[1999] OLRB REP. SEPTEMBER/OCTOBER 905
1704-98-ES Shafiqur Rahman and Shabnam Rahman, Applicants v. York Condominilim Corporation 506 and Ministry of Labour, Responding Parties
BEFORE: Laura Trachuk, Vice-Chair
APPEARANCES: Christopher Schiffmann for the applicants; Lisa S. Goodfellow, Washington Brooks and Evelyn Haidenschuster for York Condominium Corporation 506; Brian Blumenthal for the Ministry of Labour.
DECISION OF THE BOARD; October 28, 1999
[1]. This is an employee request for review of an Employment Standards Officer's decision not to issue an order in favour of the named applicants.
[2]. The applicants claim that they were terminated from their employment in contravention of sections 38, 43 and 44, the pregnancy, maternity and parental leave sections of the Employment Standards Act (the "Act").
[3]. At the outset of the hearing, the applicants sought to make a preliminary argument that the matter had been settled because they had been presented with an offer by a Labour Relations Officer which they had signed. The Board established that the "offer" had not been signed by the other parties. The Board therefore advised the applicants that it could not find such a document to be a settlement. The Board does not permit evidence of settlement discussions which have taken place with its officers to be introduced because permitting such evidence would significantly hinder the settlement process. The Board's Officers are not compellable witnesses under the Act except with the Board's permission. The Board understands that many pitfalls await the settlement process even after the parties have an agreement in principle and therefore, except in the most extraordinary circumstances, the Board will not find that a matter has been settled absent a signed memorandum from the parties. On the other hand, if the Board has such a document signed by all of the parties, it is only in the most extraordinary circumstances that it will find that a matter has not been settled. Ironically, there is an example of such circumstances in this case. The applicants signed a "release" in favour of the responding party four months after they were terminated. Ordinarily that would be binding. However in this case the applicants were required to sign the release in order to receive the termination and vacation pay to which they were entitled under the Act and which they desperately needed. A release coerced by such unlawful action will not be considered a binding settlement.
Facts
[4]. Three witnesses testified at the hearing of this matter. However, most of the relevant facts are not really in dispute. What is disputed is whether an inference can be drawn from the fact that the applicants were terminated while Ms. Rahman was on maternity leave, that they were terminated because of that leave and because Mr. Rahman might have taken parental leave.
[5]. The responding party (referred to as YCC 506) is a not for profit condominium corporation responsible for a building of approximately 200 units. The condominium was built around 1979 and since that time, or for some significant part of it, a company called Philmor Group Limited also known as MMG Property Management (referred to as Philmor/MMG) owned and/or managed sufficient units in the building to maintain majority control of the board of directors of YCC 506. The board of directors therefore also retained Philmor/MMG as the property manager for the building and paid it fees accordingly.
[6]. One of the decisions made by the board of directors and Philmor/MMG in August 1997 was to hire the applicants as a superintendent couple to run the building. There was also an assistant superintendent couple who were mainly responsible for cleaning the building. It is not clear whether there had been two superintendent couples prior to August, 1997.
[7]. In November, 1997 the resident owners of the building had sufficient numbers versus the Philmor/MMG units to hold a special meeting of the corporation and to vote for a new all resident] owner board of directors. Washington Brooks, the president of new board described this as a "coup". The first business of the new Board, not surprisingly, was to give notice to Philmor/MMG that YCC 506 would no longer be requiring its services. The contract was to terminate at the end of December pursuant to the notice.
[8]. Ms. Rahman was expecting a baby in March. She was experiencing significant stress as a result of the tensions at the building which was having a negative effect on her health. On December 17, 1997she therefore requested to begin her maternity leave on January 3, 1998. Her request was presented by the Philmor/MMG property manager to the board of directors who consented. Ms. Rahman therefore commenced maternity leave on January 3. She had indicated to the board that she expected to return to work three months later providing her delivery etc. were without complications. Mr. Rabman testified that he indicated to Mr. Brooks that he would perform both of their jobs but if the board felt it needed a couple to do the work it should lay him off.
