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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.

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Artificial Intelligence in the Workplace

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Artificial Intelligence in the Workplace: Best Practices for Employers

Article
Business
Workplace Policies & Human Rights

Generative Artificial Intelligence (Generative AI) has revolutionized the way we perceive AI's capabilities. By leveraging large quantities of data and advanced algorithms, Generative AI, such as OpenAI's ChatGPT, has gained significant attention for its ability to create human-like content in various forms such as text, images, audio, and synthetic data. OpenAI's ChatGPT is a prime example of Generative AI, a highly advanced Chatbot introduced to the public in November 2022. Its exceptional ability to mimic human speech has significantly influenced perceptions of Generative AI and its potential applications. With its rapid adoption and diverse applications, employers face crucial decisions regarding the integration of Generative AI into their workplaces. This article explores the key issues employers need to consider when implementing AI and in the workplace.

The Paradigm Shift - Replacing Human Effort

Generative AI offers a tantalizing prospect for employers by providing a cost-effective and efficient alternative to certain job tasks traditionally performed by employees, vendors, and consultants. This technology offers the promise of enhanced organizational productivity, reducing both time and costs while maintaining or surpassing quality standards. However, as employers contemplate the replacement of human workers with AI systems, they must navigate a myriad of legal implications, especially in relation to job security and working conditions.

Depending on the industry and specific job roles, Generative AI may be employed to partially or entirely replace employees' responsibilities. In such cases, legal implications arise concerning job security and working conditions, which differ for unionized and non-unionized employees.

Non-Unionized Employees - Treading Carefully

If an employer decides to entirely replace employees with Generative AI, standard considerations related to termination will apply.

Replaced employees must receive their appropriate statutory, contractual, or common law entitlements. It is crucial for employers to make termination decisions in good faith, avoiding arbitrariness or discrimination. Particular care should be taken to prevent age-based discrimination, as assumptions about older employees' ability to adapt to Generative AI could be detrimental.

Employers must also be cautious of potential claims of constructive dismissal if the adoption of Generative AI significantly alters or reduces an employee's job duties. Proactively addressing this risk involves including explicit language in employment contracts that reserves the right to change duties and responsibilities, while limiting the magnitude of such changes through measures like providing advance notice or obtaining employee consent.

Additionally, the inclusion of provisions that maintain the contract's applicability despite changes to position, responsibilities, salary, or benefits can help avoid challenges based on the "changed substratum" doctrine, which invalidates contractual provisions when an employee's job substantially changes.

Unionized Employees – Navigating Collective Agreements

In the case of unionized employees, the doctrine of constructive dismissal does not typically apply. Consequently, unionized employers may exercise their management rights to modify bargaining unit employees' duties, subject to the language of the collective agreement and relevant statutes. However, employers may face restrictions when it comes to using non-bargaining unit employees or external personnel specially trained in Generative AI to perform tasks traditionally handled by bargaining unit employees. Such actions may be deemed outsourcing or contracting out, prohibited by collective bargaining agreements. Additionally, collective agreements often contain provisions requiring employers to consult with unions and provide notice before implementing technological changes that affect working conditions or employment security. Similar obligations may be imposed by labor statutes in some jurisdictions, even without collective agreement language. Compliance with these requirements depends on factors such as the definition of technological change, the impact of Generative AI on individual employees' conditions and security, and the employer's motivations for implementing the technology.

Data Privacy, Intellectual Property, and Confidentiality Considerations

While still in its early stages, Generative AI has already triggered privacy concerns, leading to investigations by privacy commissioners. Employers must tread carefully to safeguard confidential and sensitive information from inadvertent disclosures through Generative AI outputs. Robust privacy impact assessments and algorithmic impact assessments should be undertaken to address these concerns effectively.

On the other side of the spectrum, employers must be cautious not to infringe upon individuals' privacy rights or intellectual property when utilizing Generative AI-generated content. Collaborating with Generative AI developers and incorporating privacy-compliant practices is crucial to mitigate these risks.

Navigating Humam Rights and Biased Outputs

Generative AI's outputs may unwittingly perpetuate biases present in the training data, leading to potentially discriminatory outcomes. Employers must be vigilant, especially when using Generative AI for customer service, marketing, or employee performance evaluations. Employers can minimize liability by reviewing public-facing outputs and avoiding high-stakes decision-making tasks unless the AI's decision-making process is transparent and defensible.

Workplace Investigations - Guarding Against Deepfake Threats

Generative AI's capacity to create deepfake content raises concerns for workplace investigators. Employers must equip their investigators with training to detect and mitigate potential deepfake misuse during workplace investigations.

