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:
By way of a 52-29 vote, the Canadian Senate has now passed the federal government’s bill legalizing recreational marijuana in Canada. It is now up to the federal government to set a date for formal legalization, with provincial governments receiving an eight to twelve week period to prepare for the sale of the drug within their province. The Bill is expected to receive Royal Assent within a matter of days.Read Full Article
The Ministry of Labour has announced that, as of July 1, 2018, public holiday pay entitlements in Ontario will be calculated using the formula that existed prior to the enactment of the Fair Workplaces, Better Jobs Act, 2017 (FWBJA). Many commentators - including the authors of this blog - had noted that the new formula contained in the FWBJA resulted in a significant windfall for casual employees and arguably unjustified costs for Ontario employers. The Ministry of Labour has responded to these concerns by reinstating the old public holiday rules on an interim basis while it reviews how to simplify public holiday pay entitlements under the Employment Standards Act, 2000 (the ESA).Read Full Article
In Lancia v. Park Dentistry, 2018 ONSC 751, the Ontario Superior Court found that an employee who resigned after her employer provided 18 months’ notice of changes to certain terms of her employment and a signing bonus had not been constructively dismissed.Read Full Article
The impacts of Bill 148 continue to be felt by Ontario employers as even more significant changes to the Employment Standards Act, 2000 (the ESA) are starting to come into effect.Read Full Article
Ontario employers can be forgiven for a lack of enthusiasm in ringing in 2018. Several significant changes to the Employment Standards Act, 2000 (the “ESA”) come into effect as of January 1, 2018 and many employers are scrambling to ensure that their policies and practices are up to date. However, the ESA amendments are not the only employment issues that should be on your radar for 2018. We’ve put together a short list of suggested New Year’s resolutions to help employers proactively address potential workplace issues in 2018 and beyond.Read Full Article
Cassels Brock recently hosted a seminar highlighting some of the significant changes and implications of Bill 148 and discussing strategies on how to best prepare for these changes to employment standards, enforcement measures and labour relations. You can now watch a videocast of this seminar - featuring Laurie Jessome, Caitlin Russel and Pamela Hinman - here.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:
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
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
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
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
The Ontario Ministry of Labour has announced that it is creating a new working group to provide the government with advice and feedback on how to address the gender wage gap in Ontario. The working group will be comprised of members of the business, labour and human resources communities, as well as representatives of women’s advocacy groups. The working groups are expected to focus on how the government can better leverage tools such as the Pay Equity Act and parental leaves to address gendered wage disparity in the workplace. The Ontario government estimates that Ontario’s gender wage gap ranges from 14% to 26%.Read Full Article
Late last week the Ontario Ministry of Labour posted the outcome of its recent blitz focused on temporary foreign workers and young workers. For the purpose of the blitz, workers under 25 were classified as “young workers.” Both categories of workers are considered to be vulnerable by the Ministry of Labour.Read Full Article
The Ministry of Labour has announced a targeted compliance blitz focused on “repeat violators” of the Employment Standards Act, 2000 (the ESA). The blitz will take place during both September and October 2016. Although the Ministry did not define “repeat violators,” it is safe to assume that it refers to employers who have been prior recipients of compliance orders or successful claims under the ESA.Read Full Article