Back To Basics: The Difference Between Just-Cause And Without-Cause Termination

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Introduction

A business’ greatest asset is its employees.  This is why terminating an employee is never easy.  Terminations must always be handled with sensitivity and care.  The decision is a fine balance between treating the employee fairly, while balancing the relevant legal principles, and considering the company’s best interest.

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Walsh LLP’s knowledgeable employments lawyers are experienced in guiding employers on the current legal landscape, to avoid the legal pitfalls associated with terminations, and we assist employees to ensure their legal rights have been fully recognized in their time of need.

What is Just-Cause or Without-Cause? When do they apply?

Alberta employers may terminate an employee’s employment for just-cause or without-cause. Each process is legally distinct.  All too often employers use the wrong form of termination, which exposes the company to liabilities including claims for wrongful dismissal, for insufficient working notice, for severance or reinstatement, or lost wages, human rights claims and other claims.

Basic but fundamental examples of some differences between just-cause and without-cause terminations include the following:

A). JUST CAUSE: Just-cause terminations require a high legal burden of proof. The employer must demonstrate that the decision was a reasonable and proportionate response to the alleged wrongdoing.  This decision must also take into consideration the surrounding circumstances.  Just cause terminations can occur as a result of a single incident or a series of small incidents, such as:

• Undermining, offending or repudiating fundamental terms of an employment agreement;
• Misconduct that breaches the essential and inherent trust that is implied in all employment relationships, in a way that trust cannot be repaired;
• Serious misconduct that is incompatible with the employee’s duties and prejudicial to the employer’s business and reputation;
• Acts of dishonesty, insubordination and abandonment;
• A single incident that is criminal or quasi-criminal in nature; and
• A series of small incidents like habitual neglect of duty, incompetence, poor performance, absenteeism and lateness.

Prior to terminating an employee for just cause, legal guidance should always be obtained.

B). WITHOUT CAUSE: Employment contracts are not perpetual agreements and employment is not a guarantee for life. Therefore, without-cause terminations are a tool that allows an employer to manage its workforce. Examples of without cause terminations include:

• The employer no longer requires the employee’s services, for whatever reason;
• The employer has decided to restructure its operations;
• The employer is forced to respond to economic hardships or a downturn in the economy;
• An employee exhibits unsatisfactory job performance that falls short of just cause; and,
• The employee is no longer a good fit for the organization.

The above examples are not an exhaustive list.

To limit an employer’s liability for additional claims, without-cause terminations must not offend the applicable human rights or employment laws or other laws. Further, the manner of termination must be conducted carefully and reasonable severance must be provided. Determining what constitutes ‘reasonable severance’ can be complex.  For more information on determining reasonable severance, please see my article titled: How Is Severance Calculated?

Walsh LLP is here to help

In both just-cause and without-cause terminations, the courts review each matter on a case-by-case basis.  To reduce your risks and to avoid the legal pitfalls, we recommend you obtain legal advice.  Walsh LLP’s experienced team of employment lawyers can provide the legal advice you require and advice that is tailored to your specific needs and unique circumstances.

For assistance or additional information on terminations, calculating reasonable severance and legal considerations specific to your circumstances, whether as an employer or an employee, please contact Walsh LLP’s Employment Lawyers.

Appeals Board Takes Sober Second Look At Brownfield Development In Alberta

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Walsh LLP working with a team of lawyers from Alberta and British Columbia successfully appealed multiple Environmental Orders that were issued by the Director of Alberta Environment and Parks.  The appeal of these Orders was heard by Alberta’s Environmental Appeal Board over the course of a twelve day hearing, which is now the longest ever in the history of the Board.

The Orders issued by the Director required, among other things, the immediate removal and disposal of contaminated soil that has been at depth for well over three decades.  The clean-up cost of removing all of the material as suggested by the Director in these Orders was estimated to be approximately $52,000,000.00.  While the Director cited that the removal of this material was an “emergency,” the Appeals Board disagreed with that characterization and actually found in their decision that the removal of these soils as contemplated by the Orders would pose a greater risk to the health of nearby residents.  The Appeals Board further found that the Orders were issued without proper technical or scientific foundation, and recommended that the Minister of Alberta Environment and Parks reverse the Orders. The Minister subsequently accepted that recommendation.

