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  • Hiring in the New Year? What to do when a new recruit overpromises and underdelivers?

    A recent decision1 by the Commission des relations du travail (“CRT”) highlights the plight of an employer faced with an employee who oversold his abilities during the job interview and later proves incapable of delivering on his promises. In this case, Laurentian Bank Securities inc. (“Laurentian”) successfully defended against a claim for dismissal without good and sufficient cause filed by a former employee. The facts of the case are commonplace. The employee had been a highly successful Investment Adviser with Desjardins Wealth Management (“Desjardins”) for a number of years. During a job interview with the vice-president of Laurentian, the employee estimated that he could transfer to Laurentian 75% of his portfolio, the total of which was worth $37 million of assets under managements. His performance potential led to an offer of employment from Laurentian and enabled him to negotiate a generous compensation and benefits package. During the first days of his new employment, days which prove crucial from the perspective of client retention, the employee made minimal efforts to retain the client base he had built over the years and, ultimately, few clients transferred their assets to him at Laurentian. Several months into his employment, he was far from reaching his initial earnings objectives. The disparity between his performance and projected earnings became amplified with each annual performance review. Efforts made by Laurentian to support the employee’s progress – encouraging him to utilize his business development budget, prepare a business plan, etc. – proved unproductive. After three years of service with Laurentian, the employee was dismissed for a failure to meet job requirements. From the employee’s perspective, his lack of success was the result of a number of external factors unrelated to his abilities (for example, he was placed in an open-plan office that did not permit the requisite confidentiality to call his clients; he was denied a transfer to another branch; Laurentian hired the very Investment Adviser whose book of business he had bought several years earlier, and this new employee unfairly solicited his clients; he was defamed by his former Desjardins partner, which explained why his clients broke off their relationship with him after his transfer to Laurentian). Moreover, the employee raised his health condition as a mitigating factor; the pressure at work caused him to develop depression, which left him unmotivated to solicit new clients. The constellation of explanations given by the employee to rationalize his poor performance did not sway the CRT. Ultimately, the employee was regarded as an industry veteran, well aware of performance expectations. This factor appears to have been decisive in the CRT’s weighing of the evidence, as can be seen from a summary of its analysis below. In cases of administrative dismissal, it is the onus of the employer to demonstrate good and sufficient cause. In keeping with the principles developed under applicable case law, the CRT must verify that the employer’s action was not arbitrary, discriminatory or unreasonable, and that the employer fulfilled its obligations imposed by applicable case law. The CRT’s findings in respect of the applicable criteria are summarized below: Whether the employee was informed of the company’s policies and the expectations set by the employer The employee was experienced in the financial services industry and familiar with the job requirements of an investment adviser. Moreover, the goals set for him by Laurentian were standard for such a position. Under the circumstances, the CRT concluded that Laurentian’s expectations were reasonable and sufficiently transparent. Whether the employee’s shortcomings had previously been identified The employee was repeatedly informed, both formally and informally, that his performance was inadequate. He had even been notified in writing that he was required to prepare a business plan to improve his job performance. Whether the employee received the necessary support to address his shortcomings and achieve the performance objectives The employee received appropriate support from Laurentian in order to meet his objectives (e.g. by utilizing a business development fund, launching an advertising campaign, working alongside other advisers, etc.). Whether the employee received a reasonable time to adjust The employee was employed by Laurentian for three years and was advised of his shortcomings at least as early as his first annual evaluation. He benefited from a reasonable time to adjust his performance. Whether the employee had been advised that a failure to improve would lead to dismissal The employee could not claim that he did not see the dismissal coming. He was clearly informed that his job was in jeopardy following his second annual evaluation. The case serves to remind employers of the importance of setting firm and reasonable performance objectives early on in the employment relationship. Should a dismissal for lack of competence prove inevitable, what will serve the employer well in the event that litigation arises is evidence that the employee was advised of his performance deficiencies, that resources were offered to support the employee in realizing his objectives, and that the employee was notified that a failure to improve would jeopardize his employment. While the process may require time and patience, it must be followed to avoid possible liabilities stemming from an unfavourable ruling of unjust dismissal. _________________________________________ 1 Daniel Denis v. Valeurs mobilières Banque Laurentienne inc., 2014 QCCRT 0517.

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  • The Supreme Court of Canada further clarifies the rights of workers

    On January 30, 2015, in the Saskatchewan Federation of Labour v. Saskatchewan (2015 SCC 4) decision, the Supreme Court of Canada further clarified the scope of the rights of workers pursuant to section 2(d) of the Canadian Charter of Rights and Freedoms (the “Charter”). Indeed, in its 2007 decision better known as B.C. Health ([2007] 2 S.C.R. 391), the Supreme Court of Canada had already established that the right of association provided under section 2(d) of the Charter also protected the procedural right to collective bargaining. However, it had not dealt with the issue of constitutional protection of the right to strike. In its majority (5-2) decision, the Supreme Court recognized that the right to strike is also protected under section 2(d) of the Charter. In the opinion of the Court, this right to strike allows employees, through collective action, to refuse to work under conditions imposed by the employer. This collective action at the moment of impasse is an affirmation of the dignity and autonomy of employees in their working lives. The Supreme Court of Canada added that the ability to engage in the collective withdrawal of services in the process of the negotiation of a collective agreement has always been the “irreducible minimum” of the freedom to associate in Canadian labour relations. This decision will be further analyzed in the following days; however, we already believe that it will have a major impact, particularly with respect to the essential services provided by employees of the State and the capacity of a government to end a strike through legislative action.

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  • Ditomene c. Boulanger, the next round: the Court of Appeal holds that procedural fairness rules need not be followed in the context of an employer’s investigation into alleged harassment

    In a unanimous decision dated November 17, 2014,1 the Court of Appeal of Québec held that the procedural fairness rules applicable in administrative and public law do not apply in the context of a psychological harassment investigation conducted by an employer. As a result, the Court set aside the judgment of the Court of Québec ordering the lawyer who conducted the investigation to pay $3,000 in damages.2 The Court of Québec at first instance concluded that the external investigator retained by the employer committed a fault by failing to comply with the obligations imposed by employer’s policy and by her contracts for services, which in particular, required her to ensure “the fairness of the investigative process”. In its judgment, the Court of Quebec identified the following breaches: refusal to provide the employee with the complaints made against him, refusal to provide him with a copy of the policy, refusal to provide him with the witnesses’ and complainants’ versions of the facts, failure to ensure that the investigation was conducted by the same individuals from the beginning to end, unnecessary request for a written undertaking of confidentiality, late notices to appear, and insufficiency of the report regarding the complaints made against the appellant. After having dismissed the employee’s main appeal, the Court of Appeal allowed the external investigator’s cross-appeal. The Court was of the view that the only question that the trial judge had to ask himself was whether the external investigator breached her obligations and committed a fault in the execution of the fact-finding mission conferred on her by the employer which made her extra-contractually liable to the employee under investigation. This question cannot be answered by simply referring to the rules of procedural fairness applicable in an administrative and public law context. According to the Court, such procedural fairness rules do not apply to an employer (even in the public sector) who conducts an investigation in order to determine the existence of psychological harassment and, if warranted, addresses it through the imposition of disciplinary measures against the harasser.3 The Court added that such an investigation, even one conducted by a third party mandated for that purpose, is inherently linked to the exercise of the employer’s authority to manage and discipline and need not be subject to procedural requirements comparable to those applicable to, among others, administrative or judicial tribunals or the adversarial process applicable before such bodies. As a result, an employer may adopt a policy which refers to the principles of natural justice or procedural fairness, but the applicable rules remain of those applicable in the realm of civil liability. Thus, even in the absence of an employer policy, in the case of a bungled investigation which results in a sanction being undeservedly and harmfully imposed on an employee, the employer or the investigator could be held liable to the extent a fault has been committed. In the Ditomene case, the Court of Appeal was of the opinion that the language used in the employer’s policy (specifically, the obligation to ensure the “fairness of the process”) did not impose a duty to ensure full compliance with the principles of procedural fairness as they have been developed in a public law context or with the rules applicable before a body exercising jurisdictional duties, nor did it require that the investigation be transformed into an adversarial process. The Court of Appeal concluded that there may be cases where an investigator’s conduct or way of doing things would constitute a fault which could possibly result in a determination of liability, but this was not the case in the circumstances of the Ditomene case. _________________________________________ 1 2014 QCCA 2108 (the “Ditomene case”). 2 2013 QCCQ 842. 3 On this subject, the Court of Appeal refers notably to the case of Université de Sherbrooke v. Patenaude, 2010 QCCA 2358 (see in particular, paragraph 39 of this judgment).

