Canadian HR Reporter

November 28, 2016

Canadian HR Reporter is the national journal of human resource management. It features the latest workplace news, HR best practices, employment law commentary and tools and tips for employers to get the most out of their workforce.

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CANADIAN HR REPORTER November 28, 2016 2 NEWS Recent stories posted on www.hrreporter.com. Check the website daily for quick news hits from across Canada and around the world. WEB O N T H E ACROSS CANADA Unlimited vacation: e ultimate work perk, but experts warn of pitfalls 'It almost does the opposite where people don't take vacation at all' Mint employee who hid stolen gold in his rectum convicted of theft Said to have stolen 22 pucks worth $165,000 From bust to boom, oilfield firm can't get enough staff to cover rising activity Many workers have abandoned profession: Petroleum association Trade, environment big worries for Canada after Trump win Exports could drop by 1.2 to 4.5 per cent: Study Many ways Canada could feel election aftershock Potential plus: Brain-poaching possibilities as more Americans seek jobs north of the border Air Canada says in-flight crews can wear poppy pins for Remembrance Day Spokesperson apologizes to crew for 'any confusion' Young Atlantic Canadians shouldn't have to leave home to find jobs: IBM exec Says technology has made it easier for world to come to them AROUND THE WORLD Japan looks to jolt consumption by letting workers clock off early 'Premium Fridays' would be welcomed by retailers Tough reality check for Trump's pledge of better heartland jobs, wages Little evidence to indicate economic situation can be reversed quickly Automakers, dependent on Mexico, face rougher road with Trump Investors sold off U.S. stocks and the dollar in reaction to Trump's unexpected win Mexico taking U.S. factory jobs? Blame robots instead Automation a much bigger factor than foreign trade in the loss of jobs Toronto Transit Commission earns major honour TTC takes home Best Diversity Program Award for 2016 from Canadian HR Reporter hrreporter.com FEATURED VIDEO ORDER YOUR COPY TODAY! Visit carswell.com or call 1.800.387.5164 for a 30-day no-risk evaluation THE MOST COMPLETE DIRECTORY OF ONTARIO LAWYERS, LAW FIRMS, JUDGES AND COURTS Ontario Lawyer's Phone Book is your best connection to legal services in Ontario with more than 1,400 pages of essential legal references. You can depend on the accuracy of this trusted directory that includes the most up-to-date names, phone numbers, mailing addresses and emails so you don't have to search anywhere else. 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(prices subject to change without notice) Older employees deserve more Ontario case serves as reminder of need for proper severance BY SARAH DOBSON EMPLOYERS beware: Older employees can have a tough time finding re-employment so it doesn't pay to be tight-fisted with severance. That was the mes- sage recently when the Ontario Superior Court of Justice ruled a long-term employee was owed her base salary plus benefits and RRSP contributions for the notice period of 24 months. e case concerned Stephanie Ozorio, a 60-year-old woman who worked for 30 years at the Cana- dian Hearing Society (CHS), most recently as regional director for the Toronto region. She was dis- missed without cause in 2015 as part of a restructuring process. Ozorio was offered $93,000 — less than her annual salary of $97,309 — so she declined the of- fer, seeing it as unfair. The CHS then offered 12 months' pay and limited contribu- tion of benefits for two months. In lieu of acceptance, the organiza- tion chose to pay Ozorio her regu- lar salary for the minimal 34-week period for statutory notice and severance pay compliance under the Employment Standards Act. Ozorio started an action for wrongful dismissal, believing the reasonable notice period should be 24 months — and, ultimately, the judge agreed. 'Age an impediment' In looking at the judge's com- ments, a big factor in the decision was Ozorio's age. Quoting the 2015 case of Drysdale v. Pana- sonic Canada Inc., judge Brian O'Marra said, "Generally, a longer notice period will be justified for older long-term employees who may be in a competitive disadvan- tage securing new employment because of their age." Ozorio had also applied for a variety of positions since her dismissal, without gaining an in- terview. And while she possessed certain skills, "having served one employer for such a lengthy period of time, a potential new employer may view that individual as rather set in his ways and not adaptable to change," said O'Marra, citing Drysdale. Further, "age is an impediment," said O'Marra, citing the 2015 case of Leeming v. IBM Canada Ltd. in which that judge noted the 60-year-old plaintiff did not have particularly bright prospects for re-employment "competing with younger, more recently trained and less likely expensive talent." Given the age of Ozorio, the length of her employment, her seniority, the limited availability of similar employment, her training and qualifications, "she is entitled to 24 months' payment of salary benefits in lieu of notice less com- pensation and benefits received under the ESA," said O'Marra. 