Canadian Employment Law Today

March 20, 2019

Focuses on human resources law from a business perspective, featuring news and cases from the courts, in-depth articles on legal trends and insights from top employment lawyers across Canada.

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How would you handle this case? Read the facts and see if the judge agrees YOU MAKE THE CALL 8 ©2019 Thomson Reuters Canada Ltd. All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted, in any form or by any means, electronic, mechani- cal, photocopying, recording or otherwise, without the prior written permission of the publisher. The publisher is not engaged in rendering legal, accounting or other professional advice. If legal advice or other expert assistance is required, the services of a competent professional should be sought. The analysis contained herein represents the opinion of the authors and should in no way be construed as being either official or unofficial policy of any governmental body. GST #897176350 Emplo y ment Law Today Published biweekly 22 times a year Subscription rate: $299 per year CUSTOMER SERVICE Tel: (416) 609-3800 (Toronto) (800) 387-5164 (outside Toronto) E-mail: Thomson Reuters Canada Ltd. One Corporate Plaza 2075 Kennedy Road, Toronto, Ontario, Canada M1T 3V4 Director, Media Solutions, Canada: Karen Lorimer Publisher/Editor in Chief: Todd Humber Editor: Jeffrey R. Smith E-mail: Sales Manager: Paul Burton Email: Phone: (416) 649-9928 Marketing Co-ordinator: Keith Fulford Email: Phone: (416) 649-9585 Emplo y ment Law Today Canad ad ad ad ad ad a ian an an YOU MAKE THE CALL Was the company entitled to terminate McNabb's employment for cause? OR Did the company wrongfully dismiss McNabb and breach his contract? IF YOU SAID the company was entitled to terminate McNabb's employment, you're right. e court found the evidence of Cl- ouatre and the offi ce manager to be consis- tent and believable, making it likely there were "numerous problems with McNabb" in 2014 leading up to his termination, including rude and abusive behaviour, threatening phone calls to Clouatre, using company equipment for personal reasons, being impaired at work, and frequent unap- proved absences. "Collectively, the persistent problems outlined above are more than enough to constitute just cause for McNabb's dis- missal in November 2014," said the court. "Consequently, the claim for wrongful dis- missal fails." e court also found there was no breach of contract. ere was no evidence of a for- mal agreement that McNabb was guaran- teed a job for life after he sold the company to Clouatre and McNabb's claim of such an agreement was weak, the court said. "A nephew buys a business from his aging uncle (a smart man who ought to be com- mended for his entrepreneurship but who was clearly struggling in and around 2012), and the nephew guarantees his uncle a well- paid job (regardless of economic circum- stances) forever, ceasing only upon the uncle's death? Nonsense, in my view," said the court. For more information see: • McNabb v. Clouatre et al., 2018 Carswel- lOnt 2316 (Ont. S.C.J.). Worker's job-for-life lasts less than 3 years THIS INSTALMENT of You Make the Call features a business owner who sold his business, stayed on as an employee, and was then fi red. John McNabb, 74, was the president of John H. McNabb Construction, an Ontario construction company he founded in 1969 in the township of Georgian Bluff s, Ont., and incorporated in 1979. In 2012, McNabb was having some fi nancial diffi culties so he sold the company to his nephew, Tony Cl- ouatre, who had worked for the company since 1997. McNabb remained employed with the company and leased the property where it was located — which he owned. McNabb's employment included the use of a vehicle — along with the cost of mainte- nance and insurance — and health benefi ts. ough McNabb performed his duties well and provided valuable knowledge and experience to the construction company, Clouatre soon began having problems with his uncle. According to Clouatre, McNabb poured concrete over a company storage container after he was told not to, he some- times operated equipment while under the infl uence of alcohol — contrary to the employee manual that prohibited alcohol and intoxication at work — and was often absent from work with no justifi cation throughout 2013 and 2014. In addition, Cl- ouatre claimed McNabb made "disturbing and threatening" phone calls to him and used company resources for his own use, costing the company thousands of dollars. Clouatre also said McNabb went on "mis- erable rampages" at work, verbally abused the offi ce manager, and refused to submit time cards indicating his hours worked. e of- fi ce manager agreed with Clouatre's version of events, and the company warned McNabb about his misconduct. However, it continued. In January 2014, McNabb went on vaca- tion to Florida. When he returned in March, he found Clouatre had moved the company off his property. He continued to work for the company until November 2014, when the company dismissed him for insubordi- nation, absenteeism, intoxication at work, and threatening conduct. McNabb sued for wrongful dismissal and breach of contract, arguing part of the sale agreement allowed him to remain an employee of the company for life. Founder expected his job to continue indefi nitely after selling 33-year-old company to nephew.

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