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  • An employer can file a counter claim against an employee in the context of proceedings instituted by the Commission des normes du travail in order to enforce the right of set-off

    In Commission des normes du travail v. Compagnie d'assurances Standard Life du Canada,1 (the “Standard Life of Canada case”), the Court of Québec allowed an employer to file a counterclaim against an employee in the context of proceedings instituted by the Commission des normes du travail (“CNT”) on behalf of that same employee. In so doing, the Court authorized Standard Life of Canada (the “Employer”) to request, by way of a counterclaim, the enforcement of the right of set-off between the amounts owed to the employee and the amounts owed by the employee to the Employer. However, the Standard Life of Canada case runs contrary to the majority of the case law coming out of the Court of Québec2 according to which the employer cannot file a counterclaim against his employee or ex-employee in the context of proceedings instituted by the CNT on the grounds that such an employee or ex-employee does not constitute a “plaintiff” within the meaning of the Code of Civil Procedure.3 In the Standard Life of Canada case, the CNT claimed the amount of $2,301 on behalf of an employee for unpaid vacation. For its part, the Employer argued that he had set off this amount against salary advances that had been made to the employee under a reimbursement agreement. The Employer was therefore claiming from the employee the remaining balance of the advances due after set-off by way of a counterclaim. The CNT argued that the Employer was not authorized to set off these amounts and that its counterclaim should have been filed as a separate case. Accordingly, the CNT was seeking to have Standard Life’s counterclaim dismissed and struck out. In its judgment, the Court of Québec relied on a decision of the Court of Appeal4 to conclude that the employee was a “party” to the action instituted by the CNT and that, accordingly, the Employer could enforce any right against the CNT which could be validly asserted against the employee herself.5 In the specific case where an employer seeks to set off amounts owed to an employee and the amounts the employee owes the employer, the Court will have to satisfy itself that the employer had a debt that is certain, liquid and exigible prior to proceedings being instituted by the CNT, in which case there may be extinction of the debt up to the lesser of the two amounts owed.6 The Court of Québec also bases its conclusion on the proportionality rule as set out in the Code of Civil Procedure.7 In fact, allowing the CNT’s motion to dismiss would require the Employer to institute separate proceedings against the employee. The Court was of the view that the interests of justice would not be as well served in such circumstances as opposed to if the crossclaim was dealt with at the same time as the action filed by the CNT given that both claims originated from the same source. Lavery will monitor the Standard Life of Canada case and keep you informed of any significant developments. _________________________________________ 1 2014 QCCQ 4523. 2 Particularly see Commission des normes du travail v. 9175-0489 Québec inc. (Steak frites Saint-Paul), 2013 QCCQ 3884 (C.Q.); Comité paritaire de l’industrie des services automobiles de la région de Montréal v. Hewitt Équipements ltée, 2012 QCCQ 1485 (C.Q.) and Commission des normes du travail v. Groupe Dubé Entrepreneur Général inc., 2012 QCCQ 6896 (C.Q.). 3 RLRQ c. C-25. 4 Commission des normes du travail v. Motos Daytona inc., 2009 QCCA 1833 (C.A.) (“Motos Daytona inc.”), quoting Maltais v. Corp. du parc régional du Mont Grand-Fonds inc., D.T.E. 2002T-715 (C.A.). 5 Prec., note 1, par. 11 and 12. 6 Motos Daytona inc., prec., note 4. 7 Prec., note 3, article 4.2.

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  • A pregnant worker’s right to benefits in the event of preventive withdrawal pursuant to section 36 of the AROHS does not apply to a business under federal jurisdiction: Éthier v. Commission des lésions professionnelles

    This decision of the Superior Court of Québec addresses a pregnant worker’s right to preventive withdrawal where said worker is employed by a business under federal jurisdiction.1 In this case, questions of constitutional jurisdiction were raised and the Superior Court confirmed that article 36 of the QuébecAct Respecting Occupational Health and Safety2 (the “Act”) is not applicable to businesses under federal jurisdiction. As a result, a worker who exercises her right to cease to perform a job pursuant to the Canada Labour Code (the “Code”)3 is not eligible to receive income replacement benefits, regardless of the fact that the federal scheme does not provide for the payment of such benefits.THE FACTSMs. Éthier works for the Canadian National Railway Company (“CN”), a business under federal jurisdiction. In August 2011, while she was pregnant, she filed an application with the Commission de la santé et de la sécurité du travail (“CSST”) under the “[TRANSLATION] For a Safe Maternity Experience Program”. Subsequently, due to her condition, a doctor recommended that she be assigned tasks posing no physical risk to her or, failing that, that she be preventively withdrawn as of the 20th week of her pregnancy. Her employer informed her that it could not modify her job and could not reassign her to other tasks. Consequently, Ms. Éthier availed herself of the preventive withdrawal option available to pregnant women under sections 132, 205 (a) and 205.1 of the Code. Subsequently, the CSST informed Ms. Éthier that she was not eligible for the preventive withdrawal program under the Act, since the program does not apply to businesses under federal jurisdiction. Therefore, the CSST notified her that she was not entitled to income replacement benefits under section 36 of the Act. Ms. Éthier sought review of this decision and, subsequently, appealed the decision rendered by the CSST’s Administrative Review Division before the Commission des lésions professionnelles (“CLP”). The two bodies having dismissed her requests, Ms. Éthier requested that the Superior Court review the decision rendered by the CLP.4THE SUPERIOR COURT DECISIONThe Superior Court must determine whether the compensation system provided for under the Act respecting industrial accidents and occupational diseases5 (“ARIAOD”) is, pursuant to section 131 of the Code, constitutionally applicable to a pregnant worker employed by a business under federal jurisdiction and who exercises a right of preventive withdrawal. Section 131 of the Code reads as follows:“131. [Compensation under other laws precluded] The fact that an employer or employee has complied with or failed to comply with any of the provisions of this Part may not be construed as affecting any right of an employee to compensation under any statute relating to compensation for employment injury or illness, or as affecting any liability or obligation of any employer or employee under any such statute.”Before the Superior Court, Ms. Éthier claimed that a pregnant employee working for a business under federal jurisdiction must be entitled to the same benefits as a pregnant employee working for a business under provincial jurisdiction and, therefore, must be able to receive an income replacement benefit allowing her to exercise her right of preventive withdrawal. She claimed that section 131 of the Code is an interjurisdictional reference to the provisions of the ARIAOD which entitle the employee of a business under federal jurisdiction to an income replacement benefit. The Superior Court confirmed the CLP’s decision and rejected Ms. Éthier’s appeal. Citing the Supreme Court of Canada’s decision in Bell Canada v. Québec (CSST),6 the Superior Court refused to depart from well-established jurisprudence according to which the Act does not apply to businesses under federal jurisdiction. Section 131 of the Code makes no reference to the ARIAOD or the Act. In order to be applicable, an interjurisdictional reference must be clearly defined. As well, the wording of section 132 of the Code, which provides for the right of a pregnant worker to cease performing her tasks if she believes that, due to her pregnancy or the fact that she is nursing, continuing any of her current tasks may pose a risk to her health or to that of the fetus or child, gives the worker a unilateral right to cease carrying out her tasks. At face value, this provision is inconsistent with any form of income replacement benefit under a provincial plan. Even on an expansive interpretation of section 131 of theCode, there is no clear interjurisdictional reference to the provisions of the ARIAOD which provide for the compensation of the pregnant employees of a federal business.OUR OBSERVATIONSDevelopments in this matter are still ongoing since the Court of Appeal of Québec granted Ms. Éthier leave to appeal the Superior Court’s decision on April 16, 2014. The Court of Appeal was seized of the following questions, which would be new and which had not previously been the subject of debate before either the Court of Appeal or the Supreme Court of Canada:a) Do the legislative amendments made to the Code since 1993 and the decisions of the Supreme Court of Canada in Canadian Western Bank v. Alberta,7 Tessier Ltée v. Québec (CSST),8 Québec (Attorney General) v. Canadian Owners and Pilots Association,9 Marine Services International v. Ryan10 and Martin v. Alberta (Worker’s Compensation Board)11 justify a review of the principle according to which sections 36, 40, 41 and 42 of the Act are not applicable to a federal business?b) Does section 131 of the Code constitute an interjurisdictional reference providing for the compensation of a pregnant or nursing worker pursuant to section 36 of the Act and the ARIAOD even if she is employed by a business under federal jurisdiction?These questions would be of “[TRANSLATION] general interest to all employees of businesses under federal jurisdiction.”12For their part, CN, the CSST and the Attorney General of Québec consider that the jurisprudence established by the Supreme Court in Bell Canada13 is still the authority and that sections 33, 36, 37 and 40 to 45 of the Act are not applicable to businesses under federal jurisdiction.Lavery will keep you informed of the result of this appeal._________________________________________1 2014 QCCS 1092 (“Éthier”) (application for leave to appeal granted) (C.A., 2014-04-16), 2014 QCCA 793). Note that as of July 16, 2014, no decision had been rendered in this case by the Court of Appeal.2 CQLR c. S-2.1 (the “Act”).3 RSC 1985, c. L-2 (the “Code”).4 Éthier v. Canadian National Railway, 2013 QCCLP 4672.5 CQLR c. A-3.001 (“ARIAOD”). This plan applies to preventive withdrawal by virtue of sections 36 and 42 of the Act.6 [1988] 1 S.C.R. 749, p. 801 (‘‘Bell Canada’’).7 2007 SCC 22.8 2012 SCC 23.9 2010 SCC 39.10 2003 SCC 44.11 2014 SCC 25.12 Éthier v. Compagnie de chemins de fer nationaux du Canada, 2014 QCCA 793, par. 2.13 Supra, note 6.

