In a previous post, we discussed a decision which held that, PolyOne Canada Inc. (PolyOne), did not have just cause for terminating a senior employee who committed a safety violation and failed to report it, despite finding that the incident was very serious and could have resulted in harm to the employee. The Court of Appeal upheld this decision, although it disagreed, in part, with the basis for the lower court’s decision.

Both the trial judge and the Court of Appeal agreed that, although the policy violation was very serious and a supervisor was subject to a higher standard than a line worker, Mr. Plester’s conduct did not amount to just cause for termination. This conclusion was based on the employee’s long-standing clean work record and the fact that the safety violation did not put other employees at risk. The Courts both rejected PolyOne’s argument that Mr. Plester’s behaviour amounted to a violation of the employer’s trust which was sufficiently serious to render a continued employment relationship impossible.

Where the trial judge and the Court of Appeal differed was on the significance of PolyOne’s response to a previous incident where an employee breached the same safety rule as the Mr. Plester but was not terminated by the employer (the Glassford Incident). Mr. Plester attempted to use the Glassford Incident to argue that the response in his case was disproportionate. The Court of Appeal stated that the Glassford Incident “cannot be used as a comparator and the trial judge erred in treating it as such”. The basis for this conclusion appeared to be that the employer only became aware of the Glassford Incident as a result of Mr. Plester’s action against PolyOne, although the Court of Appeal did not elaborate on this point.

Our Views

This case is a good reminder for employers to ask themselves two questions before terminating an employee for just cause. First, in view of the proportionality test, employers should ask what the employee’s track record looks like. The longer an employee has served without incident, the more egregious a single incident must be in order to justify a for-cause termination.

Second, employers should consider how they have dealt with other incidents of a similar nature in the past. Although in Plester v. PolyOne, the Court of Appeal decided that the Glassford Incident could not be used to support the employee’s argument that the termination was not justified, the trial judge and other cases relied on by the trial judge came to different conclusions, emphasizing the importance of past enforcement in cases such as these. Accordingly, it is important for employers not only to have clear written policies, those policies must be enforced on a consistent basis. Absent consistent enforcement, it will be difficult to rely on such policies in order to terminate an employee’s employment for just cause.

As of April 1, 2013, Bill C-38 (also known as the Jobs, Growth and Long-term Prosperity Act) modified the Employment Insurance (EI) appeals process.  As opposed to the former appeals system, whereby appeals of EI Commission decisions were heard by boards of referees and then subsequently by umpires, appeals will now be heard by the Social Security Tribunal (SST), a new independent administrative tribunal at arm’s length from Human Resources and Skills Development Canada (HRSDC). 

• A General Division (first level of appeal); and  
• An Appeal Division (second level of appeal) to decide appeals of decisions made by the General Division.  To qualify for an Appeal Division hearing, a claimant will have to obtain leave (permission) unless their appeal was dismissed summarily by the General Division. 

EI appeals filed on April 1, 2013 or thereafter will proceed to the SST, whereas appeals filed prior to this date will continue to proceed under the former system for a one year transitional period.  Following this transition period, the SST will be the only body responsible for hearing first and second level EI appeals. 

Notably, the SST will also be responsible for appeals relating to Canada Pension Plan (CPP) and Old Age Security (OAS) entitlements.  Murielle Brazeau, Chairperson of the SST, states that the SST, “simplifies and streamlines the appeal processes by offering a single point of contact for submitting an appeal.”  However, and with respect to EI appeals specifically, as the SST will eventually phase out the approximately 1000 part-time referees and 32 umpires under the former appeal system, it remains to be seen whether this simplification will come at the expense of expediency.

To learn more about the SST, click here.

La Cour d’appel a récemment rendu un arrêt aux conséquences majeures,en renversant le courant jurisprudentiel majoritaire qui prévalait jusqu’alors au Québec en matière de préavis de démission. Dans un arrêt rendu à deux contre un, la Cour d’appel commence par rappeler qu’un employeur peut, à sa discrétion, renoncer au préavis de démission qu’un employé a l’obligation de lui donner en vertu de l’article 2091 du Code civil du Québec ( C.c.Q. ). Se penchant ensuite sur les conséquences d’une telle renonciation, la juge Marie-France Bich tranche qu’il ne s’agit pas là d’une fin d’emploi provoquée par l’employeur au sens de l’article 82 de la Loi sur les normes du travail ( L.n.t. ). L’employeur n’est donc pas alors tenu d’indemniser l’employé.  

L’employé, Daniel Guay, travaille chez la défenderesse Asphalte Desjardins Inc., une compagnie de pavage, depuis 1994. Le 15 février 2008, M. Guay remet une lettre de démission annonçant qu’il quittera son emploi le 7 mars 2008. À l’occasion de la remise de la lettre à son employeur, M. Guay indique qu’il quitte pour se joindre à un compétiteur lui offrant de meilleures conditions salariales. M. Guay explique aussi que le préavis de trois (3) semaines qu’il donne lui servira à finaliser ses dossiers et à préparer l’historique des travaux en cours pour aider son successeur. Le 18 février 2008, l’employeur tente sans succès de convaincre M. Guay de rester. Le 19 février 2008, l’employeur décide de mettre immédiatement fin au contrat de travail de l’employé sans attendre la fin du préavis.

La Commission des normes du travail réclame trois semaines de préavis au nom de l’employé en vertu de l’article 82 L.n.t. Le juge de première instance a accueilli l’action. L’employeur se pourvoit devant la Cour d’appel.

Décision

Se livrant à une analyse fort détaillée, la juge Bich clarifie la notion des obligations créées par l’article 2091 C.c.Q. Elle explique que le délai de congé bénéficie à celui qui le reçoit. Il a pour but de pallier aux inconvénients découlant de la résiliation unilatérale du contrat de travail subis par la partie qui le reçoit. Bien que le préavis de démission comporte un avantage en pratique pour celui qui le donne, et qui tente ainsi de s’assurer ainsi une période de transition, cet avantage pratique ne constitue pas un droit. L’employeur, dans les circonstances, est donc libre d’y renoncer.

L’employeur qui a renoncé au bénéfice du préavis n’a pas non plus à indemniser le salarié démissionnaire, l’article 82 L.n.t. ne trouvant pas application. En effet, l’employeur qui renonce au préavis ne met pas pour autant fin à l’emploi de l’employé démissionnaire au sens de cet article. La démission est une fin d’emploi provoquée par l’employé; le fait que le délai de congé vienne reporter ses effets dans le temps ne vient pas modifier cette situation juridique.

La juge Bich indique finalement qu’il n’y a pas lieu de distinguer entre l’employé annonçant une date de départ ultérieure et celui qui offre simplement de rester quelque temps afin de faciliter la transition.

Il importe toutefois de souligner que, s’exprimant dans un obiter, la juge Bich reconnaît tout d’abord que la solution qu’elle propose repose sur une approche contractuelle qui peut sembler s’inscrire en faux avec les principes généraux de la législation en matière de droit de l’emploi, qui, reconnaissant les inégalités inhérentes aux relations entre employeurs et employés, tendent à protéger ces derniers. En conséquence, la juge Bich invite le législateur à intervenir pour assurer « la protection de l’intérêt pratique qui échoit au salarié démissionnaire du fait du préavis. »

Mais il y a plus. La juge Bich indique ensuite que, dans certaines circonstances, on peut imaginer que l’exercice du droit à la renonciation pourrait s’avérer abusif au sens du C.c.Q. À titre d’exemple, elle mentionne le cas d’un employé qui annoncerait sa retraite un an avant la date effective ou celui d’un employé qui annoncerait son départ à une date ultérieure pour s’occuper d’une personne malade.