Cybersecurity Risks

Generative AI can be exploited by threat actors, leading to cybersecurity-related risks for organizations. Phishing attacks, malware creation, and social engineering attacks using deepfake technology are significant concerns. Employers should implement policies, protocols, and employee training programs to verify identities, enhance cybersecurity controls, and mitigate these risks.

Conclusion

Generative AI presents a new frontier for employers, revolutionizing workplaces while introducing complex challenges. By proactively addressing data privacy, intellectual property, confidentiality, human rights, workplace investigations, and cybersecurity concerns, employers can harness the potential of Generative AI while mitigating associated risks. Staying abreast of evolving regulations, adopting best practices, and prioritizing transparency and security will enable employers to navigate this transformative technology with confidence.

Note to Readers: This is not legal advice. If you are looking for legal advice in relation to a particular matter please contact one of our group members. We communicate all these updates to our clients and readers on our Employer Resources Portal and through monthly Newsletters.

Just Cause Updates

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The Law of Just Cause in British Columbia: Recent Updates

Article
Business
Terminations

A frequent question that we deal with from employers in BC is "what is just cause to terminate an employee?" On a basic level, just cause means that the employer has a valid and serious reason to end the employment relationship without notice or pay in lieu of notice.

In this update, we will review five recent BC employment law decisions where the employers were successful in defending against claims on the basis of just cause. Specifically, the cases involved employees who were terminated for just cause as a result of:

1. False business expense claims, dishonesty and misconduct;

2. Secret recordings of workplace conversations; and

3. Time theft & side hustle during business hours.

Termination for False Business Expenses

In Mechalchuk v Galaxy Motors (1990) Ltd., 2023 BCSC 635, the employee was the president of a car dealership who was terminated as a result of submitting false business expense claims and then being dishonest when confronted about those expenses.

In this case, the amount of the expenses falsely claimed was low (approximately $250) but the court held that there was just cause as a result of:

1. The fact that the employee was the most senior employee of the company, and held a position of trust; and

2. The fact that the employee hid his dishonesty from the company and failed to come clean when confronted about the expenses by the CFO.

Another example of a very recent decision issued on June 16, 2023, dealing with termination for just cause and misconduct is Chura v. Batten Industries Inc., 2023 BCSC 1040.

Here, the employee was fired after engaging in various forms of dishonest conduct, such as making false expense claims, benefiting personally from trading company products, and misusing corporate accounts. The most significant allegation in this case was that the employee entered into a contract with a website company, without disclosing a conflict of interest, resulting in a kickback to her husband.

The Court found the employer had just cause to dismiss her, dismissed her claim for damages against the employer, and held:

Taken together, however, the various forms of misconduct in which Ms. Chura engaged leave no doubt that she engaged in a long-standing pattern of dishonest and deceptive behaviour that meant that the employment relationship could no longer viably exist. Simply put, it would be impossible for Mr. Roberts to ever again trust Ms. Chura.
[319]    For these reasons, I dismiss Ms. Chura’s action for wrongful dismissal in its entirety. As a result, I need not consider her damage claims.

Secret Workplace Recordings = Just Cause

Shalagin v. Mercer Celgar Limited Partnership, 2022 BCSC 112 was a case involving an employee who worked for the company for over 10 years and was a certified professional accountant (CPA) at the time of his dismissal.

Although the employer initially dismissed him without cause, it asserted after-acquired cause after discovering that the employee had been secretly recording conversations with his colleagues. In this case, the fact that there were over 135 recordings made by this employee over the course of several years likely played a significant role in the court's decision. Similarly, the court's decision likely hinged in part on the fact that: 1) the employee was a CPA, 2) acted contrary to the Employer's code of conduct, and 3) recorded private conversations with his coworkers despite subsequently acknowledging that he knew that this would make his coworkers uncomfortable.

The takeaway, in other words, is that secret recordings by an employee, even discovered after the fact, can be just cause for dismissal. However, whether this will in fact be successful will depend on multiple factors including the volume, contents, and purpose of the recordings.

Time Theft = Just Cause AND Compensation to the Employer?

In Besse v. Reach CPA Inc, 2023 BCCRT 27, the Civil Resolution Tribunal found that the employee committed time theft and, notably, ordered that the employee pay damages to their employer for that time theft.