While the details in dispute in this hearing were incredibly complex, there are clear implications from this decision in respect to the future of brownfield development in Alberta. With thousands of contaminated sites throughout the Province, it is important that our legislative framework allows for development of these sites in a manner that reduces risk to human health, and encourages productive use of contaminated land.

One of the largest roadblocks in facilitating brownfield development is the risk of liability, which was certainly a risk that was front and centre to these proceedings.  Had the Director been successful in enforcing these Orders, which were repeatedly referred to as “incorrect and unreasonable” in the Appeal Board’s decision, it would have arguably set a precedent that would destroy the commercial viability of brownfield development in Alberta.  There is and always has been a liability risk associated with brownfield development, however, the risk must be informed by a proper scientific and technical understanding of the site.

It is likely that challenges associated with brownfield development will continue into the future, as environmental legislation will continue to evolve along with our scientific understanding of these sites.  However, ideally this decision gives some comfort to those looking to invest in brownfield development that the risk of liability will not include liability associated with “incorrect and unreasonable” clean-up demands that are lacking in proper technical and scientific foundation.

For the full decision of the Environmental Appeals Board, click here.

Have Environmental or Commercial Litigation questions? Walsh LLP’s Commercial Litigation group is here to help.

BILL 5: A Welcome Amendment For Estate Planning With AISH Recipients

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What is Bill 5?

On June 11, 2018, Bill 5 (An Act to Strengthen Financial Security for Persons with Disabilities, SA 2018 c12) was passed in the Alberta Legislature.

Bill 5 amended the Assured Income for the Severely Handicapped Act, adding a category of assets that would be exempt from eligibility calculations under the Alberta’s Assured Income for the Severely Handicapped (“AISH”) program.

What is the significance of Bill 5?

While estate planning for family members and dependants is not new in Alberta, estate plans with AISH recipients has, in the past, undoubtedly required special attention and strategic planning to determine how much, and in what format, gifts and inheritances should be transferred.

Under the old rules, assets held in trust for a recipient of AISH benefits were included in that individual’s asset calculations (this also included assets held in trust for a recipient’s spouse). This meant that being named as a beneficiary of a family trust or a testamentary trust could affect that individual’s AISH benefits eligibility, regardless of whether funds or assets were actually ever transferred to the individual. Henson trusts (a type of discretionary trust used commonly used for individuals who receive government disability benefits) were recognized as being excluded from asset calculation in a majority of provinces in Canada, except for Alberta.

Bill 5 amends the AISH legislation so that a dependant’s interest (or their spouse’s interest) in a trust as a beneficiary is excluded from the calculation of assets for determining AISH benefit eligibility. This is a welcome change for parents and family members who want to leave a gift or an inheritance to dependants without having to prematurely direct how and in what quantity the gift or inheritance is to take. While trust income that is actually paid to the individual is still counted towards their benefit eligibility, this change means that parents and family members can better incorporate and utilize Henson trusts in their estate plan for beneficiaries who are entitled to AISH benefits.

Does Bill 5 change my Estate Plan?

Ultimately, Bill 5 and the amended AISH legislation gives parents and family members more freedom to structure their estate plan in a way that allows the beneficiary to receive both AISH entitlements and an inheritance.

Whether Bill 5 affects your current plan will depend on what you currently have in place. As with all estate planning, it is a good idea to have a review at regular intervals, to ensure that the documents and structures still reflect your wishes, and to determine whether any changes in legislation or common-law otherwise affect your plan. If you have any questions about how the new legislation or common-law may change what you have in place, or know that your plan requires changes, our Wills & Estates department is happy to help.

Taking Care of Business – What Are “Dower” Rights And How Do Spousal Interests Affect Your Business And Real Property Rights

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What are Dower Rights?