Ce commentaire n’étant pas balisé, il y a fort à parier qu’il sera utilisé par les tribunaux inférieurs cherchant à éviter l’application stricte de cet arrêt. L’employeur a donc tout intérêt à agir de façon consciencieuse et raisonnable s’il souhaite se prévaloir de son droit à la renonciation sans avoir à indemniser l’employé.

The Court of Appeal recently rendered a decision that has major implications in that it reverses the dominant Case law position in Quebec with respect to notices of resignation. In a two to one decision, the Court of Appeal states that an employer may waive the notice of resignation that an employee must provide pursuant to Article 2091 of the Civil Code of Quebec (C.C.Q.). In considering the consequences attached to such a waiver, Justice Marie-France Bich decides that it does not correspond to a termination of the employment relationship by the employer as contemplated by Section 82 of An Act Respecting Labour Standards (the Act). The employer therefore does not have to indemnify the employee. 

In 1994, the employee, Daniel Guay, started working with the defendant Asphalte Desjardins Inc., a pavement company. On February 15, 2008, Mr. Guay submitted a resignation letter to his employer announcing that he would leave his employment on March 7, 2008. Mr. Guay also indicated that he was joining a direct competitor that was offering better pay. Mr. Guay provide a three (3) weeks’ notice so as to allow him to finalize certain files and to prepare an overview of ongoing projects in order to help his successor. On February 18, 2008, the employer unsuccessfully attempted to convince Mr. Guay to change his mind and stay with the company. On February 19, 2008, the employer decided to immediately end the employment of Mr. Guay.

The Labour Standard Commission sought the payment of three weeks’ of pay on behalf of the employee pursuant to Section 82 of the Act. The first judge granted the action. The employer appealed the decision before the Court of Appeal.

Decision

In a very detailed analysis, Justice Bich clarifies the obligations created by Article 2091 C.C.Q. She explains that the notice is for the benefit of the receiving party. The purpose of the notice is to address the inconveniences resulting from the unilateral resiliation of an employment contract that are suffered by the receiving party. While the notice may also, in practice, benefit the giving party, which thereby gains a transition period, such practical advantage does not amount to a right. The employer, in these circumstances, is thus free to forego the benefits resulting from the notice of resignation.

An employer exercising such a waiver does not have to compensate the resigning employee. Indeed, the employer waiving the right to the notice does not thereby terminate the resigning employee. Resignation is a termination of employment provoked by the employee; while the notice may postpone its effect further in time, it does not have the effect of modifying the legal nature of the resignation.

Justice Bich further states that no distinction should be made between the case of an employee announcing a departure date and that of an employee offering to stay during a transition.

It should be stressed, however, that Justice Bich tempers her reasoning in obiter. She states that her proposed interpretation rests on a contractual approach that may seem difficult to reconcile with the general principles of employment law, which recognize the inherent inequalities between employers and employees and tend to protect the latter. Consequently, Justice Bich calls on the legislator to intervene.

Justice Bich also states that, under certain circumstances, the exercise of the employer’s right to waive the notice of resignation could be considered abusive pursuant to the C.C.Q. By way of example, she refers to the case of an employee that announces his retirement a year in advance or to the case of an employee who provides notice in order to go take care of a sick person.

The scope of the above remarks being quite wide, it is to be expected that they may be used by lower courts seeking to avoid the strict application of this decision. An employer should therefore act in a reasonable and conscientious manner when it foregoes a notice of resignation without compensation.

In a somewhat unique case, the Ontario Superior Court confirmed the principle that, even where a document is prima facie privileged as a solicitor-client communication, unfairness can result in the waiver of such privilege.  In this case, an employee was accidentally copied on an email from a senior manager to counsel regarding the potential termination of the employee.  Despite the manager’s attempts to recall the email and otherwise prevent the employee from reading it, the employee, not surprisingly, did read the email and shared it with her lawyer.  Although it is not clear from the decision what exactly the email said, the employee subsequently left her employment and commenced an action for wrongful dismissal. 

The judge who decided the motion at first instance agreed that the email was on its face privileged; however, the judge decided that the preservation of such privilege in the circumstances would be unfair to the plaintiff, therefore the employer’s motion was dismissed.  The employer then brought a motion for leave to appeal that decision.

To be successful on the motion for leave to appeal, the employer would have had to show that either (a) there was a conflicting decision by another judge or court, or (b) that there was good reason to doubt the correctness of the initial judge’s decision. The employer did not satisfy either of these criteria. In particular, the Court held that there was “no good reason to doubt the correctness” of the decision under review. Thus, the Court held that there was no basis for interfering with the motion judge’s decision that, although  the email was on its face privileged (which was conceded by the parties on the motion for leave to appeal),  fairness required that such privilege be waived. Accordingly, leave to appeal was denied and the plaintiff will be permitted to use the email as the basis for her wrongful dismissal claim

Our Views

Most of us can empathize with the employer in this case. It was an understandable mistake; many people are guilty of hitting send on an email before noticing that someone in the “To” or “Cc” line shouldn’t be there. However, this case is a useful reminder of the consequences of such a mistake.

Dans une décision récente impliquant Services Entretien d’édifices Allied Inc. (Allied),  la Commission des relations du travail du Québec a annulé le congédiement pour vol de cinq employés d’entretien, réservant sa compétence pour statuer sur la question des dommages.

Allied fournit des services d’entretien ménager dans des édifices publics et emploie 250 personnes. Allied est partie à plusieurs contrats en vertu desquels elle nettoie les édifices de ses clients.

Les employés congédiés, dont quatre avaient près ou plus de 60 ans, ont porté plainte pour congédiement sans motif sérieux auprès de la Commission des normes du travail.

Allied a justifié sa décision de congédier les employés concernés en argumentant que dans l’industrie des services d’entretien, le vol de la propriété d’un client constitue une faute grave susceptible de causer un préjudice important aux affaires de l’employeur, allant jusqu’à la perte du contrat avec le client, et ce, même si l’objet volé est de faible valeur. Qui plus est, les employés travaillaient sur le quart de nuit, ce qui requérait un haut niveau de confiance et de loyauté.

À ce titre, Allied a ajouté qu’elle avait établi une politique de « tolérance-zéro » à l’égard du vol par ses employés. Qui plus est, Allied a soutenu que les séquences vidéos constituait une preuve directe et sans équivoque des vols concertés de plusieurs cannettes de soda par ses employés et que, par conséquent, elle n’avait pas à se livrer à une enquête plus approfondie.

La preuve présentée lors de l’audition a toutefois permis de brosser un portrait différent des évènements allégués. En effet, un représentant de la compagnie de soda est venu témoigner à l’effet que l’argent contenu par le distributeur automatique reflétait d’assez près le nombre de cannettes manquantes. Qui plus est, le représentant a confirmé que le distributeur était défectueux et que les cannettes de soda restaient à l’occasion prises à l’intérieur, ou alors n’étaient pas relâchées par le mécanisme. Il arrivait aussi que la machine relâche plus d’une cannette à la fois. La situation fut ensuite corroborée par les employés concernés.

La Commission a conclu que Allied n’avait pas tenté d’obtenir la version des faits des employés et qu’elle n’avait pris aucunes mesures pour vérifier les distributeurs automatiques avant de procéder au congédiement desdits employés.

À la lumière de ce qui précède, la Commission a donc conclu que Allied avait réagi prématurément en ne conduisant pas une enquête complète en lien avec les vols suspectés. À ce titre, Allied n’a pas réussi à démontrer que les employés avaient été congédiés pour une cause juste et suffisante.

