KSW Lawyers Adds Another Lawyer To Their Partnership
CONTACT
PAY BILL
LINKEDIN
CONTACT
PAY BILL
LINKEDIN
CONTACT
PAY BILL
LINKEDIN
Home
> Lawyer Content
> Blog title on how to fine the perfect lawyer

Media Library

Providing high-quality, comprehensive legal services to our community doesn’t end with our services. When people know and understand their rights and obligations as citizens and business owners, they are empowered and our communities grow stronger.  Browse our wide range of resources to stay informed on both personal and business law, including articles, workshops, upcoming events, and more.

Filter
Thank you! Your submission has been received!
Oops! Something went wrong while submitting the form.
Employment & Labour Law - Employee Essentials (Personal), Employment Law & Human Rights, Estate Planning, Wills and Trusts, Family Law, Judicial Reviews and Appeals, Insurance Denials, Personal Injury, Personal Tax, Real Estate, Personal Litigation & Disputes
Business Litigation & Disputes, Corporate Services, Employment & Labour Law - Employer Essentials (Business), Employment Law & Human Rights, Labour Relations & Union Advice, Insurance Denials, Real Estate Services ,Business Tax, Charities & Non-Profits, Business Litigation & Disputes
Type
Thank you! Your submission has been received!
Oops! Something went wrong while submitting the form.

How Spousal Support Impacts your Taxes

This is some text inside of a div block.

Important Considerations for Separating Spouses

Legal Tip
Personal

When two individuals are experiencing the difficult and transformative process of ending a marriage or partnership, it can come with a myriad of questions and uncertainties. One of the more daunting aspects of this process is understanding the tax implications of paying and receiving spousal support in British Columbia. As the legal and financial aspects of ending a spousal relationship can be overwhelming, it is crucial to have a comprehensive understanding of how spousal support may affect your taxes.

Two Types of Spousal Support in BC

In BC, there exists two main forms of spousal support that may be required when a spousal relationship comes to an end: lump sum spousal support and periodic support. Although lump sum spousal support may not be applicable in every separation, it is crucial to carefully consider the potential tax implications when it is an option. Lump sum spousal support involves a one-time payment from one spouse to the other, which covers the entire financial obligation. In contrast, periodic spousal support is paid monthly, either for a set period of time or without a specified end date. The tax ramifications of each type of spousal support are unique and should be seriously considered.

Periodic Spousal Support

In the case of periodic spousal support, it is only considered taxable income for the recipient. This means that the person receiving support is required to report it as part of their annual income when filing their tax return. On the other hand, for the payer of the support, it is considered a tax-deductible expense. This means that they can deduct the amount they paid in spousal support from their income, thereby reducing their overall tax burden.

Lump Sum Spousal Support

The tax implications are different for lump sum spousal support, however. This type of support is often a one-time payment intended to provide financial assistance to the dependent spouse up-front instead of monthly payments. Lump sum spousal support is not taxable for the person receiving it, meaning that the recipient does not have to report it as income. For the payor, the lump sum payment will not be tax-deductible.

Spousal support is a very complicated area of the law, and the tax implications are just one of many considerations that must be made; the potential legal ramifications are not something that should be taken lightly. While the topic of spousal support payments may seem daunting, with the proper guidance and advice, individuals can navigate through this complex legal area with confidence. Seeking the assistance of an accountant, financial planner, and lawyer is advised to ensure all factors are properly considered, including any potential tax implications. These professionals have a deep understanding of the financial aspects of spousal support and can provide invaluable advice on tax implications and other financial considerations. So, if you are faced with spousal support payments, do not hesitate to seek the help you need to make the most informed decisions.

Sell your House, Get a Tax Reassessment!

This is some text inside of a div block.

If you sold your house, expect to get a CRA reassessment

Legal Tips

The province of British Columbia has seen a significant rise in income tax and GST assessments due to increased audits on real estate transactions. In 2024, the number of these files reached nearly 1,100, a stark increase from the mere 114 assessments filed in 2015.

If you have recently sold your home, it is highly likely that you will receive a notification from the CRA through their signature brown envelopes. While some may agree with the reassessment and pay accordingly, many taxpayers may find it necessary to challenge the decision.

So what steps should you take in this situation?

