Categories
Employment Law Wrongful Dismissal

What to Know When You Have Been Fired Without Cause

Being fired without cause can be a very confusing and upsetting experience. This blog explains what termination without cause means, how much notice an employee should receive before being let go, and how all of these entitlements may be affected by an employer’s insolvency. 

What is dismissal without cause?

Dismissal without cause is when an employer terminates an employee without workplace misconduct. However, the employer may be liable for wrongful dismissal if done improperly.

To terminate an employee without cause, an employer must give the employee notice (or pay in lieu of notice). The Employment Standards Act of Ontario sets out the minimum notice periods that must be provided to an employee terminated by the employer. (However, it is essential to note that not all employees fall under the Employment Standards Act, including those employed in federally-regulated industries.)

Employers must give notice to employees dismissed without cause

The required notice period is the amount of time an employer must provide an employee before terminating their employment. Not all employees are entitled to notice under the Employment Standards Act, including those fired for willful misconduct, neglect of duty, or disobedience. 

If eligible, the required notice period depends on the employee’s length of service. For example, employees with less than three months’ service would be entitled to a one-week notice period, no matter how many hours per week they work.

Notice for employees hired for a fixed term

For employees who are hired for a specific amount of time or a standalone task, their contract may stipulate a specific notice period. However, statutory notice under the Employment Standards Act is required for these employees if:

  • Employment is terminated before the date work was specified to end; or
  • It has been more than 12 months since the employment started, and the term or task is incomplete; or
  • Employment is ongoing after the term or task is completed.

Notice for mass terminations

When 50 or more employees are terminated within four weeks (a “mass termination”), the amount of notice is based on how many employees are being terminated:

  • For employers terminating 50 to 199 employees, they must give eight weeks’ notice;
  • For employers terminating 200-499 employees, they must provide 12 weeks’ notice; and
  • For employers terminating 500 or more employees, they must give 16 weeks’ notice.

It is important to note that notice for some employees is governed by other laws, particularly those who work for federally-regulated employers. In many cases, federally-regulated employers only need to give the employee two weeks’ written notice.

Termination pay

If an employee has worked for their employer for at least three consecutive months and is terminated without cause, they are entitled to termination pay. The amount of termination pay is one week’s wages for every full year of employment. This is paid in a lump sum and includes vacation pay. This must be paid the later of the employee’s next payday or within seven days after termination.

Firing employees due to bankruptcy

Earlier this year, the Ontario Court of Appeal released its decision in Antchipalovskaia v. Guestlogix Inc., wherein an employee was found not to be entitled to a longer notice period because she had a break in employment due to the employer’s bankruptcy. Five years into her employment, the technology company she worked for had obtained creditor protection under the Companies’ Creditors Arrangement Act. 

When claims against the company were approved, a plan was put in place that absolved it of any liability to employees who submitted claims before a certain time. The employee’s termination was part of the plan to address these affected claims, which also involved immediately offering to re-hire her under a new employment contract. She was also informed that she could submit a proof of claim in the creditor protection proceedings for severance and termination pay. 

The employee was given a new start date in the employment contract

The employee submitted her claims, which were accepted in part. The employee was subsequently formally re-hired. The offer stipulated that her start date would be “the first day following the implementation of the [creditor protection] plan[.]” In a later letter to the employee, the employer stated:

“Further to your new employment agreement dated September 13, 2016 and the implementation of the [Companies’ Creditors Arrangement Act] plan of arrangement and compromise (the “CCAA Plan”) effective September 21, 2016, this letter will confirm that your start date (the “Starting Date”) with the Company has been reset to today’s date, September 22, 2016. From today forward this will be your effective Starting Date for all employment related matters including but not limited to seniority, benefits, vacation, etc. For certainty, there will be no interruption in your benefit coverage or other program participation as a result of the transition from your past employment agreement to the new one herein.”

Employee terminated three years after new contract signed

The newly signed employment contract excluded her entitlement to notice of termination. Three years after the commencement of the employee’s new employment contract, she was terminated. The employer provided the minimum termination pay in the amount she would have been entitled to under the Employment Standards Act if there had not been a break in her employment. This worked out to 9.5 weeks’ pay. It took the employee 12 months to find a new job.

Employee successfully claimed wrongful dismissal before motion judge

The employee brought an action for wrongful dismissal, which was decided in a motion for summary judgment. The motion judge found that the employment contract’s provisions on termination were invalid for not complying with the minimum requirements in the Employment Standards Act. The motion judge also decided that the employee’s employment should be treated as if it were continuous and held that the employee was entitled to 12 months’ notice.

Court of Appeal deemed employment not continuous, shorter notice period owed

The Ontario Court of Appeal set the motion judge’s decision aside. It disagreed with her decision because she did not give effect to the employee’s termination during the creditor protection proceedings. Instead, the employee’s employment period started when the new employment contract was signed.

However, the Court held that the earlier years of employment should still be considered because the employee’s previous service had benefited the employer. The Court of Appeal concluded that seven months’ notice was appropriate, explaining:

“This notice period is longer than the notice period the respondent would have been entitled to if she had first started her employment with the appellant in 2016, thereby accounting for the benefit the appellant received from her previous period of employment. At the same time, however, this notice period recognizes and gives effect to the intent of the court ordered release in the [creditor protection] proceedings, which was to release the appellant from liabilities arising prior to the implementation of the [CCAA] Plan.”

Contact Baker & Company in Toronto for Skilled Advice on Employee Termination

The knowledgeable employment lawyers at Baker & Company represent employees and employers seeking to resolve wrongful dismissal claims. We provide pragmatic and practical guidance and represent clients through negotiations or mediation, working towards a beneficial solution that is in our client’s best interests. Our team provides trusted advice and skilled representation in various employment matters, including drafting and reviewing employment policies, contracts, and severance packages. To schedule a confidential consultation, call 416-777-0100 or reach out online.

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Enforcement Of Foreign Judgments Litigation

Service of Court Documents to Foreign Company Deemed Invalid

We have previously written about what courts consider when determining whether to enforce a foreign judgment in Canada. Another issue that arises in disputes with foreign entities is the service of court documents abroad.

