Anyone who has litigated human rights, or who has done research for said litigation, understands the challenges of putting together a claim for discrimination. However, that challenge becomes even more difficult when filing a claim for discrimination on the ground of family status. According to a relatively recent article in Canadian Lawyer Magazine (http://www.canadianlawyermag.com/), human rights tribunals, labour arbitrators and the courts will be faced more and more frequently with cases revolving around issues such as workplace flexibility and discrimination on the basis of family status, as families increasingly find themselves struggling to balance work and personal responsibilities. Unfortunately, the case law has not been very helpful, nor has it been very forgiving to these families.

In a 2004 British Columbia Court of Appeal case, Health Sciences Association of B.C. v. Campbell River and North Island Transition Society, the court held that in order to meet the prima facie threshold for discrimination on the basis of family status, it must be the employer who changes a term of employment resulting in serious interference with a substantial parental or other family obligation. At that point, the employer must prove that the change was a bona fide occupational requirement. However, the article points out that a “serious interference” isn’t required for a finding of discrimination on other grounds.

The Federal Court, and the Federal Court of Appeal, agreed in Hoyt v. Canadian National Railway, that, “The suggestion by the court in Campbell River…that prima facie discrimination will only arise where the employer changes the conditions of employment seems to be…unworkable and, with respect, wrong in law.” Meanwhile, Quebec’s human rights legislation doesn’t protect against discrimination based on family status, meaning that employers in Quebec have no duty to accommodate families hoping for flexibility in the workplace.

The article also suggests that the challenge becomes greater for human rights advocates when employers use the downturn in the economy as a defence for the termination of an employee. It has become easier for employers to argue that accommodation on the basis of family status would involve undue hardship. And, despite the conflicting case law across jurisdictions, the theme in many cases is that it is the responsibility of parents to make external arrangements for child care. In other words: get to work.

Cited from:

Glenn Kauth, “Accomodating for Family Status” (August, 2009) Canadian Lawyer Magazine.

“Employment standards legislation” and “class-action” are two phrases not commonly associated with one another - until very recently. An often ignored right to overtime pay united the two, and together the three are becoming a unique force to be reckoned with in Canada.

CIBC is both the first and now the most recent Canadian corporation to be dragged into the foray of class action law suits founded on an employment standards right to overtime pay. In June 2007, CIBC was hit with a $600-million suit from a group of its bank tellers and then, just a few weeks ago, was hit again by a $360-million suit from a group of its financial professionals comprised of stock analysts, investment bankers and financial advisors.

In between the two CIBC actions, KPMG, Scotiabank and CN Rail were presented with class action claims based on unpaid overtime. CIBC has stated it will be vigorously defending both claims but KPMG has reached a settlement with its employees.

The above cases have numerous features in common. The most intriguing common element is the combination of employment standards and class action. The less apparent but equally unique and interesting common feature is the type of employee involved. A brief look at these common features illustrates the novelty and thus the importance of this line of cases.

The underlying issue in these suits is the same: a misunderstanding of employment standards legislation. The CN Rail situation involves allegations of the misapplication of positions as “management” as it relates to eligibility for overtime pay. The KPMG case stemmed from a misconception that salaried employees do not have a right to overtime pay.

The format of the suits is the same: class action. Class action brings to employment standards legislation the power of numbers. With single employment standards claims the settlement amount can be minimal relative to the cost of altering policies, leaving little incentive for change. Not so when numerous claims are made - or where they have the ability to be made - simultaneously.

Most employment law cases are brought by previous employees. The problem current employees face is that neither employment standards legislation nor the common law is seen as conducive to solving issues in ongoing employment relationships. Many of the individuals in these class action overtime cases are still employed and intend to continue to be employed by their employers.

A further issue common to the above cases but unusual to employment standards, is the type of workers involved. The employees claiming their rights are “white-collar”, quasi-professional individuals. Historically, employment standards legislation has been used to create a floor of rights for “blue–collar” workers to maintain basic minimum levels of living.

The novelty of these cases speaks to their importance to employment law and employment lawyers:

• class-action coupled with employment standards legislation;
• current rather than former employees bringing actions; and,
• “white–collar” workers utilizing employment standards legislation.

Although the effect these actions will have on the employment landscape is yet unknown, conjecture is inviting. Some impact seems quite certain, some a little more speculative.