In our view, this is likely an outlier case, as this is one of the first instances that we are aware of in which an employer was awarded damages for time theft (vs. simply being found to have just cause for the termination). Furthermore, as a Civil Resolution Tribunal decision (vs. a BC Supreme Court decision), this decision will not be binding on any of our courts, who may choose to simply ignore the decision.

In this case, factors that likely assisted the employer significantly in the outcome were:

1. The employee signed an employment agreement allowing her to work remotely; and

2. The employer in that case was able to prove the exact number of hours that the employee did and did not work, based on a time-tracking software that it had installed (Note: there are important legal and privacy considerations that should be discussed with us prior to implementing such software).

Moonlighting During Business Hours

In the recent wrongful dismissal case Dove v Destiny Media Technologies Inc., 2023 BCSC 1032, the boundaries of employees engaging in "side-hustles" during work hours came under scrutiny. The case involved an employee, Ms. Dove, who was terminated for engaging in moonlighting activities during business hours.

Ms. Dove had a diverse work history in the food industry before joining Destiny Software Productions ("Destiny"), a technology company. During her employment, the she became involved in unpaid work for a café and general store owned by Destiny's CEO and another partner. Conflicting representations emerged regarding her status at the business, but she was referred to as an "owner" in various correspondences. Ms. Dove increasingly devoted time during work hours to tasks related to the side business, leading to concerns about her absenteeism and inability to fulfill important work obligations. She was eventually dismissed from her position at Destiny.

The court ruled that Destiny had just cause for termination based on a combination of factors, including the volume of evidence showing significant side business work during company hours without approval, the broad reach of the side business work, its impact on Ms. Dove's ability to fulfill her duties at Destiny, and her neglect of a requested business plan she failed to deliver.

The court emphasized that employees have a duty to provide full-time service to their employer, unless otherwise agreed upon. The ruling concluded that Destiny had just cause for termination and would not award Ms. Dove wrongful dismissal damages.

In Summary:

This case highlighted the importance of employees' commitment to their employers during work hours and the potential consequences of unauthorized moonlighting. The court decision reaffirmed employers' rights to dismiss employees who engage in outside business activities without proper permission. It serves as a reminder for both employers and employees to understand and adhere to their contractual obligations and ethical responsibilities within the workplace.

Conclusion

Despite these cases, it is essential to remember that just cause remains difficult to establish and depends on the facts and circumstances of each case.

Therefore, we highly recommend seeking legal advice before deciding to terminate an employee for just cause, as we will be more likely to be able to assist in assessing and building a strong case for a just cause termination, if appropriate.

Insights

  1. Dishonesty can be grounds for a just cause termination, especially for senior employees. Even an isolated incident of dishonesty can amount to just cause if it is sufficiently serious and damages the employment relationship beyond repair, especially if the employee fails to show remorse.
  2. Secret recordings of an employee's coworkers (at least, without very good reason) can support a finding of just cause.
  3. Time theft can not only form the basis for just cause, but, in extreme cases, it can even form the basis for a successful counterclaim against the employee. Engaging in unauthorized business activities during work hours can lead to dismissal.

Note to Readers: This is not legal advice. If you are looking for legal advice in relation to a particular matter please contact one of our group members. We communicate all these updates to our clients and readers on our Employer Resources Portal and through monthly Newsletters.

Tort of Harassment

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Forging New Paths: Alberta's Landmark Ruling Introduces the Tort of Harassment

Article
Business
Human Rights & Discrimination

In B.C., where necessary factors exist, one can generally seek remedies for harassment with the B.C. Human Rights Tribunal or WorkSafeBC. However, there is no common law tort of harassment in either British Columbia or Canada (see for example, Stein v. Waddell, 2020 BCSC 253 at paras. 30–35; Gaucher v. British Columbia Institute of Technology, 2021 BCSC 289; and Merrifield v. Canada (Attorney General), 2019 ONCA 205). This long-held position of the Canadian courts was recently changed when Justice Colin Feasby of the Alberta Court of King’s Bench established a new tort of harassment in that province in Alberta Health Services v Johnston, 2023 ABKB 209 (“Johnston”).

Johnston Background

In Johnston, Mr. Johnston who was a candidate for mayor of Calgary in 2021 spewed misinformation, conspiracy theories, and hate, targeting Alberta Health Services (“AHS”) and Sarah Nunn, who was employed by AHS as a public health inspector. Mr. Johnson’s engaged in persistent harassment of those who acted in the course of their duties enforcing public health orders during the COVID-19 pandemic. Mr. Johnston identified Ms. Nunn by name and shared pictures of her and her family that he obtained from her publicly accessible social media accounts, making derogatory comments about them.

