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Why They Want to Work on a Saturday: Union Trickery Finally Hits a Snag In a preliminary decision rendered on May 5, 2011, the New Brunswick Labour and Employment Board strayed from its “inflexible practice” of using the date of application as the date for determining the number of employees employed in an application for certification in the construction industry. Overview In Jones Masonry, there were two applications for certification: one from the Labourers and one from the Bricklayers. The applications were sent by registered mail on Saturday, December 4, 2010 when only 10 of 73 employees were working (seven Labourers and three Bricklayers). The preliminary issue before the Board was whether the union could use Saturday to count the employees when only 21% of the Labourers were working and 8% of the Bricklayers. In essence, if the Saturday was used, the Labourers only needed the support of 4 employees to unionize 33 labourers and the Bricklayers only needed the support of two employees to unionize 40 bricklayers. If Friday or Monday was used, the Labourers would have needed 17 signed cards and the Bricklayers would have required 21. The Arguments The employer in this case framed its argument around a number of cases including the New Brunswick Court of Appeal in Bransen. In that case, the Court of Appeal determined that while the Board can use something other than the date of application to determine whether the union has the necessary support, it was not unreasonable to use the date of application, even if it is cherry-picked by the union on a day in which the workforce is reduced. The employer argued that it would be wholly inappropriate in this case to adopt the “inflexible” rule and use the date of application when two employees could determine Atlantic Employers’ Counsel LEGAL DEVELOPMENTS OF INTEREST TO BUSINESS IN ATLANTIC CANADA Summer 2011 Editor: Clarence Bennett Fredericton Office 506.444.8978 [email protected] In this issue Why They Want to Work on a Saturday: Union Trickery Finally Hits a Snag Employer’s Cry of “Eureka” Not Audible to Court of Appeal: After Acquired Cause Overturned in Spielo Decision Global Restrictive Covenants and Global Business A Question of Priorities: Employer Duties and Beneficiary Rights After Indalex Limited Responding to Workplace Accidents Top Policies Employers Should Consider Implementing Mitigation of Damages in Cases of Constructive Dismissal: A New Option for Employees Favouring Older Workers Discriminatory “Making Whole”: Words of Caution on Termination and Disability Benefits From Justice Echlin

Atlantic Employers’ Counsel - smss.com · be relied upon by Spielo as after-acquired cause since . 4 it could have been discovered and dealt with at the time of his termination

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1 Competitive Intelligence 2 2010 NBQB 16G

Why They Want to Work on a Saturday: Union Trickery Finally Hits a Snag In a preliminary decision rendered on May 5, 2011, the New Brunswick Labour and Employment Board strayed from its “inflexible practice” of using the date of application as the date for determining the number of employees employed in an application for certification in the construction industry. OverviewIn Jones Masonry, there were two applications for certification: one from the Labourers and one from the Bricklayers. The applications were sent by registered mail on Saturday, December 4, 2010 when only 10 of 73 employees were working (seven Labourers and three Bricklayers). The preliminary issue before the Board was whether the union could use Saturday to count the employees when only 21% of the Labourers were working and 8% of the Bricklayers. In essence, if the Saturday was used, the Labourers only needed the support of 4 employees to unionize 33 labourers and the Bricklayers only needed the support of two employees to unionize 40 bricklayers. If Friday or Monday was used, the Labourers would have needed 17 signed cards and the Bricklayers would have required 21.

The ArgumentsThe employer in this case framed its argument around a number of cases including the New Brunswick Court of Appeal in Bransen. In that case, the Court of Appeal determined that while the Board can use something other than the date of application to determine whether the union has the necessary support, it was not unreasonable to use the date of application, even if it is cherry-picked by the union on a day in which the workforce is reduced.

The employer argued that it would be wholly inappropriate in this case to adopt the “inflexible” rule and use the date of application when two employees could determine

Atlantic Employers’ Counsel LEGAL DEVELOPMENTS OF INTEREST TO BUSINESS IN ATLANTIC CANADA

Summer 2011

Editor:

Clarence BennettFredericton Office506.444.8978 [email protected]

In this issue Why They Want to Work on a Saturday: Union Trickery Finally Hits a Snag Employer’s Cry of “Eureka” Not Audible to Court of Appeal: After Acquired Cause Overturned in Spielo Decision Global Restrictive Covenants and Global Business A Question of Priorities: Employer Duties and Beneficiary Rights After Indalex Limited Responding to Workplace Accidents Top Policies Employers Should Consider Implementing Mitigation of Damages in Cases of Constructive Dismissal: A New Option for Employees

Favouring Older Workers Discriminatory

“Making Whole”: Words of Caution on Termination and Disability Benefits From Justice Echlin

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the fate of 40. The Employer argued that the “inflexible interpretation” must give way to reasonableness and fairness.

The unions in this case also used the Bransen decision to argue that there was no reason to vary the “inflexible interpretation” and that the long-standing practice is the only way to deal with the problems associated with the transient nature of employment in the construction industry and the need to avoid protracted labour disputes.

The DecisionThe Board in this case determined that there was no reason to vary the normal practice of using the date of application for the Labourers. Using seven employees out of 33 was “not so significantly different from the many the Board has concluded” in the past.

However, the Board found that the Bricklayers application was significantly different stating that it “so offends the representation principle which is encoded in the Act that it is unreasonable to conclude that Saturday, December 4, 2010 is a fit representative date for this Application”.

What This Means For YouA jaundiced view of this case would follow the union logic complaining that this case makes the law too confusing and inconsistent. It is difficult to see how 12% of the employees determining the fate of 100% is better than 5% (i.e., 4 of 33 can determine whether the Labourers have the necessary support but not 2 of 40 for the Bricklayers). Unfortunately, the Board has provided no guidance on “how few are too few”.

There are two lessons to be learned from this case.

First, even the most inflexible practices of the Labour Board will occasionally give way to common sense and fairness. The Board in this decision recognized its need to “weigh the interplay of all the interests involved” and not to apply

its rules with “blinders on”.

Secondly, employers in the construction industry must be careful when scheduling work on “off-days” with only a fraction of the workforce. Unions will be on the lookout for vulnerable employers who have scheduled a few employees to “finish a job” or to work on Saturday. Sometimes an employee is eager to work on a Saturday for a reason – make sure you know what it is.

The employer in this case was represented by J. Gordon Petrie, Q.C.

Clarence Bennett Fredericton Office 506.444.8978 [email protected]

Employer’s Cry of “Eureka” Not Audible to Court of Appeal: After Acquired Cause Overturned in Spielo DecisionOn May 12, 2011, the New Brunswick Court of Appeal released its decision in Doucet et al v. Spielo et al. Two former employee shareholders of Spielo Manufacturing Incorporated, Doucet and Dauphinee, sued Spielo alleging that their dismissal had been orchestrated by Spielo and its majority shareholder for the purpose of reclaiming their shares and depriving them of the opportunity of receiving fair market value in the company when it was subsequently sold. The former employees contended that Spielo’s

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majority shareholder was aware of the pending sale of the company at the time they were dismissed and asserted claims in excess of 30 million dollars. Following a trial lasting approximately six weeks, the New Brunswick Court of Queen’s Bench had dismissed all claims and allowed the counterclaim based upon after acquired cause – awarding the return of pay in lieu of notice provided to Doucet.