Cette décision sert de rappel aux employeurs à l’effet qu’ils doivent procéder de manière diligente avant de mettre fin à l’emploi d’un employé. En cas de soupçons de vol, de fraude ou de toute autre inconduite grave, un employeur devrait toujours s’assurer de mener une enquête complète et impartiale en rapport avec les incidents allégués. Lors d’une telle enquête, il est important de laisser la chance à l’employé visé de donner sa version des faits. Selon les circonstances, il peut aussi être approprié d’imposer une suspension administrative à l’employé visé jusqu’à ce que l’enquête soit complétée.

Une fois l’enquête terminée, l’employeur doit ensuite déterminer s’il détient des preuves convaincantes et sérieuses de la faute alléguée avant d’imposer des mesures disciplinaires. Ceci est particulièrement vrai dans le contexte d’un congédiement, qui constitue la sanction ultime.

In the recent decision involving Services Entretien d’édifices Allied Inc. (Allied), the Labour Relations Board of Quebec cancelled the terminations imposed on five maintenance employees for theft and reserved its jurisdiction to determine the appropriate remedy and damages.

Allied provides maintenance services to public buildings and has 250 employees. Allied has entered into several contracts with clients providing for the cleaning of their buildings.

The terminated employees, four of which were close to 60 years old and over, filed a complaint for a dismissal without good and sufficient cause with the Labour Standards Board.

In support of the dismissals, Allied argued that in the maintenance industry, the theft of a client’s property, even of little value, constitutes a serious fault and could cause significant prejudice to the employer’s business and  lead to the loss of the contract with the client. Furthermore, the employees worked the night shift, where a higher degree of trust and loyalty were expected.

As such, Allied has a “zero-tolerance” policy with respect to theft by an employee. Furthermore, Allied submitted that the video footage constituted direct and unequivocal evidence of a concerted theft by the employees of several cans of soda and that no further investigation was needed.

However, the evidence presented at the hearing clearly painted a different picture. Indeed, a representative from the soda company confirmed that the money in the vending machine corresponded fairly closely to the number of cans missing. Furthermore, the agent confirmed that the machine was defective and cans of soda would occasionally get stuck in the machine or not be released at all. Also, the machine would occasionally release more than one can of soda at a time. This situation was also corroborated by the employees’ testimony.

The Board concluded that Allied had not attempted to obtain the employees’ version of the incidents nor did it take any steps to examine the vending machines before proceeding with the dismissal of the employees.

In light of this, the Board concluded that Allied had reacted prematurely, without conducting a complete investigation into the suspected acts of theft. As such, Allied failed to demonstrate that the employees were terminated for a good and sufficient cause.

This case serves as a reminder to employers to act diligently before proceeding with the dismissal of an employee. In cases of suspected theft, fraud or other serious misconduct, an employer should always conduct an impartial and complete investigation of the incident. In the context of such investigation, the accused employee should be given the opportunity to provide his version of the facts. In such circumstances, it may be appropriate to impose an administrative suspension on  the employee pending the outcome of the investigation.

Once the investigation is completed, the employer must determine if it has compelling and serious evidence of the alleged misconduct before imposing a disciplinary measure, particularly a dismissal, which constitutes the ultimate sanction.

In the recent decision of Transport Guy Bourassa inc. c. Meloche, the Court of Quebec accepted that an employer transform an employee's termination into a dismissal for cause after discovering a new fact. In this case, the employee held a senior management position and prior to her departure, induced two other senior employees to leave their employment and this, without having any benefit to gain from their resignations. The Court concluded that by doing so, the employee violated her duty of loyalty provided by the Civil code of Quebec as well as her contractual obligations. Moreover, the Court imposed a penalty clause and ordered the employee to pay $25,000 to her former employer.

Facts:

On May 16, 2005, Ms. Meloche began her employment at Transport Guy Bourassa Inc. (TGB) in the position of Security Director. Soon thereafter, Ms. Meloche executed a non-solicitation, confidentiality and non-competition agreement in favour of TGB. This agreement also contained a penal clause of $50,000.

Following the termination of Ms. Meloche’s employment, TGB learned that prior to her departure, she induced their accountant, Mr. Louis Bissonnette, as well as Mr. Karl Béland, a sales representative, to leave their employment with TGB. More specifically, in May 2010, the employee indicated to Mr. Bissonnette that "if he wanted a real job", he would find it at Le Centre du Camion Gamache Inc. Mr. Bissonnette, at this time, had not expressed any interest in leaving his employment nor did he solicit the advice of Ms. Meloche. Furthermore, in March 2010, while Mr. Béland was actively searching for a new job, Ms. Meloche indicated to him that Omniplast Inc. was looking to hire a sales representative. Ms. Meloche then provided useful information to Omniplast Inc. and recommended the hiring of Mr. Béland. Ultimately, Mr. Bissonnette did not resign from his employment with TGB. However, Mr. Béland did accept employment with Omniplast Inc.

TGB then proceeded to claim $50,000 from Ms. Meloche pursuant to the penal clause stipulated in her agreement.

Decision

By referring to Article 2088 of the Civil code of Quebec as well as the teachings of the Supreme Court and the Court of Appeal with respect to an employee's duty of loyalty, Justice Michel Bédard concluded that it is evident that Ms. Meloche committed a fault by suggesting to two long-standing employees to quit their job and referring them specifically to another employer.

In his analysis, Justice Bédard concluded that even if the accountant Bissonnette did not leave his employment, the context and the content of his inducement to leave TGB constituted a fault. Furthermore, Justice Bédard noted that even though Mr. Béland was seeking new employment, it was Ms. Meloche who directed him towards Omniplast Inc. and who facilitated his transfer by providing recommendations to the Human Resources department of Omniplast Inc. Ms. Meloche's actions constituted serious faults, in violation of the terms of her non-solicitation agreement as well as her legal duty of loyalty, the whole justifying a dismissal for cause.

Justice Bédard also concluded that the penal clause stipulated in the non-solicitation agreement was applicable in the circumstances. However, the Court found the amount of the penal clause to be unreasonable, taking into account the circumstances, and reduced the penal clause to $25,000. It is important to note that considering the general terms of the clause and the automatic application of the fixed penalty, the judge in this case appeared somewhat clement. Indeed, it would have been possible for the judge to declare the entire clause invalid instead of reducing the amount stipulated. As such, an employer who wishes to avail itself of a penal cause should ensure that the amount of the penalty is proportionate to the importance of the obligation sanctioned.

This decision demonstrates the scope of an employee’s duty of loyalty, particularly in the case of an employee holding a management position. In this case, Ms. Meloche did not, in any way, benefit from inducing the other employees to leave their employment, for example by soliciting them to join her new employer or her own business. Indeed her comments seemed gratuitous and did not show any direct benefit to her. The Court however, did not consider these elements as diminishing in any way the fault she committed.

In the 2011 decision of Plester v. Polyone Canada Inc., an Ontario Court held that an employer did not have just cause to terminate a senior employee who committed a serious safety violation and subsequently failed to report it, in violation of company policy.

John Plester was a line supervisor at Polyone Canada Inc. (Polyone), a company that manufactured plastic pellets using a complex and potentially dangerous process. Polyone had a strong health and safety culture, and emphasized what it termed the “Cardinal Rules” related to health and safety which employees were required to follow.  One such rule was a requirement that machines being worked on by employees be locked out in order to avoid the possibility that the machine could start up accidentally and cause injury. Another Cardinal Rule was that employees were strictly required to report any safety violations, even minor incidents.

