer can do so.

The employer is also required to deduct and remit CPP contributions and EI premiums.

However, if the employee elects to treat the lump sum (or part of it) as what is known as a “retirement allowance” (their choice), that money can be deposited directly by the employer into the employee’s designated RRSP, without the withholding tax.

Legal fees

Reasonable legal fees paid by an employee to collect or establish the right to collect amounts that must be reported as employment income (i.e. pay in lieu of notice) are tax deductible. To claim that deduction the employee files a Form T777 (Statement of Employment Expenses) with their tax return.

Legal fees paid by employers for advice and representation on terminations are, of course, deductible as business expenses.

General damages

Generally speaking, amounts paid as “general damages”, whether through a settlement or by Court Order, are not taxable because they are not “income”.

General damages (as opposed to pay in lieu of notice) are typically paid to compensate for “pain and suffering”, including “hurt feelings” or “humiliation”. General damages are also awarded, for example, in defamation cases, human rights cases and in cases where there has been tortious interference with contract. These kinds of claims might be advanced at the same time as a wrongful dismissal claim.

If claims for which general damages are awarded are settled at the same time as a wrongful dismissal claim it is important that the settlement documents specify what amounts are for pay in lieu of notice (taxable) and which amounts are paid as “general damages” (not taxable). This should not be an issue if the payment is Court-awarded because the Court will invariably specify which amounts are awarded under each heading. It is sometimes overlooked in settlements, however, because as parties move closer to settlement they tend to speak in all-inclusive dollar amounts, despite sometimes very different views on how those sums are calculated for settlement purposes.

Legal fees paid by the employee to collect or establish the right to collect general damages are not tax deductible but legal fees paid by an employer to defend against such claims are business expenses.

*Michael Coyle is an experienced employment-labour relations lawyer and a neutral mediator and arbitrator based in Kentville, Nova Scotia. Information provided in this article is meant for general interest only and is not a substitute for legal, accounting or tax advice about your own situation. For advice on your own situation consult a qualified professional. For more information and tips on employment and labour law issues, visit Michael’s website at www.michaelcoyle.ca

©Michael V. Coyle, 2013

 

Nova Scotia Elections: Fairness and Impartiality

slide2new-640x226

Remarks of Michael V. Coyle*, Chair of the Nova Scotia Election Commission, on the
occasion of the first inauguration of returning officer and assistant returning officers under the new Elections Act at Province House, Halifax, Nova Scotia, January 23, 2013:

Back in 1924, Lord Chief Justice Hewart had these words to say in a case before
the British House of Lords:
“It is not merely of some importance, but it is of fundamental importance that
justice should not only be done, but should manifestly and undoubtedly be seen
to be done.”
Of course, His Lordship meant that as a reminder to judges that it is not sufficient
that their decisions be fair and impartial. Rather, the public’s faith and trust in the
judicial system requires that the public must come away from the Court having
seen for themselves that it was fair and impartial. Appearances, in other words,
matter very much.
It is the same with elections.
It is not sufficient that election officals conduct themselves in a fair and impartial
manner. The public’s trust in the integrity of our democratic electoral process
requires that the work of election officials is, to borrow Viscount Hewart’s words,
“manifestly and undoubtedly” seen to be fair and impartial.
That, in a nutshell, is why this is such an historic occasion.
You have been appointed, for the first time in our Province’s history, as Returning
Officers and Assistant Returning Officers, by the Chief Electoral Officer, not by
the Government of the day.
That does not mean, of course, that previous returning officers (or those of you
who have now been re-appointed by the Chief Electoral Officer) were anything
less than fair or impartial.
It simply means that candidates for office, their campaign teams, the political
parties and, most importantly, the public in the communities you serve, can now
have even greater confidence in your integrity and impartiality as returning
officers. It brings a whole new level of prestige and distinction to the merit-based
appointments that we are celebrating today.
It has been my privilege to have served on the Nova Scotia Election Commission
for most of the past 30 years. Over that time, it was suggested, every once in a
while, that maybe our returning officers should be appointed by some body other
than the Provincial Cabinet, just to enhance the appearance of the returning
officers’ impartiality.
Suffice to say, that suggestion was not met with any particular enthusiasm over
the years, until 2011, when the Elections Act was revised from top to bottom by
the House of Assembly.
As it now stands, Nova Scotia has an up-to-date Elections Act that, in many
important ways, is the envy of elections officials all across this country.
 The Chief Electoral Officer now reports directly to the Legislature, as an
Officer of the House of Assembly.
 Elections Nova Scotia is now established as an independent, professional
elections organization whose budget is approved directly by the
Legislature.
 Regulations covering everything from political contributions to the
registration of our political parties, which were once made by Cabinet, are
now enshrined in the Elections Act itself.
More importantly, voters in Nova Scotia now have twelve ways they can choose
from when exercising their democratic franchise. Cumbersome processes that
once were obstacles to the exercise of the vote, and particularly so for disabled
voters, have been eliminated or streamlined. Additional voting opportunities have
been created.
And, let me assure you, Returning Officers were consulted – and you were
listened to – when the Act was being revised. Many of the improvements came
directly from your collective wisdom and experience as our most important frontline
election officials.
At the same time, Elections Nova Scotia has made tremendous strides in
enhancing the quality and availability of training for elections officials from across
the province.
The mapping services and database management expertise at Elections Nova
Scotia are now second to none in this country and are the envy of many electoral
organizations, both inside Canada and well beyond our borders.
Long-needed improvements to the remuneration for elections officials that
recognize their increased duties and responsibilities have now been put in place
and are ready to go for the next election.
Most recently, I am particularly pleased to say, Elections Nova Scotia has
entered into a formal protocol with the Department of Education and each one of
the School Boards in the Province for the use of schools as polling locations
during elections. Not only does this go an awfully long way towards providing
truly accessible polling places for many disabled Nova Scotians, but it provides a
Michael V. Coyle, Chair of the Nova Scotia Election Commission
January 23, 2013
wonderful educational opportunity for our young people to experience democracy
in action at first hand.
Using schools as polling places may seem like small potatoes to some; it’s just
common sense, after all. But I know I don’t have to tell anyone in this room what
a huge benefit that will be in communities throughout Nova Scotia, come the next
election. This achievement is, I am told, unique in Canada and it will serve as a
benchmark for others across the nation to follow.
Of course, no one is saying that our Elections Act or our electoral procedures are
now perfect. But I can say, with every confidence, that great and important
progress is being made right here in Nova Scotia.
Your historic appointments today are very much part of that progress.

*As well as being Chair of the Nova Scotia Election Commission, Michael  Coyle is a Barrister, Arbitrator and Mediator based in Kentville, Nova Scotia.

Final Offer Selection: Replication or Reasonableness

slide2new-640x226

by Michael V. Coyle, JD*

In a Final Offer Selection (“FOS”) arbitration, the arbitrator is called upon to choose between the two “final offers” put forward by the parties to the dispute. The arbitrator has no jurisdiction in a FOS arbitration to modify the offers presented or take parts of one or the other in fashioning the award.

In theory, at least, FOS requires the parties to moderate their positions and eliminate any “extreme” proposals from their final offer out of fear that their offer will be rejected by the arbitrator.

The initial debate in FOS interest arbitrations in the labour context often concerns whether the arbitrator is required to chose between the final offers based on which proposal most closely resembles the deal that the parties would have reached had they been able to negotiate a settlement themselves (“replication”) or whether the arbitrator can look “more broadly at the relative reasonableness or unreasonableness of the competing final offers” (“reasonableness”).

The weight of Canadian authority clearly favours replication as the guiding principle in FOS interest arbitrations, as it is in non-FOS interest arbitrations in the labour context, where the parties have been unable to reach a Collective Agreement through normal bargaining, although the debate still rages.

In a recent (November 2, 2012) Manitoba case, Arbitrator Arne Peltz dealt with an FOS interest arbitration where (in a reversal of the norm, perhaps) the Employer favoured replication and the Union argued in favour of reasonableness.

After carefully canvassing the authorities and the arguments of both sides, Arbitrator Peltz put it this way in his award:

In my view, replication remains the governing principle, recognizing that the essence of FOS is a stark choice between two positions, neither of which may necessarily reflect the arbitrator’s view of a replicated collective agreement. In such case, the FOS arbitrator should select the offer which better replicates the objective result under reasonable collective bargaining. The criteria ordinarily utilized in interest arbitration remain relevant. This conclusion is consistent with the arbitral authorities cited by both parties …

And a few paragraphs later:

Considering the entrenched role of replication theory and all the authorities cited above, I cannot accept the Union’s formulation based on pure reasonableness, or stated another way,  the “less unreasonable” test. The touchstone of interest arbitration remains as always – objective analysis of prevailing terms and conditions in relevant labour markets, consistent with labour relations realities. Nevertheless it was apparent that in addressing “reasonableness”, [the Union] was dealing with many of the same issues raised by [the Employer] under the guise of replication, so the parties were not so far apart, even on governing principles. Subjective fairness in the eye of the beholder is not a proper arbitral approach but certainly, as stated in the UMFA award, supra (at para. 8), “In the final analysis, an arbitrator must adopt some standard of reasonableness.”

