Law Times

Law Times • November 27, 2017 Page 7 www.lawtimesnews.com Continuity of employment when employer changes BY NIKOLAY Y. CHSHERBININ E mployees' right to choose their em- ployer is a main difference between a servant and a serf. Because em- ployment contracts are contracts of personal services, they cannot be trans- ferred from one employer to another with- out the parties' consent. In Krishnamoorthy v. Olympus Can- ada Inc., 2017 ONCA 873, the Court of Appeal for Ontario considered whether an offer of a new employment by the pur- chase of a business to the vendor's employ- ees constituted sufficient consideration for amending their employment contracts to include a termination clause. The ONCA resolved that it did and, in the process, reaffirmed that, in the context of a suc- cessor-employer scenario, s. 9(1) of the Employment Standards Act, 2000 deems there to be continuity of the employment relationship for the ESA purposes only. In Krishnamoorthy, in 2000, Nadesan Krishnamoorthy commenced his em- ployment with Carsen Group Inc. as its senior financial analyst. In 2005, he was promoted to director of finance. Carsen carried on business as an exclusive distrib- utor for Olympus America Inc.'s products in Canada. In 2005, Olympus America es- tablished a new, related company, Olym- pus Canada, and announced that it would be its distributor in Canada. Consequently, on July 31, 2006, Olym- pus America terminated its distribution agreement with Carsen, and Olympus Canada purchased some of its assets. Fol- lowing the sale of assets, Olympus Canada offered employment to Krishnamoorthy pursuant to a written em- ployment contract, which contained a new termina- tion clause that limited his entitlements at dismissal to the statutory minimums con- templated by the ESA or, in exchange for a signed release, four weeks' pay per year, up to a maximum of 10 months. The contract also specified that Krishnamoorthy's prior service with Carsen would not be recognized and, as such, he would be treated as a new employee. On Dec. 16, 2005, Krishnamoorthy signed the new employment contract for which he received no additional compen- sation from Olympus Canada or pay in lieu of notice or severance pay from Carsen. His employment with Carsen terminated on July 31, 2006 and new employment with Olympus Canada commenced on Aug. 1, 2006. On May 19, 2015, Krishnamoor- thy's employment was terminated with- out cause. Olympus Canada offered him compensation pursuant to the termination clause, which Krishnamoorthy refused and launched a wrongful dismissal lawsuit. At a motion for summary judgment, Krishnamoorthy argued that, pursuant to s. 9(1) of the ESA, his employment with Carsen and Olympus Canada was con- tinuous. He also asserted that the termi- nation clause was unenforceable, because Olympus Canada failed to provide him with fresh consideration for amending his employment contract to include the clause. In response, Olympus Cana- da contended that its offer of employment constituted suf- ficient consideration and, as such, the termination clause was binding. The motions judge accepted Krishnamoor- thy's position and awarded him damages equivalent to 19 months' pay in lieu of notice. Olympus Canada appealed. On appeal, Olympus Can- ada argued that the motions judge erred by ignoring the fact that Olympus Canada had no pre-existing employment agree- ment with Krishnamoorthy and, as such, had no obligation to make him an offer of employment. It also asserted that the ESA does not deem there to be continuity of the employment relationship upon the sale of a business for all purposes and, as such, its offer of employment amounted to suf- ficient consideration for the termination clause. Having sided with Olympus Canada, the ONCA explained that the language of s. 9(1) of the ESA makes it clear that em- ployment is deemed continuous only "for the purposes of this act." Therefore, s. 9(1) cannot be invoked to claim rights or entitlements on which the ESA is silent, such as the employees' com- mon-law rights. Relying on its previous decision, Ab- bott v. Bombardier Inc., 2007 ONCA 233, the ONCA reminded that the purpose of s. 9(1) of the ESA is to protect minimum statutory entitlements that are related to length of employment where the purchaser of a business or part of a business continues to employ the employees of the vendor fol- lowing the sale. Such statutory entitlements include holiday pay, vacation pay, pregnan- cy leave, notice, severance pay, etc. Krishnamoorthy reaffirms that s. 9(1) of the ESA does not create a continuation of employment relationship upon the sale of a business for purposes of the common law and a wrongful dismissal action. It also clarifies that s. 9(1) does not require the purchasers to offer employment to the vendor's employees on the same terms as their original contracts. If, following the sale of business, the employee is offered and accepted employment with their new employer, a new contract of employment is formed. No fresh or additional consider- ation is required to support a new employ- ment contract. In conclusion, Krishnamoorthy serves as a reminder for purchasers of a business that they would be assuming the vendor's statutory termination liability with re- spect to every employee whose employ- ment is continued subsequent to closing. To minimize their liability, the purchasers can offer the vendor's employees lesser terms and, more importantly, introduce a carefully drafted termination clause that would limit their entitlements at dismissal. LT uNikolay Chsherbinin is an employment and immigration lawyer and author of The Law of Inducement in Canadian Employ- ment Law. He can be reached at 416-907- 2587 or by visiting nclaw.ca. Making police accountable long overdue BY PAUL DUBÉ T here are many communities that have for years decried a crisis of confidence in Ontario police. The province's much- anticipated new