Written by Michael J Weiler A number of years ago, when I was trying to learn to ski, I recall one exasperated teacher continuing to say, “Mike, you have to look 20 feet ahead of you – not right at your feet”. The same principle applies to planning your business. The successful entrepreneurs are those who can anticipate change and take action now to take advantage of changes in the future.Those who have read Thomas Friedman’s outstanding book, “Thank You for Being Late: An Optimist’s Guide to Thriving in the Age of Accelerations”, will appreciate the “tectonic movements that are reshaping the world today”.The BC Business Council has just released a paper prepared by David Williams, Vice President of Policy, that takes a close look at the potential impact of automation on the BC Labour Market. With the permission of the BCBC, we are pleased to offer this informative paper along with a useful summary to our readers. We hope it will allow you to look 20 feet ahead of your skis.Set out below is a quick summary highlighting the points addressed in the Paper[1]:

• The changing role of labour and the ever-expanding range of tasks in producing goods and services in the BC labour market.
• The significant percentage of BC jobs with a high potential to be automated and the fact that BC has, compared to the rest of Canada, a slightly greater share of highly-automatable occupations and (a) how that will affect costs of adoption; and (b) the potential effect of automation on low-income jobs.
• The fact that more than half of B.C. jobs are in sectors that are highly automatable, on average.
• The fact that: about 90% of B.C. jobs are in occupations where at least 10% of tasks can be automated by a current technology; about 35% of jobs are in occupations where at least 50% of tasks are automatable, and about 11% of jobs are in occupations where 80% or more of the tasks are automatable.
• While no one can predict the pace of future automation, the paper offers a technically-focused risk assessment only – the actual pace and extent of automation will depend on non-technical factors as well, including economic, social and regulatory developments.
• It may be that productivity gains and the creation of new roles for labour could more than offset automation’s effects on overall labour demand.

Is your business ready to meet the challenges of future automation?This content is for your general information and should not be taken as legal advice. If you have a specific problem, please contact KSW Law to discuss your situation with one of our lawyers. [1] The above summary is a shorter version of the summary provided by Mr. Williams in the Paper.

Written by Michael J WeilerIn my December 2015 blog post, I commented on the increasing number of decisions in Ontario that awarded damages based upon notice periods beyond the normal “cap” of 24 months: https://www.ksw.bc.ca/2015/12/09/will-the-rough-upper-limit-of-24-months-notice-be-increased-in-bc/At that time, I opined that the 24-month cap will remain the law in BC. In this article, I note that Ontario courts continue to push the envelope in extending notice periods beyond 24 months. I have been documenting this trend since that 2015 article – including in this article posted on my blog: https://www.ksw.bc.ca/2016/03/30/26-months-notice-for-husband-and-wife-contractors/ Now, an Ontario Court, in the case of Dawe v Equitable Life, has held that 36 months’ notice would have been reasonable.Michael Dawe was employed by The Equitable Life Insurance Company of Canada as a senior VP. He was 62 years old at the time of his termination and had been with the company for 37 years. He earned a $249,000 base salary plus a bonus of $379,000. He was terminated without cause because of a minor dispute with management over the use of sports tickets. He had little chance of replacing his employment. He sued for wrongful dismissal and claimed damages based on a 30 months’ notice period. The company argued that the normal cap of 24 months should apply.The Court noted the general presumption of 24 months as the cap but found, at Para 31, that “Presumptive standards no longer apply” given that, among other things, the normal retirement age of 65 no longer applies in many cases.The Judge found, at Para 35:Mr. Dawe had commenced the process of retirement planning, not uncommon at his age and logical given the nature and focus of the life insurance industry. Mr. Dawe had made no decision as to when retirement would occur. He says he was committed to working at Equitable Life until at least age 65. Retirement, if voluntary, may have occurred sooner or later. On the evidence, I conclude it is more likely Mr. Dawe would have worked at Equitable Life until age 65. I would add, it was more likely he would have worked there to a later age than an earlier one.The Court considered the “Bardal factors”[1] but ultimately ruled in favour of Mr. Dawe. See Paras 36 and 37 where the Judge finds:Counsel referred to a number of cases as examples of a reasonable notice period. Such were helpful in my review. Mr. Dawe is at the extreme high end of each of the Bardal factors. He should have been allowed to retire on his own terms. With no comparable employment opportunities, in particular, I would have felt this case warranted a minimum 36 month notice period.Mr. Dawe’s position of a 30 month notice period is more than reasonable. I conclude he was entitled to that in this case.The result was that Mr. Dawe was awarded damages based on 30 months’ notice as he had claimed. Had he asked for more, he would have been awarded damages of at least 36 months!It should be noted that this decision was based on a summary trial that dealt only with the notice period and the entitlement to bonuses. Mr. Dawe was still entitled to pursue his claims for punitive and moral damages that would require a full trial.WHAT TO DO?While I think it remains unlikely that BC courts will regularly award damages beyond the 24-month cap, employers are well-advised to protect themselves from such extraordinary awards. Readers of this blog will know what I suggest—obtain a valid, enforceable, written employment agreement limiting the employee’s rights on termination. In BC Mr. Dawe could have been contractually limited to 8 weeks damages.The content in the Michael Weiler Employment + Labour newsletters and blog is for your general information and should not be taken as legal advice. If you have a specific problem, please contact Michael Weiler to discuss your situation.[1]Bardal v The Globe and Mail – these factors have been discussed often in my blog articles. For example, see my 2015 article linked in the first paragraph of this article.

