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  • Employers and emergency call centre workers: your liability for property damage is limited

    In May 12, 2017, the Court of Québec1 concluded that an emergency call centre had no liability for property damage caused by first responders who broke down the door of a residence in order to assist a user in respiratory distress. In this case, the Court held that a call centre who required the intervention of a first responders service cannot be held liable for damages caused during the ensuing intervention, despite the fact that the call centre clerk had made a mistake by not providing the first responders with the access code to open the door. At the hearing, the facts were not contested by the call centre, which acknowledged that the access code for the front door had been provided to the call centre dispatcher but not to the first responders. Despite that mistake, the Court dismissed the action on the basis of the exoneration of liability provided for in section 42(2) of the Act respecting Pre-hospital emergency services2 (hereinafter the “Act”): 42. No person who acts as a first responder under this Act in accordance with the clinical intervention protocols determined by the Minister under section 39 shall incur liability for any injury that may result from his or her intervention, unless the injury is due to an intentional or gross fault. The immunity also applies to the authority having established the first responder service. Likewise, the person or body having required the intervention or assistance of a first responder service may not be held liable for any injury resulting from the intervention. [our emphasis] The Court held that the scope of this provision extended to the emergency call centre as “[a] body having required the intervention or assistance of a first responder service”.3 Up until this point, the provision had never been interpreted by the courts. Therefore, the Court stated that in the absence of any evidence of intentional or gross fault, the defendants could not be held liable pursuant to the second paragraph of section 42 of the Act respecting Pre-hospital emergency services.4 The clerk’s failure to provide the door access code, although an error, was not intentional and cannot be characterized as a gross fault. Furthermore, the Court stated that given that the firemen had to act very quickly, it cannot be presumed that they would have used the code to open the door to the user’s residence even if they had been in possession of that information. Furthermore, the evidence indicated that neighbours present at the relevant time told the first responders that they had the code for opening the door. In short, in the absence of evidence of intentional or gross fault, an emergency call centre could not be held liable. In our view, this decision is consistent with the object of the Act as set out in section 1, namely to “ensure that persons in need of pre-hospital emergency services are at all times able to obtain an appropriate, efficient and quality response aimed at reducing the mortality and morbidity rate among the recipients of pre-hospital emergency services”. Acting in concert with the first responder, the emergency call centre must also be able deliver rapid intervention by concentrating on its primary objective, which is to assist people in distress, without fear of being sued.   Roy v. Groupe Alerte Santé inc., 2017 QCCQ 6729 (hereinafter the “Roy” case). Act respecting Pre-hospital emergency services, CQLR, c. S-6.2 (hereinafter the “Act”). Ibid., s. 42 (2). Roy, supra note 1, para. 15.

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  • Following the termination of a senior executive, a clause in a stock option plan is declared abusive and the behaviour of the employer deemed oppressive

    In Dollo v. Premier Tech Ltée,1 the Superior Court of Québec declared a clause contained in the Stock Option Plan (the “Plan”) offered by Premier Tech Ltée (“Premier Tech”) to some of its employees to be abusive and also declared Premier Tech’s conduct towards a dismissed senior executive to be oppressive within the meaning of the Canada Business Corporations Act (“CBCA”).THE FACTSIn May 1999, Premier Tech hired Christian Dollo (“Dollo”) as vice-president, finance. In 2001, Dollo was offered the opportunity to acquire stock options (hereinafter, the “Options”) of the corporation over time by participating in the Plan. Premier Tech’s shares then became publicly traded and Dollo acquired some of the shares in accordance with the Plan. In June 2004, he became president of Premier Horticulture, one of Premier Tech’s main subsidiaries.Premier Tech once again became a private corporation in February 2007. At that time, some executives