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  • The Asphalte Desjardins matter: the Supreme Court of Canada overturns the decision of the Québec Court of Appeal

    On July 25, 2014, the Supreme Court of Canada rendered its decision inQuébec (Commission des normes du travail) v. Asphalte Desjardins inc.1 In this ruling, which overturned a judgment by the Québec Court of Appeal,2 the Supreme Court concluded that an employer who receives notice of termination within a reasonable time period, as stipulated under article 2091 of the Civil Code of Québec3 (“C.C.Q.”), cannot, in turn, unilaterally and immediately terminate a contract of employment of an indeterminate term without having to give the employee notice of termination or pay an indemnity in lieu of such notice.On March 19, 2013, the majority of the Québec Court of Appeal reversed the prevailing trend in the case law which held that where an employee gives notice to his employer of his intention to resign, the employer may waive the notice, provided it compensates the employee for the remainder of the period.What follows is a brief analysis of the decisions rendered by the Québec Court of Appeal and the Supreme Court of Canada in this matter.The decision of the Québec Court of AppealIn its decision, the Québec Court of Appeal proceeded with an analysis of the legal principles in dispute: the option of a party to an indeterminate term employment contract to unilaterally terminate it by giving reasonable notice of termination to the other party (article 2091 of the C.C.Q.) and the obligation of the employer to provide the minimum notice of termination of employment stipulated in the Act respecting Labour Standards4 (the “Act”) before terminating the employee’s contract of employment (section 82 of the Act). Essentially, a majority of the Court of Appeal concluded that the right to reasonable notice of termination set out in article 2091 of the C.C.Q. benefits the party who receives it. However, the option to give notice is not elevated to the status of a “right” which may be invoked against the party who receives said notice. Consequently, in a case like that of Asphalte Desjardins inc., the latter could, in its capacity as employer, waive the notice of termination given by its employee, completely or in part, without having to provide the notice of termination of employment stipulated at section 82 of the Act. In reality, it was the employee who had terminated the contract and not the employer.We should point out that in the specific case of Asphalte Desjardins, the employee in question, a project manager who had access to the company’s confidential information, was resigning in order to go work for a competitor. Asphalte Desjardins inc.’s decision to request that the employee leave immediately instead of on the announced departure date was due in part to the risk to the employer by maintaining the employment of an employee with access to sensitive information, while knowing full well that the employee would be working for a competitor in a few weeks.The decision of the Supreme Court of CanadaThe Supreme Court of Canada overturned the Québec Court of Appeal’s decision and concluded that an employer who receives reasonable notice of termination cannot, in turn, unilaterally terminate a contract of employment with an indeterminate term without itself giving notice of termination or paying an indemnity in lieu of such notice which includes at least the notice of termination of employment provided at section 82 of the Act.The Court found that a contract of employment with an indeterminate term is not terminated when notice of termination is given. On the contrary, the contractual relationship continues to exist until the date specified in the notice of termination. Consequently, even after one of the parties to an indeterminate term contract of employment delivers notice of termination to the other party, both parties are bound to continue performing their obligations under the contract until the notice period expires. This includes the obligation of the party wishing to terminate the contract of employment prior to the expiration of the notice period provided by the other party, to in turn give notice of termination. In the opinion of the Court, it is inappropriate to deal with the issue from the perspective of “renunciation” of the notice period, and such an approach cannot have the effect of permitting a party to derogate from its obligations to the detriment of the other party’s rights.In essence, if the employer refuses to allow the employee to continue his or her employment and to pay him or her during the notice period provided, the employer will in effect be “terminating the contract” within the meaning of section 82 of the Act. However, this would not be the case if the employee were to announce his or her immediate resignation, offering, nonetheless, to continue working for a certain time. In such a case, the Court specifies that if the employer does indeed want the employee to leave immediately, there is a meeting of minds and notice of termination is unnecessary given that a contract for an indeterminate term can be terminated by agreement between the parties. Moreover, the Court added that the notice period chosen unilaterally by the employee cannot be imposed on the employer, a useful clarification in cases where an employee might give an unreasonably long notice period.5Finally, the Court concluded that the Commission des normes du travail may claim an indemnity equal to three weeks’ salary on the employee’s behalf in respect of the balance of the notice given by the employee, together with the amount due in respect of the annual leave.ObservationsIt is worth noting that the fact that the departing employee had announced that he would be leaving to go work for one of Asphalte Desjardins inc.’s competitors does not appear to have played a particularly strong role in the reasons of the Supreme Court of Canada. Having been called upon to resolve a controversy in the case law, the Court elected to clarify certain general legal principles based on an analysis of the provisions set out in the Act respecting Labour Standards and the Civil Code of Québec, and set aside the analysis of the Court of Appeal. The Supreme Court also held that employees are “vulnerable” parties.6 The Court went on to add that since the employee had not claimed the full indemnity stipulated in sections 82 and 83 of the Act, “it is preferable to leave the question of whether the notice period provided for in section 82 of the Act and the equivalent indemnity provided for in section 83 are matters of directive or protective public order for another occasion”.7From an employer’s standpoint, it may appear unfair to have to pay an indemnity to an employee who has just announced that he or she is resigning in order to work for a competitor, whereas it would appear natural to refuse the right of the departing employee to remain on the job given his or her likely access to sensitive information. In practical terms, isn’t an employee who resigns to go work for a direct competitor in a position to benefit from the notice of termination given, to the detriment of the employer? For an employer, having to pay the salary of an employee who has chosen to join the competition most certainly adds insult to injury, especially in those cases where, due to the circumstances, it is quite clearly the company that is the “vulnerable” party.In any case, a subsequent decision on the directive or protective public order nature of sections 82 and 83 of the Act will most certainly be an interesting development and could serve to complete the analysis developed by the Supreme Court in the Asphalte Desjardins case.Lavery will be monitoring the application of this Supreme Court decision and will keep you informed of any prevailing trend in the case law or noteworthy development in this regard. _________________________________________1 2014 SCC 51 (“Asphalte Desjardins”).2 Asphalte Desjardins inc. v. Commission des normes du travail, 2013 QCCA 484.3 LRQ c C-1991.4 CQLR c N-1.1.5 Asphalte Desjardins, par. 44.6 Id., par. 64.7 Id., par. 71.