omnibus policing legisla- tion, packaged as the Safer Ontario Act, 2017, appears to have been met with general optimism — perhaps as much a measure of the broad need and desire for change as it is of the bill itself. As members of the profession that preserves, pro- motes and protects the rule of law in our society, many lawyers and jurists have called for improvements to police oversight for decades. We should all take note of these proposed reforms and monitor their effectiveness in promoting police accountability and establishing the trust that is essential to policing by consent. My team and I are among those cautiously welcom- ing the bill, since it proposes numerous reforms that our office recommended to the province in investigative re- ports dating back to 2008, as well as to Justice Michael Tulloch's recent Independent Police Oversight Review. These include, among other things: bringing all po- lice oversight agencies under ombudsman jurisdiction; requiring them to collect demographic data (including race and mental health status on civilian interactions with police); creating standalone legislation to support and clarify the role of the Special Investigations Unit (which investigates serious injuries and deaths of civil- ians involving police); requiring police to co-operate with SIU investigations or face serious consequences; and requiring the SIU to report publicly on its investiga- tions, including when it determines that charges against an officer are not warranted. Our office made these recommendations to opti- mize the promise of civilian oversight first embraced by Ontario in 1990, when the SIU was born. The SIU was the first and only such body in Canada for nearly 20 years, completely independent and civilian-led, con- ducting investigations of police from start to finish, without police involvement. But over time, that spirit was tarnished by perceptions of a pro-police bias and a sense that, without sufficient legal force or political will behind it, the SIU was a toothless watchdog. However, as substantial as it is, this bill is just as re- markable for what's not in it. For example, the way police interact with vulnerable people — those who are in crisis, due to drugs or a men- tal illness — must also be modernized. Their standard training for encounters with someone who is armed with any type of weapon is based on an outdated use- of-force model, which teaches police officers to estab- lish authority and control of the situation by shouting commands. If the subject does not comply with those commands, officers are trained to proceed to using force, which may involve drawing and firing a weapon. De-escalation techniques — simply talking the person down or even just listening — are not part of their man- datory training, and they are not sufficiently empha- sized within the use-of-force model they must follow. After a lengthy investigation by my office that re- viewed the circumstances of dozens of fatal police shoot- ings of people in crisis, the hundreds of resulting recom- mendations by coroners' juries over two decades and de-escalation techniques in other jurisdictions, I recom- mended in my June 2016 report — "A Matter of Life and Death" — that de-escalation techniques be made man- datory through a new regulation under the existing (and now soon-to-be-replaced) Police Services Act. The previous provincial minister of Community Safety and Correctional Services recognized this and pledged to accept and implement my recommenda- tions, but they left office five months later. Since then, there has been little visible movement on this issue. In announcing the new bill, the current minister, Marie-France Lalonde, emphasized that it will sup- port individual community plans to partner mental health and social services professionals with police in certain interactions. The government has said the new act "will ensure police education, training and standards are consistent across the province." My office found this was not the case with de-escalation training; it varies widely from one police service to another. However, the bill makes no specific mention of de- escalation. Like many others who have contributed their expertise and advice to the government's lengthy con- sultations, I am encouraged by the promising direction of this ambitious new legislation, and I can only hope that this key missing piece — a new use-of-force model requiring officers to use de-escalation techniques be- fore force wherever possible — will soon follow. Since my report was released last year, at least four more police-involved deaths of vulnerable people in crisis have further galvanized calls for this change. Ontario already lags behind other jurisdictions in de- escalation training and models, but it could adapt those in use in B.C., parts of the U.S. and the U.K., where they have been proven effective. Making police oversight bodies more accountable and transparent is long overdue, but to truly realize what the government calls the most significant trans- formation of policing in a generation, change must also happen on the front lines, where officers meet people in crisis face to face. That starts with training. It is my hope that enhanced training on de-escalation will save lives by reducing the number of fatal police shootings of people in crisis. Measures to improve the encounters between police and some of the most vulner- able members of our society through de-escalation — en- hancing the safety of all concerned — will go a long way to instilling confidence in police and result in fewer tragic cases being referred to coroners' juries and the SIU. LT uPaul Dubé is the ombudsman of Ontario. He was pre- viously Canada's first federal taxpayers' ombudsman, and he has practised law in New Brunswick and Ontario. u SPEAKER'S CORNER COMMENT Labour Pains Nikolay Y. Chsherbinin

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