Archive for Employment Law
Racial Discrimination + Harassment = Employment Discrimination and a $25,000.00 Fine
Posted by: | Comments***PLEASE BE AWARE THAT THIS CASE CONTAINS EXTREMELY VULGAR LANGUAGE. In the case of Cheryl Khan v. 820302 Ontario Inc. cob as Lynx Trucking Co. Transportation and Leasing and Lynn Thompkins which can be found here. The trucking company was ordered by the Human Rights Tribunal to pay $25,000.00 to the Applicant for a violation to her impairment right to be free from discrimination and harassment and for injury to her dignity, feelings and self respect. In this case, the Applicant Khan began working for Lynx Trucking in September 2007. The Applicant testified that Lynn Thompkins, the personal Respondent, would on a daily basis swear and yell at her about her work. Khan testified that she would constantly belittle her by calling her stupid, ignorant and uneducated. She testified that she would aggressively hit her desk with her fists and throw office supplies. She testified that she made explicit racial comments specifically to her and in reference to other racialized persons including employees. She testified that she routinely called her a “paki” or referred to her as “that Indian”. Eventually, she testified, that comments were made on a daily basis. She also testified that she made general comments of persons of East Indian origin, saying that they were stupid, ignorant and that nobody would hire them. She testified that she called her a stupid immigrant. The Applicant stated that the Respondent would also tell her that she was lucky to have a job and she should be grateful. Even more shocking was that the Applicant testified that the personal Respondent was aware that her two children, ages 11 and 13, had a black father and she would describe them as her “half-nigger babies” or would tell her such things as “that’s what you get for sleeping with a nigger”. She also testified that her employer would say that “those fucking Indians did not want to work”.
With respect to work performance, Khan testified that the Respondent was inconsistent in her demands and expectations and there was no written company policies or procedures in place to indicate what was required or what was expected of her in her job. While the Applicant believed that she was qualified for the position the personal Respondent, rather, testified that she would not always arrive at work 10:00 p.m. as was expected, she would play solitaire on her computer and she would visit Facebook on company time. She often used the company issued cell phone for personal telephone calls and she had a practice of not showing up on Mondays. Ultimately the Applicant was terminated from her position. Various witnesses testified at this Human Rights Tribunal hearing with respect to the issue of racial discrimination and harassment. One former worker noted that the personal Respondent was an abusive boss who often yelled at her staff and her treatment of staff she believed constituted verbal harassment. She testified that she had never worked in such an environment. This particular witness testified that some of the comments made to her by the personal Respondent were deliberately demeaning and explicitly anti-immigrant. She recalled the personal Respondent calling the Applicant “a paki” on two separate occasions. She never heard the term “nigger”. This first witness ultimately quit her job with a resignation letter noting that she was no longer able to endure the harsh verbal abuse and constant harassments and the constant racial comments by the employer.
A salesman testified and also confirmed that the personal Respondent used to use regular terms such as paki, Indian and nigger. He suggested that the personal Respondent used the word nigger almost everyday and recalled the Respondent using the word nigger with a black employee, who according to this witness, went ballistic in response. He specifically heard the personal Respondent use the work paki approximately fifty times but did not recall him making a reference to the word nigger in relation to the Applicant and her children. Another witness testified that she often heard the boss using the f-word but never heard any racist comments. Another witness testified that the personal Respondent would occasionally swear but that she never heard racist, sexist or demeaning comments from the personal Respondent that would be discriminatory in the place of employment. Another witness testified that the personal Respondent would constantly yell and swear at employees but he had never heard her use any discriminatory comments. Another witness testified that he heard the personal Respondent yell on occasion but not swear.
The analysis and findings of the Human Rights Tribunal was predictable. The Human Rights Tribunal obviously relied on the issue of credibility. They found that certain witnesses were very credible with respect to the racial name calling, and in particular the woman who resigned by letter because of the abusive behavior. By contrast the Human Rights Tribunal found that the personal Respondent and her witnesses provided inconsistent testimony regarding the nature of the personal Respondent’s anger in the way she treated staff. The Tribunal found that these witnesses were attempting to hide aspects of the personal Respondent’s behavior, most particularly her use of racial comments, and present them in a more favourable light. The Tribunal then went over the testimony of the Applicant and her witnesses which the Tribunal described as clear and unproblematic.
