McDonald’s fails to accommodate employee unable to wash hands

by Daniel M. Pugen and Earl G. Phillips
In Canada, human rights legislation provides that employers have a duty to accommodate disabled workers unless such accommodation would cause “undue hardship” on the employer.

A recent case involving McDonald’s Restaurants before the British Columbia Human Rights Tribunal illustrates the high standard of accommodation expected of employers. It also shows the kinds of proactive measures employers may have to take before accommodation is considered “undue hardship.”

In the case, the tribunal found that McDonald’s improperly terminated the employment of a long-time employee. McDonald’s didn’t do enough to accommodate the employee who developed a skin condition that prevented her from working and meeting the restaurant’s hand-washing policy. (more…)

Getting a dismissed employee’s last meeting right

by Karen M. Sargeant and Donovan G. Plomp
Spring will soon be upon us, and with it may come the urge to do some “spring cleaning” in the home and the workplace. This might mean ending an employment relationship that isn’t working out.

In Canada, which has no concept of “at will” employment, it’s particularly important that employers handle the delicate issue of termination carefully. Messing it up can increase your liability substantially.

The termination meeting is awkward for everybody. It’s obviously tough on the employee. Facing an employee and telling him that he is dismissed is also difficult and stressful. Emotions can get the better of people. Mistakes get made.

The termination meeting is even more difficult in Canada because in recent years Canadian courts have established the principle that employers have a duty to act fairly and in good faith when dismissing an employee. If an employer fails to do this, a court may extend the period of reasonable notice of termination or pay in lieu of notice to which an employee is entitled. (See Don’t let ‘enhanced’ severance be a surprise during terminations Northern Exposure blog entry.)

What to do
This concept of fairness and good faith in handling a termination is a vague concept that can be confusing for employers. The following are some tips on how employers can meet their duty of good faith and fair dealing when conducting a termination meeting.

• If at all possible, conduct a face-to-face meeting. Avoid informing the employee of the termination by telephone, e-mail, or courier.
• Provide an employee with a letter confirming the termination including the employee’s last day of work and a summary of amounts to be paid to the employee.
• In Canada, employees must be issued a document called a “Record of Employment” upon termination to establish whether they are entitled to government Employment Insurance benefits. The termination letter should confirm that the dismissed employee will be provided with a Record of Employment.
• Inform employees accurately regarding all entitlements they may have upon termination, including insurance conversion and pension entitlements.
• Employment standards laws in most provinces in Canada provide for minimum severance upon termination unless the termination is for “just cause.” Don’t ask an employee to sign a release for amounts to which they are entitled under such laws.
• Have two members of management attend the meeting. One person should take extensive notes of what is said and by whom.
• Hold the meeting in a private location. Minimize attention from other employees to avoid interruptions and embarrassment to the employee being terminated.
• Try to avoid conducting the meeting on or near significant events such as birthdays, weddings, graduations, important religious holidays, or vacations.
• Consider offering outplacement counseling. Consider having outplacement counselors on site to meet with the employee afterwards for difficult terminations or particularly sensitive employees.
• Provide brief reasons for the termination, but don’t engage in a debate. The decision has been made. Arguments should be avoided.
• Don’t allege cause for dismissal if you can’t prove it.
• Keep the meeting short.
• Keep the meeting professional.
• Consider whether you really need to escort the employee off your premises. Where practical, allow the terminated employee to remove personal belongings, speak to co-workers, and leave your workplace in the least embarrassing or humiliating way possible.

In conclusion, follow the Golden Rule: Do unto others as you would have them do unto you.

Releases you can rely on

by Joanna M. Carvalho and Donovan G. Plomp

Does your Canadian business ask employees to sign releases in exchange for their severance packages? Imagine if an employee took the severance package, signed the release, then sued your company anyway.

That’s exactly what Douglas L. Titus did to his former employer — and he won at the trial level. Thankfully for employers, the Ontario Court of Appeal overturned this decision.

Facts
Titus was a lawyer with 25 years of experience. He started working for William F. Cooke Enterprises Inc. on March 28, 2000. His employment was terminated 18 months later because of downsizing. At the termination meeting, the employer offered him a severance package of three months salary and some continued benefit coverage in exchange for a release of all claims:

Although Titus was given seven days to consider the severance package offer, he insisted on signing the release right away. The release meant that he released his employer and its related companies from all actions, causes of actions, suits, and complaints arising from his “hiring by, employment with and cessation of employment with the Employer.”

Above the space for the signature, the release concluded with the following words in highlighted capital letters:

I HAVE READ THIS DOCUMENT AND I UNDERSTAND THAT IT CONTAINS A FULL AND FINAL RELEASE OF ALL CLAIMS THAT I HAVE OR MAY HAVE AGAINST THE RELEASEES. I AM SIGNING THIS DOCUMENT VOLUNTARILY.

A few weeks after Titus’ termination, he started a new job, although for less pay.
Approximately six months later, Titus filed a wrongful dismissal suit against William F. Cooke and successfully asked the trial court to set aside the release. The employer appealed the decision to the Ontario Court of Appeal.