'Part of trend' e comments about older work- ers were noteworthy and part of a trend, said Douglas MacLeod, principal at MacLeod Law Firm in Toronto. "It basically goes to the job pros- pect of re-employment for people who are older workers… people of this age find it extremely stiff com- petition with much younger appli- cants for the same kind of jobs." A couple of trends are going to make this a bigger issue, such as the end of mandatory retirement, said MacLeod. "In the past, employers may be inclined to start turning a blind eye to deteriorating performance knowing that the person's going to be gone at 65. So now with the prospect of people staying into their 70s, maybe even 80s, differ- ent considerations come to bear on performance." e other factor is pensions, which are not as big a part of com- pensation as in the past, he said . "You don't see defined benefit pension plans very much any- more... so people do not have great indexed pensions and some people have still been hammered by the 2008 market meltdown, and so they need to work longer, and so they don't voluntarily re- sign or retire anymore." And a lot of people did not sign employment contracts, he said. "Thirty years ago, people weren't signing employment con- tracts with a termination clause that limited rights to employment standard minimums…. so this is a big financial issue terminating a long-term employee in their 60s." In looking at the notice pe- riod, the number of Bardal fac- tors (used when calculating a dismissed employee's reasonable notice period) have no limit, said said Paul Willetts, a partner at Vey Willetts in Ottawa. "e main ones that we look at, however, are the person's age, the length of service, the type of job they had, and how hard or how difficult it would be for them to find comparable employment." Notwithstanding the fact that employers cannot discriminate against employees either in the hiring or the firing process on the basis of their age, the courts do recognize age is a factor in the notice periods awarded, said Bar- ry Kwasniewsky, a partner at law firm Carters in Ottawa. The judge also mentioned Ozorio had a young son with health issues and an elderly par- ent who required care, he said, "so that might have factored into the court's notice period decision because if new employers be- came aware of these obligations, which might affect her ability to be at work at certain times, or affect her working schedule… at might put her at a competi- tive disadvantage with younger employees who don't have those familial obligations." Tips for employers Employers should have a writ- ten employment agreement with a binding termination clause so there's clarity and certainty for both parties, said Willetts. "If you're in a situation where the person doesn't have a writ- ten employment contract and will be entitled to common law reasonable notice, it's probably worthwhile knowing upfront as an employer that that individual may potentially have a greater claim to notice, they may be entitled to a longer notice period than a younger individual in the same position." "Age as an impediment" should definitely be considered by em- ployers when it comes to reason- able notice, said Kwasniewsky. "Employers are going to have to consider that a common law enti- tlement to compensation in lieu of notice is likely to be higher for an older employee versus a younger employee." It's about making a fair and rea- sonable offer, to start, he said. "ey might think they're pro- viding that to the employee, but when it's viewed objectively by a third party like a judge, they might not have the same opinion. So if employers are in doubt as to whether their offer falls within the ballpark of being fair, they should get professional advice on it be- fore they pull the trigger and do the termination." e hearing society also didn't offer Ozorio career counselling or a reference letter, which employ- ers should consider, said Willetts. "It just helps the employer look reasonable, look like they've acted in good faith, and if there is a dis- pute at a later point about whether an individual made reasonable ef- forts to try to mitigate loss of their employment, it allows (the em- ployer) to take a stronger position on that by having made efforts to assist the person." And while there was no human rights plea in this case around age discrimination, if an employer is letting older workers go, it wants to make sure it's purely a business decision and in no way tainted by the fact of their age, he said.

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