[9]. At the beginning of January the board of directors met with the manager assigned by its new property management company, Brookfield Lepage Management Service Inc. (referred to as "Brookfield Lepage"). On January 7, 1998 the Rahmans were terminated from their employment. Mr. Brooks testified with respect to the board's reasons for the termination. He testified that the new property manager recommended that they lay off the four existing superintendents and hire one individual with the skills required to maintain the building so that it would not be necessary to hire contractors for every problem. He also recommended that a contract cleaning company would do a better job than the assistant superintendent couple. Mr. Brooks also testified that Brookfield Lepage indicated that they had encountered these situations many times before and suggested that the board could not be certain of the loyalties of the existing superintendents. Mr. Brooks was already concerned about the Rahnians' loyalties as they had been hired by the board of directors when it was dominated by Philmor/ MMG. Furthermore, the new board was of the view that most of the Rahmans' duties related to servicing the Philmor/MMG owned and/or managed rental units and were not related to providing services to the resident owners. He testified that the new property manager advised him that the administrative work done by Ms. Rahnian was really the job of the property manager. The new property manager advised the board that one property manager would be assigned to the building full-time and would do the work which Ms. Rahman had done. That work would therefore be covered by their fees. Philmor/MMG had not assigned a full- time property manager to the building so the board felt it was paying Ms. Rahman separately for what should have been included in the property management fees. Furthermore, YCC 506 was paying Philmor/MMG for the apartment in which the Rahmans were living because the apartment owned by YCC 506 to house the superintendent was occupied by the assistant superintendent couple.
[10]. The board instructed Brookfield Lepage to ask all of the superintendents to "resign" and if they refused to do so to terminate them. On January 7 the Rahmans were presented with the offer of two weeks salary in lieu of notice plus their outstanding vacation pay. However in order to receive any of the money they were required to sign a release. The offer included pay in lieu of one week more notice than YCC 506 was required to provide under the Act. However, the Rahmans did not want to sign the release. As a result YCC 506 did not even pay them the monies to which they were entitled under the Act until April 1998 when they became so desperate that they agreed to sign the release. YCC 506 did not provide them with their records of employment until March, 1998 even though Mr. Rahman asked for them several times. The Rahmans were required to vacate their apartment by the end of January, 1998. The assistant superintendent couple were asked to "resign" on January 16, 1998 and did so.
[11]. A new superintendent was hired in March, 1998 and, according to Mr. Brooks, has saved YCC 506 approximately $50,000.00 per year in contractor costs. The board has not had to pay rent for him as he resides in the superintendent apartment. He is paid a salary of $22,000.00 per year. (The combined salaries of the two former superintendent couples was approximately $50,000.00 per year.) The contract cleaning company's fees are approximately $5,000.00 per month. Brookfield Lepage was also charging $10,000.00 less in fees than Philmor/MMG had charged.
[12]. The Board also heard evidence with respect to the Rahmans' alleged participation in the election in which Philmor/MMG was ousted from the board of directors. Mr. Brooks testified that he had been told by a number of owners that the Rahmans were soliciting proxies on behalf of Philmor/MMG and that they were trying to persuade owners to vote in its favour. Mr. Brooks' testimony that he believed that this had occurred and that this influenced his decision to terminate the Rahmans' employment was credible in the circumstances. The Rahmans denied that they had solicited proxies or attempted to solicit votes and they were also credible. It appears that there may have been a misunderstanding between the parties which might have been clarified by a discussion about the matter at the time. However, the Board need not find that the Rahmans actually did involve themselves in the vote against the new board. What is relevant is that the new board thought that they did and that was part of the motivation for terminating them.
