Canada's new Spousal Support Guideline Proposal

Family Courts in Toronto and Ontario Reference New Spousal Support Guidelines

A new Federal Government proposal calls for a radical change in the way Canadian Spousal Support awards are to be determined. This proposal is already having immediate impact in family law courts in Toronto and the rest of Ontario.

The Spousal Support Advisory Guidelines Proposal, released in January 2005, attempts to bring much-needed predictability and certainty to the Courts' determination of spousal support entitlement, quantum and duration.

Two different formulas are suggested - one for families with dependent children, and a different approach for those without dependent children, as will be explained below.

Guidelines are advisory - not mandatory

Currently, the proposed Guidelines are not mandatory, and represent an approach which the Courts may choose to consider in exercising their existing discretion as to spousal support claims.


Families without Dependent Children

Under the Guideline proposal, where there are no dependent children, spousal support is to be calculated at 1.5% to 2% per year of marriage of the difference between the parties' gross incomes to a maximum of 50% for marriages of 25 years duration or longer.

To determine what support, within this range, is appropriate and how long it is to be payable, Courts will consider a number of factors.

These include the duration of the marriage, whether it is appropriate to compensate a spouse for negative economic consequences from the marriage, the need for financial support, a spouse's contribution to the enhancement of the other spouse's earning potential, any illness or disability, any imbalance in responsibility for the family's debts, and legal obligations to support other dependents.

Spousal support is to be payable for .5 to 1 year of support for each year of marriage. Support to terminate at this cut-off date.

Support to be indefinite (no end date) for marriages over 20 years, or under the "Rule of 65," where the total of the recipient's age and the years of marriage exceed 65.

Families with Dependent Children

Where children continue to be supported after a separation, the starting-point for calculation is each spouse's individual's net disposal income (INDI), or the amount remaining after payment or receipt of child support, income taxes and other allowable deductions.

A support order is to be made which provides between 40% and 46% of the two parties' combined INDI to the recipient spouse.

To determine what support, within this range, is appropriate and how long it should be payable, Courts will consider a number of factors, including the duration of the marriage, decisions made within the family to meet the childrens' needs which affected the recipient's earnings and income-generating potential, the childrens' ages and needs, whether it is appropriate to compensate a spouse for negative economic consequences from the marriage, the need for financial support and the ability to pay support, the parties' standard of living prior to separation, a spouse's contribution to the enhancement of the other spouse's earning potential, any illness or disability, any imbalance in responsibility for the family's debts, and legal obligations to support other dependents.

For shorter marriages of under ten years, support will terminate, at latest, when the last child of the family completes high school.

For long-term marriages of 20 years duration or less, it is proposed that support be payable up to one year for each year of marriage, or until the last child of the family completes high school, whichever is longer.

Support is to be payable indefinitely for marriages over 20 years, or under the "Rule of 65," where the total of the recipient's age and the years of marriage exceed 65.

Summary

The proposed guidelines may represent a small step forward in regularizing spousal support awards ny Family Courts in in Toronto and throughout Canada, but certainly do not eliminate all uncertainty or the ongoing discretion of judges in deciding this issue.

Unlike the Child Support Guidelines, which provide a specific table amount for a child support Order based on the payor's income, number of children and Province of residence, the proposed spousal support changes will do little to provide complete predictability as to the amount of support to be paid and the duration of payment.

Having said that, the consistent application of a specified formula will, over time, probably reduce the disparity between court awards in similar circumstances, and narrow the guesswork currently involved in anticipating likely outcomes in Applications for spousal support.

Will Judges use the Guidelines? In Toronto and the Greater Toronto area, the Guidelines are now regularly referenced. Our office, as a matter of course, now prepares computer-generated Spousal Support Guideline calculations for all matters where spousal support is an issue.

Time will tell how far the influence of the Guidelines will spread in Family Law Courts, but if the Child Support Guideline experience of the mid 90's can provide any historical reference, our anticipation is that over time, Judges will increasingly clarify and adopt the overriding principles set out in the Guidelines.

In Toronto and Ontario, generally, the emerging trend in this direction is already clear.

- Garry J. Wise, Toronto

Visit our main Toronto Family Law Website section: www.wiselaw.net/family.html

Visit our Website: www.wiselaw.net

Constructive Dismissal - Case Update

Employee's position was not restored on return from stress leave. Ontario Court of Appeal grants ten months' salary in lieu of notice

In an interesting decision released March 31, 2005, the Ontario Court of Appeal at Toronto reversed a trial judgment and granted ten months' salary to a claimant whose duties as a customer service representative for a car dealership were not restored on her return from extended stress leave.

Instead of reinstating the employee to her original positiion, the employer, a Peterborough Ford dealership, offered her the same salary in a different position which did not involve contact with the public. The employer contended it no longer had an available customer service position for the returning employee.

For the Court, Chief Justice Roy McMurtry, stated as follows:

"Where an employer decides unilaterally to make substantial changes to the essential terms of an employee’s contract of employment and the employee does not agree to the changes and leaves his or her job, the employee has not resigned, but has been dismissed. Since the employer has not formally dismissed the employee, this is referred to as “constructive dismissal”. By unilaterally seeking to make substantial changes to the essential terms of the employment contract, the employer is ceasing to meet its obligations and is therefore terminating the contract. The employee can then treat the contract as resiliated for breach and can leave. In such circumstances, the employee is entitled to compensation in lieu of notice and, where appropriate, damages.

To reach the conclusion that an employee has been constructively dismissed, the court must therefore determine whether the changes imposed by the employer substantially altered the essential terms of the employee’s contract of employment.

[25] It is my conclusion that Blondeau was constructively dismissed. Holiday Ford unilaterally made a substantive alteration to the essential terms of Blondeau’s contract of employment when it did not return her to her former position as “service advisor” with the same rate of pay."

For complete text of this decision, see: Blondeau v. Holiday Ford: http://www.ontariocourts.on.ca/decisions/2005/march/C40981.htm

For more information on employment law and the law of constructive dismissal in Toronto and Ontario, see: www.wiselaw.net/employment.html



- Garry J. Wise, Toronto

Hello and welcome.

As an occasional contributor and frequent visitor to numerous politically oriented blogs from the USA, I have decided that the time has come for this distinctly Canadian voice to be heard in the blogosphere.

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