With summer ending it is the perfect opportunity to take some time and reflect on the passing of the year. What better way to reflect than by looking at past Ontario Court of Appeal cases this year?
This “short” article will briefly summarize seven of the the labour and employment cases that have made their way to the Court of Appeal.
a) Non-compete? No problem
· EF Institute for Cultural Exchange Limited v. WorldStrides Canada, Inc.
The employee began working at a competitor company a day after the non-compete provision in his employment contract expired. The employer alleged there was a breach of his fiduciary duty since there must have been communication between the employee and the competitor for him to start so quickly after his clause expired. The yearlong non-compete clause was active while the employee submitted his resume, underwent interviews, and secured a position at a competitor company. This was not a breach of fiduciary duty or the non-compete clause.
b) You Might Be Surprised but You Have To Mitigate
· Monterosso v. Metro Freightliner Hamilton Inc.
An independent contractor signed a fixed term contract and was subsequently terminated a few months into his contract. The Court of Appeal reversed the finding of the lower court that there was no duty to mitigate, and that the contractor was entitled to be paid to the end of the contract. The Court held that independent contractors have a duty to mitigate damages by trying to find work when their contract is terminated early and if they are not in dependent relationships with their employer. Dependency can be established when the contractor is economically dependent, usually stemming from exclusively working for on one client/company.
Click here for more information on this case.
This decision can be contrasted with the recent, the Ontario Superior Court decision in Tarras v. The Municipal Infrastructure Group Ltd. Here, Mark Tarras is a professional engineer and former Vice President of The Municipal Infrastructure Group Limited (“TMIG”). Tarras signed a three (3) year fixed term employment agreement in December 2019. On November 25, 2020, the plaintiff received notice of the early termination of the contract in accordance with the termination clause in his contract. The Court found that the termination clause was unenforceable and therefore the entire termination clause in the contract was invalid. This effectively meant that the contract was a three-year fixed-term contract with no mitigation clause.
This case affirmed that there is no implied duty to mitigate for a fixed term employment contract. Tarras was awarded 23 months salary totaling $479,166.67 as well as vacation pay and all employee benefits during that time.
c) Tell Me Everything…
· Maynard v. Johnson Controls Canada LP
The employee was not aware of a “forfeiture provision” in his employment agreement (his Stock Units that were subject to a restriction period upon his termination without cause would be forfeited to the Company). The Court of Appeal held that the employer had a duty to inform their employees of forfeiture provisions within their employment agreements. Further, if an employer wants to rely on new terms or conditions of employment they must be clearly communicated to the employee.
Check out this article for more information!
d) When There Is Discrimination Based on Immigration Status
· Imperial Oil Limited v. Haseeb
It was determined that the employer’s requirement that potential employees have “permanent residence” immigration status was a violation of the Ontario Human Rights Code as it amounted to discrimination based on citizenship. This decision upheld the Human Rights Tribunal of Ontario’s initial finding that Imperial Oil discriminated against a recent engineering graduate who had a three-year Postgraduate Work Permit when he was denied employment.
Interested and want to read more? Click here!
e) Silence Does Not Mean Condonation
· Pham v. Qualified Metal Fabricators Ltd.
As a result of the pandemic the employer laid off a portion of its employees. The plaintiff was laid off in March 2020, the last extension of the layoff occurred in December 2020 which had the plaintiff laid off until September 2021. The plaintiff alleged wrongful dismissal in December 2020. The Court of Appeal reversed the motion Judge’s decision that the employer had an implied right to layoff employees given its past practice of laying off employees and found that the plaintiff’s silence did not mean that he consented to or understood the layoff.
For a more in-depth analysis of this case click here!
f) The Costs of a Baseless Retaliation
· Boyer v. Callidus Capital Corporation
The Court of Appeal reversed the Motion Judge’s decision to allow a counterclaim by the employer against a former employee who alleged wrongful dismissal due to a toxic work environment. Considering, inter alia, that the $150 million counterclaim was unsubstantiated the counterclaim was dismissed as “when the context is scrutinized, what is “really going on” with the counterclaim is an attempt to silence a former employee seeking recovery in his wrongful dismissal claim and create a chilling effect for other employees.”
g) Increase The Responsibilities? Update The Contract
· Celestini v. Shoplogix Inc
Over the course of his 12-year employment the employee had his duties and responsibilities substantially increase. After the initial employment agreement, the parties did not sign updated contracts to reflect the change in responsibilities. The substratum doctrine applied which caused the valid termination clause in the initial employment agreement to be unenforceable.
For more information click here.