Learn Important Dates

First and foremost, it is crucial to familiarize yourself with the deadlines relevant to your file. By the time you receive the Reassessment in the mail, the clock is already ticking, and failure to act before the time expires will result in the CRA considering the additional taxes owed as accepted. You have a limited window of 90 days from the date listed on your reassessment (NOT the date you received it) to submit an objection. But what if you have already exceeded the 90-day period? This brings us to our next point…

Contact a Lawyer

It is imperative to seek the assistance of a lawyer who specializes in tax disputes immediately. A reputable tax lawyer can offer guidance and ensure all your concerns are addressed throughout the process. and can potentially obtain an extension for submitting the objection. Though it is crucial to note that securing an Objection may become more challenging the longer you wait to file.

Collect Relevant Documents

Now that you understand the deadlines and have contacted a tax lawyer, your next step is to gather all relevant documents. These may include utility bills, insurance papers, and bank documents that have your previous residence's address listed. These documents will aid your tax lawyer in demonstrating that you did, in fact, reside at the property in question.

Take Notes

Lastly, make sure to note down all the reasons and circumstances surrounding the purchase and sale of your home. This may include factors such as an expanding family, changes in the neighborhood, rising cost of living or maintaining the property, relocation for work or school, among others. These notes will serve as a helpful reminder when discussing your case with your tax lawyer.

It is crucial to act promptly if you receive a reassessment from the CRA. Being aware of the deadlines, seeking legal assistance, and collecting relevant documents will greatly strengthen your position in challenging the decision. Remember, the clock is ticking, and timely action is critical.

CCDC Construction Contracts 101

This is some text inside of a div block.

Breaking down four types of CCDC construction contracts

Legal Tips
Business

As a developer or investor in the Canadian construction market, it is crucial to be well-versed in the CCDC contracts. These contracts are the industry standard forms used across the country and are suitable for most development projects.

I have received numerous inquiries about CCDC contracts in the past; Let's delve into the four main CCDC contracts: CCDC 2, the combination of CCDC 5A and CCDC 17, CCDC 3, and CCDC 5B. Each of these contracts will be discussed in detail to provide a comprehensive understanding. Simply put, being knowledgeable about these CCDC contracts is crucial for your success in the construction industry.

CCDC2

The CCDC 2 is the most commonly used standard form for construction contracts. It is a fixed price and fixed schedule contract in which the owner, who is also the developer, enters into an agreement with a general contractor. The contractor provides one fee to the owner and is responsible for entering into separate contracts with each sub-trade.

This type of contract offers a multitude of benefits for the owner. It provides pricing certainty, as all the risk of Tradesmen not performing their contracts falls on the contractor. In case of any issues, the owner can make claims against the contractor. Moreover, lenders favor this type of contract as it provides them with pricing certainty when advancing construction loans to Developers.

Overall, the CCDC 2 offers a reliable and secure approach to construction contracts, benefitting all parties involved.

Construction Management Model (CCDC 5A + CCDC 17)

The Construction Management Model (CCDC 5A + CCDC 17) entails the owner entering into a CCDC 5A contract with a construction manager in addition to separate CCDC 17 contracts with each tradesperson. Tthe construction manager's fee is typically a percentage of the total project cost, or potentially a flat fee.

In this model, the construction manager will provide a range of services to the owner, such as constructability review, assistance with tendering and bidding, and finding skilled tradespeople. Under this model, the owner must be equipped to handle the associated risks and possess sufficient administrative skills to negotiate directly with each tradesperson.

While a suitable option for capable owners, this model does come with potential risks. Should any issues arise, the owner will be responsible for managing and resolving them with each individual tradesperson.

Nevertheless, for sophisticated owners, this model offers increased pricing certainty as they can negotiate directly with each tradesperson.

CCDC 5B

The CCDC 5B contract model combines elements of the CCDC 5A model with some additional factors. Under this model, the construction manager is responsible for providing pre-construction services for a fee, similar to the CCDC 5A model. However, the owner also has the opportunity to appoint the construction manager as a contractor for a fixed fee.

It is important to note that this arrangement introduces some pricing risk, as construction managers often have more leverage in later stages of the process. This may lead to them exerting more influence until the owner exercises the option for them to carry out the construction work.

