Canadian Employment Law Today

6 | April 15, 2015 Canadian HR Reporter, a Thomson Reuters business 2015 Cases and Trends / Ask an Expert Termination provision separate from rest of contract tion for each complete or partial year of em- ployment — or the equivalent in salary and vacation pay, but not unused sick days, in lieu of notice — in the event of termination without cause. It stated that if the termina- tion provision was "in conflict with the La- bour Standards Code of Nova Scotia, or any successor legislation, then that legislation will override this specific provision." Moarbes was concerned if he didn't ac- cept the offer, it would be taken off the table, so he didn't consult a lawyer before signing on Oct. 4, 2010. e revised offer stated Moarbes' duties were "to design, develop, troubleshoot and improve the hardware platforms and assemblies consistent with Heka's products and market requirements." Heka was a small company and employ- ees were sometimes expected to do different things at times. As a result, Moarbes felt he took on a larger role than initially indicated. He became an "unofficial go-between" for the small staff in the Canadian office, Heka's president and an independent contractor who helped run the Canadian operation. Over a period of three years, Moarbes went on two trips outside of Canada. He re- quested additional trips to maintain profes- sional relationships, but Heka felt electronic communication was enough. Moarbes was asked to participate in de- veloping user requirements — requiring in- teraction with customers — and translating them into technical requirements, which he felt was outside the scope of his job duties as described in the offer of employment. In May 2012, Moarbes requested his compensation be changed to give him great- er flexibility in attendance at work, so Heka reached an agreement with him for a four- day work week averaging 36 hours per week. His salary was converted to an hourly rate, requiring him to submit timecards. In February 2013, Heka hired a Ger- man-trained software engineer and asked Moarbes to train him to help him become licensed in Canada. On Oct. 8, 2013, Heka terminated Moarbes' employment for shortage of work. Moarbes filed a claim for wrongful dismiss- al, saying Heka acted in bad faith by mak- ing him train a replacement employee and creating a surplus of engineers in the com- pany. He also said his employment contract was void because it did not comply with the minimum notice of termination provisions in the code by making a severance calcula- tion based only on salary and not other en- titlements such as benefits and vacation pay. Moarbes also claimed the employment offer potentially breached the code because it required him to give two weeks' notice of resignation, while the code only required him to give one week's notice. e court found that the code did not have a requirement for compensation for unused sick days or other benefits such as RRSP contributions. ese did not fall un- der the code's definition of pay, which stipu- lated "wages due or paid to an employee and compensation paid or due to an employee… but does not include deductions from wages that may lawfully be made by an employer." e court also found Moarbes' argument that the job offer was void because it didn't meet the code's requirements for notice of resignation to be "absurd," since it didn't affect his entitlement to notice of termina- tion. In addition, if the resignation provision was void, it was separate from the rest of the agreement and did not void the entire agree- ment, said the court. Regardless of the viability of the termi- nation and resignation clauses in the em- ployment agreement, the court found Heka fully paid Moarbes for the work he did and the three weeks' pay in lieu of notice was in compliance with the code's minimum no- tice requirements. ough Moarbes may have otherwise been entitled to more com- mon law notice, the signed agreement dis- placed any such entitlement and there was no evidence Moarbes suffered any loss, said the court in upholding the revised job offer. e court also found the job duties out- lined in the offer were broad enough to cover the work Moarbes actually did, par- ticularly since it was a small office with only a few staff. ough Moarbes may have taken on the role of a go-between, his job duties did not change and he unilaterally accepted that role. Additionally, the amount of travel was well within the impression given at the time of the job offer, said the court. Finally, the court found Heka did not exert pressure on Moarbes to sign the agreement. ough Moarbes may have been concerned the offer would be revoked if he continued to try to negotiate changes, there was no suggestion it would be revoked. "While Mr. Moarbes characterized this case as one where there was a lot of miscom- munication and unaligned expectations, I find that it is really a case of Mr. Moarbes having entered into a contract that he subse- quently regretted but there is no viable rea- son why he should not be held to its terms despite how much he might dislike them now," said the court in dismissing Moarbes' claim. See Moarbes v. Heka Electronics Inc., 2015 CarswellNS 174 (N.S. Sm. Cl. Ct.). « from FIRED EMPLOYEE on page 1 « from ASK THE EXPERT on page 2 tion clause, the common law will imply a term requiring the employer to provide reasonable notice of dismissal. In general, the same principles apply to dependent contractors. ere is some authority for the proposition that the rea- sonable notice period for dismissal of a de- pendent contractor should be shorter than the notice period an equivalent employee would be entitled to: see, for example, Jack- son v. Norman W. Francis Ltd. However, this approach was rejected in JKC Enterprises Ltd. v. Woolworth Canada Inc., where the Alberta Court of Queen's Bench found that the length of the reasonable notice period for a dependent contractor should reflect where the particular relationship falls on the continuum between employee and independent contractor. In the Khan decision, the court awarded the plaintiff a notice period based on the same factors that would have applied if he had been an employee, despite his dependent contactor status. It is also important not to overlook employment standards legislation, which outlines the minimum statutory en- titlements of workers who are dismissed without cause. In most jurisdictions in Canada, these entitlements apply to em- ployees only. However, in the Yukon and Quebec, the definition of "employee"is wide enough to encompass dependent contrac- tors as well. For more information see: •John v. Rees, 2 All E.R. 274, [1970] Ch. 345 (Eng. Ch. Div.). •Crown Packaging Ltd. (2014), 243 L.A.C. (4th) 423 (Dorsey). •McKee v. Reid's Heritage Homes Ltd., [2009] O.J. No 5489 (C.A.) •Khan v All-Can Express Ltd., 2014 Car- swellBC 2246 (B.C. S.C.). •Jackson v. Norman W. Francis Ltd., 1999 CarswellNB 122 (N.B. Q.B.). •JKC Enterprises Ltd. v. Woolworth Canada Inc., 2001 CarswellAlta 1346 (Alta. Q.B.). Colin G.M. Gibson is a partner with Har- ris and Company in Vancouver. He can be reached at (604) 891-2212 or cgibson@har- risco.com. Notice entitlement similar for dependent contractors

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