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Canadian Employment Issues (Page 3)
DISCLAIMER - The information provided here is of a general nature and may not apply to any specific or particular situation. It is not to be considered as a legal advice nor presumed to be indefinitely up to date.
Economic Considerations
During a periods of economic recession, the courts tend to be sympathetic to the employee and would not take into account the economic circumstances faced by the employer when assessing damages for wrongful dismissal. The case of Bohemier v. Storwal International Inc. in the Supreme Court of Ontario acknowledged that the employer might be "downsizing" because of its own economic difficulties and that to add to those difficulties by assessing large damage awards for wrongful dismissal might very well push the defendant corporation into bankruptcy. Mr. Justice Saunders said ?“as this is a contract matter, the notice period must also be reasonable for the employer. What may be a reasonable period to allow a discharged employee to find new employment may be more than an employer should be asked to pay.... If the period of notice is extended too far, the ability to dismiss employees for economic or other reasons may be seriously impaired or rendered illusory.?/p>
Courts are prepared, for the most part, to take into account market conditions as they affect the employee's ability to find reemployment for the purpose of lengthening the notice period. But they are not likely to keep in mind that a notice period must be reasonable from the employer's point of view and not place the business in jeopardy or make the cost prohibitive for an employer to terminate employees during an economic downturn. Courts were particularly sympathetic to older terminated employees who had provided long service, and the awards exemplified that concern. There was an assumption that the older the employee, the longer the service, and the higher the level of responsibility, the more difficulty the employee would experience in finding equivalent employment. Younger, lower-level employees without lengthy service were often disappointed in the courtroom because their expectations, fueled by the media, were seldom justified. Once economic conditions improved, as they certainly have in southern Ontario, it might be expected that all awards would be reduced because it takes less time for terminated employees to find new jobs during good times than during bad times.
4. Employee Protection
Both the federal government and the provinces have enacted laws that protect employees' health and safety. In 1965, the federal government enacted Canada Labour Code. The Code establishes authority to set a minimum wage and requires payment of "time and a half" or 150 percent of the normal wage rate for overtime work, defined as hours worked over the standard forty-hour workweek. However, the Code provides exceptions to the minimum wage and maximum hour requirements for "bona fide" executives, administrators, or other professionals.
To protect employees' safety, the government of Ontario passed the Occupational Health and Safety Act in 1990. The act requires workplaces to be "free from recognized hazards" that could cause serious injury or death. The act also created the Occupational Safety and Health Administration (OSHA) to oversee and evaluate compliance with health and safety standards. OSHA promulgates health and safety rules, investigates employer health and safety compliance, requires detailed records of health and safety incidents, and can bring administrative enforcement actions against employers who fail to comply with its rules and regulations. Entrepreneurs must be aware and follow these health and safety standards.
Employers must also be cognizant of employees' rights to unpaid leave for illness to themselves, a child, or parent as well as for the birth of a child or the adoption of a child. This benefit applies generally to companies with fifty or more employees, but it should be considered by all growing start-ups.
5. Protection of the Startup
Non-Compete Agreements
A non-competition agreement can be thought of as an employment prenuptial. As one commentator explained: "As long as the parties are happily married, no one reads the document." A non-compete agreement is designed to protect a company when a key employee, whose knowledge may be both the greatest asset and threat to the company, leaves for greener pastures. Too often, the details of the non-compete become the focus of each party's attention only when it is called into force. Non-compete agreements are usually enforceable so long as they are: 1) based upon valid consideration; 2) necessary to protect the company's interests; and 3) reasonable in geographic scope and duration.
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