Given the shortage of skilled workers and senior management, it is not unusual to see employers trying to protect their interests by having such a skilled or senior employee sign a contract that restricts the employee from competing, or soliciting customers, after the employee leaves his employment.Such restrictive covenants are frowned upon by the courts.  However, such contracts can be very effective if properly drafted.  In January 2017, I provided a summary of how the law operates and the value of proper drafting by the employer (see: How to Protect Your Business Interests with Non-Competition and Non-Solicitation Clauses).  The case discussed in this article only underscores my advice that careful drafting of such a provision is essential for the employer.In a recent decision of the BC Supreme Court, where Telus Communications Inc. applied for an interlocutory injunction against a former employee,  (see: Telus v Golberg), Telus discovered, the hard way, that the non-competition clause they included in a senior executive’s employment agreement, was unenforceable.  This finding by the Court was not affected by either Telus’ assertion that it paid $1 million to achieve such restriction (the court did not entirely agree with that assertion) or the fact that the employee had breached his fiduciary duties to Telus prior to terminating his employment.Daniel Golberg was employed as a senior VP for Telus.  His activities and responsibilities were limited to the telecommunications industry.  He resigned from Telus and was hired by Rogers Media.  Although Rogers is a competitor of Telus, it assured Telus that Mr. Golberg would not be involved in any way with Rogers’ telecommunications division and would be subject to a confidentiality wall with respect to any matters that involved competition with Telus.  Notwithstanding these assurances, Telus sought an injunction preventing Mr. Golberg from accepting employment with Rogers Media.The restrictive covenant read as follows (see para 2):Accordingly, the vice‑president agrees as follows:  A) during the term of the vice‑president’s employment with Telus or TeleMobile (determination) and for the trial period immediately following the date that the employment of the vice‑president ceases (determination date) regardless of who initiated the termination and whether the termination was with or without cause, the vice‑president will not, without the prior written consent of Telus, directly or indirectly either individually or in partnership or jointly or in conjunction with or on behalf of any person or persons, firm, association, syndicate, corporation or another enterprise, as principal, agent, employee, director, officer, shareholder or contractor or in any other manner whatsoever:1) carry on or be engaged in executive, management, supervisory or strategic work or participate in, make a decision in respect of, direct, assist with, contribute to, advise on, provide consulting or other services in respect of any strategic management, supervisory or executive matters for any person or persons, firm, association, syndicate, corporation or other business enterprise engaged in or concerned with or interested in any business which is competitive with the business of Telus within the provinces of British Columbia, Alberta, Ontario and Quebec.Mr. Golberg did not disclose to Telus that he was having serious discussions with Rogers Media when he attended a series of meetings to develop Telus’ short-term and long-term strategies, nor during the period when Telus and Mr. Golberg were negotiating a severance package that included an enhanced non-compete clause at the time that he knew he was going to join Rogers Media.As we reviewed in the January 2017 blog article referred to above, a court starts from the premise that a restrictive covenant is prima facie unenforceable because it is an unlawful restraint of trade.  One of the primary reasons for that position is that there is an imbalance of bargaining power between an employer and an employee, which justifies a more rigorous scrutiny of restrictive covenants in employment agreements than in a commercial contract for the purchase and sale of a business. The employer must show a strong “prima facie” case that the restrictive covenant upon which it is relying, will be found enforceable at the hearing for a permanent injunction.  To do so, the employer must demonstrate that: (a) it has a legitimate interest to protect; (b) the clause, as drafted, is reasonable, having regard to the temporal, geographic and scope provisions of the clause; and (c) the clause is, overall, fair.In the Telus decision, Mr. Golberg conceded that the clause was not unreasonable with respect to “its length or territorial reach” (the length of the period of non-competition ran for one year following the termination of employment and covered the Provinces of BC, Alberta, Ontario and Quebec).  However, Mr. Golberg argued, at para 31, that the clause was “overly broad because it prohibits him from taking a managerial role in any company that is in competition with Telus or any of its affiliates, including affiliates which come into existence after the date of execution of the covenant.”Telus raised a unique argument that the requirement that it demonstrate a strong prima facie case was to a less-demanding standard because Mr. Golberg was a highly educated individual with extensive business experience when the parties negotiated his employment contract, including the bonuses he received which were in part consideration for him entering into the restrictive covenant. In doing so, Telus relied upon a statement in Quick Pass v Zhao, a decision of the BC Supreme Court.  In that decision, the Court noted that it will more closely scrutinize restrictive covenants in employment contracts than in other contracts such as agreements for the purchase and sale of a business.  It stated, at para 34: “However, the appropriate degree of scrutiny must reflect the reality [of] both of the parties’ relative bargaining power and of the bargain struck”.  Given the size of the employer, and the expertise of the employee, the Court, in Quick Pass, found, at para 35: “The inequality of bargaining power between the parties was less than that usually presumed in an employment relationship”.  Given that, and the fact that the employee was paid $15 per hour expressly in consideration of not competing, the Court concluded that “[t]he restrictive covenants, in this case, are not subject to a high level of scrutiny.”The Court rejected Telus’ argument that the standard was lessened or that less scrutiny was required, stating, at para 26:In this case, I find that there clearly is an imbalance of resources between Telus and Mr. Golberg. The bonus to Mr. Golberg was agreed to [at] the outset of his employment and not at the time he left his employment. The bonus was based primarily on the longevity of his service rather than the granting of the restrictive covenant. This further distinguishes this case from Quick Pass.Further, the Court in Quick Pass found that the plaintiff had, in fact, established a strong prima facie case that the restrictive covenant at issue was enforceable, thus distinguishing it from the Telus covenant.The Court also noted that the Telus restrictive covenant was far too broad in restricting Mr. Golberg’s post-employment activities.  Telus argued it needed to protect its telecommunications business, yet the clause was not limited to that business.  The Court, therefore, concluded, at para 41:However, it is the blanket prohibition against taking employment with any competitor of the employer or any of its subsidiaries regardless of whether the new position had any relationship to the duties and knowledge that the employee had while employed by the employer that makes the covenant overly broad in my view. This is particularly so given that the employer is a very large enterprise that has numerous subsidiaries or affiliates in multiple fields of endeavour. I, therefore, find that the covenant is overly broad in limiting Mr. Golberg’s ability to pursue his skills in management and is therefore prima facie unenforceable.Breach of Fiduciary DutyTelus argued, at para 47, “that Mr. Golberg “breached his fiduciary duty to Telus and that the only appropriate remedy for that breach is to enjoin him from working at any Rogers Media entity.”The Court found, at para 49, that Mr. Golberg was, indeed, a fiduciary and that he had breached his fiduciary duties to Telus:I am also of the view that Mr. Golberg breached his fiduciary duty to Telus by actively pursuing a termination payment while negotiating the terms of his new employment at Rogers Media. When Mr. Golberg was seeking a termination package from Telus, he owed a fiduciary duty to provide Telus with frank and full disclosure about his employment situation.However, that breach did not enhance the right of Telus to obtain an interlocutory injunction. The Court held, at paras 52 and 53,Notwithstanding these findings, however, I do not regard his conduct as disqualifying him from being able to pursue his career. In the absence of a binding non‑competition agreement, a former fiduciary is entitled to compete with his former employer as long as he does so fairly. Acting fairly, of course, encompasses maintaining his duty of confidentiality with respect to the affairs of his former employer.The more serious breaches of fiduciary duty on Mr. Golberg’s part involved his failure to make full and frank disclosure about his employment plans while he was attempting to obtain a severance package from Telus. These breaches do not constitute unfair competition on his part. I, therefore, find that notwithstanding his breach of fiduciary duty, Mr. Golberg is entitled to compete with Telus in the absence of an enforceable non‑competition covenant.TakeawaysThe Court noted, at para 37:In my view, the restrictive covenant is the product of overzealous drafting by Telus’s solicitors. The entire focus of the covenant appears to be directed to making the covenant as broad as possible without giving adequate consideration to the important interests that Telus seeks to protect in the covenant or the interests of Mr. Golberg as an employee.When my clients ask me to draft a restrictive covenant, I encourage them to approach the task from the viewpoint of providing the least invasive restrictions necessary to achieve their goal of protecting their business, having regard to the courts’ approach that such clauses are prima facie unenforceable.   If instead, a non-solicitation clause will achieve that goal, it may be preferable to include a non-solicitation clause rather than a non-competition restriction, as the courts look at the former more favourably than the latter.  This decision must be made after considering all factors, including that it may be much harder to obtain an injunction to enforce a non-solicitation clause.  Employers’ reach should not exceed their grasp.If an employer can demonstrate the negotiation of the restrictions between the employee and the employer, that fact may be evidence that the parties did agree as to the reasonableness of the restrictions.  Paying a specific sum solely as consideration for the employee agreeing to the restrictive covenant, should be included in the employment agreement with great clarity, especially with very senior employees[1].  Following this approach will often produce a much better result than Telus achieved.  Even if the clause may be attacked in court, the closer the clause approaches reasonableness, the less likely an employee (or putative employer) will take the chance of breaching the agreement and incurring significant legal fees and potentially a large damage award. In certain circumstances, it may even be appropriate to require the employee to obtain independent legal advice.The content in the Michael Weiler Employment + Labour newsletters and blog is for your general information and should not be taken as legal advice.  If you have a specific problem, please contact Michael Weiler to discuss your situation.[1] Note that in the Telus case, the Court held that the consideration, despite the wording of the contract, was primarily to ensure a lengthy employment, not to support the restrictive covenant.

