Our Take on Things

Much like the changes to the Ontario Business Registry that took place on October 19, 2021, the Ontario Not-For-Profit Corporations Act, 2010 (“ONCA”) was proclaimed that same day. 

What does this mean?  If you are a not-for-profit or charity incorporated in Ontario under the Ontario Corporations Act (“OCA”), the ONCA now applies to your corporation.  

Some key differences between the OCA and the ONCA are as follows:

• Letters Patent are now Articles of Incorporation and can be filed on-line
• Membership structures must be outlined in the Articles, and provides for more enhanced member rights
• Allows a range in board size
• Proxies and electronic voting is now permitted

The ONCA automatically applied to non-share capital corporations.  For those corporations that have share capital, they are required to transition by October 19, 2024. 

To transition, Amendments to Letter Patents and Supplementary Letters Patent are done by filing Articles of Amendment, which can now be done on-line.  This will set out the range of directors, allowing for multiple classes of members and their voting rights and dissolution clauses, among other things.  After the Articles of Amendment are filed, then the corporation will be required to file Restated Articles of Incorporation.

If, however, the corporation does not have to update to provide for a range of directors, or separate classes of members, and there are no fundamental changes or updates required, then the corporation can simply file Restated Articles of Incorporation.

Another part of the transition will be to review and update the corporation’s By-Laws, which will address the changes made to members, directors etc. 

As you can see, lots of changes are happening.  If you are a not-for-profit and have not yet updated to be compliant, don’t wait.  Speak with your lawyer asap to get these changes started. 

Christine Allan, Sr. Law Clerk

Although legislatively mandated, paying overtime to employees is rarely enjoyable for employers.  

Overtime pay is triggered when employees entitled to overtime pay under the Ontario Employment Standard Act, 2000 (the “Act”)work over 44 hours in one work week. Often referred to as “time and a half,” overtime pay is calculated as 1 ½ times the employee’s regular rate of pay.    

Before rushing off to indiscriminately pay your employees overtime, it’s important to remember that not all employees are entitled to overtime pay even when they work over 44 hours. For example, lawyers, accountants, and IT professionals are not entitled to overtime pay (that’s right, I don’t earn any overtime pay for writing this blog – so, you’re welcome). Mangers and supervisors are also not entitled to overtime pay if the majority of their tasks are supervisory in nature. Lines can get blurred for managerial roles, so it’s helpful to get a legal opinion to determine if there is any overtime entitlement.    

Interestingly, under the Act, employers can come to an arrangement with employees to offer additional days off in lieu of overtime pay. However, the employer and employee must agree electronically or in writing to this arrangement of “banking hours”.

If your employee has agreed to bank overtime hours, they must be given 1½ hours of paid time off work (at their applicable regular rate) for each hour of overtime they work. Their paid time off must be taken within three months of the week in which the overtime is earned. If the employee agrees electronically or in writing, these three months can be extended to 12 months.

Overtime pay can be tricky. Be sure that you are only paying it when required and consider alternatives like banking hours to ease the financial burden overtime pay can create.

Robin K. Mann, Associate Lawyer

When Parliament introduced Bill 142, the Construction Lien Act Amendment Act, 2017, it introduced two new legal regimes, prompt payment rules, and mandatory adjudication to deal with contractor payment disputes. 

The new adjudication regime was designed to give parties to a construction contract a quick dispute resolution mechanism to ensure that cash continues to flow down the chain so that work on the construction project continues. 

You can’t appeal an adjudicator’s decision as of right. Section 13(18) Construction Act requires parties to apply to the Divisional Court for leave to judicially review the adjudicator’s decision, and the grounds for a successful judicial review of an adjudicator’s decision are very narrow.

The fact that the adjudicator’s decision is binding in the interim can lead to some interesting problems when you consider that a claimant who commences an adjudication can still commence lien proceedings, even before any decision has been made by the adjudicator. 

For example, a claimant who loses an adjudication can still lien the property anyways, effectively bringing the project back to square one. In the reverse, a claimant who wins at adjudication, but then loses in court will probably have spent most of the funds paid on the decision of the adjudication. 

Given that the prompt payment and adjudication regime in Ontario is still in its settling-in period under the new Construction Act, it will be interesting to see how courts address the various competing issues and concerns of owners and contractors alike going forwards. 

Max Shin, Associate Lawyer

Last month’s Work/Life Balance meeting focused on meditation.