Superior Court Decision

Justice Wein of the Ontario Superior Court found, that despite the seriousness of Mr. Plester’s actions, Polyone did not have just cause to terminate his employment. She applied the test set out by the Supreme Court of Canada in McKinley v. B.C. Tel, and considered the seriousness of the misconduct, the surrounding circumstances and the proportionality between the employee’s misconduct and the employer’s response.

Seriousness of the Misconduct

The judge found that the safety violation, and subsequent failure to report, were very serious. She also found that the failure to report the incident was aggravated by the fact that Mr. Plester was a supervisor, which increased “the danger of inculcating a sense of complacency and isolation from the rules properly set down by management.”

Surrounding Circumstances

In considering the surrounding circumstances, Justice Wein found that the threat of a culture that did not emphasize safety was problematic for both the employees and the employer. She found that Mr. Plester, as a supervisor, had to be seen “to be unambiguously supportive of enforcing the rules” in order to ensure that other employees did not become complacent about safety. She found that his failure to report the violation compounded the seriousness of the initial violation.

Proportionality

In considering the proportionality of the employer’s response, Justice Wein considered how the company had treated similar Cardinal Rule violations in the past. Although more junior employees had been terminated for Cardinal Rule violations, Justice Wein found that the employer’s response in this case was out of line with other sanctions levied by the company for similar incidents in the past, and thus not a proportionate response. For example, in a previous incident during which another employee had not locked out a machine prior to working on it had been spoken to about it by his co-workers, and had “shrugged and walked away,” there had been no consequences to the employee despite his failure to report the incident.

Justice Wein concluded that Mr. Plester’s conduct, including his deliberate failure to report, were serious violations, however, his conduct did not meet the high standard of “willful misconduct” required in order to disentitle him to notice under the Employment Standards Act, 2000.  Thus, Mr. Plester was entitled to pay in lieu of notice of termination. The judge found that the notice period to which Mr. Plester was entitled at common law was 14 months—slightly less than one month for every year of service.

Our Views

In a previous post, we discussed a case, Reichard v. Kuntz Electroplating Inc., where a court found that an employer was justified in terminating a supervisory level employee for cause after the employee had repeatedly violated company policy and failed to disclose the same to the employer. Perhaps this case can be distinguished from Reichard in that, here the employee had an otherwise clean safety record and the violation appeared to be a one-time occurrence. Likely of more significance was the fact that others who had committed similar acts were treated more leniently.

These cases together illustrate the fine line between a for-cause termination and a without cause termination and that, in order to be successful in terminating an employee for cause as a result of a policy violation, policies must be applied consistently over time and across all employees

Employees in Canada retain some reasonable expectation of privacy in personal data stored on an employer-supplied laptop, even where workplace policies and practices provide that all information stored or generated on such devices is the property of the employer, says the Supreme Court of Canada. However, the implications of this criminal law case remain unclear for private sector employers.

In its judgement in R. v. Cole, on appeal from a decision of the Ontario Court of Appeal, the Court considered the case of an Ontario high-school teacher, on whose school board-supplied laptop a school technician found nude images of a student. The technician copied the photos in question onto a disk for the school’s principal, who seized the laptop and informed police, who took possession of the laptop and disks, then examined their contents. The police did not obtain a warrant before seizing the equipment or examining the contents.

However, notwithstanding this Charter focus, the decision may nonetheless provide important guidance to private sector employers as well.

In its judgement, the Supreme Court drew an important distinction between the search and seizure of the laptop by school officials, and its subsequent search and seizure by police. The Court found that school officials had a statutory duty to maintain a safe school environment, and therefore, by necessary implication, a reasonable power to seize and search a board-issued laptop. However, while it found that the school was legally entitled to inform the police of its discovery, this entitlement, and the lawful authority of the employer to seize the device, did not extend to provide authorization to the police to examine the contents of the laptop – an act that is prima facie unreasonable without prior judicial authorization.

By analogy, private sector employers would also have clear duties to maintain safe, non-discriminatory workplaces, and to protect the interests of their workforce and shareholders generally – and may therefore also have reasonable powers of search and seizure to protect these interests, as well as the legal authority to advise law enforcement authorities of employee device usage that may be in breach of law. However, language in the ruling suggests that such authority by employers may extend only to content and behaviour that is reasonably connected to these objectives; not necessarily to all personal data that may be contained on an employer supplied device or network.

The case also underlines the importance of employers having clear, documented polices for the use of workplace computers and networks, particularly if employees are permitted some personal use, as well as communications and compliance programs to regularly remind employees of these policies. For the purposes of a Charter analysis, the Supreme Court found that such policies and practices served to diminish, but not eliminate, the reasonable expectation of privacy that an employee would otherwise have in personal content stored on an employer-supplied computer. From the perspective of Canadian private sector privacy laws, such policies help to establish the requisite knowledge and consent of employees to the collection, use and disclosure of their personal information.

Finally, although the Court stresses that device ownership is not a determining factor in assessing the reasonable expectation of privacy that an employee may have on stored personal data, the Court’s decision may nevertheless have important implications for the increasing trend toward “Bring Your Own Device”, whereby employers allow employees to use their own devices for work purposes and to access employer networks. If employees retain even a diminished expectation of privacy in personal data stored on an employer-supplied device, employees who own the devices they use for work purposes might enjoy an even higher expectation of privacy in such stored information.

In the recent decision of Ghanny v. 498326 Ontario Limited, the Ontario Superior Court of Justice held that a former employee’s wrongful dismissal action could not succeed because he failed to mitigate his losses when he rejected another position offered to him by his employer.

Background

Aleem Ghanny (Mr. Ghanny) had been an employee of a Toyota dealership for 18 years when he was informed that his position as Service Manager was to be terminated as a result of management reorganization. Upon informing Mr. Ghanny of this decision, the dealership owner offered him another management position with the same salary at a nearby Suzuki dealership, a recently acquired and related business. Mr. Ghanny, however, refused the offer for two (2) reasons: i) he thought his seniority at the Toyota dealership would be lost if he relocated, and ii) he was concerned that the future of the Suzuki dealership was uncertain.  The owner, however, made it clear to Mr. Ghanny that his seniority would be transferred to Suzuki, and that whatever the future of the Suzuki dealership was, his job would not be at risk.

The Decision

At trial, Justice Belobaba dismissed Mr. Ghanny’s action and found that his initial refusal of the replacement position was unreasonable. Citing the Court of Appeal’s decision in Misfud v. MacMillan Bathurst Inc., Justice Belobaba found that a reasonable person would be expected to take up a replacement job offered by his dismissing employer “[w]here the salary offered is the same, where the working conditions are not substantially different or the work demeaning, and where the personal relationships involved are not acrimonious.” Based on the assurances that the owner had given to Mr. Ghanny that his seniority would remain intact and that his job was safe, Justice Belobaba had no difficulty in finding that in refusing the replacement job Mr. Ghanny had not mitigated his damages. Despite Mr. Ghanny’s arguments, Justice Belobaba held that the replacement job offer was not unclear or ambiguous, nor was there a factual basis for Mr. Ghanny to fear that the Suzuki dealership was in financial difficulties.  Thus, he dismissed the action with costs in favour of the employer.

Justice Belobaba noted that had Mr. Ghanny’s claim been successful, he would have awarded Mr. Ghanny a reasonable notice period of 14 months.  This period was arrived at in light of Mr. Ghanny’s age of 47 years, his 18 years of service, and the difficulties that he encountered in finding other work in the fall of 2008 as the financial crisis was taking hold.

Our Views

This case serves to reassure employers that an employee’s duty to mitigate their damages may include accepting a replacement job offered by their employer.  This will likely be the case where the job offered is comparable to the former position in regards to compensation and working conditions, and the work environment is not acrimonious. In circumstances where such factors are not comparable, however, a court may well hold that an employee was not required to mitigate.

