Summary of Employment Law for Non-Profits
2004
The employer/employee relationship is a unique one in law, and lawmakers have developed an extensive body of law to ensure that certain minimum standards exist to protect the interests of employees and employers. Therefore, as a non-profit or charity acting within the capacity of an employer, you should be aware of some important legal rights and obligations when hiring and firing employees, as well as any legal issues that may arise between an employer and employee during employment.
All employers, including non-profits and charities, are subject to the relevant legislation of the province in which they carry on their activities. In
Employment Standards Act
Occupational Health and Safety Act
Human Rights Code
Labour Relations Act
Workplace Safety and Insurance Act
Pay Equity Act
Smoking in the Workplace Act
Wages Act
Day Nurseries Act; and
Employment Equity Act
This employment law fact sheet will examine what the law requires of a non-profit or charitable organization acting within the capacity of an employer, with particular emphasis on employment standards, human rights and health and safety legislation. In brief, employment standards legislation provides for certain minimum standards for wages, hours of work, vacation pay, overtime, termination, leaves of absence (emergency, parental/maternity), and termination. In addition to employment standards legislation, provincial human rights legislation operates to ensure the fair and equal treatment of all people in terms of employment and prohibits against discrimination against employees.
The Employee/Employer Relationship:
(i) What is an employee?
At law, an employee is someone who works for your organization under an employment contract, which is in direct contrast to a contract for service, otherwise known as an independent contractor agreement. As each employment arrangement has different legal obligations for both the employer and the employee, each is discussed in turn. A volunteer is not an employee but may be covered by various work related legislation.
(ii) The Employment Contract (Non- Unionized Environment)
An employment contract does not have to be in writing to be enforceable. However, without a written arrangement setting out the terms of the work arrangement, the law will substitute its own standard version. So it is important both as an employer and an employee to pay careful attention to the terms of the employment relationship and to write the details down in a clear, legally enforceable way. Further, if your organization provides a manual setting out many terms of the employment such as benefits, it is important that the employee is made aware of this at the time of hiring; otherwise the manual will not be considered part of the employment contract.
An employment contract is defined, in part, by:
The employer's right to set the hours of work for the employee (subject to applicable legislation), including any vacation time;
The employee's use of the tools, equipment, and premises of the employee;
The employee's right to receive a salary or wage for their work, as opposed to a share in its profit; and
The employee being subject to the employer's control in such matters as the duties that must be performed, the times at which they must be performed and how they must be performed
Standard Terms of an Employment Contract:
Many employers use a standard form contract that can be custom tailored for a few items that are unique to individual employees. Employment terms may include, but are not limited to, the following:
A job description (separate document)
A standard period of probation
Overtime and sick pay policies
Details about vacations, leaves of absence and holidays
The remuneration to be paid, including benefits and bonuses
The notice or severance that will be given in case of lay-off or termination
Identification of the lines of responsibility
Protection of the company's ownership of inventions or improvements to products done as part of employment
A non-competition clause
A trade secrets confidentiality clause
Job evaluation methods
Certification by employees of their education and qualifications
Every employment contract is subject to employment standards legislation. The standards set by the Employment Standards Act must be adhered to. Therefore, you cannot contract out of employment standards legislation. Only when a provision of an employment contract exceeds the standard set by the legislation will the term of an employment agreement prevail Once you have decided whom to hire and the candidate accepts the terms and conditions by their signaiture, an employment agreement will have been created at law.
Trade Unions & Collective Agreements
Employers can recognize unions voluntarily, but if they refuse, a union can apply to the provincial labour board for certification. Once certified as a union, the trade union becomes the bargaining agent for an employees of a recognized bargaining unit and a collective agreement replaces an individual contract of employment. Collective agreements are similar to standard form employment contracts; the only difference being is that they are negotiated by the union on behalf of those employees who are members of the bargaining unit. A collective bargaining agreement contains the usual terms of an employment contract, including clauses that:
Labour laws require that all collective agreements contain a procedure for solving disputes over the interpretation of a collective agreement know as grievances. For example, if there is a dispute about the calculation of overtime pay or there if an employee objects to mandatory drug testing. The early stages of a grievance are dealt by negotiation then arbitration if negotiations are unsuccessful.