A significant portion of the Court of Appeal decision examines the award of costs in favour of Spielo. The New Brunswick Court of Appeal ultimately reduced the award made at trial from $838,490.62 to $745,325, plus disbursements. However, the Court of Appeal noted that the costs award in this decision is still the largest ever awarded by a New Brunswick Court. In the result, the New Brunswick Court of Appeal dismissed all claims, but directed a new trial with respect to the counterclaim. This article examines that aspect of the case.

The Facts In September 2002, two employees of Spielo Manufacturing Inc., Yves Doucet and Peter Dauphinee, were terminated without cause being alleged. They sought approximately 30 million dollars in damages as compensation for losses suffered by them in relation to their shareholdings in Spielo. Doucet and Dauphinee alleged that Spielo had failed to disclose all relevant documents, and as a result of a series of pre-trial hearings, the Court ordered Spielo to painstakingly recover thousands of old emails from back-up tapes. Ironically, the efforts of Spielo to recover these emails assisted their case, as they contained evidence that Mr. Doucet had breached his fiduciary duty and his duty of fidelity and loyalty to Spielo by operating his own company (DOVICO) while employed as an officer of Spielo.

The allegations of after acquired cause were strengthened during the cross-examination of Mr. Doucet when new evidence was presented to the effect that Mr. Doucet had demanded a $60,000 “kickback” from one of Spielo’s

former suppliers for awarding him a contract with Spielo.

After nearly seven years of litigation, Justice Rideout of the New Brunswick Court of Queen’s Bench rendered a decision dismissing the claim. Adding to the woes of Doucet and Dauphinee, Justice Rideout allowed Spielo’s counterclaim on the basis of “after acquired cause for dismissal”, ordering Mr. Doucet to repay the $252,000 severance package he had received from Spielo, plus interest. Unsatisfied with the trial judge’s reasoning, Doucet and Dauphinee appealed the decision. The New Brunswick Court of Appeal handed down their decision on May 12, 2011.

The Decision The Court of Appeal upheld Justice Rideout’s decision to dismiss the 32 million dollar claim. However, a new trial was ordered in relation to the counterclaim for “after-acquired cause”, that is, to determine whether Doucet should repay his severance.

The Court of Appeal reasoned that there is an important distinction to be drawn between acts of misconduct during employment of which the employer knew or should have known and acts of misconduct that could not have been discovered by a diligent employer during the course of the employee’s employment. The Court of Appeal was reluctant to find “after acquired cause” where the misconduct was discoverable as a result of an employer’s ordinary due diligence in observing what is happening in the work place. In the Court of Appeal’s view, the conduct of Mr. Doucet in relation to DOVICO was discoverable and was not addressed during the course of his employment with Spielo. Mr. Doucet had discussed the potential of DOVICO with the president of Spielo during his employment and a local newspaper had announced Mr. Doucet as “Young Entrepreneur of the Year” for the success of DOVICO. Therefore, Mr. Doucet’s alleged misconduct could not be relied upon by Spielo as after-acquired cause since

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it could have been discovered and dealt with at the time of his termination. According to the Court of Appeal, this result was compelled by a provision in New Brunswick’s Employment Standards Act that requires employers to give written reasons for dismissal to employees at the time of their dismissal when cause for dismissal is being alleged.

Furthermore, while there is little dispute that accepting a kickback while under employment of Spielo would have been grounds for immediate dismissal, the Court of Appeal was not satisfied that Mr. Doucet was provided with a sufficient opportunity to adduce evidence in reply to the allegation. The finding that Mr. Doucet had accepted the kickback negatively affected his credibility and, without a chance to directly respond to the allegations, the entire issue of “after acquired cause” was to be sent for retrial.

What This Means For YouAlthough the Court of Appeal decision in Doucet v. Spielo Manufacturing confirms that serious employee misconduct, discovered after a without-cause termination can ground an action for the return of severance payments, the actions must have been unknown and not discoverable by the employer through the exercise of due diligence while the employee was working. Furthermore, to prove after acquired cause the misconduct must have been sufficiently serious as to justify immediate termination of the employee had it been discovered during the course of their employment.

This decision confirms that although “after-acquired cause” provides a valid defence to wrongful dismissal, employers should not “take the role of employment archaeologists, looking through the remnants of an employee’s work history in the hope of unearthing grounds for dismissal where none were thought to exist.”

Spielo was represented in this case by J. Gordon Petrie, Q.C., Cathy Lahey, and Clarence Bennett.

Alison StrachanHalifax Office 902.420.3387 [email protected]

Jeffrey WaughSummer Student Halifax Office 902.420.3200 [email protected]

Global Restrictive Covenants and Global BusinessThere has never been a more compelling time for employers to have concerns relating to goodwill, data and trade secrets than in our current global economy. Much of our guidance in dealing with restrictive covenants was developed during the earlier part of the 20th century. With the rapid growth of global industries, it was inevitable that a global restrictive covenant would eventually be considered by a Canadian court. Although not closing the door on such restrictions, the court in Chem-Trend Limited Partnership (“Chem-Trend”) v. Mason leaves us with further guidance when drafting this type of document. In particular, when drafting a restrictive covenant, being specific is essential.

Chem-Trend was in the business of formulating, manufacturing and selling certain release agents and processing chemicals used in tire production for customers around the world. To restrict its employees from competing with them after they were no longer employed with Chem-Trend, the company put a restrictive covenant in its “Confidential Information Guide and Agreement”. This restrictive covenant provided that for one year post-termination, for whatever reason, former Chem-Trend employees would be prevented from:

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…[engaging] in any business or activity in competition with the Company by providing services or products to, or soliciting business from, any business entity which was a customer of the Company during the period in which I was an employee of the Company…

In 1992, Tom Mason, then 25 years old, signed off on this clause and began working for 17 years with Chem-Trend as a technical sales representative. Mason’s territory from 1992 to 1993 was all of Ontario; from 1993 to 2001 was eight states in the U.S.; and, from 2001 to his termination in 2009 all of Canada. In 2009, Mason sued Chem-Trend for wrongful dismissal. Chem-Trend’s counterclaim sought damages for breach of contract saying Mason had, in fact, used his knowledge and experience at Chem-Trend to gain business opportunities within one year of his dismissal. In August 2010, an Ontario judge found in favour of Chem-Trend saying the restrictive covenant was reasonable as a broad scope was necessary, given the nature of the business, along with the fact that Mason worked within a number of regions during his career. Further, a broad restriction was justifiable because Mason had significant information about Chem-Trend’s business (including customers and pricing) that could be used against Chem-Trend and hurt its business. The court also commented that the time period was only for one year and this was a relatively short period of time for Mason to endure.

This finding by the Ontario Superior Court of Justice signalled that courts were willing to provide globally active companies with the ability to make restrictions going beyond traditional borders and protecting them on a world-wide basis. In the nine months following, many legal writers heralded this Ontario decision as an indication that the courts were willing to broadly recognize global restrictive covenants. In the meantime, Mr. Mason appealed the lower court decision and arguments that the restrictive covenant was not enforceable were heard in April 2011. In early May, the Ontario Court of Appeal overturned the lower court decision saying that although the clause was not

ambiguous, the complete global prohibition on competition for one year was overly broad and unreasonable.