Written by Michael J WeilerEach year we report on how the courts have defined “reasonable notice” in the previous year. For those employers who have binding written employment agreements that define the notice period on termination – congratulations! Those agreements should be determinative, and therefore these decisions are not relevant. But for the vast majority of employers who do not have such written agreements in place with their employees, the following summary will be very much relevant and should be of interest.Courts will look at four key elements to determine how much notice is reasonable: age, length of service, position and the availability of similar employment having regard to the employee’s skills and qualifications. The court will often look at economic circumstances but will not give that factor undue weight. The highest period of notice, subject to a few exceptions, is 24 months. As noted below Ontario courts seem to be ready to break through that ceiling. Please bear in mind the fact that each case will be decided on its own facts and there is no litmus test. Furthermore, the amount of notice will not always equal the amount of damages as the employee must mitigate her damages and must also prove her losses (e.g. lost benefits or bonuses).The following notable cases from 2018 will give you some idea of the courts’ present thinking on the matter. There can be very important factors in each case especially dealing with senior executives whose compensation can often exceed $20,000 per month. If you want to become a lawyer for a day, cover up the right-hand column and see how you do in assessing the notice periods:Case NameEmployee PositionIncomeAgePeriod of EmploymentNotice PeriodPakozdi v B & Bbidder/estimator$125,0005513 months5 monthsFirth v IBMnot senior management but called him a “fiduciary”!$112,0003819 yrs19 monthsDussault/Pugliese v Imperial OilD–Manager Real Estate-not supervise but NB position$190,006339 yrs26 months“Dussault” cont.P–Territory Mgr–not supervise but NB position$156,0005736 yrs26 monthsKerr v ArpacManager (no employees)$70,0007022 yrs20 monthsPasche v MDE EnterprizesSheet metal estimator$66,0006718 yrs13 monthsTymko v 4-D EnterprizesSwitchman / operator523 yrs2 monthsGreenlees v Starline Windowssalesman$100,000436 months6 monthsKok v Adera Natural Stone Ltd.s’or=senior management$131,0005427 years22 monthsCorey v Kruger Productsmaintenance s’or–first level of management$100,000582 1/2 yrs8 monthsRuston v Keddco MfgPresident$278,000 + bonus5411 years19 monthsChapple v Big Bay Landing LtdLodge Manager$85,0006126 months9 monthsDawe v The Equitable Life Insurance CoSenior Vice President$249,000 salary + $379,000 bonus6237 years30 monthsMichael Weiler practices employment and labour law including human rights and prevention of workplace harassment/bullying and independent investigations; advising on the practical and legal issues affecting private family-owned businesses; and more – see his website at www.WeilerLaw.ca . Michael is a frequent seminar presenter and the assistant editor of Canadian Cases on Employment Law. Michael can be contacted at [email protected] . For those who wish to receive articles, seminar notices and blog comments please contact Carolyn Weiler at [email protected] or call her at 604 336 7427.

1. Disclaimer
2. The content in the Michael Weiler Employment + Labour newsletters is for your general information and should not be taken as legal advice. If you have a specific problem, please contact Michael Weiler to discuss your situation.

Written by Michael J WeilerIn Communications, Energy and Paperworkers Union of Canada, Local 30 v. Irving Pulp & Paper, the Supreme Court of Canada red-flagged the struggle and conflict between safety and privacy rights in a case dealing with the right of an employer to implement random testing for alcohol and drugs.  The SCC majority struck down Irving Pulp’s policy.  The decision of the majority opened with these comments:Abella J. — Privacy and safety are highly sensitive and significant workplace interests. They are also occasionally in conflict. This is particularly the case when the workplace is a dangerous one.With the legalization of marijuana, issues of detection and discipline within the workplace will create even more tension between privacy issues and the right to operate your business in a safe and productive manner.The SCC has stepped in again to comment on privacy issues in the case of R. v. Jarvis.  Although the case is a criminal law case, it raises issues that might well apply to your workplace.An excellent article by Kelly Nicholson, a partner at Field Law in Alberta, summarizes the Jarvis decision.  I have had a working relationship with Field Law for many years on matters involving Alberta employment and labour law and have found their newsletters to be very insightful.  In many areas, the cases they review have application here in BC.  I am introducing you to this article with thanks to Field Law and the permission of the author and Field Law.As Kelly Nicholson introduces his article, I repeat here to suggest why you may want to read the article yourself:“Though it emerges in a criminal law context, the new decision of the Supreme Court of Canada in R v Jarvis, 2019 SCC 10 is likely to have an impact on future cases that consider the scope of an individual’s privacy interest, whether in the criminal or civil sphere. Articulating a sophisticated understanding of how privacy may remain a reasonable expectation even in a public or semi-public space, the case will no doubt be of interest to employers and other parties whose operations bring into question the line between that information which is personal – to a worker or customer, for example – and that which, in the circumstances, may properly be examined or observed.”READ MORE at FIELDLAW.com[1]The content in the Michael Weiler Employment + Labour newsletters is for your general information and should not be taken as legal advice.  If you have a specific problem, please contact Michael Weiler to discuss your situation. [1] Information made available in the Field Law article linked to this blog post is for informational purposes only. It is NOT LEGAL ADVICE and should not be perceived as legal advice. You must not rely upon this information in making any decision or taking (or choosing not to take) any action. This information does not replace professional legal advice – and must not be used to replace or delay seeking professional legal advice. Any views expressed in the Field Law article linked to this blog post are those of the author and not the law firm of Field LLP. The act of accessing, printing or reading the article linked to this blog post, or publication or downloading any of the content does not create a solicitor-client relationship, and any unsolicited information or communications sent to the authors or Field LLP (by any means) is not protected by solicitor-client privilege.“Field Law”, the logo and “Because Clarity Matters” are registered trademarks of Field LLP. “Field Law” is a registered trade name of Field LLP.”