Please note that a collective agreement cannot be used to justify non compliance with statutory obligations (i.e. the Human Rights Code applies to unionized employees)
(iii) Independent Contractors
As noted earlier, an independent contractors is not an employee. They are treated differently than employees who are under a contract for service. However, if the independent contractor is treated like an employee they may be regarded as an employee under the law. The distinction is important because an independent contractor is not subject to the same obligations as an employee. For example, in the absence of an employer/employee relationship, the Employment Standards Act does not apply. Therefore, employers sometimes favour the independent contractor relationship over the employment relationship because of the limited legal rights (outside the independent contractor agreement) conferred on the independent contractor.
Before engaging an independent contractor, you will need to have an independent contractor agreement, whether verbal or written. (It is recommended that it be in writing) This agreement is not subject to the minimum standards such as minimum wage, hours of work or notice for termination. The parties are at liberty to decide these issues among themselves and can contract out of these provisions should they choose.
The distinction between an independent contractor and an employee becomes especially relevant when source deductions are concerned. Employers are obliged to remit income tax from the wages and salaries of the employees as set out under the Income Tax Act. Other payroll deductions include Employment Insurance (EI) and the Canada Pension Plan (CPP). The employer is also responsible for making EI and CPP payments on behalf of their employees.
However, in the case of an independent contractor, an employer is not required to make source deductions or contribute anything on the contractor's behalf. The problem arises when a contractor is terminated or the contract comes to an end and the contractor applies for employment insurance. In order to obtain employment insurance, the contractor may describe themselves as having been an employee and without clear evidence to the contrary, regardless what the parties may have agreed to in their independent contract agreement, the legal assumption is that the person was in fact an employee.
As a consequence, it is likely that your organization may be assessed by the Canada Customs and Revenue
Therefore, in order to avoid the foregoing, it is imperative that you enter into an independent contractor agreement which should explicitly require the independent contractor to make EI, CPP and income tax payments on their behalf and to indemnify your organization if they do not. In addition, ensure that at least the following indicia of an Independent Contractor are satisfied:
Versus the following indicia of an Employee in that:
The employee is subject to the employer's control in such matters as the duties to be performed, the times at which they must be performed and how.
Your Rights and Obligations When Hiring an Employee:
There are a number of laws that impact the employee recruitment process.
For example, labour legislation prohibits asking questions about trade union membership. Under Canadian immigration legislation, persons who are not Canadian citizens or permanent residents of
Further, human rights legislation restricts the advertising and/or asking of questions during the interview process on prohibited grounds of discrimination such as:
Race
Ancestry
Place of origin
Colour
Ethnic origin
Citizenship
Creed
Sex
Sexual orientation
Age (between 18 and 65)
Record of offences (i.e. criminal record)
Marital/family statue (i.e. whether someone is divorced or pregnant)
Disability
Employers should have employment policies in place to assist human resources personnel in ensuring that they are not engaging in hiring practices that are in violation of the Human Rights Code. The Ontario Human Rights Commission, which is the regulatory authority in charge of ensuring the implementation of the Human Rights Code , issues guidelines, including a sample application form, which is intended to guide employers so as to avoid breaching any of the provisions contained in the Code available at www.ohrc.on.ca .
For a comprehensive checklist of permissible and non-permissible pre-employment inquiries and a list of effective versus ineffective nondiscriminatory recruiting practices, please refer to the checklists located on this VLS website.
Your Rights and Obligations during Employment:
Your legal obligations derive from three main sources:
the employment contract;
the common law; and
the legislation
Employment Contract:
Every employer is legally bound to comply with the terms of the employment contract provided that the contract is legally enforceable and no particular term of the agreement violates the employee's statutory rights. For example, if the term of the contract stipulates that the employee is required to give three weeks notice and the legislation only requires two, then the statute takes precedence over the contract.
Legislation:
Workplace Health and Safety: Under the Occupational Health and Safety Act in Ontario , a n employer is obligated to ensure that employees have a safe work environment including having access to safe tools and equipment. An employee may refuse work where they believe that any equipment, device or the physical condition of the workplace is likely to endanger themselves or another worker. The main purpose of the Occupational Health and Safety legislation is to:
To provide safe working conditions by identifying hazardous activities and substances, by fencing dangerous areas, putting proper shielding around equipment;
To ensure safe employment practices and the use of protective equipment such as hard-hats, goggles and other protective clothing;
To establish programs that educate employers and employees on safety issues;
To prepare and review an OHS policy and develop a program to implement same
To keep accurate records of handling, storage and use of chemicals by employees
Every employer should post a copy of this Act in a conspicuous place.