In the case of amending or exercising the option for CCDC 5B, if the construction manager is also acting as the contractor for the actual construction work, it will be necessary to amend the standard form using supplementary conditions.

Therefore, for developers utilizing the CCDC 5B model, it is essential to have a lawyer draft these supplementary conditions to ensure their interests are protected.

Cost Plus Contract (CCDC 3)

The Cost Plus Contract (CCDC 3) model bears similarity to CCDC2 as it is a general contractor model. Under this contract, the owner enters into an agreement with one contractor who then assumes responsibility for signing separate contracts with all the tradespeople.

The owner must bear all the costs of these individual trades contracts and also pay the contractor a fee on top of that. As a contractor, the risk is intermediary between CCDC2, where you have full control, and 5A, where you do not hold the risk of directly entering into contracts with tradespeople and ensuring their work is done properly.

CCDC3 is a hybrid contract and is most effective for renovation projects or those with an undefined scope, where the exact location of construction is unclear, making it challenging to obtain multiple bids.

Those are four of the primary CCDC contracts commonly used for residential and mixed-use development in BC. Familiarity with these contracts is crucial for successful project management. Standard form CCDC can be modified with supplementary conditions to meet specific project needs. These conditions enhance the contract and serve three main purposes: addressing unique business points, optimizing administrative processes, and allocating risk between the contractor and developer.

Overall, understanding CCDC contracts and utilizing supplementary conditions can greatly benefit construction projects in BC.

Curious to learn more? Check out the video above to delve deeper into the topic!

Child Custody and Summer Vacation

This is some text inside of a div block.

How to Navigate Child Custody when School is out

Legal Tips
Personal

As a parent, you want what's best for your child and that includes ensuring that your custody agreement is upheld without any hiccups. However, summer vacation can throw a wrench into any carefully crafted custody arrangement, causing confusion and potential legal issues. With children out of school and planned vacations being a common occurrence it's important to understand the possible complications that can arise during this time and take the necessary steps to protect yourself and your custody agreement. So, what can you do to protect yourself and your custody agreement during this time of year? To help you navigate this potentially tricky situation, here are three tips that you may want to consider.

Plan Ahead

The key to avoiding any complications during summer vacation is to plan ahead. It's crucial to have a comprehensive parenting schedule in place that takes into account your child's school holidays. Coordinate with your ex-partner to determine the specific dates and times that each parent will have custody of the child. This will help prevent any scheduling conflicts and ensure that there is clarity in the agreement. It's also important to keep in mind any planned vacations or activities that may interfere with the custody schedule. By addressing these potential conflicts beforehand, you can avoid any unnecessary legal battles in the future.

Extend Visitation

During the summer break, it can be highly advantageous for a child to have extended periods of time with each parent. This not only provides the opportunity for a stronger connection with both parents, but also allows for fun and engaging holiday activities like camping or traveling. Longer visits with each parent can also be beneficial for the child's emotional well-being. Moreover, these longer periods of time can also allow for a smooth transition between households. It is important for parents to consider the advantages of longer visits and work together to create a summer schedule that allows the child to spend quality time with both parents. By including this in your parenting schedule, you're not only setting up your child for an enjoyable summer but also avoiding any potential conflicts that may arise.

Keep in Touch

Along with scheduling, it's essential to include provisions for regular communication between the child and the non-custodial parent during longer periods of time when they are not physically present. This can include video chats, phone calls, or even sending letters or postcards. Maintaining regular contact with both parents can help children feel connected and supported, especially when they are away from one household for an extended period. Not only does this help maintain a strong parent-child relationship, but it also ensures that the off-duty parent is still involved in important decision-making processes, thus upholding the terms of the custody agreement.

If you find yourself in a situation where your custody agreement is being compromised, don't hesitate to seek legal advice. An experienced family lawyer can provide guidance and assist in protecting your rights as a parent. They can also help mediate any conflicts between you and your ex-partner and ensure that the best interests of the child are met. In some cases, seeking legal assistance may be the only way to enforce the custody agreement and ensure that it is upheld.

While summer vacation can make child custody agreements more complicated, taking the necessary steps to protect yourself and your agreement can help prevent any legal issues from arising. By planning ahead, documenting everything, and seeking legal advice if necessary, you can ensure a smooth and stress-free summer for you and your child.