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  • Right to refuse to work and preventive withdrawal: the Dionne v. Commission scolaire des Patriotes case

    In Québec, the objective of the Act Respecting Occupational Health and Safety1 (the “Act”) is the elimination, at the source, of dangers to the health, safety and physical well-being of workers. Recently, the Supreme Court of Canada rendered a decision in the Dionne v. Commission scolaire des Patriotes2 case concerning the right that the Act confers on a worker to refuse to work if he3 has reasonable grounds to believe that it could expose him to a threat to his health, safety, or physical well-being or would expose another person to a similar danger4. This unanimous decision of the judges of the Supreme Court of Canada clarifies the scope of the right of a pregnant woman to refuse to work where she faces job insecurity, in this case, given her status as a part-time supply teacher. A PREGNANT WOMAN TO REFUSE TO WORK WHERE SHE FACES JOB INSECURITY, IN THIS CASE, GIVEN HER STATUS AS A PART-TIME SUPPLY TEACHER. A PREGNANT WORKER’S RIGHT TO REFUSE TO WORK AND PREVENTIVE WITHDRAWAL: LEGAL CONCEPTS In the more specific example of a pregnant worker, the Act provides for the option of a preventive withdrawal where said worker provides her employer with a certificate attesting to the fact that her working conditions may be physically dangerous to her unborn child or to herself due to her pregnancy.5 In this particular case, the pregnant worker may request to be reassigned to other duties involving no such danger and that she is reasonably capable of performing. If the employer does not or cannot comply with the request, the pregnant worker may exercise her right of refusal to work until she is reassigned to duties that are compatible with her condition or until the date of delivery.6 A worker on preventive withdrawal is deemed to be at work and retains all the benefits attached to her regular position prior to her reassignment to other duties or her work stoppage.7 She is also entitled to full compensation for the first five working days of her work stoppage and, subsequently, receives 90% of her net salary for days where she would normally have worked, had she not been in preventive withdrawal.8 In these situations, income replacement benefits are provided to workers by the Commission de la santé et de la sécurité du travail (the “CSST”). THE FACTS In 2006, Ms. Maryline Dionne was a supply teacher who was added to the Commission scolaire des Patriotes’ (the “School Board”) list of supply teachers. A collective agreement requires the School Board to use the teachers on this list when replacement teachers are needed, leaving the selection of said replacements to the School Board’s discretion. Once on the list, Ms. Dionne worked frequently such that in 2006, she worked nearly full-time. In September 2006, she learned she was pregnant. Shortly thereafter, her doctor informed her that she was vulnerable to catching a contagious virus which could harm her fetus. As this virus can be spread by groups of children, her doctor completed two certificates prescribing preventive withdrawal and reassignment, confirming that her workplace also posed a risk to her health. Ms. Dionne forwarded the certificates to the CSST, which informed her that she would be eligible for preventive withdrawal on the day when she would be “called to work by [her] employer to carry out a contract”.9 Ms. Dionne received several offers from the School Board to substitute teach in November 2006, all of which she accepted. She was never reassigned to any other tasks. The CSST rendered a decision declaring that Ms. Dionne was entitled to receive income benefits related to her preventive withdrawal. This decision was appealed by the School Board to the Commission des lésions professionnelles (“CLP”), with the CLP setting aside the decision rendered by the CSST.10 In its decision, the CLP held that since Ms. Dionne was unable to enter the school due to the risks it posed to her health, she was incapable of performing the supply teaching work and no contract of employment could be formed. More specifically, the CLP held that Ms. Dionne’s condition prevented her from performing the tasks necessary to form a contract of employment within the meaning of the Civil Code of Québec (“CCQ”).11 Consequently, she could not be considered to be “a worker” within the scope of the Act nor was she entitled to preventive withdrawal and the resulting benefits. The Superior Court confirmed the decision of the CLP.12 The Court of Appeal upheld this decision, although there was a dissent.13 THE DECISION OF THE SUPREME COURT OF CANADA Basing itself on the objectives and the context of the Act, the Supreme Court of Canada allowed Ms. Dionne’s appeal. In its decision, the Court reiterated that the objective of the Act is the elimination, at the source, of dangers to the health, safety and physical well-being of workers.14 After reviewing the principles applicable to the right of refusal set out in the Act, the Court indicated that the right to refuse to perform dangerous work must not be considered to be a refusal to fulfil an employment contract but, rather, as “the exercise of legislative protection”.15 The Act being of a law of public order, this right to refuse to perform work is automatically incorporated into any contract of employment.16 The Act therefore protects pregnant women in two significant ways: it protects their health by substituting safe tasks for dangerous ones, and it protects their employment by providing financial and job security.17 The Court recognizes that in order to qualify as a ‘‘worker” within the meaning of the Act, there must be a “contract of employment”. Since this concept is not defined in the Act, the Court refers to the definition of a contract of employment provided for at article 2085 of the CCQ. In the case of Ms. Dionne, does the presence of a health risk in the workplace constitute an obstacle to the formation of an employment contract? The CLP was of the view that since Ms. Dionne could not enter the workplace to teach, the essential element of the performance of the contract was missing and, as a result, no contract of employment could be formed. According to the Supreme Court, this decision is unreasonable. The concept of “worker” set out in the Act must be distinguished from the concept of a “contract of employment” as set out in the CCQ. There are several indications of the legislative intention to reach a much broader group of workers than that contemplated by the “employee” of the CCQ. The requirement of the performance of work must be interpreted in order to give meaning to the right of refusal provided for by the Act. According to the Court, this requirement shall be respected even if, following the formation of the contract, the worker withdraws from the workplace for health and safety reasons; at that point, the Act deems the employee to be “working”.18 Consequently, when Ms. Dionne accepted the School Board’s offer to work as a supply teacher, an employment contract was formed and she became a worker in accordance with the definition of that term in the Act. It was not her pregnancy but rather the dangerous workplace that prevented her from carrying out her work, and that in turn triggered her statutory right to substitute that work with a safe task or to withdraw.19 The refusal to perform a dangerous task is not a refusal to fulfil the employment contract; it is the exercise of a statutory right under the Act. Protective reassignment is not an obstacle to the formation of an employment contract. The CLP’s decision had the “anomalous” effect of putting certain women in the untenable position of having to choose between entering into an employment contract and protecting their health and safety or the health and safety of their fetus. OUR OBSERVATIONS This decision will likely have major repercussions on workers who have casual status and employers in Quebec’s education sector. The expansive and liberal interpretation given by the Supreme Court of Canada to the rights and protections set out in the Act has the effect, notably, of extending the grounds for workers’ right of refusal compensation to which such workers are entitled when they are offered a job, regardless of whether or not these workers can in fact perform the work. Therefore, when an employer makes a job offer, the worker may accept it and then refuse to perform the work, citing a risk to her health, safety and well-being. _________________________________________ 1 CQLR c. S-2.1 (the “Act”). 2 2014 SCC 33 (‘‘Dionne’’). 3 For the purposes of convenience, in this text, the masculine is used to refer to both men and women. 4 The Act, section 12. 5 Id., section 40. See also Regulation respecting the certificate issued for the preventive withdrawal and re-assignment of a pregnant or breast-feeding worker, CQLR c. S-2.1, r. 3. 6 The Act, section 41. 7 Id., section 14 and 43. 8 Id., section 36. 9 Id., par. 10. 10 Commission scolaire des Patriotes v. Dionne, 2008 QCCLP 3215. 11 LRQ, c C-1991, article 2085 (‘‘CCQ’’). 12 Dionne v. Commission des lésions professionnelles, 2010 QCCS 1550. 13 Dionne v. Commission scolaire des Patriotes, 2012 QCCA 609. 14 The Act, section 2. 15 Dionne, supra, note 2, par. 22, citing Bell Canada v. Québec (CSST), [1988] 1 S.C.R. 749, p. 801. 16 The Act, section 4. 17 Dionne, supra, note 2, par. 30. 18 Id., par. 38. 19 Id., par. 43.

