Bill 47 – Making Ontario Open for Business Act

Making Ontario Open for Business Act

This October, less than a year after Bill 148 was signed into law, the Ontario government put forward a bill that, if passed, would repeal most of the ESA amendments created by the Fair Workplaces, Better Jobs Act.

According to the government, these changes are intended to “[lighten] the burden on business and [make] sure that hard work is rewarded.”

The idea is to make it easier for businesses to create jobs and opportunities for workers.

ESA changes under the Fair Workplaces, Better Jobs Act

Bill 148, the Fair Workplaces, Better Jobs Act, 2017, came into law just over a year ago on 22 November, 2017. The Act was the first significant review of the Employment Standards Act (ESA) and the Labour Relations Act in over 20 years. The Act’s changes were intended to address many of the particular needs and challenges facing the modern workforce. These changes included:

  • Increasing the minimum wage to $14 per hour
  • Extending the parental leave to 18 months after the birth or adoption of a child
  • Increasing vacation time to three weeks for employees who have been with a company for five years or longer
  • Simplifying the calculations for both public holiday and overtime pay
  • Expanding access to Personal Emergency Leave to 10 days per year, the first two of which must be paid
  • Pay equity for temporary, casual, part-time and seasonal workers

Proposed Changes Under Bill 47

Whether or not you welcomed Bill 148’s changes, you may soon be waving many of them goodbye.

If Bill Bill 47 is passed, the following changes would be made regarding the ESA amendments under the Fair Workplaces, Better Jobs Act:

The minimum wage will remain $14/hr

The Ontario government has already halted the prescribed minimum wage increase to $15/hr in 2019. Bill 47 would keep the minimum wage at $14/hr until 2020 at which time it would continue to increase according to inflation.

Scheduling changes will become more flexible for employers

Under the Making Ontario Open for Business Act, employers may once again make last-minute scheduling changes.

Personal Emergency Leave will be reduced

Currently, workers are entitled to 10 personal emergency leave days per year to be used as needed for bereavement, illness, child- or family-care purposes. Under the new legislation, every worker would be able to take up to take eight unpaid days of leave allotted as follows:

  • 3 days for personal illness
  • 2 days for bereavement
  • 3 days for family responsibilities (ie. to care for a sick child)

Furthermore, employers may once again require an employee to provide a doctor’s note in order to take a leave day.

Public holiday pay

Bill 47 would return the formula for calculating public holiday pay to the pro-rated pay formula that preceded Bill 148.

Elimination of equal pay for equal work for non-permanent and non-full-time employees

The Making Ontario Open for Business Act would make is possible for employers to once again pay different employees different wages for the same work depending on whether they are part-time, temporary, contract or permanent employees.

Employee misclassification burden of proof will be shifted to the employee

Employers will no longer have the burden to prove that a worker is not an employee. Instead, the onus to prove that a worker has been misclassified (i.e. as a contractor instead of an employee) would be returned to the worker.

Reduced penalties for contraventions

If passed, Bill 47 would reduce the maximum penalties for ESA violations by roughly 30 per cent.

What does this mean for employers?

In order to bring their workplaces up to the new ESA standards ushered in by Bill 148, many employers have made significant changes to their workplace policies, procedures and operations. Now with significant aspects of Bill 148 on the chopping block, many employers may be wondering if they will have to reverse course, and what the consequences of doing so will be to their workplace, employee morale and bottom line.

If passed, the Bill may allow many workplace policies and procedures to return to their pre-2018 formula but that does not mean that employers have turn back the clock on new practices that are working for them.

If you have questions regarding your obligations as an employer under the Employment Standards Act, call KCY at LAW to speak with a trusted expert in employment law. To book your consultation, call 905-639-0999 or fill out our online form here.

Duty to Mitigate & Accept Reemployment

What is the Duty to Mitigate?

The duty to mitigate refers to the obligation of a terminated employee to make a reasonable effort to find comparable new employment within the period of reasonable notice. Employees are expected to make a genuine effort to secure work during their notice period in order to offset the damages incurred by their employer.

Notice periods are intended to give employees adequate opportunity to find new employment, not provide extra paid time off. Should an employee find reemployment within their reasonable notice period, a court can reduce their termination payments to the extent to which their new income offsets their losses.

Should you as a dismissed employee neglect to make such reasonable efforts to achieve comparable reemployment, a court has the right to reduce your notice period. However, in such cases, it is up to your former employer to demonstrate that your attempts to find comparable reemployment were unreasonable and inadequate.

A dismissed employee is not expected to accept employment that isn’t comparable to their former position. For example, an executive at a company wouldn’t be expected to take on an entry-level or middle-management position elsewhere just for the sake of being employed.

Accepting Reemployment

But what if you find yourself wrongfully or constructively dismissed? Do you also have a duty to mitigate your former employer’s damages even after being wronged by them?

You do.

In fact, you may even have to accept reemployment with your former employer after being constructively dismissed in order to fulfil your duty to mitigate damages. This obligation was established in the Supreme Court case of Evans v. Teamsters Local Union No. 31.

Based on the Evans decision, if a reemployment offer is substantially the same as your original contract and working conditions – ie. your salary, duties and environment are unchanged – you may be compelled to accept reemployment with the employer who just terminated you.

Frederickson v. Newtech Dental Laboratory Inc. (2015)

An employee’s duty to accept an offer of comparable reemployment with the same company was first set out in Evans v. Teamsters. However, Frederickson v. Newtech Dental Laboratory Inc. offers some clarification on the circumstances in which an employee may decline reemployment while still mitigating their damages.

