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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.
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.
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.
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.
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.
The much-awaited appeal decision in Fresco v. CIBC was released in September. The appeal court declined to interfere with the original decision of Justice Lax. She had denied Dara Fresco’s bid to bring a class action against CIBC for unpaid overtime.
This is one of three high-profile cases we have been following, in which employees are seeking to bring class actions for millions of dollars in unpaid overtime. In any class action the one bringing the suit must show that there are common issues, the resolution of which will advance the litigation for everyone. It has become clear that the “common issues challenge” is very much alive when it comes to overtime claims.
Michael McCracken’s claim against Canadian National Railway (CN) recently got the go-ahead to proceed as a class action. The third in a trilogy of high profile overtime cases in Canada, McCracken v. Canadian National Railway Company brings the score to 2 to 1 for certification of the class action — at least in the first round. Appeals are in progress. So stay tuned.
All three cases involve federally regulated employers. The basic issue is entitlement to overtime pay under the Canada Labour Code (the Code). Fresco v. Canadian Imperial Bank of Commerce and Fulawka v. The Bank of Nova Scotia are “off the clock” cases — claims by non-managerial employees for unpaid overtime work. These were discussed in an earlier article in this newsletter.
By Bill Duvall
As the prognosis for Canada’s economy remains uncertain, the Canadian court system continues to churn out employment cases arising from distressed employers. On this front, two recent cases are of interest. In the first, an Ontario court concludes that employees may not be entitled to statutory severance pay when they are provided with pension bridging and supplementary benefits. In the second, a British Columbia court is more employee-friendly, giving a broad interpretation to the definition of wages.
Ontario employees not entitled to severance pay
In Ontario, employees with at least five years’ service are generally entitled to up to 26 weeks’ severance pay when their employer discontinues its business. Employers are exempt from this severance pay obligation when an employee retires on termination and receives an “actuarially unreduced pension benefit that reflects any service credits which the employee, had the employment not been severed, would have been expected to have earned in the normal course of events for purposes of the pension plan.”
By Stephen Acker and Julia Kennedy
As we have repeatedly reported, courts are finding new ways to put money in former employees’ pockets in Canada. Another example is the Ontario Court of Appeal’s recent decision in Link v. Venture Steel Inc. and Ruben Rivas, where it agreed with the trial judge’s decision awarding a former employee more than $4 million in damages. Only $550,000 of the damages was pay in lieu of notice. The bulk of the damages related to shares that had been improperly purchased by the employer at the time it terminated the employee’s employment for cause.
By Lyne Duhaime
There are lots of recent activities in the pension field at the federal level in Canada. The government’s actions in the past 12 months constitute the most important reform of federal pension laws since the 1980s. Here’s a quick overview.
It started on January 9, 2009, when the government of Canada released a discussion paper titled “Strengthening the Legislative and Regulatory Framework for Private Pension Plans Subject to the Pension Benefits Standards Act, 1985.” This was followed by a series of public meetings across Canada. They were led by Ted Menzies, Parliamentary Secretary to the Minister of Finance. Concerned stakeholders had the opportunity to make their views known to the government by speaking at one of the public meetings or by making written submissions. The government received a wide range of advice.
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