In-Depth Analysis

Employers’ Advisor June 2022

Articles:

  1. Come On Nylene: Court of Appeal Affirms Award of 26 Months’ Pay to Terminated Employee in “Exceptional Circumstances”
  2. Check Yourself: B.C. Government Eliminates Mandatory Voting for Union Certification in Favour of Card Check
  3. Digital Platform Workers’ Rights Act: Blurring the Distinction Between Employees and Independent Contractors Performing Digital Platform Work

Come On Nylene: Court of Appeal Affirms Award of 26 Months’ Pay to Terminated Employee in “Exceptional Circumstances”

Matthew Kim

The Court of Appeal of Ontario recently released a decision (Currie v Nylene Canada) upholding a trial judge’s decision to award a terminated employee a fully 26 months of pay in lieu of notice of termination, finding that such an award was justified in “exceptional circumstances.”

Background

The Plaintiff, a 58-year-old individual with a grade 11 education and minimal technological skills, had started working for her employer as a twisting machine operator in 1979, leaving school to do so. She progressed steadily in the job, eventually being promoted to Chief Operator in 2004.

Her initial employer had been sold, acquired, and sold and acquired again, eventually by the Defendant in 2005. Throughout it all, the Plaintiff maintained the rights to her pension plan.

In 2017, the Plaintiff was approached by Human Resources and informed that she had fulfilled the criteria to receive her accumulated pension. She was told that in order to access her pension, however, she would have to retire, but that the company would make an offer of employment following her retirement.

The plaintiff accepted the “retirement,” then accepted the company’s new offer of employment shortly thereafter.

In December 2018, the Plaintiff was terminated as a part of a restructuring. A dispute arose about amounts paid to her after her termination and an action was commenced.

The Decision at Trial

The trial judge was asked to determine, among other things, whether the Plaintiff’s “retirement” in 2017 constituted a break in the employment relationship, and what notice period the Plaintiff was entitled to in the circumstances.

The trial judged determined that the Plaintiff had no intention of truly retiring and that she accepted “retirement” only as means to access her pension, as recommended by HR. He found that she had been provided assurances that nothing else about her employment status would change. The trial judge ruled that it was “telling” that nothing existed in the Plaintiff’s employee record regarding retirement, which would have otherwise affected various terms of her employment such  merit increases, and disability leaves.

Proper Notice Period

Having determined that the plaintiff had a continuous 39 years of service, the trial judge concluded that an award of 26 months’ pay in lieu of reasonable notice of termination was appropriate. The judge acknowledged the existing jurisprudence indicating that “reasonable notice periods” in excess of 24 months should only be awarded in “exceptional circumstances,” but found that such exceptional circumstances existed in this case. In so ruling, the trial judge emphasized:

  • The Plaintiff left high school in order to start work for the employer as a twisting machine operator. “Her entire working life has been dedicated to working at the Arnprior plant,” the judge wrote. “She has known nothing else.”
  • At the time of termination, the plaintiff was 58 years old and in the “twilight” of her working years.
  • Since the plaintiff began her working life in 1979, the work landscape had “evolved and changed significantly.” The totality of her working experience was with one employer in one type of environment (specialized manufacturing) which made the transfer of her skills difficult.
  • Given the plaintiff’s age, limited education, and skills set, the termination was essentially forced retirement. The trial judge found that the plaintiff was not “well-equipped” to compete in today’s market or secure comparable employment.

The Court of Appeal Affirms the Trial Decision

The Defendant appealed based upon, among other things, an argument that no “exceptional circumstances” existed that warranted the imposition of an extremely high notice period of 26 months. However, the Court of Appeal upheld the lower court’s decision and dismissed the appeal, finding that the trial judge had “firmly anchored” his analysis inestablished jurisprudence.

The Defendant also argued on appeal, as it did at trial, that the Plaintiff’s continuity of employment was broken when she “retired” in 2017 and, accordingly, her entitlements upon termination should be calculated on the basis that she had only one year of service with the Company. The Court of Appeal rejected this argument, affirming the trial judge’s decision that, “Ms. Currie was not prepared to stop working. She signed the documents prepared by Nylene for the sole purpose of accessing her Pension Plan and on the assurance that her employment would remain the same.”