In the recent case of Salguiero et al. v. Instant Brands et al., the plaintiff in a product liability action attempted to serve court documents on the defendant, a company in China. The question before the Ontario Superior Court of Justice was whether the plaintiff had effectively served the defendant according to the Ontario Rules of Civil Procedure and international law.

The plaintiff purchased a defective from Amazon.ca

The plaintiff purchased a product from Amazon.ca and received it in December 2016. It became defective in February 2017. The Statement of Claim was not issued until days before the limitation period would run up, in February 2019. The defendants to the plaintiff’s lawsuit were Amazon.com Inc., Instant Brands Inc., and GD Midea Consumer Electric Manufacturing Co. Ltd.

The third company, GD Midea, is headquartered in China, while Amazon and Instant Brands have head offices in Seattle, Washington and Ottawa, Ontario, respectively. Service of the Statement of Claim was successfully made on both Amazon and Instant Brands, but there was a problem with service to GD Midea.

Service in the foreign country was stalled by investigation

Canada and China are contracting states under the Hague Convention of 15 November 1965 on the Service Abroad of Judicial and Extrajudicial Documents in Civil or Commercial Matters. Under the Ontario Rules of Civil Procedure, there are specific rules on service to individuals outside of Ontario located in a contracting state:

Manner of Service in Convention States

(3) An originating process or other document to be served outside Ontario in a contracting state shall be served,

(a)  through the central authority in the contracting state; or

(b)  in a manner that is permitted by the Convention and that would be permitted by these rules if the document were being served in Ontario.

The plaintiff’s counsel knew about this rule and inquired about translating the documents for service to the central authority. However, the plaintiff’s lawyer did not follow through with this request. Despite this, in March 2019, GD Midea’s insurer contacted the plaintiff’s counsel to advise that an investigation into the matter was underway. It was also requested that no further steps be taken, such as noting the defendant in default. The plaintiff agreed to hold off until all defendants had the opportunity to investigate.

Foreign company raises issue with service of Statement of Claim after serving Statement of Defence

By April 2020, after GD Midea’s request to not be noted in default had been renewed multiple times, the plaintiff provided a 45-day time limit to receive statements from all defendants. GD Midea “served what purported to be a defence and crossclaim” in June 2020. Amazon and Instant Brands served their own statements of defence a month later.

After serving its statement of defence, counsel for GD Midea realized its client might not have been served in accordance with the Hague Convention or the Rules of Civil Procedure. Counsel notified the plaintiff mid-June 2020 and requested a copy of the affidavit of service. In July 2020, a day after Amazon and Instant Brands filed their statements of defence, counsel for the plaintiff relented that service had never been formally effected in China. In response, GD Midea said it would dispute the jurisdiction and forum for the claim. In other words, the company would dispute the authority of the Ontario court to hear the case. At trial, the company did not bring any arguments forward on this point because it was premature.

GD Midea could not have been noted in default if service had not been completed. However, the company’s conduct demonstrated its awareness of its involvement in the pending legal proceedings.

Did the service rules apply if the defendant was already aware of the case?

The question before the Ontario Superior Court of Justice was “whether the formalities of service under the [Hague Convention] are required when it is quite clear that the defendant knows the particulars of the claim, has insurance which would respond to the claim and where the insurer has instructed counsel in Ontario.” The Court also mentioned the related issue of counsel for GD Midea serving a statement of defence on behalf of the company after mistakenly assuming that service had been effected.

In the event that formal service was still required, the Court considered the plaintiff’s argument that the time for service should be extended as the limitation period expired in 2019.

The purpose of the Hague Convention for service in foreign jurisdictions

The purpose of the Hague Convention pertaining to service in foreign jurisdictions is to ensure uniform procedure across contracting states. Service must occur in accordance with the Hague Convention. If the situation were reversed, it is not likely that a foreign state would enforce judgment of claims served in breach of that state’s law. Those documents must also be translated for service to be validated.

There are remedies under the Hague Convention for those who cannot effectively service defendants to their claims, but this was not the case here. Counsel made no attempt to serve in accordance with the Hague Convention and the Rules of Civil Procedure.

The defendant can waive the formalities of service if they choose

Although the purpose of the law for contracting states was clear, the Court determined that the formalities of service are not always necessary. A foreign defendant can waive the requirement of service in compliance with those rules. However, the Court did not find this applied to the present case. There was an error in assuming service had been made but not an acceptance of service once the error was discovered. So while the formalities of service on contracting parties of the Hague Convention need not be followed every time, this case was not an exception.

Concerning the applicable notice period, the Court did not find it unjust that the plaintiff now had to service the defendant in accordance with the Hague Convention. It would have been a more significant prejudice to the defendant to have proceeded without service being effected. As service through the appropriate rules could take up to 18 months to complete, the Court agreed to extend the time for completing service to 24 months so long as the plaintiff commenced the process within six months of the Court’s decision.

Baker & Company Assists With Disputes With Foreign Entities

It is important to consult with legal counsel as soon as possible when a claim arises, especially when it involves entities headquartered in foreign jurisdictions. The skilled litigation lawyers at Baker & Company help clients in international disputes and assist with the enforcement of foreign judgments in Ontario or elsewhere in Canada. We also represent clients in various other matters, including corporate & commercial law, real estate law, employment law, estate law, and hotel law. We rely on more than 30 years of litigation experience to ensure that our clients’ rights are protected. Call us at 416-777-0100 or contact us online for a consultation.

Categories
Commercial Real Estate Property Disputes Real Estate Law

Innocent Purchasers Prevail in Power of Sale

When a mortgagor of a piece of real estate defaults on its payments, its mortgagee may initiate power of sale proceedings to recoup the debt it is owed. But what happens if the mortgagor arranges the sale of the property without the mortgagee being aware? This was the dilemma posed in the recent decision of the Ontario Court of Appeal in 2544176 Ontario Inc. v. 23947562 Ontario Inc.

The Mortgagor and Mortgagee sold the same property in separate transactions

In this case, one company (the Mortgagor) owned property that a mortgage had encumbered to the benefit of another company (the Mortgagee). The Mortgagee had purchased the property for about $5.4 million in October 2017. It financed its purchase with a mortgage of $3.79 million. Three years later, in November 2020, the Mortgagor had defaulted on the mortgage. The Mortgagee demanded payment. Eleven days after the Mortgagee’s demand, the Mortgagor entered into a conditional Agreement of Purchase and Sale to sell the property for $8.7 million without notifying the Mortgagee.