The Court said that the application judge erred in saying the restrictive covenant was not an overly-broad restriction on the activity of Mason for the following reasons:

• When examining the agreement as a whole, there were other clauses (e.g., a separate covenant protecting trade secrets and confidential information) that provided significant protection for the company. • A prohibition on dealing with businesses that were former customers of the company could result in a very stale list of businesses in the context of a 17-year employee and is inconsistent with a one-year restriction on competition after which the employee would be allowed to compete freely. • Mason was not the president or CFO but only part of the technical sales force and was not limited just from soliciting former customers but from dealing with them in competition with Chem-Trend. • Practically, it was impossible for Mason to know which potential customers he was prohibited from doing business with as the scope was so broad (e.g., “any business entity which was a customer of the Company during the period in which [he] was an employee”).

What This Means For YouThe court did not close the door on global restrictive covenants but has provided guidance for drafting globally restrictive covenants. Because of the general view that public policy weighs against enforcement of restrictive covenants, drafters should ask whether there are other ways to achieve the result required. A “one size fits all” approach is not the best way to address the global issue as some employees may require stronger restrictions whereas others may not. Be specific and consider the employment context when drafting. In this case, the outcome may have been very different if Mason was on the executive

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management team of the company or if there was some precise way to identify particular customers Mason was prohibited from doing business with.

This may not be the end of this particular story. We will keep you informed of any future developments between Chem-Trend and Mr. Mason.

Grant Machum Halifax Office 902.420.3330 [email protected]

Alison StrachanHalifax Office 902.420.3387 [email protected]

A Question of Priorities: Employer Duties and Beneficiary Rights After Indalex LimitedThe decision released this spring by the Ontario Court of Appeal in Indalex Limited (Re) raised more questions than answers for employers, particularly those in insolvency situations. While many of those questions will relate to specific issues with statutory deemed trusts and proceedings under the Companies’ Creditors Arrangement Act (CCAA), the decision also created potential issues that will apply more generally.

For example, greater scrutiny will apply to employers that wear both “hats” as plan sponsor and plan administrator. While the fact that employers can play both roles is recognized in pension legislation and court decisions, what employers do when those two “hats” conflict may cause additional liability to the employer. Further, the decision also raises questions about the priority of plan beneficiaries versus secured creditors of the employer. Legislation and previous cases have limited the additional priority given to plan beneficiaries to specific circumstances, particularly in proceedings under the Bankruptcy and Insolvency Act. The decision suggests that those priorities may be shifted based on the circumstances and equities (or inequities) of the case, particularly in light of the vulnerabilities of the beneficiaries and the financial status of the employer and its creditors. This adds additional considerations that will need to be taken into account by employers and lenders in the future.

BackgroundIndalex Limited (Indalex) was the sponsor and administrator for two pension plans, one for its salaried employees and

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another for executives. In March 2009, Indalex’s parent company (Indalex U.S.) sought Chapter 11 bankruptcy protection in the United States. Shortly after that, in April 2009, Indalex obtained protection from creditors under the CCAA. No notice was given to the plans’ beneficiaries. At the time, both plans were underfunded by approximately $6.75 million. The salaried plan was wound up effective December 31, 2006. The executive plan was only in the process of being wound up. The notice of proposal for the wind up was not issued until March 10, 2010 with a proposed effective date of September 30, 2009. Indalex had made the required current service cost and special payments that were due. The remaining deficiencies were not paid as they were not yet due; they were to be paid over time in accordance with requirements under the pension legislation.

As of July 31, 2009, all of the directors of Indalex resigned and both Indalex and Indalex U.S. formally came under the same management. The CCAA court allowed Indalex to borrow funds under debtor-in-possession (DIP) credit agreements and granted the DIP lenders a “super priority” charge on Indalex’s property. Indalex U.S. guaranteed Indalex’s repayment obligations to the DIP lenders. Sun Indalex was the principal secured creditor for Indalex U.S.

In July 2009, Indalex sought approval of the sale of its assets on a going concern basis and the distribution of the sale proceeds to the DIP lenders. Under the proposal, none of the proceeds would have been paid towards the funding deficiencies in the pension plans. The United Steel Workers (USW) and a group of retired executives objected to the plan distribution. They argued that the deemed trust provisions of the Ontario Pension Benefits Act (PBA) applied to the unpaid amounts owing to the pension plan. They also claimed Indalex had breached its fiduciary obligations to the beneficiaries of the plans. The CCAA court approved the sale and it closed at the end of July 2009. However, the court-appointed monitor retained $6.75 million of the proceeds in reserve, approximately the

amount of the deficiencies in the plans. The sale proceeds were insufficient to repay the DIP lenders and Indalex U.S. paid the shortfall of approximately $10.75 million as guaranteed. Sun Indalex, as secured creditor for Indalex U.S., sought to receive payment of the reserve funds. Indalex also sought to have itself assigned into bankruptcy, ostensibly to defeat the PBA deemed trusts.

The CCAA judge dismissed the motion of the USW and retired executives, finding that the deemed trusts did not apply. As a result, he found that it was unnecessary for him to decide the bankruptcy motion. The USW and retired executives appealed.

Court of Appeal DecisionDistinguishing the case from prior decisions, the court held that the deemed trust provisions of s. 57(4) of the PBA applied to all of the payments required under s. 75(1) of the PBA, including all amounts required to fund the wind up deficiency, not just the required payments that were due. This did not apply to the executive plan as it had not been wound up. However, the court found that a constructive trust was created in favour of both plans when Indalex breached its fiduciary duties. The court ordered the reserve funds to be paid to the plans.

As plan administrator, Indalex owed a fiduciary duty to the plan members and beneficiaries. The court acknowledged that, in addition to wearing this “hat”, Indalex was also wearing a “corporate hat” as employer. Indalex had the right to decide to commence CCAA proceedings wearing its corporate hat. However, after that initial decision, its following decisions were not made only under its corporate hat. The court found that Indalex could not, at that time, ignore its plan administrator role.

When Indalex obtained the DIP financing, it knew that plans were underfunded and that, unless more funds were put into the plans, benefits would be reduced. The court noted two points. First, Indalex was unclear as to what happened to

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its role as administrator during CCAA proceedings. Second, the court dismissed the argument that an employer can only wear either its corporate hat or its administrator’s hat, and never both. Indalex ignored its administrator hat and did nothing in the CCAA proceedings to fund the deficit in the plans and protect the plans’ beneficiaries. In fact, it had taken active steps to undermine the possibility of additional funding by:

• Commencing the CCAA proceedings without notice to the plans’ beneficiaries; • Obtaining a super-priority for the DIP lenders over the deemed trusts without notice to the plans’ beneficiaries; • Selling its assets without making any provision for the plans. Indalex knew that the purchaser was not taking over the plans; • At the direction of Indalex U.S., bringing a bankruptcy motion with the intention to defeat the deemed trusts.

The court found that Indalex was in a conflict of interest position. Indalex could not avoid that conflict by ignoring its role as an administrator. The court also found that Indalex had breached its statutory obligations to act with due care, diligence and skill under the PBA. Indalex U.S. was not an arm’s length, innocent third party to these breaches.

