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Terminations, Human Rights and Pension and Benefits – What’s New?. Presented by Stikeman Elliott LLP and the Association of Corporate Counsel, Ontario Chapter Thursday, October 28, 2010 Toronto, Ontario. Today’s Speakers.

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Terminations human rights and pension and benefits what s new

Terminations, Human Rights and Pension and Benefits– What’s New?

Presented by Stikeman Elliott LLP and the Association of Corporate Counsel, Ontario Chapter

Thursday, October 28, 2010Toronto, Ontario

Today s speakers

Today’s Speakers

MODERATORLorna Cuthbert |Head of Employment, Labour & Pension Group, Stikeman Elliott, Toronto

PRESENTERSKathleen Chevalier |Stikeman Elliott, TorontoAndrea Boctor |Stikeman Elliott, TorontoNancy Ramalho |Stikeman Elliott, Toronto

PANELLISTSAlison Burton |Senior Counsel, RBC Law Group, Royal Bank of CanadaMarsha Lindsay |Legal Counsel, Purolator Courier Ltd.Bruce Pollock |Stikeman Elliott, Toronto

Termination of employment recent lessons from our courts

Termination of Employment: Recent lessons from our courts



Mckee v reid s heritage homes 2009 onca 916
McKee v. Reid’s Heritage Homes, 2009 ONCA 916

  • McKee enters into agreement in 1987 with Reid’s Heritage Homes to advertise and sell 69 new homes in Guelph, ON

    • Agreement contains exclusivity and termination clause

    • McKee receives a fixed amount per house sold

  • Reid’s gives McKee title of “Sales Manager”

    • McKee still paid per home, and through her corporation

    • McKee hires, trains and manages a team of sub-agents

  • In 2004, Reid’s restructures its sales force

    • Reid’s offers to employ McKee and her sales force as “direct employees”

    • Negotiations break down, McKee sues for wrongful dismissal

Mckee continued

  • Trial judge determined that McKee was an employee

    • The 1987 agreement, and hence termination clause, did not govern the relationship

    • Awarded 18 months notice

  • Court of Appeal upholds trial decision

    • Confirms that an intermediate category of “dependent contractor” exists

    • Dependent contractor is a non-employment work relationship that exhibits signs of economic dependency, manifested by complete or near-complete exclusivity

    • Legal principles utilized to distinguish between employees and contractors apply

    • Contractor’s degree of exclusivity may be determinative of the issue.

    • Determined that McKee was properly classified as an employee, and entitled to 18 months notice

Brien v niagara motors ltd 2009 onca 887
Brien v. Niagara Motors Ltd., 2009 ONCA 887

  • Brien commenced employment with Niagara Motors in 1978 as a clerk

  • Brien resigned her employment in 1982 following birth of her child, returned to same position at Niagara motors after 8 months

  • In 1984 Brien again resigned after the birth of her second child, was invited back to Niagara Motors as office manager in 1986

  • Brien remained in this position until 2003, when she was terminated without cause and provided with 8 weeks pay in lieu of notice

  • Brien commenced claim for wrongful dismissal

Brien continued

  • Trial Judge awards 24 months notice and 2 months bad faith damages

    • Disregards Brien’s gaps in service

  • Court of Appeal upholds continuous service finding, dismisses bad faith damages

    • Niagara Motors could not treat Brien as a “new hire” following each absence

    • Brien was specifically invited to return to work by Niagara Motors and was treated as if “she had never left”

    • Niagara Motors was required to consider Brien’s entire length of service for purposes of entitlement upon termination of employment

    • Brien could not demonstrate actual compensable damages suffered, therefore bad faith damage award was dismissed

Miranda v lake shore gold corporation 2010 onca 597
Miranda v. Lake Shore Gold Corporation, 2010 ONCA 597

  • Miranda became Chief Executive Officer of Lake Shore on July 1, 2007

  • On that same date, Miranda executed a Change of Control Agreement

    • Agreement entitles Miranda to $175,200 should he cease to be an officer of Lake Shore, “within six months of the date on which control of the Corporation changes”