Tort of Harassment

Having considered the facts and relevant authorities, Justice Feasby established the tort of harassment as follows:

                [107] Based on the foregoing, I define the tort of harassment as follows.  A defendant has committed the tort of harassment where he has:

                    (1) engaged in repeated communications, threats, insults, stalking, or other harassing behaviour in    person or through or other means;

                    (2) that he knew or ought to have known was unwelcome;

                    (3) which impugn the dignity of the plaintiff, would cause a reasonable person to fear for her safety    or the safety of her loved ones, or could foreseeably                                 cause emotional distress; and

                    (4) caused harm.

The Court in Johnston found Mr. Johnston to have met the test for the tort of harassment, and awarded $100,000 in general damages against him for the breach of the tort, as well as general damages for defamation in the amount of $300,000 and aggravated damages of $250,000.

Takeaway

While it remains to be seen how the B.C. courts will respond to this new tort of harassment, employers should be aware of this new tort and the potential risk it presents. Where employees engage in harassment, employers could be held vicariously liable. In view of this newly established tort, in addition to the statutorily imposed legal obligations to discourage and prohibit harassing conduct, employers should consider policies to control harassment in the workplace.

Note to Readers: This is not legal advice. If you are looking for legal advice in relation to a particular matter please contact one of our group members. We communicate all these updates to our clients and readers on our Employer Resources Portal and through monthly Newsletters.

Employers need to protect themselves

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Asking the Fox to Guard the Chicken Coop - Employers Beware

Article
Business

It is a rare occurrence that employers sue their current or former employees.   We see it more often in cases where employers are suing to enforce or seek damages because an employee has stolen confidential information or has violated a non solicitation or non competition clause:  see for example Quick Pass Mater Tutorial School Ltd v Zhao 2018 BCSC 683; 2022 BCSC 846.

So I read with interest a recent action brought by an employer against its long serving Payroll Supervisor for $1,923,290 that the supervisor had stolen from 2015 to 2021 (yes you read that right).

B.A. Blacktop Ltd. and Eurovia BC Inc. v Fazio, 2023 BCSC 892

In this case the employee F resigned on August 5th 2021.  Shortly after her departure the employer commenced an internal investigation that led to the discovery that F had been using her knowledge of their computerized system to systematically defraud B A Blacktop of almost $2 million.  It is not clear what caused the employer to conduct the review.

The employer filed a NOCC starting an action against F and immediately got a Mareva injunction freezing F’s assets.  F was self represented and filed a Response to the NOCC but basically ignored the substance of the action for fraud and instead made allegations of a toxic workplace and various forms of mistreatment by the employer.

The court had little trouble in entering judgment against F.  The employer led evidence that included a detailed forensic audit report that identified 885 unauthorized payments in excess of $1.9 million that were deposited into 19 separate bank accounts that she held in 4 separate financial institutions.

The forensic audit report identified the modus operandi of the fraud:

      Briefly, Mr. Williams identified Ms. Fazio's modus operandi as follows:

  1. First, she would secretly select current and past employees of the plaintiffs at random and change the payroll direct deposit bank account information from the employees’ bank accounts to bank accounts owned and controlled by her;
  2. Second, she would create fictitious payment proposals that induced the plaintiffs’ computer payroll system to pay unauthorized employee wages that were not owing directly to her own bank accounts;
  3. Third, she would create payment instruction text files based on the payment proposals and upload them to the plaintiffs’ online banking platform, which automatically instructed the plaintiffs’ banks to make the unauthorized payments to one of her 19 bank accounts; and
  4. Finally, she would in many cases reverse the bank account information in the employee master file back to the original and correct bank account for that employee after the unauthorized payment had been made.

The court awarded judgment for $1,923,820.74, interest, $100,000 punitive damages and special cost. The latter two awards are rarely made and only in the most egregious circumstances.

So the good news for the employer is that it obtained judgment for the stolen money.  The bad news for the employer is that it appears from the judgment that it might have real trouble collecting:

During submissions, Ms. Fazio effectively admitted the fraud. She says she developed a gambling addiction and gambled all of the money away to an online gambling portal. She says she is now without assets or income and in poor health.

What Should Employers Do?

Employers face numerous financial challenges in this post COVID world.  Everything from cyber security attacks and ransom demands to spiraling costs of doing business.

So just as employers take steps to try to avoid or diminish the damage of cyber attacks and ransom demands or protect its petty cash, so too should employers monitor the financial matters and not simply trust the employees who hold important positions of trust especially those responsible for the financial aspects of the business. Here are some suggestions.

