Zubas + Associates in the news “ONCA Employment decision in Waksdale potentially voids thousands of termination provisions” in Canadian Lawyers Magazine


Recently, Zubas + Associates Lawyer, Dan Hassell, was published in Canadian Lawyers Magazine. The opinion piece, which discussed the ONCA employment decision in Waksdale and its impact on termination provisions, is available to read on the Canadian Lawyers Magazine website here and below.

ONCA Employment decision in Waksdale potentially voids thousands of termination provisions

Terminated employees should get a boost from the ruling, says Daniel Hassell

The past few months have been distressing for both employers and employees. First, COVID-19 swept across the world and across Canada, resulting in business closures, layoffs and terminations. Courts then reduced operations and suspended procedural deadlines, leaving most wrongfully dismissed plaintiffs on standby, with limited access to justice.

A glimmer of hope for the prospects of employees who require more than the bare minimum protections of the Employment Standards Act, 2000 (ESA) came from the Ontario Court of Appeal in the recent decision in Waksdale v. Swegon North America Inc., 2020 ONCA 391. The case represents a significant judicial development in the ongoing efforts by employers to limit their liability when terminating employment relationships.

Waksdale boils down to a discrete technical issue regarding the legal effect of a written employment contract and, more specifically, the enforceability of a termination provision that attempts to limit an employee’s entitlements to slightly more than the minimum under the ESA. At issue was whether an unenforceable “for cause” termination provision would render the operative “without cause” termination provision unenforceable as well.

If a termination clause violates the ESA, then the clause is void and the more generous (and nuanced) common law applies.

The principles of the leading case of Machtinger v. HOJ Industries Ltd., 1992 CanLII 102 (SCC), [1992] 1 SCR 986, summarized in the oft-cited Wood v. Fred Deeley Imports Ltd., 2017 ONCA 158 (CanLII), include the following:

  • Courts should … favour an interpretation of the ESA that “encourages employers to comply with the minimum requirements of the Act” and “extends its protections to as many employees as possible”…
  • Termination clauses should be interpreted in a way that encourages employers to draft agreements that comply with the ESA. …

The court will scrutinize restrictive termination clauses for potential, and often minor, breaches of the ESA. Since Machtinger, the analysis has become increasingly technical.

The Ontario Court of Appeal clarified in Waksdale that the correct approach is to determine whether the termination provisions, read as a whole, violate the ESA. It declined to apply a “severability” clause to separate the “for cause” and “without cause” termination provisions.

Waksdale represents a significant and far-reaching departure in the application of the widely accepted principles used to determine if a termination provision is void for breach of the ESA.

“For cause” termination provisions are often in breach of the ESA, but this violation has been largely inconsequential. Counsel for dismissed employees will now be able to use such breaches to more effectively poke holes in the language of restrictive termination provisions to access typically greater common law entitlements.

A common drafting flaw is to overlook a narrow distinction between the ESA and the common doctrine of just cause. Pursuant to the ESA, “An employee who has been guilty of wilful misconduct, disobedience or wilful neglect of duty that is not trivial … ” is not entitled to statutory notice of termination/termination pay, or severance pay. The common law standard of just cause is a somewhat broader.

Employment lawyers are frequently presented with the following scenario:

  • An employee is dismissed for reasons beyond their control, such as restructuring, changing business needs, and more recently the impact of COVID-19.
  • The dismissal is therefore “without cause,” meaning the employer is not taking the position that the employee engaged in egregious misconduct and ought to have been ‘fired on the spot.’
  • On legal review it is determined that:
    • the “without cause” termination provision is technically sound and on its own would probably be enforceable;
    • the “for cause” termination provision (which is not being relied on) is technically in breach of the ESA and probably unenforceable; and
    • the two clauses are not entangled.
  • Assuming there was no other basis to invalidate the employment contract, prior to Waksdale, the “without cause” provision would probably be enforceable.

