Canadian HR Reporter

CANADIAN HR REPORTER August 7, 2017 INSIGHT 19 Tim Mitchell TOUgHeST HR QUeSTiON Introducing a probationary period for a recently hired employee Changing a new employee's status is no easy task and could result in litigation Question: If an employee is given full em- ployment status on hiring, can the em- ployer later implement a probationary period a few weeks later? Answer: A probationary em- ployee is hired conditionally on the basis that the employer must be satisfi ed at the end of the pro- bationary period that the em- ployee is suitable for the position for which she was hired, while an employee given full employment status on hiring is not subject to such a condition. Often, probationary employ- ment contract language will spec- ify an employer may terminate a probationary employee for any reason, without notice. Full-sta- tus employees, on the other hand, are entitled to a statutory notice period pursuant to applicable em- ployment standards legislation, or a common law notice period, prior to termination. So implementing a proba- tionary period a few weeks after employment has commenced is tantamount to amending an ex- isting employment contract, and increases the risk an employer will be found to have constructively dismissed the aff ected employee. Constructive dismissal results when unilateral changes are made to the fundamental terms of an employee's employment that are deemed suffi cient, at law, to ter- minate the employment relation- ship. When an employer makes a change that is considered funda- mental, and imposes it unilaterally upon an employee, the employee does not have to accept the change and may take the position he has been constructively dismissed, and sue for wrongful dismissal. To validly vary an employment contract after employment has already commenced: • the parties must mutually agree to vary the term of the contract • it must be the intention of both parties to do so • the employee must accept the employer's attempt to vary the contract of employment. Further, the Ontario Court of Appeal has repeatedly recognized that new or additional consider- ation to support the variation must be exchanged by the parties. Practically, to validly vary an employment contract, or to retain the right to vary an employment contract, an employer should do the following: •Seek employee consent: Writ- ten and informed employee con- sent to proposed amendments will minimize the risk of success- ful constructive dismissal suits. •Provide "fresh consideration": If the proposed amendments af- fect substantive employee rights, employers should provide the employee with an additional ben- efi t (such as a one-time payment). •Provide reasonable notice of change: An employee should be given advance notice of all proposed amendments. Where the employee rejects the change, notice of termination with an of- fer of re-employment on the new terms and conditions is possible. Employers, however, might also consider providing notice of the contemplated amendments (along with notice that the em- ployee may not continue under the existing employment terms at the end of the notice period) for a duration that is equal to or greater than the employee's ter- mination entitlements. •Draft variation clauses: Varia- tion clauses in an employment agreement will support an em- ployer's claim that the proposed amendment was permitted by the employment contract. Finally, if the employment con- tract contains a valid termination clause — meeting the statutory minimum entitlements in the applicable jurisdiction's employ- ment standards legislation — it may not be necessary for an em- ployer to implement a probation- ary period at all. For more information see: •Potter v. New Brunswick (Legal Aid Services Commission), 2015 CarswellNB 87 (S.C.C.). •Singh v. Valley Forge Automotive of Canada Ltd (1989 Carswell- Ont 764 (Ont. Dist. Ct.). •Stott v. Merit Investment Corp., 1988 CarswellOnt 887 (Ont. C.A.). •Francis v. Canadian Imperial Bank Commerce, 1994 Carswell- Ont 995 (Ont. C.A.). Tim Mitchell practises management- side labour and employment law at Norton Rose Fulbright in Calgary. He can be reached at (403) 267-8225 or tim.mitchell@nortonrosefulbright.com. The employee does not have to accept the change and may take the position he has been constructively dismissed. A tale of 2 companies Demise of Target, Sears highlights retailers' different corporate values It was the best of times for employees of one company; it was the worst of times for loyal employees at another. Sorry to plagiarize Charles Dickens but it strikes me that the tales of Target Canada and Sears Canada are somewhat eerily similar. It was January 2015 and Target announced it was ceasing its Ca- nadian operations. is was after two years of investing and trying to make it work in this country. Target sought and was granted creditor protection. Target had always been about its team members, and here is where the company showed its true values. In an