In December 2020, the Mortgagee began private power of sale proceedings. It served a notice of sale on the Mortgagor, who did not act during the 35-day standstill. As the closing date approached for the Agreement of Purchase and Sale entered into by the Mortgagor, it notified the Mortgagee in January 2021.

Mortgagee sold the property to third-party Purchaser with a new mortgage attached

The Mortgagee questioned the legitimacy of the sale and asked for a copy of the Agreement. The Mortgagor quickly gave this to them, but the Mortgagee failed to provide a default statement that the Mortgagor had requested. The day after, the Mortgagee listed the property for sale. However, because the Mortgagee had not provided the Mortgagor with a default statement, the Mortgagee’s enforcement rights were suspended as per section 22(3) of the Mortgages Act.

Days later, the Agreement of Purchase and Sale was finalized at a reduced price of $5.4 million. The sale was to close on March 31, 2021. The Mortgagor, again, did not inform the Mortgagee of the sale. Within a week, the Mortgagee entered into an Agreement of Purchase and Sale with a different Purchaser for $4.49 million. The Mortgagee assured the Purchaser on two occasions that they had complied with the legal requirements for a power of sale. The sale closed on March 2, 2021. The Purchaser granted a mortgage to a third-party lender for $4.3 million, with a second mortgage for $1 million going to the Mortgagee.

Section 22 of the Mortgages Act suspends enforcement rights if certain documents not shared with mortgagor on request

After title to the property was transferred to the Purchaser, the Mortgagor applied to have it set aside based on section 22 of the Mortgages Act. Section 22 reads:

Statement of arrears, expenses, etc.

22(2) The mortgagor may, by a notice in writing, require the mortgagee to furnish the mortgagor with a statement in writing,

(a) of the amount of the principal or interest with respect to which the mortgagor is in default; or

(b) of the nature of the default or the non-observance of the covenant, and of the amount of any expenses necessarily incurred by the mortgagee.

Idem

22(3) The mortgagee shall answer a notice given under subsection (2) within fifteen days after receiving it, and, if without reasonable excuse the mortgagee fails so to do or if the answer is incomplete or incorrect, any rights that the mortgagee may have to enforce the mortgage shall be suspended until the mortgagee has complied with subsection (2).

The judge at the initial hearing set aside the transfer

The Mortgagor had requested the Mortgagee produce the default statement, as outlined in section 22 of the Mortgages Act. Because the Mortgagee’s enforcement rights were suspended when the property was sold to the Purchaser, the application judge focused on whether the Mortgagee had transferred good title. The application judge believed himself to be bound by 1173928 Ontario Inc v. 1463096 Ontario Inc, which held that some sales are invalid when executed during a suspension of enforcement rights under section 22 of the Mortgages Act. He held that the purpose of the Mortgages Act was to:

“protect the mortgagees’ ability to take and enforce security to support lending. But it also imposes limits to protect mortgagors from the ‘well-known history of abuses of mortgage lenders,’ with s. 22 being added specifically to protect a mortgagor’s equity of redemption.”

The application judge determined that a breach of section 22 trumped any claims the Purchaser had under the Land Titles Act. The transfer of the title to the Purchaser was therefore set aside.

The Purchaser was an “innocent purchaser” protected by registration under the Land Titles Act

Upon appeal, the Court of Appeal sided with the Purchaser. Even though the Mortgagee’s enforcement rights were suspended when the transfer of title occurred, the Purchaser was an innocent purchaser with title registered under the Land Titles Act system. This is in line with the principles of the land titles system:

“The philosophy of a land titles system embodies three principles, namely, the mirror principle, where the register is a perfect mirror of the state of title; the curtain principle, which holds that a purchaser need not investigate the history of past dealings with the land, or search behind the title as depicted on the register; and the insurance principle, where the state guarantees the accuracy of the register and compensates any person who suffers loss as the result of an inaccuracy. These principles form the doctrine of indefeasibility of title and [are] the essence of the land titles system[.]”

It was the Purchaser seeking to enforce rights, not the Mortgagee

At no time was the Purchaser given notice that there may have been any defects in the power of sale process. In fact, the Mortgagee had informed the Purchaser of compliance with the power of sale process on two occasions.

The Court of Appeal stated that the application judge had incorrectly interpreted section 22 of the Mortgages Act as an exception to the mirror principle of the land titles system. As far as the Purchaser knew, they had obtained good title to the property.

Moreover, the fact that the Mortgagee’s enforcement rights were suspended does not mean their substantive rights had also been suspended. It merely could not enforce the mortgage until it complied with the Mortgagor’s request for the default statement. In this case, the only party seeking to enforce rights was the Purchaser. For that, the appeal was allowed. The Mortgagor’s application to set aside the transfer was dismissed.

Contact the Baker & Company in Toronto for Experienced Real Estate Legal Services

At Baker & Company, our skilled real estate lawyers provide dynamic legal solutions and robust advice to clients on a variety of property disputes, including commercial real estate and title issues. We also represent clients in residential real estate issues, development projects, and leasing matters. To schedule a confidential consultation, contact us at 416-777-0100 or reach out online.

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Enforcement Of Foreign Judgments

Understanding The Rules Behind Enforcing Foreign Judgments

One would think that, when a case is decided, the decision must carry forward no matter where the parties to that matter may reside. But not a lot of people know that there is a body of laws dedicated to determining whether a foreign judgment is enforced in Canada. In some instances, decisions made in foreign jurisdictions have no application or weight in Canada.

What is private international law?

The rules surrounding the enforcement of foreign judgements in Canada are called private international law. Private international law is a branch of public law that concerns the regulation of relations between private parties across national boundaries. It is distinct from public international law, which instead concerns relations between states and other entities. Because private international law regulates relations between individuals or organizations and not countries themselves, it is sometimes called a “conflict of laws.”

Private international law determines the application of decisions across family law, corporate and commercial law, real estate law, employment law, wills and estates law, and more. The purpose of this law is to ensure consistency in how foreign judgments are dealt with in Canada.