Concluding Thoughts

This decision highlights that a nominal break in service will not be sufficient to reduce an employee’s length of service for the purposes of determining their entitlements upon termination if, in substance, they continued in their job without any meaningful interruption or change in their terms and conditions of employment.

Additionally, this case serves as a reminder of the importance of including clear and enforceable termination clauses in an employee’s employment contract. Such clauses are the best and surest way of avoiding situations where, as in Currie v Nylene Canada, an employer will be required to pay excessive amounts of “common law” pay in lieu of notice upon the termination of an individual’s employment.

Check Yourself: B.C. Government Eliminates Mandatory Voting for Union Certification in Favour of Card Check

Mark Bout

On June 2nd, 2022, British Columbia etched into law Bill 10 – a suite of amendments to the province’s Labour Relations Code, likely to increase union organizing activity in workplaces throughout British Columbia.

Bill 10

Bill 10 includes an array of changes, but there are least two particularly significant amendments. These are:

I) The move from Two-Step Certification to Card Check Certification to ratify a collective bargaining agent.

II) The removal of a three year moratorium between union ‘raids’ in the construction industry, in favour of annual open periods for raiding.

Taken together, Bill 10 is likely to increase union organizing in British Columbia workplaces by a significant margin.

Card Check Certification

Prior to Bill 10, the certification of a union required 45% of employees in a proposed bargaining unit to hold signed membership cards, following which a secret ballot vote would be held by all members in the unit.

Bill 10 removed the mandatory secret ballot vote, which required majority employee support in order for a union to be “certified” to represent workers.

Under the card check system, a union needs only 55% of the proposed unit to hold a signed membership card in order to be certified automatically without a vote.  Where less than 55% of employees in a proposed bargaining unit have signed a membership card, the Board may still order a vote, so long as at least 45% of employees have signed a membership card.

This regime makes it entirely possible for nearly half of a proposed bargaining unit to have their workplace unionized without an opportunity to have their say on the matter. This also places card signees in a difficult position of effectively making decisions for their co-workers, without deliberation or private consideration.

Notably, this change is contrary to the recommendations made by the majority of an expert panel appointed by the BC government in 2019 to study the BC Labour Relations Code and make recommendations for legislative change.

Annual Raids in the Construction Industry

The second amendment included in Bill 10 permits annual union “raids” in the construction industry every summer, in July and August.  A raid occurs when one union attempts to displace another at a workplace. 

Prior to Bill 10, where an existing union had a collective agreement in place with an employer for a term of 3 years or less, no rival union could conduct a raid until the months of July and August in the final year of the collective agreement. 

Unlike the switch to Card Check certification, this switch swiftly reversed a recent amendment which instated the three year freeze just three years prior. Again, this change was made contrary to the recommendations of the aforementioned expert panel, which found that “there was considerable support from unions and employers for reducing the frequency of the open raids to correspond to other Canadian jurisdictions.”

Commentary and Industry Response

Historically, arguments in favour of card check stem from the intermediate period between the certification application and vote, during which employers are perceived to counter-organize. However, prior to the introduction of Bill 10, Union certifications in BC had already materially increased since the various recommendations of the 2019 expert panel were implemented.

Many organizations have published opinions or letters condemning both the changes contained within Bill 10, but also the manner in which the legislation has been brought forward. 

The Greater Vancouver Board of Trade published a joint industry statement, available here, which criticised the substance as well as the timing of Bill 10, and the lack of consultation with stakeholders in the province. The British Columbia Construction Association, along with many other organizations, have published a letter to Premier Horgan to express their dismay with the changes.  That letter is available here

Expectations Moving Forward

Bill 10 passed third reading on May 17, 2022 and was codified into law June 2. 

Studies examining the shifts in union certification between card-check and two-step models have found a significant increase in certifications in jurisdictions which utilized the card-check system.

In periods materially before and after the removal of card-check certification in Ontario, there was a nearly 20-percent shift in certification applications, and those submitted were successful more often. This is consistent with British Columbia’s history. The province last removed the card check model in 2001, and experienced a subsequent decrease in new certifications issued thereafter.

The divergence between card check and two-step models have been most impactful in the private sector, and specifically in workforces with fewer employees. As the study linked above found, industries with less of a traditional union association such as the service sector saw far more organizing activity under the card-check regime than with mandatory voting, especially compared to public sector workplaces or the manufacturing industry.