In determining how the funds were to be distributed, the court emphasized that the CCAA mechanism was intended to provide greater flexibility and judicial discretion. The court particularly noted that courts are encouraged in CCAA proceedings to treat all stakeholders “as advantageously and fairly as the circumstances permit”. The plan’s beneficiaries were stakeholders and, as a result of the deemed trust and pension claims, were not only mere unsecured creditors. They were unsecured creditors to whom a fiduciary duty was owed. The court noted that the DIP lenders had been paid in full and saw the dispute as between the pensioners and Sun Indalex, the principal secured creditor of Indalex

U.S. The court found that the CCAA was not intended to allow the company to avoid its pension obligations and paying Indalex U.S. (and Sun Indalex as secured creditor) would condone Indalex’s breaches of fiduciary duty. The plan beneficiaries were vulnerable and ought to be protected. The court applied the same reasoning to both plans and ordered that the proceeds be paid towards the plans to fund the deficiencies.

Challenges with Two HatsThe decision made some significant findings of a more specific nature, particularly the treatment of the deemed trust provisions of the PBA. However, perhaps of more general significance is the discussion of the roles and fiduciary responsibilities of Indalex as employer and plan administrator. While acknowledging that the same company can wear both hats, the court strongly held that those roles and responsibilities may change on a decision-by-decision basis. While the company is entitled to make business decisions that are clearly separate from the pension plan with its corporate hat, it cannot ignore its administrator hat when making decisions that affect the pension plan beneficiaries.

This reminder of an administrator’s ongoing fiduciary duties increases the potential scrutiny of decisions affecting pension plans when an employer is playing both roles. While finding a breach was simpler in this case as the court found that Indalex had done nothing to protect plan beneficiaries, not all cases will be as clear cut. While notice to plan beneficiaries was a key requirement identified to the court, other actions may be required depending the circumstances.

Where there is a conflict between the two hats, the company must also have an answer to questions on what happens to each role. In the future, this may mean the appointment of an independent administrator in situations when the conflict is unavoidable and cannot be resolved.

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The court’s statements on these roles may have ramifications beyond the insolvency context, such as in situations when an employer plan sponsor is forced to make business decisions that may or will impact the pension plan.

What This Means For YouIn recent decisions, Canadian courts, including the Supreme Court of Canada, have recognized that employers have interests as stakeholders in their pension plans. The “pendulum” of pension rights had moved towards greater recognition of employer rights. The Court of Appeal’s decision made a renewed statement of the interests of plan beneficiaries, and the need to protect those beneficiaries, even in light of creditor-debtor obligations that have been recognized in legislation and past cases. While the circumstances were unique in that the DIP lenders had been paid, the secured creditors were associated with Indalex, and importantly, Indalex committed breaches of fiduciary duty, the decision may signal a possible swing back of the pension pendulum towards the protection of beneficiaries.

We understand that leave to appeal the decision has been sought and we will continue to monitor developments.

Level Chan Halifax Office 902.420.3389 [email protected]

Responding to Workplace AccidentsWorkplace accidents are an unfortunate fact of life, even though all of the stakeholders in the workplace may fulfill their statutory duties to exercise due diligence to prevent such accidents. When they occur, workplace accidents can give rise to significant liability, including possible criminal charges. Investigations and enforcement actions will be taken. The initial response to a serious workplace accident can be critical in protecting an organization’s interests and in minimizing potential liability.

What will happen if a serious accident or fatality occurs in a workplace that your company is responsible for? Will your managers know how to respond? It is critical that your organization has a trained incident response coordinator who is familiar with OHS obligations, is trained to respond to accidents and knows how to deal with OHS investigators. Your incident response coordinator should, with the help of legal counsel, be able to understand the complex legal issues which your organization may be faced with, in order to ensure that the incident response is appropriate and minimizes potential legal liability. The response of an organization immediately following an accident can be critical in determining the outcome of any investigation by the OHS inspector.

What follows is the basic outline of the elements of an accident response plan. These are the basic steps that need to be followed in all jurisdictions – but your own plan should be more detailed and ensure that the questions posed below are answered and that the response, no matter how serious the accident, unfolds according to plan.

Initial StepsWhen an accident occurs, immediate steps will be required of on-site personnel to address the situation as it unfolds.

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Senior management and the organization’s designated incident response coordinator must be informed immediately so that appropriate steps can be taken to respond to the situation. In order of priority, the following steps will be required by site personnel:

Provide Medical AssistanceObviously, the first step is to take appropriate measures to ensure that an accident victim receives appropriate medical attention from on-site first aid personnel and/or first responders such as paramedics. Typically, a 911 emergency call will access these services.

Preserve the SceneThe legislation in all provinces provides that no one may disturb the scene of an accident that results in serious injury or death except as is necessary:

• to attend to persons injured or killed; • to prevent further injuries; or • to protect property that is endangered as a result of the accident.

Accordingly, after taking steps to ensure that the victim has received medical attention and any unsafe situations are addressed, site personnel must ensure that that the accident scene is secured and no one is permitted to disturb the scene.

Report the Accident to the Required AuthoritiesEvery jurisdiction has different requirements with respect to accident reporting – for example, in New Brunswick, fatal accidents in certain workplaces, including woodland operations, sawmills, lumber processing plants, food processing plants, fish processing plants, construction project sites, mining plants or mines must be reported to the coroner, as well as to WorkSafeOffice. It is therefore critical that on-site personnel be aware what accidents

must be reported, to whom, in what manner and within what time frame. Failure to do so may result in the investigator thinking that you are covering up the cause.

Contact Legal CounselBecause serious legal liability can result from workplace accidents, it is vital that competent legal counsel be involved from the outset. If legal counsel is involved from the beginning, issues regarding privilege of documents and responding to orders can be addressed and some of the pitfalls we see in many investigations can be avoided. A response plan should include contact information (including after-hours numbers) for the organization’s specialized OHS legal team.

Further StepsCooperate with the Investigation being Conducted by the OHS InspectorThe legislation in all jurisdictions requires cooperation with the representatives of the responsible governmental agency, typically an OHS inspector. The incident response coordinator may well be the first contact your organization has with the inspector. He or she should be able to communicate the importance of safety at your organization and immediately be able to pull together the steps that had been put in place to prevent the incident.

While the legislation does require cooperation during an investigation, a point may be reached where the OHS inspector has formed a conclusion that a breach of the legislation may have occurred. If that point is reached, the inspector may have an obligation to obtain a search warrant and the obligation to cooperate is modified accordingly. Experienced counsel can assist in determining whether this point has been reached and in asking the appropriate questions of the inspector. Obviously, if presented with a search warrant, the warrant should be reviewed carefully to determine its scope. Any documents or materials that are removed from the premises

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should be indentified and copied, if possible. Particular attention must be given where the warrant specifies materials that may be subject to solicitor-client privilege and steps should be taken (such as sealing the documents in an envelope with appropriate disclaimers) to ensure that privilege is maintained.

Shadow the Official InvestigationGovernment officials, as well as law enforcement personnel, may be involved in investigating the accident. Steps should be taken to shadow the official investigation to the extent possible to ensure that the organization is aware of what information is being obtained, and to take the opportunity to correct any misinformation that may be offered. If possible, a company representative should be present during witness interviews. If this is not permitted, the witnesses should be debriefed as soon as possible following the interview to determine what was stated to the investigator.