You may have heard of the term “dower rights.” But, what is it? Well, in simple terms, it is a married person’s right in the homestead and property of their wife or husband. It is legislated in the Dower Act, which protects the rights of a spouse and prevents the other spouse from selling, mortgaging, or transferring or gifting the property out from under them.

Dower rights, as well as spousal property claims, can have costly impacts on you, if you don’t address them with proper legal steps.

What this means when you sell or refinance your house, or make your Will

If you own a home that you or your spouse lived in and the title to the property is only in one of your names, the spouse without title in their name must sign a properly-prepared dower consent before you can legally transfer, mortgage, or gift the property.

When making you Will, remember that dower and other spousal rights belong to the surviving spouse, so you cannot give what you don’t own (by Will or otherwise), and dower or spousal rights may still attach to your assets and what you thought you gave in your Will may not in fact go to your beneficiaries. At least not without dealing with any applicable spousal claims.

Divorce and your business

Spousal rights are often overlooked when you start a new company. Upon break-up of the marriage, your spouse’s rights in the company can change your plans significantly. This can be especially so if your spouse is a co-founder of your business or if you bring a new spousal partner into the business.

A company held by one of both may, in some situations, be marital property to be divided under the Matrimonial Property Act. If property is divided, there may be a risk that the former spouse may be deemed a shareholder.

What you can do about it

Whether you simply want to simplify handling your property, your business, or your estate plan, there are a number of steps you can take to protect your interests. These include:

1. Getting a Release of Spousal Rights (including Dower) for Property: Your spouse could sign a release of their rights, dealing with the specific lands or other property or business assets.

2. Shareholder Agreement: Shareholder Agreements govern the relationship between the shareholders of the company and its purpose is to protect all of their interests and kept the business running if there are ever problems in the future. Our lawyers can draft an agreement that will ensure that a former spouse of a shareholder cannot become a shareholder through divorce. This protects the value of your business, because it may ensure that no shareholder has their ownership or disclosure rights restricted or hijacked by a spousal claimant.

If both spousal owners have shares in a company, the Shareholder Agreement could plan ahead for a situation where maybe they cannot work together anymore. We can help you create the remedy for this problem, in advance, to create mandatory buying-and-selling rights, in the event of an irreconcilable dispute; you can even pre-determine the buy-out price!

3. Pre-nuptial Agreement: Well before you get married, you should consider making a pre-nuptial agreement to deal with property owned jointly or by either spouse (amongst other issues these agreements can avoid!).

Conclusion

To manage potential risks of a new relationship, we encourage you to start right now, with good planning. It sure can protect you later down the road! To discuss this, please contact one of our Business Law or Wills and Estate or Family Law lawyers today.

Estate Law Update: Is A lost Will A Fatal Event? And, Is A Detailed Intention To Make A Will Enough To Make A Will?

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The Alberta Court of Appeal has answered both of these interesting questions, on the same day!

Lost and Found – If a Will is lost, how can it be “found” again?

Although the Court doesn’t address the more philosophical question here, it does answer the more practical question of what the executors and beneficiaries can do when the original document itself is nowhere to be found, when the testator dies.

On January 30, 2019, the Court of Appeal decided in the Neufeld v. Neufeld case (2019 ABCA 33), that an unsigned copy of a 1988 Will can be given a grant of probate.

Although this is not new law, the Court of Appeal has given it fresh effect. In the Cordell case we discussed in 2016, the lower court (Queen’s Bench judge) found that Will was proven solely by oral testimony of its contents (where the document was entirely missing upon the testator’s death).

The lower court in Cordell applied a more detailed standard than the new Neufeld decision. In the Goold case we discussed in 2016, the court looked at an analogous situation where the Will was a photocopy of the signed holographic Will, but not the original ink version. Both the Cordell and Goold decisions granted probate of the Wills.