unprecedented move, the company announced it was putting aside $175 million dollars for all team members to receive full pay from January un- til May. It didn't matter if an em- ployee was staying until the bitter end or if the company no longer required her services — there were no strings attached. It's one of the reasons I fondly recall working for Target. I have heard it's been said that in the hardest of times, the darkest of days, you see what a company is truly made of. Target clearly was living up to its values, right until the end, and in the most trying of circumstances. And then there is the slow, painful descent of a once great company. I am, of course, talking about Sears and the death spiral it has been in for a number of years. I have always been a silent cheerleader for this company. It gave me my start as a worker and I cut my teeth there as a leader. I started my career at Sears just as Paul Walters had assumed lead- ership of the company. I saw the power of a dynamic leader. People loved Paul and would do anything to see him succeed. He was able to inspire us and get us moving in the right direction. He communicated a clear vision; he stated that we couldn't shrink ourselves to greatness — we had several strengths and we needed to use those to show the world who we were. As a result, the company achieved record results and prof- itability. I remember the Sears stock selling for $40 and upwards on the Toronto Stock Exchange (now the shares are being delisted from the TSX). Contrast that with the scene currently playing out. A company that once employed more than 30,000 associates now has fewer than 20,000. Divisions have been sold off . Favourable store locations and leases have been closed in the name of the mighty short-term cash infusion. Departments have been outsourced, while remaining stores are old and tired-looking. en came the announcement that shook the business world — Sears would be seeking protection from its creditors. It's sad that this once great company would be forced to seek this solution. Further, it was announced that 59 stores would be closing in small communities across this great land, and about 2,500 people would lose their jobs. en the kicker: Because Sears was granted creditor protection, it was not legally bound to pay any severance to these employees. Further, retiree benefi ts were to be cut off and the pension plan would no longer be funded by the company. Talk about adding insult to in- jury — how could a company do this to its loyal employees? What are Sears Canada's val- ues? When I worked there, the values were known by everyone who worked for the company: "We will make Sears Canada a great place to work, a great place to shop and a great place to invest." It would appear those values are no longer alive within the compa- ny in not paying loyal employees and throwing them out of work with no assistance? Ebenezer Scrooge would ap- prove of this bottom-line focus and wringing out every last penny, while serving the short end of the stick to loyal employees. Certain- ly, this does not look like a great place to work. Is it still a great place to shop? Would you shop at a company if you knew it was giving employees no safety net, showing no compas- sion, and punishing retirees who gave their all for this company? Sears Canada said this decision wasn't easy to make — I would say that making the right decision isn't that hard. Do right by those who stood by you; show that sometimes being ethical is better than being legal. e company went on to say Sears was reinventing itself. I would submit it has already rein- vented itself. What was once a great com- pany and innovative retailer has now become a morally bankrupt company. I will continue to observe the activities of Sears Canada. How- ever, I am no longer rooting for its turnaround. I will be watching to see how long it takes the Ca- nadian public to see through the sham and scam, to stop spending money online and at its stores. While I don't enjoy the thought of the remaining 15,000 employ- ees losing their jobs, the Sears I once knew and worked for is but a distant memory. To those working for this com- pany, I wish you the best — I can appreciate the diffi cult situation you are facing. Clearly, we've all seen how low this company will go to save a buck. It would be enough to make Charles Dickens write another novel about greed and the al- mighty dollar. Steve Elliot is a store manager at Star- bucks in Mississauga, Ont., and has worked there two years. He can be reached on Twitter @sellio7. Sears Canada said this decision wasn't easy to make. I would say making the right decision isn't that hard — do right by those who stood by you. It was the best of times for employees of one company; it was the worst of times for loyal employees at another. Sorry to plagiarize Charles Dickens but it strikes me that the tales of Target Canada and Sears Canada Steve Elliot GUeST COMMeNTaRY

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