For a glimpse into the heart of an employment standards legislation class-action suit from inception to resolution, see Justice Perells’ reasons for accepting the KPMG settlement. For a cautionary word on class action and employment standards from an employment lawyer, see Daniel A. Lublin’s article on his blog, Toronto Employment Lawyer.

Update: The National Post ran a detailed article on Sunday about the class certification hearing which began on Monday, December 8.

This morning, the Supreme Court of Canada dismissed the leave to appeal application in Western Inventory Service Ltd. v. Darrell Wronko (”Wronko“).  In doing so, the debate in this province as to the proper approach to be taken when an employer seeks to amend an existing employment contract has effectively ended.

Wronko involved an employer who tried to modify a fundamental term of an employment contract with their long-service employee, Darrell Wronko.  Mr. Wronko had rejected the employer’s proposed changes, and so the employer gave him reasonable notice-two years in his case-that the new contract would in fact come into effect.  He consistently rejected the change during this time.  At the end of the period, the employer stated to him that as per the notice they had provided the amended contract was now in place and there would be no job for him if he refused.   Mr. Wronko again rejected it, left, and sued for wrongful dismissal.

Making a unilateral and unwanted change to a fundamental term of an employee’s contract of employment will in most cases constitute constructive dismissal.  Did the employer’s actions in this case guard them against a bona fide employee claim?  Did the end of Mr. Wronko’s employment constitute a resignation, a constructive dismissal, or a termination?  The employer’s giving of “notice” in this case was one way employers have sought to legally and unilaterally change a fundamental term of an existing employment contract without attracting a wrongful or constructive dismissal claim.  The question is, was this notice approach legally valid?

The trial judge seemed to think so.  The issue was whether the employer had the unilateral right to vary a fundamental term of the employment contract upon reasonable notice to the employee.  The trial judge held that the employer did in fact have this right.  In keeping with employment law jurisprudence that seemed to indicate an employer could make unilateral changes to an employment contract as long reasonable notice of the change had been given, Mr. Wronko’s claim was dismissed.  The employer’s actions were proper.  Mr. Wronko had resigned and was not entitled to damages.

The Ontario Court of Appeal did not agree.  It restated the three options that were available to an employee when an employer attempts to unilaterally change a fundamental term of an employment contract-one of them being clear rejection of the new term as Mr. Wronko did in this case.  An employee, as Mr. Wronko did, is entitled to insist on the employer’s adherence to the terms of the contract.  This act triggered an extra step that the employer must take.  The mistake the employer made was that it did not, at the outset, include explicit notice of termination with the two years notice of the change when it was rejected by Mr. Wronko.  What the employer could have and should have done was to “advise [Mr.] Wronko that his refusal to accept the new contract would result in his termination and that re-employment would be offered on the new terms.”  The employer did not do this, and because Mr. Wronko continued working, could be taken to have effectively accepted Mr. Wronko’s position that the terms of the existing contract remained in effect.   Because of their actions it was the employer that ended the employment relationship, not Mr. Wronko.  He was entitled to potential damages of two years as per the termination provision in his old contract.

As noted, the Supreme Court of Canada denied the employer’s leave to appeal.  Wronko now becomes the most recent case of a high authority in this province as to how an employer may make unilateral modifications to fundamental employment contract terms.

In its decision, the Court of Appeal has set out one way for an employer to make planned changes when an employee clearly rejects them.   An employer must take that extra step of notifying their employee that there will be a termination of their existing employment when the notice period they provide expires, and new employment under the altered conditions will begin.  Legally, this makes sense.  It is in accordance with constructive dismissal principles and logically equates reasonable notice of termination of employment with reasonable notice of termination of existing employment conditions.  Instead of ending an employment relationship altogether, the employer is just re-commencing it on different terms.

From another perspective, it may not make sense.  It effectively forces an employer to tell a long-service, loyal employee, or a newer employee who was recently welcomed to the company: ”You don’t accept these changes?  Well, now you’re terminated in x months’ time.”  It is true that changing a fundamental term of employment may have a detrimental effect on the employer-employee relationship no matter what course of action is taken, and that modifications could alternatively be made by ensuring they coincide with fresh “consideration.”  But it is the extra step Wronko upholds which can leave a more negative impression in the mind of an employee.

One might say that this is not a valid concern because it is essentially a human resources issue and not a legal one, and can be tempered through effective management skills and sensitivity.  But for an employer who is attempting to operate and consider bona fide operational business concerns while still maintaining positive and productive relationships with their employees, realistically, is there much of a difference between the two?  Is there any difference in substance between this approach and the one Western Inventory had taken?