holding Options, including Dollo, were asked to acquire shares. As part of the privatization of Premier Tech, new Options were offered to Dollo.During 2009, members of Premier Tech’s management team felt that Dollo’s performance fell short of the corporation’s expectations and that the relationship of trust was deteriorating. At the same time, Dollo became aware of clause 8.01.2 of the Plan, which stipulated that in the event of termination for any reason other than the death, retirement or disability of the participant, he or she would lose all of his or her Options which were vested but not yet exercised unless the Board of Directors decided otherwise. Worried about the existence of this clause, he requested information from the corporation’s management team and was reassured with respect to the possibility of losing his vested Options in the event of his termination.In August 2010, Dollo was terminated. At the time, he held 71,100 shares of the corporation and 207,619 vested Options. During the months that followed, Premier Tech and Dollo settled their disputes, with the exception of Dollo’s Options. During the fall of 2010, Dollo requested that the Board of Directors exercise its discretion under clause 8.01.2 of the Plan in order to allow him to retain his vested Options. The Board of Directors refused.In March 2011, Dollo instituted proceedings against Premier Tech and its majority shareholder. He asked the Court to declare clause 8.01.2 to be abusive and to recognize his right to exercise his vested Options (in order to collect the profits in the amount of $1,313,847). He added that Premier Tech was abusing its rights and was acting in an oppressive manner within the meaning of the CBCA. He further submitted that he had been illegally terminated and, accordingly, he claimed the value of the Options that he would have acquired and that he could have exercised during the twelve months following his termination.THE DECISION OF THE SUPERIOR COURT OF QUÉBECWAS CLAUSE 8.01.2 OF THE PLAN ABUSIVE?The Court first concluded that the Plan constituted an adhesion contract and that the context of the privatization of the corporation did not offer Dollo any real possibility to intervene with respect to the main provisions of the Plan.With regards to clause 8.01.2, the Court ruled that it was abusive and void. Following an in-depth analysis of the expert testimony, it concluded that such a clause [TRANSLATION] “is not found in the rules generally governing this type of contract” and that [TRANSLATION] “this type of clause is a rarity in the context of commercial practice.” The Court added that Dollo’s vested Options in fact constituted significant long-term incentive compensation. Under the Plan, this long-term compensation was not linked to Dollo’s performance. Rather, the last Options which were granted to Dollo in 2007 were vesting at the end of each month, regardless of his performance. The Court deemed it to be unreasonable that the use of clause 8.01.2 would cause the loss of such vested compensation. The loss of compensation that was vested in Dollo for the previous years during which Premier Tech benefited from his dedication lead the Court to conclude that clause 8.01.2 was not only unreasonable but it was also excessive.Finally, according to the Court, clause 8.01.2 was similar to a purely discretionary clause insofar as Premier Tech, in deciding to terminate Dollo, made a decision (namely, not to recognize that Dollo was entitled to exercise his vested Options) which depended entirely upon its discretion. Although the Court did not hold clause 8.01.2 to be truly purely discretionary, it was of the view that such a similarity supported it being qualified as abusive.However, the Court dismissed Dollo’s request regarding the Options he would have acquired during the twelve-month period following his termination since it would be inappropriate to provide a Plan member with “long-term compensation” to retain and motivate him while his employment was already terminated. Contractual justice demanded that this request be denied.WAS DOLLO TERMINATED WITHOUT CAUSE?The Court noted that Dollo’s termination could only be qualified as an administrative dismissal. In this context, the following steps must be followed:(1) The employee must be aware of the business’ policies and his employer’s expectations in his regard;(2) He or she must have been notified of his or her shortcomings;(3) He or she must have received the necessary support to correct him or herself and to reach his or her objectives;(4) He or she must have been provided with reasonable time to adjust;(5) He or she must have been warned about the risk of termination in the absence of improvement.The Court found that Dollo was only informed of the reasons for