It remains an open question in non-labour FOS arbitrations, which are of increasing interest for settling private disputes in the business community, as to whether the commercial arbitrator must adopt “replication” or a “reasonableness” standard in FOS arbitrations.

In my view, the arbitrator in non-labour FOS cases should seek the views of the parties on that issue very early in the proceeding and encourage them to reach agreement on it at the outset. Failing agreement, and after hearing the parties on that point, the arbitrator should rule on that question before the hearing commences on the merits.

 

*Michael Coyle is an experienced labour lawyer and a neutral arbitrator in both labour and non-labour cases based in Kentville, Nova Scotia. Information and opinion expressed in this article is meant for general interest only and is not a substitute for legal advice about your own situation. Michael can be reached by email at michael@mvc-private-law.ca  For more information on Final Offer Section and Private Arbitration, visit his website at www.michaelcoyle.ca

©Michael V. Coyle, 2013

 

 

Municipal Government Law: Closed Meetings of Council

slide2new-640x226

by Michael V. Coyle, JD*

The spirit and intention of Nova Scotia’s Municipal Government Act (MGA) is to ensure that municipal councils and committees conduct public business in public, in open sessions where all are free to attend and see for themselves how public business is being conducted.

In certain exceptional cases, however, Council is permitted to meet in closed session where the public is excluded, often called in camera meetings. The only things that can legally be discussed in a meeting where the public is excluded are specifically listed in s. 22 of the MGA:

  • The buying, selling or lease of municipal property
  • Establishing the minimum price to be accepted at a Tax Sale
  • Personnel matters
  • Labour relations
  • Contract negotiations
  • Litigation or potential litigation
  • Privileged legal advice or
  • Public security issues

However, beyond providing directions to staff and/or municipal solicitors, Council is not permitted to make any decisions in a closed or in camera meeting. That can only be done in an open, public meeting.

Council is required by law to specify in its minutes the type of matter that was discussed in a closed session. In my view, that means that the motion to go in camera must specify which of the above items listed in s. 22 are to be discussed outside of the public purview. Only in that way can a member of the public be satisfied that Council had the legal authority to meet in private.

The same rule applies to all meetings of committees that are appointed by council and, in my opinion, to all meetings of inter-municipal services corporations established under s. 60 of the MGA, which includes, for example, regional transportation or solid waste management authorities.

Unfortunately I often see minutes from municipal Councils and related bodies that fail to give any reason for conducting public business in private. The minutes often merely record that Council went “in camera” on motion, without giving any reason, followed by an annotation that there was “no report” coming out of the closed session.

In my view, Councils or municipal bodies that operate in that manner are in violation of the MGA and are taking a risk that their private proceedings could be challenged. They are also inadvertently contributing to public suspicion and mistrust of government. It makes no sense for Councils to do that when it is so easy to avoid by simply having the motion specify a lawful reason for going into a closed session. It would, in my opinion, be perfectly acceptable simply to move a motion to go in camera, for example, “to discuss a labour relations matter” or “to receive a legal opinion” or “to set a minimum acceptable price at a tax sale”.

*Michael V. Coyle, JD is an experienced municipal government lawyer. He is currently Town Solicitor for Bridgetown, Nova Scotia. The opinions expressed in this article are his own and are intended for general information only, not as legal advice on your particular situation. For more information, please visit his website at michaelcoyle.ca  He can be reached by email at michael@mvc-private-law.ca

© MVC Private Law 2012

 

Statutory Holidays in Nova Scotia

by Michael V. Coyle, JD*

It seems that as each “holiday” approaches I get questions from employers and sometimes from employees about what the “paid holidays” are in Nova Scotia. And no wonder. It can be quite confusing.

Under Nova Scotia law there are only five “paid holidays”: New Years Day, Good Friday, Canada Day, Labour Day and Christmas Day. Remembrance Day is not a “holiday” per se, but most businesses in this province are required to be closed on November 11 and, under the Remembrance Day Act, they are required to pay their employees for that day.

