July 19, 2012

Regional Employment and Labour Group Newsletter

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FACEBOOK POSTINGS MAY WARRANT TERMINATION

With the widespread use of social media, employers frequently have to discipline employees for inappropriate content on the Internet. A recent Alberta Arbitration decision, Canada Post Corp. v Canadian Union of Postal Workers, [2012] CLAD No 85, held that termination may be warranted when an employee posts on Facebook inappropriate and offensive comments that are tied to the workplace.

FACTS

The Grievor, a postal clerk at Canada Post, was terminated in 2009, after management became aware of derogatory postings she had made on Facebook. The postings specifically named two supervisors and the Grievor’s employer.

More than 30 postings were made to Facebook over a one-month period. Some of the postings made fun of the supervisors’ appearance and age. Other postings were violent, describing the voo doo dolls the Grievor had made of each supervisor and threatening harm to them. The most threatening posts alluded to the death of the supervisors.

The named supervisors became emotionally distressed as a result of the comments and required a significant amount of time off work. Upon their return to work, both supervisors were placed in different positions within the company.

The termination was grieved. The Union acknowledged that the postings were inappropriate and warranted discipline. However, they argued that termination was too harsh a penalty. The Grievor was in her early 50’s, close to retirement and had more than 30 years of service with Canada Post. The Grievor believed a toxic work environment had provoked the postings. Further, the Grievor believed the postings were only available to a select group of people.

ARBITRATION DECISION

The issue before the Arbitrator was whether the Grievor’s conduct warranted termination. The Arbitrator concluded the postings were abusive and intimidating. Furthermore, they identified two supervisors and the employer. The Grievor was unapologetic thus there was no evidence that her behaviour was likely to change. The Union offered three defences:

1) The Grievor did not intend her postings to be seen by management;
2) The Grievor was drinking when she made many of the postings and therefore should have diminished responsibility; and
3) The Grievor was provoked because of management’s bullying and belligerent behaviour.

The Arbitrator rejected all three defences. He held that the Grievor brought the postings into the workplace by having co-workers as Facebook friends. The Arbitrator explained that diminished responsibility due to drinking would only be considered a factor under exceptional circumstances which were not present in this case. Finally, the Arbitrator found that while the supervisor’s management style was aggressive, the postings were a grossly disproportionate response and could not be justified. No provocation was found to exist.

WHAT THIS MEANS FOR EMPLOYERS

Although the Arbitrator upheld the termination in this case, inappropriate postings on social media websites will not always warrant termination. When evaluating whether termination is warranted, arbitrators will consider whether:

• the posting was publicly available;
• the posting specifically identified the employer and/or employees;
• the posting caused any harm and if so, the extent of the harm; and
• the employee has shown any remorse for his or her conduct.

Where the social media content is not so extreme as to warrant termination, other forms of discipline may be imposed.

EMPLOYERS MUST EXPRESSLY REQUIRE EMPLOYEES TO MITIGATE

Bowes v Goss Power Products Ltd., 2012 ONCA 425 deals with whether an employee has a duty to mitigate damages when there is an employment contract provision stipulating a fixed term of notice or payment in lieu thereof.

FACTS

Bowes entered into an employment contract with Goss Power Products Ltd. in 2007 which stated that the employee could be terminated at any time without cause by providing a pre-determined period of notice or pay in lieu thereof. The contract was silent about the duty to mitigate.

In 2011, Bowes was terminated without cause; the termination letter indicated that his salary would continue for six months, but that he was required to actively seek employment and inform Goss Power should he attain employment prior to the end of the notice period. Bowes commenced employment with another employer at the same salary approximately two weeks after his termination. Goss Power took the position that Bowes had successfully mitigated his losses and ceased payment over and above the minimum statutory entitlement.

The applications judge held that Bowes was obligated to mitigate and was entitled only to the statutory minimum which he had already received.

ONTARIO COURT OF APPEAL DECISION

It is well settled in Canada that unless it is stated otherwise, reasonable notice of termination is an implied term of every employment contract and that a breach of this term will result in damages payable to the employee based on common law principles for determining reasonable notice. It is also well established that an employee has a duty to mitigate such losses.

The Court of Appeal held that the applications judge erred in finding that a contractually-fixed period of notice is indistinguishable from the common law reasonable notice period. When parties contract for a specified notice period or pay in lieu, they are opting out of the common law approach, including with respect to the duty to mitigate.

