April 19, 2020 Update - Our Group hosted a Q&A webinar to answer some of your questions! Review the Webinar recordings and Q&A in our blog post Let’s Talk: Questions about Covid-19, The Workplace and Your Business

April 14, 2020 Update: For further details, please read our recent detailed post on Canada Emergency Wage Subsidy Is Now Law! What’s New & Employment Law Considerations

Canada Emergency Wage Subsidy - KSW Article - Download PDF

On Friday March 27th 2020, the Prime Minister announced a wage subsidy of 75% for qualifying businesses. After much discussion and lobbying the government made changes to its proposal and on Wednesday April 1st 2020 the Department of Finance announced the new Canada Emergency Wage Subsidy (“CEWS”). The details were contained in a Press Release entitled “Government Announces Details of the Canada Emergency Wage Subsidy to Help Businesses Keep Canadian in their jobs”. As well the government provided details on its web site here. Most importantly Minister Morneau held a press conference April 1st 2020 where he provided important details and answered questions.

Normally when reporting to you about significant government policy we would wait for the actual legislation, regulations and would follow the debates on same in Hansard. While the Press Release, Government web site posting and Minister Morneau’s comments are very useful in understanding where the government wants to go with this program and while they provide some more important details, the fact is there is no draft legislation nor regulations and the House will have to sit at some point to pass the enabling legislation. Unfortunately there are many “interesting questions” that cannot be answered with certainty at this point. At the same time you want a summary of what we know today and where there may be issues to consider. Many businesses will decide to wait until they see the legislation before they take action; others will want to rely on what we know to date and begin the process of bringing employees back to work or discussing with their employees currently working how this subsidy will impact their jobs.

With that in mind and in order to bring you up to date on matters as they stand now, we offer the following analysis.

The overall policy objective of the CEWS is to help businesses keep and return workers to their payroll through the challenges posed by COVID-19. As such, the wage subsidy aims to prevent further job losses, encourage employers to re-hire workers previously laid off, and help better position Canadian businesses to more easily resume normal operations following the crisis. As a result of information released over the course of the week, we now have a partial idea of how the CEWS will operate to achieve these objectives:

• Eligible employers include individuals, taxable corporations and partnerships, and non-profit organizations and registered charities; it does not include public employers, including schools and municipalities;  
• In order to qualify for the subsidy, an eligible employer must have suffered a decline in gross revenue of at least 30 percent during the eligible period being applied for; there are currently 3 eligible 4-week periods:

• Period 1: March 15 to April 11, 2020;
• Period 2: April 12 to May 9, 2020;
• Period 3: May 10 to June 6, 2020;

• Eligibility is generally determined by the change in monthly revenues, year-over-year, for the calendar month in which the period began. For example, if revenues in all of March 2020 were down 50 per cent compared to March 2019, the employer would be allowed to claim the CEWS on remuneration paid between March 15 and April 11, 2020 (Period 1 above). Similarly, a comparison between the month of April 2020 over April 2019 would be used for Period 2 and May 2020 over May 2019 for Period 3. Importantly, the amount of wage subsidy provided under the CEWS in any given month would be ignored for the purpose of measuring the decline;
• For businesses established after February 2019, eligibility will likely be determined by comparing monthly revenues to a reasonable benchmark, such as the previous month(s);  
• A for-profit employer’s “revenue” will be its revenue earned from business carried on in Canada from arm’s-length sources; the employer’s normal accounting method would be used to calculate revenue and extraordinary items and amounts on account of capital will be excluded from revenue. Employer will be required to attest to the decline in revenue in making the application;  
• The definition of revenue for non-profits and charities will be determined on a case by case basis following consultation with each sector;
• The wage subsidy will cover up to 75% of an employee’s wages on the first $58,700 of annual salary (a maximum of $847 per week). For example: a floral shop in BC has four full‑time employees, each earning $800 per week, and 6 part-time employees, each earning $400 per week, for a total weekly payroll of $5,600. The shop is closed during the pandemic and only fulfilling online orders. They are keeping all of their employees on the payroll at 100% wages, despite revenues being down by 30 percent. This business would be eligible for a weekly wage subsidy of $4,200 ($600 for each of their full-time employees and $300 for each of their part-time employees);
• A special rule will apply to employees that do not deal at arm’s length with the employer.  The subsidy amount for these employees will be limited to the eligible remuneration paid in any pay period between March 15 and June 6, 2020, up to a maximum benefit of $847 per week, or 75% of the employee’s pre-crisis weekly remuneration; we expect there to be further clarification on this exception;  
• Eligible remuneration appears to include salary and wages and other remuneration subject to tax withholding, and likely commission and bonuses, but does not include severance pay, or items such as stock options or personal use of a corporate vehicle;
• Importantly, entitlement to the CEWS will be based on the salary or wages actually paid to employees. Therefore the employer must pay the employees first and receive the subsidy on remuneration actually paid and shown as such;
• There is no cap on the number or category of employees who can be subsidized nor on the overall amount an employer can claim;
• Employers will be expected to make “best efforts” to top-up employees’ salaries to 100% of the maximum wages covered and will be required to attest to this in the application;  
• The amounts received under the CEWS would be included in the employer’s taxable income but presumably this would be offset by the additional salaries paid;  
• Applications will be made through the CRA’s My Business Account portal as well as a web-based application; an employer must re-apply for the subsidy each additional month it is claimed for;
• It is expected that the portal will be opened for applications in three to six weeks;
• There will be anti-abuse rules and penalties proposed to ensure the subsidy is not inappropriately obtained and that employees are paid the amounts they are owed. The government may create new offences for individuals or businesses who provide false or misleading information to obtain access to the benefit or who misuse funds obtained under the program; the penalties may include fines or even imprisonment;
• Employers not eligible for the CEWS may still apply for the previously announced 10% wage subsidy from March 18 to June 20, which is limited to up to $1,375 per employee and $25,000 per employer. For employers eligible for both subsidies, any benefit from the 10% wage subsidy for remuneration paid in a specific period would generally reduce the amount available to be claimed under the CEWS in that same period;
• An employer will not be eligible for the CEWS in a week that falls within a 4-week period for which the employee is eligible for the $2000 Canadian Emergency Response Benefit.

There are many questions that remain unanswered which we hope will become clearer in the days and weeks to follow. These include:

• When will the CRA portal be open, how long will the application process take, and what materials will be required? It is likely that in order to streamline the delivery of funds, the government will only require an attestation now and require back-up later. The government has noted that if it approves an application but later determines an employer does not qualify, the employer will have to repay the subsidy. Employers are wise to keep good records of their calculations.
• How long until funds are actually released to employers? We expect that after the portal is opened in three to six weeks and applications are received, there will be some additional delay until the actual delivery of funds.
• How does the retroactive portion of the subsidy work? It would appear that making the subsidy retroactive to March 15, 2020 is intended to cover employers who have kept some or all of their employees on payroll since that date. We query whether or not wages paid to employees that have been recalled from layoff and then paid retroactively could also be subject to the subsidy. If the employees have already been paid EI benefits, this may complicate things.
• Must employees actually perform work in order for the employer to claim the wage subsidy or can they simply be kept on payroll? Based on the current information provided, it appears that performing work is not a requirement to receive the subsidy. What is required is that employees be on payroll and be paid.
• If employees are simply put back on payroll and work is not available, must the employer still make best efforts to top-up wages? The government has stated that it expects businesses to do everything in their power to top-up employee’s wages to their full amount. That said, Minister Morneau appears to have recognized that this will not be possible in every situation.
• What exceptions will be made for startups or small firms with highly variable income and how flexible will the test be to establish the decline in revenue? Given the stated policy objectives, we expect the revenue comparison test to be reasonably flexible. As a result, businesses who might not qualify under the conventional test should think creatively about how they might show declining revenues.
• Does the 30% decline in revenue have to be related to COVID-19? At this time, there does not appear to be a requirement of a direct or indirect connection to COVID-19. We expect this will be a case-by-case determination.
• Will the CEWS program be extended beyond 12 weeks? Given that some provincial government officials have announced social distancing measures will likely continue into the summer months, it is possible that the government will consider extending the CEWS beyond 12 weeks. We will continue to monitor the situation carefully.