Feds Target Predatory Lending

This is some text inside of a div block.

Criminal Interest Rate to be Lowered

Legal Tips
Business

Effective January 1, 2025, the federal government will lower the criminal interest rate from 60% effective annual rate (EAR) to 35% annual percentage rate (APR), which equals about 42% EAR, in order to combat predatory lending. “Interest” includes all charges and expenses, including fees, fines, penalties, or commissions, associated with a loan.

Commercial loans under $10,000 will have the new interest rate limitations.

Commercial lenders will be allowed to structure loans with an interest rate of up to 48 per cent APR for loans between $10,000 and $500,000, in order to provide small business owners with some level of protection from loan sharks.

Commercial loans over $500,000 can be structured with no cap on the interest rate, allowing for more flexibility for risky credit borrowers. The reason being that these types of larger, sophisticated transactions should not affect vulnerable Canadians.

Lenders and brokers should be aware of these changes and take the time to learn their responsibilities under the new laws. Violations can result in fines of up to $25,000, or imprisonment of up to 5 years.

If you are a private lender or mortgage broker with any questions related to the new laws, or require help in navigating these pending changes, reach out to Aman Bindra at abindra@kswlawyers.ca or 604-591-7321 today.

BC Human Rights Tribunal Update

This is some text inside of a div block.

Employers can raise their defence when applying to dismiss

Article
Personal

In May 2024, the BC Human Rights Tribunal decided that Telus Employer Solutions (TES) was reasonably certain to prove that any discriminatory conduct that might be proven at a hearing was justified.  In McNeil v. Telus Employer Solutions (TES) (No. 2), 2024 BCHRT 166 (CanLII), the Tribunal considered both the Complainant’s and the Respondent’s respective points of view when deciding if there was no reasonable prospect that the complaint would succeed.  Its consideration was guided by analysis from the BC Supreme Court, following the Complainant’s successful judicial review of an earlier decision to dismiss the complaint.

The Facts

Events at issue in this case date to 2018 when Ms. Dawn McNeil was working at TES as an employee with a series of temporary employment contracts and had asked to take advantage TES’s work from home policy called “Work Styles Program” due to environmental sensitivities/allergies. The default at TES was a “work from office standard” and eligibility to work from home involved an assessment of individual circumstances, job performance and function, mobile readiness, and space availability.  In denying Ms. McNeil’s request to work from home, TES considered the eligibility requirements before declining to allow her to work from home.  In considering whether TES could defend that decision e.g. whether it had a bone fide occupational requirement for Ms. McNeil to be in the office, the Tribunal had to consider TES’ evidence about:

  • The work from office standard, and how it was rationally connected to the performance of the job.
  • The adoption of the work from office standard, for instance was it adopted in good faith and in the belief that it was necessary to fulfill a legitimate work-related purpose.
  • Whether the work from office standard was reasonably necessary to accomplish the legitimate work-related purpose, in the sense that the employer could not accommodate people sharing Ms. McNeil’s protected characteristics.

When the evidence was considered, the Tribunal concluded that TES was reasonably certain to prove at a hearing that it had a bone fide occupational requirement for not allowing work from home on the facts.

Employer Takeaways

  1. Employers have a duty to accommodate employees with a disability (visible or not) so consider what policies you are seeking to apply when accommodating employees with a disability. If those policies aren’t rationally connected to work performance, have not been updated recently, and/or no longer accomplish a work-related purpose, then don’t use them to justify rejecting an accommodation request.
  2. If your company is faced with a complaint that you did not properly accommodate an employee, review the policies you applied in that case, and articulate how they are a bone fide occupational requirement, so that at the earliest opportunity (usually an application to dismiss) you can articulate why the decision not to provide the requested accommodation was justified.
  3. When an employee asks for accommodations in the workplace, consider reaching out to a lawyer early since legal advice early in the process will assist in minimizing the risk of a legal proceeding later on.

Informal Emails Are Still Binding

This is some text inside of a div block.

Informal employment contract sent via email found to be legally binding

Article
Personal

The BC Supreme Court recently determined that an email sent to a prospective employee detailing partial employment terms prior to a formal agreement constituted a full and binding employment contract (Adams v Thinkific Labs Inc., 2024 BCSC 1129).