What about those other “holidays” that we all know and love:  Victoria Day, Thanksgiving Day and Boxing Day? Well, these are not technically paid holidays for employees in Nova Scotia who work for businesses under the provincial jurisdiction. Most employers in Nova Scotia come under the provincial jurisdiction, except broadcasters, the banks, telecommunications, airline and (certain) transportation companies. However, these federal holidays, often called “bank holidays” because the banks are closed, are traditionally recognized as paid holidays by most non-retail employers in Nova Scotia.

If these “bank holidays” have been historically recognized by an employer and if the employer suddenly decides not to recognize them as “paid holidays” the affected employees could file a complaint under the provincial Labour Standards Code that the employer has broken an “agreement” with the employees and they could seek their lost pay (or a day off in lieu) for those days.

And, as a practical matter, most unionized employees get all of the above holidays under their Collective Agreements with the employer (plus the “August holiday” that I will discuss in a moment). Because the provincial government is a unionized employer that means that provincial government offices, the courts and public registries are also closed on those so-called “federal” holidays, even though they are not actually provincial general holidays.

Easter Monday is not a recognized holiday, either provincially or federally, but it is a designated holiday under the provincial civil service collective agreement, so government offices are closed. Some employers have traditionally recognized Easter Monday as a paid holiday and, as such, they could also be held to that “agreement” with their employees.

By the same token, Davis Day (June 11), while not a statutory holiday, is staunchly recognized in some former mining communities in Nova Scotia as a quasi-civic holiday.

The holiday that falls on the first Monday in August, which has been traditionally called Natal Day in Halifax and is now generally referred to elsewhere as “the August holiday”, has become widely observed throughout the province. As mentioned, many union contracts in Nova Scotia now recognize it as a paid holiday so the provincial government offices are closed that day. The banks also recognize it voluntarily, as do many of our leading employers.

Retailers are governed by designated retail closing day legislation and, if they operate in a shopping mall, by leases that may require them to be open on some “holidays”.

Of course, most employers understand that traditional holidays, even if they are not technically “statutory holidays” are very important to their employees. Many of us have family and community traditions built around them. Whether it is opening the cottage on the Victoria Day weekend, a community or church picnic on the August holiday weekend or sharing a family meal on Thanksgiving Day, these holidays are much-anticipated and appreciated events that contribute to employee morale, family bonds and work-life balance.

So, I explain to my business clients that while, legally-speaking, you may be able to require your employees to come to work on Boxing Day – or dock their pay if they stay home – you run the risk of offending your employees, their families, at least some of your customers and the wider community in which you operate. Most employers agree that would not be particularly good for business. And there is the chance that you could still face a Labour Standards complaint.

*Michael Coyle is an experienced employment and labour relations lawyer based in Kentville, Nova Scotia. Information and opinion expressed in this article is meant for general interest only and is not a substitute for legal advice about your own situation. Michael can be reached by email at michael@mvc-private-law.ca  For more information and tips, visit his website at www.michaelcoyle.ca

©Michael V. Coyle, 2012

 

 

 

 

 

 

 

 

 

 

 

Regular Employee Performance Appraisals a Must

by Michael V. Coyle, JD*

Sally’s job performance had been slipping. The boss grumbled but did nothing. Recently, she missed an important deadline that cost the company a contract. She used the ‘excuse’ that she was often distracted by her home situation because, as the employer knew, she had to look after her elderly mother with progressive dementia. The boss didn’t buy it and she was fired for poor performance.

Joan’s work was first rate. She was up to any challenge. The boss and the clients loved her and she was a real asset to the company with a bright future, which everybody just assumed she knew. Then she quit to work for a competitor and many of the clients followed her out the door.

In neither case did the company do regular employee performance appraisals. And in both cases it cost them.

Sally sued for wrongful dismissal and won. The company was unable to document her “increasingly poor performance” leading up to her dismissal and, even worse, was unable to show that there had been any warnings or counselling or any progressive discipline before she was fired for that “one incident”. She testified that her boss was irritable and unapproachable and made snide comments all the time. She also successfully brought a human rights complaint against the employer because the company had failed to accommodate her family situation and therefore had discriminated against on grounds of her family status. All told, with legal fees and damages, the cost to the employer was well in the six figure range.

If Sally had had regular performance appraisals not only would the employer have a record of her deteriorating performance and their efforts to help her improve it but they would likely have been made aware of her home situation. Human rights tribunals across the country are increasingly placing an onus on the employer, once they are aware of a potential human rights issue, to explore that with the employee and discuss accommodation. A routine performance review would have provided that opportunity.