[13]. The Board also heard evidence about a conference call in which the Rahmans were asked to perform a fire patrol until the building's fire alarm system could be upgraded. It appears that the new board learned shortly after the election that the fire marshall was requiring a 24 hour fire patrol. The Rahmans testified that the board wanted them to do the patrol, or some part of it, so that it would not have to pay for a security company. In a conference call they, supported by the property manager at the time, took the position that Ms. Rahman could not do the patrol because of her pregnancy. They allege that one of the board members who was on the conference call said that the patrol would be good for her health. In the end it was agreed that Mr. Rahman would patrol for four hours and one of the assistant superintendents would also patrol for four hours and they would hire a security firm for the other 16 hours. The Rahmans also allege that after the call Mr. Brooks and the other board member were heard saying something like "now we can fire them over this". Mr. Brooks testified that shortly after he was elected he learned about the fire alarm problem. The board thought that the Rahmans could do the fire patrol, since it was of the view that they spent most of their time servicing the Philmor/MMG units. He testified that the Rahmans refused to do the patrol and he had to get the property manager involved to negotiate a compromise. The Board cannot determine which version of events is true as the Rahmans' version was never put to Mr. Brooks while he was testifying. However, for reasons set out below, the Board does not find it necessary to decide what was really said during that conference call.
[14]. The Rahmans deny that most of their time was spent servicing the rental units although they did so some work in that capacity. Again it appears that an earlier discussion might have clarified matters for the board of directors.
Arguments
[15]. YCC 506 denies that its decision to terminate the Rahmans had anything to do with Ms. Rahman's pregnancy or maternity leave and was made for a bona fide business reason. It wanted to save money and was concerned about the Rahmans' affiliation with Philmor/MMG. It claims that the evidence supports their position.
[16]. The Ministry of Labour agrees that there is evidence to support the Officer's determination that the decision to terminate the Rahmans was based on bonafide business reasons. It asserts however, that YYC 506 did violate section 7(4) of the Act by not paying the Ralimans their termination and vacation pay until three months after they were terminated.
[17]. The applicants claim that they were terminated contrary to the Act. The applicants rely upon the timing of the decision and assert that the business reasons claimed for the decision are not credible.
[18]. The applicants referred the Board to the following decisions: Belanger et al. v. Southwestern Insulation Contractors Ltd. et al. 1993 CanLII 5503 (ON CTGD), 16 OR. (3d) 457; Fretz v. Roman Catholic Episcopal Corp. of the Diocese of Hamilton [1991] O.J. No. 1504; Re Ontario Blue Cross [1994] O.E.S.A.D. No.203; 241 Pizza Ltd. [1993] O.E.S.A.D. No.66; Re Hardin [1993] O.E.S.A.D. No.16; Wah Lung Labels (Canada) Inc. [1998] O.E.S.A.D. No.292 and Re Spinaker Industries Inc. [1996] O.E.S.A.D. No.34.
Decision
[19]. The relevant sections of the Employment Standards Act provide as follows:
(4) If an employee is entitled to a payment upon termination of employment, the employer shall make the payment to the employee not later than seven days after the termination.
(1) An employee who has been employed by his or her employer for at least thirteen weeks and who is the parent of a child is entitled to a leave of absence without pay following,
(a) the birth of the child; or
(b) the coming of the child into the custody, care and control of a parent for the first time.
(2) Parental leave may begin no more than thirty-five weeks after the day the child is born or comes into the custody, care and control of a parent for the first time.
(3) The parental leave of an employee who takes a pregnancy leave must begin when the pregnancy leave ends unless the child has not yet come into the custody, care and control of a parent for the first time.
(4) The employee must give the employer at least two weeks written notice of the date the leave is to begin.
- (1) The employer of an employee who has taken pregnancy leave or parental leave shall reinstate the employee when the leave ends to the position the employee most recently held with the employer, if it still exists, or to a comparable position, if it does not.
(2) If the employer's operations were suspended or discontinued while the employee was on leave and have not resumed when the leave ends, the employer shall reinstate the employee, when the operations resume, in accordance with the employer's seniority system or practice, if any.
(3) The employer shall pay a reinstated employee wages that are at least equal to the greater of,
(a) the wages the employee was most recently paid by the employer; or
(b) the wages that the employee would be earning had the employee worked throughout the leave.
