Disability insurance (short-term and long-term) is designed to provide one with income replacement or supplement in the event one becomes disabled due to an injury, illness, or accident and cannot work. Typical disability insurance policies provide for monthly benefits of 60-85% of one's regular monthly earnings.

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Disability insurance is governed by the insurance policy, the Insurance Act, RSBC 2012, c 1, and common law principles.

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There are a variety of sources of disability income, LTD is one of them. Others include:

- employer sick pay,

- Employment Insurance sickness benefits,

- short-term disability insurance ("STD"),

- Canada Pension Plan disability pension ("CPPd"),

- Disability Tax Credit,

- Workers Compensation, and

- BC Disability Assistance.

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Disability Insurance - Peace of Mind Contract

Disability insurance is a "peace of mind" contract. This means that disability insurance is meant to provide the insured with: (1) income replacement during a period of disability when they cannot work; and (2) the reassurance of financial security during such a period. The Supreme Court of Canada in Fidler v. Sun Life Assurance Co. of Canada, [2006] S.C.J. No. 30 at paras. 39 and 57 ("Fidler"), described disability insurance as "where the very object of [the]insurance contract is to provide… peace of mind…" and commented that "the intangible benefit provided by such a contract is the prospect of continued financial security when a person's disability makes working, and therefore receiving an income, no longer possible."

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Two Types of Disability Policies

There are two broad categories of disability insurance policies: group policies and individual policies. Individual policies are characterized by a one-to-one relationship between the insured and insurer. Group policies are a single insurance policy issued to a group or association (e.g., employer or union) to which all eligible members of that group may be insured under the policy. The employer may pay some or all of the premiums on behalf of the individual insureds. Employees become plan members, but do not have direct privity of contract.

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Eligibility for LTD Benefits: "Totally Disabled"?

The standard required in disability policies to be eligible for benefits is "totally disabled". Each insurance policy will have its own slightly different definition but, generally, it means that the insured person is unable to perform the essential duties or majority of their job due to an injury or illness.

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While the insurance policy generally governs the test for total disability, BC and Canadian courts have also weighed in on what "totally disabled" means:

An insured is considered to be totally disabled from performing her own occupation where she is unable to perform 'substantially all of the duties of that position.' Total disability does not mean absolute physical disability, but rather that the insured's injuries are such that common care and prudent require her to desist from her occupation in order to effectuate a cure: Paul Revere Life Insurance v. Sucharov, 1983 CanLII 168 (S.C.C.), [1983] 2 S.C.R. 541, at para. 546.

You may also be considered “totally disabled” if:

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1. You cannot work your regular job in the short-term.
2. You cannot work your regular job in the long-term.
3. You can currently work PART-TIME at your own job.
4. You can currently work PART-TIME at another job.
5. You can perform SOME tasks of a job, but not all.
6. Ceasing to work can improve your quality of life or prolong your life.

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Most disability policies have two different time periods during which the definition of "totally disabled" is applied differently:

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1. the "own occupation" period that refers to the insured's pre-disability job and that typically runs for the first 2 years of disability; and
2. the "any occupation" period that broadens the definition to include any occupation for which the insured is suitable by education, training, and skill.

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Disability Insurance Information

Continue learning about submitting a Long Term Disability Claim and claim denials, wrongful dismissals and cutting off benefits, disputing claims and overview of the legal process in our related Disability Articles:

1. Applying for Long Term Disability and Denied Claims
2. Calculating Damages in a Wrongful Dismissal With a Disability Benefit Claim
3. Disputing Denied Disability Claims, Remedies and Overview of Legal Process

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Our experienced Employment & Disability Group is ready to review your claim in a free consultation, and provide you with invaluable information and assistance. Get in touch today.

On December 1, 2022, federally regulated private sector employees will gain 10 days of sick leave per year with amendments to Part III of the Canada Labour Code. Here’s what you need to know.

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Since the beginning of the pandemic, employers have struggled to navigate perpetually changing Covid policies and procedures. Further, many employees simply cannot afford to stay home after testing positive for Covid, but are legally obligated to due to mandatory isolation periods. In response to these issues, governments across the country are implementing variations of paid sick day provisions.

The Government of Canada’s introduction of 10 paid sick days for federally regulated private sector employees will impact approximately 6% of Canadian workers employed by 18,500 employers (article here). On December 1, 2022, the new paid medical leave provisions will come into force. An Act to amend the Criminal Code and the Canada Labour Code (BillC-3), which received Royal Assent in December 2021, amends Part III, Division XIII (Medical Leave)of the Canada Labour Code, RSC, 1985, c L-2 (“the Code”).

