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December 11, 2011

New Rules Change Employment Litigation Landscape

Authors Malcolm MacKillop and Hendrik Nieuwland

As all Human Resource professionals know, the employment law landscape is always changing. Among the most recent changes to impact employment law are the significant amendments to the Rules of Civil Procedure, which govern practice and procedure in the Ontario courts. This article will provide an overview of the changes to the Rules of Civil Procedure which come into effect on January 1, 2010 and discuss the impact of such changes on Human Resource professionals.

By way of introduction, the Rules of Civil Procedure, known in the legal community as simply “the Rules”, govern the conduct of the parties in a civil action such as a claim for wrongful dismissal. The Rules provide the procedural framework by which the court will handle the dispute. More particularly, the Rules require the parties to take certain steps at particular points in time and provide procedural safe guards throughout the process.

The new Rules are designed to make the civil justice system more accessible and affordable for the public. The Attorney General’s press release boasts that the reforms will make it less expensive to access justice and easier to use the courts to quickly resolve disputes. Mr. Justice Coulter Osborne, whose recommendations formed the basis for the reforms, had the following to say about the new Rules: The reforms reflect the need for proportionality in our civil justice system, which means that straight forward, lower valued cases should not take as long or cost as much as large, complex cases.

While accessibility and affordability are noble objectives, the changes to the Rules are not all good news for employers. Many of the Rules may actually end up costing employers more money and cause disputes to take longer to resolve. The balance of this article will discuss the specific changes that will impact employers and you as a Human Resource Professional as you navigate the civil justice system in Ontario.

1. Increased cap for small claims court actions. The previous cap was $10,000.00. Under the new Rules, the cap is raised to $25,000.00. This means that more wrongful dismissal claims will fall within the jurisdiction of the small claims court. Accordingly, you can expect to see that more employees will file wrongful dismissal claims in the small claims court. Furthermore, such claimants will often not be represented by legal counsel. This will undoubtedly present difficulty to employers as they attempt to negotiate reasonable settlements with the claimants. Without the benefit of independent legal advice, the claimants will likely have an inflated view of their legal entitlements making settlement of the dispute at an early stage more difficult.

2. Increased cap and discovery for simplified procedure actions. The previous cap was $50,000.00. Under the new Rules, the cap is raised to $100,000.00. This means that many more wrongful dismissal claims will fall within the jurisdiction of the simplified procedure. Under the new Rules, however, the simplified procedure is less streamlined than it was previously. The parties to a simplified procedure action will now be permitted to engage in limited examinations for discovery (up to a maximum of 2 hours). Limiting the time does limit the cost of the discovery itself but, a discovery does not consist only of the few hours in an official examiners office. Other costs associated with the discovery process include discussions with the client, scheduling the examinations, travel time, advising the client afterwards, purchasing and analysing of the transcripts, and answering undertakings. These costs to the client for even a limited discovery are substantial. In the result, simplified procedure claims will cost employers more than they did in the past and will likely take longer to resolve under the new Rules than before.

On the other hand, justice may be better served by allowing a limited discovery. In some cases, for example where there is an allegation of constructive dismissal on the basis of harassment by a supervisor, it is preferable to have the opportunity to proceed to discovery to learn further particulars of the employee’s case before proceeding to trial. A limited discovery would ensure the employer is not taken by surprise by the particulars raised by the employee and better enable the employer to assess the merits of the employee’s position. These factors set the parties up to be better able to settle their disputes without the necessity of proceeding to trial. In summary, the usefulness of limited discovery depends on the circumstances of each case.

3. Evidence on summary judgment motions. Recently, there has been an increase in the number of employees that are bringing motions to have their action disposed of by the court without a full trial where there is “no genuine issue for trial”. Under the new Rules, judges will be able to weigh evidence, evaluate credibility, draw reasonable inferences, and order oral evidence to be presented on such motions. Previously, these powers were prohibited. The result will be to allow a mini-trial of sorts, and widen the scope of matters that can be determined by way of summary judgment.

These changes will almost certainly result in more wrongful dismissal claims being decided by way of summary judgment. Employers should therefore be aware of this possibility, particularly as a judgment may occur before the notice period is over and, therefore, before mitigation can be fully evaluated. It remains to be seen how the courts will resolve situations where the employee mitigates during the notice period, but after summary judgment has been rendered.

4. Other changes to civil actions over $100,000.00. One of the most significant changes to civil actions over $100,000.00 is the “one day rule”, which limits the length of examinations for discovery. Pursuant to this new rule, a party can examine the opposing party or parties for a maximum of 7 hours. The time limit applies regardless of the number of parties to be examined. It can, however, be varied by consent of with permission from the court.

In addition, the scope of discovery has been refined by the new Rules. Previously, every document “relating” to any matter in issue was required to be disclosed. Under the new Rules, every document “relevant” to any matter in issue is required to be disclosed. This is more than a change in semantics. The new language serves to narrow the scope of production obligations. The effect of the change is to remove the broader semblance of relevance test and replace it with a simple relevance test. This is a positive change for employers as it will (a) minimize the ability of employees to engage in a fishing expedition by demanding voluminous productions, and (b) limit the expense associated with far reaching production obligations.

In summary, the new Rules attempt to introduce a principle of proportionality such that the time and expense devoted to the proceeding reflects what is actually at stake. While the new Rules attempt to ensure that cases that are straight forward and of lower value do not take as long or cost as much as large complex cases, the new Rules may actually end up costing litigants, particularly employers, more money in some circumstances.

It remains to be seen whether the new Rules have caught up with today’s times and have struck the appropriate balance between procedural safeguards on the one hand and timeliness and efficiency on the other.

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