The failure of Joan’s employer to have regular performance appraisals meant that it missed the opportunity to tell Joan how great she was doing, to thank her for her efforts and to discuss her future with the company. Instead, she felt taken for granted and that her accomplishments were unnoticed and unappreciated. She was particularly disappointed that the company never asked for her input on what they could do to be a better employer. When the competitor offered a more progressive employment package that included support for employee growth and development (based on regular reviews) she was off like a shot.

Performance reviews do not need to be a torment – for either the employee or the manager. Performance appraisal forms should avoid ‘check boxes’. They should permit both the manager and the employee to give a narrative answer, without the incessant ‘excellent, good, fair, poor’ categories or their numerical equivalents.

The purpose of these reviews is twofold. They provide an opportunity for the manager to give feedback – both positive and negative – so that the employee knows where they stand, good and bad. And they give both parties an opportunity to look towards the future in a constructive and mutually beneficial way.

It is legally very risky indeed for an employer not to have regular performance reviews with all of their employees. It is equally risky for employees to work for such an employer.

Regular performance reviews should, of course, be tied to a currently updated company employment policy. But that’s another topic.

*Michael Coyle is an experienced employment and human rights lawyer based in Kentville, Nova Scotia. Information and opinion expressed in this article is meant for general interest only and is not a substitute for legal advice about your own situation. Michael can be reached by email at michael@mvc-private-law.ca  For more information and tips, visit his website at www.michaelcoyle.ca

©Michael V. Coyle, 2012

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

No ‘Near Cause’ for Employment Termination

by Michael V. Coyle, JD*

Most people understand that if an employer has “just cause” to fire an employee for misconduct the employee is entitled to pay up to the date of the firing and nothing more. On the other hand, if the dismissal is “without cause” the employer has to pay the employee an amount of money (severance) in lieu of the notice that the law says the employee should have received, except where reinstatement is available under a Collective Agreement or the Labour Standards Code.

But what about the situation that falls somewhere in the middle, where the employee’s misconduct is not quite bad enough to be cause for dismissal? Can the employer reduce the severance to account for the misconduct?

In employment law, that is known as “near cause”. Under the doctrine of “near cause”, it was held by some courts back in the 1980s and early 1990s, that misconduct on the part of an employee even where it falls short of cause for dismissal can still be grounds for reducing the severance.

But in 1998 the Supreme Court of Canada put an end to the doctrine of “near cause” when it overturned the Nova Scotia Court of Appeal’s decision in Dowling v. City of Halifax. The nation’s highest Court bluntly stated that, “We do not accept any argument relating to near cause.”

So the bottom line is that the employer either has “cause” for termination, in which case the employee gets nothing, or the termination is “without cause” in which case the employee is legally entitled to full pay in lieu of notice as severance, or possibly to reinstatement. There is no middle ground.

This is why it is so important – for both employers and employees – in dismissal situations to get competent advice on whether there really is what the law considers to be “cause” for dismissal. Personal opinions on the subject – by either party – no matter how strongly they are held, do not decide the matter and can, in fact be very costly. The law books are full of those cases.

The determination of whether or not there is “cause” in a particular situation is a highly specialized legal question.

For information and advice about your personal situation, please contact me.

*Michael Coyle is an experienced employment-labour relations lawyer and a neutral mediator and arbitrator based in Kentville, Nova Scotia. Information provided in this article is meant for general interest only and is not a substitute for legal advice about your own situation. Michael can be reached by email at michael@mvc-private-law.ca  For more information and tips on employment and labour law issues, visit his website at www.michaelcoyle.ca

 

 

 

 

 

 

 

 

 

 

©Michael V. Coyle, 2012

 

BC Jury Awards $809,000 in Wrongful Dismissal Case

by Michael V. Coyle, JD*

In an unusual case, a British Columbia jury recently awarded a fired employee total compensation of $809,000, approximately $573,000 of which was awarded as punitive damages against the employer after a three week trial.

Larry Higginson worked at a saw mill as an electrician for 34 years. In later years he was manager of the electrical department. The mill was “sold” to a related company. The “new” owner proposed an employment contract in which the employees would basically lose the severance rights they had earned. Mr. Higginson refused to go along. As a result, the employer started excluding him from meetings and started putting unfair pressure on him.

Then he was then fired without notice, allegedly “for cause”. He said that the employer concocted the grounds for dismissal so they wouldn’t have to pay him the severance he was legally entitled to as a long-term employee. He also said that the parent company was directing this particular strategy against long-service employees to lessen its financial exposure. The testimony at trial of other mill workers who had been fired and were now able to come forward confirmed the employer’s strategy of getting rid of long-service employees by firing them on trumped-up grounds. On that basis, Mr. Higginson sought damages in tort for the wrongful interference with contract against the parent company. That was in addition to the wrongful dismissal claim. That opened the door to a claim for punitive damages.