Facts

The employer sent a prospective employee a 60-page detailed offer of employment via email (the “Email Agreement”). The Email Agreement contained information about the employee’s compensation, bonuses, benefits and leave entitlements. It did not, however, contain termination or non-competition terms. The Email Agreement indicated that the employer would provide the official employment contract upon receipt of the employee’s full legal name and desired start date.

Upon the employee’s acceptance of the Email Agreement, the employer sent a formal written employment contract (the “Letter Agreement”). The Letter Agreement included termination and non-competition clauses among other burdens and limitations on the employee, none of which had been included Email Agreement. It did not contain the information about employee entitlements and benefits outlined in the Email Agreement. The employee signed the Letter Agreement and commenced work on September 20, 2021.

On May 23, 2023, the employer terminated the employee, relying on the termination clause in the Letter Agreement.

Issue

Was the Letter Agreement an enforceable contract? Or did the Email Agreement constitute a complete and binding employment contract, such that the employer could not rely on the termination clause and notice entitlements in the Letter Agreement?

Decision

The court held that the Email Agreement constituted a complete and binding employment contract between the employee and employer. The Letter Agreement was unenforceable, as no new consideration was presented to the employee along with its terms. Thus, the employer could not rely on the termination provision in the Letter Agreement, and the employee was entitled to five months pay in lieu of notice under the common law.

Reasoning

The Email Agreement contained a full offer of employment with detailed and lengthy terms. The employee accepted the offer when she provided her name and start date. The subsequent Letter Agreement imposed new terms to the existing agreement with no new benefits or entitlements to the employee. To enforce the new terms in the Letter Agreement, the employer would have had to provide additional consideration or benefit to the employee. The promise of continued employment in exchange of acceptance of new terms does not constitute consideration. The court noted that adequate consideration is especially important where new terms impose onerous burdens and detriments on the employee.

Takeaways for Employers

Provide a single, formal and comprehensive offer of employment with consideration

This decision serves as a reminder to employers to provide prospective employees with a single, formal and comprehensive offer of employment that incorporates all relevant terms and conditions. Employers should avoid sending initial offers with partial terms prior to the formal agreement, as these communications could be enforced as a complete and binding contract, rendering the formal agreement unenforceable. Employers should be especially careful not to introduce new terms or obligations to employees without providing new benefits or consideration.

Failure to provide consideration for new employment terms could result in high awards for short service employees

Employers should be aware that, should their formal agreement be rendered unenforceable, they may lose important protections related to termination. In this case, the employee worked for the employer for approximately one year and eight months. Because there was no termination clause in the Email Agreement, the BC Supreme Court awarded her five months pay in lieu of reasonable notice under the common law. After deducting mitigation earnings and the amount already received, the total award was $31,647.44. If, the employer had successfully relied on the Letter Agreement’s termination clause, the employee’s compensation would have been $5769.23 for three weeks pay in lieu of notice. If, for example, the employer had successfully relied on a termination clause limiting their liability to the requirements in the BC Employment Standards Act, RSBC 1996, c 113, the employee’s compensation would have been two weeks pay in lieu of notice.

The BC Supreme Court will not award costs to a party who’s claim reasonably should have been brought in Small Claim Court.

The final award was within the monetary jurisdiction of the Small Claims Court. The BC Supreme Court held that the employee was not entitled to costs of her action, except for her reasonable disbursements. This was because there was no sufficient reason to bring the claim in in the Supreme Court, as even the highest potential award to the employee was still less than $5,000 over the monetary jurisdiction of the Small Claims Court.

Written By: Roan Wallace

Contractors vs Dependent Contractors

This is some text inside of a div block.

Though Not An Employee, A Contractor May Still Be Entitled To Notice

Article
Business

Dibble v. Creative Music Therapy Solutions Inc., 2024 BCSC 1066 (“Dibble”) is a relatively lengthy case dealing with a whole assortment of employment-related issues. Of note, Justice Loo addressed the issues of:

  1. Whether the individual in this case was an employee or contractor;
  2. Whether the individual in this case was entitled to reasonable notice if they were a contractor;
  3. Whether the company had just cause to terminate Ms. Dibble;
  4. Whether a restrictive covenant (in this case, a non-solicit and non-compete) was enforceable; and
  5. The duty to mitigate (i.e. an employee’s obligation to take reasonable steps to find replacement employment) and avoided loss (i.e. the idea that replacement income during the notice period should be deducted from the award).