The new Neufeld decision is the highest and newest case on “lost Wills,” in Alberta. The Court of Appeal dismissed the allegation by the appellant that the lower court had no authority to do so, and upheld the lower court’s grant of probate of a copy of a lost Will. The high court in Neufeld confirms that the courts do have authority to consider your application to save a lost Will, if you can show:

1. The lost Will was “duly executed.” This means that the testator signed it in the presence of two subscribing witnesses and all 3 signed the Will together, for a formal Will; or that it is entirely in the testator’s own handwriting and signed by the testator, for a holographic Will; and,

2. The copy reflects the contents of the lost original Will. This requires proof that the testator “knew and approved” the original Will’s effects, in a legal sense; and,

3. The presumption that the testator destroyed the Will, if the original is not found at death, is rebutted or inapplicable. If the testator was the last one holding the Will before they died, but it is missing at death, there is initially a weak presumption that the testator destroyed the Will and it is accordingly voided. However, that presumption can be rebutted. Doing so requires proof of chain of possession and that the Will continued to exist up to the moment of death: in other words, that the Will was always in the testator’s possession before death and beyond, up to the date it was lost.

As in all estate litigation, the evidence presented must be corroborated by more than just one witness attesting to the key facts, as required by the Alberta Evidence Act. Such proof can be by multiple witnesses, or a combination of witnesses and records or declarations that, together, corroborate the statements to convince the court.

So, as of 2019 the law in Alberta is that you can indeed find a Will again. All is not lost.

Is a Detailed Intention to make a Will, a “Will”?

It seems perhaps obvious that one can no more wish a wild horse into being by picking its name, than they can wish a Will to spring forth from merely naming names or drawing out broad strokes in the abstract sense.

In this new court case, it appears that the latter logic was an honest but mistaken view of section 39 of the Wills and Succession Act.

In some situations, section 39 the may indeed save a “slip,” from killing an otherwise valid Will.

On January 30, 2019, the Court of Appeal in the Re Hood Estate case (2019 ABCA 34) found that if there is “clear and convincing evidence” that the testator “intended to sign the document (Will) but omitted to do so by pure mistake or inadvertence,” and that the document was the testator’s final, binding intention for their property (i.e. their “last Will”) then the courts indeed can correct the oversight of failing to sign it by deeming the Will signed and valid.

However, in the Hood Estate case, the argument advanced by the disappointed beneficiary (the testator’s nephew), is that his aunt intended to change her Will, hired a paralegal to prepare the drafts, but failed to sign it before she died, and so her death itself was the “inadvertence” that prevented her from actually signing it, to satisfy s. 39 of the Act and deem it signed.

The apparent gap in this argument that both the lower court and the Court of Appeal found, is that mere death itself comes to each of us, and cannot be an “inadvertence” that gets in the way of the signature. In the Hood case, the aunt had also had a lengthy period of time, albeit while in the hospital (a not-uncommon scenario in actual practice), to review the detailed draft Will that the nephew apparently shuttled between the paralegal and his aunt. The appellant (nephew) presented no convincing evidence as to why it wasn’t equally logical that his aunt simply either never reached a “final, fixed intention,” to make that Will valid, or that she had even intended to sign it.

This decision confirmed that under Alberta’s legislation, the courts do not have the ability to imagine into being the missing evidence of that final intention to sign the document. And, the testator’s death itself while a draft is “out there” on the high seas, does not allow an inference that they intended to put into port to sign that draft document.

So, in short: even a detailed draft wish is not a final wish, without being either a firm and final swish of the pen or a mere a slip twixt swish and swatch. To learn more or to begin a discussion regarding your unique situation, please contact one of our Wills and Estate lawyers today.

Oil and Gas: Supreme Court of Canada Rules That Environmental Liability Follows The Company

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And in this case, the borrower/trustee in bankruptcy. Provincial regulations govern, so the company’s liability to remediate well sites continues beyond even insolvency.

The Supreme Court overturned Alberta Court of Appeal’s earlier finding that liabilities didn’t follow the company under bankruptcy law (that’s no longer the law of Canada/Alberta). The policy at play here is that environmental liability is not a form of money debt per se, so the bankruptcy laws don’t wipe it out.

See full case report for Orphan Well Association v. Grant Thornton LLP.