On February 14, 2012, in the decision Commission des droits de la personne et des droits de la jeunesse c. Centre hospitalier universitaire de Sherbrooke, the Quebec Court of Appeal upheld a decision of the Quebec Human Rights Tribunal (HRT), concluding that the refusal of the Sherbrooke University Hospital (CHUS) to consider the application of a former employee previously terminated was not discriminatory and did not violate sections 10 and 16 of the Charter of Human Rights and Freedoms of Quebec (the Charter).

Facts

The plaintiff had been working as a food services clerk at the CHUS since 1985 until his termination in 2001 due to his chronic absenteeism caused by an addiction to alcohol. The plaintiff filed a grievance to challenge his termination but the arbitrator rejected it on the basis that the employer had offered many “last chances” to the grievor who had promised to undergo therapy and resolve his alcoholism problem, but never did.

Human Rights Tribunal Judgment

The HRT conceded that, prima facie, there was discrimination on the grounds of a handicap. According to the case law, addiction to alcohol is considered a handicap and a prohibited ground of discrimination pursuant to section 10 of the Charter. Moreover, section 16 of the Charter prohibits discrimination at the time of hiring.

However, the HRT ruled that proper attendance at work is a justified occupational requirement within the scope of section 20 of the Charter. Section 20 provides that denying an applicant a position on the basis of a lack of aptitudes or qualifications required for employment does not amount to discrimination. According to the HRT, the obligation of accommodation incumbent upon the employer did not require the CHUS to disregard the plaintiff’s past employee record, which demonstrated that the plaintiff was unable to meet this position’s requirements. Furthermore, his past behavior had permanently broken the trust relationship between the two parties.

Judgment of the Court of Appeal

The Court rejected the appeal by a majority of two judges against one.

According to Justice Duval-Hesler, timely attendance at one’s workplace constitutes a good-faith professional requirement. In her view, the issue at hand was to determine whether the refusal of an individualized evaluation of the plaintiff’s application because of his previous termination for poor attendance was unreasonable. The judge noted that the employer had verified the plaintiff’s situation many times prior to proceeding with his termination and that an arbitrator had ruled that the cause for his termination was reasonable and not discriminatory. As a result, since the refusal of the application of the plaintiff relies on the same cause as the termination, this refusal cannot be considered unfair in the circumstances. The judge also mentions the termination issue is res judicata and the HRT could not review the arbitrator’s decision.

Justice Dufresne writes that the trust relationship between the CHUS and the plaintiff no longer exists, justifying the refusal to consider the plaintiff’s application. According to Justice Dufresne, this refusal was not discriminatory pursuant to section 20 of the Charter on the basis that the CHUS had no obligation to invite the plaintiff for an interview.

Justice Bouchard, dissenting, insists on the fact that when the applicant applied for a job in 2005, the plaintiff had remained sober for over three years and a half and was in complete remission according to a medical expert. Moreover, the plaintiff had completed formal training and three internships to work as a personal support worker. According to Justice Bouchard, even though the employer could indeed take into account the plaintiff’s previous record and that the employer had no obligation to make a job offer, the employer should have given the plaintiff access to the normal hiring process. The employer should also have conducted an individualized evaluation of the application, taking into account the plaintiff’s current situation. As a result, Justice Bouchard would have allowed the appeal.

Le 14 février dernier, dans l’affaire Commission des droits de la personne et des droits de la jeunesse c. Centre hospitalier universitaire de Sherbrooke, la Cour d’appel a confirmé une décision du Tribunal des droits de la personne (le TDP) qui avait conclu que le refus du Centre hospitalier universitaire de Sherbrooke (le CHUS) de considérer la candidature du plaignant, un ex-employé congédié, n’était pas discriminatoire et ne violait pas les articles 10 et 16 de la Charte des droits et libertés de la personne du Québec (la Charte).

Faits

Le plaignant a travaillé à un poste d’aide à l’alimentation au CHUS de 1985  jusqu’à son congédiement survenu en 2001 pour absentéisme chronique occasionné par sa dépendance à l’alcool. Le plaignant contesta son congédiement, mais l’arbitre rejeta le grief au motif que l’employeur avait à maintes reprises offert une « dernière chance » au plaignant, qui à chaque fois s’était engagé à suivre des traitements et à régler son problème d’alcool sans jamais respecter ses promesses.

Jugement du Tribunal des droits de la personne

Le TDP concéda qu’il y avait, prima facie, discrimination fondée sur le handicap. En effet, selon la jurisprudence, la dépendance à l’alcool est considérée comme un handicap, lequel est un motif de discrimination interdit en vertu de l’article 10 de la Charte. L’article 16 de la Charte, quant à lui, interdit la discrimination dans l’embauche.

Cependant, le TDP jugea que l’assiduité au travail constitue une « exigence professionnelle justifiée » au sens de l’article 20 de la Charte. Cet article prévoit qu’il n’est pas discriminatoire d’exclure une personne sur la base des qualités ou aptitudes requises par un emploi. Selon le TDP, l’obligation d’accommodement n’exigeait pas que le CHUS fasse abstraction du dossier antérieur du candidat, qui démontrait que celui-ci était incapable de remplir cette exigence de l’emploi. De plus, les comportements passés du plaignant avaient définitivement rompu le lien de confiance entre ce dernier et le CHUS.

Arrêt de la Cour d’appel

La Cour d’appel a rejeté le pourvoi de l’appelante par une majorité de deux juges contre un.

La juge Duval-Hesler convient que l’assiduité au travail est une exigence professionnelle de bonne foi. À son avis, la question en l’espèce est de déterminer si le refus d’une évaluation individualisée de la candidature du plaignant, en raison de son congédiement pour manque d’assiduité, était déraisonnable. La juge rappelle que l’employeur s’était penché sur le dossier du plaignant à de nombreuses reprises avant son congédiement et qu’un arbitre de griefs a jugé que le motif de ce congédiement était raisonnable et non discriminatoire. De l’avis de la juge, puisque c’est ce même motif qui est à la base du refus d’examiner la candidature du plaignant, il n’est pas possible de considérer que ce refus est injuste dans les circonstances. Elle souligne par ailleurs qu’il y a chose jugée sur la question du congédiement et qu’il n’eût pas été loisible au TDP de réviser la décision de l’arbitre.

Quant au juge Dufresne, il souligne que c’est le lien de confiance fortement ébranlé entre le CHUS et son ancien employé qui motive le refus du CHUS de considérer sa candidature. Il considère que ce refus n’est pas discriminatoire au sens de l’article 10 de la Charte sur la base que le CHUS n’était pas tenu d’inviter le plaignant à une entrevue.

Le juge Bouchard, dissident, insiste pour sa part sur le fait que, lors de sa demande d’emploi en 2005, le plaignant était sobre depuis plus de trois ans et demi et pouvait être considéré en rémission totale prolongée selon un médecin expert. Il avait de plus suivi une formation sur l’assistance aux bénéficiaires et réussi trois stages. Selon le juge Bouchaud, même si l’employeur pouvait tenir compte du dossier antérieur du plaignant et qu’il n’avait pas l’obligation de lui offrir un poste, il aurait dû lui donner accès au processus normal d’embauche en procédant à une évaluation individualisée de sa candidature et ce, à la lumière de sa situation actuelle. Le juge Bouchard aurait donc accueilli l’appel.

