You Need Written Workplace Policies: a Case of Boyer Beware

You Need Written Workplace Policies: a Case of Boyer Beware

If you’re an employer or a human resource professional, when was the last time that you looked at your workplace policies?

You may have created a policy manual when you hired your first employees. Perhaps a lawyer (cough, cough) recommended that you have one, and so you set out some rules for how you wanted to run your workplace. Maybe during COVID-19 lockdowns you revisited some of those policies, and you might have implemented new ones about working from home.

Alternatively, you may not have any policies in place at all (the written kind, that is). Why would you? You’ve always hired great people, and you’ve never had any trouble. You’ve tried to treat people well, and when you give instructions, your employees listen. Something like a policy manual would only get in the way of a smooth-sailing ship, right?

The reality, as one employer recently learned the hard way, is that your written workplace policies can be incredibly meaningful. Not only do they lay out the ground rules for the workplace, but they can clearly tell employees what is not allowed, especially when it comes to some matters that can prove costly to employers.

To be effective though, policies need to be more than just a notion in an employer’s mind. Not only do they need to be set to writing, but implementation and training are just as important as the policy itself.

The Decision

In Boyer v. Callidus Capital Corporation, 2024 ONSC 20, Mr. Boyer had worked as a vice-president of underwriting and portfolio management for the defendant, Callidus, from 2009 until 2016. Callidus carried on business as a lender to distressed businesses. He had participated in the deferred bonus and stock option plan from the time that they were introduced in 2014, and he was entitled to four weeks’ vacation per year. It is also important to note that Mr. Boyer had no written employment contract.

In the summer of 2015, Boyer informed his then manager that he planned on retiring at the end of 2016. His health was failing, and he had stated that he was no longer comfortable with the direction of the company. However, things took a turn ahead of Mr. Boyer’s planned departure.

In the summer of 2016, Mr. Boyer began reporting to a new manager, who was far less agreeable than his previous one. There was debate over his vacation entitlements, wherein Mr. Boyer attempted to take his 22 weeks’ accumulated vacation over the last half of 2016, and his manager only allowed a two-week leave. During those two weeks, Callidus announced Mr. Boyer’s departure.

There were other issues as well—including unfortunate comments made during performance reviews, and Mr. Boyer witnessing an incident of violence between employees at a lawyer’s office. All of which led Mr. Boyer to bring a claim for constructive dismissal, arguing that the employer’s conduct in his final months made his employment untenable.

The Ruling

Mr. Boyer initially brought his legal action in 2017, and Callidus had filed a counterclaim against him for damages related to conduct on some files. The Court ruled that the counterclaim must be resolved prior to any summary judgment, and in 2023 the Ontario Court of Appeal dismissed Callidus’ counterclaim and allowed Mr. Boyer to proceed with summary judgment—a simpler procedure when there is no issue requiring a trial.

In this most recent decision, the Court heard Mr. Boyer’s evidence regarding his constructive dismissal claim, and ruled that he was not, in fact, constructively dismissed. While some of the incidents may have been unfortunate, none would lead a reasonable person to believe that Callidus’ behaviour meant that they no longer intended to employ him. Instead, the Court ruled that Mr. Boyer retired on September 6, 2016. Therefore, as he was not dismissed, he was not entitled to damages such as pay in lieu of reasonable notice (a.k.a. severance).

However, outstanding amounts due to him as a result of his employment, and unrelated to the termination of that employment, were another matter entirely. How the court dealt with Mr. Boyer’s claims for these amounts is described below.

Vacation Pay

Mr. Boyer claimed that he had only taken six weeks’ vacation during his employment due to his heavy workload, and that he had been allowed to roll over unused vacation to subsequent years. According to Callidus though, it did not permit rollover without express written approval, and Mr. Boyer had already been compensated for unused vacation days. His former manager testified that he thought there may have been a policy in place specifically because of Mr. Boyer, but he was unsure.

Callidus claimed that Mr. Boyer was well aware of the policy around vacation time, but there is no evidence that any such policy had been communicated to him. As a result, Mr. Boyer was awarded 22 weeks’ vacation pay, with a total value of just over $50,000.