Conduct your Own InvestigationThe legislation in your jurisdiction may require the participation of the JOHS Committee in any investigation – how will that be done? Should the report be disclosed to the OHS inspector? Have you done an internal audit of your training records and policies? Is an expert required? Regardless of how it may ultimately be used, the internal report should be conducted at the request of legal counsel (and be protected by privilege) in order to assist your organization in responding to any orders or charges resulting from the incident.

Respond to OrdersA serious accident will most frequently result in the issuance of multiple compliance orders by the OHS inspector. There is no option but to respond to such orders; however, some orders may not be feasible (such as an order to modify equipment in contravention of a warranty) and others may result in the disclosure of privileged information (such as the requirement to disclose a report). Practically, it is better

to address any such issues with the inspector before the order is issued – most inspectors are willing to address such issues (as long as you are cooperative). However, any orders should be reviewed with legal counsel to determine what responses are available. In some jurisdictions, the appeal period is very short so the need to make informed decisions can be required in a compressed time-frame.

Take Corrective StepsIf your investigation (or the incident itself) reveals flaws in the operation of your health and safety system, your organization should take whatever corrective measures are necessary to solve the problem.

Additional ConsiderationsA serious workplace accident will raise a whole host of issues, including such basic questions as who is responsible for notifying the family of the victim, what internal communications should be issued, what kind of comments should be made to the media, who else should be notified and what should be said.

Decisions will need to be made about whether to engage grief counsellors, what resources should be offered to the family to deal with the situation, what steps need to be taken to restart the work and a variety of other issues.

In dealing with these various issues, care needs to be taken to ensure that appropriate measures are being taken, with sensitivity to the emotional reaction that will result from a workplace tragedy, while at the same time being aware of the possible liability that may result.

A comprehensive accident response plan will equip managers with the tools that they need to comply with their legal obligations, and to prudently deal with the multitude of issues that inevitably arise in these situations, while at the same time protecting the legal rights of your organization and the individuals concerned.

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James LeMesurier Saint John Office 506.632.2776 [email protected]

Rebecca Saturley Halifax Office 902.420.3333 [email protected]

Top Policies Employers Should Consider Implementing Well drafted, consistently enforced workplace policies can save employers a lot of money and a lot of headaches. The key components to successful workplace policies are: • Clear and careful drafting; • Effective communication of the policy to all employees; • Consistent enforcement of the policies.

An employer who creates, communicates and consistently enforces workplace policies will be able to defend the discipline or, in appropriate circumstances, the discharge of employees, and demonstrate it has fulfilled its requirements under legislation such as human rights legislation and occupational health and safety legislation.

Given these multiple advantages, consider whether your workplace needs any or all of the following policies.

Zero-Tolerance Theft PolicyTheft is a very serious offence in any workplace. Nevertheless, there are cases where theft alone is still insufficient to justify a termination. A zero-tolerance theft policy can lead a court or arbitrator to the conclusion that the employee knew he was doing something wrong, was acting dishonestly, and was endangering his job.

In Paul Gosse v. Atlantic Wholesalers, the Nova Scotia Labour Standards Tribunal upheld the termination of a 20 year employee with a clean disciplinary record. The employee, who took two packs of cigarettes out of the store without paying for them, admitted that he was aware of the employer’s policy forbidding the removal of product from the store without paying for it under any circumstances. He was also aware of a second policy that stated the employer could terminate for theft. The clear expectations laid out for the employee through the policies, his understanding of them, and his breach were all strong factors in the Tribunal’s decision to uphold the termination.

A zero-tolerance theft policy should make clear to employees that no theft, no matter how small in value, will be tolerated, and that termination of employment is a possibility following any infraction.

Computer and Internet Use PolicyEmployers cannot assume that employees have no privacy right over the information stored on employer-issued and employer-owned computers, phones or other devices. In a recent Ontario Court of appeal decision, R. v. Cole, the Court found that a high-school teacher had a reasonable expectation of privacy over the contents of his school-issued laptop. The teacher was charged with possession of child pornography. Much of the evidence was taken by police from the laptop’s hard drive and temporary internet files after a school technician inadvertently discovered

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it. The Court excluded evidence obtained by the police’s warrantless search of the employee’s laptop, on the grounds that the employee did not abandon his expectation of privacy by turning the laptop over to the technician.

The Court specifically stated that one of the reasons the teacher had an ongoing expectation of privacy was that “there was no clear and unambiguous policy to monitor, search or police the teachers’ use of their laptops”. Although the school board had a blanket computer use policy, it did not address monitoring, policing or other enforcement mechanisms.

Compare the outcome in Cole to that in the 2009 Alberta Court of Appeal case Poliquin v. Devon Canada Corporation, where the Court upheld the termination of an employee who repeatedly violated the employer’s computer-use policy by forwarding pornographic, derogatory or racist emails. The Court specifically stated that employers have the right to set ethical, professional and operational standards for the workplace, which include developing and enforcing a computer-use policy and monitoring equipment to ensure employee compliance. As Devon had a consistently enforced policy, the termination was upheld.

Transmission of viruses, cyber-bullying of co-workers, and online postings all create the potential for lawsuits, not to mention the potential to adversely affect the workplace, damage the employer’s reputation and diminish the productivity of employees. A computer and internet use policy which sets out acceptable and unacceptable professional and personal uses states that an employee has no expectation of privacy over information stored on the employer’s system and explains how use will be monitored and enforced, can protect your organization.

Respectful Workplace PolicyHuman rights legislation in the Atlantic Provinces prohibits discrimination against employees on the basis of disability,

sex, religion and other protected grounds. Through the enactment of a respectful workplace policy, you not only demonstrate that your organization is committed to promoting a healthy workplace and preserving the dignity of all employees, you make it clear that discrimination, harassment and bullying will not be tolerated in your workplace. Other policies that may fall under this banner include discrimination or harassment prevention policies or violence prevention policies.

Occupational Health and Safety PolicyCreating and communicating an occupational health and safety policy is required under some occupational health and safety legislation. While the legislation is usually not specific about what should go into a policy, standard terms include a duty on employees to report any incidents or safety hazards; establishment of a formal reporting structure; and general safety rules.

In R. v. Meridian Construction Inc., the defendants were charged with an offence under the Occupational Health and Safety Act and found guilty of failing to ensure that a system of formal reporting of safety concerns was in place for workers.

Employers should ensure they are aware of their obligations under this legislation, and have appropriate policies in place.

Dress Code or Appearance PolicySome courts and arbitrators have recognized that a policy about an employee’s personal appearance can infringe employee rights such as privacy, physical appearance or freedom of expression. However, it has also been recognized that where employers: 1. have created the appearance policy in order to achieve a legitimate and important goal, 2. the policy is rationally connected to achieving that goal, and 3. the policy minimally impacts employee rights, the policy is valid.

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If maintaining a certain image is important to your workplace, a dress code policy can assist you in enforcing that image. In Capstick v. Stan’s Unisex Hairstyling, the Nova Scotia Labour Standards Tribunal upheld the termination of a hairstylist who had signed off on the employer’s dress code policies. The stylist was reminded repeatedly that her prominent nose ring, low-rise pants, and bare midriff were inappropriate in the workplace and contrary to the policies she had signed. The Tribunal found that the appropriate dress policy provisions, as well as consistent reminders about their flagrant breach, justified the termination.