Contractor vs. Employee

The first two issues may come as a surprise to some employers as an employer may wonder:

  1. Why someone who’s agreed to be a contractor could be an employee; and
  2. Why a contractor would be owed notice for termination.

The answer to this lies mostly in the fact that although the courts will generally try to give effect to the deal reached between two parties, employment or employment-like relationships are treated somewhat differently due to the usual imbalance of power.

As noted in Dibble, there is a history of cases where the courts have recognized that between the extremes of employees (who are entitled to reasonable notice) and independent contractors (who are not), there is an intermediate category of “dependent contractors” who are entitled to notice of their termination even though they are not employees. As noted by Justice Loo at paragraph 44 of Dibble:

As a general proposition, a person on an employer’s payroll and for whom the employer makes conventional statutory deductions from his pay will be considered to be an employee. If his contract does not provide otherwise, that person is entitled to reasonable notice of termination of his employment. An independent contractor, on the other hand, is not an employee. Between those two states lies a construct of the common law: the dependent contractor. The dependent contractor is not on payroll, but in most other ways operates and is treated as an employee. A dependent contractor is entitled to reasonable notice of termination of his contract.

Whether someone will be considered an employee, independent contractor or dependent contractor will depend on numerous factors including the level of exclusivity, degree of control over their work, the duration/permanence of the relationship, the level of integration, and the level of economic dependence. If in doubt, it is always best to consult legal counsel before terminating a contractor’s services especially if the contractor has been providing services to the company for some time.

In Dibble, the plaintiff was able to decline work from the company (one of the indicators of independence) but depended upon the company for over 70% of her annual income.

As the court found that she was a dependent contractor, it naturally flowed that absent a contract containing an enforceable termination clause Ms. Dibble was entitled to reasonable notice of her termination unless there was just cause.

Just Cause

The employer in this case argued that it had just cause to terminate Ms. Dibble for two reasons:

  1. she performed music at one of the company’s client locations; and
  2. she acted “unprofessionally” by refusing to follow a client’s instruction to cover up one of her tattoos (due to it being too hot) and later, when confronted by her supervisor regarding the interaction, she used curse words.

As noted in the decision at paragraph 79, just cause is seen as the “capital punishment” for workplace offences. It is therefore very rare that single incidents will constitute just cause (although it is possible). This is because just cause will only be a successful defence where the employer can show that the conduct of the employee was “fatal” to the employment relationship from the objective view of a reasonable employer in the circumstances.

In this case, Justice Loo found that just cause was not met due to the fact that:

  1. the contractual term prevented the plaintiff from accepting musical therapy work at client locations, but not music entertainment (which is what she was performing); and
  2. the “unprofessional” conduct noted by the defendant did not rise to the level of just cause, even if the defendant’s more extreme version of the events was believed. Rather, a lesser form of discipline such as a reprimand would have been appropriate.  

Reasonable Notice and Mitigation

As a dependent contractor, the plaintiff was entitled to “reasonable notice” or “pay in lieu” of her termination. “Reasonable notice”, when there isn’t a contractual term addressing this, is calculated based on the individual’s length of service, age, role and other factors.

In this case, the plaintiff had provided services to the company for 12 years and was 37 years old. She was therefore awarded a notice period of 12 months.

Although she was awarded a notice period of 12 months, and the wages that she would have earned during that period were calculated as $26,346, the court reduced this award to account for her “mitigation” income.

Mitigation is the principle that someone who suffers a loss must act in a reasonable manner to minimize that loss. In the case of employees or dependent contractors, that is in the form of finding replacement income. In this case, Ms. Dibble was able to earn replacement income through her business during the notice period and was therefore awarded only $12,090 in damages. Ms. Dibble also sought punitive and aggravated damages which were not awarded due to the fact that the company’s conduct did not rise to the required level of “bad faith” conduct.