Additionally, there are proposed changes to the Canada Labour Standards Regulations, CRC, c 986 (the “Regulations”) which will provide detailed guidance on the operation of the new provisions. Currently, they are slated to come into force at the same time as the changes to the Code.

How It Will Work

Employees who are newly hired will not be entitled to the full ten sick days immediately. Once an employee has been employed for 30 continuous days, they will be eligible for three paid sick days. From thereon, employees will gain one additional sick day per month work, with a maximum of ten paid sick days per year. Additionally

[a]nydays of medical leave with pay that an employee does not take in a calendar year will carry forward to the next calendar year and each day carried over reduces the number of days that can be earned in that next year by one [Canada Gazette]

If an employer uses a different year, other than a calendar year, for calculating vacation pay, the Government of Canada currently directs these employers to “use that same year for the purposes of the paid medical leave provisions.”

Employees who take sick days will be paid their ‘regular rate of wages’. If an employee does not have a standard set of working hours each day, section 17 of the Regulations states that their regular rate of wages would be calculated as follows:

(a)  the average daily earnings of an employee (other than overtime pay) for the 20 days the employee worked immediately before the first day of the period of paid leave; or

(b)  an amount calculated by a method agreed on under or pursuant to a collective agreement that is binding on the employer and the employee.

The Regulations will mandate employers to keep records of the following:

1. The dates of commencement and termination of the leave;
2. The year of employment in respect of which the leave was earned;
3. The number of days of leave carried over from a previous year;
4. A copy of any written request for a medical certificate made by an employer; and
5. A copy of any medical certificate submitted by an employee

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Additionally, employers may instruct employees to take sick days “in periods of not less than one day” and may ask that employees provide a medical certificate if they go on sick leave for at least 5 consecutive days.

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Who is a Federally Regulated Private Sector Employee?

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The 10-day sick leave applies to workers employed at Federal Crown Corporations and Federally regulated private sector employees. This includes the following:

1. International and interprovincial transportation by land and sea, including railways, shipping, trucking and bus operations;
2. Airports and airlines;
3. Port operations;
4. Telecommunications and broadcasting;
5. Banks;
6. Industries declared by Parliament to be for the general advantage of Canada or for the advantage of two or more provinces, such as grain handling and uranium mining; and
7. First Nations Band Councils

Employees who are part of the Federally regulated public sector will not be eligible for the 10-day sick leave (such as the Federal Public Service and Parliament).

Part II (occupational health & safety) and Part III (standard hours, wages, vacations &holidays) of the Canada Labour Code only apply to the employee/employer relationship, and therefore does not apply to independent contractors. Accordingly, independent contractors will not be eligible for 10 days of paid sick leave either.

If you are unsure whether these changes impact your workplace, or if you have any questions about this topic, please do not hesitate to get in touch with our Employment & Labour Group.

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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.

On June 23, 2022, changes to the Competition Act were passed into law which criminalized wage-fixing and no-poach agreements between unaffiliated employers in Canada.

These changes will come into force on June 23, 2023. It is important for both employers and employees to understand how these provisions operate before that date, as these changes open employers found in breach to significant legal exposure.  

The most important changes from an employment perspective are the creation of two offenses which are new to Canadian law:

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1. It is an offense for unaffiliated employers to conspire, agree or arrange to fix, maintain, decrease or control salaries, wages or terms and conditions of employment; and
2. It is an offense for unaffiliated employers to conspire, agree or arrange to not solicit or hire each other’s employees.

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Penalties under Competition Act

The changes to the Competition Act also include significant penalties for wage-fixing and no-poach agreements, including imprisonment for up to 14 years and/or a fine in the discretion of the court.  Notably, the amendments to the Competition Act removed the previous ceiling on fines of $25 million, so the size of the financial penalty that an employer can face is now theoretically uncapped.

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Why?

The motivation behind the changes to the Competition Act was to address a gap in the law in Canada which was driven into sharp relief during the Covid-2019 pandemic.  In March 2020, various food retailers in Canada introduced a wage premium to, among other reasons, reward employees who continued to provide essential services during the early lockdowns.  Three food retailers subsequently simultaneously terminated this wage premium in June 2020.

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The House of Commons Standing Committee on Industry, Science and Technology conducted hearings to look into the matter in July 2020.  The testimony of the representatives of the food retailers before the Committee confirmed that communication had taken place at the executive level regarding the termination of the wage premiums, but all of the representatives denied any coordination, and maintained that their decisions had been made separately.  Notably, under the Competition Act at the time this communication occurred, coordination for the purposes of suppressing wages (had it in fact occurred) was entirely legal.