his dismissal following the institution of the proceedings against Premier Tech, that he received no support which would have allowed him to improve and that he had received no warning as to the risk of termination. In light of these elements, the Court was of the opinion that Dollo had been terminated without cause.WAS PREMIER TECH’S CONDUCT OPPRESSIVE WITHIN THE MEANING OF THE CBCA?The Court last reviewed the issue of whether the conduct of Premier Tech and its majority shareholder justified recourse to the oppression remedy in accordance with section 241 of the CBCA. It first established that Dollo constituted a plaintiff under the CBCA since it is possible to attribute this status to a person who was promised a portion of the share capital of a corporation. In addition, when he petitioned the Board of Directors regarding the exercise of his vested Options, Dollo was still a shareholder of Premier Tech. Finally, Dollo was a “potential shareholder” who would have been entitled to additional shares were it not for (abusive) clause 8.01.2.The Court mentioned that Dollo had legitimate expectations both of benefiting from the Plan, which constituted long-term compensation, and that his rights as an employee would be respected. According to the Court, Dollo had a right to expect that his termination be carried out in compliance with the steps provided for in the case law. Due to this non-compliance, Dollo was unable to exercise his options and protect himself from the brutal application of clause 8.01.2. The Court noted that simply declaring that clause 8.01.2 was void may not be enough to allow Dollo to benefit from the long-term compensation. In fact, [TRANSLATION] “legal and financial stumbling blocks [particularly the issue of financing the acquisition of the shares] will be found on the road to an easy resolution of this dispute.”2The Court therefore allowed the oppression remedy, concluding that the conduct of Premier Tech and its majority shareholder was abusive, and applied some remedial measures explicitly provided for at section 241 CBCA by:(1) Ordering the issuance of Premier Tech shares to Dollo;(2) Modifying the clauses of a contract to which Premier Tech was a party to settle the financing problems for the issuance of the shares (forcing Premier Tech to finance the issuance of the shares to Dollo);(3) Ordering Premier Tech’s majority shareholder to buy the shares so issued to Dollo, to reimburse Premier Tech for the financing of the issuance of the shares (that is, $612,857) and to pay the balance of the sale price to Dollo (that is, $1,313,847); and(4) Modifying clauses in the unanimous shareholders’ agreement in order to enable Dollo to receive the balance of the sale price of his shares notwithstanding the existence of certain provisions in the agreement which could have been invoked against him.For the full text of the decision (in French), click here.This decision of the Superior Court is currently on appeal._________________________________________1. 2013 QCCS 6100.2. Paragraph 356 of the decision.

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  • Legal newsletter for business entrepreneurs and executives, Number 19

    CONTENT  Notifying your insurer of potential legal proceedings : A sensible measure which may help you avoid significant costs! The ABCs of Managing >Absenteeism at WorkNOTIFYING YOUR INSURER OF POTENTIAL LEGAL PROCEEDINGS: A SENSIBLE MEASURE WHICH MAY HELP YOU AVOID SIGNIFICANT COSTS!Jonathan Lacoste-JobinCompany directors sometimes have the reflex of minimizing the importance of a letter of demand or of the threat of a legal action. Fearing, for example, to see their insurance premiums increase, they sometimes decide not to notify their insurer of potential legal proceedings. This can have significant consequences and cause problems that a simple notice could have avoided.OBLIGATION TO NOTIFY THE INSURERParticularly in liability insurance matters, the insured has the obligation to notify his insurer as soon as he becomes aware of any loss, as provided under article 2470 of the Civil Code of Québec. Such is the case, for example, upon receipt of a letter of demand. If the insured neglects to notify his insurer, the insurer may, in certain circumstances, refuse to respect its own obligations.This article also provides that the insured must declare any loss “which may give rise to an indemnity”, that is, which would be covered under the insurance policy. Once again, it is best to play it safe. In fact, it is not for the insured to determine whether a loss is covered or not1. When in doubt, it is therefore prudent to notify the insurer as soon as possible upon a loss occurring, the receipt of a formal notice or a legal action.A timely notice will allow the insurer to