Employment and Labour Law 2013: Discussion Panel

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Employment and Labour Law 2013: Discussion Panel

  1. 1. Employment and Labour Law SEMINARS | 2013
  2. 2. FACT SITUATION #1 – THE NIGHTLY NEWSFrom 1991 to 2012 Dan Jeffries was the anchor of Wolf News, acable network owned by a media consortium.He repeatedly took on a political party by ridiculing a number of theircandidates for their position on gay marriage and just abouteverything else which earned him the anger of company President,Jane Honda, and ultimately a “pink slip”.The company gave Dan eight weeks’ working notice and agreed tohonour the termination provision in his contract provided that heagreed to notify them if he became reemployed. 2
  3. 3. THE NIGHTLY NEWS (cont’d…)The Employment Agreement between the parties provided for 10months’ notice or pay in lieu (base salary and bonus but no furtherbenefits).Dan was earning a salary of $480,000.00 with a 25% bonus.Fortunately he managed to find a new job with the samecompensation package by the expiration of the eight weeks.The employer alleges that Dan has mitigated his damages and Dansues. 3
  4. 4. THE NIGHTLY NEWS (cont’d…) What are the issues?If the parties settle, where does all the money go? 4
  5. 5. THE NIGHTLY NEWS (cont’d…)DISTRIBUTION OF FUNDSAnnual base salary: $480,000.00Annual bonus of 25% = $120,000.00Total annual compensation $600,000.00 ($50,000.00 per month)Contractual entitlement to 10 months $500,000.00Contribution to legal fees 10,000.00Total money payable by Defendant $510,000.00 5
  6. 6. THE NIGHTLY NEWS (cont’d…)Dan Jeffries worked from 1991 to 2012 (21 years).TD2 Roll-Over: The employee can roll-over $2,000.00 for every year orpart calendar year of employment up to and including 1995.5 x $2,000.00 = $10,000.00The employee can also transfer from a lump sum retiring allowance anamount to use up any unused RRSP room as shown on the employee’smost recent Notice of Assessment from CRA. Here assume that Danhad $30,000.00 unused RRSP room.Total roll-over: $40,000.00Allocation from settlement to actual legal fees (obtain undertaking to billno less than amount allocated) $20,000.00. 6
  7. 7. THE NIGHTLY NEWS (cont’d…)Step 1: Total settlement + contribution to legal fees $510,000.00Step 2: RRSP roll-overs - 40,000.00Arrange for transfer of funds directly from employer to financialInstitution without withholdingsStep 3: Payment directly to Plaintiff’s counsel(actual legal fees) - 20,000.00Step 4: Remaining funds $450,000.00Step 5: Arrange payment in 2012 requested by Plaintiff $15,000.00Step 6: Calculate withholding at source ($0 - $5,000.00 = 10%,$5,000.01 to $15,000.00 = 20%, above $15,000.00 is 30%)Here 20% of $15,000.00 = $3,000.00 payable to CRA - 3,000.0080% of $15,000.00 is $12,000.00 payable to Plaintiff - 12,000.00 7
  8. 8. THE NIGHTLY NEWS (cont’d…)Step 7: Payable in 2013 $435,000.0030% of $435,000.00 = $130,500.00 to CRA - 130,500.0070% of $435,000.00 = $304,500.00 to Plaintiff - 304,500.00 $ 0.00TOTAL CHEQUES PAYABLEFinancial institution $ 40,000.00Pelican O’Brady Pain 20,000.00CRA 3,000.00Plaintiff 12,000.00CRA (2013) 130,500.00Plaintiff (2013) 304,500.00TOTAL… $510,000.00NOTE: Any EI repayment obligations come out of net funds to employee. 8
  9. 9. FACT SITUATION #2 – THE GOOD LIFEAlicia is so possessed of a variety of talents that despite a hecticschedule campaigning at political rallies for her husband and raisingtwo active teenagers, her firm has assigned her to some of its mostsignificant litigation notwithstanding her position as an associatelawyer.Now she has been asked to handle two pieces of employmentlitigation. 9
  10. 10. THE GOOD LIFE (cont’d…)Matt Mauler is a young and aggressive associate working at Alicia’sfirm.Matt is more focused these days on his music career andauditioning for Canadian Rock Star than his law practice.Unbeknownst to the firm, he has been relying heavily on onlineprecedents and he has not taken the time to make sure that theyare all “state of the art”. Recently an Employment Agreement whichhe drafted has come under some scrutiny. 10
  11. 11. THE GOOD LIFE (cont’d…)The following provision in the Employment Agreement has drawnnegative attention: The employer may terminate the employment of the employee by providing notice (or pay of base salary in lieu thereof) of two weeks for each completed year of employment.Matt acknowledges that he was in a rush when he drafted thisprovision but he believes that the intention of the parties was clear. 11
  12. 12. THE GOOD LIFE (cont’d…)Brian Rightheart had been employed by the firm for 25 years, mostrecently as its HR Manager.An otherwise exemplary employee, Brian had for the past severalyears been engaged in an extra marital affair in contravention of thefirm’s non-fraternization policy with an Administrative Assistant whois 15 years his junior. 12
  13. 13. THE GOOD LIFE (cont’d…)Instead of complying with the disclosure requirements of the company’spolicy, Brian: a) Repeatedly denied the existence of a romantic relationship in response to direct questioning. b) Had the Administrative Assistant promoted to a position within his department; and c) Refused to stay out of the workplace as requested during an investigation into the “affair”.When Brian’s employer decided to terminate his employment hestormed out asserting “just cause is a myth in this province... I willsee you in court”. 13
  14. 14. THE GOOD LIFE (cont’d…)What advice should Alicia give to the partnership? 14
  15. 15. FACT SITUATION #3 – UPTOWN MANORJonathan Valet was the butler for 30 years at Uptown Manor, a palatialestate that employs numerous housekeepers, cooks, chauffeurs, maidsand groundskeepers to service the every need and whim of the familythat has lived there for generations.For years it has been a not so well kept secret that Jonathan has a“friend” and that many nights after the family are asleep Jonathan slipsout of the manor using one of the vehicles and returns before dawn. 15
  16. 16. UPTOWN MANOR (cont’d…)When it is subsequently discovered that Jonathan’s friend is a man, thefamily decides that they no longer require a butler and provideJonathan with the eight weeks’ notice required by the EmploymentAgreement signed by Jonathan mid morning on the day he started 30years ago.Jonathan looks for other work but at 60 finds few opportunities and 13months post termination suffers a stroke that renders himunemployable. 16
  17. 17. UPTOWN MANOR (cont’d…)At the date of termination Jonathan was paid $50,000.00 per annumand enjoyed a comprehensive suite of benefits including health, dental,drug, life and disability coverage.In the ensuing litigation the family asserts that the after hour’s comingsand goings of Jonathan amounted to just cause (albeit after acquiredcause). 17
  18. 18. UPTOWN MANOR (cont’d…)What are the legal issues? 18
  19. 19. Thank Youmontréal  ottawa  toronto  hamilton  waterloo region  calgary vancouver  beijing  moscow  london

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