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Barristers & Solicitors

SAMFIRU TUMARKIN LLP

Toronto Head Office:

350 Bay Street

Suite 1000

Toronto, Ontario

M5H 2S6

Mississauga Office:

2 Robert Speck Pkwy.

Suite 750

Mississauga, Ontario

L4Z 1H8

T: 416.861.9065

F: 416.361.0993

EMPLOYMENT LAW ISSUES DURING THE JOB SEARCH

PROCESS

Presented by: Lior Samfiru and Peter Cicak

Prepared for: Mississauga Employment Center

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Employment Law Considerations

Topics:

1. Employment contracts: what you need to know

2. Working as a consultant/independent contractor

3. Termination of employment: your rights

4. Steps in a wrongful dismissal lawsuit

5. Questions.

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Employment Contracts:What You Need to Know

Consider this: Written contracts almost always benefit the employer

Contracts are drafted by lawyers

You sign it, you have to live with it

Will govern your employment relationship and even conduct after employment comes to an end

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Employment Contracts:What You Need to Know

Important Contractual Clauses

1. Termination: The BIG OneConsider this Clause:

“If your employment is terminated without cause, the Company shall give you notice or pay as required by the Employment Standards Act of Ontario. This shall constitute your full termination entitlements”.

Employment Contracts: What you Need to Know

Termination Clauses: Employer will seek to minimize termination exposure

Employment Standards Act only prescribes minimums

Contract may have fixed notice period --- not always good.

The longer you work, the more important it becomes

Understand what you will get at termination (pay, bonus, benefits, etc.)

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Employment Contracts:What You Need to Know

2. Restrictive Covenants Non-competition provisions: duration, location, scope Non-Solicitation Confidentiality obligations Can significantly impact ability to find other employment

3. Other Clauses to Note: Are changes to duties allowed? Are changes to pay allowed? Are other documents mentioned (get a copy!) Does contract apply when position changes? 

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Employment Contracts:What You Need to Know

Negotiating Terms Negotiate before you start working.

Only fight the battles that matter

Don't ask and you shall not receive

Agree in writing to re-negotiate once specific conditions met

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Independent Contractor/Consulting Arrangements

Employee / Consultant: What's in a name? The employment contract places a certain label on the

relationship

Generally, the question is: Are you an employee, or are you self-employed?

No one factor is determinative of your relationship, including the label that the parties to the contract choose to place upon it

Contract here beneficial to both parties

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Independent Contractor/Consulting Arrangements

Factors to Consider: All relevant factors will be considered when defining the

relationship: Control over how your work is done

Ability to freely negotiate your pay and set hours for work

You own your own tools, materials; and

You take on the full profit or loss from your business

Are you economically dependent on one company, or are your activities an essential component of the business --> EMPLOYEE

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Independent Contractor/Consulting Arrangements

What Does Not Work: Changing the title only

Can only work for one employer? No good.

Title, but nothing else

You perform the same job as other EMPLOYEES

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Independent Contractor/Consulting Arrangements

Why be "Independent Contractor": Taxation

Ability to claim "reasonable business expenses", as opposed to being confined by statutory expense deductions;

Mischaracterization could result in a reassessment and might result in the imposition of fines

Payroll deductions No statutory deductions taken from pay (EI, CPP and

income tax), however Independent contractors:

Cannot collect EI benefits when unemployed; Would be responsible for making their own CPP contributions

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Independent Contractor/Consulting Arrangements

Considerations: No minimum standards protection

Independent contractors are deprived of minimum standards legislation

– Not subject to minimum wage, hours of work, vacation and other protections

Limited notice of termination rights

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Termination of Employment

Manners of Termination

Termination for cause - no notice

Termination without cause - notice!

Termination of Employment

Termination with cause

Employer can terminate employment for cause, where employee’s conduct is inconsistent with the continuation of the employment relationship.

Can only happen when the employee is guilty of repeated and very serious misconduct.

Employer has an obligation to take other lesser forms of discipline before resorting to termination.

One incident of misconduct is almost never enough. If employer establishes cause, no requirement to pay

severance. In reality, very difficult to establish cause, and employer may

be liable for damages for bad faith.

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Termination of Employment

Termination Without Cause

Can happen at any time, for any reason

Performance is irrelevant

Seniority is irrelevant

No termination as a result of a discriminatory ground (for example, no termination without cause because employee was absent due to an illness)

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Termination of Employment

Termination Without Cause (contd.)

Employer must provide reasonable notice or pay in lieu thereof

Starting point: employment contract

No contract: probably good news for employee

Must determine what reasonable notice is for each employee

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Termination of Employment

Termination Without Cause (contd.)

Notice is based on employee's age, length of employment, nature of position

Was employee induced to leave secure employment? Notice goes up.

Employer may decide to give working notice If no working notice, must be put in the same financial position

as if given working notice. Payment can be made as lump sum or as salary continuation. Package must include everything: salary, bonus, commissions,

benefits, stock options, vacation pay.  Important: employee has duty to mitigate

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Termination of Employment

Termination Without Cause (contd.)

Employer imposed time limits: take your time!

Always take package home and consider speaking to a lawyer

Employer will want a release

Consider if employer must pay lump sum (if payroll > $2.5 million) 

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Termination of Employment

Constructive Dismissal

Significant, unilateral, change to important contractual term

Gives rise to termination without cause

Employment contract is important

Resign...or else...

WRONGFUL DISMISSAL

Steps in Wrongful Dismissal Claim:

1. Demand Letter: resolves vast majority of disputes

2. Statement of Claim served by employee

3. Employer has 30 days to serve Statement of Defence

4. Mandatory Mediation (Toronto only): resolves close to 95% of employment lawsuits

WRONGFUL DISMISSAL

Continued:

5. Examinations for Discovery (only for lawsuits exceeding $50,000)

6. Pre-Trial Conference7. Trial

Timelines:To mediation: 3 monthsTo trial: 8 to 12 months

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For further information, please contact:

Lior SamfiruTel: (416) 861-9065

Fax: (416) 361-0993

www.stlawyers.ca

Offices in Toronto and Mississauga

Barristers & Solicitors

SAMFIRU TUMARKIN LLP

Toronto Head Office:

350 Bay Street

Suite 1000

Toronto, Ontario

M5H 2S6

Mississauga Office:

2 Robert Speck Pkwy.

Suite 750

Mississauga, Ontario

L4Z 1H8

Presented by: Lior Samfiru and Peter CicakPrepared for: Mississauga Employment Center

Trusted.

Dedicated.

Experienced.