• It appears that employers who wish to access the subsidy will have to incur payroll costs now and hope to receive the subsidy at a later date. Employers who want to retain their workforce in the face of significant revenue declines should carefully review the published criteria before making decisions about the workforce.
• The government has stated that: “employers would have to keep records demonstrating their reduction in arm’s-length revenues and remuneration paid to employees”. As such, start reviewing and analyzing your financials now with a view to establishing the appropriate paper trail and due diligence for showing revenue decline and monies paid to employees for which you will seek the subsidy. This may include creating a Memo to File or consulting with your accountant or other professional.
• Analyze your current workforce and the work you have available. Communicate with any employees you have laid-off to determine who might be available to return to work and in what capacity. Find out how many employees have applied for the CERB and make note of this. Consider how you can provide meaningful work to employees for which you intend to claim the subsidy.
• We have noted in our previous articles that layoffs, even temporary layoffs may be considered a constructive dismissal at common law or a termination under the Employment Standards Act. Be mindful that if you bring employees back to work under the subsidy but fail to top-up their salary to 100%, this may also trigger a constructive dismissal claim and/or a claim for termination pay under the Employment Standards Act. The same considerations apply if you substantially change an employee’s position or duties. If the employee agrees to come back at a reduced wage or in a different position, carefully document this agreement.
• For employers that may qualify for both the 10% wage subsidy and the CEWS, it is worthwhile to take advantage of the 10% wage subsidy now as it will simply be deducted from any future CEWS payment for the same period. More details on this program here: https://www.canada.ca/en/revenue-agency/campaigns/covid-19-update/frequently-asked-questions-wage-subsidy-small-businesses.html
• Employers in need of additional financial relief pending approval of the CEWS may wish to consider availing themselves of the various new credit options being extended by the federal and provincial governments and other sources, including the new Canada Emergency Business Account. Various tax deferrals and other sources of credit have also been announced provincially and federally to give employers increased liquidity.
• As the economic downturn will likely continue past the timeline of the CEWS program, employers may wish to also consider the Federal Government’s existing Work-Share and Supplemental Unemployment Benefits (SUB) Programs. Please contact us for further details on these programs.

Note to our Readers: Information regarding COVID-19 is rapidly evolving. We are working to bring you up-to-date articles as the legal issues unfold. This is not legal advice. If you are looking for legal advice or are dealing with an issue in relation to COVID-19, please contact our Employment & Labour Group.

The use of handheld devices while driving is banned in British Columbia. In this blog post, I will focus specifically on the use of electronic devices while driving, not on other forms of distraction, such as eating or talking with other passengers.

Using an electronic device while driving can lead to a ticket of $368 and 4 penalty points, which amounts to $175, leading to a total fine of $543.

Part 3.1 – Use of Electronic Devices While Driving in the Motor Vehicle Act, RSBC 1996, c. 318 sets out the specific rules and prohibitions.

Even holding a phone in your hand without speaking or texting can lead to a distracted driving ticket, as noted in a 2018 BC Provincial Court case, R. v. Bainbridge, 2018 BCPC 101. Furthermore, charging a phone at a red light is also considered distracted driving (R. v. Jahani, 2017 BCSC 745).

You are not allowed to use hand-held cellphones and other electronic devices with transmitting functions while driving. Under section 214.1 of the Motor Vehicle Act, electronic devices are defined as:

(a) a hand-held cellular telephone or another hand-held electronic device that includes a telephone function,

(b) a hand-held electronic device that is capable of transmitting or receiving electronic mail or other text-based messages, or

(c) a prescribed class or type of electronic device

Use of electronic devices is defined as:

(a) holding the device in a position in which it may be used;

(b) operating one or more of the device’s functions;

(c) communicating orally by means of the device with another person or another device;

(d) taking another action that is set out in the regulations by means of, with or in relation to an electronic device.

You are allowed to use your device in hands-free mode, such as with a Bluetooth headset or with the integrated speaker function in a vehicle. However, if you have an L (Learner’s) or N (Novice) licence, then you are not allowed to use the device at all, even in hands-free mode. There are certain exceptions for emergency personnel.

According to the Canadian Automobile Association (CAA), distracted driving involving a cellphone can increase your chance of a crash by 8 times.

Using electronic devices while driving can not only lead to a violation ticket and penalty points, but also liability if you are involved in a car accident. It can also prevent you from successfully suing the other party.

In the case of Rollins v. Lovely, 2007 BCSC 1752, the defendant was looking down at his ringing cell phone, and liability was apportioned to him at 90%.

In the case of Shaver v. Lymbery, 2012 BCSC 978, the plaintiff sued for soft tissue injuries she suffered in an accident. However, she was unsuccessful in proving liability, as she was using her cellphone during the accident.

Contact Peter Unruh, Personal Injury Lawyer in BC

If you have been injured in a car accident, Peter Unruh will review your case to determine if you should be compensated beyond ICBC Part 7 benefits for your injuries. The extent of your injuries and fault for the collision needs to be assessed in order to arrive at whether you have a personal injury case for compensation. Call Peter Unruh today, personal injury lawyer in Abbotsford, at 604-746-4357.

By: Chris Drinovz & Japreet Lehal

Employers dismissing short service employees, be wary! A recent trend has been developing in British Columbia trial-level decisions towards higher common law reasonable notice awards for employees with shorter lengths of service. In our inaugural KSW Workplace Law blog post, we examine this trend in greater detail as presented in the following trio of cases decided less than a month apart.

In Greenlees v. Starline Windows Ltd., 2018 BCSC 1457 (August 29, 2018), a 43-year-old Mr. Greenlees quit his previous employment and accepted a sales job with the defendant window company after receiving a cold call promising the potential to earn $100,000 per year. Mr. Greenlees had a written employment agreement but it did not address severance. After only six months, Starline terminated employment without cause. Despite getting no reference letter, Mr. Greenlees engaged in significant mitigation efforts, applying to 3 recruitment firms and 42 companies. After 8 job interviews, he found another job 7 months post-termination.

Mr. Justice Gomery began his analysis with reference to Saalfeld v. Absolute Software Corp, 2009 BCCA 18 (“Saalfeld”) where the BC Court of Appeal suggested a benchmark for short service cases of two to three months’ notice for a nine-month employee, to be adjusted in other cases for age, length of service, and job responsibility. Most significant to the upward adjustment was the limited availability of alternative employment. The court found that it could draw an inference as to this fact due to the plaintiff’s lengthy but unsuccessful job search, made even more difficult by Starline’s failure to provide a reference letter. His Lordship also found (para 52) that Starline had induced the plaintiff to quit his old job (para. 54) though this factor was only given modest weight as the case was “close to the line”. For these reasons, Mr. Greenlees received six months’ notice.