Overtime PolicyWhether you require mandatory overtime in certain situations or have banned overtime work, a policy clearly outlining expectations for employees can provide added protection. Consider the situation of the employer in Riddiford v Independent Security Services Atlantic. The employer had a policy that provided security officers were never required to work overtime and as such the employer would never pay overtime pay. Nevertheless, an officer who needed extra money took on extra shifts and work, and then made a claim for 194 hours of overtime pay. The Nova Scotia Labour Standards Tribunal found that while the refusal to pay overtime is a breach of labour standards, in this case it was appropriate because the employer made it clear overtime was never mandatory.

What This Means For YouThese are only a few suggestions among countless policies you may want to consider, depending on the needs of your individual workplace. Just remember that creating the policy is only the first step. Communicating the policy to employees, consistent enforcement, and, regular reviews of such polices to ensure legal compliance policy, are steps that will provide your organization with additional protection.

Michelle McCann Halifax Office 902.444.1724 [email protected]

Mitigation of Damages in Cases of Constructive Dismissal: A New Option for Employees In a recent Ontario Supreme Court of Justice decision, Russo v. Kerr Bros. Ltd., a court found that a long term employee who deemed himself constructively dismissed but remained in his position to mitigate his damages was not deemed to have accepted the new terms and conditions of his position by remaining in that position under its reduced terms.

The FactsIn this case, the employee alleged constructive dismissal after his employer of 37 years drastically reduced his compensation package. Normally, once an employee deems himself constructively dismissed, the contract of employment is deemed to be at an end and the employee is required to leave his employment; otherwise, previous case law has determined that the employee can be deemed to have accepted the change. The unusual aspect of the case is that the employee remained in his employment under the new conditions of employment; and claimed that his doing so was a means of mitigating his damages. He claimed damages for constructive dismissal based on the amount he would have received under his original terms of

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service, level of responsibility, and anticipated difficulty in securing another job, a reasonable notice period would be 28 months.

Counsel for the employer acknowledged that a constructive dismissal occurred, but submitted that Russo was obliged within a reasonable period of time to elect whether to accept the new terms or accept the dismissal and, if the latter, he was obliged to leave his employment and could then sue for constructive dismissal. By not doing so, he must be deemed to have accepted the new terms. Counsel further submitted that, in the circumstances of this case, an appropriate notice period would be 18 months.

DecisionThe court found that there was no reason in principle why Russo could not adopt the course of action that he chose here, and why he could not be considered to have been mitigating his losses by doing so. He had made it clear to his employer that the unilateral change in his terms and conditions constituted constructive dismissal and that he did not consent to the alteration. Once Kerr had been advised of these facts, it could have instructed Russo to leave the workplace or could have kept the old terms and conditions in place for the period of reasonable notice. Instead, the employer allowed Russo to remain in the workplace, and must be taken to have understood that he was not remaining under the acceptance of the changed terms and conditions. As long as Russo did not remain in the workplace under the changed terms beyond the period of reasonable notice, here determined to be 22 months, he could work under those new terms as a means of mitigating his losses. Russo was awarded damages for the period of reasonable notice minus his mitigation earnings.

What This Means For YouWhile the law used to require an employee to accept the changes to their employment or leave and claim constructive dismissal, the Supreme Court of Canada decision in Evans appears to have changed the analysis.

employment, less the amount he was paid under the new terms.

Lorenzo Russo was 53 years old and had been employed with Kerr Bros. Ltd., a manufacturer of candy products, for the whole of his working life when the company ran into financial difficulty and began to assess the viability of remaining in business. Kerr determined that the remuneration packages for all employees were excessive in relation to marketplace standards, and were more than the company could viably support. All employees were asked to accept a 10% reduction in compensation and the dissolution of the pension plan. When these changes were implemented, Kerr still asserted that Russo was being paid excessive remuneration given his skill level and market rates for his position. He was asked to accept a further pay decrease, which would see his salary reduced to $60,000 per year, down from a high of $114,000, which he had received prior to the first pay cut going into effect.

After the final pay cut went into effect, Russo retained counsel and through a letter to Kerr made it clear that his position was that the unilateral changes in the terms and conditions of his employment constituted constructive dismissal, and that he did not consent to the alteration. Following the writing of that letter and up to the time of the hearing reported here, Russo continued his employment with Kerr in the same position and with the same duties, and accepted the reduced pay.

Submissions of the PartiesCounsel for Russo submitted that Russo had made it clear to Kerr in his letter to them that he was not consenting to the alteration in the terms and conditions of his employment, and that it therefore could not be concluded that by continuing to work under these new terms and conditions he had elected to accept them. His continued employment subsequent to his constructive dismissal was only a means of mitigating his damages. Counsel submitted that in the circumstances, having regard to Russo’s age, years of

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What HappenedIn late 2003, Monika Rogers was hired by Tourism British Columbia (“Tourism BC”) on a one-year contract for the period from February 15, 2004 to March 31, 2005. Rogers’ work under the contract was seasonal, generally running from March through September. In April 2005, Rogers and Tourism BC signed a new contract for a three-year period from April 1, 2005 to March 31, 2008. The contract clearly provided that it would terminate automatically on the expiration of its term and could also be terminated by Tourism BC at any time for reasons other than cause by providing Rogers with 21 days’ written notice and paying her wages for that period. The contract also contained a clause stating that it constituted the entire agreement between the parties. In other words, the written contract negated any verbal agreements that may have been made between Rogers and Tourism BC. On December 7, 2007, Rogers’ supervisor at Tourism BC gave her notice that her contract was being terminated effective December 31, 2007, meeting the three week notice requirement in the contract.

The Court’s DecisionThe critical components of the Court’s decision started with finding that no oral material misrepresentations inducing Rogers to enter into the contracts with Tourism BC had been made. Furthermore, that even if they had been made, the parties had signed written contracts that explicitly provided that they constituted the entire agreement between the parties, and that particular provision would have overridden any oral representations between Tourism BC and Rogers. The Court then addressed whether the contracted notice period was enforceable. The Court found that contractual terms that unambiguously specify a period of notice are enforceable and replace the common law presumption of reasonable notice, so long as they do not contravene the minimum notice requirements in the Employment Standards Act of the province.

Because an employee may be required to mitigate loss with his former employer, employees may attempt to do so more frequently. Therefore, you may need explicit acceptance of changes to an employee’s job where once you could rely on conduct as acceptance.

Gordon Petrie, QC Fredericton Office 506.443.0150 [email protected]

Prepare for Termination By Inserting the Notice Period in the Employment ContractAs many employers know, the purpose of the notice period is to provide employees with an opportunity to find alternative work. There is an extensive body of cases which examine how to determine the length of a reasonable notice period, and the result is that there are a number of factors to be considered, such as length of service, age, and the availability of similar employment opportunities. The courts’ reasoning behind enforcing the rule of reasonable notice is that it is an implied term of every employment contract. In a recent decision by the Supreme Court of British Columbia, the Court confirmed that an explicit notice period in the employment contract was binding and negated the effect of any notice period the employee may have been otherwise entitled to.