Inga set us up with Wellness Mentor, Ceasar Barajas, to speak with our firm and give us some tools to help with meditation and mindfulness. Meditation has been practiced for thousands of years, with many physical, mental and emotional benefits.

In today’s fast-paced work environment and overall lifestyle, stress and burnout are so common, often making it difficult to focus and stay productive. It’s easy to get caught up in the endless cycle of deadlines, emails and meetings. We move so quickly through work and life and forget to stop and simply breathe.

At the start of our meeting, Ceasar asked the firm if anyone practices meditation, to which most of us shook our heads no. When he asked us why, most said that they couldn’t find the time. He told us to stop, breathe in and out, and focus on what we are feeling. This simple activity took about one minute, and at the end, he told us that we had just successfully meditated.

Stress in the workplace is a common symptom that often leads to burnout, fatigue, and decreased productivity. Meditation can help lower stress levels and boost mental clarity.

Taking just a few minutes each day to sit quietly and focus on your breathing can calm your mind and leave you feeling more relaxed.

Consider incorporating meditation into your daily routine; a few deep breaths can contribute to lowering stress levels and boosting your overall health.

Meriam Noori, LLB

         

A new client was sued personally a while back and didn’t know why.

They advised that they carried on business through their numbered company, so they were confused to discover their personal name on the Plaintiff’s Claim, and not their business.

When we asked for them to provide their Business Name Registration to confirm registration, they were not aware that their trade name had to be registered because it was “never was an issue before.”  Well….it is now, isn’t it?!

The answer to their question was obvious: they were personally sued, because there was no record of their trade name so it could not be tied to the numbered company, as it should have.

They previously had their trade name registered, however, like most things, it didn’t last forever, and it had expired, and they weren’t even aware of it.

Had they had proper representation during registration, the expiry date would have been so that it could have been renewed, however, that was not the case, and here we are defending a claim against them personally. 

Now that we’ve re-registered the trade name to the numbered company, they are once again ready to go out in the world and generate business under the trade name knowing that they’re protected.

If you carry on business using a trade name, it must be registered, whether it’s a business name registered to a numbered company, or the trade name itself is incorporated or its registered to your name personally as a sole proprietorship.

If you use a trade name that isn’t registered, you run the risk of being sued personally, as suing an unregistered trade name will result in a useless, unenforceable judgment that no creditor wants.

Had the client ensured their registrations were up to date, they might not have been in the position they are in now.

If you have a trade name, now might be a good time to look into its registration to ensure yours hasn’t expired, or you may end up being sued personally!

Murray Brown, Licensed Paralegal

Renting Commercial property is confusing to many people and the consequences of not understanding it can be very expense.

The Residential Tenancies Act doesn’t generally apply to Commercial Property.  This means that the Landlord and Tenant Tribunal doesn’t deal with Commercial Leases and those lengthy delays you’re reading about are not going to apply to Commercial Leases.

An Offer to Lease often is the start of a Commercial Lease.  Have a lawyer review it before you sign it and yes, that even applies if you’re using a realtor.  The reason for this is that an Offer to Lease has binding terms in it and if you’ve agreed to something, there is little we can do to get you out of it without the agreement from the other side.

Another thing to keep in mind is that even if the Offer says that a “head lease” will be entered into, but it isn’t the terms in the Offer end up being the terms of the lease, so you’re stuck with them without any further information about them.  This matters.

Too often lately a client has come to us with a bad offer that they’re stuck with.  The legal fees and moving fees that end up being incurred could all have been prevented had they used a lawyer first.  Yes, lawyers cost money, but its cheaper to use us before you sign something that to use us to litigate that something you signed.

Inga B. Andriessen, Principal Lawyer

If you’ve ever watched the Good Wife, Suits, or literally any other legal drama, you have heard of the notorious “NDA.” You may not know what it means or why it’s important, but chances are you’ve heard this particular abbreviation in passing.  

“NDA”, which stands for “Non-Disclosure Agreement”, is a legally binding contract between two or more parties that aims to protect confidential information. An NDA helps parties freely share sensitive information such as financial reports, client lists, intellectual property, and trade secrets. These types of agreement are typically signed before the parties begin their commercial interactions.

There are 2 types of NDAs that are commonly used:   

1. Unilateral NDAs – As only one party is disclosing confidential information to the other under this type of NDA, only one-party signs this Agreement. A unilateral NDA is common in employer-employee relationships, as well as seller-buyer agreements.