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  • The Wal-Mart Decision: The Supreme Court of Canada confirms that the collective dismissal of the employees of the Jonquière establishment constituted an illegal change in their conditions of employment under section 59 of the Labour Code[1]

    THE FACTSWal-Mart Canada Corporation (hereinafter “Wal-Mart”) opened its Jonquière establishment in 2001. After the United Food and Commercial Workers, local 503 (hereinafter the “Union”), was certified to represent the employees in 2004, negotiations were initiated in view of concluding a first collective agreement. As these negotiations proved to be unsuccessful, the Union opted to call upon the Minister of Labour to appoint an arbitrator to establish the terms of their first collective agreement. Shortly thereafter, Wal-Mart announced that it would be permanently closing its Jonquière establishment, which it did on April 29, 2005.Several proceedings were instituted by the employees and the Union to contest this closure, including a grievance under section 59 of the Labour Code2(hereinafter the “Code”). In particular, this section provides that no employer may change the conditions of employment of its employees during the period spanning from the moment a petition for certification is filed to the moment a collective agreement is concluded, or until the right to strike or lock out is exercised. Essentially, the purpose of this section is to protect the bargaining period by imposing a relative freeze on the employees’ conditions of employment. It also obliges the employer to adhere to the “business as usual” rule.At first, the arbitrator appointed to hear the grievance ruled that he did not have jurisdiction to hear the dispute on the grounds that the grievance essentially dealt with alleged breaches of sections 12 to 14 of the Code, over which only the Commission des relations du travail had sufficient jurisdiction.3 However, this preliminary decision was quashed on judicial review.4 The Superior Court found that the arbitrator ought not to have relied so closely on the exact wording of the grievance in concluding that he lacked jurisdictional authority. Instead, he ought to have identified the true issue, which clearly centered on section 59 of the Code. The Superior Court therefore remitted the matter back to the arbitrator.The arbitrator, then seized of the merits of the dispute, held that the issue he had to consider was whether the employees’ dismissal — and not the permanent closure of the establishment — had illegally changed the employees’ conditions of employment.5 Having concluded that this was indeed the case, the arbitrator subsequently had to inquire as to whether these changes were made in the ordinary course of Wal-Mart’s business. The arbitrator found section 59 of the Code to be inapplicable, due to the fact that an employer may “[TRANSLATION] decide to close up shop for whatever reason.”6In the arbitrator’s view, Wal-Mart did not justify the closure of its establishment other than by providing a statement that it was a business decision. The arbitrator deemed Wal-Mart’s explanation to be insufficient, holding that the reasons that led to its decision ought to have been further explained so as to ascertain whether they fell within the ordinary course of its business. He allowed the grievance and his decision was upheld by the Superior Court on judicial review.7However, the Court of Appeal did not subsequently agree and ruled that the Union’s grievance ought to have been dismissed.8 In the majority’s assessment, the closure of the establishment did not constitute a change in the employment conditions as such, but rather a termination of employment, even falling outside the broadened meaning of the concept of conditions of employment. In addition, since the establishment had shut down, it was not possible to return the employees to their situation before the alleged change in their employment conditions. Concurring, Justice Léger stated however that it was incoherent and contradictory to recognize an employer’s power to close its business for its own specific reasons while also accepting that the continuation of the employment relationship is a condition of employment. Such reasoning would grant the employees an advantage which they did not have prior to the filing of the petition for certification, an outcome that cannot result from the application of section 59 of the Code. Otherwise, an employer could shut down its business without justification before and after the period for which the provision applies, but could not do so over the course of said period.THE SUPREME COURT OF CANADA’S DECISIONEssentially, the majority of Supreme Court —Justice Lebel being the principal drafter of the opinion — adopted the position articulated by the arbitrator, stating that his decision and reasoning were not unreasonable, and that in the circumstances, the Court of Appeal ought not to have intervened.Justice Lebel opined that the sole purpose of section 59 of the Code is not to restore the balance between the parties for the period of its application, but also to enable employees to exercise their right of association and to uphold good faith in the negotiation of the collective agreement. The principal means for exercising influence over employees — its management authority — is thus limited by the provision.Secondly, Justice Lebel stated that the maintenance of the employment relationship constitutes a condition of employment, and that this condition is implicitly incorporated into the contract of employment. Therefore, unless there is a legitimate cause of extinction of obligations, the proper role of a contract is to require the parties to carry out their obligations. In addition, given that employees are generally dependent on their jobs, the Court’s interpretation is that such employees have a reasonable expectation that their employer will not terminate their employment, except to the extent and in the circumstances provided for by law. Applying section 59 of the Code, this premise means that, during the period prescribed by this provision, the employer must demonstrate that it would have made the same decision — i.e. to close its establishment — in the absence of a petition for certification. To come to this conclusion, the employer’s decision must meet one of the following criteria: (1) be consistent with its past management practices, or (2) be consistent with the decision that a reasonable employer would have made in the same circumstances. These requirements therefore required Wal-Mart to justify the closure of its establishment, given that the right to close up shop for any reason whatsoever is not sufficient. Consequently, in the absence of appropriate justification, it was reasonable for the arbitrator to conclude that the collective dismissal of the employees at the Jonquière establishment was illegal under section 59 of the Code.As for the possible remedies, unlike other provisions of the Code, section 59 does not explicitly limit the scope of the arbitrator’s remedial power to the sole reinstatement of the wronged employee — which would not be possible in the circumstances — the arbitrator has the power to award damages to compensate for the illegal changes made to the employees’ employment conditions.AN INTERESTING DISSENTING OPINIONThe dissenting judges fully disagree with the majority’s reasoning, regarding the applicability of section 59 in situations of permanent closure of a business, and with respect to the available remedies.For these judges, section 59 of the Code simply does not apply in the case of a business closure. Firstly, this provision would oblige the employer to justify its decision to close up shop, which is otherwise inconsistent with the employer’s right to close its business for any reason. The only requirement in such a case is that the closure be genuine and definitive. Secondly, a business closure cannot, by definition, be consistent with a company’s past management practices: you only shut down once. Thirdly, applying section 59 to closure situations would lead to an absurd result: the employer would be required to justify the closure of its business only during the period prescribed by the provision, whereas the restriction would not apply following the conclusion of a collective agreement, for example. Finally, section 59 cannot apply to a business closure situation because it presupposes the existence of an active business. The purpose of this section is to facilitate the conclusion of a collective agreement in the context of an existing employment relationship, and not to maintain the employment relationship itself, just like a collective agreement, strike or lockout can only occur in the context of an active business.As for the remedies in the event of a breach of section 59, the dissenting judges stated the remedies must have the effect of restoring the status quo ante. For this reason, and since an arbitrator could not oblige a closed business to reopen, the awarding of damages is incompatible with the purpose of section 59, i.e. to maintain the balance between the employer and the employees during the collective bargaining period. Moreover, since Wal-Mart had already compensated all the employees from the Jonquière establishment for the loss of their jobs, there was no longer any compensable harm related to the termination of their employment.CONCLUSIONIn this decision, the Supreme Court limits the right of all employers to close their business for any reason whatsoever during the period prescribed by section 59 of the Code, i.e. between the filing of the petition for certification and the conclusion of a collective agreement, or the exercise of the right to strike or to lock out. An employer who would like to close its business during this period must henceforth justify its decision and demonstrate that the decision is made in the ordinary course of business or that it is reasonable.The question of whether or not damages will be awarded to Wal-Mart’s former employees at the Jonquière establishment still remains to be resolved. We will keep you informed of any further developments.This decision may become a landmark case and change Québec’s labour law: although it does not recognize the right to work as a fundamental right – which it has always refused to do – the Supreme Court nevertheless recognizes an implicit right to employment, at least where a motion for certification is granted._________________________________________1 United Food and Commercial Workers, Local 503 v. Wal-Mart Canada Corp., 2014 SCC 45.2 RLRQ c C-27.3 Travailleurs et travailleuses unis de l’alimentation et du commerce, section locale 503 v. Compagnie Wal-Mart du Canada, [2006] R.J.D.T. 1665 (T.A.).4 Travailleurs et travailleuses unis de l’alimentation et du commerce, section locale 503 v. Ménard, 2007 QCCS 5704 (S.C.).5 [2009] R.J.D.T. 1439 (T.A.).6 I.A.T.S.E., Stage Local 56 v. Société de la Place des Arts de Montréal, 2004 SCC 2 at para. 31.7 Compagnie Wal-Mart du Canada v. Ménard, 2010 QCCS 4743 (S.C.).8 Compagnie Wal-Mart du Canada v. Travailleuses et travailleurs unis de l’alimentation et du commerce, section locale 503, 2012 QCCA 903 (C.A.).