How to determine whether a foreign judgment should be enforced

As is common in any branch of law, a procedure exists to help courts determine whether a foreign judgment should be enforced in Canada. It is as follows:

  1. First, there must be a conflict between foreign judgment and Canadian law. For example, in Cariello v Perella, at issue was whether a retired priest could appoint a power of attorney to friends in Canada when an interim guardian had already been appointed by an Italian court.
  2. Second, the problem must be distinguished as one of the following:
    1. Conflict of Jurisdiction – The conflict concerns whether Canadian courts are competent to make a decision on the matter.
    2. Conflict of Laws – The conflict concerns which law should apply to an international situation.
    3. Conflict of Authority – The conflict concerns the recognition of laws or decisions made by foreign bodies.
  3. What are the factors that are connecting the matter to either Canada or the foreign decision, law, or authority? Connecting factors include each party’s domicile, the residence of the parties, the location of the property in issue, the location an offence or infraction was committed, the nationality of the parties, and what the parties chose themselves in the contract.

Key terminology in private international law

In private international law, two connecting factors can prove to be crucial. Those are the domicile of the parties and the residence of the parties. Although there are similarities between the two concepts, they are different in distinct ways.

Domicile. A domicile is a place where a person permanently lives or where a corporation was incorporated. In Quebec, a corporation’s domicile is wherever the corporation’s head office is located. In the case of a person, their domicile is wherever they intend to be permanently situated. In layman’s terms, a domicile is one’s “place of origin” or “home base.” Everyone starts with their place of birth as their domicile. This is retained until a person chooses to make another place their domicile by moving to another country with plans to remain there indefinitely. Even if a person leaves their domicile country or province for long periods of time, it cannot be lost.

Residence. Contrasted to the domicile, the residence is the place where a person habitually resides. There is no need to prove intention to reside in one place indefinitely. Indicia of residence include provincial health insurance, where someone declares taxes, and in which province a person works. If a person resides across multiple properties, such as a cottage, the residence is where they reside stably and constantly compared to the others.

Exceptions to the Application of Private International Law

Although there are many areas of law to which private international law applies, other areas of law involve different procedures. A reason for a lot of this conflict is the need to respect the decisions of other nations, which are best situated to determine what is in their own best interests when they are parties to the matter. For certain areas of law where the state is a party, it is not possible to enforce those decisions within Canada. Consider the following:

Criminal Law

These laws involve a sanction, for a violation of a duty to the state. Generally, private international law will not apply except in two circumstances: extradition treaties and specific provisions of the Criminal Code of Canada.

Fiscal Law

A fiscal law is any law that imposes a non-contractual pecuniary obligation in favour of the state. This includes federal or provincial income tax, provincial or federal inheritance tax, provincial retail sales taxes, municipal taxes, and indirect taxes (such as customs duties, stamp duties, etc.).

Public Law

Public law tends to be concerned with the nature of a transaction between the state and an individual.

Are there instances where Canada might not enforce a foreign judgment?

It is sometimes the case that there are other reasons, outside the aforementioned exceptions, for which a Canadian court may not want to enforce a foreign judgment. One of those reasons is public policy.

Public policy plays an important role in private international law. On the basis of public policy, a Canadian court is able to set aside a foreign decision that is manifestly incompatible with the fundamental concepts underpinning the Canadian legal system.

Contact the Litigation Lawyers at Baker & Company in Toronto For Assistance with Enforcing a Foreign Judgment in Ontario 

If you are involved in a cross-border or international dispute and have received a judgment in a foreign jurisdiction that you wish to have enforced in Ontario or elsewhere in Canada, contact the highly skilled litigation lawyers at Baker & Company. We rely on more than 30 years of litigation experience to ensure that our clients’ rights are protected. Call us at 416-777-0100 or contact us online for a consultation.

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Expropriation Law

What To Do If Your Land is Expropriated

When it comes to expropriation law, you have rights. You may not know it, but there are steps you can take and opportunities you can avail yourself of if your land or property has been expropriated by the government. While this process may seem intimidating and complex, knowing the basics about this area of law will help ensure that you understand your rights and how to protect them should an expropriation occur in your life.

What is expropriation?

Expropriation is when the government takes land for public use. The process for making this happen is a legal one and involves compensation for any damages incurred as a result of the expropriation process.

Typically, a notice of intent will be given by an authority or agency before proceeding with an expropriation project. If no objections are raised within 30 days, then they can proceed with their plans without further consultation with the affected parties.

In most cases where property has been expropriated, there are four main factors that go into determining your compensation: 

  1. Fair market value of the expropriated property;
  2. Damages that cover the consequences of the land being expropriated (e.g. improvements to property not part of the fair market value);
  3. Damages from the consequences of expropriation that are not directly tied to the property (e.g., business losses); and
  4. Special damages to cover the property owner’s difficulties in relocating.

How do I know if my property has been expropriated in Ontario?

The notice of expropriation is the first step in the process. You can receive a notice of expropriation if your property is being taken or used by the government, whether permanently or temporarily. The government may issue a notice if they need to build a highway, railway or hydro line through your land, or use some of it for construction purposes.

A notice will tell you how much money will be paid for the land being taken from you. It also describes how long before construction on your property begins and when you should expect to start receiving payments (if applicable).

What should I do if I want to oppose land expropriation?

If you want to oppose expropriation, a hearing may be held on request to determine if the taking of your land is fair, sound and reasonably necessary. This hearing does not deal with compensation and is limited to whether it is necessary for the expropriating authority to acquire the land. An inquiry officer prepares a report after the hearing on the merits of expropriation, but they do not make the final decision.

What happens after my land is expropriated in Ontario?

Once your land is expropriated, you may be able to get more than the amount of compensation offered. If you have a good case and can prove that your property is worth more than the offer, you may be able to go back to court for a second compensation hearing. The municipality will hire an appraiser who will determine how much your land is worth if it were developed as residential or commercial property. They also consider how much it would cost them to buy similar properties in your area with similar development potential (the “market value”).

The courts sometimes award additional money on top of the market value (monetary compensation), but only if they find that there are special circumstances affecting their decision.

If I don’t agree with how much I’m being offered, what can I do?

One of the first things you should do is contact an experienced lawyer and find out how much they think your land is worth. If they think it’s worth more than what they’re offering, they’ll be able to help you negotiate with the government.

