Canadian Employment Law Today

April 1, 2015

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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GST #897176350 Published biweekly 22 times a year Subscription rate: $299 per year cuStoMeR SeRVIce Tel: (416) 609-3800 (Toronto) (800) 387-5164 (outside Toronto) Fax: (416) 298-5082 (Toronto) (877) 750-9041 (outside Toronto) E-mail: carswell.customerrelations Website: thomson Reuters canada ltd. One Corporate Plaza 2075 Kennedy Road, Toronto, Ontario, Canada M1T 3V4 Director, Carswell Media: Karen Lorimer Publisher: John Hobel Managing Editor: Todd Humber Editor: Jeffrey R. Smith E-mail: ©2015 Thomson Reuters Canada Ltd. All rights reserved. Emplo y ment Law Today Canad ad a ian How would you handle this case? Read the facts and see if the judge agrees yoU mAKE THE CALL 8 long-time worker pushes for severance pay after layoff THiS inSTAlMenT of You Make the Call involves a worker who was laid off after 12 years of employment. Hiawatha Horse Park and Entertainment Centre was a facility in Sarnia, Ont., that hosted a variety of entertainment activities, including live horse racing, broadcast horse racing, a driving range, a go-kart track and, for a period of time, slot machines. It also occasionally held concerts. Wendy Ellis began working for Hiawatha in May 2000 as a permanent full-time cus- todian, with no written contract of employ- ment. She worked without event until July 26, 2012, when Hiawatha provided her with written notice that she would be placed on indefi nite layoff eff ective Sept. 29 — more than eight weeks later. Hiawatha indicated that it was reducing its workforce due to the Ontario government's decision to end the slots program there — the slot machines were removed in April 2012 — which also would aff ect the horseracing operations. e company also said the eight weeks' no- tice and the layoff were in accordance with the Ontario Employment Standards Act, 2000. Hiawatha issued all employees laid off in 2012 record of employment (ROE) forms, including Ellis. Most of the ROEs were is- sued to employees who worked on the seasonal activities such as go-karts and horseracing, whose employment ended when the season ended — and whose em- ployment began after the slots closed in April. e total number of ROEs issued to employees who weren't seasonal, didn't quit, or whose employment ended previous to 2012 was 22. Hiawatha's payroll in 2011 was about $1.2 million and less than $900,000 in 2012 up to the point Ellis was laid off . Hiawatha eventually recalled Ellis to work on July 22, 2013, but this was more than 35 weeks after her layoff . As a result, Ellis fi led a claim for severance, arguing that under the Employment Standards Act, 2000, the layoff became a termination of employment after 35 weeks. Since she had 12 years of service, Ellis claimed Hiawatha owed her severance pay. You MaKe tHe call Was the employer not obligated to provide severance pay once the layoff became a termination? OR Was the employee entitled to severance pay? iF YOU SAiD the employer did not have to provide severance pay — or any other com- pensation — to the terminated employee, you're right. e Ontario Labour Relations Board noted that Ellis didn't have a written employment contract, so the only entitle- ment to severance pay would be through what was stipulated under the act. Under the act, Ellis was entitled to eight weeks of notice or termination pay, which was covered by the more than eight weeks' notice Hiawatha provided before her indefi nite layoff came into eff ect. As a result, Ellis wasn't entitled to any termination pay, said the board. e act also stipulated that employees were entitled to severance pay if they had more than fi ve years of service, which Ellis easily met with her 12 years with Hiawatha. However, in addition to the service time re- quirement, the entitlement only came if the terminated employee was one of at least 50 employees terminated within a six-month period or the employer had an annual pay- roll of at least $2.5 million. e board found the seasonal employees did not owe their layoff s to the closing of the slots — which was the reason for Ellis' layoff — and were laid off later, months after the slots closed. e total number of employ- ees who were laid off within six months of the closing of the slots — characterized as a discontinuance of a part of Hiawatha's busi- ness — was less than 30, including Ellis. Ad- ditionally, Hiawatha's payroll was far below the act's stated minimum for severance pay to be owed, said the board. "( e) discontinuance (of a part of the business) did not lead to 50 or more Hi- awatha employees having their employ- ment severed within a six-month period," said the board. "Obviously, the seasonal employees who started work after the slots closed and who were laid off at the end of the racing season did not owe their layoff to the closure of the slots. Even assuming that everyone else to whom an ROE was issued in respect of employment in 2012 had their employment severed because of the closure of the slots, the total number of such em- ployees is fewer than 30." e board determined Ellis was not enti- tled to severance pay and the working notice she received before her layoff eff ective date met the requirements under the act. ere- fore, she wasn't entitled to any additional compensation. Ellis' claim was dismissed. For more information see: • Ellis v. 405730 Ontario Ltd., 2015 Carswel- lOnt 2435 (Ont. Lab. Rel. Bd.).

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