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  • Notice to employers under federal jurisdiction: amendments to the Canada Labour Code will take effect on October 31, 2014

    On December 12, 2013, A second act to implement certain provisions of the budget tabled in Parliament on March 21, 2013 and other measures1 (“Bill C-4”) received royal assent. Bill C-4, which consists of more than 300 pages, proposes a significant number of legal amendments, some of which relate to the Canada Labour Code2 (“CLC ”). On June 18, 2014, the amendments were set to take effect on October 31, 2014.3 According to a consultation paper issued by the Government of Canada, the amendments regarding Part II of the CLC , entitled “Occupational Health and Safety”, are intended in the following context: Over 80% of refusals to work in the last 10 years – from 2003 to 2013 – have been determined to be situations of no danger, even after appeals. By clarifying the definition of “danger” employees and employers will be better able to deal with health and safety issues through the Internal Responsibility System.4 The amendments made by Bill C-4 concern, in particular, changing the definition of the term “danger”, the abolition of “health and safety officers” as well as changes to the process applicable to investigations relating to the right to refuse to work (section 128 of the CLC ) or to complaints made under section 127.1 of the CLC (an employee who believes on reasonable grounds that there has been a violation of Part II of the CLC or that there is likely to be an accident or a disease arising out of, linked with or occurring in the course of employment). Well in advance of its enactment, several labour unions reacted to Bill C-4, alleging in particular that it compromises the rights of workers regarding workplace health and safety matters, even going so far as to state that the proposed amendments could lead to increased injury and health risks. Currently, section 122 of the CLC defines the concept of “danger” as follows: “danger” means any existing or potential hazard or condition or any current or future activity that could reasonably be expected to cause injury or illness to a person exposed to it before the hazard or condition can be corrected, or the activity altered, whether or not the injury or illness occurs immediately after the exposure to the hazard, condition or activity, and includes any exposure to a hazardous substance that is likely to result in a chronic illness, in disease or in damage to the reproductive system. It is interesting to note that this definition of danger follows the amendments to Part II of the CLC enacted in September 2000.5 In the course of this legislative amendment, the concept of “danger” was changed to include potential dangers as well as the conditions or activities, present or future, which could reasonably result in injury or illness. Such amendments were made to “improve” the previous definition of “danger”, which was “believed to be too restrictive to protect the health and safety of employees”6: [...] According to the jurisprudence developed around the previous concept of danger, the danger had to be immediate and present at the time of the safety officer’s investigation. The new definition broadens the concept of danger to allow for potential hazards or conditions or future activities to be taken into account. [...]7 Therefore, it is interesting to note that the amendments made by Bill C-4 appear to, in some way, remove these additions in order to re-establish a concept of “danger” that more resembles the one which existed prior to the legislative amendments in the year 2000. In fact, the new definition of “danger” in section 122 of the CLC provided by Bill C-4 now reads as follows: “danger” means any hazard, condition or activity that could reasonably be expected to be an imminent or serious threat to the life or health of a person exposed to it before the hazard or condition can be corrected or the activity altered.8 As a result, the danger must be reasonable rather than “existing or potential”, as well as “be an imminent or serious threat to the life or health of a person exposed to it”, as opposed to “likely to cause injury or illness”. It is therefore possible that after Bill C-4 is enacted, the jurisprudential interpretation of the concept of “danger” established over the past ten years will be modified. The term “danger” also appears in section 128 of the CLC regarding the right of an employee to refuse work that he considers to be dangerous; this provision will need to be interpreted in light of the new concept of “imminent or serious threat to the life or health of a person exposed to it” once Bill C-4 is enacted. The burden of employees who wish to invoke a right of refusal will thereby be changed, given that the exercise of their right will depend on the presence of a situation that could reasonably result in an imminent or serious threat to their life or their health, as opposed to a reasonable and objective possibility that a risk will materialize.9 As well, Bill C-4 abolishes the concept of “health and safety officer”.10 Currently, Part II of the CLC sets out the procedures to follow when a complaint is made regarding occupational health and safety.11 At a certain stage, these complaints are referred to health and safety officers for investigation. As a result, the removal of said officers, as well as the additional amendments contained in Bill C-4, will result in changes to the investigation process related to these complaints. It will henceforth be a matter of an internal investigation between the employer and employee and if the internal investigation does not lead to a resolution of the complaint, it will be referred directly to the Minister of Labour.12 The impact of removing health and safety agents still remains, in our opinion, to be seen. However, we should point out that in the Order Fixing October 31, 2014 as the Day on which Division 5 of Part 3 of the Act Comes into Force,13 under the section entitled “Implications”, the text mentions that: […] These changes will reinforce the internal responsibility system to improve protection for Canadian workers and allow the Labour Program to better focus its attention on critical issues affecting the health and safety of Canadians in their workplace. The amendments will also help improve the quality and consistency of decisions being made by the Labour Program […]. It is also a matter of granting the Labour Program discretionary power and greater flexibility so that it can exercise its functions at “optimum efficiency”. Finally, the Order specifies that “the Minister will have the authority to decline to investigate refusals to work which can be more effectively dealt with under another act or which are deemed to be trivial, frivolous, vexatious, or made in bad faith.” Lavery will keep a close watch on the implementation of the changes that Bill C-4 will bring about after it comes into force on October 31, 2014 as well as their impacts in the short-, mid- and long-term, and will keep you informed of any significant trends. _________________________________________ 1 SC 2013, c.-40. 2 RSC 1985, c. L-2. 3 Order fixing October 31, 2014 as the day on which Section 5 of Part 3 of the Act comes into force, C.P. 2014-13, TR/2014-52 (Gaz. Can. II). 4 Government of Canada, Department of Finance Canada, ‘‘Bill C-4’’, Economic Action Plan 2013 Act, No. 2 - Part 3 - Various Measures: Division 5: Canada Labour Code, online: < http://www.fin.gc.ca/pub/c4/7-eng.asp > (site consulted on July 23, 2014). 5 An Act to amend the Canada Labour Code (Part II) in respect of occupational health and safety, to make technical amendments to the Canada Labour Code (Part I) and to make consequential amendments to other Acts, SC 2000, chapter No. 20. 6 Welbourne and Canadian Pacific Railway Company (March 22, 2001), decision No. 01-008, par. 17. 7 Id. 8 Bill C-4, section 176 (2). 9 Laroche v. Attorney General of Canada, 2013 FC 797, par. 60. 10 Bill C-4, section 176 (1). 11 W e refer in particular to sections 127.1 (8) and 129 of the CLC. 12 Bill C-4, sections 179 and following. 13 Supra, note 3, page 1758.

