Canadian Employment Law Today

Canadian Employment Law Today | 7 Cases and Trends Canadian HR Reporter, 2019 contract that were part of the project. Initially, the project had a goal of being ready to sell to developers by the end of March 2017. However, CLC needed to se- cure revenue after another project was de- layed, so it moved up the deadline to the end of March 2016, which worried Schultz as he felt everything would have to go exactly as planned to meet the new deadline. In early 2015, CLC decided to start a new procurement process for consultants as many contracts were ending or had been extended already. Schultz didn't want some of the consultants to have to go through the process again, as the tighter deadline made it desirable to continue with consultants who were already familiar with the project. Information given to consultant submitting proposals In addition to his concerns over the pro- curement process and the shorter timeline, Schultz had to contend with an office en- vironment that was fractured due to per- sonality conflicts and differing work styles. CLC sent a human resources representative to the office to help resolve the issues, but while she was there an employee told her she had seen an email that suggested Shultz had shared information with a candidate in the procurement process for consultants. Upon learning this information, CLC hired a third-party firm to conduct a fo- rensic audit of the Ottawa procurement processes. A March 2016 report of the au- dit identified several emails sent by Schultz to consultant candidates in which he had sent confidential information to them. is included emails to two incumbent consul- tants who were bidding in the new procure- ment process that were intended to get in- put from them on the scope of work — not an uncommon practice — but the emails contained requirements for a successful bidder, a draft memo with the evaluation team's recommendations for each proposal, and an emphasis that it was confidential information. One of the consultants was submitting a proposal for the municipal planning contract and the other for the landscape design contract. CLC also learned that Schultz went to a soccer game and a concert with employees of the municipal planning consultant firm. While Shultz saw these events as normal social contact with contractors, CLC felt there were different standards when the procurement process was underway. CLC felt Schultz breached confidentiality by providing the scope of work and informa- tion on the proposal evaluation to consul- tants who would be submitting proposals, as this went beyond simply asking for input on the work and was contrary to CLC's poli- cies. In addition, the company believed the work in question wasn't complex enough to require consultants with the incumbent contractors. In addition, Schultz admitted that he had favoured the incumbent consul- tant by providing it with the information. CLC terminated Schultz's employment for cause effective March 31, 2016. Schultz then sued for wrongful dismissal and breach of the common law duty of good faith. He argued seeking the input of the incumbent contrac- tor was a breach of CLC's code of conduct and his request for confidentiality was to keep it from outside parties, not to hide what he was doing from CLC. He also said provid- ing that information ensured the proposals received in the procurement process would properly relate to the work required — it wasn't uncommon to seek the input of the incumbent contractor, regardless of whether they were submitting a new proposal or not. Schultz also pointed to a previous inci- dent when he had advised a contractor about a contract before a formal decision had been made. His supervisor talked to him about it but there was no discipline or warning. e third-party audit also revealed an instance where a contract was awarded before a recommendation was drafted — a breach of CLC policy — but there were no conse- quences for the employee involved. e court noted that Schultz was work- ing under tight timelines and was con- cerned about potential delays new con- tractors could cause, so CLC may not have liked the way he sought input from the in- cumbent contractors given the information he included, but his motivation was in the best interests of the company. In addition, CLC was concerned about the perception of conflict of interest in their procurement process, but the evidence was that CLC had been lax in the past about applying their policies, the court said. e court found that Schultz over- stepped in the information he supplied to the incumbent consultants, but his motiva- tion, the relatively minor seriousness of the infraction, and CLC's lack of enforcement of its policies in the past meant his miscon- duct was not enough to deserve termina- tion without cause. CLC was ordered to pay Schultz damages equal to 12 months' pay, benefits, and bonus payments for wrongful dismissal. ough Schultz requested moral and punitive damages for bad-faith con- duct, the court found CLC's actions didn't "represent a marked departure from ordi- nary standards of decent behaviour" and Schultz admitted he didn't suffer any psy- chological damage greater than what would ordinarily result from dismissal. For more information see: • Schultz v. Canada Lands Company CLC Limited, 2019 ONSC 2124 (Ont. S.C.J.). Emails contained too much information on evaluation process Clearly set out seller and purchaser obligations « from EMPLOYEE on page 1 « from ASK AN EXPERT on page 2 • Is it an asset sale or a share sale? If it is an asset sale, is the intention for the pur- chaser to operate the business as a going concern? • Is the workforce unionized or non- unionized? • Will the vendor sever employment and will the purchaser hire the employees under new employment contracts? If so, will terms and conditions of employ- ment change or stay the same? • Conversely, will employment be con- tinuous from the vendor to the pur- chaser? Who will be liable for pre- existing severance obligations to long-term employees? How will this affect the purchase price? • If there is a union, how will this affect the purchaser's other operations? Is there a risk of unionization spreading to non-unionized operations? • How much statutory notice is owing to individual employees? If there is a union, what do the severance and tech- nological change provisions of the col- lective agreement say? • If there is no union, how much common law or contractual notice is owing to the employees? Are there written employ- ment agreements in place and if so, what do they say? In all instances, each party to the trans- action will want to obtain legal advice from a labour and employment law spe- cialist. e particular facts and circum- stances of each transaction will need to be considered and explored well in ad- vance of the transaction to ensure that all labour and employment issues have been covered off in a manner that is agreeable to both parties. Leah Schatz is a partner with MLT Aikins LLP in Saskatoon. She can be reached at (306) 975-7144 or lschatz@mltaikins. com.

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