If you don’t agree with the assessment of compensation, you can first bring a claim before the Local Planning Appeal Tribunal (formerly the Ontario Municipal Board). If the Local Planning Appeal Tribunal makes a decision in favour of expropriation, you can appeal that decision to the Ontario Land Tribunal. Decisions of the Ontario Land Tribunal may be further appealed. The Ontario Land Tribunal is not bound by any of the decisions made at the Ontario Municipal Board.

What kind of evidence should I gather to support my case in front of the tribunal?

You should gather as much evidence as possible to support your case. This includes:

  • Documentation of the value of your property;
  • Documentation of your financial situation and how it is affected by the expropriation. You can use bank statements, cancelled cheques and other documents that show how much money you were spending at the time or what kind of expenses were incurred during or after the expropriation process;
  • Documentation regarding your family situation—for example, if there was a death in the family while it was taking place or if this event resulted in some kind of trauma for children who lived through it (e.g., having their home taken away); and
  • Photographs and drawings that illustrate how you use your home (e.g., showing off a beautiful view from one side).

There are steps and opportunities you can take if your land is expropriated

Hire an experienced lawyer who specializes in this area of law who can help with appealing to either the Local Planning Appeal Tribunal or the Ontario Land Tribunal. You may want to seek legal advice before going through this process as well as when negotiating or preparing documents such as affidavits supporting your case if things go wrong later on down the road.

Contact the Toronto Expropriation Lawyers at Baker & Company in Toronto for Guidance on Expropriation

Contact the highly experienced Toronto expropriation lawyers at Baker & Company. For more than 30 years we have advised property and landowners and ensured that they were being adequately compensated following an expropriation. Call us at 416-777-0100 or contact us online for a free consultatio

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Employment Law

Why this Clause in Your Employment Agreement is Unenforceable

You’ve likely heard or signed an employment contract containing a non-competition clause. Some employment contracts include these provisions for the purpose of protecting their business. Employers may find it beneficial to use these clauses when a former employee has put a lot of time into the business, and it would be in their best interests to prevent them from taking clients with them, taking other employees with them, or even opening up shop next door.

Non-compete clauses, thus, come in a variety of forms. Although many of us are familiar with these provisions in employment agreements, they have recently been prohibited in Ontario by the Working for Workers Act, 2021, which came into force in October 2021.

Non-Competition Clauses are No Longer Permitted in Ontario

The Working for Workers Act, 2021 amended Ontario’s Employment Standards Act, 2000 to prohibit employers from providing potential employees with an employment contract containing a non-compete agreement. Non-compete agreements are defined as:

“an agreement, or any part of an agreement, between an employer and an employee that prohibits the employee from engaging in any business, work, occupation, profession, project or other activity that is in competition with the employer’s business after the employment relationship between the employee and the employer ends.”

The amendments came into force as of October 25, 2021. Courts have since ruled that the new amendments prohibiting non-compete clauses do not apply to employment contracts entered into before this date.

What If I Signed My Employment Agreement Before the Law Changed?

In a recent case before the Ontario Court of Appeal, M&P Drug Mart Inc v Norton, the owner of a pharmacy brought an application alleging that their former pharmacist, Norton, had breached the non-competition covenant in the employment agreement. Norton had worked for M&P’s pharmacy, Hometown IDA, since 1980. M&P acquired Hometown IDA in 2014. The new owners wanted to keep Norton on as pharmacy manager, so they negotiated with him to sign a new employment contract.

The contract Norton signed acknowledged the non-competition clause as necessary for the protection of M&P’s business interests. Irrespective of the common law at the time, the non-competition covenant read:

“The Employee agrees that during the Employee’s employment with the Company and during the one year period following the termination of the Employee’s employment with the Company, for any reason whatsoever, the Employee shall not carry on, or be engaged in, concerned with, or interested in, directly or indirectly, any undertaking involving any business the same as, similar to or competitive with the business within a fifteen (15) kilometre radius of the business located at 10 Main Street East, Huntsville, Ontario P1H 2C9.”

In September 2020, Norton resigned from Hometown IDA. He began work as a pharmacist at Campus Trail Pharmacy, which was located less than three kilometres away from his former employer. When M&P reminded Norton of the clause in the contract he signed, he claimed it was unenforceable. The application judge dismissed M&P’s application because the employment clause in question was too ambiguous and overly broad. M&P appealed that decision.

Non-Competition Clauses Must Be Reasonable If They Are Going to be Enforced

Before the Working for Workers Act, 2021 came into force, non-competition clauses were generally unenforceable unless they were reasonable and in the best interest of the public. When looking at the reasonableness of these clauses, courts had to consider two things:

  1. whether the employer had a proprietary interest that is entitled to protection; and
  2. whether the clause was overly broad with respect to prohibited activities, length of time, or geographical limits.

Where the second consideration was not clear, the clause was considered ambiguous and unenforceable.

Courts Won’t Ignore Unreasonable Possibilities Stemming from Terms of Employment Contract

The Court of Appeal agreed with the decision of the application judge. When an employer wishes to enforce a non-competition clause, also called a “restrictive covenant,” in a contract, it is up to the employer to prove that it is reasonable. The application judge found the clause in question to be ambiguous because M&P failed to demonstrate that the restrictions on Norton after his departure from Hometown IDA were reasonable.

The clause was found to be overly broad because, when the language of the agreement is interpreted closely it appeared to go beyond what was reasonable. For instance, the contract did not expressly prohibit Norton from working as a pharmacist at a pharmacy or in a store that has a pharmacy. Instead, it prohibited him from “carry[ing] on, or be[ing] engaged in, concerned with, or interested in, directly or indirectly, any undertaking involving any business the same as, similar to or competitive with the [Hometown IDA].” The wording of the contract suggests that Norton would be unable to work at a story containing a pharmacy in a non-pharmacist role. It also reads to preclude Norton from being a passive investor in businesses like M&P’s.

M&P was critical of the court’s interpretation of the clause but could not demonstrate that the clause could not be interpreted in this way. In response, the court noted that background facts cannot be used to change the meaning of the words used in the contract or to make a new agreement. In other words: “The language of the covenant is the primary indicator of contractual meaning.”