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  • Serious breaches of the duty of loyalty by a human resources employee – Dismissal upheld by the C.R.T.

    The Commission des relations du travail, both in its initial decision and on review, dismissed the complaints challenging the dismissal of an employee despite the absence of prior disciplinary measures. The complainant, who was hired in April 2011, held a position as an administration technician for the Human Resources Department of a CHSLD. In 2004, the complainant sought a position as staff management officer. This position was not offered to her the first time it became vacant due to the fact that she did not possess the necessary qualifications. After obtaining her Master’s Degree in 2007, the complainant resumed her attempts to secure the position she sought. However, since the vacancy had already filled, her reclassification request was once again denied.This refusal resulted in the complainant taking a series of actions and behaving in a way that created an unhealthy work environment in the Human Resources Department. The complainant said that she felt that she was being unnecessarily monitored by her superior while the latter took the position that she had only taken action in response to complaints made by the complainant’s colleagues that she was engaging in improper behaviour. The investigation culminated in the employee being dismissed. The complainant went on to file a complaint under section 124 of the Act respecting Labour Standards (hereinafter the “ARLS”).In the meantime however, the complainant had begun to record conversations she was having with her superiors. The employer was only made aware of these recordings at the hearing before the Commission des relations du travail (hereinafter, the “CRT”). The complainant had also filed a complaint under the ARLS against one of her colleagues for psychological harassment. However, this complaint was withdrawn before making it to a hearing.The CRT dismissed the complaint contesting the termination, particularly for the following reasons: The clandestine recordings made by the complainant without a valid reason broke the trust between her and her employer and constituted a serious breach of her duty of loyalty. The psychological harassment complaint was unfounded and by falsely accusing her managers of such behaviour, the complainant had also committed a serious breach of her duty of loyalty.Dissatisfied with this decision, the complainant filed for review with the administrative review division of the CRT.THE DECISION BY THE CRT ON ADMINISTRATIVE REVIEWOn administrative review, the CRT confirmed that the complainant’s decision to file a psychological harassment complaint against her colleagues that she knew was unfounded constituted a serious breach of her duty of loyalty. This was a clear case of the abusive exercise of the right to file a complaint. The CRT dismissed the complainant’s submissions to the effect that her complaint had to be founded given that the Commission des normes du travail had reviewed it and accepted to transfer it to the CRT for hearing, on the grounds that nothing could be inferred from that simple fact.Furthermore, the CRT also agreed with the initial panel with respect to the legal qualification of the complainant’s actions when recording several conversations she had with her superiors. Even if the employer had not taken this fact into consideration when dismissing the complainant given that it was unaware of the very existence of these recordings until the initial hearing, the CRT was of the view that this constituted evidence of facts which occurred subsequent to the dismissal and which was admissible in the case under review.In fact, this evidence confirmed that the employer’s conclusions that the complainant’s bad faith and disloyalty constituted a basis for her dismissal were justified and it was not unreasonable for the tribunal to take such evidence into account. By acting in such a way, without a valid reason and for the sole purpose of supporting her harassment allegations after the fact, the complainant broke the trust which is necessary in any employment relationship. This again constituted a serious breach of her duty of loyalty.Finally, the CRT confirmed the reasoning of the initial panel with respect to its conclusion that the principle of progressive discipline did not apply in this situation. It noted that this principle cannot apply in the case of a serious fault, such as a breach of the duty of loyalty, or in the case of irreversible conduct on the part of an employee. Holding that the complainant’s behaviour met both these criteria, her employer was justified in dismissing her despite an unblemished disciplinary record.This decision is currently the subject of judicial review proceedings before the Superior Court.

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  • Employees and the Cost of Justice: The Court of Appeal of Québec concludes that a complaint pursuant to section 124 of the Act Respecting Labour Standards (the Act) is admissible despite the existence of an internal arbitration procedure

    THE FACTSThe complainant, a non-unionized employee, was hired by McGill University (hereinafter the “University”) in 1987 to be a member of the administrative staff. After working as an administrative assistant since 1994, she was dismissed by the University on June 30, 2009 for fraud. The University’s administrative staff is subject to a Dispute Resolution Policy (the “Policy”), which also covers their employment conditions. That Policy, which was unilaterally adopted by the University, provides, among other things, that it forms part of the employment contract of all employees falling within its purview. It also provides for a dispute resolution mechanism, the last step of which is the referral of the complaint to arbitration. With respect to arbitration, the Policy states that the costs are to be shared equally by the employee and the University.Following her dismissal, the complainant initiated the dispute resolution procedure. She followed every step, going so far as to request that her complaint be referred to arbitration. It is unclear what exactly happened with her request for arbitration but, given what followed, every indication is that it had become irrelevant.At the same time, the complainant also filed a complaint with the Commission des normes du travail under section 124 of the Act contesting the same dismissal.During the hearing before the Commission des relations de travail (the “Commission”), the University contested the jurisdiction of the administrative tribunal, arguing that the Policy provided the complainant with another remedial procedure in accordance with section 124 of the Act. The Commission dismissed the preliminary objection and held, firstly, that the Policy formed part of the complainant’s employment contract and, secondly, that the recourse provided for in the Policy was not the equivalent to the one provided for at section 124 of the Act since, in contrast to the “free” recourse prescribed by section 124 of the Act, the complainant had to pay half the costs. The complainant was therefore able to avail herself of the recourse provided by the Act.On judicial review, the Superior Court of Québec said that it agreed with the Commission’s conclusions and dismissed the University’s action. Dissatisfied with the decision, the University appealed.THE COURT OF APPEAL’S DECISIONThe Court of Appeal began by stating that the complainant’s mere knowledge of the Policy did not mean that it was automatically incorporated into her employment contract. However, the Court of Appeal was of the opinion that the Commission had rendered a reasonable decision in ruling that, by taking advantage of the arbitration mechanism under the Policy, the complainant had implicitly admitted that it formed part of her employment contract.Regarding the equivalence of the recourses, the Court of Appeal confirmed that the Commission had correctly determined that, based on the legislator’s intention and given the resulting costs for the complainant, the mechanism provided for by the Policy was not an equivalent remedial procedure to that provided for by section 124 of the Act. In fact, the parliamentary debates surrounding the 1990 amendments to sections 124 and 126.1 of the Act – which, at the time, granted a right of action before an arbitrator – demonstrated the need to provide a free recourse, given that the cost could represent a serious impediment for a person wishing to assert his or her rights, especially someone working for minimum wage. These legislative changes (and the others that followed) consequently transferred jurisdiction over the recourse set out at section 124 of the Act to the labour commissioner (now the Commission), leading to, among other things, the following consequences: The employee does not have to bear the decision-maker’s costs The employee has the option of being represented by the Commission des normes du travail free of charge According to the Court of Appeal, in ruling as it did, the Commission ensured that section 124 of the Act was effective and in doing so, took into account the vulnerability of the employee who, once dismissed, no longer has a union (or other association) to represent him or her or to assume the cost associated with arbitration; a recourse that is inaccessible is not an effective recourse. This approach is in keeping with current access to justice concerns.An arbitration policy will therefore be valid, but the issue regarding the concurrent jurisdiction of the Commission under section 124 of the Act may be raised again in the event that the arbitration procedure does not require the employee to assume any cost.This Court of Appeal decision is available at the following address:http://www.canlii.org/fr/qc/qcca/doc/2014/2014qcca458/2014qcca458.html_________________________________________1 Université McGill v. Ong, 2014 QCCA 458.