If you have any questions, please call our Business and Corporate Law group, today. We will be happy to help you with your needs. If you want more information about our business law services, there are more articles here.

Walsh LLP Announces John Jung’s Addition To The Partnership

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We are pleased to announce that John Jung has joined the partnership of Walsh LLP, effective January 1, 2019.

John’s real estate practice encompasses commercial transactions, financings and real estate developments, including:

• Acting for developers and builders in the planning, development and conveyance of real estate, purchase, sale and lease transactions dealing with commercial and residential real estate.
• Creation and advice on commercial and residential condominiums.
• Construction financing and mortgaging.

John successfully combines his real estate experience with his commercial and corporate law practice. He has served clients through complex commercial financings, asset acquisitions and dispositions, and share transactions. He handles development issues arising at the planning stage and construction stage.

Visit John’s profile to learn more.

When Are You Legally A “Common-Law” Couple In Alberta?

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“It’s complicated,” indeed.

Contrary to popular belief, how long you live together is not the only factor. The question is complex. And, in Alberta, property legislation treats a common-law partner much differently than a married spouse.  So, the difference can be very important for your rights.

The Alberta Adult Interdependent Relationships Act sets these rules for unmarried couples.  When a couple’s relationship progresses to an “interdependent” state, the law grants important property rights to both members of the couple.

How financially intertwined are you?

Amongst other considerations, the key milestone for when a couple becomes “interdependent” is when they meet all 3 pre-requisites, for a minimum and uninterrupted period of 3 years (if they have children together or sign an agreement, this time can be shorter):

• They share one another’s lives;
• They are emotionally committed to each other; and,
• They function as an “economic and domestic unit” (which the courts have found means that they must be “financially inter-dependent” on each other).

Those 3 pre-requisites must be established to establish a valid “common law” (interdependent) relationship in the sense required by Alberta’s legislation.

To answer whether the third factor — an “economic and domestic unit” — exists, the question of financial inter-dependence is most important.

If financial inter-dependence exists, the courts then still look for other factors on a case-by-case basis to see if despite the financial aspect, the relationship is an economic and domestic unit:

(a) is it a conjugal relationship?
(b) how exclusive are you?
(c) what are your household and living arrangements?
(d) how much do you show others you’re an economic and domestic unit?
(e) how much did “formalise” intentions and responsibilities to each other?
(f) what contributions did you make to your mutual well-being?
(g) what is the degree of financial dependence or interdependence or financial support between you?
(h) do you share care and support for children?
(i) Do you own or use or acquire property together?

Proving it can get fairly up close and personal

With exception of the financial interdependence pre-requisite, the other factors are largely equally weighted. In practical terms, the courts have looked at a very large list of different activities, to consider of the latter laundry list of factors exists, such as:

• Sharing a family and social life together, such as hosting family get-togethers and shared friends. Do others see them as a couple? (e.g. do others observe: “Oh that’s John and Sue, and I see that couple at the grocery store/family weddings together”)
• Do they live together? Do they enjoy each other’s company?
• Division of labour: who looked after the house and garden and did most of the cooking, or the heavier work.

Being “common law” carries significant consequences for your property and obligations

This status carries with it many enforceable legal rights and obligations. If you are either in an interdependent relationship, or you are nearing that three-year mark, or maybe have a baby on the way, or if you are planning for your family’s financial future through estate planning, we strongly recommend you speak with a knowledgeable lawyer for some important advice.

Walsh LLP’s Family Law Group or Wills and Estates Group are happy to discuss your question with you. Call us today!

The Squeaky Wheel Gets the Grease — Owed Oil And Gas Rentals? Get The Compensation You Are Owed!

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The Alberta Government has paid nearly $10 million in compensation to landowners for rent owed to them by oil and gas companies, in as many years Do you own lands? Want to know how you recover money owed to you from oil and gas companies?

What are your rights to compensation?

If an operator owed you money under a surface lease, Right of Entry Order or a Compensation Order, you can bring an application to the Surface Rights Board. The Board may order the Alberta Government to pay you. It is in the Board’s discretion whether they award compensation.

What is the process?