Where the are more than 20 people regularly employed in a workplace where toxic substances are used, the Act requires the employer to establish a Joint Health and Safety Committee which must consist of at least 50% of non-managerial employees. The Committee is then charged with the following duties:
To identify sources of danger or hazard to workers
To make recommendations for improvement
To suggest maintenance and monitoring procedures respecting the health and safety of workers
To obtain information regarding potential or exiting risk hazards, practices/standards in other industries and for the testing of equipment, materials, chemical, etc.
Minimum Wage: Employment Standards Act sets minimum wage requirements, which is the lowest hourly rate an employer can pay its employee. All full-time and part-time employees are entitled to receive minimum wages.
Manner of Payment of Wages: Employees must be paid in cash , cheque or direct deposit with employee's consent. As well, there are provisions relating to the frequency of pay (not less than every two weeks) and the information the employee must be given regarding the pay including the period which the pay covers and source deductions required by statute.
Employment Insurance : The Employment Insurance Act is a federal statute designed to provide an insurance system for those who are unemployed. The employer is responsible for making certain deductions from the employees' pay and to remit them to the Canada Customs and Revenue Canada (CCRA). Further information should be obtained from the CCRA. Note that a sole proprietor is entitled to make employment insurance contributions on their own behalf.
Income Tax Deductions: U nder the federal Income Tax Act , employers are required to withhold a certain portion of each employee's salary, wage, bonus, commission or similar payment and remit the withheld money to CCRA.
Hours of Work: Employment standards legislation provides that no person can be required to work more than an 8-hour workday. In addition, no person can be required to work more than between 40 and 48 hours in any week. Any time worked over and above these hours is (with few exceptions) subject to overtime pay. There are also required meal break of at least 30 minutes for eating within the first five hours worked.
Public Holidays: Provided that employees meet the qualifications under the employment standards legislation, they are entitled to a paid day off for those days designated as public holidays. Public holiday pay is equal to the regular and holiday pay earned over the previous four working weeks divided by 20 (i.e. basically a regular day's pay).
Vacations: Under employment standards legislation, employees must be given at least 2 weeks paid vacation after completing their first 12 months of employment. The employer shall also pay the employee 4% of the employee's regular annual salary and must hold accruing vacation pay in a deemed trust for the employee. The employer and employee may agree to forgo accrued vacation time, (with the approval of the Director of Employment Standards) but the employer is still obligated to pay vacation pay.
Overtime: Overtime is typically defined in employment standards legislation as any time worked by an employee that exceeds the maximum number of hours per week an employee may work under the legislation. As a rule, overtime rate of pay must equal at least 1.5 times the regular hourly wage (or if the employer and employee agree, time can be taken at the same 1.5 in lieu of wages).
Equal Pay for Equal Work: There should be no difference based upon gender for people who perform substantially the same work, who use the same skills, exert comparable effort and have similar working responsibilities under similar working conditions. Generally, if one job requires the same level of skill, effort and responsibility as another job, those jobs can be said to be of equal value. No trade union shall cause an employer to contravene this equal pay obligation.
Maternity Leave: Provided an employee meets the qualifications of the relevant employment standards legislation, they are entitled to maternity or pregnancy leave. Both full-time and part-time employees qualify for pregnancy leave which usually lasts for 17 weeks. Pregnancy leave starts no earlier than 17 weeks before the due date or date of birth, and no later than the due date or date of birth. The leave ends 17 weeks following the start of the pregnancy leave. The employee is required to give 2 weeks notice before leaving for or returning from pregnancy leave, and 4 weeks before expected return date from leave if not returning. Each employee taking pregnancy or parental leave is allowed, under the law, to return to their job at the end of the leave. If during the time of leave a new benefit becomes associated with the job (i.e. the hourly wage increased), the employee is entitled to receive that benefit.
Parental Leave : Parental leave is also allowed under the Employment Standards Act . Parental leave starts within 52 weeks of first custody, care and control of the children (or if pregnancy leave is taken then immediately after pregnancy leave). If pregnancy leave is taken, then parental leave ends 35 weeks following the start of parental leave; and if no pregnancy leave is taken, then parental leave may be taken 37 weeks following the start of parental leave. The same notice requirements apply as for pregnancy leave note above.