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What the Board SaidThe Board found that the provision was discriminatory. It did not accept the union’s argument that employees 50 years of age and older are a disadvantaged group at risk of losing employment solely because of their age. Nor did the Board accept the union’s argument that there was evidence of systemic age discrimination in the workplace. The union contended that older employees worked less hours on average. The Board held, however, this could have been a result of other factors.

The Board declined to declare the provision “a special program” which supported a disadvantaged group. This argument suggested that “experienced, skilled and productive journeymen electricians who happen to be 50 years of age and older require some protection from layoffs simply because of their age”. The Board did not want to “perpetuate that stereotype”. The perception of older workers as being less productive and less committed are “myths that are not borne out by evidence”.

What This Means For YouThis case continues a trend of striking down age based distinctions in collective agreements and workplace policies. This trend began with the decline of mandatory retirement. Now we can see that any age based distinctions will be very difficult to justify, and the principle applies equally to policies which purport to advantage – or disadvantage – an age-based group. From our perspective, this decision is based on common sense and achieves a balanced approach, levelling the playing field on this issue.

Murray Murphy Charlottetown Office 902.629.4558 [email protected]

What This Means For YouThe judge in the present case relied on the principle enunciated by the Supreme Court of Canada in Machtinger v. HOJ Industries Ltd. that the common law presumes that an employee may be dismissed only upon reasonable notice and that this is an implied term of every employment contract. This presumption will be rebutted where the contract of employment clearly specifies the notice to be given, either expressly or by implication. Make sure all your new hires execute an employment contract.

Richard Petrie Fredericton Office 506.443.0155 [email protected]

Favouring Older Workers DiscriminatoryBackgroundIn International Brotherhood of Electrical Workers, Local 353 v. Black & McDonald Limited, the Ontario Labour Relations Board ruled that a Collective Agreement provision that protected older workers from lay-offs is discriminatory.

The clause provided that twenty percent of the workforce must be age 50 or older. As a result of a lay-off, the employer no longer met the quota and the union grieved the lay-off. The employer defended, arguing that the clause contravened the age discrimination provisions in the Human Rights Code. The union argued that the clause was permitted under the Code as a special program designed to relieve hardship and to assist a disadvantaged group.

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Having regard for the relevant considerations and the facts, the trial court found Mr. Olguin entitled to 22 months as reasonable notice, fixing his annual cash compensation at $71,000. Turning his mind to the “make whole” principles, Justice Echlin noted that, to put Mr. Olguin in the position he would have been in had Canac Kitchens provided him with working notice, he would have received his regular cash employment compensation, plus all benefits coverage for the entire 22 month notice period. He condemned the actions of Canac Kitchens as follows:

Canac consciously chose not to make alternative arrangements to provide its loyal, long-service employee with replacement disability coverage. Rather, it chose to go the ‘bare minimum’ route. It provided only the statutory minimums in pay and benefits and then gambled that he would get another job and stay well. When it lost that gamble, it chose to litigate this matter for over five years. When confronted with its potential significant exposure, it raised the argument that Mr. Luis Romero Olguin failed to mitigate his potential damages by purchasing a replacement disability policy.

Canac Kitchens tried to defend against providing Long Term Disability because the insurance policy contractually prohibited recovery. The court dispensed with this defence saying that because Mr. Olguin contributed to this coverage, he was entitled to recovery. Canac Kitchens then argued that the “any occupation” requirement of its policy should end its liability to Mr. Olguin for benefits to age 65. The court again found against Canac Kitchens as Mr. Olguin had proven his total disability.

All in all, Canac Kitchens was found liable for more than $500,000. That included $15,000 in punitive damages and $125,000 costs above and beyond the disability benefits and reasonable notice discussed earlier.

“Making Whole”: Words of Caution on Termination and Disability Benefits From Justice Echlin A recent Ontario Superior Court decision awarded substantial damages against an employer for wrongful dismissal, including damages for lost disability benefits (exceeding $200,000). It is a decision employers will want to know about when assessing potential damages for termination of employees.

The facts are straightforward. The employee, Mr. Olguin, worked for Canac Kitchens for 22 years. He was 55 years old when terminated without cause in July 2003 due to business restructuring. When he was terminated, he was given the statutory minimum pay in lieu of notice plus benefits for the same period (8 weeks). Although Mr. Olguin found another position less than a month later, it was lower-paying and did not offer him any disability benefits. Thus, the claim Brito, et al. v. Canac Kitchens was born.

In November 2004, some 16 months after his termination, Mr. Olguin began treatments for cancer of the larynx, receiving chemo-radiation treatment and having a tracheotomy tube inserted into his throat for some time. Further cancer surgeries were conducted in 2008 and 2009 and more were contemplated in the future. Mr. Olguin’s treatment left him totally disabled and unable to work. During the trial, Canac Kitchens eventually conceded that Mr. Olguin was entitled to a notice period of less than 16 months but at no time did it advance any compensation to Mr. Olguin beyond the statutory minimums. Toward the end of the trial, Canac Kitchens modified its submissions on notice to 16 to 19 months.

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What This Means For YouCourts strive to “make whole” employees who are dismissed without cause. This case appeared to be ripe for extending liability to include lost disability benefits. While it was somewhat easy for the court to reach its conclusion because of the benefit contribution scheme (Mr. Olguin contributed to these benefits throughout his employment and previous case law supports entitlement where there is employee contribution), employers should nonetheless take steps to mitigate disability benefits as a source of liability by exploring comparable replacement disability coverage and advising terminated employees if such does exist, or extending disability benefits to terminated employees when available. Perhaps more importantly, employers terminating long term employees should consider offering a termination package above the statutory minimums available under employment standards legislation in exchange for full release of liability.

Alison Strachan Halifax Office 902.420.3387 [email protected]

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This newsletter is intended to provide brief informational summaries only of legal developments and topics of general interest and does not constitute legal advice or create a solicitor-client relationship. The newsletter should not be relied upon as a substitute for consultation with a lawyer with respect to the reader’s specific circumstances. Each legal or regulatory situation is different and requires review of the relevant facts and applicable law. If you have specific questions related to this newsletter or its application to you, you are encouraged to consult a member of our Firm to discuss your needs for specific legal advice relating to the particular circumstances of your situation. Due to the rapidly changing nature of the law, Stewart McKelvey is not responsible for informing you of future legal developments.

A legal strike against ECP had been ongoing for over two years. Earlier court orders had been necessary to attempt to control the situation - those orders, even with police involvement had been insufficient and contempt findings had been made against more than one individual. There was evidence of threats, harassment and intimidation.

During the course of the strike, ECP brought in replacement workers and on September 16, 2010, approximately 100 picketers and their supporters obstructed a bus carrying replacement workers entering the premises. The situation escalated and court intervention on September 20 resulted in a limit of a maximum of seven picketers at the business premises of ECP until trial or other disposition of the action. This decision by the Ontario Superior Court of Justice was to provide supplementary reasons on the issue of contempt allegations made by ECP against a number of individuals including a Rick Morgan who admitted to posting a message on a Facebook web page that said the following:

This is not a threat just an observation. If you want Anti Scab legislation put into place in this province better yet country-wide this is how you do it. Blow up the Scab bus when it is full in place where a few innocent bystanders get taken out along with the scabs. People will take notice then, and the demand from the people of this country to never let this kind of situation take place again will be overwhelming.

