A recent decision of the Ontario Superior Court of Justice illustrates the challenges employers can face when attempting to enforce a signed release. In Swampillai v. Royal & Sun Alliance Insurance Company of Canada, 2018 ONSC 4023 (CanLII), the Court was asked to consider on a motion for summary judgment on whether or not the release signed by Mr. Swampillai at the time of the termination of his employment barred him from pursuing a claim for long term disability benefits. Justice Cavanaugh found that Mr. Swampillai had signed the release under circumstances that were unconscionable and, as such, the release could not prevent him from pursuing a claim for long term disability (LTD) benefits. Mr. Swampillai was thus free to continue his action against his former employer, Royal & Sun Alliance Insurance Company of Canada (RSA) and Sun Life Assurance Company of Canada (Sun Life), who acted as the administrator of RSA’s long term disability benefits program, even though the release signed by Mr. Swampillai specifically cited “long term disability benefits” as a released claim. So what went wrong for RSA? To understand the Court’s decision, we need to review the circumstances that existed at the time that RSA and Mr. Swampillai negotiated the severance package.
Mr. Swampillai had worked for RSA as first a contract employee and then a permanent, full-time employee since 2001. He worked as a distribution clerk and in the mail room, with some physical demands like lifting and moving. In or around 2013, he developed certain medical conditions that prevented him from working in his role as a distribution clerk. He first went on short term disability leave and then transitioned to long term disability leave, where he remained for a period of two years. Like many LTD plans, RSA’s LTD distinguished between being disabled from one’s “own occupation” and “any occupation.” After two years of disability, an employee would only qualify for continued LTD benefits if they could show that they were disabled from “any occupation.” If not, they were expected to return to work in some capacity.
Unlike many employers, RSA was self-insured for long term disability benefits. RSA retained Sun Life to adjudicate employee claims for LTD but Sun Life was not responsible for paying these benefits. RSA relied on Sun Life to communicate with employees regarding their claims, collect and review medical evidence and make a determination as to eligibility for benefits.
In March of 2015, Mr. Swampillai was notified by Sun Life that his eligibility for LTD benefits would cease as of July 22, 2015, on the basis that he was not disabled from performing “any occupation.” He was told he had until October 22, 2015, to appeal Sun Life’s decision. On May 12, 2015, Mr. Swampillai appealed the decision and provided further medical information to Sun Life in support of his claim. On June 2, 2015, he received a second denial letter. Again, he was advised that he had until October 22, 2015, to appeal. On June 19, 2015, Mr. Swampillai retained a law firm to assist him with his claim for LTD benefits. Meanwhile, RSA had conducted an evaluation as to whether or not it had alternative work for Mr. Swampillai that would fit his restrictions and had concluded that no such positions were available. Accordingly, it notified Mr. Swampillai by way of a letter dated June 24, 2015, that his employment with the company was being terminated. RSA offered Mr. Swampillai a severance package in exchange for a release of claims against the company. Notably, the June 24, 2015, termination letter from RSA confirmed that Mr. Swampillai’s LTD benefits would end as of July 21, 2015, and the RSA release listed “long term disability benefits” among the released claims. Mr. Swampillai was given until July 22, 2015, to review the offer and sign the release. Mr. Swampillai sent portions of the severance offer to his lawyer, whose assistant advised that he should speak to an employment law specialist about the offer. Mr. Swampillai did not do so. However, he did negotiate a more favourable severance offer with RSA before eventually signing the release on July 14, 2015. Mr. Swampillai gave evidence via affidavit that prior to signing the release, he had notified RSA in a telephone call that he disputed Sun Life’s decision regarding his entitlement to LTD benefits.
