Major trends in labor law | Financial position

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Too many lawyers representing employees bring cases of little value but seek large sums of money in punitive or aggravated damages. Courts are losing patience with such claims and lawyers’ gullible clients are being awarded costs.

In Chin v. Beauty Express Canada Inc., the court awarded Chin compensation for seven and a half months, totaling $16,000. His lawyer sought costs of $54,777, and most of the trial was devoted to Chin’s claim for bad faith damages, which the court rejected.

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In deciding not to award any costs since the matter should have gone to Small Claims Court, Justice Morgan said:

“The lawsuit can be objectively characterized as an unfortunate waste of the parties’ resources. The amount of damages is largely offset by legal costs. And that’s not to mention the legal time consumed by what turned out to be a rather minor claim.

The same type of criticism has been leveled at employers who waste courts’ time, with similar financial consequences.

In Summers v. OZ Optics Limited, Hackland J. found that the employer had failed to admit the facts and law it should have admitted, had unduly prolonged the proceedings and held that, without any basis — and, significantly, without helping the laid-off employee find work — that the employee had not taken sufficient measures to mitigate his damages. As a result, the court awarded the employee $25,000 in costs out of a judgment of only $36,000.

Fixed-term contracts are another hot topic labor law.

In Bouchard v. Facility Condition Assessment Portfolio Experts Ontario Ltd., the employee agreed “to enter into a contract of employment for a period of at least three years on terms agreeable to both parties.” The court found that this created a three-year term and the early termination clause in the contract was found to be invalid. As a result, Bouchard was entitled to the remainder of the remaining three years.

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This is a cautionary tale for employers not to enter into fixed-term contracts, particularly as courts are inclined to invalidate redundancy provisions because the employee is then presumed to be entitled to a compensation until the end of the mandate, regardless of its duration. It is far better for employers not to take the risk of such a payment.

Courts striking down termination provisions is the biggest employment law trend of the last two years — except maybe the workplace investigation industry costs more than it adds.

Employers are increasingly trying to safeguard their termination clauses by adding additional clauses specifying that the employee will not receive less than what the Employment Standards Act (ESA) provides. These “saving provisions” are simply not intended to “save” otherwise invalid termination provisions.

As Vermette J. concluded in Wilds v. 1959612 Ontario Inc:

“Savings provisions” in termination clauses cannot save employers who attempt to evade the minimum standards of the ESA and cannot reconcile a provision that is in direct conflict with the ESA from the outset. Deciding otherwise creates the risk that employers will insert penalties into employment contracts in the hope that employees will accept the terms. This outcome exploits vulnerable employees who hold unequal bargaining power in contract negotiations. Additionally, this defeats the purpose of the SEC — protect employees and ensure that employers treat them fairly in the event of dismissal. Employers cannot be allowed to draft provisions that capitalize on the fact that many employees are unaware of their legal rights and often fail to challenge notice provisions in court.

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Another common problem is that of employees who keep their company vehicle after being laid off.

In the case 415909 Canada Inc. cob PARS 2000 c. Moghadam, Judge Kaufman ordered the immediate return of a company car and made the employee pay $10,000 in costs, stating:

“The former employee claims that his employment was terminated unfairly and that he would be entitled to the benefit of these cars during the reasonable notice period. The defendant intends to bring an action for wrongful dismissal.

If the defendant is successful in his claim for wrongful dismissal, he may be compensated for the value of the fringe benefits he would have received during the reasonable notice period, but he is not entitled to use the vehicles until ‘have proven his case for wrongful dismissal, even if alone before commencing such action.

The judge not only ordered the car to be returned immediately, but also made the employee pay $10,000 in costs.

These few recent cases, among the hundreds of employment law cases that are decided each year, provide an idea of ​​the constantly evolving dynamism of this area of ​​law, which has a direct impact on tens of millions of Canadians.

Howard Levitt is a senior partner at Levitt LLP, a labor and employment law lawyer with offices in Ontario, Alberta and British Columbia. He practices labor law in eight provinces and is the author of six books, including Law of Dismissal in Canada.

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