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  • Heavy burden for employers respecting mitigation of damages for lost salary: following dismissal, an employee who makes no effort to mitigate his damages may still be entitled to an indemnity

    The Court of Appeal recently reviewed the scope of the duty of employees to mitigate their damages for lost salary pursuant to section 128(2) of the Act respecting labour standards (ARLS).1In this case, the Court of Appeal allowed in part the appeal of an employee following a decision of the Superior Court which had dismissed his motion for judicial review of two decisions of the Commission des relations du travail (CRT). In one of these decisions, the CRT had refused to grant an indemnity to the employee under section 128(2) ARLS because it was of the view that by failing to search for a job, the employee had breached his obligation to mitigate his damages.Although acknowledging as being reasonable the interpretation generally given by the CRT to section 128(2) ARLS, namely, that it implicitly includes an obligation to mitigate one’s damages, the Court of Appeal was of the view that in the case under review, the application of that rule by the CRT was unreasonable.The Court of Appeal noted that the mitigation of damages is an obligation of means which is subject to an objective test, that is, the review of how a reasonable person placed in the same circumstances would behave. Contrary to popular belief, a dismissed employee has no obligation to take all means one could imagine to reduce his damages to a minimum, he is rather required to make “reasonable efforts” toward that purpose.The Court of Appeal also stated that for taking the absence of mitigation into account, such absence of mitigation must, pursuant to article 1479 of the Civil Code of Québec, have had the effect of increasing the damages. To illustrate this principle, the Court noted that in some situations, mitigation efforts would probably be fruitless. Lastly, the Court indicated that the employer has the burden of establishing that the employee failed to discharge his obligation to mitigate and to prove the resulting increase in damages.Applying these principles, the Court of Appeal decided that for the period during which the Commission de la santé et de la sécurité du travail had determined that the complainant was able to work while his employer was refusing to reinstate him (period of one year during which the employee received benefits pursuant to section 48 of the Act Respecting Industrial Accidents and Occupational Diseases), any effort of the employee for mitigating his damages would have been pointless. He would probably not have been able to find a comparable job on account of his recourses against the employer and his 3-year disability leave due to depression. In the absence of preponderance of evidence demonstrating an increase in damages, the employee could not be blamed in this respect.As to the following period, during which the CRT allowed his complaint and set aside his dismissal without however order his reinstatement, the Court of Appeal considered that the employee could not be blamed for not having undertaken a job search while waiting for the issuance of the second judgment of the CRT ordering his reinstatement. The Court stated that [TRANSLATION] “it remains that to force the appellant to search for a job in the meantime while he will likely be reinstated shortly places him in a very uncomfortable situation in respect of potential employers and confers a rather artificial character to the obligation to mitigate”. par. [131]This decision, which proposes a contextual approach, repositions the obligation to mitigate damages in the area of indemnity for loss of salary pursuant to section 128(2) ARLS by taking into account the specific facts of each case. However, the decision would not apply to the recourses instituted under ordinary law, which does not recognize the right to reinstatement.._________________________________________1  Carrier v. Mittal Canada Inc., 2014 QCCA 679, April 4, 2014.

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  • Fieldturf Tarkett inc. v. Gilman(1): The Court of Appeal upholds the payment of « phantom share » bonuses where employment has been terminated without a serious reason

    THE FACTSOn January 22, 2014, the Court of Appeal of Québec confirmed the 2012 decision of the Superior Court of Québec in Gilman v. Fieldturf Tarkett inc.2 At issue in this case was whether the payment of so-called “phantom share” bonuses were to be paid to employees whose employment was terminated by the company.The incentive program at issue was established for certain non- shareholder key employees of the company. It provided that specific amounts would be contributed to a special bonus fund upon the sale of some of the shares of the company in accordance with the provisions of a Joint Venture Agreement and, later on, of a Share Purchase Agreement. More specifically, the program provided for the conversion of additional capital contribution into a number of notional shares of the company (the “phantom shares”). When actual shares of the company were purchased, an amount was contributed to the bonus fund, that amount being equal to the value of the phantom shares at that time. The incentive program also stipulated that it was the company’s CEO, John Gilman, who had the discretion to decide which key employees would receive phantom share bonus payments and how much each would be paid.The five plaintiffs in the present action were the largest beneficiaries of this incentive program, together receiving almost 60% of the total phantom share bonus amount paid out in September 2005 and about 66% of the one paid out in March 2007. Sadly, in July of 2007, John Gilman died unexpectedly while the last payment was still to be paid.In September 2008, following a subsequent internal restructuring of the company, four of the five plaintiffs were dismissed without cause, none of them receiving a final phantom share bonus payment prior to their departure. This final payment was made in February 2009 to all employees of the company despite the fact that, in accordance with the incentive program, only key employees who were employed on December 31, 2008 qualified for the final payment.While the company accepted that these four individuals were entitled to several months’ notice of termination ending in 2009, the new CEO refused to provide them with the final phantom share bonus payment.As for the fifth plaintiff, he refused the new terms of employment proposed by the company and resigned in January 2009. He also did not receive the final phantom share bonus payment.The five plaintiffs filed an action against the company claiming that they were entitled to receive the final phantom share bonus payment.THE DECISION OF THE SUPERIOR COURT OF QUÉBECThe Superior Court granted the plaintiffs’ claim. It dismissed the company’s argument that, insofar as the bonus was payable entirely at the discretion of the CEO, the company had no obligation to make the final phantom share bonus payment to the plaintiffs. The Court held that “an employee who is terminated without cause is entitled to receive all of the benefits that accrue during the notice period, including bonuses.”3 While the Court agrees that where its payment is entirely dependent on the employer’s discretion, an employee will generally not be entitled to claim a bonus as part of his pay during the notice period, evidence that the employee regularly received a bonus in the past may rebut the argument that its attribution was discretionary.The Court goes on to conclude that an assessment of the company’s past practice demonstrates that the phantom share bonus payments had become an integral part of the plaintiffs' wages by the end of 2008. More specifically, the Court states that the plaintiffs received the 2005 and 2007 bonuses and moreover, they had a reasonable expectation that they would receive a final bonus payment at the end of 2008.Finally, the Court notes that the bonus payments were not entirely discretionary. Rather, in accordance with the Joint Venture Agreement/Share Purchase Agreement and subject to the company’s financial performance, they had to be paid whenever shares of the company were purchased. Moreover, the amount of the bonuses was based on a specific formula and the bonuses were reserved for the company’s “key employees.” The plaintiffs were, according to the trial judge, “key employees” and were undoubtedly viewed as such by John Gilman prior to his death. As such, the Court comes to the conclusion that “Gilman's past practice defined what the reasonable exercise of the CEO's discretion had become by the end of 2008.”4 As a result, insofar as the plaintiffs’ entitlement to receive the final phantom share bonus payment vested during their respective notice periods, they were eligible to receive this payment.THE DECISION OF THE COURT OF APPEAL OF QUÉBECThe Court of Appeal of Québec upheld the trial judge’s decision and held that due to John Gilman’s death, the provision of the incentive program which specifically granted him the discretionary power to decide, among other things, which key employees would receive phantom share bonus payments became ambiguous and had to be interpreted in light of the parties’ intent, the nature of 4 Ibid at para 61. power was exercised. The Court agreed that the evidence was the incentive program, and the way in which this discretionary clear that John Gilman always considered the plaintiffs to be “key employees” and that no evidence was brought forth to demonstrate that this situation changed during the period between his death and the date on which the plaintiffs’ employment was terminated. The Court added that in the circumstances, the new CEO could not “[TRANSLATION] in the good faith exercise of the discretionary power with which he was invested in Mr. Gilman’s stead” conclude that the plaintiffs ceased to be key employees after July 2007 and before they were terminated.With respect to the eligibility condition (i.e. that only “key employees” who were employed on December 31, 2008 qualified for the final payment), the Court stated that, under Quebec law, bonuses and share purchase options form part of an employee’s total compensation and, as such, they are generally taken into account as forming part of an employee’s pay during the notice period. Therefore, the plaintiffs’ termination, in the absence of a serious reason, prior to the date on which the final phantom share bonus payment became payable does not prevent them from being able to recover the amounts claimed.To read the Court of Appeal judgment, click here._________________________________________1 2014 QCCA 147.2 2012 QCCS 1429.3 Ibid at para 36.4 Ibid at para 61.

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