Canadian Employment Law Today

Have a question for our experts? Email Jeffrey.R.Smith@thomsonreuters.com Canadian HR Reporter, a Thomson Reuters business 2018 2 | September 12, 2018 with Brian Johnston Ask an Expert STEWART MCKELVEY HALIFAX Ask an Expert 2 | Answer: ere is no easy answer. Some em- ployers will wait until the complaint is re- solved before terminating employment; oth- ers will press on with a non-cause dismissal and perhaps be a little more generous with respect to reasonable notice compensation and insist on a full release. Ideally, the employees' non-cause dis- missal is arising out of a long-planned orga- nizational change which effects many em- ployees, not just the complainant! Retaliation for filing a complaint is ille- gal. Many statutes provide for reverse onus, whereby the employer has to establish that the dismissal did not arise out of the com- plaint. For example, the Ontario Occupa- tional Health and Safety Act provides that "the burden of proof that an employer or person acting on behalf of an employer did not act contrary to subsection (1) lies upon the employer or the person acting on behalf of the employer." Other prov- inces such as Nova Scotia, British Columbia, Manitoba, Saskatchewan, Newfoundland and Labrador, and the federal government all have similar provisions which places the burden of proof on the employer. Obviously, satisfying that onus is much easier if the termination was for cause. In a non-cause situation it is difficult, but well documented concerns about the circum- stances giving rise to the termination that pre-date the filing of the complaint are of considerable assistance. Negative inferences may be drawn from the timing of events. In Walsh v. Mobil Oil Canada, the Alberta Court of Appeal dealt with the issue of retaliation in a human rights complaint. In making a finding of retaliation, the court reiterated that negative inference may be drawn if, for example, the perfor- mance evaluation of an employee suddenly changes following a complaint. Employers must be careful not to give a perception of retaliation post-complaint. Care should be exercised when mak- ing decisions concerning a complainant. In most instances, the onus of proof will be on the employer to demonstrate that retaliation did not occur. To counter a retaliation claim, careful documentation is required. For more information see: • Walsh v. Mobil Oil Canada, 2008 Car- swellAlta 1168 (Alta. C.A.). Discretionary bonus conditional on signing of termination agreement Question: If a dismissed employee's bonus is part of the employment contract but it's stipulated the amount of the bonus is discretionary based on a number of factors, can the employer require the employee to sign a termination agreement/waiver before providing the bonus? Answer: e answer is yes; an employer can require an employee to sign a termination/ waiver before providing the bonus. ere is nothing illegal or wrong about that. How- ever, such an approach begs the question as to whether the employer would be otherwise liable for the bonus if the employee does not sign the termination agreement or waiver. Bonus entitlements have been the subject of much litigation. Courts of Appeal in Nova Scotia, Alberta, and Ontario have taken a strict approach to any language that an employer claims ex- cludes bonus entitlement during a reason- able notice period. In considering the issue, the Ontario Court of Appeal in Paquette v. TeraGo Networks Inc. articulated a two- part test: Is the bonus or incentive plan an integral part of the employee's compensation pack- age, triggering a common law entitlement to damages in lieu of bonus? If so, is there any language in the bonus or incentive plan that would restrict the em- ployee's right to recover the compensation through the notice period? e question is not whether the contract or plan is ambigu- ous, but whether the wording of the plan unambiguously alters or removes the appel- lant's common law rights. Recent decisions in Alberta and Nova Scotia have stressed that the intention of the parties, as evidenced through the plain and ordinary meaning of the language of the rel- evant incentive plans, should govern. In Styles v. Alberta Investment Manage- ment Corp., the Alberta Court of Appeal held that if there are preconditions to receiv- ing a bonus payout and those conditions are not met, the failure to pay the bonus cannot be described in any sense as being "dishon- est." Similarly, in Ocean Nutrition Canada Ltd. v. Mathews, the Nova Scotia Court of Appeal held that the issue was not whether the employer was seeking to limit the em- ployee's common law rights, but whether the employee qualified for the bonus pursu- ant to the terms of the agreement. Terms such as "employed," "in good stand- ing," and "active employment," without fur- ther explanation, will be insufficient to limit an employee's entitlement to a bonus. To provide certainty, the employment contract should contain a clause that explicitly lim- its an employee's right to recover the bonus during a common law notice period. e language should include more than just a mere reference to the requirement that the employee be "actively employed." In both Styles and Ocean Nutrition, the relevant language in the contract provided additional definitions and context, including, as was the case in Styles, language that referenced the bonus being forfeited "without regard to whether the participant is receiving, or will receive, any compensatory payment or salary in lieu of notice of termination." Without specific contractual provisions limiting the right of employees to the bonus, the employee has no obligation to sign the termination agreement/waiver. Nonethe- less, the employee may sign the waiver vol- untarily if appropriate consideration is pro- vided. For more information see: • Paquette v. TeraGo Networks Inc., 2016 CarswellOnt 12633 (Ont. C.A.). • Styles v. Alberta Investment Manage- ment Corp., 2017 CarswellAlta 1 (Alta. C.A.). • Ocean Nutrition Canada Ltd. v. Mathews, 2018 CarswellNS 393 (N.S. C.A.). Brian Johnston, Q.C., is a partner with Stewart McKelvey in Halifax. He can be reached at (902) 420-3374 or bjohnston@ stewartmckelvey.com. Dismissing employee who recently made a complaint Question: If an employer wants to dismiss an employee without cause but the employee has recently made a harassment or safety complaint, what can it do to avoid an allegation that the dismissal is a reprisal? Should it wait until a certain amount of time has elapsed? The onus of proof will be on the employer to show no retaliation

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