An Ontario court recently came down hard on an employer that attempted to terminate an employee for cause without sufficient justification for doing so. The termination and the employer’s actions related to the termination resulted in a criminal trial and a chain of events that led to the destruction of the employee’s reputation, and, accordingly to the employee, his marriage. The trial judge initially awarded the employee $25,000 in punitive damages and aggravated damages of $75,000. The employee appealed the punitive damages award and a new trial was ordered. The trial judge then increased the award for punitive damages significantly, to $550,000.

The employee in this case, John Gordon Pate, was terminated for cause from his position as the Chief Building Official for the Township of Galway and Cavendish. He had been employed by the Township for approximately 10 years before being terminated. The basis for the termination was related to permit fees that Mr. Pate had collected but could not, according to the Township, be accounted for. Mr. Pate’s immediate supervisor, John Beaven, advised Mr. Pate that discrepancies with respect to the permit fees had been uncovered and insinuated that Mr. Pate had kept the missing amounts. No information regarding the details of these discrepancies was provided to Mr. Pate, nor was he offered a chance to respond to the allegations.  Instead, the Township gave him two options: a quiet self-imposed resignation without police involvement or dismissal by council and a police investigation.  Mr. Pate did not resign and the Township turned over some, but not all, of the information they had uncovered. A criminal trial followed. 

Mr. Pate was eventually acquitted of all charges, but not without severe damage to his personal and professional reputation, as well as his mental and emotional health.  A key point in the trial judge’s decision to rule in favour of Mr. Pate was the exculpatory evidence in relation to the missing building permit fees which the Township had not turned over to the O.P.P. when the discrepancies were reported.  There was evidence that the missing permit fees may have been explained by files that were misplaced during an office move; however, the police were not informed of this fact. In addition, Mr. Pate maintained a detailed journal of all his records but the journal was seized by the Township at the time of Mr. Pate’s termination – the journal was not returned to Mr. Pate, nor was it brought to the attention of the O.P.P. 

The O.P.P. confirmed that if the Township or Mr. Beaven had disclosed of any of the above potentially-exculpatory evidence, charges would not have been laid against Mr. Pate. 

Trial Decision

The trial judge, Gunsolus J., awarded the employee damages for wrongful dismissal as well as aggravated and punitive damages as a result of the Township’s conduct in relation to Mr. Pate’s termination. 

Wallace Damages

The Township acknowledged that Mr. Pate was wrongfully dismissed and the parties agreed that 12 months was a reasonable notice period. In addition, Mr. Pate argued that he was entitled to additional Wallace-type damages, based on the circumstances surrounding the termination, including the offer of clemency in exchange for Mr. Pate’s resignation, Mr. Pate’s clean employment record during his 10 years of service, the Township’s continued reliance on the allegations against Mr. Pate, even after the allegations were proven to be unfounded, the Township’s accusation of theft and its failure to give Mr. Pate an opportunity to  respond to such accusations.  This conduct, according to the judge, was a marked departure from “ordinary standards of decent behaviour” and amounted to bad faith.  As a result, the judge found that Mr. Pate was entitled to an additional 4 months’ pay in lieu of notice.

Aggravated Damages

Aggravated damages of $75,000 were awarded to Mr. Pate in order to compensate him for the harm caused by the Township’s conduct. The Plaintiff’s four day criminal trial and very public humiliation in a small community affected him emotionally and financially and left him “humiliated” and “defeated”. In addition, the Township alleged numerous other grounds for misconduct on the part of Mr. Pate which were not proven at trial (nor were they withdrawn by the Township). Moreover, the judge emphasized that the Township’s decision to terminate Mr. Pate without any notice or reasons for his dismissal, and without giving him the opportunity to respond to allegations made against him, was “unfair and insensitive”. The judge’s view was that the Township terminated Mr. Pate and then held an investigation to build a case in order to justify the termination. This was not viewed favourably by the judge.

Punitive Damages

In addressing Mr. Pate’s claim for punitive damages, the judge found that the Township’s actions were reprehensible and that such conduct was intentional and resulted in significant mental distress, as well as social and economic damage to Mr. Pate.  The judge found that the harm caused to Mr. Pate as a result of the Township’s actions was foreseeable and, as a result, ordered the Township to pay punitive damages of $25,000.  The judge did not provide an explanation as to the calculation of this amount.  Interestingly, after setting out the award, the judge stated: “I would order more, however, I am bound by the principles of proportionality”.

Court of Appeal Decision

Mr. Pate appealed the trial judge’s decision with respect to the amount of punitive damages.  The Court of Appeal allowed the appeal and found that, based on the Township’s conduct as described by the trial judge, a higher award of punitive damages would not violate any “principle of proportionality”. Accordingly, the Court ordered a new trial on the issue of the defendant’s conduct so that the amount of punitive damages could be reconsidered.

The Second Trial Decision

In reconsidering its original punitive damages award, the judge again recounted the significant misconduct on the part of the Township and “the devastating impact on the employee’s life, including his future employment prospects and broken marriage, and the fact that these were intentional and foreseeable actions significantly”. After briefly reviewing the case law, the judge found it was reasonable to increase the award of punitive damages to $550,000. 

Our Views

While the facts of this case are very unique, this case demonstrates the care that must be taken before terminating an employee’s employment for just cause. Prior to attempting to terminate an employee for cause, an employer should ensure it has evidence to support any allegations made at the time of termination, especially where such allegations could lead to criminal or other charges, or otherwise affect the employee’s reputation or career prospects. Further, the reasons for the termination should be provided to the employee and the employee should be allowed the opportunity to respond to those reasons. Finally, in the event that evidence to support a termination for just cause is lacking, employers would be wise to recognize this and postpone the termination until such time as just cause can be established, or provide the employee with pay in lieu of notice of termination. Failure to do so, as demonstrated by this case, could result in further damages being payable to the employee.

The Ontario Court of Appeal recently held that the duty to mitigate following dismissal does not apply when a dismissed employee’s contract contains an express notice of termination provision and is silent with respect to mitigation.

Peter Bowes (Bowes) began his employment with Goss Industries Inc. (Goss) in October 2007 as a Vice-President of Sales and Marketing.  As part of his employment contract, Bowes was entitled to six (6) months’ notice of termination (or pay in lieu thereof) if he was terminated without cause before completing four (4) years’ service with Goss.  Bowes was terminated without cause by Goss in April 2011.  Thus, Bowes was entitled to six (6) months’ salary continuation pursuant to his contract.

However, a dispute arose when Bowes secured new employment only two (2) weeks later at the same salary level. Upon becoming aware that Bowes was working again, Goss took the position that Bowes was only entitled to termination pay under the Employment Standards Act, 2000 (ESA) as he had successfully mitigated his loss at common law.  This common law duty holds that a former employee must make reasonable efforts to mitigate the damages payable by their former employer by seeking alternative sources of income. 

After not receiving further payments, Bowes brought a court application to determine his rights under his employment agreement.  The application judge held that Bowes had a duty to mitigate since his agreement did not directly or impliedly relieve him of this obligation.  Consequently, the judge held that Bowes was not entitled to further continuance payments (beyond termination pay under the ESA).

The Court of Appeal

The Court of Appeal overturned the application judge’s decision and held that when parties contract for a specified period of notice (or pay in lieu thereof) they are choosing to opt out of the “common law reasonable notice approach” and the employee is not required to mitigate.  In particular, the amount of notice specified becomes a contractual entitlement similar to liquidated damages and is not subject to mitigation in the absence of an express provision to that effect in the agreement.

The Court of Appeal further held that it would be unfair and counter-intuitive to permit an employer to benefit from the certainty of a fixed entitlement termination clause and also allow it to later claim that termination payments should be reduced by raising the issue of mitigation when it was not mentioned in the employment agreement. 