Now the likely outcome will be the exact opposite. The court will declare the entire termination provision void, and not just the “for cause” provision.

Waksdale is ground-breaking because of the sheer volume of employment agreements likely impacted, especially given the unprecedented number of terminations due to COVID-19. Statistics Canada reported that unemployment rates in May 2020 reached a record high of 13.7 per cent.

The decision in Waksdale represents some respite for wrongfully dismissed employees, many of whom may now have significantly greater entitlements.

Employers may want to have their employment contracts updated with enforceable termination provisions that are reasonable and not overly restrictive.

Employees would be prudent to have their termination provisions reviewed by an employment lawyer.

Zubas + Associates in the News “Good Negotiations need faith more than fear” in Canadian Employment Law Today

Recently, Zubas + Associates Lawyer, Ted Flett, was published in Canadian Employment Law Today. The opinion piece, which discussed tips for HR professionals preparing for a phone call with a lawyer, is available to read on the CELT website here, by pdf here and below.

Good negotiations need faith more than fear

5 Tips for HR Professionals preparing for a phone call with a lawyer

AS EMPLOYERS tighten their purse strings while the business impacts of the coronavirus (COVID-19) pandemic take hold, in-house HR professionals are likely to see a reduction in budget and resources. Some have already. The pre-COVID-19 days of punting a file to external counsel in which an employee, or former employee, has lawyered up may be long gone. Today’s HR practitioner is being called on to rep- resent the employer’s interests in the dispute, in a cost-effective and efficient manner.

Whether it’s a negotiation on the terms of a termination settlement, or with respect to the conditions of a workplace investigation inter- view, the thought of talking to a lawyer of a former or current employee by phone is about as compelling as public speaking naked. However, putting a pause on a letter-writing campaign — where one can hide behind a keyboard — and taking a matter to a phone call could help clear an impasse in a negotiation.

The prospect of such a call could conjure up fears of thinking that you’re about to enter a booby trap in which the lawyer will trip you up, trick you into a confession or twist your words later. And the stakes are not insignificant. The phone call can forge a path toward resolution or could ignite greater conflict in equal measure. The latter is more probable with inadequate preparation.

But HR practitioners should summon confidence in what they bring to the table in a negotiation or a discussion with a lawyer. When an employer’s HR specialist, rather than a lawyer, responds to my correspondence, I see a clear opportunity to resolve the matter amicably; not to mention comparatively faster and cheaper. And it’s not because I plan to bamboozle the person. There are approaches that an HR practitioner can adopt to maximize the call. Here are five helpful tips to prepare for and manage the dreaded phone call with a lawyer. Of course, your standby negotiation techniques — from BATNA (best alternative to a negotiated agreement) to MESOs (multiple equivalent simultaneous offers) — still apply.

Limit the scope of the call. If the communication has been through letters or by email and the lawyer requests a phone call “to discuss the matter,” be available while also following your workplace procedures. In advance of the call, ask whether there is a particular topic or position that the lawyer wishes to discuss, if such is not obvious. This clarification will help provide scope to the conversation and guide your preparation. Have relevant documents on hand for the call, including all correspondence exchanged, and review these in advance.

Determine who leads. While some subscribe to the theory in a negotiation that it is best to lead by speaking first, there are benefits to active listening. When the call begins, if the lawyer has requested the call, let them start the conversation. Pre-supposing what opposing counsel will argue or say is a mistake, particularly if there has been a moderate passage of time between the request for the call and the call itself. The employee’s position or circumstances may have changed since then.

Conversely, if you have requested the call, be prepared to start the dialogue as to what you are seeking and what information you feel is helpful to provide. Organize your thoughts in a few bullet points.

Write it down. Take careful and detailed notes of what the lawyer is saying to help organize your thoughts for a response and to assist with formulation of future arguments. If some in- formation shared by the lawyer is surprising or seems out of context, ask to confirm it to ensure you understand correctly.