Restrictive Covenants

The employer in Dibble brought a counterclaim against Ms. Dibble for allegedly breaching a term of their contract that said:

11. The contractor agrees that on the termination of this contract, the contractor will not solicit or accept work with the facility outside of Creative Music Therapy Solutions for a period of 3 years (time period) from the date of termination of this contract.

Our courts have, in previous cases, established that terms that restrict the ability of people to find work will be presumptively unenforceable and interpreted narrowly. In other words, for this type of clause to be enforceable it needs to be reasonable as between the parties and with regard to the public interest.

Whether or not a restrictive covenant will be “reasonable” will depend on the specific circumstances of each case and restrictive covenants such as non-competes and non-solicits are another area where seeking legal advice is recommended. This is because in some cases, a three-year timeframe for a non-compete may be enforceable (for example, in some commercial transactions) but in others (like most employment scenarios) it will not be.

In this case, the clause failed as a result of ambiguity over terms such as “the facility” and “work”, and the geographic scope and duration were both excessive.

Revelations from Court-Ordered Reports

This is some text inside of a div block.

Protecting The Administration of Justice vs Upholding Claims of Confidentiality

Article
Business

In early July 2024, the Toronto-Dominion Bank was ordered to produce an unredacted workplace investigation report, and the related complaints, in a wrongful dismissal claim.

At issue in Jarvis v The Toronto-Dominion Bank, 2024 CanLII 62260 (ON SC) was whether participants interviewed as part of a workplace investigation should be afforded confidentiality when the workplace investigation became relevant in a legal proceeding.

In this decision, the Toronto-Dominion Bank argued they had cause to fire Mr. Jarvis because of the findings of a workplace investigation, and the public interest and privacy required the names of the participants in the workplace investigation to remain confidential. The judge didn’t agree and held that:

  • Confidential information from an employee connected to their employment is not protected from disclosure in a court proceeding because the public interest in the proper administration of justice outweighs the public interest in upholding claims of confidentiality and privilege.
  • Privacy law is not a bar to disclosure in a court proceeding because such disclosure is permitted by the applicable law.

In light of this decision, and a May 2024 decision in a BC medical negligence claim, Homan v Nemanishen, 2024 BCSC 735 (CanLII), that confirms privilege is waived when documents are referenced in pleadings, here are some key takeaways for employers and workplace investigators:

  1. Don’t promise confidentiality if the facts of the termination are likely to end in front of a judge or arbitrator

    While it doesn’t happen often, employers should be prepared to have their workplace investigation reports seen by a judge or arbitrator if they choose to rely on the report when terminating an employee.  Since the Court in Jarvis says that workplace investigation reports aren’t to be treated differently from the employment contract, or other relevant employment relationship documents, it is important to inform workplace investigation participants that if the subject matter of the investigation leads to legal proceeding there is the possibility that their information will not remain confidential.  

    Similarly, the court in Homan confirms that relying on solicitor client privilege because a lawyer has been engaged as the workplace investigator will be difficult since choosing to rely on the workplace investigation report in legal proceedings will be considered a waiver of solicitor client privilege.  
  2. Privacy law is important however disclosure in court proceedings is more important

    In Jarvis, the employer sought to protect the names of the participants through arguments about the application of the Personal Information Protection and Electronic Documents Act, however the court was unpersuaded since the act allows disclosure to the court of personal information without the knowledge or consent of the employe in order to comply with rules of court relating to the production of records. While employers should always be aware of the information they are collecting about their employees and under what circumstances privacy law allows them to share it, it is important to remember that employers aren’t allowed to use privacy law as a shield when there are legal proceedings.
  3. Employers have a choice about how they terminate an employee

    In both Jarvis and Homan, a choice was made to rely on documents that contained confidential and privileged information to justify actions taken.  That choice meant the contents of the documents needed to be produced to the court so the could could determine if the actions were justified. An employer can avoid this choice by weighing the desire to terminate for cause with the costs of a wrongful dismissal litigation, including the the costs of the workplace investigation report being made public.

    Workplace investigations seldom contain “gotcha” findings of fact so employers should consider other options like progressive discipline when conduct breaches harassment and discrimination policies.

    If you are an employer who needs a workplace investigation or is considering terminating an employee because of the findings of a workplace investigation consider contacting a trust legal advisor, like the lawyers at KSW, to help evaluate the legal risks of the options available to you.