  • Lake Shore terminated Miranda’s employment on April 14, 2008

  • On June 17, 2008, Hochschild Mining Holdings assumed control of Lake Shore

  • Miranda brings application before Superior Court of Justice seeking declaration that the April 14, 2008 dismissal fell “within 6 months” of the change of control

Miranda continued
Miranda (continued)

  • Application Judge held that “within” generally means “since or after”

  • Court of Appeal determines that “within” means “before or after”

    • “within six months” does not require that termination of employment and change of control occur in any particular order

    • Wording of the Agreement did not support the conclusion that Miranda was only entitled to the payment if his termination followed a change of control

    • Purpose of change of control agreement is to ensure loyalty during uncertain times, and that time period is not limited to events following a change of control, but also the “period during which the change is being brought about”

Mathieson v scotia capital inc 2008 canlii 45409
Mathieson v. Scotia Capital Inc., 2008 CanLII 45409

  • Scotia Capital terminated Mathieson’s employment and provided 18 months pay in lieu of notice

    • Mathieson was 58 years old and held a senior position with Scotia Capital for 30 years

    • Before trial, Scotia Capital increased Mathieson’s notice period to 24 months

  • Mathieson commenced an action, seeking:

    • Increased bonus amounts for 2006

    • An increase of the notice period to 32-36 months

    • Damages for bad faith conduct

Mathieson continued
Mathieson (continued)

  • Trial Judge determined:

    • 2006 Bonus

      • Evidence demonstrated that poor performers received reduced bonuses in 2006

      • Bonus reduction was fair and reasonable, both in criteria utilized and process followed by Scotia Capital

    • Notice Period

      • No judicial authority to justify a notice period above 24 months, which was fair and reasonable in the circumstances

    • Bonus During Notice Period

      • Mathieson entitled to a pro-rated bonus payment for the notice period

      • Amount to be paid based on historical pattern of Mathieson’s bonuses in prior years, and bonuses paid to similar situated employees during the notice period

Mathieson continued1

  • Bad Faith Damages

    • Mathieson argued that “but for” Scotia’s bad faith termination, he would have held his position at Scotia Capital until age 70

    • Court found that there is no guarantee of employment to a certain age, and as such “reasonably contemplated” economic damages for any breach are limited to the common law Bardal notice period

    • Bad faith was not present in the manner of Mathieson’s termination

    • Court rejected Mathieson’s argument that his 2006 bonus reduction amounted to bad faith

Merrill lynch canada inc v soost 2010 abca 251
Merrill Lynch Canada Inc. v. Soost 2010 ABCA 251

  • Merrill Lynch terminated Soost for cause in May 2001

    • Soost was 35 years old, held position of high-performing financial advisor and had 3 years of service

    • Soost filed an action, claiming damages for wrongful dismissal, general damages and punitive damages

  • Trial Judge awards 12 months notice and $1.6 million in damages

  • Court of Appeal reverses damage award of $1.6 million

    • Honda v. Keays damages are limited to compensating loss, and are not automatic enhancements of all wrongful dismissal damages

    • Honda damages should only be awarded where employer utilized methods in the manner of dismissal which are unduly unfair and insensitive, mere sloppy conduct does not suffice

    • Merrill Lynch did not wrongfully allege just cause when Soost was dismissed, had good faith belief and should not be punished

Pensions and benefits a year in review

Pensions and Benefits: A Year in Review

  • New and Proposed Legislation

  • Selected Case Law

Andrea Boctor



New and proposed legislation overview
New and Proposed Legislation - Overview

  • Ontario Pension Reform

    • Bill 236

    • Bill 120

  • Federal Pension Reform

    • Bill C-9

    • Bill C-47

  • Income Tax Act changes to rules on stock option benefits

    • Bill C-47

A ontario pension reform bill 236


a) Ontario Pension Reform - Bill 236

  • Received Royal Assent on May 18, 2010

  • Not yet proclaimed and regulations yet to come

  • Amends the Pension Benefits Act (“PBA”):

    • Elimination of partial wind-ups

    • Expands the application of “grow-in” benefits

    • Immediate vesting

    • Clarification and simplification of asset transfers

    • Surplus reversion/sharing on plan wind-up and partial wind-up

A ontario pension reform bill 2361


a) Ontario Pension Reform - Bill 236

  • Amends PBA:

    • Facilitates the establishment of pension advisory committees

    • Requires notice of plan amendments be given to plan members

    • Superintendent powers to supervise pension plans at risk

    • Grounds for full wind-up expanded

    • Phased retirement

    • Terminology changes

A ontario pension reform bill 120


a) Ontario Pension Reform - Bill 120

  • Given second reading on October 25, 2010

  • Amends the PBA:

    • Adds new types of permissible benefits and pension plans

    • Elimination of solvency funding for JSPPs

    • Restrictions on contribution holidays

    • Use of letters of credit to fund solvency liabilities

    • Entitlement to surplus

    • Limits application of Pension Benefits Guarantee Fund

    • Payment of administration costs from pension fund

    • Expands circumstances in which Superintendent may appoint a replacement administrator

    • PBA to be reviewed every 5 years

B federal pension reform bill c 9


b) Federal Pension Reform - Bill C-9

  • Budget bill

  • Received Royal Assent on July 12, 2010

  • Amends the Pension Benefits Act, 1985 (“PBSA”)

    • Full funding on plan termination

    • Use of letters of credit to fund solvency liabilities

    • DC plans may provide benefits in retirement similar to a LIF

    • Distressed plan workout scheme

    • Pension regulator permitted to replace plan’s actuary

    • Partial wind-up may only be declared by the regulator

    • Immediate vesting

    • New GST/HST rebate system for employer-sponsored pension plans

B federal pension reform bill c 47


b) Federal Pension Reform - Bill C-47

  • Received second reading on October 7 and 8, 2010

  • Amends the PBSA

    • Establishes “negotiated contribution pension plans”

    • Allows administrator to pay amounts owed to unlocated beneficiaries to a third party

    • Establishes a “safe harbour” for DC plans where employees direct investments

    • Establishes rules relating to electronic communications with plan members

C income tax act stock option changes


c) Income Tax Act – Stock option changes

  • Part of Bill C-47

  • Amendments implement March 2010 budget announcements

  • Amends Income Tax Act

    • Requires withholding on option benefits

    • Eliminates election to defer tax on option benefit (with limited transitional relief)

    • Changes rules with respect to “tandem plans” which are cash-settled, by either eliminating half rate of tax or employer deductibility, at employer’s election

Selected case law

1. DB to DC Conversion

Dawson v. Tolko Industries Ltd., 2010 B.C.S.C. 346

USW, Local 9235 v. St. Marys Cement [2010] O.L.A.A. 152

2. Administration

Smith v. Casco 2010 ONSC 2584

3. Partial Wind-Ups

Lomas v. Rio Algom Limited, 2010 ONCA 175

Marino v. Ontario (Superintendent of Financial Services) (2010), 78 C.C.P.B. 1

4. Insolvency

Re Indalex Ltd. (2010), 79 C.C.P.B. 301

5. Surplus

Burke v. Hudson’s Bay Company 2010 SCC 34

Selected Case Law

Dawson v tolko industries ltd 2010 b c s c 346


Dawson v. Tolko Industries Ltd., 2010 B.C.S.C. 346

  • In 1997, Tolko engaged Towers Perrin (“TP”) to assist in DB to DC conversion

  • Services included drafting communications and holding employee seminars

  • Employees were offered choice to convert past service DB to DC (the “Offer”)

  • Plaintiffs are former employees who terminated employment from 2004 to 2008

  • On termination each plaintiff signed a release releasing “agents” of Tolko

  • Plaintiffs claimed against Tolko, TP, and lead actuary, but discontinued Tolko claim

  • Claim is for:

    • Failure to advise plaintiffs of personal considerations which they ought to have had in mind when deciding whether or not to accept Offer

    • Failure to have regard for best interests of plaintiffs in establishing initial account values

    • Utilization of the wrong discount rate

    • Negligent misrepresentation in relation to preparation of written materials

    • Use of unreasonable annuity purchase interest rate in written materials; and

    • Failure to advise plaintiffs of risks associated with transfer of their DB to DC

Dawson v tolko industries ltd 2010 b c s c 346 continued


Dawson v. Tolko Industries Ltd., 2010 B.C.S.C. 346 (continued)

  • Proceeding on preliminary issue:

    • Did plaintiffs release defendants when they released Tolko and its agents?