Mr. Justice Gomery ruled again a few days later in Corey v. Kruger Products L.P., 2018 BCSC 1510 (September 4, 2018). Here, the plaintiff was hired as a maintenance supervisor at 55 years old. His written employment agreement provided for a starting salary of $100,000 but was silent on the issue of termination. His duties and responsibilities were middle management and included supervision of highly-paid specialized tradespersons at the defendant’s tissue paper manufacturing facility. Mr. Corey was terminated without cause after 2 years and 7 months. He was 57 years old at termination and 58 by the time of trial.

After a summary trial on the issue of damages, the same Mr. Justice Gomery awarded 8 months’ notice. The starting point of the analysis (para. 30) was again Saalfeld and an adjusted “benchmark” of four to five months’ reasonable notice for “middle management employees with supervisory responsibilities and two to three years of service” such as Mr. Corey. That was not the end of the analysis however as his Lordship then concluded (para. 50) that “Mr. Corey’s age and the lack of availability of suitable alternate employment justify a somewhat longer notice period than would otherwise be the case.” While Mr. Corey had made diligent search efforts (10 applications, 2 interviews) he had not found new employment. The court found that his age was a factor in this as well (para. 47) as it made Mr. Corey less competitive having “fewer years of service to offer to prospective employers." This case is interesting in that the trial was heard on August 17, 2018, only five months after the date of dismissal. Kudos to counsel involved for efficiency!

Approximately three weeks later, the reasons for judgment for Chapple v. Big Bay Landing Ltd., 2018 BCSC 1666 were released. This case was also determined by a one-day summary trial on the basis of an agreed statement of facts. Mr. Chapelle was hired as the “Remote Resort Manager” for the defendant’s resort on Stuart Island with an annual salary of $84,000. After working for 26 months, Mr. Chapelle was terminated without cause at the age of 61 years old. He was then unemployed for 12 months before finding replacement work.

As Mr. Chapelle did not have a written employment contract, the length of reasonable notice was the main issue. Mr. Justice Steeves turned to Saalfeld here as well, noting the plaintiff was “entitled to notice longer than, for example, the rough rule of one month per year of service that is sometimes used”. The court found that Mr. Chapelle’s work was “somewhat specialized and the opportunities for work in the resort lodges in coastal British Columbia are limited”. As a result, he awarded 9 months’ notice.

Takeaways

Employers and employees alike would be wise to consider the following takeaways arising from this trio of cases:

• The starting point for short-service employees is the two to three-month benchmark established for a nine-month employee in Saalfeld to be adjusted in each case with reference to age, length of service, and job responsibility.
• The above “benchmark” may be increased to four or five months’ notice for a middle-management employee with two to three years’ service.
• Factors such as age, inducement, specialized industry, and the unavailability of similar alternate employment in the face of strong mitigation efforts may increase the notice period upward from the benchmark into the range of six to nine months. 
• None of these employers had a written termination provision! These significant liabilities for short service employees can be reduced through the use of carefully drafted termination of employment clauses.

If you are an employer or an employee seeking advice regarding your employment relationship, the Workplace Law Practice Group at Kane Shannon Weiler LLP would be pleased to speak with you. Please contact us at cdd@kswlawyers.wpengine.com or 604-746-4357.

By: Melanie D. Booth

An effective Return to Work Program (RTW) is important to support employees who have faced an illness or injury. The program is intended to help employees who want to work in some capacity during their recovery phase. This would include working in a different capacity than their usual work duties, such as in a temporary or limited role. Of course, there is a benefit to employers in facilitating early re-entry to the workforce after an employee’s injury to avoid longer-term absences and the associated costs.

In this blog post, we outline some steps for employers on how to develop an effective return to work program. For legal advice tailored to your specific circumstances, please contact us.

Develop a stay at work/return to work (RTW) policy

The first step that you can take is to create a Stay at Work/Return to Work policy. You should consider the injuries that are to be covered by the policy, including work-related (WorkSafeBC), non-work related (sporting injuries, MVA, slips and falls, and other STD and LTD claims) and other clauses. For each of the positions within the company, you can prepare a physical job demand analysis. In addition, it is recommended that you create an Occupational Fitness Assessment form for employees to provide to their medical provider (GP) to assess their ability to work with more specificity. A Weekly Assessment Form will allow you to monitor the employee’s progress on a weekly basis. There should be a position/job role for a RTW coordinator at your company to facilitate the program with interaction from supervisors and management. It is important that you educate and train staff and management regarding the RTW policy and plan.

Communicate the policy to staff

You should communicate this RTW policy and plan to staff through various channels, so that they are fully aware of the policy. Orientation, staff/department meetings, and tool box talks can help spread the message through the workplace. One-on-one meetings between employees and the managers can also help. Newsletters, notes on pay stubs, and posters/memos on bulletin boards can raise awareness. Sending an email about the policy and putting it on the website can also be effective.

Once an employee notifies the employer they have an injury and that they are unable to work

Once you have been informed by the employee that they have suffered an injury and they are unable to work, you should communicate with them regarding the reason for their absence. It is a good idea for the supervisor to take notes of this conversation. You should consider whether a modified work schedule is appropriate and then coordinate with the RTW coordinator and Human Resources accordingly. The RTW coordinator should provide the employee with a letter/written notice that modified work is available and reasonable accommodation will be made. An employer’s duty to accommodate includes multiple aspects and legal advice should be sought for further information.

It is recommended that the RTW coordinator provide an Occupational Fitness Assessment form and Job Demand Analysis form to the employee for their GP to complete to assess their ability to return to work. The RTW coordinator should be the continuous source of follow-up with the employee. Weekly follow-ups ensure that documents are completed and that the employer stays in the loop. A Weekly Assessment Form can be used to record follow up communications with the employee.

The RTW coordinator would then review the completed documentation and determine the appropriate Return to Work position for the employee. This step may require further consultation with the GP, physiotherapist, other specialists or an independent medical exam (funded by the employer). 

Define the RTW Plan

Defining the Return to Work plan includes setting goals and providing details on the work modifications that will be made. The modifications can include:

1. increasing the frequency of breaks
2. performing pre-injury duties for half days only
3. change of shift
4. different start/end times
5. varying the hours of work
6. job rotation
7. telework/work at home
8. allowing time away for medical appointments
9. not performing duties requiring a specific action for a specified period of time
10. assistance with heavy lifting from fellow co-workers (time-limited)
11. ergonomic changes to the workstation
12. assistive devices (software, lift assists, etc.)
13. supply personal protective equipment over and above what is required by WorkSafeBC

You can consider the assignment of other duties not originally part of pre-injury duties that are permissible given the medical limitations of the employee. There can also be a placement in another position.

The timeframe for progress and restrictions and a follow-up schedule should also be included in the RTW plan.

Managing resistance by an employee to the RTW plan

If the employee does not agree with the RTW plan, you should consider the company’s HR policies, applicable legislation and the medical information on file to formulate an appropriate plan accepted by the employee, RTW coordinator and medical treaters. If the employee refuses to complete the job that is being offered despite the medical ability to do so, you should seek legal advice before discontinuing the employee’s employment.

Effective communication of the plan and support by management, supervisors and first aid attendants is crucial to ensure that the RTW plan is implemented. This framework will need to be set up prior to a workplace injury.

RTW Coordinator to evaluate the success of RTW plan

After implementing the Return to Work Plan, the RTW Coordinator should assess and evaluate how successful the plan has been. It is important to keep statistics and details on the injuries. This should include description and frequency of injuries, as well as the injury severity rates. The number of RTW plans initiated and their results should also be noted down and evaluated. You should also look at the methods of communication and timeframes, education and training scheduled, and preventative programs initiated.