The Employment Lawyers at Baker & Company Can Help You Draft or Review Your Employment Contracts

Baker & Company regularly works with employers in drafting and reviewing employee workplace policies and manuals. It is vital that these documents be kept up to date to ensure that they comply with all relevant legislation and that an employer’s obligations have been satisfied while also mitigating an employer’s liability and risk. To speak with a lawyer about a workplace policy or an employment law issue contact us online or by phone at 416-777-0100.

Categories
Corporate & Commercial Law

Ontario Launches New Website to Help Entrepreneurs

Ontario’s Ministry of Economic Development, Job Creation and Trade recently announced the introduction of a new Business, Workplace, and Economy website to help entrepreneurs start new businesses in the province. The site provides access to information and services to support business growth and job creation.

Entrepreneur Website Part of Fewer Fees, Better Services Act

The Business, Workplace, and Economy website connects entrepreneurs to resources and free personalized help in applying for funding, tax credits, and registering their business. The website was created under the initiatives developed by the Fewer Fees, Better Services Act, which received royal assent on March 3, 2022. The preamble of the Fewer Fees, Better Services Act states:

“Ontario is committed to reducing administrative burdens for those seeking permits, licences, information or any other type of government approval and improving the overall experience for the user by making it easier to access required information and services.

Ontario is dedicated to increasing predictability and keeping government accountable.”

The website is part of the provincial government’s efforts to cut red tape and reduce burdensome administrative and regulatory requirements. Minister of Economic Development, Job Creation and Trade Vic Fedeli stated that the site demonstrates that the province has “listened to business owners” and will raise the bar for customer service.

As per Associate Minister of Small Business and Red Tape Reduction Nina Tangri:

“With the launch of the new website, we’re taking the first step toward a holistic, start-to-finish approach to allow entrepreneurs to more effectively interact with government in meeting the requirements to get their business up and running.”

Helping Entrepreneurs Start a Business 

The Business, Workplace, and Economy website connects entrepreneurs to information and guides about:

Business Closures

In addition to helping Ontario business owners start an enterprise, the website also provides information about issues relating to closing a business, including succession planning, selling a business, account closures, and bankruptcy.

Small Business Enterprise Centres

Small Business Enterprise Centres are located throughout Ontario and offer advisory services and workshops on foundational entrepreneurial skills. These centres provide support, mentorship, training, and grant opportunities to new business owners. Entrepreneurs can search by postal code to determine the location of the nearest Small Business Enterprise Centre.

Information About Funding Opportunities 

Depending on the type of business and services offered, Ontario business owners may be eligible for various programs, grant opportunities, and funding relating to:

The website also offers financing advice, mentoring, and support for aspiring business owners between the ages of 18 and 39.

Funding for businesses looking to expand or bring business to their community is, in some cases, specific to the region in which the company seeks to operate: Eastern Ontario, Northern Ontario, Southwestern Ontario, or Rural Ontario.

Employment Laws & Workplace Insurance

Ontario entrepreneurs can use the new website to access information about their rights and obligations as an employer under the Employment Standards Act and the Occupational Health and Safety Act.

To ensure compliance with accessibility laws, the site provides free training about employee accessibility requirements and standards, including mandatory accessibility reporting for businesses or non-profit organizations with 20 or more employees.

Businesses can also determine whether they need workplace insurance for wage-loss benefits, medical coverage, and support for employees suffering work-related injuries or illnesses. Additionally, entrepreneurs can research business insurance to protect against loss or damage to physical property or the loss of operation and income.

Indigenous Business Development Toolkit

The Indigenous Business Development Toolkit aims to provide support and resources to Indigenous persons in Ontario looking to start or expand a business. The toolkit includes a list of Indigenous financial institutions that can assist with business planning and instructions for bidding on government contracts that benefit Indigenous people and communities.

In addition to the toolkit, Indigenous entrepreneurs are encouraged to read the First Nations Community Economic Development Guide for practical advice, case studies, and economic development resources for boosting their community’s local economy.

Export and Trade 

In addition to provincially-focused business matters, the Business, Workplace, and Economy website provides information on growing a business nationally and internationally. It offers information about international trade programs and events, including exhibitions, seminars, and workshops, across multiple sectors and market regions. 

Ontario-based businesses can use the site to find trade missions, market research, trade insurance options, and funding opportunities.

Contact Baker & Company in Toronto for Trusted Business Law Advice

The knowledgeable corporate and commercial lawyers at Baker & Company provide reliable advice and innovative legal solutions to entrepreneurs looking to start or grow a business. Whether you are a new or seasoned business owner, we help navigate the business law landscape and ensure your company is structured to maximize profitability and avoid risk. To speak with a member of our business law team, please call 416-777-0100 or contact us online. 

Categories
Employment Law

What Remote Workers Should Know About Employee Monitoring

The onset of the pandemic caused the work of many to shift to the online space. Although many workplaces are preparing to return to the office, others will remain either fully remote or will be transitioning into a hybrid model.

A concern of many employers when all or a portion of their workforce is clocking in from home is just how much work their employees are doing. To ensure employees are staying on task, some workplaces may use software or other means to monitor employee activity. Recently, Ontario became the first province to pass a law that requires provincially regulated employers to establish an employee policy about disconnecting from work. Embedded in this legislation is a new requirement for employers who monitor their employees who work remotely.

Has Remote Work had a Positive or Negative Effect on Productivity?

Nowadays, it is estimated that up to a quarter of hours spent at work could be performed remotely after the pandemic ends. But with remote work happening in a person’s home, often on personal laptops or computers, a debate has been brewing concerning how work life and private life intersect.

Studies are overall inconclusive on the level of productivity for employees working from home compared to those in the office. Some studies have shown that the longer employees work remotely, their productivity decreases. It is notable, however, that not all drops in productivity are tied to employees being irresponsible when unsupervised. Some employees must take on parenting or caregiver responsibilities when at home. Technology can pose another challenge to productivity that is not directly tied to an employee’s work ethic.

Outside of the office setting, employers have been more interested in opportunities to monitor their employees’ productivity. Employers may consider using tools to monitor keystrokes, geolocation, and eye movements and the like to ensure employees are working on their tasks. Although such technologies are becoming more prevalent in the workforce, bringing it to workers at home has overarching implications when much of work from home is done through the use of personal devices and networks.