  • Result:

    • No. Release was not specific enough to cover defendants

  • No decision yet made on the merits of whether TP and actuary breached any duty or standard of care

Usw local 9235 v st marys cement 2010 o l a a 152


USW, Local 9235 v. St. Marys Cement [2010] O.L.A.A. 152

  • St. Marys converted pension plan from a DB to DC without consultation with the USW

  • Plan was incorporated by reference into the collective agreement

  • Plan included a provision that reserved the right to amend the plan to the employer

  • Could St. Marys convert the plan unilaterally?

  • Result:

    • Yes. Plan was incorporated into collective agreement, including provision in plan that allowed employer to amend the plan

Smith v casco 2010 onsc 2584


Smith v. Casco 2010 ONSC 2584

  • Casco retiree elected a life pension with a five year guarantee; his spouse signed a post-retirement spousal survivor benefit waiver form

  • Waiver was not the standard form under the PBA

  • Retiree died three years after retirement and wife attempted to apply for survivor’s pension but was denied due to waiver

  • Wife initiated proceedings against administrator of plan for negligent misrepresentation

  • She argued that she signed waiver without reading it carefully; did not understand implications

Smith v casco 2010 onsc 2584 continued


Smith v. Casco 2010 ONSC 2584 (continued)

  • Ontario Superior Court of Justice:

    • Found in favour of wife

    • She had no independent legal advice

    • Reasonable to rely on husband’s, employer's, and plan representative’s explanations which were insufficient

  • Ontario Divisional Court:

    • Upheld lower court’s decision

    • Differences in waiver form were fatal to employer’s appeal

    • PBA s. 46(1) created an implied mandatory statutory requirement for waiver to be in a form approved by the Superintendent

    • If this was the case, outcome would have been different

Lomas v rio algom limited 2010 onca 175


Lomas v. Rio Algom Limited, 2010 ONCA 175

  • 1966 - DB pension plan established and funded through trust

  • 1997 - DC component added to plan

  • Allegation that Rio Algom unilaterally amended plan to members’ detriment

  • Does court have jurisdiction to compel employer to commence proceedings to wind-up pension plan pursuant to s. 68(1) of PBA?

  • Result:

    • Ontario Court of Appeal held it is “plain and obvious” that court does not have authority to order employer to commence wind-up proceedings

    • Statutory scheme must be followed and not circumvented by courts

  • Decision has not been appealed

Marino v ontario superintendent of financial services 2010 78 c c p b 1


Marino v. Ontario (Superintendent of Financial Services) (2010), 78 C.C.P.B. 1

  • Reorganization at Hydro One resulted in 126 terminations including 73 middle managers

  • Superintendent refused to order partial wind-up as 126 was not a “significant” number

  • What is threshold for when Superintendent may order partial wind-up of pension plan pursuant to paragraph 69(1)(d) of the PBA?

  • Grounds for a partial wind-up where significant number of subset of members is terminated?

  • Result:

    • Court of Appeal held that FST had correctly and reasonably interpreted PBA

    • Subset analysis permissible for purposes of ordering partial wind-up

    • Significance may be assessed by relative size of number of terminated employees in a defined subset compared to total active members in that subset

    • Expands potential ambit of partial wind-up concept

Re indalex ltd 2010 79 c c p b 301


Re Indalex Ltd. (2010), 79 C.C.P.B. 301

  • Indalex received protection from creditors under CCAA

  • CCAA order approved sale of assets

  • Two member groups asserted “deemed trust” claims over sale proceeds in respect of pension deficits

  • Do deemed trust provisions of s. 57 apply to funding deficiencies in an on-going plan and/or deficit on wind-up?