Written by Michael J Weiler Labour Relations Code amendments—Why are BC Fed officials smiling? On April 30th, 2019 the NDP government introduced Bill 30, the Labour Relations Code Amendment Act that fundamentally alters the law in favour of unions Bill 30 – Labour Code. The Act largely follows the recommendations of the Labour Relations Code Review Panel (the “Review Panel”) in its August 31st, 2018 Report (the “Report”) see Report of Review Panel.While employers may be thankful that Andrew Weaver stuck to his guns and forced the NDP to retain the secret ballot vote in certification applications, the reality is that employers, especially nonunion employers, need to take note of these changes as they may well have a profound impact on how business is done in BC. Further, the Report makes it clear that there may well be other changes following further consultations.Bill 30 comes on the heels of proposed amendments to two other pieces of employment legislation, namely:

• significant “worker favourable” changes to the Workers Compensation Act that have been introduced or will likely be introduced following further consultations; and
• significant changes to the Employment Standards Act that were introduced on April 29th 2019 in Bill 8. We will be posting a summary of Bill 8 on our blog website in the week of May 13th,

Nonunion employers in particular should become familiar with the certification process and the potential impact of the changes on your particular business once Bill 30 becomes law in order to develop effective strategies to respond to a union organizing drive.Bill 30 is aimed at increasing union power and union density. BC Fed President Laird Cronk summed it up nicely:“British Columbia remains a low-wage province, and precarious work is on the rise. The best antidote to economic inequality is greater union density.”Furthermore, the changes proposed in Bill 30 create uncertainty for employers and will undoubtedly increase litigation as the Labour Relations Board (the “LRB”) sorts out what the changes mean and how they are to be applied. Further consultations recommended by the Review Panel will likely produce more legislation down the road (for example, in the forest industry). One thing remains certain—the changes in Bill 30 are, for the most part, intended to increase union density and security and will likely be interpreted by the LRB with that in mind. The LRB will likely rely on the Report as well as Hansard debates in interpreting the new provisions as well as the old (e.g. sections 6(1) and 8) of the Code.Here then is a brief summary of the provisions. As noted, this summary is prepared based on the legislation tabled in First Reading. The reader will have to consider any changes between now and the time Bill 30 is proclaimed into law. DEFINITION OF BUSINESS DAY SECTION 1(1)(a)Section 1 of Bill 30 adds a new definition, namely, “business day”. That term is defined as a day other than Saturday, Sunday or another holiday. This amendment is made to define the 5 business days notice now required between the application for certification (or decertification) and the secret ballot vote (see sections 24 and 33 discussed below).DEFINITION OF PICKETING SECTION 1(1) (b)In 1999, the Supreme Court of Canada struck down the definition of “picketing” under the Code because the definition encompassed consumer leafletting. The SCC held that consumer leafletting was freedom of expression protected by the Charter. Section 1 of Bill 30 excludes from the definition of “picketing”, consumer leafletting that does not unduly restrict access or egress or prevent employees from working at their place of employment. Hopefully this will be seen as a housekeeping measure and not a call to increased consumer picketing.CONTINUING REVIEW OF THE CODE SECTIONS 3(3)-(6)Every 5 years the Minister must appoint a committee of special advisors to undertake a review of the Code and make recommendations. See section 2 of Bill 30.EMPLOYER FREE SPEECH SECTIONS 6(1), 8 and 123.In 2002, the Liberal government made two fundamental changes to the Code that had been amended by the NDP in 1992. The 1992 NDP amendments introduced sweeping changes in favour of unions and, not surprisingly, union density increased. The 2002 Liberal amendments restored some of the balance lost in 1992 by (a) reinstating the secret ballot vote in union certifications; and (b) expanding and widening employer free speech.Bill 30 returns to the restrictive practices of the 1992 Code by reversing the 2002 Liberal amendments to sections 6(1) and 8. We will have to go back and look at the LRB’s jurisprudence from 1992 to 2002 to consider how restrictive these changes might be and how the current LRB might interpret those changes. It is difficult to reconcile the Review Panel’s desire to modernize the Code in a changing world through “déjà vu all over again” amendments like these.Recognizing the return to restrictive employer freedom of speech, the Review Panel noted in its Report that the LRB was better equipped to provide “objective neutral information that best assists the exercise of employee choice”. The Review Panel recommended detailed provisions on how that information should be provided. Bill 30 does not follow the specific recommendations but rather amends section 123.1 of the Code to require the LRB to make available to the public information about rights and obligations under the Code. It also gives the LRB the power to direct employers to make available to employees “information about rights and obligations under this Code” as “provided or approved by the board.”REMEDIAL CERTIFICATION WITHOUT A VOTE SECTION 14 (4.1)The Code provides the LRB with a very broad remedial authority including requiring an employer to reinstate an employee; ordering a second vote; and requiring an employer to post its decisions at the employer’s place of business. The LRB has always had the power in the face of egregious unfair labour practices to order a certification without a vote. The current language of the Code gives the LRB the power to order remedial certification if it were likely that the union would have obtained the majority support of the employees “but for” the egregious unfair labour practices. That “but for” restriction is removed by section 5 of Bill 30 and replaced with: “the [LRB] believes it is just and equitable in order to remedy the consequences of the prohibited act”. At this stage, no one knows exactly how the LRB will exercise its very broad discretion under this amendment.This is a major change in my view that, coupled with changes to employer free speech, might well see a significant increase of remedial certifications issued by the LRB. The Review Panel’s comment, at p. 10 of the Report, that “In our view, remedial certification is the most effective deterrent and remedy for unfair labour practices” suggests this result.The impact of this change will be felt in other areas of the Code, such as the imposition of a first time collective agreement under section 55 of the Code. Now the LRB will be able to take the conduct of the employer, before and after certification, into account in exercising its discretion.RAIDS SECTIONS 19 AND 27.1Under the current provisions of the Code, if an employer is certified to and has a collective agreement with Union A, Union B can apply to take over that certification and collective agreement and step into the shoes of Union A. Such applications must be made during the 7th and 8th months in each year of the collective agreement.Bill 30 makes two key changes.First, section 6 of Bill 30 replaces section 19 of the Code. Under that new section 19, the new “raiding rules” are:(a) if the collective agreement is for a term of 3 years or less, then the raid can only take place in the 7th and 8th month of the last year of the agreement;(b) If the collective agreement is for a term of more than 3 years, the raid can take place in the 7th or 8th months of the third year and thereafter in each subsequent year of the agreement; and(c) a raid can take place in both (a) and (b) above, in the 7th or 8th month of any subsequent year of the collective agreement and/or a continuation of the collective agreement.Special conditions apply where “a majority of employees [are] primarily engaged in construction work” in which case a raid may take place each July or August of each year of the collective agreement. “Construction” was defined by the Review Panel in the Report, but Bill 30 does not define “construction work”.Second, section 8 of Bill 30 adds a new section 27.1 to the Code. It provides that, if a union is successful in raiding a bargaining unit, it may apply to the LRB to have the collective agreement declared “expired”. If it is successful in its application to the LRB, the union is not bound by the collective agreement of the incumbent union and can require collective bargaining to begin. Bill 30 does not set out the criteria to be considered in making such decisions, but the LRB might well look to the Review Panel’s Report for guidance. The Review Panel recognized that reopening collective agreements could have serious consequences and suggested, at p. 18 of the Report, that the exercise of this discretion should only be used “in extra-ordinary circumstances having regard to [the successor union’s] Section 2 duties”. Many employers rely on the certainty of a collective agreement in organizing their long-term business objectives and, in many cases, long term agreements reflect the employees’ recognition it is in their interests to do so. However, the one example the Review Panel gives is scary. The Review Panel, at p. 18, suggested one example of where the collective agreement could be voided would be where the “terms of the collective agreement are clearly inferior to the norm in the sector.”TIME LIMITS ON APPLICATIONS FOR CERTIFICATION SECTION 24 AND DECERTIFICATION SECTION 33Under the current Code, when a union applies for certification, the LRB must order a vote of employees in the bargaining unit within “10 days”. During that time, the LRB will direct a special officer to review payroll records and prepare a report to decide, for example, if the union has the threshold 45% of employees signed up to proceed with its application and to identify any issues that might arise (e.g., inclusions/exclusions, appropriateness of the bargaining unit etc).The special officer will also schedule a tentative vote within the 10-day period. The LRB will schedule an immediate hearing to consider if the union has the threshold support, confirm the vote and timing and hear any objections that might arise.Consequently, there is very little time, even under the current system, for a non-union employer to seek legal or other advice on the process; obtain the data required; understand its rights and obligations; and implement a communication strategy that is both effective and in accordance with the restrictions of the Code. That communication statement must be in accordance with the changes and restrictions on employer free speech in the amended sections 6(1) and 8 of the Code (See: “EMPLOYER FREE SPEECH SECTIONS 6(1), 8 AND 123.1” above). That will require more risk management assessment.Section 9 of Bill 30 amends the timeframe to require a vote within “5 business days” (see new definition above) instead of the existing 10 days. It also provides for mail ballots in exceptional circumstances. Bill 30 also amends the time limits for a secret ballot vote in a decertification application to 5 business days.This time period between the application for certification and the secret ballot vote can be very critical. For example, a union may file its application just before 4 pm on a Monday and the employer may not become aware of it until sometime the following day. The vote would be held on the Friday at the latest. As well the union has control of the timing when the application will be made. That means it can file its application for example at a time when it knows senior management may be away and unable to respond to the application. As well, the Review Panel recommended that Regulation 3 of the Code be amended to expand the time union membership cards are valid for use in a certification application from 90 days to 6 months. This Regulation has not yet been amended, but likely will be once Bill 30 becomes law.This is why we recommend that nonunion employers learn more about the certification process and the issues well in advance of any organizing drive or application for certification. We hope that you never need to use this information, but your motto should be “BE PREPARED”. Let’s hope you never need to mobilize your strategy in a short time period but, having done your preparation, you will at least be in a better position to implement an effective strategy.Note also that the decertification provisions have extended the time another union can apply to certify a unit that was decertified from “10 months” to “12 months”.SECTION 35 SUCCESSORSHIP WHEN SERVICE CONTRACTS ARE RETENDERED SECTION 3Section 35 of the Code provides that if a business or part of a business is sold, leased, transferred or otherwise disposed of, the successor employer will assume the obligations of the vendor including a certification and collective agreement.However, it has long been recognized by the LRB, that the successorship provisions do not apply to contracting out or re-tendering of contracts. This approach is consistent with the fundamental premise of the Code that certifications do not attach to the work but to the business and the employees.Bill 30 makes very significant changes to successorship rights where there is contracting out or re-tendering of a service contract.Section 10 of Bill 30 amends section 35 of the Code by adding a new definition of the term “contract for services” as meaning any contract for:

• Building cleaning services
• Security services
• Bus transportation services
• Food services
• Non-clinical services provided in the health sector (including a lengthy definition of non-clinical services)
• And any other services the NDP prescribes

It is noteworthy that these definitions go well beyond the suggested definitions in the Review Panel’s Report that limited food services to those in the health sector (see p. 12 of the Report). And without any restrictions on what other services might be caught down the road employers cannot have the certainty such legislation requires.The new section 35 of the Code goes on to provide that if contracts for services are “retendered and substantially similar services continue to be performed, in whole or in part, under the direction of another contractor”, the contractor is bound by all proceedings under the Code prior to the date of the contract and the collective agreement continues to bind the successor contractor. The problem with this amendment is that, in the ordinary successorship, there is a business relationship between the vendor and purchaser—under these amended provisions there will likely be no contact with the contractor who lost the contract. As a result, the successor employer will be bound by the predecessor’s collective agreement and other proceedings under the Code, but will not have access to the normal business documents and records regarding the employees and the union.In order to avoid any opportunity for an owner of a business or a contractor to address these situations, this amendment is made retroactive and is effective the date of the First Reading.This will likely be one of the most problematic amendments of Bill 30. The definition of services is unclear and there is no way of knowing what other services will be included by Regulation. Will landscaping be added? What if the successor contractor has a collective agreement that covers employees in a number of locations? What if a business has contracted for certain services and it is found the contract is totally unsustainable? The new contractor must negotiate a contract with the owner of the business but is bound by a collective agreement that may be too rich and not reflect the business realities.Why should a small group of unionized employees be able to get a lifetime job security attached to the work whereas the vast majority of employees do not enjoy that type of job security? To raise the questions is to answer them—these amendments have not been well thought out and the cost implications could be huge.Ironically unionized service contractors will now find it much hard to get contracts for fear of the successorship provisions.The problem with the amendments to section 35 of the Code is that they ignore today’s business reality. Many employers, large and small, make a solid business decision to contract out non-core parts of their business. This promotes efficiency and supports the success of the business for the owners as well as the employees of the main business. Why should that fundamentally sound business model be interfered with in this way?STATUTORY FREEZE AND REQUIREMENT OF PROPER CAUSE SECTION 45Under the current section 45 of the Code, if a union is certified, there is a statutory freeze on wages and other terms and conditions of employment for 4 months. In section 11 of Bill 30, that time period has been increased to 12 months. Under the current section 45(4) of the Code, an employer can only terminate an employee for “proper cause” during this extended period.Further, if an application to impose a first collective agreement is made during the 12-month “freeze”, and that process has not concluded, the freeze will continue until the conclusion of the process related to the imposition of the first collective agreement.FILING A COLLECTIVE AGREEMENT WITHIN 30 DAYS AFTER EXECUTION SECTION 51This provision has historically been honoured more in the breach than in compliance. In order to encourage the parties to file the agreements, section 12 of Bill 30 adds a new subsection to section 51 that provides that if the collective agreement is not filed the [LRB] may decline to consider the collective agreement in any proceeding before the [LRB].”Not sure how effective this “hammer” will be.JOINT CONSULTATION COMMITTEES SECTION 53(5)In an effort to improve the collective bargaining relationship, section 53(5) of the current Code provides that the LRB “must on the joint request of the parties appoint a facilitator to assist in developing a more cooperative relationship between the parties.” Bill 30 provides that such a request can now be made by either party.ADJUSTMENT PLANS SECTION 54 (2.1) – (2.5)Section 54 of the current Code provides that if the employer plans on introducing major changes affecting the employment of a significant number of employees, it must give at least 60 days’ notice and must meet with the union, in good faith and endeavour to develop an adjustment plan. Section 14 of Bill 30 amends section 54 to provide that, if the parties haven’t agreed to an adjustment plan, either party may apply for mediation. While the mediator may make recommendations, he/she cannot impose an agreement.FIRST TIME COLLECTIVE AGREEMENTS SECTION 55As noted above (see: “REMEDIAL CERTIFICATION WITHOUT A VOTE SECTION 14 (4.1)), under Section 55, the associate chair can, following mediation, set a process for concluding a collective agreement that may include arbitration or allowing the parties to strike or lockout. Before that application can be made, however, the current provision requires that the employees have voted to go on strike. This requirement has been removed (see section 16 of Bill 30). Without a strike vote, unions can now try to obtain an arbitrated first collective agreement without having confirmed the employees support the union’s position.Under these amendments, if the certification is a remedial certification following an unfair labour practice, the mediator, in making recommendations, and the associate chair, in deciding whether to impose arbitration, can each look at the conduct of the parties both before and after certification.My sense is this will end up with more arbitrated first-time collective agreements where the employees do not have the desire to strike.ESSENTIAL SERVICES SECTION 72Education will no longer be an essential service. What is interesting is that the Review Panel noted at p. 28 of the Report that “Education services that may be truly essential (such as grade 12 examinations) would continue to be captured by the Board’s interpretation of the term “welfare”. See section 16 of Bill 30.INDUSTRY COUNCILS SECTION 80These amendments will allow the Minister to establish Industry Councils with specific mandates. See section 17 of Bill 30.SETTLEMENT OFFICERS SECTION 87(1)Currently, a settlement officer can only be appointed after 45 days of the completion of the grievance procedure. That time limitation has been removed. See section 18 of Bill 30.CASE MANAGEMENT CONFERENCES SECTION 88.1In order to move arbitrations forward, this amendment provides that, within 30 days of the appointment of an arbitration board, the arbitration board must conduct a case management conference to exchange information and documents, schedule hearing dates and encourage settlement of the dispute. See section 19 of Bill 30.APPEAL TO THE COURT OF APPEAL SECTION 100Over the years there have been a number of cases where one party wants to appeal an arbitration award. Generally, that application would be made to the LRB under section 99 of the Code. But the Code provided, in section 100, that certain reviews had to go directly to the Court of Appeal. The line of demarcation was not clear. Section 20 of Bill 30 attempts to limit the jurisdiction of the Court of Appeal to matters of “general law” that are not included in section 99 and are “unrelated to a collective agreement, labour relations or related determinations of fact”. While helpful in narrowing the court’s jurisdiction, there will certainly be a period of litigation as the court sorts out what specific jurisdiction it retains.EXPEDITED ARBITRATION SECTION 104Section 21 of Bill 30 attempts to streamline the process for expedited arbitration by, among other things, eliminating and replacing existing time limits and providing for oral decisions followed by a written decision not exceeding 7 pages within 30 days. This brings to mind the difficulty arbitrators may have in sticking to the limited number of pages: “I was going to write you a short letter but I did not have time…”LIST OF EMPLOYEES SECTION 140Section 23 of Bill 30 amends section 40 of the Code to allow the LRB to order an employer to provide a list of employees in the proposed bargaining unit within the time specified by the LRB. It is not clear what the LRB will do with the list. The Review Panel did not propose the production of employee lists to a union prior to an application for certification but this amendment is not specifically clear enough to describe how such a list will be used.FINES SECTION 158In order to enhance enforcement of LRB orders, the fines for individuals will go from $1,000 to $5,000 and for corporations or trade unions from $10,000 to $50,000. See section 25 of Bill 30.SUMMARYBill 30 is a major piece of labour reform brought about by the NDP’s commitment to expand union bargaining rights. It is consistent with other initiatives of the NDP such as the all Building Trades Project Agreements for major construction in B.C. (e.g., the Pattullo Bridge). There may be a debate in how far the pendulum has swung but there is no doubt we are once again in a pendulum mode of creating labour legislation in B.C.We strongly encourage employers to consider their options at this time in order to prepare for any union organizing drive that might come your way or the impact of the other provisions of Bill 30 on your business.If you have any questions regarding the above please do not hesitate to give me a call or drop me an email at [email protected]The content in the Michael Weiler Employment + Labour newsletters and blog is for your general information and should not be taken as legal advice. Further, this review is simply a summary of some of the key items of Bill 30 as it stands at First Reading. There will very likely be changes before Bill 30 becomes law. If you have a specific problem, please contact Michael Weiler to discuss your situation.