Then the government would have no choice but to put the legislation in place only to let the people think they really have a say. Again this is not a threat just an observation of the world we live in.

Morgan removed these comments from the Facebook page when he was informed that ECP had viewed it.

ECP sought to have Morgan found in contempt for threatening, intimidation and harassment contrary to existing court orders. In an affidavit filed with the court, Morgan offered an apology for his posting.

The court said:

“It is difficult to conceive of the words used by [Morgan] as anything other than encouraging or threatening violence against replacement workers. At a minimum his words constitute harassment and an attempt at intimidation. This court is satisfied beyond a reasonable doubt that [Morgan] must be found in contempt.”

The court found that given Morgan’s apology and that the words were published for less than three weeks, a jail term would be excessive and imposing a fine upon an individual on strike for over two years would be inordinately severe. Instead, the remedy imposed by the court was that Morgan be banned from the picket line for a period of 60 days.

Facebook Finds New Ways to Impact Labour Law Case Note (ECP, Engineered Coated Products v. United Steel et al)

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Upcoming Events Speaking Engagements

Sacha Morisset and Jennifer Ronalds spoke at a Lorman conference on July 12, 2011 in Moncton entitled Navigating Social Media in the Workplace in New Brunswick.

On September 15, 2011, Peter McLellan, Q.C. and Rosemary Scott, Q.C., are presenting the topic An Ounce of Prevention… A Legal Update on Pension Liabilities and Solutions at the Atlantic Regional Conference of the Canadian Benefits and Pension Institute.

Richard Petrie will be giving an Atlantic Provinces update in the Cross Canada Labour Update at the 8th Annual CACE Conference being held on September 22 – 24, 2011 at the Marriott Gateway on the Falls, Niagara Falls, Ontario. At the same conference, Grant Machum will be speaking about Picketing and the Injunction Process in Atlantic Canada and Rebecca Saturley will be a panellist for the topic Work Refusal Rights and Reprisal Prohibitions.

Rebecca Saturley will be addressing Workers’ Concerns and New Developments in Occupational Health & Safety Legislation at Insight’s 10th Annual Atlantic Canada Labour & Employee Relations Conference on September 29, 2011.

At the Insight conference, Bill 160 – Shaping Health & Safety Policy for the Future being held in Toronto on October 20, 2011, Rebecca Saturley will be speaking on Zero Tolerance Administrative Monetary Penalties (AMPs): Lessons from Nova Scotia.

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Service First1 We will work to provide you with the highest quality of confidential, ethical legal services.

2. We will work with you to develop a full understanding of your business / organization and expectations.

3. We will pursue your work conscientiously and without delay. We will work together with you to establish time specific goals and objectives that meet your needs.

4. We will delegate work to our lawyers who have the legal expertise and experience appropriate to both the nature and complexity of the matter and our understanding of your expectations. Where deemed appropriate by you, we will designate a qualified lawyer as an alternative service contact to ensure continuity of service when the lawyer responsible for your matter is not available. At your request, we will work with you to develop practical fee estimates. We will always strive to add value.

5. At your request we will provide documentation that outlines the scope of the legal services to be provided; the potential timeline for handling the matter; a list of the client team members and alternate service contact, with their fields of expertise; and our lawyers’ contact information.

6. We will meet and strive to exceed your expectations and always welcome your feedback. We will from time to time, seek from you, either formally or informally, an assessment of our performance.

7. We will maintain effective channels of communications including keeping you informed of all significant developments in the legal matter and responding to your contact in a timely fashion.

8. Accounts will be easy to understand. We will always be receptive to client feedback on our billing practices. When issues arise, we will treat them seriously and respond promptly.

9. If you are dissatisfied with our services, or if you feel we have failed to meet any of these commitments, we ask that you call the service lawyer on your matter, the alternate service lawyer, the local Practice Manager or Managing Partner to discuss your concern. We will honestly and fairly address your concerns.

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Labour and Employment Group MembersCharlottetown, PETel: 902.892.2485Fax: 902.566.5283E-mail: [email protected] Direct Dial Residence E-mailRosemary Scott, Q.C 629.4503 569.3021 [email protected] Clements 629.4538 569.3776 [email protected] Murphy 629.4558 892.8019 [email protected] Clark 629.4562 367.2141 [email protected] Stephen Carpenter 629.4556 687.2855 [email protected] Patti Wheatley 629.4546 940.7431 [email protected]

Fredericton, NBTel: 506.458.1970Fax: 506.444.8974E-mail: [email protected] Direct Dial Residence E-mailGordon Petrie, Q.C. 443.0150 459.8672 [email protected] Petrie 443.0155 455.0287 [email protected] Bennett 444.8978 454.8978 [email protected] Everett Withers 443.0131 454.2683 [email protected] CounselGérard La Forest, C.C., Q.C 443.0135 460.0992 [email protected] Halifax, NS Tel: 902.420.3200Fax: 902.420.1417E-mail: [email protected] Direct Dial Residence E-mail Peter McLellan, Q.C. 444.1717 425.5248 [email protected] John Plowman 420.3322 423.4942 [email protected] Brian Johnston, Q.C. 420.3374 422.5896 [email protected] Grant Machum 420.3330 477.6788 [email protected] Lisa Gallivan 420.3392 443.6230 [email protected] Rebecca Saturley 420.3333 423.8622 [email protected] Rick Dunlop 420.3384 229.7424 [email protected] Mark Tector 420.3358 225.0520 [email protected] Level Chan 420.3389 229.5838 [email protected] Andrea Baldwin 420.3370 [email protected] Rebecca Druhan 420.3355 429.7006 [email protected] Jessica White 420.3379 405.6472 [email protected] McCann 444.1724 440.7064 [email protected] Kelly 444.1742 471.5359 [email protected] Staff LawyerAlison Strachan 420.3387 429.2174 [email protected] McDougall, Q.C 420.3312 443.6158 [email protected]

Moncton, OfficeTel: 506.853.1970Fax: 506.858.8454E-mail: [email protected] Direct Dial Residence E-mail André Richard, Q.C. 853.1962 384.3922 [email protected] Stewart 383.2224 384.7115 [email protected] Morisset 853.1942 383.6939 [email protected] Ronalds 853.1979 [email protected]

Saint John, NBTel: 506.632.1970Fax: 506.652.1989E-mail: [email protected] Direct Dial Residence E-mailWilliam Goss, Q.C. 632.9515 529.1910 [email protected] LeMesurier 632.2776 652.8962 [email protected] Lahey 632.8307 672.2602 [email protected] Paton 632.8332 651.9765 [email protected]

St. John’s, NLTel: 709.722.4270Fax: 709.722.4565E-mail: [email protected] Direct Dial Residence E-mailHarold Smith, Q.C. 570.8895 753.8337 [email protected] Wallace 570.8839 739.9495 [email protected] Zdebiak 570.8841 722.8538 [email protected] Penney 570.8881 722.8874 [email protected] Reid 570.8828 237.1339 [email protected] Trask 570.8893 728.9256 [email protected]