So what was the outcome? The Tribunal found the racial terms were offensive, and given the nature of the terms the employer should have known that they were unwelcome. The Tribunal was satisfied that the personal Respondent repeatedly harassed the Applicant and this obviously constituted a violation of both Sections 5(1) and 5(2) of the Human Rights Code. With respect to her job, the Tribunal was of the view that although the personal Respondent and Applicant repeatedly argued over the Applicant’s job performance, the personal Respondent’s ongoing verbal harassment of the Applicant indicated that she saw the Applicant as inferior and less capable because of her colour, race and ethnic origin. The Tribunal found that the personal Respondent’s constant, and what can only be described as deliberately cruel references, to the Applicant being a paki, having slept with a nigger and having half-nigger babies to being indications that the personal Respondent considered the Applicant inferior in her personal behaviour objectionable. The Tribunal also found the personal Respondent’s references to the Applicant being a paki, and a person who is stupid, ignorant and uneducated to be indications that the personal Respondent considered the Applicant’s work performance to be related to her race, colour and ethnic origin. Therefore, the Tribunal found that the claim that the Applicant was a poor performer because of her unwillingness to accept the personal Respondent’s directions was inextricably linked to the personal Respondent’s racism and racial treatment of the Applicant. The Applicant’s race, colour and ethnic origin were a factor in the termination of her employment.
The Tribunal set out the remedial powers of the Human Rights Tribunal under Section 45.2. Monetary compensation was awarded in the amount of $25,000.00 to the Applicant to compensate her for the injury to her dignity, feelings and self respect arising out of the infringement of the Code. Further, she was awarded $6,750.00 in lost wages and that the Respondent, at its own expense, engage in the services of a Human Rights expert to assist in the development and implementation of a Human Rights and anti-harassment policy for the organization within 6 months from the date of the Order. Training was to be provided to the personal Respondent and with respect to Human Rights and anti-harassment policies and Human Rights Law, racial harassment and how to administer the provisions and organizational Human Rights and anti-harassment policies.
What are non-competition clauses and do I need my employees to sign them?
Posted by: | CommentsThe answer is that depends. Non-competition clauses in employment contracts are to protect the interests of your company or business by contractually preventing your employees from either talking to competitors or using, to their own advantage, any employer-specific product information, knowledge of customers or business opportunities. They are tough to uphold however. Courts often do not look well on non-competitions since they may restrict the individual employee’s right to use the skills and experience acquired while working with the former employer.
A great non-competition case to read is the 1978 SCC case of Elsley Estate v. J.G. Collins Insurance. It involved a 17-year employee of an insurance company who, at his previous employer, essentially had all the contact with customers/clients and whom all customers contacted. His former partner sued him when he left with over 200 clients. The court upheld the contract and set the standard for acceptable restrictive covenants.
Specifically, the court concluded that a restraint of trade (non-competition) covenant in an agreement might only be upheld if it is “reasonable”. When determining the reasonableness of a clause the court will look at three things:
1. whether the employer has a proprietary interest entitled to protection;
2. whether the time and space provisions of the clause are too broad; and
3. whether the covenant is unenforceable as it is really against competition generally and not just limiting solicitation of former clients.
Also, you need to remember that the general proposition is that non-competition clauses will not be upheld except in extraordinary circumstances. If you have any questions please do not hesitate to contact Matt Lalande.
Ford Class Action certified by Justice Sproat
Posted by: | CommentsThe Superior Court has certified a class-action lawsuit against Ford that alleges the automaker changed it’s mind and reneged on employment offers for hundreds of new employees at its Oakville plant two years ago.
Lawyers for three workers acting on behalf of a class held Monday that Mr. Justice John Sprout had certified their proceedings versus Ford Motor Co. of Canada Ltd. and it would now progress toward trial.
Sprout’s order said certification does not mean the court has made a pronouncement on the merits of each parties’ standing, or whether or not the plaintiffs and other class members will recoup any alleged losses.
The three workers filed a claim against Ford that sought after a huge number of dollars in damages after the corporation, during the week of July 14, 2008, offered jobs to them and some 350 other people as assemblers at the Oakville plant, with a starting date of July 28th. But Ford recommended to the recruits during the week of July 21 that it was postponing a third shift in Oakville for the reason of falling product sales demand in the North American auto industry. Throughout the week of Aug. 8, Ford advised workers that it would not put into operation the shift at all.
However the August 2008 proceedings, which has not been proved within court, states a lot of workers had resigned previous positions or indicated these kinds of intentions to their employers so they could enlist with Ford. The claim denotes that Ford did not make any payment or compensation to affected class members, nor would it present any compensation to affected class members.”The three plaintiffs had quit their jobs for the Ford positions but were unable to withdraw their resignations and were left unemployed, according to the claim.
In addition – and obviously - the union said the people could not file a grievance for the reason that the employees were not yet members.
The claim described Ford’s conduct as anticipatory breach of contract, wrongful dismissal and/or a repudiation of the employment contract for the reason that the company did not provide them the promised positions of employment.