  • Result:

    • Deemed trust under PBA does not apply to solvency deficiency of on-going plan or to deficit of wound-up plan where all payments due to date have been remitted

    • As of wind-up date, no amounts were “due” or “accruing due” - no deemed trust arising in respect of remaining deficiency

    • Leave to appeal granted and will be heard on November 23 and 24

Burke v hudson s bay company 2010 scc 34


Burke v. Hudson’s Bay Company 2010 SCC 34

  • Hudson’s Bay Company (HBC) operated a contributory DB plan

  • As part of a sale of a division, assets and liabilities associated with certain employees transferred to the purchasing employer’s plan

  • HBC did not transfer a pro rata share of surplus assets

  • Proceeding commenced by transferred members to require HBC to transfer pro rata share of surplus to new plan and seeking declaration that HBC improperly paid expenses from the pension fund and improperly took contribution holidays

Burke v hudson s bay company 2010 scc 341


Burke v. Hudson’s Bay Company 2010 SCC 34

  • Ontario Superior Court of Justice (2005)

    • Rejected claims over the contribution holidays and expenses

    • Found in favour of plan members on surplus transfer issue

  • Ontario Court of Appeal (2008)

    • Upheld decision on contribution holidays and expenses

    • Reversed decision on surplus transfer issue

  • Supreme Court of Canada (2010)

    • Agreed with Court of Appeal

Update on human rights

Update on Human Rights

Nancy Ramalho




  • Growing recognition of family status as a ground for discrimination

  • Dealing with disability

  • Terminating an employee who is on long term disability

  • Accessibility for Ontarians with Disabilities Act (“AODA”)

Growing recognition of family status
Growing Recognition of Family Status

  • Family status is an enumerated ground upon which an employer is prohibited from discriminating

  • Recent jurisprudence provides some guidelines to assist in negotiating this mine field

  • In particular, one case has clarified that the definition includes the responsibilities one has as a result of being a parent

Johnstone v canada border services 2010 chrt 20
Johnstone v. Canada Border Services, 2010 CHRT 20

  • Fiona Johnstone, claimed that she was being discriminated against on the basis of family status when her employer, Canada Border Services (“CBSA”), failed to appropriately accommodate her request for more regular hours after the birth of each of her two children.

  • Ms. Johnstone was unable to find a day care for her full-time shift work but was able to arrange for someone to look after her children three days per week.

  • She proposed to work full-time hours over the three day period where she could arrange child care.

  • CBSA’s unwritten policy requires employees who need accommodation in the form of static shifts to go to part-time hours. In doing so, the employee loses their pension benefits.

  • This policy was applied by CBSA unevenly in that employees seeking accommodation for religious or medical reasons to work part-time in order to receive accommodation.

Johnstone threshold issue
Johnstone – Threshold Issue

  • The employer argued for a restrictive definition of family status that only includes the “absolute status of being in a family relationship” and not the obligations that relate to being a parent.

  • The Tribunal found that family status encompasses family and parental obligations such as childcare.

  • The Tribunal found that employers have a duty to assess the circumstances of employees such as Ms. Johnstone and work together to assist employees with balancing their family and work obligations, up to the point of undue hardship.

Johnstone tribunal s decision on the merits
Johnstone – Tribunal’s Decision on the Merits

  • It was clear to the Tribunal that the employer’s unwritten policy was

    • discriminatory – impeded her ability to receive employment-related benefits based on her family status

    • arbitrarily applied - it did not apply to all groups the same

  • Having established a prima facie case of discrimination, the onus then shifted to CBSA to show: (1) a bona fide occupational requirement; and (2) that the necessary accommodation would result in undue hardship to the employer.

  • The evidence showed that the employer relied upon its policy and did not even attempt to consider whether it could accommodate Ms. Johnstone.

Johnstone award
Johnstone - Award

The Tribunal ordered the employer to:

  • consult with the Canadian Human Rights Commission to prevent such discrimination in the future;

  • implement a written policy to address requests for accommodation based on family status within 6 months;

  • compensate Ms. Johnstone for all lost wages and benefits (including pension contributions) back to 2004;

  • pay Ms. Johnstone $15,000 in general damages for injury to her confidence and reputation that resulted from the discrimination; and

  • pay Ms. Johnstone $20,000 based on the CBSA’s “willful and reckless” behaviour in failing to accommodate to Ms. Johnstone and denying it had such a duty.

Johnstone lessons learned
Johnstone – Lessons Learned

  • In this case, the Tribunal has reiterated the duty of an employer to work with employees to assist them in establishing a work/life balance.