• Mutual NDAs – These NDAs are signed by both parties to the Agreement as confidential information is anticipated to flow both ways between the signatories. Mutual NDAs are common in joint ventures and corporate mergers and acquisitions.

While an NDA is a great deterrent for the misuse of confidential information, it has teeth as well. If a party breaches the NDA by disclosing or otherwise misusing confidential information, the innocent party can seek damages. The cost award for a breach of an NDA will vary depending on the severity of the breach and the extent of the harm caused.  

If you’ll be selling your business, hiring an employee, retaining a contractor, engaging a distributor, or anything else that would result in your proprietary information being disclosed, you’ll sleep better at night with an NDA in place.

Robin K. Mann, Associate Lawyer

The end of 2022 and beginning of 2023 were really hard on people.  The cost of everything was going up (did you see the price of lettuce?) and people were struggling to keep a steady income. 

How are businesses now coping?

We always notice when companies are struggling, we see an increase in sending demand letters and litigation.  Companies can only wait so long before they get paid.

I think it’s a great time to review the 30-60-90 sue® program.  This will ensure that you get paid in time so you can take care of your own business needs.

30 days after you issue your invoice, send a gentle reminder that the invoice is outstanding.

60 days after you issue your invoice, send a firm reminder that the invoice, and interest, is due and you expect payment immediately.

90 days after you issue your invoice, put your customer on notice that if you do not receive payment in five days, you will commence legal proceedings. 

The only way to ensure that this method works is to follow through.  Don’t let customers keep making endless promises of payment, if you do that, it could then well over a year before you get paid. 

We understand that they are your customers and you want to keep them happy, but you deserve to be paid for your services – you are not a bank.  Protect yourself and your company. 

Want more information on how to ensure you get paid quickly? Inga B. Andriessen and Murray Brown are excellent at getting that done for you.  

Christine Allan, Law Clerk

This is the thought I had this morning while reading through a mediation memo from the opposing side that was clearly written over a standard fill-in-the-blank precedent. It was also clear to me that this particular precedent had not been reviewed by an actual lawyer in a very long time or, at the very least, not in great detail. It was filled with inaccurate case law, irrelevant fact comparisons and the list goes on.

Now, don’t get me wrong. I’m not knocking on mediation. Civil litigation is an expensive prospect and mediation gives parties the opportunity to settle their dispute without any further expenses, and the benefit of a neutral party to help evaluate the strengths and weaknesses of their own and their opponent’s cases. My question is, why is it mandatory in some courts?

There are cases where mediation makes sense, but there are also cases where it doesn’t. Yes, mediation can help a party evaluate a case, but in my experience, clients tend to care more about a dollar amount than a legal position. Without giving the parties the discretion to choose whether they should mediate based on their own unique cases, mandatory mediation either ends up feeling like an unnecessary expense, or pretrial lite.

Now if you, like me, ever decided to try looking up this subject, you’ll find no shortage of articles and law blogs waxing poetic on the virtues and benefits of mandatory mediation, and that all courts should make mediation mandatory before trial. The funny thing is most of these articles were written by contingency lawyers. In short, the nation is facing a dangerous shortage of tennis balls being thrown, says the puppy union.

Max H. Shin, Associate Lawyer

For this month’s Work/Life Balance meeting, our topic was the importance of being able to say no in the workplace.

At work, we often feel the pressure to take on as much as we can, but we very seldom stop to reflect on why that is. We don’t want to feel like we’re not being team players or contributing to the workplace. We spend a large amount of time at work and as such, it’s natural to want to avoid conflicts and be liked by our peers. 

Sometimes, saying “no” when you need to can be more valuable to the office, rather than saying yes to something that you cannot handle due to a lack of knowledge on the ask or a lack of time.

Everyone in the office has their own role and responsibilities, and your responsibility is to stay on top of your own. Similar to when flight attendants advise that in the event of a drop in pressure, you have to place the oxygen mask on yourself before assisting anyone else; you’ll find it very difficult to help yourself if you’re always busy helping everyone else.

I’ve been guilty of this. when asked if I can lend a hand with something, I very rarely say no. Over time, I have learned to say “yes, but here’s when I can get this to you” instead so that I can fit things around my time, which is valuable.

When it comes to saying no, we found that it’s better to stop and assess what you already have on your plate and see if you have the space to take on more. If not, it’s better to simply be honest about it.

No one wants to wave the white flag at work, but knowing your limits and being communicative of them is always the better alternative.

Meriam Noori, LLB,