employment counsel

Proceed without good employment counsel at your peril

By Jennifer Mathers McHenry

Setting up and running a restaurant is risky, expensive and a heck of a lot of work. I can understand why restaurateurs, both new and experienced, want to avoid unnecessary costs. I can also understand why having an employment lawyer involved in your business when everything is running smoothly can seem like an unnecessary cost. Here we discuss why it isn’t.

A good employment lawyer will understand that she or he needs to add value to your business. That means helping you manage and mitigate risk and, better yet, making it so you don’t need that lawyer (or don’t need them as much) going forward. I often tell my clients that they can pay me to get them set up properly, or they can pay me a lot more down the road when something goes wrong.

Business owners (the successful ones) are smart people that are usually in possession of a lot of common sense, but the “right” answer isn’t always obvious – especially where industry norms have developed over time that fly in the face of legal requirements – and practices that go unchallenged for years can come back to bite you and your wallet.

A blitz conducted by the Ministry of Labour earlier this year found that three-quarters of the employers looked at were breaking the law by falling below minimum legal requirements relating to their employees. Infractions included poor record keeping, failure to pay over-time and requiring employees to work an excessive number of hours. The Ministry collected $361,000 in unpaid wages following those inspections. Many of the employers involved had no idea their practices were illegal but – surprise – they owed the wages and associated fines anyway.

You know what you don’t need when running a business? Surprise bills. You also don’t need human rights complaints and the associated public relations mess that can come along with them. Ask the restaurants who found themselves at the centre of controversy and human rights complaints when women began to protest long-accepted dress codes as sexist and discriminatory. Any employment lawyer worth their salt could have seen that risk coming.

As the owner/manager of a business, what goes on at that business is your responsibility. If you and your staff are not well trained regarding human rights issues and if you do not have clear policies in place, you are exposed to real liability. Ask the restaurateur who had to pay $12,000 to a customer with obsessive compulsive disorder when his staff refused to accommodate him by cleaning his booth and serving him water, hold the lemon and straw.

Off of the top of your head, can you answer all of these questions correctly?

  1. If you fire someone during month four of a six-month probationary period, do you have to pay them anything? Yes – relevant Employment Standards only permit 90-day probationary periods.
  1. If someone works for you for five years, quits, comes back five years later and then you terminate their employment after two years, do you owe them the severance of seven-year employee or two? They must be treated as a seven-year employee. If you are a large enough business to have severance requirements, the ESA requires you to count all years of service, notwithstanding a break.
  1. If you terminate someone and your insurance policy requires that their long-term disability coverage terminates immediately and that person gets hit by a bus one week later, might you be liable for paying that person something, and for how long? If LTD terminates before the end of the notice the person is entitled to by law, the employer may have to keep them whole until the employee can return to work or until the age of 65.
  1. You have an employee with children – do you have a responsibility to schedule around that person’s childcare needs? Maybe. Family status accommodation is a growing area and if the accommodation is not an undue hardship, chances are it is required.
  1. If you have employees sign an agreement not to compete with your business after they leave, will that agreement be enforceable? Maybe – enforcement of restrictive covenants is fact-specific, but if well drafted, targeted and reasonable when signed, they can be enforced.

These and a whole host of other questions are just the sort of advice you can get from expert employment counsel. Having the right answers up front can save you a lot of aggravation and a whole lot of cash down the road.

About the author:

Jennifer Mathers McHenry is a Partner in the Colson Group at Teplitsky Colson LLP. She and her team regularly advise employees and employers with respect to all aspects of the employer/employee relationship including: offers of employment, human rights obligations, changes of control, M & A, executive and other compensation issues, resignations, terminations of employment, constructive dismissals, and post-employment fiduciary and contractual obligations. Jennifer is a skilled litigator and negotiator with a business-minded and practical approach that is designed to help her clients achieve their goals, mitigate their risks, and most importantly, succeed in their work or business life.

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