Managing workplace injuries

For workplace injuries, consider each decision made by WorkSafeBC and seek legal advice immediately as timelines for appeal are short. They can be 90 days or less, depending on the decision. You should consider defending against causation at the outset, if applicable, and seek legal advice regarding the defence and investigation of claims early on. Where an employee has pre-existing injuries and/or conditions that may protract their workplace injury or disability, review any relief of costs decision from WorkSafeBC closely with legal advice to help minimize claims costs.

If you are an employer seeking advice on developing an effective Return to Work program or other workplace law matters, the Workplace Law Practice Group at Kane Shannon Weiler LLP would be pleased to speak with you. Please contact us at mdb@kswlawyers.wpengine.com or 604-591-7321.

By: Chris Drinovz and Japreet Lehal

In our first blog post of 2019, we look back at some of the key cases and developments in BC employment law for 2018.

5. BC Human Rights Commission Re-Established

In November 2018, the provincial government introduced Bill 50 – Human Rights Code Amendment Act, 2018, which re-established a BC Human Rights Commission. The Bill received Royal Assent on November 27, 2018. For more than a decade and a half, BC did not have a Commission. Prior to this recently introduced legislation, BC was the only province in Canada without a human rights commission, after it was ended in 2002 by the provincial government of that time. The Bill follows the 25 recommendations that were outlined in the report of Ravi Kahlon, Parliamentary Secretary for Sport & Multiculturalism along with 8 weeks of public consultation.

The amendments create an independent human rights commissioner and office with a mandate to promote and protect human rights in the province. Under section 47.12, the commissioner is given broad powers to further this mandate including the ability to intervene in Tribunal complaints, create and develop guidelines for institutions, publish reports and make recommendations, deliver public education, support research, and consult with organizations regarding human rights issues.

We will be closely monitoring how the Commission is rolled out this year and look forward to seeing how it begins to address systemic injustices and patterns of discrimination proactively.  To view Bill 50 – Human Rights Code Amendment Act, 2018, please visit the following link: https://www.leg.bc.ca/parliamentary-business/legislation-debates-proceedings/41st-parliament/3rd-session/bills/third-reading/gov50-3

4. Shorter is Better?

A series of reasonable notice cases involving short-service employees has reinforced the notion that a lengthy tenure is not absolutely crucial to receiving a longer reasonable notice period. These cases included:

• Greenlees v. Starline Windows Ltd., 2018 BCSC 1457: a 43-year-old salesperson was entitled to six months reasonable notice after only six months of employment. Important factors included the limited availability of alternative employment, made even worse by the employer’s failure to provide a reference letter. We note that inducement was also a factor. 
• Corey v. Kruger Products L.P., 2018 BCSC 1510: A 58-year-old maintenance supervisor received eight months’ reasonable notice after working only 2.5 years. Key factors were his age and unavailability of similar employment despite diligent search efforts. 
• Chapple v. Big Bay Landing Ltd., 2018 BCSC 1666: A 61-year-old resort manager received nine months reasonable notice after working for just over two years. Again, age was a factor, along with the specialized nature of the work. 

To read more about this issue, please click on the link to our blog post titled, Increased Reasonable Notice Period for Short Service Employees.

3. Employment Standards Amendments Recognize Changing Workplace

British Columbia’s Bill 6, Employment Standards Amendment Act, 2018 received Royal Assent on May 17, 2018, and came into force on that day. The amendments to Employment Standards Act include a longer period of job protection for pregnancy/parental leave, an increase of the available time for compassionate care leave, and two new unpaid job-protected leaves (for eligible employees upon the disappearance of a child due to a suspected crime and upon the death of a child under 19 years of age for any reason).

Even more significant amendments to British Columbia’s employment standards legislation are in the works. In 2018 after much consultation, the BC Law Institute released its Report on the Employment Standards Act. The report is the final publication in connection with BCLI’s Employment Standards Act Reform Project, which began in 2014 and is the first comprehensive, independent review of the Act since the early 1990s. 

The 300-page report contains 71 recommendations for changes to the Act to address contemporary and evolving circumstances in the 21st-century workplace. The introduction to the report provides the following interesting comments in this respect: 

“Today’s workplace is markedly different from the workplace of the mid-to-late twentieth century. Digital technology, changes in the composition of the workforce, and competitive pressures resulting from globalization, among other factors, have transformed the working world. Long-term, relatively secure full-time employment has increasingly given way to less secure temporary and part-time employment. New kinds of working relationships strain the boundaries of the traditional categories of “employee” and “independent contractor.” There is pressure from employers and employees alike for greater flexibility in patterns of work. These paradigm shifts make the revision and modernization of legislation governing the workplace timely and essential.”

You can review the Report on the Employment Standards Act here. We will continue to carefully monitor the legislature to see how many of the proposed changes are implemented into law.  

2. Duty of Good Faith Expands

The duty of good faith and honest performance in the execution of contract duties has continued to expand since the Supreme Court of Canada laid new ground in the Bhasin case. This is now one of the most exciting and fruitful developing aspects of employment and employment-like contract analysis. An interesting precedent from Ontario was set in 2018 and is becoming influential in this province as well.

The case of Mohamed v. Information Systems Architects Inc. 2018 ONCA 428, actually dealt with a six-month independent contractor arrangement (ICA) between the plaintiff, Mr. Mohamed and Information Systems which was an employment-like relationship. Prior to signing the ICA, Mr. Mohamed had disclosed the fact that he had a dated criminal record arising from an incident in high school. Information Systems engaged him nonetheless after he passed security checks. One month into the engagement, Mr. Mohamed was sent to work for Canadian Tire, a client of Information Systems. Canadian Tire found out about Mr. Mohamed’s past and requested that he be removed from the job due to their internal policies. Information Systems, in turn, terminated Mr. Mohamed under the ICA on the basis of his criminal record relying on its language which gave them nearly unfettered discretion to terminate the agreement.  

The appeal court found that terminating Mr. Mohamed’s engagement after he had disclosed the criminal record and passed the security checks only one month earlier was not a good faith exercise of the company’s rights under the termination clause. As a result, Mr. Mohamed was entitled to damages equivalent to what he would have made in the remaining five months of the term of his engagement. 

Mohamed was applied in BC in Lightstream Telecommunications Inc. v. Telecon Inc., 2018 BCSC 1940. This case involved a commercial but employment-like relationship between two contractors whereby the defendant Telecon had accused one of the plaintiff’s key workers of stealing tools and had terminated the agreement as a result. A proper investigation would have revealed that the worker had in fact not stolen the tools but signed them out in accordance with the accepted procedure. Madame Justice Russell found that the defendant’s lack of a thorough investigation into the matter and consideration of unreliable evidence constituted a breach of its duty of good faith as follows:

[104] I am guided in this analysis by the reasoning in Mohamed v. Information Systems Architects Inc., 2018 ONCA 428. In that case, a contractor disclosed his criminal record before he signed an Independent Consulting Agreement (the “ICA”) with a company. A month into the contract, one of the company’s clients found out about the contractor’s criminal record and requested that the company remove the consultant. The company did so without trying to secure the customer’s agreement to continue the project and subsequently did not consider the contractor for any other roles before terminating the ICA. The Court of Appeal agreed with the trial judge that this lack of effort in finding any solution other than outright dismissal was a breach of the company’s duty of good faith. I would likewise find that Telecon taking no steps to find a solution other than Wray’s permanent removal, let alone consider such a solution, was a breach of their duty of good faith.

