October 23, 2024
Four common legal mistakes landscape companies can't afford to make
BY LAI-KING HUM
Every season in the landscaping industry brings new challenges and opportunities. The last thing any business owner wants is to be blindsided by legal troubles. Navigating employment law in the landscaping industry requires careful attention to detail and proactive management. To avoid legal disputes and ensure a compliant workplace, landscaping employers should steer clear of common errors such as failing to maintain proper contracts, ignoring ESA requirements, neglecting risks of heat stress and mishandling termination and layoffs.
Not having or updating written employment contracts
While there is no legal requirement for written employment contracts, they are crucial for preventing disputes and safeguarding employer interests. In the landscaping industry, where seasonal work, variable job conditions and adjustment of job duties are common, having these elements in a contract can effectively prevent constructive dismissal claims. Additionally, contracts should include terms such as: temporary layoff rights, resignation notice periods, termination pay and confidentiality agreements. Without these, employers might find themselves embroiled in disputes, particularly regarding wrongful dismissal.
Wrongful dismissal is one of the most litigated disputes in employment law, and it is usually caused by not having a written contract with an enforceable termination clause which can limit the termination costs to the minimum requirements under the Employment Standards Act, 2000 (ESA). Without a properly drafted contract, many employers are often surprised by the significant amount of termination pay they owe to an employee under common law and then frustrated to learn the common law does not provide a simple mathematical formula to ensure certainty in advance. Any uncertainty could be avoided by having a written contract with an enforceable termination clause.
Not complying with the ESA
Landscaping employers must adhere to the ESA, which sets out minimum standards for wages, overtime pay and other entitlements. Failure to comply can be costly and result in serious legal consequences. For instance, if a landscaping business pays its workers below the minimum wage, it may face penalties, fines or even prosecution. After receiving a demand letter and a handful of emails, an employer paid $60,000 for unpaid overtime. Why? Overtime claims have no time limit.
Under the ESA, while “landscaping gardeners” do not benefit from certain entitlements such as daily (eight hours) or weekly (48 hours) limits on hours of work, overtime pay and public holidays or public holiday pay, landscaping employers may violate the ESA by misclassifying an employee as a landscaping gardener. For example, an employer might incorrectly label an employee who installs lighting systems for gardens as a “gardener” to avoid paying overtime. However, this employee is not a gardener and is entitled to overtime pay under the ESA. Consequently, the employer unknowingly violates the ESA. Landscaping employers should understand that a gardener is an individual who maintains or alters land and gardens for aesthetic purposes. Any duties beyond this scope do not fall under gardening.
The ESA’s requirements are strict, and landscaping employers need to ensure their contracts and practices align with these standards to avoid costly disputes.
Failing to address heat stress
The physical demands of landscaping work, combined with rising temperatures, make heat stress a critical issue in the industry. The Ontario government has proposed a new regulation addressing heat stress under the Occupational Health and Safety Act (OHSA) that has passed the consultation stage. This new regulation introduces heat stress exposure limits and mandates employers to implement control measures based on a “hierarchy of controls.” It also requires employers to educate workers about recognizing heat-related illness symptoms and protective measures.
Although the new regulation has yet to be implemented, landscaping employers still have a general duty under s. 25(2)(h) of the OHSA to protect workers from hazardous thermal conditions. This includes developing policies, providing training and ensuring adequate hydration and breaks during hot weather. With the potential for new regulation on the horizon, landscaping companies should be proactive in mitigating heat stress risks.
Not properly managing termination and layoffs
In the landscaping industry, seasonal work and fluctuating demand can lead to layoffs or terminations. However, employers must handle these situations carefully to avoid legal repercussions. Without a clear temporary layoff clause in employment contracts, employers risk claims of constructive dismissal. The case of Michalski v. Cima Canada Inc. illustrates how costly this can be, with the employer ordered to pay over $33,000 in damages for a wrongful layoff. Additionally, terminating an employee for cause without justification can result in significant penalties, as demonstrated in Galea v. Wal-Mart Canada Corp., where the employer faced $750,000 in damages for wrongful dismissal and bad-faith termination.
LAI-KING HUM is senior partner and founder of Hum Law in Toronto, Ont., specializing in employment law, human rights, professional regulation, mediation and litigation. Learn more at thehumlawfirm.ca.