investigate, meet with the appropriate witnesses, visit the site, hire the necessary experts, etc. It will also allow the insured to more quickly be informed of the position of the insurer as to insurance coverage.Failing to receive such a notice, an insurer sustaining injury therefrom may set up against the insured any clause of the policy providing for forfeiture of the right to indemnity. A liability insurer could thus refuse to cover the loss and refuse to defend its insured against legal proceedings.COSTS OF DEFENCEOne of the main obligations of the insurer in liability insurance matters is that of defending its insured against any proceedings covered by the insurance policy. Article 2503 of the Civil Code of Québec provides that the costs and expenses resulting from actions against the insured, including those of the defence, judicial costs, lawyers’ and expert fees, are borne by the insurer, over and above the proceeds of the insurance. This obligation is all the more important since the costs of defending a legal action may escalate rapidly even if the amount claimed is not very high.With this in mind, it is therefore prudent and advisable to notify the insurer as soon as possible in order to have him assume these costs, irrespective of the amount claimed and the chances of the proceedings being successful.DEMONSTRATION OF INJURY SUSTAINED BY THE INSURERTo invoke a late notice, the insurer must however demonstrate that it suffered an injury therefrom. It may assert, for instance, that it was prevented from investigating and that the site of the loss has been disturbed between the event and the time it received the notice2. The disappearance of exhibits or evidence which would have allowed to establish the loss, exonerate the insured or involve a third party, the death of some witnesses, etc. may also constitute an injury to the insurer3.Although the courts require from insurers convincing demonstration of the injury sustained, failure to notify the insurer may be fatal to the claim of an insured, even if he successfully defends the liability proceedings instituted against him.4CONCLUSIONAn insured has the obligation to notify his insurer of a loss as soon as he becomes aware of it. Upon receipt of a letter of demand or a notice whereby he may incur liability, the insured should notify his insurer accordingly. Failure to do so may result in the insurer refusing to take up the defence of the insured and thus put him in a position where he has to incur significant costs which he may have avoided. It is always better to be safe than sorry.________________________________1 Marcoux v. Halifax Fire Insurance, [1948] S.C.R. 278; Androutsos v. Manolakos, J.E. 2000-2046 (C.S.).2 Union canadienne Compagnie d’assurance v. Bélanger [1998] R.R.A. 685 (C.A.).3 LEMAIRE, M., Du délai d’avis et de la prescription en assurance : quelques problèmes, Développements récents en droit des assurances (2001), Service de la formation permanente du Barreau du Québec, Yvon Blais, 2001, online: EYB2001DEV220.4 Axa Boréal Assurances inc. c. Université Laval J.E. 2003-540 (C.A.); See also Gagnon v. Ratté [1996] R.R.A. 766 (C.S.).THE ABCs OF MANAGING ABSENTEEISM AT WORKMarie-Hélène JolicoeurINTRODUCTIONAbsenteeism brings with it high costs for employers, leading to losses in efficiency, productivity and even the demoralization of staff. In such a context, the employer must act quickly. This text provides an overview of the basic principles applicable to absenteeism.1The obligation to perform work is the foundation of the employment contract.2 The employer can expect work to be performed in a consistent manner and for such work to be of sufficient quality.However, a wide range of laws apply to the issue of absenteeism, sometimes making it difficult for employers to make sense of them all and to fully understand the scope of their managerial rights. In a unionized environment, such managerial rights are of course limited by the terms of the collective agreement.Generally speaking, an employer is entitled to be informed of the health of its employees , meaning that he or she may be provided with access to certain medical information. In addition, the employer has not only the right, but also the duty, under various occupational health and safety laws, to ensure that such an employee is capable of performing his or her work. The employer is also entitled to be informed of the reasons for the employee’s absence, to assess whether such justifications are reasonable, and, if necessary, to take disciplinary action.There are two forms of absenteeism, and each must be managed in a different way.UNJUSTIFIED ABSENTEEISMUnjustified absenteeism can leave the employee open to sanctions in accordance with the principle of escalating sanctions (verbal