Ontario Will Require Its Employers to Create Electronic Monitoring Policies

We previously wrote about the Working for Workers Act, 2022, which was enacted on April 11, 2022. The legislation adds a requirement for provincially regulated employers to the Ontario Employment Standards Act, 2000. Employers must create and provide a copy of a policy on disconnecting from the workplace for all employees. In the Employment Standards Act, “disconnecting from work” means “not engaging in work-related communications, including emails, telephone calls, video calls or sending or reviewing other messages, to be free from the performance of work.”

Additionally, this legislation will also require employers with 25 or more employees to “create and publish an electronic monitoring policy that essentially describes how the electronic monitoring will take place.” Employers need to provide this policy to new, existing, and temporary employees.

Ontario Employers Are Not Being Granted New Rights to Monitor

This move makes Ontario the first province to pass a law of this variety. In addition to establishing transparency measures on employee monitoring, the Bill also establishes a minimum wage for gig workers, like couriers or rideshare workers.

This does not change the law as it relates to what employers can do. Generally, employers have the right to monitor company devices at any time and in any way the employer so chooses. Employers who do this should strive to be transparent and inform their employees. Similarly, employers can monitor social media platforms to ensure that content aligns with company values. Regardless of whether employers choose to exercise their right to monitor, they must also disclose that monitoring is occurring in addition to the purpose and monitoring of the collection of information.

The Federal Government is Considering Similar Legislation

The federal government is planning to introduce similar requirements as Ontario for federally regulated employers. In February, the federal Minister of Labour received a report from the Right to Disconnect Advisory Committee. The report included several points, spanning from establishing a positive work-life balance to the need to protect workers’ privacy and security.

An area of disagreement within the report concerned the creation of a statutory right to disconnect. While union and NGO representatives recommended a legislative requirement to establish a right to disconnect, employer representatives were in opposition. Instead, they recommended that the federal government encourage parties to develop policies to ensure proper work-life balance for employees.

Contact the Employment Lawyers at Baker & Company in Toronto for Assistance with Workplace Policies

The knowledgeable team of employment and corporate lawyers at Baker & Company will continue to monitor when the Working for Workers Act, 2022 comes into force so you can stay informed of your rights and entitlements. We can assist your company in proactively responding to today’s business environment, whether you are a small or large size organization and tailor responsive and strategic legal solutions to meet your company’s individual needs. To speak with a lawyer about employment policies or any other employment law issue, contact us online or by phone at 416-777-0100. 

Categories
Employment Law

Changes to Ontario Employment Law under the Working for Workers Act, 2022

Bill 88, the Working for Workers Act, 2022, received Royal Assent on April 11, 2022. This law includes several amendments to Ontario’s Employment Standards Act, including the creation of employee electronic monitoring policies, enhanced rights for gig workers, and occupational health and safety protections.

The new employer obligations created by Bill 88 are a continuation of the changes to Ontario’s employment landscape implemented by the passing of the Working for Workers Act, 2021 in late 2021.

Mandatory Electronic Monitoring Policies

Bill 88’s amendments to the Employment Standards Act include the requirement for employers with 25 or more employees to create an electronic monitoring policy. We previously discussed these policies in our blog.

Employers who have or hit the 25 employee threshold by January 1 of each year must have this policy in place by March 1 of the same year. The electronic monitoring policy must address the following:

  • whether the employer electronically monitors employees. If it does, the policy must then include:
      • a description of how and in what circumstances the employer may monitor employees; and
      • the purposes for which information obtained through electronic monitoring may be used by the employer;
  • the date the policy was prepared and the date that any changes are made to the policy; and
  • any other information that may be prescribed by the Employment Standards Act and its regulations.

Employers that had 25 or more employees as of January 25, 2022, have until October 11, 2022, to comply with this new requirement.

Digital Platform Workers’ Rights Act Enacted

The passage of Bill 88 has created the new Digital Platform Workers’ Rights Act to establish rights for workers who perform digital platform work. This Act is not yet in effect. Instead, it will come into force on a day to be named by the government.

Under the Digital Platform Workers’ Rights Act, “digital platform” work is defined as the provision of paid “ride share, delivery, courier, or other prescribed services, by workers who are offered work assignments by an operator through the use of a digital platform”.

Once in effect, this new legislation provides digital platform workers with the following rights:

  • The right to information;
  • The right to a recurring pay period and pay day;
  • The right to minimum wage;
  • The right to amounts earned by the worker and to tips and other gratuities;
  • The right to notice of removal from an operator’s digital platform;
  • The right to resolve digital platform work-related disputes in Ontario; and
  • The right to be free from reprisal.

New Consultant Exemptions Under the Employment Standards Act

Effective January 1, 2023, individuals who meet the qualifications of specific business and information technology (IT) consultants are now exempt from the Employment Standards Act.

Business Consultants

Under the newly-amended Employment Standards Act, a “business consultant” is an individual who provides advice or services to a business or organization in respect of its performance, including:

  • operations
  • profitability
  • management
  • structure
  • processes
  • finances
  • accounting
  • procurements
  • human resources
  • environmental impacts
  • marketing
  • risk management
  • compliance
  • strategy

Information Technology Consultants

For the purposes of exclusion from the Employment Standards Act (as of January 1, 2023), an “information technology consultant” means an individual who provides advice or services to a business or organization related to its IT systems, including:

  • plans
  • design
  • analysis
  • documentation
  • configuration
  • development
  • testing
  • installation

Changes to Reservist Leave

The Working for Workers Act, 2022, added new changes to reservist leave under the Employment Standards Act. An employee participating in Canadian Armed Forces military skills training is now entitled to reservist leave. Employees are now entitled to reservist leave after being employed with their employer for three consecutive months.

Amendments to the Occupational Health and Safety Act (OHSA)

In a previous blog, we summarized changes to the Occupational Health and Safety Act (OSHA) concerning the availability of naloxone kits. The Working for Workers Act, 2022 amends the OSHA by requiring employers to provide naloxone kits and comply with related requirements if the employer becomes aware, or ought reasonably to be aware, that there may be a risk of a worker having an opioid overdose at a workplace where that worker performs work for the employer. This change will come into force on a day to be named by the government.