Ms. Frederickson was a dental technician at Newtech Dental Laboratory Inc. for eight and a half years. After returning from a two-month medical leave of absence, Ms. Frederickson was laid off without termination pay.

Ms. Frederickson sought legal counsel and presented her former employer with a letter. Newtech responded with their own letter demanding she return to work. Ms. Frederickson refused the offer of reemployment and began an action for wrongful dismissal. In the months that followed, Newtech made repeated offers of reemployment, all of which Ms. Frederickson declined.

At trial, Ms. Frederickson showed records of her mitigation efforts, including applications to nearly 100 job postings and a bookkeeping diploma which did eventually secured her new employment.

The judge agreed that Ms. Frederickson had been wrongfully dismissed but that, by refusing Newtech’s repeated offers for reemployment, she had not mitigated her damages and her damages for wrongful dismissal would be therefore reduced.

However, on appeal, the court found that Ms. Frederickson had not failed to mitigate damages. While Newtech’s offer of reemployment provided for the same salary, responsibilities, benefits and seniority, the erosion of trust in the employment relationship by her sudden termination after would have likely made for a strained and potentially toxic work environment for Ms. Frederickson.

By unceremoniously terminating Ms. Frederickson after a medical leave of absence, the court found that Newtech’s offer was ultimately incomplete and insincere. The Court of Appeal’s decision created room for consideration of the intangible aspects of the employment relationship – such as trust, dignity and respect – when weighing a former employee’s duty to mitigate. The Frederickson decision now offers the courts a more nuanced and holistic approach to determining if an offer of reemployment is complete.

Takeaway for Employers

The duty to mitigate seeks to balance the competing duties of an employee to find reemployment and minimize damages and of an employer to compensate a dismissed employee for their losses.

If you offer an employee reemployment to remedy a termination, make sure the situation can be made whole again. The offer of reemployment must be made in good faith and your working relationship must not have been irreparably damaged by the termination or actions leading up to it. No employee should have to return to an environment of hostility or humiliation.

KCY at LAW are experts in all matters of employment law. To book your consultation, call 905-639-0999 or fill out our online form here.

What are Wallace Damages?

Good faith. It’s not just for the pews on Sunday morning.

When it comes to employment relationships, businesses and organizations of all kinds, it is essential that all parties act in good faith. That is, everyone should operate with honesty and integrity. This means being fair and sincere in word, action and intent.

Bad faith is bad for business.

Both employers and employees have a duty to act in good faith towards one another at all times and in all regards of their employment relationship. As the 1997 case of Wallace v. United Grain Growers determined, good faith is even required during terminations.

Wallace Damages

Wallace Damages are concerned with how an employer handles a dismissal, not the dismissal itself.

They are named for the 1997 Supreme Court of Canada decision in Wallace v. United Grain Growers Ltd. The case established that employers owe their employees good faith and fair dealing in the way they handle dismissals.

When employers fail to behave appropriately, an employee may have their notice period extended as compensation for any mental distress caused by their poorly-handled dismissal. Wallace Damages can be awarded in addition to damages for wrongful dismissal.

The Case

In 1972, at the age of 46 Mr. Wallace was hired by United Grain Growers as a salesperson. He took the job after repeated assurances of competitive compensation and a job that would take him through to retirement. These assurances were important to Mr. Wallace as he was leaving a secure position with another company and did not want to find himself looking for a job again as he approached retirement.

After 14 years of employment at United Grain Growers – during all of which he was the top salesperson – Mr. Wallace was unexpectedly dismissed without explanation.

In his statement of claim, Mr. Wallace said that he has been wrongfully dismissed. United Grain responded that Mr. Wallace had been terminated for cause. This was not corroborated by his sterling sales record. Therefore, this assertion caused Wallace a great deal of mental distress to the point that he sought psychiatric help. Meanwhile, now 58 years old, Mr. Wallace struggled to find comparable employment.

The trial judge awarded Wallace 24 months’ salary in lieu of notice for wrongful dismissal and another $15,000 in aggravated damages for his mental distress. While the Court of Appeal reduced Wallace’s damages to 15 months notice and eliminated the $15,000 aggravated damages, the Supreme Court of Canada ultimately restored the trial judge’s 24-month notice period though not the $15,000 in aggravated damages.

For a time, Wallace damages were applied quite liberally. It became common practice to sue for Wallace damages if an employer behaved less than gentile during a dismissal. However, the 2008 case of Honda Canada v. Keays established a means for courts to determine if the damages should be applied.

Honda Canada v. Keays established that employees must demonstrate both that their employer acted in bad faith during dismissal and that this behaviour resulted in damages towards the employee. Dismissed employees now have a burden to demonstrate that the dismissal caused their distress.

Increasingly, courts have found that while an employer may have acted in bad faith in their manner of dismissal, the former employee did not suffer genuine damages as a result and are therefore not entitled to Wallace Damages.

Takeaway for Employers

Employers should always be respectful when terminating an employee. Regardless of the circumstances of the dismissal, employers should show regard for their employee’s dignity, treat them fairly, and conduct themselves in an honest and open fashion.

KCY at LAW

If you have been dismissed and your employer’s conduct towards you in the dismissal process has caused you undue mental or emotional harm, call the employment law experts at KCY at LAW today to book your consultation and see what we can do for you.

Call us to book your consultation at 905-639-0999 or fill out our online form here.