Essentially, Mr. Higginson argued that he was the victim of a nasty conspiracy. The jury obviously agreed. They handed him the largest punitive damage award in a wrongful dismissal case in Canadian history.

Fortunately for Mr. Higginson, he started to secretly record conversations at work when he feared that the employer might start to make things up about him. The tapes were used during litigation to substantiate his claims that the employer had done exactly that. Interestingly, the employer argued in court that his secret recordings were further evidence of his disloyalty and dishonesty and proved that the dismissal was justified. That unusual submission seems to have backfired on the employer.

Because this was a jury award we do not, of course, have the benefit of the judge’s reasons. Normally, we might expect that the employer would appeal from the jury award and that this would have resulted in a written decision from the appeal court no matter how the appellate court decided the appeal. However, it seems that the parties reached a confidential post-trial settlement to avoid an appeal. One can assume that involved an actual payment that was somewhat less than the $809,000 awarded by the jury, but not so much less that Mr. Higginson would have the incentive to defend the jury award in the court of appeal.

For its part, the employer likely decided to cut its losses in a case that should never have gone to court.

For confidential advice about your own situation, please contact me.

*Michael Coyle is an experienced labour and employment lawyer based in Kentville, Nova Scotia.  He is recognized by the Government of Canada as a neutral arbitrator, mediator and adjudicator. Information in this article is meant for general interest only and is not a substitute for legal advice about your own situation. Michael can be reached by email at michael@mvc-private-law.ca  For more information and FAQs on private dispute resolution please look under the Private Dispute Resolution tab on the left.

©Michael V. Coyle, 2012

What’s the deal with Workers Comp?

slide2new-640x226by Michael V. Coyle, JD*

The statistics on workplace injuries in Nova Scotia are truly staggering. Every month, on average, there are 180 serious back injuries, 9 burns and 49 broken bones or dislocations. And there are 2 workers each month who go to work but never return home to their families.

According to the Workers’ Compensation Board, one in every 10 Nova Scotia workers is injured on the job at some point.

Many years ago, before there was Workers’ Compensation, and still today if your employer doesn’t have it, a worker who is injured on the job would have no choice but to sue their employer to get any compensation for their injury or for time lost at work because of the injury.

So the deal with Workers’ Comp is that the employer pays a premium (like insurance) and, in exchange for that, employees are legally forbidden from suing their employers for workplace injuries. Instead of having to go to court, workers – in theory at least – will receive the same compensation from Workers’ Comp that they would have gotten from a lawsuit against their employer.

There are industries where Workers’ Comp is mandatory for employers with three or more employees and a few industries where it is still optional. The amount of the premium that an employer pays depends first on an assessment made by the Workers Compensation Board. If you are in an industry where there are lots of injuries, you pay more, in theory at least, than if they operate in a “safer” sector with fewer injuries. Individual business rates are then set based on the employer’s WCB claims experience. The more workplace injuries your employees have, the more you pay.

Many employers naturally view Workers’ Comp as a tax and they only provide it for their employees if they absolutely have to. For example, businesses that operate entirely in office environments may (or may not) be in a sector where Workers’ Comp is not legally required. With the increasing frequency of diagnosed repetitive strain injuries (like carpal tunnel syndrome, for example) employers who opt not to provide Workers’ Comp are taking a certain risk that might be sued by an employee for an injury sustained on the job.

Employers who are seeking free advice and advocacy when dealing with the WCB on assessments, claims and other matters can contact the Office of the Employers Advisor at 902-442-9366. Their website is oeans.ca

Employees who have been denied Workers Comp benefits may obtain free legal advice and representation through the Workers Adviser’s program, operated by the provincial Department of Labour and Advanced Education. They have experienced lawyers and paralegals who are completely independent from the Workers Compensation Board. Their toll free number is 1-800-774-4712.  Their website is www.gov.ns.ca/lae/wap/about

*Michael Coyle is an experienced lawyer and a neutral mediator and arbitrator based in Kentville, Nova Scotia. Information expressed in this article is meant for general interest only and is not a substitute for legal advice about your own situation. Michael can be reached by email at michael@mvc-private-law.ca  Please feel free to send him questions or suggest topics for future articles. For more information and tips, visit his website at www.michaelcoyle.ca

©Michael V. Coyle, 2012