by Nicola Sutton

When the employment relationship becomes impossible to perform because of a factor outside the control of a Canadian employer or employee, the employee’s employment can be terminated by virtue of frustration of contract. When an employee won’t be able to return to work because of injury or illness, the same applies. But not so for federally regulated employers such as banks, airlines, inter-provincial trucking companies, etc.

According to the recent decision of Kingsway Transport v. Teamsters, Local Union 91, the frustration argument is no longer available for those employers when the employee’s inability to return to work is because of a work-related injury or illness. read more…

by Marisa Victor and Christopher Copeland

Can a Canadian employee who is fired for cause sue for outstanding bonuses? What about if those bonuses relate to the period of the employee’s wrongdoing? This was the issue in Mady Development Corp. v. Rossetto, when a terminated executive sought to claim his bonuses for a period when he was found to be misappropriating company resources.

Facts

Leonard Rossetto was employed as an executive with a group of corporations (Mady). In fall 2007, he diverted labor, materials, and funds from Mady to renovate his house. He was fired on December 12, 2008, when Mady discovered his wrongdoing. Mady then sued him to recover the misappropriated corporate funds and resources. Rossetto counterclaimed for his bonuses for 2007 and 2008. Pursuant to his employment contract, he was entitled to an annual bonus equal to 30 percent of Mady’s profits after overhead. The parties ultimately submitted their dispute to arbitration. read more…

by Karen Sargeant and Clayton Jones

Last week, we reported on the Ontario Court of Appeal’s decision in Bowes v. Goss Power Products Ltd., which found that an employee does not have a duty to mitigate where an employment contract contains a fixed severance entitlement but no express requirement to mitigate.

The Court of Appeal relied on a number of factors in coming to this conclusion, which should provide a clear warning to employers across the country. This article sets out those factors and suggests ways in which employers can make their employment agreements or offer letters more bullet-proof. read more…

by Keri Bennett

It has been a fundamental principle of employment law that terminated employees generally have an obligation to seek alternate employment to minimize or mitigate their resulting losses. Their right to get from the terminating employer the pay they would have received during a period of reasonable notice is usually net of any other earnings during that period. But does this same rule apply where a contract specifies the employee’s severance entitlement?

In an important recent decision, Bowes v. Goss Power Products Ltd., the Ontario Court of Appeal concluded that the duty to mitigate does not, in fact, apply where employment contracts contain specific termination payments and the employment relationship is terminated without cause. This is important because Canadian law on this point has been mixed. read more…

by Jennifer Shepherd

Can a Canadian employer justify an employee’s dismissal for acts committed after he or she has been fired? The answer is: sometimes. In Gillespie v. 1200333 Alberta Ltd., an Alberta court overturned a lower court ruling that permitted an employer to retroactively justify an employee’s termination because the employee removed confidential documents from the office upon her termination. The question on appeal was whether the employee’s post-termination conduct was sufficient to limit the employer’s obligation to provide reasonable notice or pay in lieu of such notice.

The dismissal

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By Gulu Punia and Jennifer Shepherd

Deciding to retain a contractor rather than an employee can be the right decision depending on the needs of a business. But there are risks. If a court determines that the relationship is in fact an employment relationship, the employer can be liable.

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By Lyne Duhaime

In most Canadian jurisdictions, employers are limited in retroactively reducing pension benefits. The Quebec Superior Court recently considered employers’ rights in this regard in Synertech Moulded Products, Division of Old Castle Buildings v. Tribunal Administratif du Québec et al.

The court ordered the Quebec Regulator to register pension amendments proposed by the employer and said that absent specific powers, the Quebec Regulator could not arbitrarily refuse to register pension amendments to which affected employees had agreed.

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By Lyne Duhaime

On June 21, 2011, in Canadian Jewish Congress v. Polger, the Court of Appeal of Quebec overturned a decision of the Superior Court that had ordered an employer to pay millions of dollars in pension benefits based only on an alleged practice and without proper written documentation to that effect. The pension benefits in this case were deemed to be ex gratia payments only, not required to be paid to all departing employees by virtue of policy or practice.

Facts
Leona Polger and Abraham Smajovits had worked for the Canadian Jewish Congress for 36 and 22 years respectively when they were dismissed following a reorganization. Not surprisingly, they sued for termination pay. They included in their action a claim for supplemental pension benefits that they said weren’t provided in their defined contribution pension plan.

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By Lyne Duhaime and Ross Gascho

If your company is both the sponsor and administrator of a pension plan in a Canadian province other than Quebec, you should take note of the recent Ontario Court of Appeal decision in Re Indalex.

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By Christopher Ferguson and Stephen Acker

In 2010, Jen-Hsun Huang’s salary was $1. No, he’s not a fresh-faced intern. Rather, Huang is the CEO of Nvidia Inc., the graphics and mobile chipmaker with Intel-sized ambitions.

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