  1. First and foremost, employers need to be careful when hiring such senior employees.  This is now more difficult given the employee shortage.  BUT cutting corners on the hiring process can be very costly:  Check out our previous article on the Art of Hiring.  Background checks etc will sometimes reveal problems.
  2. Consider the methods used by F as noted above that went undetected.  Was there any hint of impropriety?  E.g. did she fly to Vegas every weekend?  Did she show an unusually high standard of living?  Were there rumours?
  3. Have your accountants and auditors provide a security protocol that might detect the problem earlier.  And don’t feel bad about checking someone who you feel is a trusted employee—if they are a trusted employee they will understand the need for financial security measures.
  4. Implement regular reviews of employees’ computers.  It is important to ensure that you have the right to access employees’ computers and cell phones to ensure their privacy rights are protected but so are your business interest.

Mike Weiler & Chris Drinovz

May 31, 2023

Note to Readers: This is not legal advice. If you are looking for legal advice in relation to a particular matter please contact one of our group members. We communicate all these updates to our clients and readers on our Employer Resources Portal and through monthly Newsletters.

BC's Pay Transparency Act

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Navigating Change: Insights into BC's Pay Transparency Act for Employers

Article
Business
Human Rights & Discrimination

On March 7, 2023, the BC government introduced Bill 13, the Pay Transparency Act. It came into effect on May 11, 2023. The purpose of the Act is to identify and eliminate wage gaps persisting for women and other equity groups. Section 2 of the Act comes into effect on November 1, 2023, requiring all employers in B.C. to include the expected pay or the expected pay range for a specific job opportunity that they advertise publicly.

Key Features

We will review each section below, but want to start with a quick overview of the key features of note:

  • Requires employers to specify the expected “salary or wage” in all advertised job postings – effective November 1, 2023
  • Prohibits employers from asking job applicants how much they previously or currently make
  • Prohibits retaliation against employees for: asking about their pay; disclosing information about their pay to other employees; or asking employers to comply
  • Require employers to prepare annual pay transparency reports. Employers with publicly accessible websites must post their reports online.
  • Reports must include data re: Indigenous women, women of colour, immigrant women, women with disabilities and non-binary people
  • Reporting obligations phased in between November 2023 and November 2026 depending on size of employer - the largest private employers (over 1000 employees) will start in November 2024, over 300 employees in 2025 and over 50 employees in 2026
  • Exception for employers with less than 50 employees
  • Bill 13 does not create recourse mechanisms where gender pay gaps are identified --> individual’s primary recourse is filing wage discrimination complaint with Human Rights Tribunal

The BC province also provided additional guidance on wage or salary information to be posted, in October, 2023, summarized below:

  • Employers are not obligated to include bonus pay, overtime pay, tips, or benefits on job postings, although they can choose to do so voluntarily.
  • Job postings must include the expected wage or salary, which can be presented as a single figure (e.g., "$20 per hour") or as a range (e.g., "$20-$30 per hour" or "$40,000 - $60,000 per year").
  • When presenting a wage or salary range, it must not have unspecified minimum or maximum amounts (e.g., "up to $30 per hour" is not acceptable, but "20-$30 per hour" is).
  • There is currently no specified limit on how broad or narrow the wage or salary range can be, and this is at the discretion of the employer.
  • The wage or salary information should represent the employer's reasonable expectation of pay for the job at the time of posting.
  • Applicants can request a higher wage or salary than advertised, and employers can agree to pay more than the amount advertised.
  • The requirement applies not only to jobs directly posted by employers but also to positions posted by third parties on various job search websites, job boards, and other recruitment platforms.
  • This requirement extends to jobs advertised in other jurisdictions if they are open to B.C. residents or may be filled by someone living in B.C., regardless of whether the work is in-person or remote.
  • General "help wanted" posters and broad recruitment campaigns that do not specify job opportunities are exempt from this requirement.
  • If a job is not publicly posted, there is no obligation to include pay information.

Review of the Act

Pay History

The Act prohibits employers from asking job applicants how much they previously or currently make, unless the pay history information is publicly accessible.

Non-Retaliation Provisions

The Act prohibits retaliation against employees for

  • asking about their pay;
  • disclosing information about their pay to other employees; or
  • asking employers to comply.

Job Postings

The Act requires employers to specify the expected “salary or wage” in all advertised job postings, effective November 1, 2023.