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 Our Labour Law specialist, Mike Weiler shares his expertise in the New Car Dealers Association of BC magazine Signals, on how recent changes to the Labour Relations Code make it easier to unionize. 

Read Mike’s article on page 23 in the magazine's digital version here: https://issuu.com/blvdmag2/docs/2020_04_signals_aprmayjun_hr

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Mike Weiler wrote this article for the Spring Issue (April - June 2020) of the Signals Magazine, publication for members and friends of the New Car Dealers Association of BC - read the issue here.

LABOUR RELATIONS CODE CHANGES—WHY ARE B C FED OFFICIALS SMILING?

When the NDP formed government in 2018, they substantially altered employment laws in support of unions.  This reflected the pendulum swing of labour reform in BC upon change of government. Significant changes were made to Employment Standards, Human Rights, and the Workers Compensation Act where the NDP plans to implement the findings of 4 Reports, most of which will make employers’ lives more complicated and expensive.

The NDP also struck a 3-person Panel to review the Labour Relations Code (“Code”) as they had done in 1992. On May 30th 2019 Bill 30, the Labour Relations Code Amendment Act, was passed into law.

Space does not permit a thorough review of all the changes to the Code. This article focuses on those which make it easier for a union to certify a non-union car dealership or expand its certification in a partially-unionized one. While these changes have not received much fanfare, it is our view that the worsening economic conditions in BC will create greater opportunity for unions to utilize these rules to increase membership, which will result in costly and burdensome collective agreements that are counterproductive to the workplace.

UNFAIR LABOUR PRACTICES, EMPLOYER FREE SPEECH AND REMEDIAL CERTIFICATION

These changes were to be expected. Changes were made to the Code to enhance union organizing rights.  BC Federation of Labour president Laird Cronk summed it up nicely:

           “British Columbia remains a low-wage province, and precarious work is on the rise.  The best antidote to economic inequality is greater union density.”

Three key changes make it harder for employers to fend off a union organizing drive.  This increased risk of unionization applies to both non-union operations and the non-union departments of a unionized car dealer where the union seeks to organize the remaining employees.

First, the new Code restricts employer free speech.  In 2002 the Liberals expanded employer free speech in section 8 of the Code to allow the employer to discuss almost any topic, including unions, without running afoul of section 6 (which prohibits an employer from interfering with a union). Under Bill 30, section 8 protection now only applies to “facts or opinions reasonably held with respect to the employer’s business”.   If it feels like “déjà vu all over again” it’s because this was the language of the Code under the NDP from 1992 to 2002.

Secondly, the time period for the certification vote has been reduced from 10 days to 5 business days from the time of the application.  This is a huge advantage to the unions especially because they control the timing of filing (perhaps filing at 3:59pm on a Friday so the employer won’t find out until Monday).  Employers who don’t anticipate the application have little time to prepare their strategy and avoid unfair labour practices (“UFLP”).  This past Christmas our client faced a certification application filed Friday December 20th with the vote scheduled December 27th.  You can imagine how difficult it was for the employer to properly respond.

Thirdly, the power of the Labour Relations Board to order automatic certification without a vote to remedy an UFLP has been broadened to allow such a Draconian remedy whenever the LRB “believes it is just and equitable in order to remedy the consequences of the prohibited act”.  We don’t yet have any decisions on this provision, which leaves much uncertainty for employers who might cross the line and commit an UFLP.

For those who think these changes will not be significant or that there won’t be further changes I refer to the following passage from the Review Panel’s Report:

           “The Panel is acutely aware the secret ballot vote can only be an effective mechanism for employee choice if the Code deters and prevents employers from engaging in unfair labour practices and provides meaningful consequences for such practices.

           The exercise of employee choice through certification votes must be protected by shortening the time-frame for votes, ensuring the expeditious and efficient process for certification applications and unfair labour practice complaints, together with expansion of the Board’s remedial authority. If these enhanced measures are not effective, then there will be a compelling argument for a card check system.”