  • Important to note that in 1993, a predecessor to the CBSA had been involved in the Brown case where the Tribunal ordered them to:

    • “prevent similar events from recurring through recognition and policies that would acknowledge family status to be interpreted as involving ‘a parent's rights and duty to strike a balance [between work obligations and child rearing] coupled with a clear duty on the part of any employer to facilitate and accommodate that balance’”

  • In the Johnstone case, the Tribunal did acknowledge that not every work-life conflict would be a human rights issue but still a high threshold.

  • Ensure your unwritten policies are not applied differently to other groups and audit your workplace to ensure that, as an employer, you are fulfilling your duty.

Mcdonald v mid huron roofing 2009 o h r t d no 1277
McDonald v. Mid Huron Roofing, [2009] O.H.R.T.D. No. 1277

  • This decision – heard prior to Johnstone - also involves the employer’s obligation to accommodate an employee’s obligations as a parent

  • Harry McDonald had worked for his employer from May to October, 2008.

  • During that period, Mr. McDonald’s spouse was going through a difficult pregnancy – involved attending numerous medical appointments and was hospitalized several times.

  • Mr. McDonald took both paid and unpaid time off to attend some of these appointments with her.

  • He always followed the appropriate request and approval processes of the company for taking days off.

  • When his son was born, prematurely, he took a week off of work but was told that after he came back he would no longer be permitted to take time off.

Mcdonald facts continued
McDonald – Facts (continued)

  • A few weeks later, he needed to take his son to a medical appointment during work hours because his wife was quite ill and was in the emergency ward.

  • Mr. McDonald told his supervisor that he had to deal with a medical emergency that would take up to an hour.

  • His supervisor told the applicant that if he was not back in 20 minutes, he would be fired, which he was. On the same day, the applicant asked his supervisor for his job back and was denied.

Mcdonald tribunal decision
McDonald – Tribunal Decision

  • Refusing to allow Mr. McDonald to take the time off work to take his son to his medical appointment was discrimination based on Mr. McDonald’s family status.

  • Tribunal pointed to the following facts:

    • Employer knew about the family situation.

    • As a result of this knowledge, the employer had a duty to determine what accommodation was needed and whether it could be provided without undue hardship.

    • Employer failed to make such inquiries or allow Mr. McDonald to make a proposal for accommodation.

  • On the above basis, the employer did not fulfill its duty to accommodate Mr. McDonald.

Mcdonald undue hardship
McDonald – Undue Hardship

  • The Tribunal held that accommodating Mr. McDonald would not have resulted in undue hardship

  • Tribunal acknowledged that:

    • the employee had already taken 14-16 days off during his five months of employment

    • the employer did show that it was difficult to replace Mr. McDonald when he was absent and that his absences resulted in inconvenience, frustration and even some cost to his employer

  • Notwithstanding the above, the Tribunal held that there was insufficient evidence that the employer was experiencing any concrete losses as a result of Mr. McDonald’s absences sufficient to result in undue hardship

Mcdonald award
McDonald - Award

  • The Tribunal awarded Mr. McDonald:

    • $3,500 for lost wages for the eight weeks during which he was out of work

    • general damages of $20,000 for loss arising from the infringement of his rights under the Human Rights Code

  • In making the award for general damages, the Tribunal relied upon evidence that Mr. McDonald had “suffered considerable loss of self-respect, dignity and confidence” and that he became depressed for some time after he lost his job.

Li v novopharm ltd 2009 o h r t d no 879
Li v. Novopharm Ltd. [2009] O.H.R.T.D. No.879

  • Mr. Li made a complaint alleging that his employer discriminated against him based on his disability and on his family status. 

  • His allegations regarding family status relate to his employer’s cell phone use policy. 

  • His employer did not allow warehouse employees to carry personal cell phones and they were required to leave their cell phones in their lockers. Cell phones would only be used on their time and outside of the work area. 

  • In October 2005, Mr. Li’s father was dying and his mother felt unable to call him at work due to her inability to speak English. Mr. Li wanted to be able to carry his personal cell phone with him while he was working, so that he could receive calls from his mother. Mr. Li alleged that any failure to allow him to do this was discrimination based on family status.