[105] I accept that the allegation of theft was sufficient to remove a subcontractor from the load for fear that the allegation would reflect poorly upon Telecon to Telus, pending a thorough and careful investigation by Telecon. I accept that Telecon’s business is premised on the honesty and integrity of its subcontractors because Telecon’s business viability is reliant upon Telus providing it work. Telus’s performance requirements are stringent and the possibility of theft by a subcontractor could be prejudicial if no action were taken. However, the lack of any such subsequent thorough and careful investigation to justify Telecon’s continued position that it would not work with Wray ran directly against their duty of good faith.

[106] Telecon did not allow Lightstream to meaningfully present its case as to why Telecon should reconsider its position. Telecon did not appear to justify its position at all to Lightstream other than to say that theft was a serious matter. I find that Telecon’s lack of any accountability for its investigation to be rooted in a lack of good faith. Telecon relied upon unreliable evidence and was unreasonable in their justification for permanently removing Wray from the load.

The implications for employment law as this doctrine develops are enormous. These decisions suggest that employers may need a good faith reason to terminate a contract and in order to rely on a termination clause.  The threshold for what constitutes a good faith reason for termination remains unsettled. Can an employer terminate an employee because they are not a “good fit” for the company? Will the employer have to prove the employee was not a good fit?

This decision adds an additional layer of uncertainty to the enforceability of termination clauses in employment contracts.  For now, what is clear is that employers need to carefully consider their reasons for termination, regardless of the existence of an enforceable termination clause. 

1. Radical Change to the Law of Consideration

Coming in at number one is the extraordinary change to the law of contract determined by the BC Court of Appeal in Rosas v. Toca, 2018 BCCA 191 [Rosas]. While not an employment law case, the implications for employment law are far-reaching. Rosas won a $4.163 million lottery. She loaned her friend, Toca, $600,000 interest-free and requested a pay-back of the loan in a year. Seven years later, Toca had still not repaid the loan and as her friend, Rosas had repeatedly agreed to extend the loan an additional year. Finally, Rosas finally demanded it back but Toca would not pay. Rosas sued Toca, but Toca argued that the applicable six-year limitation period had elapsed. In particular, she said the gratuitous extensions for payment she received did not constitute an amendment of the original contract as no fresh consideration had been provided.

Chief Justice Bauman, for the BC Court of Appeal, canvased the evolution of the doctrine of consideration in contract law and decided that fresh consideration is no longer required to vary the terms of an existing contract. Essentially, the Court was of the view that the legal requirement for consideration has been so rigidly applied that it has created room for injustice. The application and formality of an artificial rule like consideration can no longer be used as a tool to allow parties to avoid their legal contractual obligations:

[183] …When parties to a contract agree to vary its terms, the variation should be enforceable without fresh consideration, absent duress, unconscionability, or other public policy concerns, which would render an otherwise valid term unenforceable. A variation supported by valid consideration may continue to be enforceable for that reason, but a lack of fresh consideration will no longer be determinative.

The enforceability of such variations remains subject to the usual defences of duress, unconscionability, and public policy concerns of course.

While not yet considered in an employment law context, Rosas has potentially far-reaching implications. Consideration has always been required to support changes made to an employment contract during employment. For example, an employer cannot enforce a change to an employment contract such as the introduction of a limitation on severance pay or non-competition covenant, unless it has given fresh consideration to the employee in exchange. It will be very interesting to see if the special considerations present in an employment law relationship such as the power and resource imbalance between employer and employee will influence the interpretation and application of Rosas going forward.   

If you are an employer or an employee seeking advice regarding your employment relationship, the Workplace Law Practice Group at Kane Shannon Weiler LLP would be pleased to speak with you. Please contact us at cdd@kswlawyers.wpengine.com or 604-746-4357.

By: Japreet Lehal

A Step in the Right Direction to Protect Migrant Workers

In November 2018, the provincial government passed the Temporary Foreign Worker Protection Act (the “Act”). It was introduced by the BC Minister of Labour, Harry Bains. The regulations will be introduced this year and we look forward to seeing how this legislation is implemented. The legislation is intended to ensure that recruiters and employers are regulated and prevented from exploiting temporary foreign workers (“TFWs”).

They are employed in industries such as agriculture, hospitality, construction and in care-giving roles. Thousands are employed in British Columbia. In 2017, there were 16,865 TFWs here.

Migrant workers face numerous hardships. A March 2018 report, Envisioning Justice for Migrant Workers: A Legal Needs Assessment, by the Migrant Workers Centre outlines many of the issues they face. In one case, an employee was fired simply for pointing out that the duties she was asked to do were not mentioned in her employment contract (page 33).

A migrant worker expressed concerns about how raising a voice against injustice in the workplace can even lead to homelessness (page 36):

“Most caregivers, we are afraid to file a complaint about our rights because if something happens then we are on the streets. It is not the same thing like if I work for a company but I have my own house and I go home everyday, if I make a complaint and get fired I would still have a house. For us, if we make a complaint and get fired it’s like ‘sorry you have to sleep on the streets so I think that most people don’t complain even if the situation is bad because where are you going to live. I have talked to a lot of people who are in bad situations with their employers and people tell them that they have to report it. But if you need to find a new employer it can take like 4 to 6 months to do all the paperwork and where are you going to live in that time and so they are scared (Focus Group 1, July 28, 2017).”

Under the new law, a foreign worker recruiter will have to apply for a license. A licensed foreign worker recruiter registry and registered employer registry will be introduced, requiring online registration by recruiters and employers. Recruiters and employers are prohibited from misleading workers, taking and holding their passports, mispresenting work opportunities, making threats of deportation for no lawful reason, and threatening workers if they complain or are involved in an investigation against their employer (Section 20).

An employer or recruiter is not allowed to charge the employee for the recruitment services, either directly or indirectly (Section 21). There are disclosure requirements if the recruiter is referring the foreign national to someone else and is receiving some sort of fee or compensation for this. The recruiter needs to put this in writing to let the foreign national know (Section 22). If the recruiter is providing immigration services as well as providing an employer with recruitment services, then there are certain requirements that this recruiter needs to meet, discussed in further detail in Section 23 of the Act.

A complaint to the Director has to be made within two years of the contravention being alleged and it has to be delivered in writing to an Employment Standards Branch office, as per Section 33 (2). The Director can also start an investigation, regardless of whether the Director received a complaint or not (Section 32).

A contravention of this Act can lead to a monetary fine or even jail time. An individual can be fined up to $50 000 or imprisonment up to one year (Section 80(2)(a)). A corporation can be fined up to $100 000 (Section 80(2)(b)).

I will now turn to some cases that have involved TFWs and workplace law.

Dominguez v. Northland Properties Corp. (c.o.b. Denny’s Restaurants), [2012] B.C.J. No. 443, BCSC 328 was a class proceeding by 75 people, which was certified against the defendants. The plaintiff claimed that the defendants did not provide them with overtime pay and did not give them the amount of work they were promised. The plaintiffs also alleged that the defendants did not give them money to travel from their home country and the agency recruitment fees (para. 2).

A settlement in the amount of $1.425 million was made in 2013 (Dominguez v. Northland Properties Corp. (c.o.b. Denny’s Restaurants), [2013] B.C.J. No. 527, BCSC 468). The terms of the settlement agreement included: work hours, overtime, airfare costs, agency fees, donations and release. The donations were to be made to an organization helping temporary foreign workers and a children’s charity (para. 17).