Emergency Leave: If an employer has more than 50 employees employed at the workplace, employees are entitled under the Employment Standards Act to take emergency leave for a maximum of 10 days per year for emergency leave. There is no requirement under the Employment Standards Act that employees be paid during this leave. However, the employee can continue to participate in any work related benefit plans. Employees are entitled to take emergency leave due to illness, injury, medical emergency, death, illness or urgent matter relating to the following identified individuals:
Employee's spouse/same-sex partner, brother or sister
Employee's (or employee's spouse/same sex partners') parent, step-parent, child, step-child, foster child, grandparent, step-grandparent, grandchild or step-grandchild
Employee's child's spouse/same sex partner
A relative dependent upon the employee for care or assistance
Sick Leave: The Employment Standards Act does not require the employer to give employees sick leave. Whether you do or not, is discretionary. That said, terminating an employee because they became ill or unable to work is fraught with potential liability. Among other things, it may be considered a violation of human rights legislation insofar as it amounts to discrimination on the basis of disability. The law tends toward the position that an employee is entitled to paid sick leave.
Discrimination: The restrictions against employer discrimination under human rights legislation apply throughout the period of employment. Discrimination refers to any refusal to employ or to continue to employ any person, or adversely affect any current employee on the basis of that individual's membership in a protected group. There are two types of discrimination:
Direct Discrimination: Occurs when an employer adopts a practice or rule which on its face discriminates on a prohibited ground. For example: No Catholics or no women or no blacks employed here.
Indirect Discrimination: Refers to a situation where an employer, in good faith, adopts a policy or practice that has an unintended, negative impact on members of a protected group. For example: Employee referrals.
Sexual Harassment: any unwelcome sexually oriented behaviour that makes an employee feel uncomfortable or obstructs an employee from doing their work, or interferes with employment opportunities, is sexual harassment. It may be obvious, such, as crude jokes, or subtle, such as a request for a date by a superior that an employee feels compelled to accept. The offender is personally liable for the conduct. However, an employer may be liable even if unaware of the incident unless the employer has been proactive in preventing the harassment. Employers are advised to:
Create a sexual harassment policy and post it in a conspicuous place
Train employees in the policy and make it part of new employee orientation
Encourage employees to speak up if harassed
Develop a clear complaint procedure
Discipline offenders by written warnings, suspension without pay and/or dismissal
Ensure that the policy covers clients, outside providers, volunteers, visitors
Typically the method of dealing with sexual harassment cases has been to file a complaint with the Ontario Human Rights Commission. This process, while free of any legal expense to the individual, is slow and cumbersome. The alternative is to use existing "tort" law to sue civilly. The process is faster and there is no limitation on the sum to be recovered. These cases can be heard by juries. However, the downside is that there are costs consequences to be paid in the event the claim does not succeed, unlike the Human Rights process.
Record Keeping:
All employers in
The employee's name, address and starting date of employment (this must be kept for three years after the employee stopped working for the employer)
The employee's date of birth if the employee is a student under 18 ( this must be kept either three years after the employee's 18 th birthday or three years after the employee stopped working for the employer, whichever happens first)
The hours worked by the employee each day and week
For a detailed guide outlining the rights and obligations of both employers and employees under the Employment Standards Act and the Occupational Health and Safety Act , please visit the Ministry of Labour at: http://www.gov.on.ca/LAB/english/es/ .
Common Law:
Payment: The common law implies a duty on the employer to pay the employee. The employer must not only pay the employee their wages but must also reimburse the employee for any expenses the employee had to incur in the course of their duties. The employer does, however, have the right to set terms and conditions on these expenses including the right to approve them in advance.
Reasonable Accommodation: An employer must take reasonable steps short of causing undue hardship to adapt any work rules that would discriminate against an employee. The employer must put in place modifications to discriminatory employment practices or procedures to meet the needs of members of a group being affected by the employment practice or procedure. Some of the factors a court would consider are:
Financial cost to employer as result of making accommodation
Disruption of existing collective agreement
Impact of lowered morale on other employees
Flexibility of workforce and facilities
Magnitude of risk for workers and general public when safety is compromised
Bona Fide Occupational Requirement: An employer must implement a procedure to defend a discriminatory employment practice or policy on the grounds that the policy or practice was adopted in an honest and good faith belief that it was reasonably necessary to assure the efficient and economical performance of the job without endangering employees of the general public.
Your Rights and Obligations When Firing Employees:
An employer has the right to terminate the employee for just cause and in effect breach the employment contract. An employee may also be dismissed without cause so long the employer provides reasonable notice of the termination or pays the equivalent in salary, which is the measure of damages at common law. Whether the employee is terminated with or without cause, the employee is entitled to receive their vacation pay, wages and benefits, if any, usually within a certain number of days after the day of termination.