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Proving wage-fixing and no-poach agreements

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Notably, the Competition Act allows a conspiracy, agreement or arrangement to be proven through circumstantial evidence.  Accordingly, while the existence of the conspiracy, agreement or arrangement must be established beyond a reasonable doubt to make out the offense, it is impossible to infer the existence of such a conspiracy without direct evidence.  

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There is an interesting exception to the wage-fixing and no-poach agreements, in that if it can be shown that the wage-fixing or no-poach agreement is ancillary to a broader or separate agreement or arrangement involving the same parties, and if it can be shown it is directly related to and reasonably necessary to give effect to the objective of the broader agreement, there can be no conviction under the Competition Act.  What this means, in effect, is that employers who enter into a no-poach agreement in certain contexts, such as the purchase and sale of a business or a joint venture, which may reasonably require such a clause in certain circumstances, are likely not in breach of the new provisions to the Competition Act.  Any employer contemplating such an agreement should approach it with extreme caution, and seek legal advice before doing so.

TAKEAWAYS

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Employers should consult with legal counsel to review any agreements they have entered into with other unaffiliated employers to ensure that they are in compliance with the new provisions of the Competition Act well in advance of the amendments coming into force in June 2023.  

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From the employee perspective, employees who believe that they have been subject to a wage-fixing or no-poach scheme should seek legal advice, as it is possible to ground private civil actions on violations of certain sections of the Competition Act.

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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.

Most Wills remain effective if you move. However, updates are required when a Will gives a spouse or child a right to live at or keep a certain address and that address has changed. 

Moves are also a great time to review documents. Is your new location still convenient for your executors or should you choose new ones? Have you appointed a Power of Attorney in case you lose capacity? Etc. 

Consideration should also be given if you’ve moved between provinces. Each province has their own version of a Power of Attorney and Medical Agreement so it advisable to have one in any jurisdiction where you own property. 

If your Will needs to change, give Dan Grice and his team at KSW Lawyers a call. We can manage all your estate and tax planning needs, business services, disputes and more.

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If so, you may have received a letter from the B.C. Government stating the need to file a report with the Land Owner Transparency Registry (LOTR) by November 30, 2022. The filing’s purpose is to disclose the true owners, or “interest holders”, of land in B.C. If the deadline is missed, there are significant penalties that can result in fines of up to $50,000 or 15% of the property’s assessed value.

The Government requires a legal professional to file the report on your behalf because legal professionals are experts in land and title matters. They can advise on issues with respect to land ownership that may have far reaching effects on estate planning, taxation and other legal matters. The Government is relying on lawyers to protect the integrity and accuracy of the information in the registry, since they will complete the required identity verification.

If you received this letter from the Government or think you may own land in B.C. through a company, a partnership, or a trust, please reach out to us at 604-591-7321 or [email protected]. We can assist with your filing before the November 30, 2022 deadline and help you avoid any penalties.

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With the passing of Queen Elizabeth and her funeral set for Monday September 19, 2022, governments throughout the world are looking to see how to honour Her Majesty’s passing.

In Canada Prime Minister Trudeau announced there would be a National Day of Mourning.  The government published a Proclamation of the Governor General stating, inter alia, “…by this Our Proclamation request that the people of Canada set aside September 19th 2022 as the day on which they honour the memory of Her late Majesty Queen Elizabeth the Second, who passed away on September 8th 2022.”  The Proclamation requires that the “Loving Subjects…take notice and to govern themselves accordingly.”

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Is September 19, 2022 a Statutory Holiday?

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Unlike the September 30 NDTR holiday, this day of remembrance is NOT a statutory holiday under the Canada Labour Code or (federal) related legislation.

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Nor is it a statutory holiday under the BC Employment Standards Act (provincial). The Premier has made it clear that while the BC government will give the day off with pay to provincial employers and shut down government offices including schools and courts, there will be no amendment to the Employment Standards Act to make it a holiday applying to all provincial employers.

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The Prime Minister has declared that federal government employees will have a paid day off. But his Minister of Labour, following the outcry of federal employers led by the banks, made it clear that this holiday would not affect non-government federally regulated employers such as banks, telecommunications, or aerospace employers. In a tweet he stated:

September 19, 2022 will be a holiday for federal government employees. It will be a day of mourning for the passing of Her Majesty Elizabeth II, Queen of Canada. Federally regulated employers are welcomed to follow suit, but they are not required to do so. [emphasis added]

Therefore, provincially regulated non-union employers are not required to give their employees the day off with pay.  We encourage employers to follow the direction to provide employees with the opportunity to take a moment of silence on Monday to show their respect for Her Majesty.