In 2017, a Determination was issued by a delegate of the Director of Employment Standards, which was about an individual, Mr. Brijesh Mohan, who was in Canada as a TFW and was working as a cook for a restaurant. He was not paid overtime pay, and his employer contravened other sections of the Employment Standards Act as well. He was awarded $32,702.43. His employer also had to pay administrative penalties of $3,000.00. Paragraph 17 of Right Choice Products Inc. (Re), 2018 BCEST 56 states:

“The Director made several findings of fact: that Mr. Mohan worked 12 hours a day, 6 days a week, commencing November 9, 2016, and ending, but not including, February 16, 2017; that Mr. Mohan was not paid for all regular hours worked; that Mr. Mohan worked four hours of overtime every Tuesday through Saturday for which he received no overtime pay; that Mr. Mohan qualified for and worked three statutory holidays for which he was not paid in the manner required under the ESA; that Mr. Mohan was owed 4% annual vacation pay on wages found owing to him; that Mr. Mohan voluntarily resigned employment on February 16, 2017, and was not owed compensation for length of service; and that RCP contravened section 8 of the ESA, misrepresenting wages and hours of work in order to induce Mr. Mohan to accept employment with them resulting in compensable losses to Mr. Mohan.”

The 2018 British Columbia Court of Appeal decision in Basyal v. Mac’s Convenience Stores Inc., [2018] B.C.J. No. 1086, BCCA 235 was an appeal of a certification order under the Class Proceedings Act. The case involved TFWs who alleged that Mac’s breached their contract and did not provide them with the work they were promised or “…in other cases any work at all…” (para. 1). The certification against the immigration companies was confirmed for breach of fiduciary duty. The plaintiffs were given the chance to make amendments to their pleadings for other aspects (paras. 77-80). In paragraph 80, Madam Justice Mary V. Newbury stated that “…As for the remaining causes of action, I would stay the action pending the plaintiffs’ amendment of the NOCC such that the material facts relating to each cause and to the existence of an agency relationship (if counsel chooses to pursue that allegation) are clearly stated…”

The journal article and report mentioned below delves deeper into the problems faced by migrant workers and provides further insights into how they can be supported.

A 2017 journal article, The Inaccessibility of Justice for Migrant Workers: A Capabilities-Based Perspective, by Bethany Hastie, an Assistant Professor at the Peter A. Allard School of Law, University of British Columbia, notes the various hardships that migrant workers face. It is noted that even though migrant workers face abuse and exploitation by employers, the number of legal cases is not high because of a lack of access to justice. A capabilities approach to justice, when addressing issues faced by migrant workers, is appropriate. The capabilities approach says that legal rights should not just be limited to what is written in the law itself, but one also has to examine whether the people who the law is meant to benefit are actually able to access it or not. The question is whether the people are able to access the laws to advocate for their rights (pages 21-22 and 24-25).

Migrant workers face numerous hardships and barriers in accessing justice and asserting their legal rights. Because of a lack of legal resources in their language, some may not know about their legal rights (pages 28-29). As noted on page 29:

“…the unfamiliarity or lack of knowledge about applicable laws and rights, where to seek assistance or advice, and even language barriers, can combine to create daunting obstacles for migrant workers who may desire to seek out information or help (referencing footnote 43)…”

The author of the article also notes, however, that access to knowledge about their legal rights is not the only barrier to accessing justice for migrant workers. There are deeper issues that prevent workers from enforcing their rights, such as fear that they may not be called back to their job. In some situations, despite knowing about their legal rights, they face an even bigger systemic issue. This is about barriers in the system which can lead to problems turning knowledge of legal rights into “valued functionings” (pages 29-30).

Migrant workers face a challenging situation, as their work permits under the Temporary Foreign Worker Program (TFWP) streams are tied to one specific employer. While in theory, they can change employers, this is actually quite difficult in reality (pages 31-32):

“…The employer-specific work permit thus creates significant dependence on an employer, and can prevent a migrant worker from freely circulating in the labour market (referencing footnote 52). This, in turn, produces a strong disincentive for migrant workers to assert their rights in the workplace, or in other words, creates a barrier to effective conversion of formal rights into substantive realization of just conditions of work in practice…”

A study participant noted on page 33:

“Well, I feel that the first barrier is the fact that the – the dilemma for the worker. This doesn’t look good. Should I endure it? To what extent? What happens if I seek help? While the employer is constantly saying, ‘Well, either you do this or you go back to where you came from.’ So the threat is – verbalized or not – it’s always on the horizon of the temporary foreign worker. He or she knows that they have to come back eventually, but every day they stay here, it’s a financial difference that has an impact on their lives and their families. So that even if they are not paid well, even if they are paid close to nothing, they still have the hope that eventually they are going to be paid. […] So the dilemma and at what point they reach the limit of their endurance, how much I’m going to support this, to endure this abuse […]”

In a complaints-drive system, a migrant worker has to spend lots of time and resources, which is not feasible for workers here on a temporary basis. Furthermore, the complainant also worries about his/her future and immigration status. The literature states that as “proactive investigations and monitoring” has decreased, so has “voluntary employer compliance” (pages 34-35).

Complainants also worry that coming forward with a complaint can identify them to the employer and put their current and future employment and income at risk (page 36).

The TFWP regulations and employer-specific work permit can become the root problem for many other issues. Many workers are hesitant to raise a voice because even though there are laws on paper, it is difficult to turn them into “…meaningful and just working conditions, and into realizable remedies or compensation for workplace rights violations…” The remedial options are quite limited as well. While workers could receive compensation for the abuse they have suffered, it is not likely that they will receive “longer-term employment and administrative security” (pages 36-37). At page 37, it is noted:

“For migrant workers who face rights violations in the workplace, this requires not only compensation, but considering how mechanisms for justice can address the underlying issues concerning security of employment, administrative status, and other important values underlying migrant workers’ experiences.”

It is important to provide information and resources about legal rights, but further work is needed to support migrant workers. There are many problems with the employer-specific work permit (pages 37-38):

“…Rather, an exploration of the employer-specific work permit establishes the deeper underlying issues that effectively disable migrant workers from substantively accessing the rights which they are entitled to in practice. This article has explored how the bonded nature of the work permit constrains migrant workers’ capabilities to access justice. The work permit system negatively impacts the ability for migrant workers to convert their legal rights into just conditions of work by creating a distinct and exacerbated power imbalance in the employment relationship. This, in turn, creates strong disincentives to assert rights or utilize vehicles for legal remedy when considered in light of the wider context in which migrant labour occurs, and the underlying motivations and needs of migrant workers participating under the TFWP. As a result, the legal system and access to justice for migrant workers who face abusive or unlawful treatment appear to be far too often out of reach.”

The author of the journal article also mentioned another important point in regards to the usage of terminology in her article (footnote 1 on page 20):

“This article will use the term ‘migrant worker’ to refer to participants under Canada’s Temporary Foreign Workers Program [TFWP], as opposed to the technical label of ‘temporary foreign worker’ which propels forward the ‘otherness’ of this population.”

I have also tried to minimize the use of this term in the blog post.

The Canadian Centre for Policy Alternatives report of August 30, 2018, titled, Building a Stronger Foundation of Basic Workplace Rights for BC Workers, suggests further measures that can be taken to help TFWs. In regards to farmworkers, the report states on pages 14 and 15:

“…In addition to the recommendations already made above for targeted proactive enforcement in the agricultural sector and reintroducing the entitlements to statutory holidays, annual vacation, hours of work and overtime pay for farmworkers, BC employment standards must be strengthened as follows:

23. Mandate that workplace rights are posted in the workplaces of all farmworkers in appropriate languages, including the native language of all migrant farmworkers employed under the Seasonal Agricultural Workers’ Program.