The Court of Appeal also took note of a broad release in Bowes’ employment agreement in favour of Goss.  This release stated that Bowes would forego any and all claims against Goss related to his termination (with the exception of claims to enforce the termination clause).  The Court of Appeal stated that such a broad release demonstrates an intention to avoid the courts and confirms a desire for finality.  In turn, this bolstered a finding that the parties intended that mitigation would not apply unless the agreement expressly stated otherwise.

Our Views

As it is common for employment agreements to contain fixed entitlement termination clauses, this decision is noteworthy for employers across Canada, and particularly in Ontario.  An employer considering hiring an individual under a contract with a fixed notice period in excess of statutory minimums must insert a clear requirement that the individual is subject to mitigation if it is intended that mitigation apply.  Otherwise, such employer will find themselves in the same situation that Goss did. 

In the recent decision of Rubin v. Home Depot Canada Inc., the Ontario Superior Court of Justice held that a release signed by an employee at the time his employment was terminated was unenforceable, as the employee did not have sufficient time to review the release and seek advice.

Eric Rubin worked as a competitive shopper for Home Depot Inc. (Home Depot) and its predecessor for almost 20 years. He was 63 years old. His employment was terminated by Home Depot during a brief meeting at which he was handed a letter offering him 28 weeks’ pay in lieu of notice in exchange for signing a release. This offer included his minimum statutory notice and severance pay entitlements under the Employment Standards Act, 2000, totaling 27.75 weeks, plus an additional one quarter weeks’ pay. The offer did provide for benefits continuation during the 8-week statutory notice period; however, it was silent about certain benefits, notably accidental death and dismemberment coverage. While the letter contained language to the effect that Mr. Rubin would have a week to review and sign the release, he signed it during the meeting and accepted the 28 weeks’ pay.

Shortly after his termination, Mr. Rubin retained counsel, who sent a letter to Home Depot challenging the enforceability of the release and asking to negotiate an appropriate severance package.  Home Depot refused, relying on the release, and Mr. Rubin brought a motion for summary judgment, seeking to set aside the release. Home Depot moved for dismissal, arguing that the release was enforceable because Mr. Rubin had not been pressured into making an immediate decision, had taken the time to read the letter before signing and had asked about his options regarding apportioning funds to his RRSP.

Superior Court Decision

Justice Lederer of the Ontario Superior Court found that, given the circumstances in which it was signed, the release was unenforceable.  Justice Lederer applied the test for unconscionability outlined in the Alberta Court of Appeal decision Cain v. Clarica Life Insurance Company and later adopted by the Ontario Court of Appeal in Titus v. William F. Cooke Enterprises Inc., to find that release was unenforceable. This decision was based on the following factors:

• The severance package offered was grossly unfair and “far removed from what the community would accept” given the fact that it was a without-cause termination and the fact that Mr. Rubin was approaching the end of his working life.
• Mr. Rubin lacked suitable advice regarding the offer. No attempt had been made by the employer’s representative to explain or clarify the terms of the severance package (which, according to the judge, were ambiguous and misleading) and Mr. Rubin was not told that he could take a week to think about, or obtain independent legal advice (though the letter provided a deadline for acceptance that was a week later).
• The inherent imbalance of bargaining power between Mr. Rubin and his employer. The judge found that it was not relevant that Mr. Rubin failed to act concerned or surprised at the meeting.
• Home Depot knowingly took advantage of Mr. Rubin’s vulnerability by misleading him to believe his only option was to sign the release, when in fact the release gave him barely more than he was already entitled to by statute.

Based on Mr. Rubin’s role and responsibilities, his years of service, his age, and the difficulty he was likely to experience finding alternative employment, the judge found that he was entitled to 12 months’ pay in lieu of notice.

Our Views

This case is a reminder to employers that a release signed on the spot by an employee at the time of termination may later be challenged by the employee and be found to be unenforceable, based on the inherent imbalance of bargaining power between an employee and his or her employer at the time of termination and the lack of opportunity to obtain legal advice. To ensure the reliability of a release, employers should first and foremost not permit employees to sign the release at the termination meeting. Employers should inform employees that they must take the offer away to consider it and obtain independent legal advice if they so choose.  Employers cannot rely on the fact that employees could have taken more time to consider the offer; they must ensure that employees do so.

Dans une décision récente la Cour d'appel du Québec a déclaré que le devoir de loyauté prévu à l'article 2088 du Code civil du Québec continue rarement plus de quelques mois après la cessation d'emploi d'un employé.

Dans cet arrêt, l'appelant, Concept Électronique, a demandé à la Cour d'appel de prolonger la durée d'une injonction de trois mois émise par la Cour supérieure, ordonnant à deux anciens employés de s'abstenir de solliciter ses clients.

Immédiatement après leur départ, les deux employés ont annoncé la création de JP Électrique et ont commencé à solliciter les clients de Concept Électronique. Après quelques semaines, JP Électrique s’est vu attribué un contrat avec un client de Concept Électronique.

La Cour d'appel a confirmé qu'en l'absence d'une clause de non-concurrence, un ancien employé peut concurrencer son ancien employeur. Toutefois, l'employé est encore lié par un devoir de loyauté qui s'applique pour une période de temps raisonnable après la cessation d'emploi. La Cour a confirmé que les employés avaient violé leur devoir de loyauté en communiquant avec l'un des clients de Concept Électronique avec lequel ils avaient développé une relation étroite à travers leur emploi, et en prenant des démarches pour former une entreprise concurrente, le tout lorsqu'ils étaient toujours à l’emploi de Concept Électronique.

Toutefois, la Cour a confirmé qu'après avoir été avisé de l'intention des employés de démarrer une entreprise concurrente après leur démission, une période de trois mois était considérée suffisante pour permettre à Concept Électronique de contacter ses clients et de prendre les mesures nécessaires afin de faire face à ce nouveau concurrent.

La Cour a confirmé que l'obligation de loyauté post-contractuelle doit être interprétée de manière restrictive compte tenu que la concurrence en affaires est la règle dans l'organisation de la société québécoise. Un employé peut concurrencer son ancien employeur, même vigoureusement, à condition que cette concurrence se fasse de bonne foi. La Cour a aussi confirmé que la portée de l'obligation de loyauté post-contractuelle varie en fonction des circonstances particulières, y compris la nature des activités de l'employeur, les conditions d'emploi de l'employé et son niveau hiérarchique au sein de l'organisation, les motifs de la terminaison du contrat de travail et l'état de concurrence dans le secteur d'activités de l'employeur. Toutefois, le devoir de loyauté se poursuivra pendant plus de quelques mois après la cessation de l'emploi que dans des cas très exceptionnels.

À la lumière de ce qui précède, compte tenu de la protection limitée offerte par le devoir de la loyauté, il est important pour un employeur d'inclure les clauses nécessaires et appropriées de non-concurrence et de non-sollicitation au contrat de travail d'un employé. Cela permet d'assurer que ses intérêts légitimes d'affaires sont suffisamment protégés après le départ d'un employé.

In a recent decision the Quebec Court of Appeal declared that the duty of loyalty provided at Article 2088 of the Civil Code of Quebec rarely continues for more than a few months following the termination of an employee's employment.

In this case, the appellant, Concept Électronique, was seeking the extension of the duration of an injunction issued by the Superior Court against two former employees requiring them to cease soliciting its clients for three months.

Immediately after their departure, the two employees announced the creation of JP Électrique and began soliciting the clients of Concept Électronique. Within a few weeks, JP Électrique was awarded a contract from one of Concept Électronique's clients.