Li tribunal s decision
Li – Tribunal’s Decision

  • The Tribunal held that the policy was developed for safety reasons and was not in any way targeted towards Mr. Li.

  • There was no adverse effect discrimination.

  • While the applicant's inability to carry his personal cell phone around with him was perhaps an inconvenience, it did not reach the level of an exclusion, restriction, obligation or penalty.

  • There was also evidence that the employer had agreed to allow Mr. Li carry his personal cell phone in his pocket and set on vibrate, so that he could know if his mother was trying to reach him and then request a break to call her back.

  • Tribunal held that there was no violation on the basis of his family status.

Li lessons learned
Li – Lessons Learned

  • In order to amount to adverse effect discrimination, there must be some exclusion, restriction, obligation or penalty imposed upon a person or group because of a prohibited ground.

  • Look at the effect of the policy.

  • In this case, this would be no different than an employee who wanted to speak to their lawyer about their house closing.

Dealing with disability
Dealing with Disability

  • The decision in Duliunas v. York-Med Systems Inc. is an example of the importance of following your own policies and procedures and when restructuring a workforce, treating a disabled employee like other able bodied employees to the extent possible.

Duliunas v york med systems inc 2010 o h r t d no 1393
Duliunas v. York-Med Systems Inc. [2010] O.H.R.T.D. No. 1393

  • Mr. Duliunas began working as a technical service representative in January 2003.

  • Mr. Duliunas was diagnosed with depression and anxiety in March 2006.

  • He took a month of disability leave in March 2006.

  • In March 2007 he went off again.

  • From the end of May to July 2007, he was on the company's short-term disability program.

  • He was approved to return to full-time employment on February 1, 2008 on a part-time basis and without the ability to drive.

  • In late February he was offered a new position at part-time hours (two days per week), and would receive a reduction in pay.

  • Based on the physician’s RTW schedule, the applicant would be ready to work full-time hours at the end of June.

  • In late August, the company advised he could return three days a week but that he would be monitored for attendance.

Duliunas facts continued
Duliunas – Facts (continued)

  • Throughout this time, the applicant consistently requested full-time hours and was refused.

  • In September, in response to yet another request for full-time hours, the employer offered him a new employment contract which provided that after 30 days, the parties would discuss the possibility of full-time hours.

  • The applicant refused to sign the contract, objecting to the fact that the new contract did not guarantee a return to full-time work.

  • As a result, the applicant’s employment was terminated and he brought a claim under the Code.

Duliunas tribunal decision
Duliunas – Tribunal Decision

  • Tribunal held that the employer failed to accommodate Mr. Duliunas for a number of reasons and that his refusal to sign the contract was entirely reasonable.

  • The Tribunal focused on the employer’s failure to provide full-time hours, the reduction in pay and the reassignment of job duties.

Duliunas tribunal decision1
Duliunas – Tribunal Decision

  • In terms of the request for full-time hours:

    • By beginning of July, the applicant was fit to return to work.

    • While the Tribunal acknowledged that the employer’s policy mandated a gradual return to full-time hours, it found that there was no explanation why after four months the applicant was still working only two days per week with no prospect for full-time hours.

    • Tribunal found that the employer failed to follow its own policy.

Duliunas tribunal decision2
Duliunas – Tribunal Decision

  • The reduction in pay

    • The employer argued that due to restructuring in the applicant’s absence it could not maintain his previous salary level.

    • The evidence showed that the applicant was the only member of his former department who was not given an option to either retain their position or make a lateral move to another department with their former salary.

Duliunas tribunal decision3
Duliunas –Tribunal Decision

  • The applicant’s reassignment to another position

    • the employer was concerned about the episodic nature of the illness and made some assumptions based on unclear medical evidence

    • while the Tribunal acknowledged that the lack of clarity in some of the applicant’s medical documentation contributed to some of the employer’s doubt, the reasonable response would have been to ask more questions rather than to draw false conclusions

    • The employer’s reassignment was based on incorrect information

Duliunas lessons learned
Duliunas – Lessons Learned

  • Follow your own policies and procedures – be prepared to defend your inconsistencies

  • The struggle of making the right decision based on the information received

    • Tribunal stated that employers necessarily assume some risk of uncertainty when it comes to the future health of their staff, and that the nature of many disabilities is that they can be episodic, meaning that the worker’s needs may change over time. Accordingly, the employer’s obligations can change over time as well.