Appeal decision
The Court of Appeal found that the trial judge was mistaken in setting aside the release and said that a release should only be set aside if it is “unconscionable.” The court applied the following test for unconscionability:

1. a grossly unfair and improvident transaction;
2. a victim’s lack of independent legal advice or other suitable advice;
3. an overwhelming imbalance in bargaining power caused by the victim’s ignorance of business, illiteracy, ignorance of the language of the bargain, blindness, deafness, illness, senility, or similar disability; and
4. the other party’s knowingly taking advantage of this vulnerability.

Let’s take a look at those four factors:

Grossly unfair transaction. The Court of Appeal found that the employer’s offer of three months’ salary was not grossly unfair even though the trial judge had ultimately determined that the reasonable notice period was 10 months. The Court of Appeal relied on the following reasons:

• the employer had sought legal advice regarding the reasonableness of its offer;
• Titus’ previous stints working for William F. Cooke didn’t serve to increase the reasonable notice period because he had received separate severance payments each of those times;
• upon acceptance of the offer, the money was payable immediately;
• a dismissed employee normally must make efforts to avoid or “mitigate” lost pay and benefits by finding new employment, which Titus wasn’t required to do;
• by accepting the offer, Titus avoided the delay, costs, and uncertainty of litigation;
• although making a reference letter conditional upon acceptance of the offer could support a claim of “unconscionability,” Titus didn’t request a reference letter and obtained new employment quickly; and
• making the severance offer conditional on the release was not grossly unfair because the release contained standard terms and it was fair for the employer to propose such an exchange.

Absence of legal advice. As a senior lawyer with extensive experience in contract and employment law, Titus didn’t want or need legal advice.

Imbalance in bargaining power. The Court of Appeal acknowledged that an employer has more bargaining power than a dismissed employee. Titus claimed the imbalance was magnified because his finances were terrible and his father had just died. The court rejected those two arguments. William F. Cooke had given Titus time to deal with his father’s death. The court found Titus’ evidence regarding financial hardship to be unconvincing.

Exploitation of vulnerability. The court found that William F. Cooke had not taken advantage of Titus’s vulnerability because:

• the employer had sought legal advice before making its offer;
• the offer was not unreasonable;
• the termination was conducted in a private office;
• the termination was conducted in a polite and professional manner;
• the employer gave Titus the opportunity and urged him to take time to consider the offer;
• upon acceptance of the offer, Titus was paid immediately; and
• the employer quickly complied with Titus’s request for payment of the severance money directly into his tax deferred savings plan.

Lessons for employers
When you offer a severance package to an employee, it’s usually prudent to have the employee sign a release in exchange. To help ensure that the release will be enforceable, it will be helpful if you:

• give the employee a reasonable period of time to consider the offer and, if desired by the employee, to seek independent legal advice;
• advise the employee in writing that he or she has the right to seek independent legal advice;
• seek legal advice regarding the reasonableness of the severance package;
• conduct the termination in private;
• conduct the termination in a polite and professional manner;
• don’t make a reference letter conditional upon acceptance of the offer; and
• once an offer is accepted, process payment of severance funds promptly.

Terminating for cause? How to limit your liability in Canada

By Karen Sargeant and Brian P. Smeenk

You’ve likely been in this situation before: One of your employees has engaged in questionable conduct. You’re in the process of investigating and are considering whether you should terminate the employee for cause. How do you go about it under Canadian employment laws?

Be careful

Terminating an employee’s employment for cause can be difficult and stressful for all concerned. It also can lead to increased damages and costs if you don’t do it right. That’s because Canadian courts will not award damages in lieu of notice of termination or severance pay when you have just cause for termination, but courts will often award increased damages when you make an allegation of misconduct that you can’t ultimately prove in court.

Here are some tips to help limit your company’s liability, while also reducing your stress: (more…)

Don’t let ‘enhanced’ severance be a surprise during terminations

by Rosalie Cress

Since the concept of at-will employment isn’t recognized in Canada, U.S. employers need to understand how terminations are handled in their operations north of the border. Are you confident that your termination decisions are in line with Canadian law? And what about the “enhanced” severance known as “Wallace damages”? Are you clear on that concept?

Here’s a key difference between United States and Canadian employment laws: In Canada, unless termination is for just cause, employees are entitled to notice or payment in lieu of that notice. Also, unless an employment agreement expressly provides otherwise, the courts may allow a terminated employee notice or payment of an amount that the court considers reasonable.

This “reasonable” notice or pay is based on the employee’s age, position, length of service, and the availability of alternative employment. Such notice is usually more than the statutory minimum. Plus, the courts can award extra notice or pay if the employee has been treated unfairly during termination. So it’s important that you understand what you’re up against when letting employees go. (more…)

When can you terminate a disabled unionized employee in Canada?

by Marie-Hélène Maheu

Canadian discrimination laws, like those in the United States, generally require employers to make accommodations for employees with disabilities. By law, employers must accommodate to the point of “undue hardship,” but undue hardship is difficult to define and is assessed on a case-by-case basis.

What happens when employee rights come up against your rights as an employer under a union agreement to terminate an absent employee after a specified period? Just how far must you go in accommodating an employee who is considered totally disabled and unable to work for the foreseeable future? (more…)