The process includes these steps:

1. Apply to the Board for rental payments. Your application will require information including:
   • A properly completed application form to file your application to the Board.
   • The right of entry document (e.g. a Surface Lease, a Compensation Order, a Right of Entry Order or a Consent of Occupant), and any amendments.
   • An up-to-date plan of the site, if available.
   • Letters or emails from the operator, about the rental payments.
   • A copy of the last cheque stub received.
     
     
2. Complete a Statutory Declaration. After receiving this information, the Board will provide you with a draft Statutory Declaration, if your matter is straightforward. If your matters is complex, you may be required to write the declaration yourself. It must be properly completed and sworn.
   
   
3. The Board will serve notice to the operator. If the Board is satisfied you have shown a debt owing, the Board will serve the oil company, demanding full payment to you. If the company does not respond within 30 days, the Board may send a second notice and suspend the right of the operator to enter the site. If 30 days more passes with no response, the Board may issue a final notice and terminate the operator’s right to enter your land.
   
   
4. You may then receive the payment you are entitled to. If the operator’s rights have been terminated and you still have not received full payment, the Board may direct the Energy Minister to pay you from government funds.
   
   
5. You may submit further applications. If you show that the oil company continues to default on the same site, the Board can order further payments from the government, to cover your loss. Less documentation is required, for such further compensation applications.

A word of caution about insolvent or bankrupt oil companies

Beware bankrupt or insolvent oil companies. The Board’s powers are very limited where rents were owing before an oil and gas firm went bankrupt. Bankruptcy restricts the Board’s powers to direct repayment of debts from before bankruptcy. If the rental payments become due to you after the date of bankruptcy, there may be some ability to recover them. Each case must be examined on its own facts.

Contact Us Today!

If you have any questions about getting your fair compensation from an oil and gas company, please call our Business and Corporate Law group, today. We will be happy to help you with your needs. If you want more information about our business law services, there are more articles here.

Are You Protected From Mortgage Fraud?

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You may have heard people at the café talk about “Mortgage Fraud”, or “Title Fraud.” Or, perhaps you hear a story about how someone came back from vacation only to find that their house was sold while they were gone!

So, is this an urban legend, or does it happen? Yes Mortgage Fraud (or Title Fraud) does happen! We can suggest a few steps to make it less likely to happen to you.

What is Mortgage Fraud?

There are many different types of Mortgage Fraud. We discuss ‘Fraud for Title’.

Fraud for Title is when someone poses as you and changes the title on your home, or takes out a mortgage on your house under your name.

The fraudster uses fake documents and your stolen identity. The bank lends the money to the fraudster, assuming they are actually you. The fraudster takes the loan money, and leaves you holding the bag: the debt in your name, and registered against your title.

Another twist on “Fraud for Title: the fraudster could also use these fake documents and your stolen identity to sell your house to an unsuspecting buyer.

What You Can Do

While it is almost impossible to fully prevent these frauds from happening, there are some ways to protect your property.

You should monitor your property titles, as well as your credit rating account. Also, any confidential banking or identifying material (social insurance, date of birth, etc.) you throw away should be shredded before you throw them out.

If you keep your mortgage registered against your property (even if you’ve paid it off), it adds another hurdle for the fraudster, because they would need to try to remove the mortgage from title, to sell it. This would alert the bank. It complicates things for the fraudster. If the fraudster tried to borrow more against your property, the new bank would also look into the prior mortgage, before lending more money against the title.

If you happen to find yourself the victim of title fraud, all hope is not lost. In Alberta the title to one’s home is insured through the Land Titles Act.  If your title is fraudulently conveyed by someone forging your signature or someone fraudulently registers a mortgage on your title, the Provincial Government guarantees that you will be reimbursed for your losses.  Yes, you will have to prove your claim in a court of law, but once you get a judgment then the government will pay you if you can’t recover from the fraudster.

If you have any questions about title fraud, or if you or your company own properties that you wish to protect, please call our Business and Corporate Law group, today. We will be happy to help you with your needs. If you want more information about our business law services, there are more articles here.