Bonus

Callidus also maintained a deferred bonus program, with a large percentage of sizable bonuses paid out in subsequent years. Callidus claimed that Mr Boyer needed to be actively employed to receive any bonus. However, again, this policy was not communicated to him. Callidus also claimed that Mr. Boyer had been offered a position post-retirement which would allow him to continue active employment, yet his was never explained to him as a condition of receiving the bonus.

Ultimately, the Court ruled that:

Mr. Boyer’s evidence that he was not provided with a copy of Callidus’ Deferred Bonus Policy or told that he would not be paid for earned and deferred bonuses after his employment ended is not challenged. If this was a condition of Mr. Boyer’s employment, it was incumbent on Callidus to inform him of such a condition and obtain his agreement. In the absence of evidence that Mr. Boyer agreed to such a condition, I find that Mr. Boyer’s contract of employment did not include a condition that he would not be paid deferred bonuses after his employment with Callidus ended.

The Court found Mr. Boyer eligible to collect his deferred bonuses from 2014 and 2015 totalling just over $500,000, plus interest. However, there was one final claim which was slightly more complicated, but whose ultimate value exceeded the others.

Stock Options

Mr. Boyer also claimed that all of his stock options should vest by their respective dates and that he should receive the vested options. He claimed that there was no applicable written policy, and it was routine practice for an employee’s options to vest upon leaving the company. However, the Company had gone private since his departure, so these options no longer existed.

This left the Court with the challenge of how to properly assess Mr. Boyer’s options. Callidus alleged that Mr. Boyer’s claim was improperly pleaded (drafted). However, the Court ruled that Callidus understood that Mr. Boyer was claiming damages, and it disallowed Callidus from making any objections to this claim. Thus, the next question was how to assess the value of these damages.

Both parties had agreed on Mr. Boyer’s number of outstanding options. Mr. Boyer claimed that, in 2014, he had inquired about what would happen to his options upon retirement. His manager told him that they would be treated the same way as they would on his death, and “would be exercisable within 180 days.”

While Callidus attempted to rely on other documents, no document shown to Mr. Boyer stated clearly what would happen to options upon retirement. As Mr. Boyer’s employment contract was oral, he properly asked his manager about the matter, and, receiving an answer, it then “became a term of his contract of employment.”

Mr. Boyer’s evidence, which the Court accepted, was that he was unhappy with the strategic direction that Callidus was taking and would have sold his shares within weeks after his retirement had he been given the option. Callidus claimed that there would have been blackout periods, but the Court ruled that its evidence in support was hearsay, so it rejected this claim, and it did not allow Callidus to add additional evidence to the record.

Ultimately the Court ruled that there was no genuine issue for trial regarding the stock options, and that the value should be based on the difference between the grant price and the market price on the date when Mr. Boyer would have exercised the vested options. The final valuation totalled just over $1.25 million!

Final Thoughts

The Boyer decision should be the ultimate alarm bell for employers when it comes to workplace policies.  Remember, the Plaintiff’s constructive dismissal claim was dismissed. Under ordinary circumstances, that likely would have eliminated most claims for any amounts from a former employer. However, Mr. Boyer ultimately recovered just over $1.8 million, plus costs. Not bad for an employee who was deemed not to be wrongfully dismissed.

The true lesson is that so much of this was avoidable had the employer designed and implemented comprehensive policies. Not only should employment contracts be in writing (unlike in Boyer), but policies also need to be clearly written, and clearly communicated to employees, along with supporting documentation.

In this case, a clear policy restricting vacation carry-forward would have saved the employer $50,000, and while policies regarding bonuses and stock options may be more intricate, having those policies properly written and frequently reviewed could ultimately save millions.

But remember the old saying “kids, don’t try this at home!”. Drafting your own policies, or cherry-picking ones that you find online, is usually a recipe for disaster in my experience as an employment lawyer and mediator. Like contracts, policies need to be clearly written and reviewed by a professional to ensure that they’re providing the required legal coverage.

If you are an employer or employee, I can help you with any contract, policy or other workplace issue. I have more than 25 years’ experience as an employment lawyer with satisfied, repeat clients.

If you are a lawyer or paralegal looking to hire a mediator or arbitrator for your employment law dispute, I have been a neutral for over a decade.

This blog is for educational purposes only and is not intended as legal or other professional advice. Use of this blog does not create a lawyer-client or other business relationship.

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