Pay Transparency Reports

The Act requires employers with 50 or more employees to prepare annual pay transparency reports by November 1st of each year. These reports must include data on pay gaps for certain groups including:

  • Indigenous women;
  • women of colour;
  • immigrant women;
  • women with disabilities; and
  • non-binary people.

Employers with publicly accessible websites must post their reports online. Employers who do not have publicly accessible websites must make a copy of the report available to their employees in a conspicuous place in each of their workplaces and make a copy available to any member of the public who requests one.

These obligations will be phased in between November 2023 and November 2026, depending on the size of the employer:

  • As of November 1, 2023: B.C. government and the six largest Crown corporations, which are BC Hydro, BC Housing, BC Lottery Corp., BC Transit, ICBC, and Work Safe BC
  • As of November 1, 2024: all employers with 1,000 employees or more
  • As of November 1, 2025: all employers with 300 employees or more
  • As of November 1, 2026: all employers with 50 employees or more

Summary of other details available in October 2023:

  • Employers will need to create reports highlighting pay disparities for specific demographic groups
  • An online reporting tool is now provided to assist employers in generating these reports: https://www2.gov.bc.ca/gov/content/gender-equity/preparing-pay-transparency-reports
  • The exact content requirements for the reports were developed through collaboration with the BC Public Service Agency and the six largest Crown corporations - see mock report: https://www2.gov.bc.ca/assets/gov/british-columbians-our-governments/services-policies-for-government/gender-equity/pay-transparency-report-mockup.pdf
  • Employees must have the option to voluntarily update this information annually
  • Employers will use the collected data to generate a Pay Transparency Report with the assistance of a tool introduced by the Ministry
  • The Ministry will involve employer groups and payroll associations in the tool's development and share it with employers
  • The pay gap will be reported as the difference in hourly wages, overtime, and bonuses between men, women, and non-binary individuals
  • Employers may also need to report the percentage of each gender within quartiles, categorizing them as the top 25% of earners, high 25%, mid 25%, and lowest 25%
  • Detailed wage data in terms of dollar amounts will not be part of the reporting requirements.

Recourse Mechanisms

The Act does not create recourse mechanisms where gender pay gaps are identified. An individual’s primary recourse is filing a wage discrimination complaint at the BC Human Rights Tribunal.

Note to Readers: This is not legal advice. If you are looking for legal advice in relation to a particular matter please contact one of our group members. We communicate all these updates to our clients and readers on our Employer Resources Portal and through monthly Newsletters.

If you are an employer or an employee seeking advice on how the Act affects your employment relationship, the Employment and Labour Group at KSW Lawyers would be pleased to speak with you. Please contact us here or by phone at 604-507-6192.

Are Waivers Really Necessary?

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Are Waivers Really Necessary?

Article
Business

Waiver and release agreements are essential for businesses as it shields them from legal liabilities. These agreements, signed by individuals participating in activities or using services, waive their right to hold the business accountable for any resulting injuries or losses. Having such agreements drafted and reviewed by a lawyer ensures the agreement is customized, clear, and compliant with the province's laws, minimizing the risk of disputes. This professional review enhances enforceability, safeguards the business, and mitigates potential risks, reducing the chance of costly litigation and reputational harm.

It's coming by 2025

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Are you aware of the new public ownership registry?

Article
Business

Private companies in BC are currently required to maintain “transparency registers” at their records office, which are only accessible to directors and certain government officials like the police and tax authorities in the hopes of fighting money laundering and tax evasion. They require companies to disclose significant individuals who, directly or indirectly, have substantial shareholdings in a BC company (25% or more) or who have the ability to exercise control or significant influence over a BC company.

The BC government recently approved the implementation of a public transparency register that will be introduced by 2025. Similar to Land Owner Transparency Register (LOTR) implemented last year, the new company transparency register will be searchable by the public.

Failure to comply can expose companies to regulatory offences and fines of up to $50,000.

To avoid these fines, companies and their directors can review the new corporate transparency rules pre-emptively to ensure they are prepared to comply with the new reporting requirements once the public transparency register is introduced in 2025.

If you have any questions about the new rules or if you need assistance in reviewing or preparing your company’s transparency register, reach out to Aman Bindra at abindra@kswlawyers.ca or 604-591-7321 today.

How Do Builders Liens Work?

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How Do Builders Liens Work?

Article
Business

A builder’s lien is a legal claim made by a contractor, subcontractor or supplier against a property owner for unpaid work or materials used in a construction project. Even if there is no direct contract with the property owner, a lien can still be claimed. An owner’s property may even be liened without the owner knowing about it.