In June of 2017, Mr. Swampillai commenced an action against RSA and Sun Life for allegedly unpaid LTD benefits. RSA brought this motion for summary judgment, asking the Court to enforce the release and dismiss Mr. Swampillai’s claim. Mr. Swampillai’s counsel argued that the release was unconscionable and should be set aside. The test for showing that an agreement between two parties is unconscionable has four elements:
Bill 148 made significant amendments to Ontario’s Employment Standards Act, 2000. Below we have provided a timeline outlining when the most significant changes will come into force. Please note that this is a summary only, and does not contain all of the details relating to the amendments outlined below. Should you require further information regarding any of the amendments, please contact one of the lawyers in CBB’s Employment and Labour Group.Read Full Article
The federal government recently introduced a bill in the House of Commons that would amend both the Canada Labour Code (the Code) and the Parliamentary Employment and Staff Relations Act to address concerns regarding workplace harassment and sexual harassment. The government says that Bill C-65 is intended to provide victims of workplace bullying, harassment and sexual harassment with better protections and support. It also aims to prevent workplace harassment and bullying by making employers responsible for ensuring that their workers are not subjected to risk of “accidents and physical or psychological injuries and illnesses.” Previously, the Code’s workplace safety provisions were primarily focused on accidents and injuries. The inclusion of psychological injuries and illnesses is a significant expansion of the employer’s health and safety responsibilities toward its workers. The draft Bill would also expand the protections in Part II of the Code (which relate to workplace safety) to Parliamentary employees, who had previously been exempt from those provisions of the Code.
To achieve these goals, Bill C-65 would require federally regulated to take the following steps:
On October 18, 2017, the Government of Ontario announced that between October 18, 2017 and December 1, 2017, it will be seeking input from the public to review certain exemptions under the Employment Standards Act, 2000 (the “ESA”). The announcement signals a potential for further changes to labour and employment laws in Ontario in addition to those currently contemplated under Bill 148.Read Full Article
On June 1, 2017, the Ontario Government introduced Bill 148, the Fair Workplaces, Better Jobs Act, 2017. As we have previously reported, if passed, Bill 148 will significantly alter the employment and labour landscape in Ontario. Today, Bill 148 passed Second Reading after debate in the Ontario Legislature, moving one step closer toward becoming law. The Ontario Government published a news release regarding the Bill’s status, which can be found here.Read Full Article
The Human Rights Code Amendment Act, 2017 (“Bill 164”) was introduced to the Ontario Legislature and passed First Reading on October 4, 2017. Bill 164 proposes to add four new prohibited grounds of discrimination to Ontario’s Human Rights Code:Read Full Article
The Ontario Labour Board has found that Canada Bread’s drivers, who were principals of franchisee corporations that contracted with Canada Bread for the right to deliver products along designated routes, are dependent contractors and capable of being certified into bargaining units.Read Full Article
Many employers have found themselves in a situation where their employee has provided a medical note or doctor’s recommendation that doesn’t seem quite right. But how do you investigate further without invading your employee’s privacy and without breaching your duty to accommodate under the Ontario Human Rights Code (the “Code”)? A recent decision of the Ontario Divisional Court, Bottiglia v. Ottawa Catholic School Board and the Human Rights Tribunal of Ontario 2017 ONSC 2517 (“Bottiglia”) provides some helpful guidance.Read Full Article
On June 1, 2017, the government introduced Bill 148, the Fair Workplaces, Better Jobs Act, 2017. As we have previously reported, if passed, Bill 148 will significantly alter the employment and labour landscape in Ontario. For an overview of the proposed changes to the Employment Standards Act, 2000 (ESA) and the Labour Relations Act (LRA) found in the original version of Bill 148, see our previous posts on changes to the ESA and changes to the LRA.Read Full Article
With legalization of recreational marijuana use on its way, many Canadian employers have been looking for guidance on how to respond to a potential increase in the number of employees who have access to or make use of cannabis products. The Human Resources Professionals Association (HRPA) has recently issued a white paper identifying some of the issues employers may face once the Cannabis Act comes into effect and making some recommendations for both employers and government. In connection with preparing this white paper, the HRPA conducted a survey of its members and found that only 11% of responding human resources professionals believed that their workplace policies addressed the use of medical marijuana in the workplace at all and 46% believed their workplace policies did not adequately cover issues that may arise as a result of legalization of recreational marijuana. Close to 90% of respondents had no personal experience with accommodating an employee who used medical marijuana.Read Full Article
