Canadian HR Reporter

CANADIAN HR REPORTER OCTOBER 2018 INSIGHT 51 Brian Johnston Toughest HR Question Discretionary bonus conditional on signing of termination agreement Can an employer require a dismissed employee to sign the termination agreement/waiver before providing the bonus? Question: If a dismissed employee's bonus is part of the employment contract but it's stipulated the amount of the bonus is dis- cretionary 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 employ- ee to sign a termination/waiver before providing the bonus. ere is nothing illegal or wrong about that. However, such an approach begs the question as to whether the employer would be otherwise liable for the bonus if the employ- ee does not sign the termination agreement or waiver. Bonus entitlements have been the subject of much litigation. Courts of Appeal in Nova Sco- tia, Alberta, and Ontario have taken a strict approach to any language that an employer claims excludes bonus entitlement dur- ing a reasonable notice period. In considering the issue, the Court of Appeal for Ontario in Paquette v. TeraGo Networks Inc. articu- lated a two-part test: • Is the bonus or incentive plan an integral part of the employee's compensation package, trigger- ing a common law entitlement to damages in lieu of bonus? • If so, is there any language in the plan that would restrict the employee's right to recover the compensation through the no- tice period? e question is not whether the contract or plan is ambiguous, but whether the wording of the plan unambigu- ously alters or removes the ap- pellant'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 relevant incentive plans, should govern. In Styles v. Alberta Investment Management Corp., the Court of Appeal of Alberta held that if there are preconditions to receiv- ing a bonus payout and those conditions are not met, the fail- ure to pay the bonus cannot be described in any sense as being "dishonest." 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 employee's common law rights, but whether the employee quali- fied for the bonus pursuant to the terms of the agreement. Terms such as "employed," "in good standing" and "active em- ployment," without further expla- nation, will be insufficient to limit an employee's entitlement to a bonus. To provide certainty, the employment contract should con- tain a clause that explicitly limits an employee's right to recover the bonus during a common law no- tice period. e language should include more than just a mere reference to the requirement that the em- ployee be "actively employed." In both Styles and Ocean Nu- trition, the relevant language in the contract provided additional definitions and context, includ- ing, as was the case in Styles, lan- guage that referenced the bonus being forfeited "without regard to whether the participant is receiv- ing, or will receive, any compensa- tory 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. Nonetheless, the employee may sign the waiver voluntarily if appropriate consideration is provided. For more information see: •Paquette v. TeraGo Networks Inc., 2016 CarswellOnt 12633 (Ont. C.A.). •Styles v. Alberta Investment Management Corp., 2017 Car- swellAlta 1 (Alta. C.A.). •Ocean Nutrition Canada Ltd. v. Mathews, 2018 CarswellNS 393 (N.S. C.A.). Brian Johnston is a partner at Stew- art McKelvey in Halifax. He can be reached at (902) 420-3374 or bjohn- ston@stewartmckelvey.com. To provide certainty, the contract should contain a clause that limits an employee's right to recover the bonus. Is employer branding discriminatory? Excluding certain age groups from seeing social media such as LinkedIn or Facebook ads likely amounts to discrimination A few weeks back, I was talking to one of our authors about employer branding when the issue of employers targeting certain demographics for employment came up. e question was whether such targeting could amount to discrimina- tion under human rights legislation. Organizations obviously have specific target markets for their products and services, so why not target specific demographics for employment, particularly in certain types of positions? After all, there is no question some or- ganizations tend to hire people in specific age groups and certain life stages. For example, McDonald's tends to hire a lot of young people and seniors to work at its fast-food res- taurants. Home Depot also hires a fair number of retirees to work at its stores, and Wal-Mart people greeters have become a cliché re- garding the employment of older workers. e point is that students and retirees often appreciate the flex- ibility of such positions. I would imagine some parents with young children in school would also ap- preciate such flexibility and the ability to make their own hours. I also suspect in the case of Home Depot that experienced and older workers might be de- liberately sought after for their wisdom and experience. This might be a little unfair, but in many cases, people would rather ask a retired tradesperson for ad- vice about home renovations than a 20-something student working part-time. It is also clear that some genders and even ethnic groups tend to be overrepresented in certain indus- tries and occupations. Without stereotyping anyone — and leav- ing aside issues of discrimination, marginalization and streaming of groups of people into lower status jobs — for whatever reason, some jobs seem to appeal to certain people more than others. Only a few days after my dis- cussion with our author, I read an article by Hayley Kirton of People Management magazine, pub- lished by the U.K.-based Char- tered Institute of Personnel and Development (CIPD), discussing two companies being warned by the Equalities and Human Rights Commission (EHRC) not to use tools on Facebook to target spe- cific age groups. The article also mentions a class-action lawsuit in the United States involving the Communi- cations Workers of America and three workers filed against em- ployers based on their alleged use of Facebook filtering tools to exclude people over a certain age from viewing job advertisements. e article goes on to explore filtering options using Facebook ads and explains how the maga- zine attempted to create a fake job ad excluding people of certain de- mographics or with certain inter- ests, the exclusion of which might be seen as discriminatory. e tool allowed them to create the ad, but People Management did not actually post it, and the article points out that the website in question has a policy of vetting ads and prohibiting discriminato- ry content. When reporters went back later, the filtering tools had been removed. e article also reviews Linke- dIn and points out that the pro- fessional networking site allows users to target specific age groups with a rough estimate of people's ages. LinkedIn's advertising policy prohibits discriminatory adver- tising, although the article also points out there could be legiti- mate reasons for excluding adver- tisements from people of certain ages, such as advertising for gam- bling or alcohol. e article quotes employment lawyer Stefan Martin, who argues employers cannot simply del- egate their responsibility to avoid discrimination to social networks when advertising jobs. He argues this isn't going to fly and is similar to employers send- ing advertisements to newspapers expecting them to vet the content and arguing that they thought the newspaper would reject the ad if there was a problem. Canadian human rights law and practice So, is this aspect of employer branding potentially discrimi- natory? Are employers entitled to target certain demographics in their social media advertise- ments? How would a Canadian human rights tribunal likely rule in such a case? While I am not a human rights lawyer, I would speculate that a Canadian human rights tribunal would rule on such a case in a similar manner. I personally think employers should be entitled to appeal to certain demographics in their job advertisements with respect to the messaging (at least to a cer- tain extent), but actually excluding certain people from seeing the ads crosses the line. Even where employers are aware of their target demograph- ics, they should always be mindful of diversity, use multiple channels to source candidates and avoid rejecting candidates simply be- cause they fall outside those demographics. Brian Kreissl is the Toronto-based product development manager for omson Reuters Legal Canada's hu- man resources, OH&S, payroll and records retention products and so- lutions. He can be reached at brian. kreissl@thomsonreuters.com. Brian Kreissl Guest Commentary Employers should be entitled to appeal to certain demographics in their job advertisements with respect to the messaging — to a certain extent.

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