An employer shall not intimidate, discipline, suspend, lay off, dismiss or impose a penalty on an employee because the employee is or will become eligible to take, intends to take or takes pregnancy leave or parental leave.
Where an employer fails to comply with the provisions of this Part, an employment standards officer may order what action, if any, the employer shall take or what the employer shall refrain from doing in order to constitute compliance with this Part and may order what compensation shall be paid by the employer to the Director in trust for the employee.
[20]. The Act prohibits an employer from terminating the employment of an employee because she or he is eligible for, or has taken, maternity or parental leave (section 44). It also prohibits an employer from deciding that it prefers to operate without an employee who has been on leave or to move an employee who has been on leave to a new position (Section 43). Essentially the Act protects an employee from adverse consequences stemming from accessing her or his rights to maternity or parental leave. It does not protect an employee from consequences which would have occurred regardless of her or his entitlement to leave. Thus an employer need not create a job to accommodate An employer need not reinstate an employee if there has been a lay off an employee who is going on, or returning from, maternity leave if none would have existed. while she is absent. Likewise an employer may terminate an employee for bona fide reasons while she is on maternity leave. However, a presumption arises in such a case that the termination is related to the leave. An employer faces a high hurdle in rebutting that presumption.
[21]. However, this is a, perhaps rare, example of a case in which the employer has successfully rebutted the presumption. The Board is persuaded that YCC 506 terminated the employment of the Rahmans because the new board believed that they were aligned with Philmor/MMG who they considered to have been acting in bad faith. They were also terminated because the board of directors took the advice of its new management company that it would receive better service and save money if YCC 506 used a single superintendent with maintenance and building skills as well as a cleaning company. It is credible that the new board would have seen the advantages of having one superintendent rather than four, especially when employing four superintendents required the leasing of an apartment. The new board was also advised by Brookfield Lepage that the building was not being properly maintained and that it could find a superintendent with the skills to maintain it. It is also reasonable that the new board would have taken this advice given its members' (perhaps erroneous) view that most of the Rahmans' time was spent servicing the rental units.
[22]. The only evidence that the terminations might have been motivated by Ms. Rahman's leave is the timing of them. They occurred four days after she commenced her leave. However, the other evidence outweighs the suspiciousness of the timing and the commencement of the new property management contract provides an explanation for it. The fact that the assistant superintendent couple was also terminated is further significant support for YCC 506's claim that the terminations were motivated by the change in the board ,the new property management company and the legitimate reorganization of the building services.
[23]. The applicants rely upon the statements allegedly made in the conference call by the board members that doing the fire patrol would be good for Mrs. Rahman's health and that their reluctance to commit to doing the fire patrol for a longer period was a reason to fire them. However, even if the Board were to find that those things were said, they actually indicate a personal antipathy towards the Rahmans in late November, or early December before Ms. Rahman had given notice of her early maternity leave. If anything, the comments would reflect the board members' view that the Rahmans had acted against them in the election and that they therefore wanted to get rid of them.
[24]. For the above reasons the Board finds that the Rahmans were terminated for reasons not related to Ms. Rahman's pregnancy or to their entitlement to maternity and parental leave and therefore not in contravention of the Act. Nevertheless, the termination of the Rahmans at that time had particularly serious consequences because they lost all of their income and also lost their apartment eight weeks prior to the birth of their baby. It was not possible to get another job as a superintendent couple given the pending birth. The Board is therefore disappointed by the callousness exhibited by YCC 506 in refusing to pay the Rahmans the termination and vacation pay to which they were entitled under the Act until they signed the release in April. An employer may not delay the payment of monies to which employees are entitled under the Act in order to extract a "release". The Act requires that payments owing to employees be paid within seven days under section 7(4) and YCC 506 violated that section in particularly harmful circumstances. Nevertheless the money was eventually paid, including an extra week's wages, and there is, therefore, no remedy which the Board can, or should, impose at this time.
[25]. This application is hereby dismissed.