  • Appreciate that more and more accommodation is an ongoing evolution that will require time and resources.

Terminating an employee on long term disability
Terminating an employee on long term disability

Naccarato v. Costco Wholesale Canada Ltd. [2010] O.J. NO. 2565 (June 15, 2010)

  • Mr. Naccarato was employed by Costco for over 17 years in various clerical roles

  • Initially went on long-term disability on or about July, 2002.

  • In January 2007, his physician advised the company that he was still very depressed, that another psychiatrist was being sought for further treatment and that he was unable to predict when Mr. Naccarato might return to his job

  • Mr. Naccarato was dismissed for alleged cause of frustration of his employment contract, following a long-term disability leave totalling nearly five years.

Naccarato court s decision
Naccarato – Court’s Decision

  • The Court held:

    • the onus was on the employer to prove that the contract had become frustrated and that it was not the employee’s onus to provide medical evidence with respect to their ultimate prognosis.

    • the prognosis “did not support a finding that there was no reasonable likelihood of Mr. Naccarato returning to work in the reasonably foreseeable future.”

    • there no evidence of hardship or disruption to Costco’s business as a result of maintaining Mr. Naccarato’s employment status, such as would be found in the case of a senior employee who was irreplaceable.

    • the provision of short and long term benefits by Costco to Mr. Naccarato meant that illness (even a long term illness) was reasonably contemplated under the employment contract .

Naccarato lessons learned
Naccarato – Lessons Learned

  • As employer counsel, we can take the following from this decision:

    • 5 years not enough – the onus is on the employer that there is no possibility that the individual will ever be in a position to return to work

    • The door is left open to argue that this threshold might be lower if the employee is a more senior employee

    • We should rethink our long term disability policies and whether they can play a role in reducing this liability

Accessibility for ontarians with disabilities act aoda
Accessibility for Ontarians with Disabilities Act (AODA)

  • AODA establishes accessibility standards to be followed by businesses and organizations in Ontario to identify, remove and prevent barriers to accessibility.

  • There are currently five standards that were identified:

    • customer service;

    • employment;

    • information and communications;

    • public transportation; and

    • built environment.

  • Standards regarding customer service came into effect on January 1, 2008 with a deadline of January 1, 2010 for public sector organizations and January 1, 2012 for private sector and non-profit organizations.

Aoda employment standard
AODA – Employment Standard

  • The proposed employment standard will require organizations to:

    • deliver accessibility awareness training to employees;

    • accommodate persons with disabilities in the recruitment process;

    • develop individual accommodation plans for employees with disabilities, upon request;

    • deliver individualized workplace emergency information to employees with disabilities;

    • take into account the accommodation needs of employees with disabilities in existing performance management, career development and redeployment processes; and

    • develop procedures for return-to-work of employees who are absent from work due to a non-workplace injury or illness that uses individual accommodation plans, where appropriate.

  • Regulation was posted for public review until October 16, 2010 – gone back to committee to reflect input received.

Aoda enforcement
AODA - Enforcement

  • If a Director deems that a person or organization has failed to file an accessibility report, or failed to provide the director with requested reports or information, it can make an order that the person or organization do any or all of the following:

    • File an accessibility report that complies with the requirements of the Act within the time specified in the order.

    • Provide the Director with such reports or information as may be required within the time specified in the order.

    • Pay an administrative penalty.

  • Non-compliance with an order is an offence, which upon conviction leaves the convicted person or corporation liable for a fine of not more than $50,000 (person) or $100,000 (corporation) for each day or part of a day on which the offence occurs or continues to occur.

Terminations human rights and pension and benefits what s new


Lorna Cuthbert lcuthbert@stikeman.com

Kathleen Chevalier kchevalier@stikeman.com

Andrea Boctor aboctor@stikeman.com

Nancy Ramalho nramalho@stikeman.com

Alison Burton alison.burton@rbc.com

Marsha Lindsay mlindsay@purolator.com

Bruce Pollock bpollock@stikeman.com