The Court of Appeal confirmed that in the absence of a non-competition covenant, a former employee may compete with his former employer. However, the employee is still bound by a duty of loyalty that applies for a reasonable period of time following the termination of employment. The Court confirmed that the  employees had violated their duty of loyalty by contacting a client of Concept Électronique with whom they had developed a close relationship through their employment, and by taking steps to form a competing business, the whole while still employed at Concept Électronique.

However, the Court confirmed that having been advised by the employees at the time of their resignation that they intended to start up a competing company, three months was considered a sufficient period of time for Concept Électronique to contact its clients and take the necessary steps in order to face this new competitor.

The Court confirmed that the post-termination obligation of loyalty must be interpreted restrictively considering that competition in business is fundamental in Quebec society. An employee may compete with his former employer, even vigorously, at the condition that this competition is done in good faith. The Court further confirmed that the scope of the post-termination duty of loyalty will vary, depending on the particular circumstances, including the nature of the employer’s business, the conditions of the employee's employment and his hierarchical level within the organization, the reason for termination of the employment contract and the level of competition within the employer's sector of activities. However, it is only in very exceptional cases that the duty of loyalty will continue for more than a few months following the cessation of the employment relationship.

In light of the foregoing, considering the limited protection offered by the duty of loyalty, it is important for an employer to include the appropriate and necessary non-competition and non-solicitation covenants in an employee's employment contract. This will ensure that an employer’s legitimate business interests are sufficiently protected following the departure of an employee.

Dans une décision récente la Cour supérieure du Québec a refusé d'accorder une indemnité de fin d’emploi à un employé de 75 ans, car ce dernier a manqué à son obligation de mitiger ses dommages à la suite de la cessation de son emploi.

Faits

M. Levy a commencé son emploi au Standard Desk Inc. en avril 1971. En mai 2009, les employés de Standard Desk, incluant M. Levy, ont été informés de la fermeture de l'usine de la compagnie. M. Levy, ainsi que d'autres employés, se sont vu offrir un poste avec l'une des entités liées de Standard Desk. Le nouveau poste offert à M. Levy était similaire à son poste actuel, avec le même salaire et les mêmes avantages. L'emplacement du nouveau poste constituait la seule différence. Ce dernier était situé dans la ville de Granby, alors que M. Levy travaillait à Laval. Toutefois, la compagnie était prête à offrir aux employés, à ses frais,  un service de navette quotidien entre les deux villes. M. Levy a catégoriquement refusé l'offre et, par conséquent, a été licencié en décembre 2009. M. Levy avait 75 ans au moment de sa fin d’emploi. Par la suite, l'avocat de M. Levy a envoyé une mise en demeure à Standard Desk réclamant près de 100,000.00 $ à titre d'indemnité tenant lieu de préavis de fin d’emploi et des dommages moraux.

La Cour supérieure s'est d'abord référée à l'article 2091 du Code civil du Québec qui prévoit qu'un employé congédié sans motif sérieux est en droit de recevoir un délai de congé raisonnable, qui doit tenir compte des circonstances particulières de l'emploi, y compris la durée de la prestation de travail, l'âge, la nature de l'emploi et la difficulté de trouver un autre emploi. La Cour a déclaré que le délai de congé raisonnable avait pour but d'accorder à l'employé un temps suffisant afin qu'il puisse se procurer un nouvel emploi sans encourir des pertes économiques.

Après avoir examiné tous ces facteurs, la Cour a déterminé que M. Levy serait admissible à un délai de congé raisonnable de 14 mois, en plus des 8 semaines de préavis déjà donné.

Toutefois, la Cour a ensuite examiné le devoir d'un employé à mitiger ses dommages à la suite de la cessation de son emploi. La Cour a confirmé que l'employé doit faire un effort raisonnable pour trouver un emploi similaire et ne peut refuser d’offres raisonnables d'emploi.

Ainsi, il incombait à M. Levy de démontrer qu'il était incapable d'accepter l'offre d'emploi faite par Standard Desk et qu'il était incapable de trouver un autre emploi. La preuve dans cette affaire a montré que M. Levy n'a pas essayé de trouver un nouvel emploi parce qu'à son avis, son âge rendait cette recherche inutile et que par conséquent, il était dispensé.

La Cour a confirmé que, pour mitiger ses dommages, M. Levy aurai dû accepter l'offre d'emploi à Granby, qui était une position raisonnable dans les circonstances. Sinon, compte tenu du fait que M. Levy ne voulait pas prendre sa retraite, il était obligé de prendre des mesures raisonnables pour trouver un nouvel emploi, ce qu'il n'a pas fait. De ce fait, la Cour a déclaré que M. Levy n'avait pas mitigé ses dommages et que par conséquent, il  n'avait pas droit à l’indemnité de 14 mois.

Cet arrêt est un rappel que tous les employés, indépendamment de leur âge, ont l'obligation légale de mitiger leurs dommages à la suite de la cessation de leur emploi, soit en acceptant une offre raisonnable faite par l'employeur actuel ou en déployant des efforts raisonnables pour trouver un nouvel emploi .

In a recent decision the Superior Court of Quebec refused to award a termination indemnity to a 75-year-old employee due to his failure to mitigate his damages following the cessation of his employment.

Background

Mr. Levy began his employment at Standard Desk Inc. in April of 1971. In May 2009, the employees of Standard Desk, including Mr. Levy, were advised that the company was shutting down its plant. Mr. Levy, as well as other employees, were offered a position with one of Standard Desk’s related entities. The position was similar to Mr. Levy’s current role and had the same salary and benefits. The only difference in the two positions was that the new role would be in the city of Granby, whereas Mr. Levy currently worked in Laval. However, the company was prepared to offer the employees a daily shuttle service between the two cities, at the company’s expense. Mr. Levy categorically refused the offer and consequently, his employment was terminated in December 2009. Mr. Levy was 75 years old at the time of his termination. Thereafter, Mr. Levy’s lawyer sent a letter of demand to Standard Desk claiming nearly $100,000 as payment in lieu of notice of termination and in moral damages.

The Superior Court first referred to Article 2091 of the Civil Code of Quebec which provides that an employee who is terminated without a serious reason is entitled to receive a reasonable notice of termination, that must take into account the particular circumstances of the employee’s employment, including years of service, age, nature of the job position and difficulty of finding alternate employment.  The Court further declared that the objective of the reasonable notice of termination is to provide an employee with a sufficient period of time in order to secure new employment without incurring economic losses.

After considering all these factors, the Court determined that Mr. Levy would be eligible for a reasonable notice of termination of 14 months, in addition to the 8 weeks of notice already given.

However, the Court then proceeded to discuss an employee’s duty to mitigate his damages following the termination of his employment. In particular, the Court confirmed that an employee must make a reasonable effort to find similar employment and not refuse any reasonable offer of employment.

As such, Mr. Levy had the burden of demonstrating that he was incapable of accepting the offer of employment made by Standard Desk and that he was incapable of finding another job. The evidence in this case ultimately showed that Mr. Levy did not try  to find a new job because in his view, considering his age, it would be impossible and therefore he was relieved of this duty to mitigate.

The Court confirmed that in order to mitigate his damages, Mr. Levy should have at least accepted the job offer at Granby, which was a reasonable position in the circumstances. Alternatively, considering Mr. Levy he did not want to retire, he was obligated to take reasonable steps to find a new job, which he failed to do. As such, the Court declared that Mr. Levy did not mitigate his damages and consequently, was not entitled to the termination indemnity of 14 months.

This case serves as a reminder that all employees, irrespective of their age, have a legal duty to mitigate their damages following the termination of their employment by either accepting a reasonable offer of alternate employment made by the employer or by making efforts to seek new employment.