“Ford recognized or ought to have recognized that class members would rely upon the promise of employment and the employees would obvioulsy be quitting their jobs – so the class members are alleging that they sufferend and that they will continue to experience significant damages. What does Ford say? Well they blame it on the turndown. They stated that a sharp recession triggered the postponement and eventual elimination of the third shift, while further market deterioration resulted in proceedings that cut an additional 450 jobs later.
Any employment contract therefore linking Ford and the individual plaintiffs or proposed class members was frustrated as a consequence of the cancellation of the third shift and by factors entirely beyond the power of Ford,” the company said. Ford also said information from job applications showed a considerable number of proposed members of the class-action lawsuit were unemployed when they sought work at the Oakville operations. Ford held the “vast majority” of employed candidates found work at their former firms or elsewhere.
Dependent Contractor addressed by the Ontario Court of Appeal
Posted by: | CommentsIn late December of last year the Court of Appeal recognized the existence of the dependent contractor in the case of McKee v. Reid’s Heritage Homes Ltd.
In this case, the plaintiff was an in-house sales agent for Reid’s Heritage Homes. Reid’s is a new home builder that originally retained the services of McKee to sell new homes in the Guelph area. McKee would conduct the sales of the new homes within model homes supplied by Reid. She began her work with Reid in around 1987 and she was paid through her own registered corporation. Over the years she became very busy with her work through Reid and over time, she hired, trained and managed her own sub-agents with whom she split her commissions on their sales without any intervention, direction or interference from Reid.
In 2004, a corporate sales manager was hired by Heritage Homes to restructure their entire sales force, inclusive of their relationship with McKee. In 2005, Heritage Homes told McKee that she and her sub-agents would have to work for Heritage as direct employees. McKee, (who was 64 years old at the time) decided that she would agree on the terms as well as a 100-lot assurance to McKee for the following 2 years. After this, Heritage pulled back the refusal to agree to 100 lots per year and from that point forward, the relationship between McKee and Reid Heritage fell apart. McKee sued Reid for wrongful dismissal. After a 4 day trial in Guelph, the Judge released a 51 page Judgment that noted that an original agreement that was made between McKee and Reid in 1987 was “spent” after the sale of the initial 69 homes which she was retained for to sell.
The main issue in the trial was whether or not McKee was an employee or an independent contractor, or even a dependent contractor. The trial Judge found that the plaintiff was an employee and as such she was entitled to pay in lieu of reasonable notice which was assessed at 18 months or about $400,000.00. The Judgment was appealed to the Court of Appeal, and the major analysis, important to this article, is the Ontario Court of Appeal’s analysis of employee vs. dependent contractor.
The court revisited many cases leading up to the “intermediate” category of a dependent contractor. The basic test set up by the Court of Appeal was to determine whether or not a worker is a contractor or an employee. The next step is required only if the first step results in the contractor conclusion – and it determines whether that contractor is independent or dependent, for which a worker’s exclusivity is determinative as it demonstrates economic independence. The Court explained that if a contractor is in a position of economic vulnerability, then it would make sense to carve out a dependent contractor category out of a broader existing contractor category and leave the definition of employee intact.
The trial Judge’s determination that McKee was an employee is in fact determinative under the law. They noted that McKee worked exclusively for the defendant’s company. They also found that McKee’s work was subject to the defendant’s control, as to where she sold, her promotional methods, what she was to sell and how much she was to sell it for. Thirdly the Court found that McKee performed her sales function in model homes provided to her by Reid’s Heritage Homes and they were in control of these tools. Fourthly, McKee was financially dependent on Reid’s Heritage Homes and fifthly, the sales force of which McKee was a member of was a crucial element of Reid’s business organization. The fact that she operated her own corporation within her work for Reid was not determinative of her work status. The Court also found that it did not matter that she had her own sub-agents. Technically, and employee can act as a conductor between higher management and staff within their divisions. The Court also addressed her first agreement with Heritage Homes from 1987. That agreement held that either party could terminate the agreement by giving each other 30 days notice. The Court found that if McKee was an employee at Heritage Homes from 1987 to 2005 then that 30 day notice period in the 1987 agreement contravenes the Employment Standards Act.
The Court, in conclusion did not interfere with the 18-month notice order. It is important for employers to be aware that because their employees remain within their own corporations to control their own taxes, it simply does not mean that they are going to be labelled as dependent contractors. The Court of Appeal in this case confirmed that this intermediate category of a dependent contractor does in fact exist and because of this, employers that engage contractors into contracting relationships will have to be careful because if it is found that the relationship creates one of economic dependency it may give rise to reasonable notice.
If you need to discuss the issues of independent, dependent contract status vs that of an employee please feel free to give our Burlington Ontario Employment Lawyers a call at Haber & Associates. at 905.639.8894
Matt Lalande