To summarize, Bill 10 is intended to increase union organizing in British Columbia and to that end it will be successful. Employers should take care to familiarize themselves with the updated certification process, and consider proactive measures to ensure confidence and stability in their workplace.

The author gratefully acknowledge the assistance of Jakob Sanderson, an Articling Student in the firm’s Vancouver office.

Digital Platform Workers’ Rights Act: Blurring the Distinction Between Employees and Independent Contractors Performing Digital Platform Work

Andrew W. Reynolds

On April 11, 2022, the Government of Ontario passed Bill 88 – the Working for Workers Act, 2022, which, among other things, will enact the Digital Platform Workers’ Rights Act, 2022 (“the Act”) on a day to be named by proclamation of the Lieutenant Governor. Once in effect, the Act will establish significant rights for digital workers. This Act will introduce minimum statutory rights applicable to all digital workers, even those who would potentially be considered to “independent contractors” and not “employees” covered by the Employment Standards Act, 2000 (the “ESA”).

What is “Digital Platform Work”?

Under this new Act, “digital platform work” is defined as the provision of for-payment ride share, delivery, courier or other prescribed services by workers who are offered work assignments by an operator through the use of a digital platform. A “digital platform” is defined as an online platform that allows workers to choose to accept or decline digital platform work.

Established Rights and Obligations

The new Act provides for, among other things, the following rights and obligations:

Provision of Information: Digital platform operators must provide workers with information regarding how pay for work is calculated; whether and how tips and gratuities are collected by the operator; pay periods; and performance rating systems. This information must be provided in writing within 24 hours after an individual is given access to an operator’s digital platform for the purpose of accepting or declining to perform digital platform work. Operators will also need to provide certain information to workers regarding performance ratings, such as a description of any consequences based on the worker’s ratings.

Recurring Pay Period and Pay Day: Digital platform operators must establish a recurring pay period and a recurring pay day. Workers must be paid all amounts earned during each pay period and all tips or other gratuities collected by the operator during each pay period, no later than the pay day for that period.

Minimum Wage: An operator must pay workers at least the minimum wage mandated by the ESA for each work assignment performed. Tips and other gratuities paid in respect of a work assignment shall not be included in determining whether the operator is in compliance with this obligation.

Tips and Other Gratuities: Operators may not withhold, make a deduction or cause a worker to return any amounts they have earned (including tips and gratuities), unless otherwise authorized by another statute or court order.

Notice of Removal: Operators must not remove a worker’s access to the digital platform unless the worker is provided with a written explanation of why the access was removed. If access is removed for more than 24 hours, a worker must be provided with two weeks’ written notice.

Resolving Disputes in Ontario: The Act requires that all digital platform work-related disputes between an operator and a worker must be resolved in Ontario.

Reprisal Protection: An operator cannot intimidate or penalize (or attempt to do so), because the worker: asks any person to comply with this Act, makes inquiries about their  rights, files a complaint, exercises or attempts to exercise their rights, provides information to a compliance officer, or testifies or participates in a proceeding under the Act.

What Will This Act Mean for Employers Operating a Digital Platform?

The distinction between an employee (which includes the category of “dependent contractor”) and an independent contractor has always been a significant and potentially costly one for employers. This determination can be very complex as many workers do not neatly fit within one category or the other.

The Digital Platform Workers’ Rights Act is novel in that it will provide independent contractors with minimum entitlements that, unlike employees, they do not have under the ESA. However, it is important to note that this Act will not deem workers to be independent contractors or employees for the purposes of the ESA (or other legislation such as the Labour Relations Act). For those who classify as digital platform workers, including workers engaged as independent contractors, this Act simply sets out minimum rights and protections. In other words, this Act does not mean that all digital platform workers will be covered by it instead of the ESA – someone who works for a digital platform and who meets the definition of “employee” will still be covered by the ESA despite the issuance of this latest legislation.

Thus, for employers operating a digital platform, the distinction between employees and independent contractors will continue to be somewhat blurred. Nevertheless, employers operating digital platforms will need to consider their upcoming obligations under this Act when engaged in the difficult determination as whether a particular worker is properly classified as an employee or independent contractor.

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This newsletter is not intended as legal advice.  Any employer or organization seeking assistance should feel free to contact a Mathews Dinsdale lawyer for assistance.

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