Archive for employment conditions
An employee is returning from Maternity Leave: reinstatement is a must.
Posted by: | CommentsWhat happens if a woman takes maternity leave, returns to work, and is then terminated soon after? Well, if you are reading this and you are an employer – you are probably trying to educate yourself on the issue. Let me help you – don’t mess around with employees coming back from mat leave. Talk to a lawyer. You are opening the evil door of exposure. An employee cannot be penalized because she plans to take or has taken a pregnancy and parental leave. This is a right that employees have in this province. If you tell and employee differently you are violating her rights.
Why do I say this? There are a number of ways to look at the situation. Firstly, the Employment Standards Act of Ontario is very clear in stating that an employee who takes a pregnancy or parental leave is entitled to be reinstated into their same job or into a comparable position. If you do not reinstate your employee upon her return from maternity leave, or you do not offer her a comparable position, or if you terminate her position – then she can file a claim under S.53 of the employment standards act. If you terminate her job functions and eliminate the position, you will be called on a “sham reinstatement”. Depending on the situation, she can also possibly file a civil claim for wrongful dismissal damages and drag your into a lawsuit. This will become a bigger problem the termination prevented her from collecting EI. She can also possibly file a human rights claim. It is important to remember that an employee may not commence a civil proceeding for wrongful dismissal if that employee is filing a wage loss claim with the ministry. You are up the creek every which way. And if you manage to paddle out, it will cost you a half-ton of legal fees defending it.
Section 53
A quick read of s. 53 will tell you that the Act imposes on an employer an obligation to reinstate an employee following pregnancy and/or parental leave. The presumptive remedy for such a breach is for the Board to order reinstatement. Where it is established in evidence before the Board that reinstatement is not an appropriate remedy, the Board will consider an alternative remedy – normally called a “make whole” award of damages.
Reinstatement is not often a good choice. It is rare that the Ministry of Labour will make that decision. If your employee has been absent from the workplace on maternity leave only to return to be terminated, both of you will feel quite uncomfortable if that employee is reinstated. The workplace will be poisoned. Instead the Board will determine what is necessary to put the employee in the position she would’ve been in had the act not in breached. It is sort of a “make whole “order.
The components noted as “make whole” damages that can be awarded payable to an employee are categorized as follows:
a) Direct wage loss;
b) Damages for emotional pain and suffering;
c) Job Search expenses; and
d) Damages for the loss of expectation of continued employment. The jurisprudential developments are in the direction of awarding one month’s pay for every year of service.
These were the damages explored and awarded to a terminated employee in the publicly noted case of Judith Buys Dentistry Professional Corp. v. Parker. You can find a copy of the case here.
Tracy Parker was employed by Dr. Buys. Initially, she worked exclusively in the home of Dr. Buys, primarily providing childcare for their two pre-school children, but also performing certain other domestic chores. Ms. Parker then commenced a maternity leave at some point. No one replaced Ms. Parker in the home or in the office during her period of leave. By the time Ms. Parker returned from her maternity leave, both of Buys’ kids were enrolled in private school. There were no more childcare responsibilities for Ms. Parker to perform. She then went to work at Buys’ dental practice. She was covering another employee’s maternity leave. Parker found out that she was pregnant again. Parker and Buys had a fallout when Buys was advised of this. There was also the issue of another employee was making more money than Parker in the same position. Parker wasn’t happy with Buys’ response and took her maternity leave early. Nearly a year passed and when Parker communicated her return to Dr. Buys trouble brewed. She was advised by Dr. Buys that, pursuant to their signed agreement, her employment had terminated in May 2007 when Amanda Crowley (the employee she was replacing) returned from her maternity leave. There were contractual issues debated. The Ministry did not agree with Buys.
Vice-Chair McKellar found that Parker should be entitled to find that the appropriate measure of damages in this case is $22,687.41. This was made up of:
1) $418.05 for Ms. Parker’s job search expenses
2) $500.00 for pain and suffering
3) $2,607.68 for past income losses
4) $104.31 for vacation pay in respect to the income losses
5) $16,994.88 in damages in respect of her loss of expectation of continued employment.
The vice chair agreed with the case law that holds that where an award is made both for direct wage loss (or loss of the expectation of continued employment) and termination pay, the latter amount has been characterized as duplicative she did not find that Ms. Parker was entitled to any additional or separate amounts in respect of termination pay.
Parker still may would have had a claim under at the Human Rights Tribunal. Because she was not entitled to termination pay she may would still have had a wrongful dismissal lawsuit. It is important to note that Parker had been employed for Buys for over ten years. A wrongful dismissal claim may attract damages significantly higher than $22,687.41.
The long and the short is don’t mess with pre or post natal employment. You must prove the termination was not attached to the maternity issues – and in most cases this is very tough to prove. Call a lawyer. Call a lawyer. Call a lawyer.
