Canadian Employment Law Today

June 26, 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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with Colin G. M. Gibson Ask an Expert HARRIS AND COMPANY VANCOUVER 2 | June 26, 2019 Have a question for our experts? Email Canadian HR Reporter, 2019 Ask an Expert Can an employee be required to use vacation during a temporary shutdown? Question: If an employer shuts down its operations for a short period of time can it order employees to use some of their annual vacation entitlement for that period of time? What are the options if an employee has already used her vacation time for the year? Contractual definitions of 'just cause' Question: If an employment agreement has specific examples of misconduct that constitute just cause for dismissal, can the employer automatically dismiss the employee without notice if they are guilty of that misconduct? Answer: Employers have a general right to dictate when employees take vacation. In the unionized context, this right is subject to the terms of the collective agreement. In the non-union context, management may schedule vacation time according to busi- ness needs, unless the employment agree- ment provides otherwise. Provincial employment standards legisla- tion requires that employers allow employ- ees to take their vacation in periods of one or more consecutive weeks unless otherwise requested by the employee and agreed upon by the employer. Employees are also required to take their vacation within 12 months of earning it, although an employer can request that employees take their vacation days be- fore earning them. If an employer wishes to do so, it must explain the impact this will have on future vacation entitlements and obtain the employee's approval. Employers may accordingly require non- unionized employees to take vacation dur- ing a shutdown, provided the employees have vacation available and the shutdown is for a period of at least one consecutive week. For employees who have exhausted their vacation entitlement, a shutdown will result in a temporary layoff . At common law, a tem- porary layoff will normally be considered a constructive dismissal, unless there is an express or implied term in the employment agreement that contemplates temporary layoff s from time to time. Provincial employment standards legisla- tion provides that employers may temporar- ily lay off employees. e allowable length of a temporary layoff diff ers throughout the ju- risdictions. However, because the common law does not provide for layoff s, courts have generally held that unless the employment agreement expressly or impliedly allows for a layoff , employment standards provisions regarding temporary layoff s do not apply. In Collins v. Jim Pattison Industries Ltd., the court noted that: "the (Employment Standards) Act does not grant all employ- ers the statutory right to temporarily lay off employees, regardless of the terms of their employment contract. Rather than creating new rights, the Act appears to be qualifying employment agreements in which the right Answer: Just cause for summary dismissal is normally diffi cult to prove. In McKinley v. BC Tel, the Supreme Court of Canada described just cause as serious misconduct that gives rise to a breakdown in the employment re- lationship. Just cause will exist where the employee's behaviour violated an essen- tial condition of the employment contract, breached the faith inherent in the work re- lationship, or was fundamentally or directly inconsistent with the employee's obligations to the employer. In some cases, an employer may want to include language in an employment contract specifying certain types of misconduct that will be just cause for dismissal without no- tice or severance compensation. Clauses of this nature can be eff ective in tailoring an employment agreement to the particular re- quirements of the employer's business. Generally speaking, a court will enforce a contractual defi nition of just cause, provid- ed the defi nition is clear and does not violate statutory termination restrictions, such as those found in human rights, labour rela- tions or workers' compensation legislation. Care must be taken in drafting provisions of this nature, however, because like clauses that seek to limit an employee's notice or severance rights on a termination without cause, they will often be subjected to careful judicial scrutiny. It is important to ensure that if an employ- ment agreement lists certain infractions that will be just cause for dismissal, the list con- cludes with a catch-all phrase such as "any other act or omission that would constitute just cause for dismissal at common law". Otherwise, categories of serious misconduct that do not appear on the list (even theft, for example) will not be grounds for dismissal without notice or severance compensation. If a contractual defi nition of just cause in- cludes conduct by the employee that can't be measured objectively, and depends on the exercise of the employer's subjective judge- ment, a court will expect the employer to act in fairly and in good faith in its application of the clause: Truckers Garage Inc. v. Krell. In Meyer v. Partec Lavalin Inc., the Alberta Court of Appeal ruled that if the employer has exercised its discretion under a provi- sion of this nature honestly and in good faith, the court should not overturn the employer's decision on grounds of reasonableness. Where an employment agreement defi nes just cause more broadly than the applicable employment standards legislation, an em- ployer may fi nd itself in the position where it is required to provide the employee with statutory notice or severance compensation, even though summary dismissal is permis- sible under the terms of the employment contract. In Khashaba v. Procom Consultants Group Ltd., the termination language in the em- ployment agreement defi ned cause as "any grounds at common law for which an em- ployer is entitled to dismiss an employee summarily without notice or compensation in lieu of notice." e Ontario Supreme Court found that this provision violated Ontario's Employment Standards Act, 2000, which re- quires a higher standard of "wilful miscon- duct" for summary termination. However, while the court found that the defi nition of just cause in the contract was void, it reject- ed the employee's argument that under the principles expressed in Mach nger v. HOJ Industries Ltd., this also invalidated the other termination provisions in the agreement. In ruling that the employee was limited to the severance outlined in his contract, the court cited the comments of the B.C. Court of Ap- peal in Miller v. Convergys CMG Canada Lim- ited Partnership, that "the construction of an employment contract remains an exercise in contractual interpretation, and the inten- tions of the parties will generally prevail, even if this detracts from employment law goals that are otherwise presumed to apply." For more informa on see: • McKinley v. BC Tel, 2001 SCC 38 (S.C.C.). • Truckers Garage Inc. v. Krell (1993), 3 C.C.E.L. (2d) 157 (Ont. C.A.). • Meyer v. Partec Lavalin Inc., 2001 ABCA 145 (Alta. C.A.). • Khashaba v. Procom Consultants Group Ltd., 2018 ONSC 7617 (Ont. S.C.J.). • Mach nger v. HOJ Industries Ltd., [1992] 1 S.C.R. 986 (S.C.C.). • Miller v. Convergys CMG Canada Limited Partnership, 2014 BCCA 311 (B.C. C.A.). SHUTDOWN on page 7 »

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