As Canadian employers and U.S. employers with Canadian subsidiaries well know, the climate in Canada has never been favourable to drug and alcohol testing. Earlier this month, however, the Supreme Court of Canada endorsed an employer’s decision to terminate the employment of an employee who, post-accident, tested positive for drugs – even after he disclosed that he thought he was addicted to cocaine. The case is Stewart v. Elk Valley Coal Corp., 2017 SCC 30.Read Full Article
Following the release of the final Changing Workplaces Review report last week, Ontario employers and (and their lawyers) have been anxiously awaiting the government’s response. In press conference held today Premier Kathleen Wynne announced that her government would be introducing proposed legislation, The Fair Workplaces, Better Jobs Act, 2017, which will amend both the Employment Standards Act (ESA) and the Labour Relations Act (LRA). Click here for our update on the changes to the LRA.Read Full Article
As we previously wrote here, last week Ontario’s Ministry of Labour released the final report in its Changing Workplaces Review (Report), which proposed a number of amendments to the Employment Standards Act, 2000 (ESA) and the Labour Relations Act, 1995 (LRA). Today, in response to the recommendations made in the Report, Ontario Premier Kathleen Wynne held a press conference to announce that her government would be introducing proposed legislation, The Fair Workplaces, Better Jobs Act, 2017 (the Act), which will amend both the ESA and the LRA. While not providing detail on the specifics of the proposed amendments, the Ontario Government released a Backgrounder outlining its proposed legislative changes. Click here for our update on the proposed changes to the ESA.Read Full Article
After much anticipation, the Special Advisors appointed to lead the Ministry of Labour’s Changing Workplaces Review (Review) released their final report (Report) this past Tuesday (May 22, 2017). The Report proposes a number of amendments to the Employment Standards Act, 2000 (ESA) and the Labour Relations Act, 1995 (LRA).Read Full Article
Today the Ontario Government released its long-awaited final report (Report) in its Changing Workplaces Review (Review). Initiated in February of 2015, the Review aimed to consider broader issues and trends affecting Ontario’s workplaces (such as an increase in precarious employment and a shift from manufacturing to service jobs) and to assess how Ontario’s existing labour and employment law framework addressed those issues.Read Full Article
In a good news decision for employers, the Court of Appeal for Ontario in Kielb v National Money Mart Company, 2017 ONCA 356, denied an employee’s claim for payment of a non-discretionary bonus on the basis that it was expressly excluded by the relevant contract language.Read Full Article
The Liberal government of Ontario has confirmed a release date for its long-awaited Changing Workplaces Review, which solicited feedback on, and will make recommendations regarding changes to, the province’s Employment Standards Act and Labour Relations Act. The government is targeting the week of May 22, immediately following the Victoria Day holiday.Read Full Article
When an employer breaches an employment agreement and an employee resigns in response, a critical question is raised: has the employee been constructively dismissed? If so, the employee is deemed to have been terminated and the employer may incur substantial liability for pay in lieu of notice or even punitive damages. However, not every breach of an employment agreement will constitute constructive dismissal, and the resolution of this issue can make all the difference in terms of employer liability.Read Full Article
Under the Employment Standards Act, 2000, (the ESA), most employees whose employer regularly employs 50 or more employees are entitled to 10 days of unpaid personal emergency leave annually for any of the following reasons:
• a personal illness, injury or medical emergency;
• the death, illness, injury or medical emergency of a family member (as listed in the ESA);
• an urgent matter that concerns a close family member (as described in the Act).
In our overview of significant cases and trends in 2016, we reported on a series of decisions signalling a move away from the overly technical interpretation of termination clauses in employment contracts, and a return to a more employer-friendly, common sense approach focusing on the intentions of the parties.Read Full Article
When faced with a disability-related accommodation request, employers often have questions around the type and scope of medical information they can request from the employee in order to support the accommodation request and facilitate the accommodation process.Read Full Article