However, as a property owner, you can protect yourself by:

  • Having a written contract: property owners should have written contracts with their contractors and subcontractors that clearly outline the scope of the work, the timeline for completion of various steps in the project, and payment terms.

  • Ensuring timely payments are made: property owners should understand the payment provisions of the contract and ensure that contractors, subcontractors, and suppliers are paid on time and according to the provisions of the contract.

  • Keeping accurate records: property owners should keep detailed records of all payments made to their contractors, subcontractors, and suppliers. Details should include the party the payment was made to, the date the payment was made, and an itemized list of what the payment was made for.

The law governing builder’s liens in British Columbia is complex so if you have concerns regarding your construction project, reach out today.

"Family Status" Discrimination Test

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Gibraltar Mines: "Family Status" Discrimination Test Reviewed

Article
Business
Human Rights & Discrimination

The British Columbia Court of Appeal just issued its important decision of a 5 member panel reviewing the test for family status discrimination under the Human Rights Code (“Code”): British Columbia (Human Rights Tribunal) v. Gibraltar Mines Ltd., 2023 BCCA 168 (“Gibraltar”). This decision came out on Friday, April 21, 2023, and represents a loss for employers but also a win.

Introduction - Family Status Discrimination

One of the protected grounds of discrimination under the Code is “family status”. Family status discrimination continues to be an area in which the law differs across Canada. In British Columbia, the test for family status discrimination has been more stringent than in other parts of Canada for the past 15 years, defined by the BC Court of Appeal decision in HAS v Campbell River and North Island Transition Society, 2004 BCCA 260 (“Campbell River”).  In that case the court held that the test for determining if there is prima facie family status discrimination is as follows:

Whether particular conduct does or does not amount to prima facie discrimination on the basis of family status will depend on the circumstances of each case. In the usual case where there is no bad faith on the part of the employer and no governing provision in the applicable collective agreement or employment contract, it seems to me that a prima facie case of discrimination is made out when a change in a term or condition of employment imposed by an employer results in a serious interference with a substantial parental or other family duty or obligation of the employee. I think that in the vast majority of situations in which there is a conflict between a work requirement and a family obligation it would be difficult to make out a prima facie case.

Since then, many have tried to challenge this more stringent test to match the rest of Canada. Now the test was challenged again in this judicial review.

Gibraltar Mines Ltd. v. Harvey

Lisa Harvey and her husband were both employees of Gibraltar Mines, who usually worked the same 12-hour shifts but they sometimes worked different night shifts. Lisa became pregnant and after the birth she sought a workplace accommodation to change her and her spouse’s work schedules to facilitate childcare arrangements. After she and Gibraltar were unable to agree on an accommodation, she filed a Human Rights Complaint.

Gibraltar brought an Application to Dismiss the Complaint by way of a summary application under section 27 of the Code. The Tribunal is empowered to dismiss the complaint at an early stage if for example it determines there is no reasonable prospect of success.

On an application by Gibraltar to dismiss the complaint, the Tribunal dismissed the claim of sex and marital status discrimination. However, it decided to not dismiss the family status complaint, determining it had to go to a full hearing at a later date. As part of its analysis, the Tribunal held that the Campbell River legal test did NOT require that there be a change in a term or condition of employment. The Tribunal could not make findings of fact at this stage, so it held that a hearing was necessary to decide whether Gibraltar’s decision not to modify the work schedules of Lisa and her husband “created a serious interference with a substantial parental obligation”, resulting in discrimination based on family status under the Code.

Gibraltar (the employer) filed a judicial review in the BC Supreme Court, challenging the initial Tribunal decision to not dismiss the complaint, arguing that the Campbell River test required as a precondition a change in terms and conditions of employment (see quote above in the Introduction). The Judicial Review Judge agreed with Gibraltar, and overturned the Tribunal’s decision, holding that the Tribunal was bound by Campbell River to dismiss the complaint, as it had not arisen from a change of terms and conditions of employment in this case.

The employees were not interested in pursuing further appeals, but with the opportunity to challenge the more stringent BC test, the Human Rights Tribunal brought an appeal of this judicial review decision. The Tribunal argued first that the change of terms and conditions of employment was not a prerequisite to bringing a family status discrimination complaint. It also argued that the second part of the Campbell River test (“materiality condition”) was contrary to the Code.

BC Court of Appeal

Because one of its landmark decisions was in issue, the BC Court of Appeal constituted a 5-member panel signaling that it was going to reinterpret or overrule the Campbell River earlier decision.

Does the Tribunal Have Standing to Bring This Appeal?