SUMMARY

These changes are huge for dealers faced with a certification application. Therefore employers are wise to consider the very real possibility their operations may be organized and take steps now to prepare.

*After this article was prepared the LRB issues its first decision interpreting the new remedial certification provisions. The Board ordered remedial certification where wo union organizers were terminated just as the union organizing drive started. The LRB gave a very broad interpretation to these new provisions: see Salade ETCETERA Inc., 2020 BCLRB 34. A more detailed summary will be posted in a new blog article soon.

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On May 5, 2020, we had the pleasure of hosting a webinar for the New Car Dealers Association of BC and its members, with CEO Blair Qualey. We heard from car dealerships from across the province and answered their questions about CEWS, CERB and more. We thought the information covered should be shared with our communities as well, and this is how this post came about.

**Please be advised that this Q&A is only applicable to the first four reporting periods of the CEWS (March 15 to July 4). For reporting periods after July 5, 2020, please stay tuned as the federal government is in the process of introducing amendments to the CEWS program that would result in new formulas for calculating the subsidy amounts. We expect to have further updates as more information becomes available.***  

On March 27th 2020 the Prime Minister announced a wage subsidy of 75% for qualifying businesses, and on May 8, 2020 he announced the program will be extended past June. The legislation allows for extension by regulation up to September 30, 2020 but further details will be released soon.  

This program is the most important and fundamental initiative in the Federal Government’s COVID 19 strategy.  Over the last few weeks we have covered the program, and other support programs extensively in our other blog posts, which we invite you to browse for more information - read our previous articles here.

Kane Shannon Weiler LLP wants to be there for our communities during these unprecedented times, and support businesses and individuals by sharing as much knowledge as we can.

Please remember that this information is general information and should not be taken as specific legal advice to your particular issues. Each case is analyzed to its particular facts. Also, the government makes changes on daily basis. Finally, please note that the notes below are only a condensed outline of the full questions and answers provided during the webinar. If you are dealing with any of these particular questions, we recommend that you contact Mike or Chris for legal advice.

Overview of CEWS (Canada Emergency Wage Subsidy):

The CEWS application has 4 parts:

1. Are you an eligible employer? Do you meet the revenue decline test? this a calculation you do prior to the application, several ways of doing this calculation. Once you choose a method you have to use the same one for the next periods. If you qualify for one period, you automatically qualify for the next period.

2. Who are your eligible employees? 1) Employed by a business in Canada, 2) and not without pay for a period of 14 days consecutive during the claim period. If that employee did not receive pay for 14 consecutive days in the claiming period, then that employee is not eligible – this way their won’t be doubling up for employees to use the CERB and CEWS.

3. Calculate the subsidy - Use the excel calculator spreadsheet provided on the government website. It allows you to put the date for each eligible employees you have for the claim period. You enter the pre-crisis weekly earnings, whether the employee is non-arms length, and the amount paid to the employee during the claiming period. The calculator will then provide the basic subsidy amount.

4. Apply for the CEWS online. You do this through your CRA MyBusiness Account. You can use the data from the spreadsheet calculator for the eligible remuneration and subsidy lines. There are lines to enter CPP/EI contributions for employees on payroll but not working (called furlough), which are refundable. There are also lines for the 10% subsidy, which is deducted, along with wages paid to employees on work-sharing. Finally, there is an attestation required to certify the application is true and accurate. There are significant penalties and even criminal liability for making fraudulent or other misrepresentations to CRA so use caution. If you have direct deposit set up, you should have the funds in your account in approximately 10 days.

CEWS, CERB and other programs — QUESTIONS and ANSWERS from webinar

1. Would like some clarification around how the employee is impacted if they received CERB and we call them back? Is it better to not claim CEWS for them during that CERB cycle so that they are not impacted by having to pay it back

Employee can earn up to $1,000 a month and still be eligible to CERB. If you are want to bring an employee back and still have them getting the CERB try to not pay them over $1000 a month so they will continue being eligible. If you pay them over $1000 a month they will no longer be eligible and they will have to pay the CERB back what they received. Consider if there is any risk associated with reducing their hours/wages or bring them back part time instead of full time which could lead to constructive dismissal and severance pay.

2. Are employees able to repay a week at a time back for the CERB if we rehire? The CRA Excel form automatically shows zero if you select the employee is not arm's length. If the employee's wages do qualify, do you select no? We laid employees off in March and then closed for 2 weeks. Do we not qualify for the subsidy for the 1 week they worked?

If you re-hire during the CERB cycle and pay more than $1,000 in the claiming period, the employee will be disentitled to the CERB for the rest of the claiming period and will have to repay any CERB amounts received. For non-arm’s length employees, you can only claim the subsidy based on pre-crisis earnings. As long as they were already on payroll before March 15, 2020, you should be able to calculate the subsidy using the spreadsheet. Regarding the employees that were laid off in March, you must review the definition of eligible employees to determine if they were without remuneration for 14 consecutive days in the claiming period. If they were then they are not eligible employees and you cannot claim the CEWs on the wages paid to them during the claiming period.

3. We pay our employees semi-monthly. To calculate average weekly for those paid commission or flat rate should we divide their earnings from Jan 1 to March 15 by number days worked plus vacation days plus stat days and multiply by 5 (for full time)? So basically divide by 10.6 weeks? Just want to do the same calculation that CRA would be doing. "

The definition of baseline remuneration is as follows: “the average weekly eligible remuneration paid to the eligible employee by the eligible entity during the period that begins on January 1, 2020 and ends on March 15, 2020, excluding any period of seven or more consecutive days for which the employee was not remunerated.” So this person is exactly right – you want to take the total eligible remuneration actually paid to the employee and divide by the total number of weeks over which it was paid. The Excel calculator only provides for weekly and bi-weekly pay periods –so for those with semi-monthly pay periods you just have to normalize the calculations by figuring out the weekly average. We’ve learned that CPA Canada has asked the CRA to include semi-monthly as an option so hopefully that’s coming in the next version of the calculator.

4. What are our rights when an employee who has been called to come back to work and they want to stay on lay-off?

First thing, when you make the decision to call someone back, check the amendments to the Employment Standards Act, if you are an eligible employee you are entitled to an unpaid leave. Type of leaves that are there:

• If they have been diagnosed positively.
• Quarantined during self isolation not just voluntary but in accordance to some regulation or order.
• The employer due to the employers concerns about the employer exposure to other has directed the employee to not work.
• If they take care of people who are diagnosed.

Have ongoing communication with your employees that are on leave so that you will not be blindsided and they will not be as well. If they refuse to come back to work, try to understand why.

5. If the company paid employees on 3/31/2020 for the pay period is 3/9/2020-3/24/2020, we should use the pay date to calculate the subsidy or the pay period?

Subsidy is based on the amount actually paid during the relevant pay period March 15 – April 11th. Exclude March 9-14th, and start counting on March 15 and include anything paid up to April 11. This employer next pay period would be March 25 to April 8. All earning to that pay period. And then 3rd pay period April 9/10/11 and combine those three to total the amount paid to the employee during the first claiming period. You can claim wages that were paid for the specific period - “It is not when they were earned (wages) but it is when they were paid”.

6. If we laid off the employee on 3/28 and paid him on 3/31 and rehire him on 4/10/2020, but paid him on 4/30/2020 for the period from 4/10-4/24, which claim period we can include his wage?