24. Establish an independent review of the ESA in relation to farmworkers, including representation from workers and their advocates. The review would make recommendations for improving the working conditions of farmworkers and develop coordinating mechanisms with other agencies that oversee migrant agricultural programs to fill the jurisdictional void that exists in enforcing the rights of migrant workers. It would include a review of the farm labour contracting system, notorious for its violations of employment standards, safety regulations and for shoddy recordkeeping practices, which make it virtually impossible for workers to seek redress when their rights are violated…”

It is also suggested that the complaint process rapidly address the issues faced by TFWs (page 16):

“…28. Expedite the investigation of complaints by temporary foreign workers to address potential reprisals and unjust dismissal that would force the worker to leave Canada before their complaint is handled…”

The introduction of the Temporary Foreign Worker Protection Act is a step in the right direction. Further efforts also need to be made at both the federal and provincial level to protect migrant workers, as noted above. We look forward to seeing how the Act is implemented and how it can address the many hardships that temporary foreign workers face.

If you are an employer or an employee seeking advice regarding your employment relationship, the Workplace Law Practice Group at Kane Shannon Weiler LLP would be pleased to speak with you. Please contact us at cdd@kswlawyers.wpengine.com or 604-746-4357.

By: Japreet Lehal

Proposed class-action lawsuit against Uber can proceed in Ontario

We are living in a time where the gig economy is becoming more prominent and popular. In British Columbia, food delivery apps are being used and many people are driving for these apps. Ride-hailing apps are expected to come to this province in the near future.

In this post, I will be focusing on quite a significant Ontario Court of Appeal decision, Heller v. Uber Technologies Inc.,2019 ONCA 1 (CanLII) [Heller]. This case was an appeal by Mr. David Heller, from a decision of the Ontario Superior Court of Justice, Heller v. Uber Technologies Inc.,2018 ONSC 718 (CanLII). Mr. Heller delivered food through the UberEATS app. This is a proposed class-action lawsuit against Uber. The ONSC decision was decided in the favour of Uber Technologies Inc. (“Uber”). In the Court of Appeal decision, Mr. Heller was successful.

In the proposed class-action lawsuit against Uber, the appellant wants to put forth the idea that Uber drivers should be considered employees pursuant to the Employment Standards Act,2000, S.O. 2000, c. 41 (the “ESA”), and that Uber has violated the ESA by not considering them employees. Furthermore, it sets out that the arbitration clause should be considered “void and unenforceable,” and the drivers are entitled to $400 million in damages (para. 4).

Mr. Heller entered into the Driver services agreement and the UberEATS services agreement. There was an arbitration clause in both agreements. This clause stated that the laws of the Netherlands are applicable to the Agreement (para. 11). Additionally, UberEATS drivers would be required to pay US$14,500 in the beginning, prior to the mediation-arbitration starting. These were called administrative/filing-related costs (para. 15).

It was decided that the arbitration clause is invalid because it contracted out of the ESA, which is not allowed (paras. 41 and 49). As noted in paragraph 41:

[41] Given my conclusion regarding the meaning of “employment standard”, it follows that the Arbitration Clause constitutes a contracting out of the ESA. It eliminates the right of the appellant (or any other driver) to make a complaint to the Ministry of Labour regarding the actions of Uber and their possible violation of the requirements of the ESA. In doing so, it deprives the appellant of the right to have an ESO investigate his complaint. This is of some importance for, among other reasons, if a complaint is made then the Ministry of Labour bears the burden of investigating the complaint. That burden does not fall on the appellant. Under the Arbitration Clause, of course, the appellant would bear the entire burden of proving his claim.

Even though the appellant did not go through the ESA complaint process route, the arbitration clause is invalid because it contracts out of this legislation, which is a violation of ESA Section 5(1). Under the ESA, the appellant has a right to begin a civil proceeding, instead of the complaint process. The appellant began the civil proceeding because this is a class proceeding. Under arbitration, there would be no class determination, and no public record. Even if the appellant was successful, it remains unknown what sort of remedy he would have received, because the laws of the Netherlands apply. If he is considered an employee, as an Ontario resident, he would be entitled to the minimum benefits under the ESA (paras. 42-46).

It was also decided that the arbitration clause is invalid on the basis of unconscionability (para. 52). In Ontario, a contract provision is considered unconscionable if the factors in Titus v. William F. Cooke Enterprises Inc., 2007 ONCA 573 (CanLII), 284 D.L.R. (4th) 734, at para. 38, recently affirmed in Phoenix Interactive Design Inc. v. Alterinvest II Fund L.P., 2018 ONCA 98 (CanLII), 420 D.L.R. (4th) 335 are met (cited at para. 60 of Heller):

1.   a grossly unfair and improvident transaction;

2.   a victim’s lack of independent legal advice or other suitable advice;

3.   an overwhelming imbalance in bargaining power caused by the victim’s ignorance of business, illiteracy, ignorance of the language of the bargain, blindness, deafness, illness, senility, or similar disability; and

4.   the other party’s knowingly taking advantage of this vulnerability.

These factors were applied in this case. The Clause was considered quite unfair because even for a small claim, the driver would have to pay lots of money to initiate the mediation-arbitration. Uber would be better suited to incur these costs, instead of the drivers. Moreover, there is the issue that the driver would have to engage in individual arbitration in the Netherlands, instead of where he/she is living (para. 68, at 1).

Mr. Heller did not receive any legal advice, and he could not negotiate the agreement terms with Uber either (Ibid, at 2). There is also bargaining inequality between Mr. Heller and Uber (Ibid, at 3). It was held that Uber inserted this Arbitration Clause in the agreements because it wanted to take advantage of the driver’s vulnerability, and did so knowingly and intentionally (Ibid, at 4).

It is noted in this case that the appellant and other individuals like him are similar to consumers, and Uber has greater bargaining power. At paragraph 71, it was stated that:

[71] I would add that, for the purposes of this analysis, I do not see any reasonable distinction to be drawn between consumers, on the one hand, and individuals such as the appellant, on the other. Indeed, I would note that, if Uber is correct and their drivers are not employees, then they are very much akin to consumers in terms of their relative bargaining position. Alternatively, if Uber is wrong, and their drivers are employees, we are not speaking of employees who are members of a large union with similar bargaining power and resources available to protect its members. Rather, the drivers are individuals who are at the mercy of the terms, conditions and rates of service set by Uber, just as are consumers. If they wish to avail themselves of Uber’s services, they have only one choice and that is to click “I agree” with the terms of the contractual relationship that are presented to them.

The Judge did not consider the arbitration clause valid from two different aspects. It was considered illegal under the ESA and Arbitration Act, 1991, S.O. 1991, c. 17. At paragraph 74, Nordheimer J.A. stated:

[74] I conclude that the Arbitration Clause amounts to an illegal contracting out of an employment standard, contrary to s. 5(1) of the ESA, if the drivers are found to be employees as alleged by the appellant. I reach the separate and independent conclusion that the Arbitration Clause is unconscionable at common law. On the basis of each finding, the Arbitration Clause is invalid under s. 7(2) of the Arbitration Act, 1991. The remedy of a mandatory stay has no application.

With the introduction of new technologies, it is important that issues relating to employment law are also taken into consideration. In British Columbia, with the popularity of food delivery apps and the imminent introduction of ride-hailing apps, such legal issues may arise in this province as well. Heller can be persuasive case law here too.

As Ottawa lawyer Paul Willetts notes, we can expect that Uber will seek a leave of appeal to the Supreme Court of Canada (final para., under “So, are Uber Drivers now Employees?”).