Formulate your response. Take confidence in knowing that you are likely closer to the true and precise facts of a story than the lawyer. You have the benefit of a documented history on the employee, buttressed by the employee’s HR file, information from colleagues and witnesses. This is not lost on the lawyer who will naturally have some expectation that you will be more apprised of some of the finer points relevant to the matter at hand and will inquire accordingly.

However, knowledge of the information does not require you to disclose it. Ascertain what information you feel can be disclosed in advance of the call. Take pauses during the call to formulate your thoughts and answers; do not feel rushed. If in doubt during the call, advise that you must follow up with the lawyer later. If you don’t know the answer, don’t make one up or speculate in the moment.

Do not allow the lawyer to leverage a supposed power imbalance. Label interrupting when it happens.

Consider whether documents that are requested by the lawyer are best provided during the call via a quick email or afterwards. Sending documents in the moment without careful review is not recommended, as this may result in disclosing more than you had wanted. Further, the transmission may extend the call unnecessarily as the lawyer reviews them hurriedly, without sufficient time to read them in their entirety.

Concluding the call. At the end of the call, confirm any outstanding matters for follow-up. Establish feasible deadlines to help prioritize your- self and keep the lawyer accountable to you.

Should the call get out of hand, driven more by passion than reason, or if you feel you are making no progress and speaking in circles, wrap up the conversation and suggest that you reconnect at another time once you have had the time to reflect, consider the matter further or have sought additional advice.

Special thanks to a handful of astute HR professionals with whom I have negotiated in my practice who spoke to me on the condition of anonymity.

Special thanks to a handful of astute HR professionals with whom I have negotiated in my practice who spoke to me on the condition of anonymity.

ABOUT THE AUTHOR – Ted Flett

Ted Flett is a lawyer with Zubas + Associates Employment Lawyers in Toronto, practising employment law and human rights law. He can be reached at (416) 593-5844, Ted@employment-lawyers.ca or by visiting www.employment-lawyers.ca.

Zubas + Associates in the News: “The Turbulent Life of an Employment Lawyer during COVID-19” in Canadian Lawyer Magazine

Today, Zubas + Associates Lawyer, Ted Flett, was published in Canadian Lawyer Magazine. The opinion piece, which discussed the various pressures on an Employment Lawyer during COVID and tensions within the employment bar, is available to read here and below.

The Turbulent Life of an Employment Lawyer during COVID-19

Clients and public are at risk of being thrown overboard without precision counsel and more cooperation, writes Ted Flett

Like many lawyers in the employment bar, my practice seems unrecognizable to what it was just one month ago. I may be less recognizable myself, as Lululemon attire has replaced my suiting and my hair resembles that of a final contestant on Survivor. Given the distinct effects of the novel coronavirus (COVID-19) pandemic on workplaces and resulting pressures on an employment lawyer, many friends, family and peers ask, “How are you doing?”

To be an employment lawyer during this coronavirus pandemic is a wild adventure. It seems like a game of whack-a-mole meets ‘choose your own adventure’ meets ‘what’s behind this door?’ Each day is equal parts exhilarating, taxing and demoralizing.

Between grasping the law, staying abreast of new employee and employer support programs, understanding workplace restrictions and navigating limitations to court services and suspensions of limitation periods and procedural deadlines, today’s employment lawyer is uniquely challenged. We are being extraordinarily tested by lawmakers, the courts, and panicked clients seeking solutions.

Changes in the law

On a daily basis, the Prime Minister pops out of his cottage to drip-feed details of the federal government’s Economic Response Plan, including a wage subsidy for employers, extended work-sharing and enhanced employment insurance. In Ontario, an emergency sitting of the legislature was called to amend the Employment Standards Act to provide unpaid leave for employees who, for example, are in isolation due to COVID-19 or who are caring for children. Additionally, Premier Doug Ford continues to trim the list of essential businesses allowed to operate and restricts the size of gatherings. I admit to some angst as I watch each press conference; what surprise will today’s announcement include?