First the Appeal Court had to decide whether the Tribunal could bring an appeal involving one of its decisions. Gibraltar argued that to allow the Tribunal to do so would call into question its impartiality.

The court held that the Tribunal, as a party to the judicial review, had a statutory right to appeal and further the Tribunal was entitled to make submissions on the question of law namely whether a finding of prima facie family status discrimination requires a change in a term or condition of employment. The Tribunal was also allowed to argue that the second part of the Campbell River test should be overturned. The notion that a tribunal can appeal its own decision has evolved over time reflecting what the court described as “the evolution in thinking” and courts now say such standing and scope of participation is a matter of discretion. The court must “balance the need for fully informed adjudication against the importance of maintaining tribunal impartiality.” [para 35]

Interpretation - Change in a Term or Condition of Employment

Secondly the BCCA held that on a proper interpretation of Campbell River a complainant does not have to prove there has been a change in a term or condition of employment.  The court justified its decision on the basis that in Campbell River the employer in fact did alter the employee’s shift schedule “so it was not necessary for the Court to consider whether prima facie discrimination regarding a term or condition of employment could arise from a change in circumstances of the employee, or a change in the employee’s family status, and the Court did not do so. That question was not a live issue before the Court in Campbell River, as it is in this appeal.” [para 63].

The court held that the proper test is:

I conclude that s. 13(1)(b) applies whenever a term or condition results in a serious interference with a substantial parental or other family duty or obligation of an employee, whether as a consequence of a change in the term of employment or a change in the employee’s circumstances. [para 77 emphasis added]

Interference With a Substantial Parental or Other Family Duty or Obligation

Thirdly the Court upheld what it described as the “substantive element” of Campbell River namely the “materiality test”.  It held:

The requirement in Campbell River that to establish discrimination arising from a conflict between work requirements and family obligations, the parental or family duty be substantial or out of the ordinary is necessary to give meaning to the protected characteristic of family status. Without a materiality standard, any family obligation that is impacted by a person’s employment conditions could support a finding of prima facie discrimination, which would require justification by the employer. Such an interpretation would trivialize the important value that is reflected by the inclusion of family status in s. 13(1)(b) of the Code. [para 92]
I conclude that for purposes of assessing conflicts between work requirements and family obligations, prima facie discrimination is made out when a term or condition of employment results in a serious interference with a substantial parental or other family duty or obligation. To put this test in terms of Moore, to establish prima facie adverse impact discrimination as a result of a conflict between work requirements and family obligations, an applicant must establish that their family status includes a substantial parental or other duty or obligation, that they have suffered a serious adverse impact arising from a term or condition of e1mployment, and that their family status was a factor in the adverse impact. [para 101]

The court allowed the appeal, and the matter was sent back to the BC Supreme Court level for the judge to decide the question of materiality (the judge might decide to refer it back to the Tribunal for a hearing as it had found).

What Does This Mean for my Business

There is no doubt that the elimination of the “changed working conditions and terms” test is “bad news” for employers.  That threshold test was clear and easy to understand and apply and would eliminate any complaints that did not result from such a change.

However the “good news” is that the Court of Appeal has strongly affirmed the “materiality” test for any claim of family status discrimination.  Absent a legislative change, that is a high bar for a complainant to hurdle.  But unfortunately, each case will be decided on its own facts so there is far less certainty in the outcome.  As witnessed here in the Gibraltar case the Tribunal held that it could not decide the application of the materiality test and would require a formal hearing.

The other concern employers will have with this expanded scope of family status discrimination complaints is that the Tribunal is so backed up in processing complaints that employers may not even know a complaint has been filed and accepted by the Tribunal for a year or longer.  That will make it more difficult for employers to defend such complaints.  Such delays will also impact on remedies.

Finally the action of the Tribunal in aggressively attacking the Campbell River tests (#1 and #2) might raise concerns of the perception of impartiality in any particular case.  If the Tribunal expands the scope of what is included in the materiality test, then the business community will have reason to be concerned.

It remains to be seen if the comments of the court in Campbell River regarding the likely success of such family status discrimination complaints will continue to apply:

“I think that in the vast majority of situations in which there is a conflict between a work requirement and a family obligation it would be difficult to make out a prima facie case.”

Mike Weiler & Chris Drinovz

April 24, 2023

Note to Readers: This is not legal advice. If you are looking for legal advice in relation to a particular matter please contact one of our group members. We communicate all these updates to our clients and readers on our Employer Resources Portal and through monthly Newsletters.