Uber is involved in lawsuits in other countries as well. In the UK, the Court of Appeal agreed with the Employment Appeal Tribunal that Uber’s drivers should be considered workers. If a driver is considered a worker, he/she then receives worker rights, such as the national minimum wage and paid holiday entitlement (paras. 2 and 3 of “Court of Appeal confirms that Uber drivers are workers”, by Katie Spearman). To read the full decision, please visit this link.

In France, Paris’ Court of Appeals decided that drivers had a “work contract” with Uber. They were not considered “independent workers” because they could not decide how much they were going to charge customers for the fare nor their working conditions. However, they are not yet considered employees because the driver’s complaint must first go to an employment matters court (paras. 1-2 and 4-5 of “French court: Uber and drivers tied by ‘work contract’”, by Laura Kayali).

The New York State Unemployment Insurance Appeal Board decided that to receive unemployment insurance benefits, Uber drivers can be considered employees, as opposed to independent contractors (NYS UIAB Appeal Decision for case 596725, online: <http://uiappeals.ny.gov/uiappeal-decisions/596722-appeal-decision.pdf>, cited in National Employment Law Project (NELP) link). Uber withdrew its appeal regarding this decision (NELP link).

In this blog post, I have not delved into the distinctions between employee, independent contractors, and dependent contractors. I have instead focused on the arbitration clause. These distinctions are another big topic that is related to the gig economy, and it is likely that in the coming years, there will be new legal developments in Canada in this area as well.  

If you are an employer or an employee seeking advice regarding your employment relationship, the Workplace Law Practice Group at Kane Shannon Weiler LLP would be pleased to speak with you. Please contact us at cdd@kswlawyers.wpengine.com or 604-746-4357.

Overtime for salaried employees can be an area of confusion for workers in BC.  Many employees (and many employers) assume that because their employment contract sets out a fixed salary for the year, the employer is not required to pay the employee for overtime worked.  This assumption is incorrect, and can lead to significant problems in the employment relationship. Let's delve into discussing overtime and the salaried employee under the Employment Standards Act.

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In fact, unless an employee is in one of the select categories of employees excluded from hours of work and overtime requirements under s. 34 of the Employment Standards Regulation, or is working under an averaging agreement or a variance, a salaried employee is entitled to overtime under the Employment Standards Act if he or she has worked more than 8 hours in a day, or more than 40 hours in a week.  An employee is also entitled to time-and-a-half pay if he or she is not provided with at least 32 hours in a row free from work each week.

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As the Employment Standards Act sets out minimum standards for employment contracts in British Columbia, employees and employers cannot contract out of these obligations.  This means that even if a salaried employee has agreed that overtime cannot be paid, he or she is not bound by this agreement, and can seek to recover unpaid overtime through the Employment Standards Branch.

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With salaried employees, the amount of overtime is determined by calculating a nominal hourly rate, based on how many hours they would have to work at full-time employment to achieve their salary.  After this hourly rate has been determined, the employee is owed:

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• Time-and-a-half when working more than 8 hours a day;
• Double pay when working more than 12 hours a day;
• Time-and-a-half when working more than 40 hours a week; and
• Time-and-a-half for any time the employee is required to work during the 32 hour rest period. 

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Because both employees and employers are often unaware of the requirement to pay overtime for salaried workers, it is possible for significant unpaid overtime to accrue without anyone realizing it, particularly as the Provincial government has recently amended the Employment Standards Act to extend the period for recovering of unpaid wages from 6 months to 12 months.  This means that there is now the potential for up to a year of unpaid overtime to be owing. 

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If you are a salaried employee who has been required by your employer to work unpaid overtime, or an employer concerned that you have salaried employees who have been working significant amounts of unpaid overtime, it is important that you speak with a qualified workplace lawyer regarding your situation.

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If you are an employer or an employee seeking advice regarding your employment relationship, the Employment & Labour Group at KSW Lawyers would be pleased to speak with you. Please contact us here or by phone at 604-746-4357.

By: Chris Drinovz

Sherstobitoff v British Columbia (Workers’ Compensation Appeal Tribunal), 2019 BCSC 1659

Chris D. Drinovz of KSW Lawyers recently represented our client Dale Sherstobitoff in a judicial review overturning a decision of the Workers Compensation Appeal Tribunal (“WCAT”). Ms. Sherstobitoff was injured on her first day at a new job as a heavy equipment operator. The issue before WCAT was whether her employment was permanent or temporary. This in turn determined her rate of compensation while disabled under the Workers Compensation Act (the “Act”). This judicial review presented an interesting intersection of employment law, workers compensation law, and administrative law. Let's look at where employment law and contract law principles meet.

In the WCB regime, when a worker is injured less than 12 months into the job, that worker receives WCB benefits at a rate based on what they actually earned in the 12 months prior to the injury. Section 33.3 of the Act provides an exception for workers whose employment was not casual or temporary i.e. permanent. In this case, the worker’s compensation is based on the average earnings of other permanent company employees doing similar work. This often results in a more favourable wage rate than what a temporary worker would receive.

Ms. Sherstobitoff was hired to operate a haul truck for a contractor on the Site C dam project. She did not have a written employment contract or any terms that limited her employment to casual or a fixed term. The employer argued the employment was nevertheless temporary because its work at the Site C dam project would come to an end and it had no other projects in BC at the time of hiring. WCAT agreed with the employer.

In its analysis, WCAT invoked common law principles of contractual interpretation and reasoned that interpreting the nature of Ms. Sherstobitoff’s agreement required looking at the surrounding circumstances such as her past periods of short-term employment with multiple employers and the apparently seasonal nature of the heavy construction industry. In the judicial review, we argued that WCAT’s contractual interpretation was flawed and therefore patently unreasonable. In particular:

"The correct approach which accords with the common law and WCAT jurisprudence would be for the Tribunal to consider only the objective evidence that informs the terms and conditions of the employment contract at the time of hiring. Such evidence includes any written offer letter(s), employment contracts, collective agreement, and documents provided or things said at the time of hiring and the entering into of the agreement."

In the Court’s decision, Madam Justice Fleming stated that “in these circumstances, I view legal findings relating to general common principles of contractual interpretation, or mixed findings of law and fact-based on a contractual interpretation as susceptible to review for patent unreasonableness” (para 65). She noted that the only way to determine the nature of the worker’s employment was to consider the principles of contractual interpretation with the goal of objectively determining the parties’ intention at the time the contract was formed. Applying this standard, Madam Justice found that “although the common law framework required the [WCAT Vice Chair] to consider and make findings about the words of the Contract, his reasons demonstrate he did not do so. Instead, he immediately turned to the surrounding circumstances” (para 71). She therefore found WCAT’s decision patently unreasonable and remitted the matter back for a re-hearing. 

There are two key takeaways here:

1. First, the decision highlights that the nature of the employment contract is relevant not just in determining matters such as severance pay, but in determining a worker’s wage rate for a WCB claim. This gives employers and employees yet another reason to ensure they have a written employment contract clearly setting out the terms and conditions of employment.
2. Second, those making submissions at the Tribunal level can take comfort knowing that administrative decision-makers who engage in legal exercises such as contractual interpretation are subject to the review of the Court to ensure conformity with accepted common law principles.

If you are an employer or an employee seeking advice regarding your employment relationship, the Employment & Labour Practice Group at KSW Lawyers would be pleased to speak with you. Please contact us at cdd@kswlawyers.wpengine.com or 604-746-4357.