Staying on top of news cycles to capture details of these programs and changes in order to advise clients regarding eligibility and suitability is tricky. In the increasingly competitive world of employment law, many firms are jockeying to be the go-to. Most employment law firms, including mine, have unveiled an online COVID-19 resource, or knowledge centre, featuring Q&As, blogs and links. Fasken Martineau DuMoulin LLP prepares a daily cross-country roundup of government announcements relating to the workplace, and Samfiru Tumarkin LLP has launched an online calculator for users to determine if they qualify for the Canada Emergency Response Benefit (CERB).

Terminations and layoffs in the time of COVID-19

Advice to clients – both employees and employers – on the legality of any particular layoff has sparked a debate within the employment bar.

The more litigious firmly subscribe to the principle that a layoff that is not contemplated within the employment contract amounts to constructive dismissal, a unilateral change of a person’s job. This would possibly give rise to a lawsuit for common law notice, among other damages. They’re ready to sue.

Another set assesses other factors, including the possibility that lawmakers will intervene with legislation to amend or override the restrictions around layoffs given the exceptional nature of the pandemic. Alternatively, judges may consider the current exceptional circumstances faced by employers, to decide that a layoff due to COVID-19 would not amount to constructive dismissal.

And even if a settlement can be achieved in a claim for constructive dismissal because of an unlawful layoff, a prudent plaintiff-side lawyer ought to weigh their client’s interests. Are the employee’s interests truly advanced once unemployed and facing a bleak job market? Or, is he or she better positioned by riding out the layoff, possibly collecting the CERB or other support benefits, and awaiting a return to work once the curve flattens or the economy rebounds? Equally challenging is forecasting when business will return to normal.

And for conventional wrongful dismissal claims, the employment bar is engaging in lively speculation as to what impact the global pandemic and the consequential economic downturn will have in the determination of the reasonable notice period upon termination of employment.

Despite the employee-friendly decision in Michela v. St. Thomas of Villanova Catholic School, which found that the employer’s financial circumstances are not relevant to the calculation of notice period, management-side counsel will surely argue that the “corona factor” be added to the Bardal test.

Defence counsel is likely to pursue a resurrection of Gristey v. Emke Schaab Climatecare Inc., which preceded Michaela and whereby the Court reduced the employee’s notice period after considering economic factors present at the time of termination.

More than most problems in employment law, solving the ‘COVID-19 constructive dismissal by layoff’ puzzle and estimating the reasonable notice period during an economic downturn is teaching me to elucidate difficult concepts to clients while remaining patient in obtaining their clear instructions.

Until further notice, the court is closed

Adding to the dilemma is that any employment claim is presently curtailed by the suspension of the courts, limitation periods and procedural deadlines. This decision and resulting conduct by lawyers expose a hidden wart in the justice system and legal profession.

The courts’ longstanding resistance to technology has, ironically, become no more apparent than in these times of crisis, when access to justice should be fortified, not placed on pause. The impractical and outdated fixation on paper submissions and in-person attendances is under significant scrutiny.

And despite the Ontario Superior Court’s call for parties to cooperate and engage in every effort to resolve matters during this temporary suspension of regular operations, I sadly suspect that some counsel leverage the suspension as a delay tactic.

Though we remain an essential service, I both know of and am experiencing matters in which opposing counsel is disagreeable to meeting a procedural deadline or to conducting discoveries or mediating by videoconference for reasons that are wanting for merit. Such ploys to frustrate opposing counsel will likely come at a higher cost. Clients of the progressive, resolution-minded lawyer are likely to be left bewildered by and suspect of the justice system and its members.

This time of pandemic will surely shape employment lawyers busily riding the competing currents. Regrettably, clients, parties and members of the public are at risk of being thrown overboard unless we firmly grasp the tiller and remember the public whom we serve.