notice, written notice, short suspensions, lengthy suspensions, and dismissal).Unjustified absences are absences which are neither authorized nor justified, and include absences taken under false pretences. There are also other violations which are related to absenteeism, such as the failure to provide notice of an absence or of the fact that one will arrive late to work (even where such absence/ tardiness is justified), the unjustified and unauthorized abandonment of one’s position, the refusal to provide a valid medical certificate upon request, or the falsification or fabrication of a medical certificate.Where absences are repeated or combined with other violations, the sanction will be more severe.Note that, in the absence of specific clauses in the collective agreement on this subject, an absence for “personal reasons” is not justified.JUSTIFIED ABSENTEEISMJustified absenteeism is involuntary. In such a case, the employer’s management of the employee will be administrative rather than disciplinary in nature.For example, an employee may be absent on numerous occasions, all of which may be justified, particularly if the absences have been authorized by the employer for a valid reason (e.g., health problems), or were permitted by statute (Act Respecting Industrial Accidents and Occupational Diseases,3 Act Respecting Labour Standards4) or the collective agreement.This type of absenteeism can sometimes justify dismissal. For this to be the case, the following five (5) elements must generally be demonstrated:1) The absenteeism is excessive and lasts for a significant amount of time.In this respect, it is useful to compare the employee’s rate of absenteeism with the average rate of absenteeism within the company. While there is no magic number, an absenteeism rate fluctuating at a minimum of about 20% over a period of three (3) or four (4) years can be considered excessive.52) Little likelihood of improvement in the foreseeable future.If the employee’s absenteeism is primarily or entirely due to a single cause (e.g., chronic illness), medical evidence will be necessary and must address the prognosis, among other things. The instructions to the medical expert must be well-written so that he or she can provide a complete and substantiated opinion. Where the absence is due to multiple causes, such evidence is not required.3) The absenteeism has consequences for the business.It is advisable to document the effects of the absenteeism both on the workplace (e.g., work overload) and on the costs that it entails (e.g., overtime, new hires).4) The employee is informed of the problem and of the risk of losing his or her job.It is appropriate to meet with the employee to ensure that he or she is aware of, and to require him or her to resolve, the absenteeism problem. The employee should be informed that his or her employment may be terminated if his or her attendance does not improve.5) The employee has a disability or “handicap”6 and the employer is not able to accommodate him without undue hardship.If the employee has a “handicap” within the meaning of the Charter of Human Rights and Freedoms,7 the duty to accommodate will be triggered. For example, physical musculoskeletal limitations, alcoholism, drug addiction, bipolar illness, depression, and anxiety may all constitute “handicaps”. The employer will therefore have a duty to attempt to find a reasonable accommodation. The employee, his union, where applicable, and his colleagues must also be involved in this process. However, the employer will be relieved of its obligation if it can demonstrate that it is not possible to accommodate the employee without experiencing undue hardship. Undue hardship may result from the impact of the accommodation on other workers or from the significant costs the business may incur given its size and financial resources.MEDICAL CERTIFICATEThe employer is not entitled to require medical certificates on a systematic basis, but rather must have a legitimate interest and valid reasons for doing so. Such reasons may include:  repeated or chronic absenteeism; where questionable reasons are given for the absence; to evaluate an employee’s ability to return to work following a prolonged absence; to evaluate the employee’s ability to perform the work where there are valid reasons for doubting his or her ability (e.g. repeated falls, disorientation, blackouts).To be valid, the medical certificate must be signed by a physician and must refer to the specific dates of the absences. A mere statement that the employee was seen by a physician is insufficient.8 The employer may require a detailed medical certificate indicating a diagnosis.9CONCLUSIONWe invite you to clearly inform your employees of the company’s expectations as they relate to attendance ( punctuality, notice of absences or tardiness prior to the beginning of one’s shift, compliance with the work schedule, and the obligation to remain at one’s station for the entire shift, etc.). Employees should also be informed that they may be required not only to justify their absences, but also to provide a valid medical certificate if they cite their health as the reason for their absence.