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]]>In Waksdale, the employee plaintiff was dismissed without cause and received severance in line with the termination without cause provisions in the employment agreement. Mr. Waksdale responded with an action alleging that the terms in the agreement concerning termination with cause were not enforceable on the basis that they violated Ontario’s Employment Standards Act (“ESA“). Importantly, Mr. Waksdale accepted that the “without cause” provisions which applied to his termination were lawful, with the employer admitting that the “termination for cause” clause challenged by Mr. Waksdale violated the ESA. Notably, the employment agreement also contained a severability clause which would normally sever unenforceable terms from the agreement leaving the remainder intact. The motions judge determined that although some of the termination clauses were unlawful, the “termination without cause” provisions were valid and could be enforced.
The Ontario Court of Appeal disagreed, overturning the original decision.
The principal question the Court of Appeal dealt with was whether a single unlawful termination clause could leave a separate and valid clause unenforceable, even in the presence of a severability clause in the agreement. There were two key findings in the Court’s analysis.
Employment agreements and termination clauses are to be considered as a whole, not piecemeal, and without separating the “with cause” and “without cause” parts as the motions judge had done. The proper approach is to decide whether the termination provisions together violate legislation, and if they do, courts will not enforce them.
The employer hoped to use the severability clause to preserve the lawful terms, but the Court of Appeal refused to do so. A severability clause cannot have any effect on clauses made void by a statute. And since the termination clauses must be read together, it could not sever just the unlawful portion. Consequently, severability clauses in employment agreements confer much less protection.
The Waksdale decision is a reminder of how courts interpret contracts. When evaluating termination provisions, it does not matter whether they are found in one place in the agreement, separated, or in any way linked. Going forward, they will be read together. The Court of Appeal also noted the power imbalance in the employment relationship and the fact that the ESA is remedial legislation. Recognizing that employers may still gain a benefit even if they do not rely on an illegal termination clause may have coloured the analysis.
The significance of Waksdale is that if a termination provision is unenforceable the employment contract will not govern the termination, and without any contractual limits to termination benefits, employees will be entitled to common law reasonable notice if dismissed without cause. For employers, the risk is those benefits may be more generous than what they anticipated providing under the contract.
Rather than Waksdale being an isolated example, it is already being relied on in Ontario and was cited in Sewell v. Provincial Fruit Co. Limited to strike down another termination clause. Following the Waksdale precedent, the judge in Sewell looked at the entire employment agreement and found both the “with cause” and “without cause” provisions to violate the ESA. Instead of distinguishing Waksdale, the judge accepted that the illegality of one clause voids the entirety of the agreement.
The course set by Waksdale may quickly become a trend within Ontario. Following the Court of Appeal’s decision, there was speculation that the unique facts in Waksdale could limit its future application. Now, as courts continue to outline the circumstances in which contractual termination clauses are found to violate the Employment Standards Act, it will be increasingly difficult to argue a disputed contract is valid. Employers should have their employment contracts reviewed to ensure they have mitigated their risk for litigation, and employees presented with a termination notice should seek legal advice.
Navigating the termination of an employee is more complicated than it appears. To manage risk and avoid costly litigation, contact GLG LLP in Toronto for experienced and strategic advice for your business planning and employment law solutions. During this period of economic uncertainty, it is crucial that employers are up to date on their obligations. Our lawyers can be reached at 416-272-7557 or contact us online to learn how we can help.
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]]>The post Workplace Harassment Goes Virtual During COVID-19 appeared first on GLG LLP Lawyers - Experienced Toronto-Based Lawyers Providing Client Centred Business, Real Estate and Litigation Services.
]]>On the employment side, there has been an interesting, and perhaps unexpected, change in workplace harassment claims. With workplaces across Ontario largely shifting to remote status across the province for the past nine months, one might have expected harassment to decrease significantly since coworkers are not interacting face-to-face like they used to. But in fact, some HR professionals have found that claims have actually increased this year.
A recent article in The Walrus highlighted the fact that many professionals are reporting an increase in workplace harassment claims. These claims continue to stem from interactions happening in the physical workplace for those who are deemed essential and therefore still attending work in person. However, there is also a significant jump in the number of online harassment claims, given that most workplace communication has shifted from the boardroom or office lunchroom to online tools such as Zoom, Slack, and email.
One software developer in the United States noted that the online workplace has become more combative than the previous in-person environment due to a number of factors. Employees are often more overworked than they once were, given our inability to ‘leave’ work behind for the day. Now that many people are operating out of their homes, there is less structure and division each day, and as a result, people are often working more. In addition, a number of companies have been forced to cut back on staff in the past year, requiring those who are still employed to pick up the slack created by those absences.
With more work often being done by fewer people, there is a greater sense of urgency that sometimes results in a lack of proper recognition, as well as a more demanding culture. All of these factors are contributing to increased worker burnout and a more hostile work environment overall. A professor of management at Villanova University said that “[s]imply being drained and stressed or feeling depleted are strong predictors of aggressive behaviour”.
The online environment allows for new channels to bring negativity into the workplace. Zoom and Slack meetings mean coworkers are often texting or messaging one another in side conversations, perhaps expressing negative feelings about colleagues or the workplace overall. This can reduce morale and increase paranoia among staff.
Not only is abusive or harassing behaviour increasing online, the current climate means that many employees may opt not to report the problems their facing. According to Tracy Porteous, executive director of the Ending Violence Association of BC, remote working “increases a worker’s vulnerability to sexual harassment and can decrease the chances of reporting”. While the work from home environment has many benefits, such as cutting the need to commute and saving employees time and expense on travel, food and clothing, employees are also feeling more isolated and vulnerable than ever before.
Experts say that employers should proactively work to address the situation to reduce the negative effects of working remotely on their staff. Actions should include openly encouraging employees to report incidences of abuse, harassment or other aggressive behaviours, and then take those reports seriously. Each claim should be properly investigated and dealt with accordingly. Before the pandemic started, the Ontario and federal governments addressed workplace harassment by creating additional responsibilities for employers to manage these types of situations. In Ontario, the Occupational Health and Saftey Act puts an onus on employers to develop and communicate a comprehensive harassment and violence policy, and follow through on the mandates within.
Contact GLG LLP in downtown Toronto for assistance with any employment litigation matter, including claims relating to harassment or violence in the workplace. The firm’s litigation lawyers represent both employees and employers in a range of employment issues. Call the firm at 416-272-7557 or contact them online to schedule a confidential consultation.
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