1. Termination for Just Cause:
Termination for cause is also referred to as summary dismissal. An employer has the right to dismiss an employee immediately for good reason, without advance notice (hence the reason for summary dismissal) and without payment of damages. This is just cause in law and includes the following circumstances:
Theft
Dishonesty
Frequent absenteeism, not due to illness
Intoxication affecting the employee's work
Insolence and insubordination
Frequent lateness
Incompetence: Before an individual can be found incompetent, the employee must be given written warnings. The employer must be proactive in correcting an employee's work otherwise, without any warnings, the employer may be found to have approved the conduct.
Misconduct: This term may refer to dishonesty, cheating on expense accounts, disrespect, unco-operative attitudes and/or failure to obey reasonable orders. Once again however, the employee must be given notice and a chance to improve their behaviour. The law is that serious misconduct cannot refer to an isolated incident especially if the employee is remorseful or has taken steps to change their behaviour. A single incident of misconduct will constitute serious misconduct in exceptional circumstances such as theft or sexual harassment.
Sexual harassment: Employers must conduct a proper investigation of any allegations of sexual harassment. The employer is responsible under human rights legislation for the acts of their employees, and could be fined.
Retaliation: employers cannot fire an employee for launching a complaint with the government that the employer has violated employment standards legislation.
Personality conflict: a conflict of personalities is not just cause for termination
Conflict of interest: Holding a second paid job in the same area of work may be a conflict of interest and the first employer must approve the extra work. An employee cannot compete with or take away business from the main employer.
Note that just cause can also be discovered after the dismissal has taken place. It is advisable to include the above in the policy and procedures manual.
2. Termination without Cause:
An employer is entitled to dismiss an employee without just cause, provided that reasonable notice of the termination is given or pay in lieu of termination notice (otherwise referred to as termination pay). Exceptions to this general rule include the following situations:
The employment contract has a specific term (i.e. two years) in which case you must pay in full the wages and other benefits the employee would have received had the contract been carried through to its full term
The employee is on maternity or parental leave
The employee seeks to enforce their rights under the applicable employment standards legislation
(i) Notice Period
Employment standards legislation sets out the minimum notice periods (advance written notice) for termination without cause, which is 1 week for less than 1 year or service, 2 weeks for less than 3 years of service, 3 weeks for less than 4 years of service, 4 weeks for less than 5 years of service, and so on, to a maximum of eight weeks.
Essentially, the longer the employee has worked for you the longer the period of advance notice. Further, at common law, the notice must be reasonable. This is a maximum period and may be increased depending on the following factors:
Length of Service: (see above)
Age: it is usually easier for a 25-year old worker to find employment rather than one who is 50 years of age
Level of position: A 25-year old with no previous experience would probably need one month's notice after one year's service. A 45-year old who left a previous job after 10 years may need several month's notice if terminated from their position
Length of time to find alternative employment: a legal secretary may find a job more easily than a president of a multinational corporation
In the alternative, employers can fire an employee immediately and provide termination pay, which is the pay the employee would have been entitled during the notice period had they continued to work for you. For example, if the employee is entitled to 2 weeks notice, you may terminate their employment effective immediately and provide them with a cheque for two weeks pay. It is worthy to note that during the notice period, all the entitlements owed to the employee, such as vacation pay and benefits, must be paid out. In addition, you may not alter the terms of the employment contract. For example, you may not lower the employee's wages or vary their working hours during the notice period.
As a matter of freedom of contract, an employee is able to negotiate a lesser notice period than the common law notice period as a term of their employment contract. However, an employee cannot agree to a notice period that is less than the statutory notice period. Therefore if an employer wishes to use such a clause, it is essential to make certain that it is greater than the statutory requirement and that the term is brought to the employee's attention at time of hiring.
(ii) Severance
An employee is entitled to severance pay if:
The employee was employed for more than five years, or
The severance occurred because of permanent discontinuance of all or part of the employer's business, or
The employee is one of 50 or more employees whose employment relationship has been more severed within a six-month period or the employer has a payroll of over 2.5 million
3. Wrongful Dismissal
Wrongful dismissal by an employer occurs whenever an employee is terminated
Without cause and without either due notice of termination or termination pay in lieu of notice
With cause and the cause is not justified
Contrary to applicable legislation (i.e. a Human Rights Code violation)
In each case an employee can bring a legal claim against the employer that, if successful, may entitle the employee to a variety of remedies, including an award of damages. The employer must be fair in dealing with their employees. Fair is always open to interpretation, but it would suggest that the employee along with any witnesses be given an opportunity to provide an explanation for the behaviour which lead to their termination. For example, if you regularly allow an employee to stumble into work drunk, you cannot condone such misconduct and then fire the employee on that basis. Similarly, an employee who has been habitually late after a close relative died cannot be reasonably terminated for cause on that basis.