Understanding Severance
Posted by: | CommentsOften times employees don’t properly understand what severance is. Severance pay is not termination pay. Termination pay is given to the employee in place of the required notice of termination. So what is severance?
Severance is a statutory term. Severance of employment occurs when the employer dismisses the employee, including an employee can no longer be employed due to the bankruptcy or insolvency of the employer. Severance occurs when an employee is laid off 35 or more weeks out of 52 weeks. Severance also occurs when the business closes permanently.
To qualify for severance pay in Ontario, the employee must have worked for the employer for five or more years (whether continuous or not and whether active or not with the employer) and that employee’s employer has a payroll of at least $2.5 million or the employer has severed the employment of 50 or more employees any six month period because all or part of the business closed. Severance pay is not difficult to calculate.
The basic calculation is made by multiplying the employee’s regular wages for regular work week by the sum of the number of completed years of employment and the number of completed months of employment divided by 12 for years not completed. The maximum amount of severance pay that you could receive under the employment standards act of Ontario is 26 weeks.
An example calculation is that Sandy works a 40 hour workweek in a state $15 an hour. Her employer has a payroll of $2.5 million. The employer gives Sandy seven weeks notice and Sandy works for the notice. At the end of the notice Sandy’s employment severed. On that date saying he has been employed for seven years nine months and two weeks. To calculate severance pay you would do as follows:
1. Calculate Sandy’s regular wages for a regular work week. She works 40 hours a week times $15 an hour = $600/week.
2. The number of Sandy’s completed years = 7
3. Why the number of completed months Sandi was employed by 12(Sandy worked nine complete months divided by 12 equals .75)
4. You then add the number and step two to the number rise in step three = 7.75
5. Multiply Sandy’s regular wages for regular work week (600) by the number rise in step four = $4650.00.
Sandy’s therefore entitled to $4650 in severance pay and employment standards act. Simply done it’s the regular wages in a work week X (completed years of employment PLUS number of completed months of employment divided by 12 for a year that is not completed).
The employment standards act notes that employee must receive severance pay out within seven days after the employment is severed or on what would have been that employees regular next payday, whichever is later. An employer may also pay severance pay to employee if there is a written agreement or the approval of the Dir. of employment standards at the Ministry of Labor. However the installment plan, if approved by the director of employment standards may not exceed three years. There are several exceptions from severance pay. For example if the employee has refused an offer reasonable alternative employment, has refused reasonable alternative employment that is available to the employee through a seniority system, has had the employment severed because of the strike as long as the employer is able to show that the economic effects of the strike caused the closing of the business are part of the business, has lost his or her employment because the contract of employment is impossible to perform or has been frustrated by unexpected or unforeseen circumstances (not including bankruptcy or insolvency or when the contract has been frustrated or impossible to perform as the result of an injury or illness suffered by an employee). There are other reasons why employment severance is not payable. You must speak to a lawyer to determine whether or not severance is payable to employees.
Also important is that severance pay under the employment standards act and termination pay under the employment standards act are minimum requirements only. This is where you run the risk of employee is suing your company for wrongful dismissal. Another important point to remember is that employee cannot sue an employer for wrongful dismissal and file a claim for termination pay or severance pay with the Ministry of Labor for the same termination or severance of employment by the employer. Employees need to choose one or the other and this is where an employee should speak with counsel before making a decision with respect to any offer of employment. As for employers, there is an advantage to you it is obvious if you choose to overpay the minimum requirements within reason. It comes down to the costs of the employee retaining a lawyer versus the over and above the statutory minimum notice.
There is argument as to whether the statutory minimums should be worked by the government. The Toronto Star had a great article printed last May 8, 2008 concerning a man woodwork 16 years service with a company in London and was terminated without severance. The company that made packages for M&M meats have fewer than 50 employees and a payroll below $2.5 million. It was legal but it did not seem right especially with the economy in a downturn in manufacturing jobs being reduced a rapid state. The NDP leader Howard Hampton at the time noted that this was a loophole in companies were taking advantage of it. They were quietly chopping the jobs below the number of 50 thereby reducing their payroll to under 2.5 million then laying off the remaining staff to avoid paying severance. He indicated at the time that companies with fewer than 25 employees in payrolls below 1 million should be exempt. It is horribly unfortunate that companies are trying to skirt the law. It was also noted in that article that it was difficult to know how often companies take advantage of the severance law because the Ministry does not require the employers to report layoffs fewer than 50.
The process is inequitable and unfair for long-term employees if the company purposely reduces its staff in piecemeal fashion.
If you have any questions concerning severance please do not hesitate to call Matt Lalande to discuss.
This is not legal advice, but a comment on the employment standards act.