Additional changes include an extended limitation period for prosecuting offences under the OSHA, from one to two years. The maximum fines faced by directors and officers have been raised from $100,000 to $1.5 million and $500,000 for other individuals. A list of aggravating factors will be used to determine the appropriate penalty in each case. Many of these changes come into force on July 1, 2022, although some new provisions regarding the service of OSHA orders and decisions are already in effect as of April 11.

Amendments to the Fair Access to Regulated Professions and Compulsory Trades Act

Bill 88, the Working for Workers Act, 2022, also sets out new changes to the Fair Access to Regulated Professions and Compulsory Trades Act, 2006. These amendments establish timelines within which regulated professions must respond to domestic labour mobility applications unless an exemption is granted to these timelines. These timelines came into effect on April 11, 2022.

Contact the Employment Lawyers at Baker & Company in Toronto for Assistance with Employment Law Issues

The knowledgeable employment lawyers at Baker & Company can help your company ensure it has proper measures to comply with the changes created by the Working for Workers Act, 2022. Our team has extensive experience drafting employment policies that mitigate legal and financial risks for a wide variety of employers. To speak with a lawyer about Bill 88 or any other employment law matter, please call 416-777-0100 or contact us online.

Categories
Business Succession Planning Corporate & Commercial Law

Budget 2022 Proposes Amendments to the Competition Act and Other Changes to Assist Businesses

Recently, Minister of Finance Chrystia Freeland presented the federal government’s 2022 Budget Implementation Act which included reforms aimed at “making Canada’s economy more competitive.”

Making Canada’s Economy More Competitive 

The Competition Act (the “Act”) is a federal law governing competition in Canada aimed at maintaining competition by regulating anti-competitive practices. It is enforced and administered by the Competition Bureau, and cases are adjudicated by the Competition Tribunal. The Act contains both criminal and civil enforcement provisions, including imprisonment and/or fines for failing to comply with the Act.

The purpose of the Act is:

…to maintain and encourage competition in Canada in order to promote the efficiency and adaptability of the Canadian economy, in order to expand opportunities for Canadian participation in world markets while at the same time recognizing the role of foreign competition in Canada, in order to ensure that small and medium-sized enterprises have an equitable opportunity to participate in the Canadian economy and in order to provide consumers with competitive prices and product choices.

Budget 2022 specifically announces the government’s intention to introduce legislative amendments to the  Act as a preliminary phase in modernizing the competition regime. This will include fixing loopholes; tackling practices harmful to workers and consumers; modernizing access to justice and penalties, and adapting the law to today’s digital reality.

As Budget 2022 states:

“A competitive economy is a fair, growing, and innovative economy. In this regard, the government will consult broadly on the role and functioning of the Competition Act and its enforcement regime. However, there are also shortcomings in the Act that can easily be addressed and move Canada in line with international best practices.”

These proposed changes come on the heels of a call from the Commissioner of Competition for “a comprehensive review of the Competition Act.” The Commissioner further noted that “[w]e need to have a debate in Canada about what our competition law should look like in the 21st century.” In September 2021, Edward M. Iacobucci, Toronto Stock Exchange Chair in Capital Markets Regulation, released a consultation paper which examined the application of the Act in the new digital age. In response, the Honourable François-Philippe Champagne, Minister of Innovation, Science and Industry, issued a statement on affordability and competition in Canada’s telecommunications sector, stating that the government would be reviewing the Act and considering amendments in order to modernize it:

“In recognition of the critical role of the Competition Act in promoting dynamic and fair markets, the Minister will also carefully evaluate potential ways to improve its operation.”

The Act has not been frequently amended with the last comprehensive revisions having been done in 1986 and the most significant amendments dating back to 2009.  While new amendments are expected, it is still not certain which competition laws will be changed and how. The competition law community continues to speculate on just how the Act will be reformed. 

Driving Investment and Growth for Small Businesses 

Budget 2022 also intends to address the barriers that are preventing small businesses from growing. This includes reducing payment card fees for merchants. It will also help Canadian businesses make the most of global trade opportunities, while better protecting Canadian businesses against unfair competition.

Creating a Canadian Innovation and Investment Agency 

Budget 2022 announces the government’s intention to create an operationally independent federal innovation and investment agency, and proposes $1 billion over five years, starting in 2022-23, to support its initial operations. Final details on the agency’s operating budget are to be determined following further consultation later this year.

The new innovation and investment agency will proactively work with new and established Canadian industries and businesses to help them make the investments they need to innovate, grow, create jobs, and be competitive in the changing global economy. The government will consult further with both Canadian and global experts in finalizing the design and mandate of the new agency, with details to be announced in the 2022 fall economic and fiscal update.

Launching the Canada Growth Fund 

Budget 2022 proposes to establish the Canada Growth Fund to attract substantial private sector investment to help meet important national economic policy goals:

  • To reduce emissions and contribute to achieving Canada’s climate goals
  • To diversify our economy and bolster our exports by investing in the growth of low-carbon industries and new technologies across new and traditional sectors of Canada’s industrial base; and
  • To support the restructuring of critical supply chains in areas important to Canada’s future prosperity—including our natural resources sector.

The Canada Growth Fund will be a new public investment vehicle that will operate at arms-length from the federal government. It will invest using a broad suite of financial instruments including all forms of debt, equity, guarantees, and specialized contracts. The fund will be initially capitalized at $15 billion over the next five years. It will invest on a concessionary basis, with the goal that for every dollar invested by the fund, it will aim to attract at least three dollars of private capital.

In creating the Canada Growth Fund, the government intends to seek expert advice from within Canada and abroad. Following these consultations, details about the launch of the fund will be included in the 2022 fall economic and fiscal update. Funding for the Canada Growth Fund will be sourced from the existing fiscal framework.

Contact the Corpoate Lawyers at Baker & Company in Toronto for Assistance with Corporate Law Issues   

The knowledgeable team of corporate lawyers at Baker & Company will continue to monitor for changes to the Act and how competition law reform may impact your corporation and business practices. We can assist your company in proactively responding to today’s business environment, whether you are a small or large size organization and tailor responsive and strategic legal solutions to meet your company’s individual needs. To speak with a lawyer about employment policies or any other employment law issue, contact us online or by phone at 416-777-0100.