________________________________1 This text was taken from a presentation on the management of absenteeism given by Carl Lessard and Marie-Hélène Jolicoeur on November 13, 2013 at the offices of Lavery de Billy. It is not a legal opinion, nor is it comprehensive in its coverage of this issue, providing only an overview of the basic principles that apply.2 Article 2085 of the Civil Code of Québec, SQ, 1991, c. 64.3 CQLR, chapter A-3.001.4 CQLR, chapter N-1.1.5 For example: Syndicat des métallos, section locale 7625 et Dyne-A-Pak inc., D.T.E. 2012T-212.6 Section 10 of the Charter of human rights and freedoms, CQLR, chapter C-12.7 CQLR, chapter C.-12.8 Aliments Cargill et Travailleuses et travailleurs unis de l’alimentation et du commerce, section locale 500 (TUAC), D.T.E. 2010T-817 (T.A.).9 Syndicat des travailleuses et travailleurs du Pavillon St-Joseph (CSN) et Pavillon St-Joseph, D.T.E. 2010T 754 (T.A.), upheld by the Superior Court (2011 QCCS 3426).

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  • Can smoking at work justify an automatic dismissal?

    In a recent arbitration award, an arbitrator assessed a company's internal policy which provided for the dismissal of any employee caught smoking at the employer's plant of on its property, even in the case of a first offence.1THE DISPUTEThe plaintiff worked at ADM Milling Co.’s flourmill for nine years, a mill where grain is made into flour. On October 11th, 2012, he was dismissed after having been caught smoking in the cloakroom of the facilities. To justify its decision, the employer relied on its policy prohibiting any employee from smoking in the mill or on the employer’s property, under penalty of automatic dismissal.A grievance contesting the plaintiff’s dismissal was filed. The union essentially attacked the severity of the penalty.THE EVIDENCEThe impugned policy came into effect in 2009. In general, it is aimed at preventing the risk of fire, detonation and explosion which may result from flour dust if it comes into contact with sources of ignition such as a lit cigarette. In the fall of 2012, two other employees were dismissed after smoking on the premises.The evidence showed that the safety rules, particularly as they related to the prohibition on smoking at the mill, had been explained to the employees and were posted at the time they were implemented in 2009. Moreover, the employees had received annual training as well as periodic reminders on the subject. It was also demonstrated that the main risk posed by the company’s flour-milling operations is a risk of fire, detonation and explosion which may result from contact between flour dust and a source of ignition. Furthermore, the employer presented evidence of explosions which had occurred at some of its other establishments and at other similar facilities.At the hearing, the plaintiff admitted that he had indeed smoked in the cloakroom on company’s property, a fact that he previously denied when the employer’s representatives met with him. He also acknowledged that the cloakroom was adjacent to a flour compressor and transfer room. According to his testimony, he knew about the employer’s policy as well as the goal sought by the prohibition on smoking.THE PARTIES’ ARGUMENTSThe union claimed that a number of circumstances undermined the severity of the plaintiff’s misconduct and, as a result, the penalty imposed was too severe. The union emphasized the plaintiff’s seniority, his unproblematic behaviour, that the “zero tolerance” policy failed to take into consideration the circumstances surrounding the infraction, the gravity of the misconduct in proportion to the risk, and the fact that the employer’s notion of danger is “applicable everywhere”.For its part, the employer argued that the policy adopted had been followed and applied in a uniform manner, that there was a risk of danger given the operations which were carried out in the part of the mill adjacent to the cloakroom, the fact that the plaintiff lied when he met with the employer’s representatives, and furthermore that he had failed to present any justification for his conduct._________________________________________ 1 Travailleuses et travailleurs unis de l’alimentation et du commerce, section locale 501 and ADM Milling Co., (T.A. Mtre Jean Barrette, 2013-04-09), AZ-50958802.

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