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Restrictive Covenants in Employment Contracts: What Are They and When Are They Enforceable?
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Employment Law

Restrictive Covenants in Employment Contracts: What Are They and When Are They Enforceable?

By Employment Law

Employers frequently include restrictive covenants in their employment contracts. Generally, these are clauses that seek to prevent a party to the contract from taking a specific action. In the employment context, they generally take the forms of non-competition and non-solicitation clauses, which employers add to employment agreements with a view to protecting their business interests, customer bases, employee bases and/or supplier relationships. These two types of restrictive covenants serve different purposes and have different likelihoods of enforceability. Non-Competition Clause Defined Simply put, non-competition clauses seek to limit a former employee’s ability to work in the same market as their previous…

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Mitigation Following a Constructive Dismissal – Are You Required To Accept Work From Your Former Employer?

By Employment Law

Terminated employees are generally entitled to notice or pay in lieu thereof at common law. Failure to provide such notice or pay constitutes a wrongful dismissal, and the employee can sue the employer for the amounts owed. However, a wrongful dismissal does not entitle an employee to take an extended vacation while awaiting the outcome of litigation. Rather, a wrongfully terminated employee must make reasonable efforts to mitigate the resulting damages. This usually takes the form of trying to find suitable alternative employment, and failure to do so will result in a reduction in notice entitlements. However, in some circumstances,…

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What Happens If You Sign an Employment Agreement After You Have Already Started Working?

By Employment Law

Often, new employees do not sign their employment agreements until after they have already commenced their new employment. This can be for any number of reasons. Generally, neither of the parties involved is too concerned about it, and in most cases, they have no reason to be. However, under some circumstances, executing an employment agreement after the employee begins providing their services can have significant implications on the terms of their employment. Specifically, the signed employment agreement may be rendered void. Basic Principles In Holland v Hostopia Inc., 2015 ONCA 762, the Court of Appeal for Ontario had to consider…

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What Happens When You Are Terminated from a Job that You Were Recruited For?

By Employment Law

Getting fired is generally not an enjoyable experience. However, it can be particularly frustrating when you are terminated from a position that you were initially recruited for. This is especially true for people who left long-term employment elsewhere based on promises about the nature and term of a new position, only to have their employment cut short.   Canadian courts agree that such situations are distinct from other instances of termination. This distinction is most clearly reflected in two lines of jurisprudence. First, employees who were induced to leave previous employment may be entitled to a longer common law notice…

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The Tribunal Administrative Records Act: Application of the Open Court Principle to Administrative Tribunals and Its Impact on Bringing Employment Matters Before Adjudicative Bodies

By Employment Law

Under the “open court” principle, the public presumptively has access to court proceedings and records, and such access is viewed as vastly important. The application of the principle means that anyone seeking to deny such access to court proceedings and records must prove extraordinary circumstances. The principle is based on the assumption that public confidence in the court system and understanding of the administration of justice requires openness and publicity. Further, it is necessary to ensure freedom of expression, as the public and the media must be able to speak openly about court proceedings and the justice system. As such,…

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Responses to COVID-19 in the Context of Employment – the Employment Standards Amendment Act (Infectious Disease Emergencies), 2020

By Employment Law

COVID-19 and its impact on society are significant and unprecedented. In many parts of the world, society has essentially been put on pause – social distancing requiring many areas to temporarily close all inessential services. This has had a substantial impact on many employment situations, as all those who can work at home are strongly encouraged or required to do so. In the name of public health and safety, many businesses are closed and/or losing significant income, resulting in layoffs and terminations, and many people are quarantined due to potential exposure to the virus. Governments have had to respond quickly…

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Changes to Infectious Disease Emergency Leave

By Employment Law

The Government of Ontario recently created a new regulation under the Employment Standards Act, 2000 (the “ESA”) in furtherance of its efforts to control and minimize the impact of the COVID-19 pandemic on employment. The new regulation deals with “infectious disease emergency leave” and affects whether non-unionized employees have been terminated or constructively dismissed under the ESA in certain situations. Generally, when an employee is laid off for a period longer than a temporary layoff, as defined by the ESA, he or she is considered to have been terminated for the purposes of the Act. In such cases, the employee…

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COVID-19, Mass Layoffs & Wage Reductions, Forced Resignation, and EI Applications

By Employment Law

The recent global pandemic COVID-19 has led to a significant slowdown in Canada’s economy. In light of the ongoing financial stress and anticipated recession faced by many consumer-based businesses like restaurants, retailer stores, and airline companies, many employers have decided to downsize their workforce and lower salary standards indefinitely. In this dilemma between staying with current employers and finding alternative jobs with higher compensation, employees often fear that resigning from their current job with reduced pay will disqualify them from EI entitlement, making their lives even harder by starting a job search without any sources of income. Employment Insurance Act…

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More Government Action in the Time of COVID-19: Temporary Pandemic Pay

By Employment Law

As the COVID-19 pandemic continues to impact workers in all areas, governments are attempting to find ways to provide relief. For example, the Federal Government has created the Canada Emergency Response Benefit and Canada Emergency Wage Subsidy, which are intended to help those who have lost work due to the pandemic and to prevent the loss of work by subsidizing employers, respectively. These are just two examples of many responses to the pandemic that governments in Canada are taking to attempt to help its workforce. Recently, the Government of Ontario announced that it was implementing a new measure to help…

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Can an Employee Refuse to Return to Work Because of Covid-19?

By Employment Law

As the Province’s economy begins to reopen, employers and businesses are beginning to recall their employees. Many employees are concerned about the health hazards that a premature return to work may pose. Employers are concerned about the legal challenges they may face if an employee refuses to return to work. On account of the foregoing, the question on many peoples’ minds at the moment is, can an employee refuse to return to work due to Covid-19? In short, the answer is no, though there are exceptions. Provided that the employer is legally permitted to open its doors (i.e. provincial orders…

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Are Covid-19 Related Lay-Offs Constructive Dismissals?

By Employment Law

On account of the ongoing Coronavirus disease (COVID-19) pandemic (the “Pandemic”), on March 17, 2020, the Government of Ontario declared a state of emergency under section 7.0.1 (1) of the Emergency Management and Civil Protection Act. As a result of this declaration and its associated orders, several establishments and businesses were legally required to close. Further, on March 23, 2020, the Government of Ontario ordered the mandatory closure of all non-essential workplaces, effective March 24, 2020 (the “Second Order”). The forced closure of non-essential businesses has been in effect for over a month, with the possibility of being extended as…

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