The Court of Appeal held that where an employment contract contains a stipulated notice entitlement arising from a termination without cause, the amount in question is either liquidated damages or a contractual sum. The duty to mitigate does not apply in either case, absent express contractual language stating otherwise. The Court of Appeal rejected the employer’s argument that an employee receiving pay in lieu of notice at the same time he is receiving wages from a new employer ends up receiving a double payment or a golden parachute. It reasoned that employment contracts are drafted primarily by employers and that individual employees often lack bargaining power. Because contractual notice provisions provide finality, closure and certainty to employers, and typically reduce what an employee would otherwise be entitled to receive at common law, the Court of Appeal felt it is not unfair to require an employer to explicitly state in the employment contract that the employee is subject to a duty to mitigate.

WHAT THIS MEANS FOR EMPLOYERS

If an employer enters into an employment contract specifying a fixed amount of notice or pay in lieu, whether the quantum is a fixed amount or readily calculable from the terms of the contract, and intends that the duty to mitigate will apply upon a termination without cause, the employer must express this intention in clear and specific language in the contract.

UNIONS REQUIRED TO MAKE FINANCIAL DISCLOSURE
BILL C-377: AN ACT TO AMEND THE INCOME TAX ACT (CANADA)
(REQUIREMENTS FOR LABOUR ORGANIZATIONS)

SUMMARY

The proposed bill will require all unions in Canada to file a public information return detailing how their money is earned and spent, to be published on a government website, and accessible to the public.

STATUS

Bill C-377 is a Private Members Bill proposed by Russ Hiebert (South Surrey – White Rock – Cloverdale, CPC) with first reading on December 5, 2011, entitled an Act to Amend the Income Tax Act (Requirements for Labour Organizations). The Bill passed second reading on March 14, 2012 and is currently before the Standing Committee on Finance.

PURPOSE

According to Mr. Russ Hiebert, the purpose of the proposed amendment to the Income Tax Act, RSC 1985, c. 1 is to increase transparency, public accountability, and public confidence in Unions by requiring that all Unions file a public information return (Hansard, February 6, 2012). This public information return will detail how their money is spent, and will be made available to the public online. The member stated that because Unions are given tax exempt status, they must be accountable to those tax payers who provide this benefit, similar to tax exempt charitable organizations.

PARTICULARS

The proposed amendment has four key parts. The first part (s. 149.01(1)) adds three definitions applicable to section 149: labour organization; labour relations activities; and labour trust. These defined terms apply only to this section, and define the terms broadly so as to include all labour organizations involved in collective bargaining, and their activities.

The second part establishes the new requirement that every Labour Organization and Labour Trust file with the Minister a public information return for the fiscal year within six months from the end of each fiscal year. Section 149.01(3) then states that the public information return must include three general categories of information for that fiscal period: a) financial statements; b) statement of aggregate amount of transactions and disbursements; and c) a statement of all labour relations expenditures and non-labour relations expenditures. The financial statements must include a balance sheet, as well as a statement of income and expenditures. The statement of transactions and disbursements must include a statement with each transaction over $5,000 shown as separate entries, with name, payer and payee, and a description of the purpose of the transaction. The disbursements specifically must include identification of monies spent on political activities, lobbying, labour relations activities, legal activities, as well as disbursements to officers or employees, loans and statements of accounts, and employee benefits including pensions. The statement of labour relations and non-labour relations expenditures must include the relevant disbursements discussed above divided into expenditures on labour and non-labour relations, as well as relative amounts of salaries paid to officers and employees. There is an additional requirement for Labour Organizations with headquarters outside of Canada to provide a statement showing amounts paid to the labour organization or trust on behalf of the taxpayers in Canada, and expenditures inside and outside of Canada, recorded separately (s. 149.01(3)(d)).

The third part, Section 149.01(4) states that the public information return shall be made available to the public on the departmental website in a format allowing for word searches, and cross-referencing of data.

The fourth part, Section 239, makes any contravention an offence, and subject to a fine of $1,000 for each day that they fail to comply.

CONCLUSION

Should this Bill pass, this information will be published on the internet and available to the public, including rival unions and employers with whom the union is to negotiate. While 7 out of 10 provinces already require some form of financial disclosure to union members (PEI, Alberta and Saskatchewan currently have no reporting requirements), this Bill focuses on public disclosure and in that way is a significant addition to the Income Tax Act. The disclosure also includes sensitive issues such as lobbying and political donations, which may raise concerns of government backlash. The Bill applies to both provincially, as well as federally regulated unions. By framing the amendment as an income tax issue, which falls under the federal powers in the Constitution, the reporting requirements cross the usual constitutional barrier which prevents the federal government from passing legislation which regulates unions under provincial jurisdiction.

Contact

Please direct questions or suggestions to:

New Brunswick

Trisha Gallant-LeBlanc

Nova Scotia

Alison Bird

Prince Edward Island

Alanna Taylor

 


Cox & Palmer publications are intended to provide information of a general nature only and not legal advice. The information presented is current to the date of publication and may be subject to change following the publication date.