Therefore it is important to keep a written record of all warnings and notices given to the employee and to keep a paper trail by tracking all incidents in their personnel file. If you must terminate an employee, do so in a private office with a witness to spare the employee any mental distress and/or humiliation. The manner of giving notice and termination is given great weight by a court should an employee decide to sue for damages on account of mental distress.
Courts have the power at common law to award compensation and damages in the case of a successful wrongful dismissal claim. A wrongfully dismissed employee may recover damages for the following claims:
breach of contract
mental distress
damage to reputation
economic losses such as the costs of having to relocate
Factors that may increase the amount of damages the courts will award include:
If the employee moved from one province to another to take the position from which they were subsequently fired
The employee's health at the time of termination would make it difficult to find alternative employment
The employee had a secure position and was enticed away from that position by their present employer
Factors that have been found to decrease the amount of damages the courts will award include:
The quality of the employee's work was deteriorating
The employee had been looking for a position prior to dismissal
The employee was employed in a highly cyclical industry (i.e. construction)
The position itself was insecure and the employee was aware that the employer had financial difficulties before accepting employment
The employer provided job relocation counseling
The employee rejected the employer's offer of free placement services
A non-unionized employee may bring a claim through the employment tribunal system, traditionally used by lower level employees. However, when a tribunal makes a decision it is final and the employee cannot later apply to a court to recover damages. This does not apply to grievance tribunals held under collective bargaining agreements.
Constructive Dismissal
Constructive Dismissal is a type of wrongful dismissal that occurs when an employer unilaterally and fundamentally changes a significant aspect of the employment agreement that amounts to a demotion of the employee. Behaviour that may constitute constructive dismissal includes situations in which an employer:
Significantly reduces an employee's wages, salary or other remuneration
Requires an employee to change work locations
Significantly changes an employee's duties, title, responsibilities or job description
Significantly changes an employee's work conditions (i.e. a job that was formerly performed outdoors is now required to be performed indoors)
If it appears that changes to the employment arrangement were made in attempt to force the employee to quit, courts will be sympathetic to the employee. Therefore, in a situation where an employer is faced with legitimate economic and commercial problems and may need to relocate the business across town for example, there should be no fear of a wrongful dismissal claim if your employees were dealt with fairly.
Temporary Layoff
An employer is entitled to lay off employees on a temporary basis during slow periods of business. T he Employment Standards Act sets guidelines on how long an employer can temporarily layoff an employee. What the Act does not do, however, is actually give an employer the right to layoff it just places a limit on the exercise of the layoff right should it exist. It is important to note that a layoff, even for just a short time, can amount to a constructive dismissal even though the Employment Standards Act expressly allows for temporary layoffs. The courts have held, however, that the question of a layoff amounting to a constructive dismissal relates to the employment contract itself and the provisions of the Employment Standards Act do not apply. In order to prevent any abuses of an employer's right to temporarily lay off their employees, there are certain rules to keep in mind when doing so:
the temporary layoff cannot last for more than 35 weeks, after which time the employment will be considered terminated and the employee is entitled to termination rights and pay;
the employee is entitled to work during that period; and
if the employee refuses to return once the layoff period is over, they are not entitled to termination pay
6. Reinstatement
Typically, the common law does not allow for reinstatement for an employee who is not a unionized employee. The common law claim is one of a civil claim for damages based upon reasonable notice.
Provincial statutes that allow for reinstatement are the Environmental Protection Act , where a person has been terminated due to his insistence the Act be followed or the Employment Standards Act , where an employer refuses to reinstate after a maternity/paternity/compassionate/emergency leave. These situations are quite rare.
(i) Mitigation
The general rule is that an employee is entitled to be put back into the same position the employee would have been in, if they were permitted to continue in employment to the end of the reasonable notice period. However, an employee who has been terminated has the duty to reduce the damages by making every effort to find alternative employment.
This material is for discussion only and does not conclusively state the opinion of the author or firm on the subject matter nor does it provide an exhaustive review thereof.
30/11/04