“It is not when they were earned (wages) but it is when they were paid”. This employer would claim the wages paid for the period between March 15 and March 28 PLUS the wages paid for April 10 and 11 – which is just the first two days of the second pay period. The rest of that pay period would go on the second claiming period: April 12 to May 9.

7. How does the 10% wage subsidy impact the 75% wage subsidy calculation?

Any amounts that you have already claimed under the 10% claim will be deducted from the 75% for the specific period. So you will be receiving 65%.

8. What is the impact of withholding federal tax and not withholding federal tax for the 10% subsidy?

You have to withhold to get this subsidy as there is no other way to get it.

9. Is the criteria for qualifying for the 10% subsidy different than the 75% subsidy? What are the differences?

For the 10% you do not have to show any drop in revenue, you will automatically qualify if your taxable capital is less than $15 million in the previous tax year. Main difference is that 10% is limited to $25,000 total per employer and up to $1375 per employee for the 3 month period it applies – focus more on small business. Rather than the 75% that has no overall limit on what a business can claim.

10. What is the proper way of claiming the wage subsidy for commission sales people? Average from last year? Actual sales from the period claimed?

Focus is on the wages actually attributed to the employee’s payroll in the claiming period, not amounts that might have been “earned” but will be added to a later payroll period, because the subsidy is based on what you have actually paid the employees. The payment could be for commission earned for pervious months or years but it is shown on payroll in the claiming period, so it qualifies.

11. I read that once you are eligible for one period of subsidy, you automatically qualify for the next period, even if you are not below the 30%. Can you confirm that this is true?

This is true.

12. Sales commissions and monthly bonuses paid for reaching targets at month end. For CEWS are we able to take commissions paid and average them over 4 weeks in the month or are they treated as earned when paid. Also, can bonuses paid in May that are for targets reached in April considered as April earnings or do they have to be calculated as May?

Only look at amounts attributed to the employee’s payroll during the claiming period and not at amounts earned. Bonuses paid on May payroll for targets reached in April will go on the May claiming period when they are actually attributed to the employee’s payroll and paid by the employer.

13. If a company has more than one pay period type with different pay periods that fall within each of the CEWS periods do we wait until the last pay period's pay date occurs before a claim can be made or can multiple claims per period be made?

You can only make one claim per claiming period, if you have multiple pay periods within that claiming period best practice to wait until you paid all the amounts you are going to be paying eligible employees before you are making the application. You have to pay the money before you get the subsidy. If you have to wait to May 10th, wait. Pay the money and then make the application.

14. Are automobile benefits included in the total remuneration paid to an employee?

Yes, if it’s the taxable portion of the benefit.

15. As part of the conditions of receiving the CEWS, is an employer supposed to be topping up current wages to the pre-crisis baseline amount?  In an Apr. 11 update it stated  %22These employers are expected where possible to maintain existing employees' pre-crisis employment earnings.%22  But I haven't seen anything on this topic in more recent updates." open="on" _builder_version="3.19.18"]

Nothing in the legislation itself that requires you to do that, if you do bring someone back at a reduced wage, you are not required to top them up to receive the CEWS.  Nothing in the attestation either that requires the employers to certify that they are doing everything they can to top up the employee pre-crisis wages. The government has backed away from this position a bit in the sense that there do not appear to be any legal consequences for not topping up to pre-crisis earnings.  

16. When bringing laid off staff back, do you have to bring them back in order of seniority?

Generally, no, unless they you have a collective agreement and you have to deal with the union on who gets called back. Secondly, the Employment Standards Act -  check on updates if they are entitled to the COVID-19 leave.

17. If an employee is asked to quarantine by health officials, and then there is no work to come back to, do you amend the role from sickness to lack of work?

Yes – in this case you likely would have issued the first ROE with code “D” for sickness. If the reason for the interruption in earnings has changed, you want to issue a new ROE coded as “A” for shortage of work.

18. Regarding the BC Emergency Benefit for Workers, the one time $1,000 payment from the BC government according to the website, it says that in order to be eligible you must “have been approved for the CERB”. What if some of the employees that we temporary laid off was approved for EI instead of the CERB, can they still apply for the $1,000 BC emergency benefit even though they didn’t apply for the CERB because they were approved for EI instead?

In order to be eligible for the BC Emergency Benefit for Workers (BCEBW), individuals must:

• be a resident of B.C. on March 15, 2020;
• meet the eligibility requirements for the CERB, i.e.:
• Received at least $5,000 of income in 2019 or in the 12 months before the application;
• Ceased working for at least 14 consecutive days for reasons related to COVID-19 (e.g. sickness, quarantine, caregiving of family member due to COVID-19)
• Not received more than $1,000 in income during the benefits period;
• have been approved for the CERB, even if a federal benefit payment has not yet been received;
• be at least 15 years old on the date of application;
• have filed, or agree to file, a 2019 B.C. income tax return; and
• not be receiving provincial income assistance or disability assistance.

We note that for anyone who became eligible for EI regular or sickness benefits on March 15, 2020 or later, their Employment Insurance claim will be automatically processed through the Canada Emergency Response Benefit (CERB). As such, any employees laid off after March 15, 2020 should have their claim processed under CERB and not under the pre-existing EI rules and should therefore be eligible for the BCEBW.

19. Is it correct that you cannot claim the CEWS on wages paid to an employee that is collecting CERB? I thought this is what was said in one of the Dealer Pilot webinars.

The definition of “eligible employee” in the CEWS legislation requires that the employee was not without remuneration for 14 consecutive days or more during the claiming period. This was originally how the CERB eligibility was defined. Thus, if the employee is receiving CERB, it is possible they are not an eligible employee. To determine if the employee is eligible for CEWS, check your payroll records for the claiming period. If the employee was without pay for 14 or more consecutive days, then you cannot claim the CEWS on any wages paid during the claiming period.

20. Have there been any updates on the special code that is supposed to be used to report wage subsidy amounts on T4’s?

That question is not within our expertise as employment lawyers. I would suggest checking with your accounting or tax professional.

21. Don’t you have to deduct the TWSE from your CEWS claim regardless of whether you have claimed the TWSE or not?

No. You don’t have to deduct the 10% temporary wage subsidy from the CEWS unless you have actually claimed it. If you have not claimed it, you enter “$0” in Line F of the online application.

22. I have had different advice on the calculation of wages for the purposes of the CEWS claiming periods in that you must calculate those wages that were earned and paid with respect to each week. As such, the calculation is on an earned basis, not on a paid basis meaning that where the dealership’s pay periods does not line up with the claim period of March 15-April11 (which is likely the case). You will need to calculate what the employees earned for each week.

There is a key difference between “earned” and “paid” during the claiming period. For example, something can be earned during the claiming period but actually paid out for on a different claiming period. For the CEWS, our interpretation is that you look at the paid wages attributed to the employee during each week of the claiming period. What does their paycheque say they earned for that period and has it actually been paid? The wages may not have actually been paid during the claiming period (if the pay date falls after the pay period) as long as the wages have been paid before you make your application, they can be claimed. In essence, you look at the wages paid to the employee for each week in the claiming period.

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: Chris Drinovz at [email protected], Mike Weiler [email protected], Jesse Dunning at [email protected], Melanie Booth at [email protected], or or our Tax Group: Kevin Scott at [email protected]