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Unionized Employers and Collective Agreements

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The more difficult question relates to those BC unionized employers who have in their collective agreements language that provides for listed Paid Holidays but adds holidays declared or proclaimed by the federal government.  For example, the BC government collective agreement stated:

Any other day proclaimed as a holiday by the federal, provincial, or municipal governments for the locality in which an employee is working shall also be a paid holiday.

The BC Government relied on that language to say they were obligated to give September 30, 2021 off as a paid holiday to its unionized employees notwithstanding that the NDP chose not to make it a statutory holiday.

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The language of the collective agreement in question will be the deciding factor as to whether you as an employer are bound to treat September 19, 2022 as a paid holiday. Therefore, each case will be decided on the specific language in the collective agreement including bargaining history.  We suggest that you consult with your professional advisors including legal counsel if you have a question about your collective agreement.

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However, with that caveat, in our view there is a strong argument that the September 19, 2022 day of remembrance will not likely be covered by the various collective agreements that might otherwise incorporate federal holidays.  This day has not been declared or proclaimed as a federal holiday with pay.  The statement by the Prime Minister and as reflected in the Proclamation does not have legal force nor does it purport to impose an obligation on any employer.  That is made clear by the Minister of Labour’s statements that non public service employers are not bound to provide a paid holiday.  Both the federal government and the provincial government are making decisions to give the day off as employers, not as government.

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This is of course a one-off holiday so it might be hard for unionized employers to refuse to provide that day off if government employees have the day off with pay.  But the precedent set by giving the day off might be a problem down the road.

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If you have any questions about this topic, please do not hesitate to get in touch with us for legal advice specific to your workplace.

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Mike Weiler - Contact Info: [email protected]; Cell: 604 250 0090

September 15, 2022

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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.

We’ve all heard the term child support, but what is it really? 

The courts view the payment of child support as a right of the child and this right is taken very seriously.

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The parent or guardian who pays support is called the “payor.” The parent or guardian who receives the support is called the “recipient.” 

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Child support is the obligation of a parent or guardian to pay support for a child based on the paying parent or guardian’s income. The child support also varies depending on the number of children for whom support is paid. In other words, the child support amount increases with the number of children. For example, if the payor lives in BC and has an income of $50,000, the payor would pay $470/month in child support for one child, $781/month for two children, $1,029/month in child support for three children, and so on.

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 What happens when you get behind?

What happens when you get behind on making these child support payments also known as being in arrears? The answer really depends on the facts that will inevitably be unique to your situation. But broadly, here is what can happen:

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1.  You and the recipient can talk about the change that may have led to you being behind in payment. For example, if you lost your job and haven’t been able to find another one, the recipient may be willing to cooperate with you and wait a few months before taking steps to seek or obtain a court order for child support or enforce an existing court order or agreement.
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2. If there is a court order or written agreement, and the recipient has already registered the court order or written agreement with the Family Maintenance Enforcement Program (or “FMEP” for short), then FMEP can start taking enforcement measures against you. For example, FMEP can garnish your wages, intercept any federal incomes or money you are going to receive such as income tax refunds or EI, cancel your driver’s licence or prevent its renewal, take you to court for unpaid support payments, and so on.
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3. If there is a court order or written agreement, whether or not FMEP is taking enforcement steps, the recipient can go to court to enforce payment in accordance with the order or agreement. You will in a position then to explain why you are behind in payments. You may also want to consider making a court application, if you haven’t already, to vary or change the child support payable by you.
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4. If you and the recipient don’t agree to any changes in your child support obligations, then you can (and likely should) make a court application to vary or change the child support payable by you under a court order or agreement.

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Follow the agreement

Keep in mind that if there is a court order or written agreement between you and the recipient, you should be following it. But if for some reason you cannot, and you and the recipient don’t agree on the change, then you should make a court application to vary or change that court order or agreement. Part of that court application could be to cancel or set aside any arrears of child support.

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If you are behind in making payments for child support or need help navigating the court system on this issue, come see us and we’d be happy to assist you in determining the viability of your case.

In an attempt to enhance consumer protection for homebuyers, the B.C. government has introduced a new 3-day “cooling-off period” on residential real estate sales. The “homebuyer protection period”, asit is referred to by the B.C. government, is a first of its kind in Canada, and becomes effective on January 1^st, 2023.

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The cooling-off period is meant to protect B.C. homebuyers from being pressured into high-risk sales. Amendments to the Property Law Act made in April 2022 grant the B.C. government the power to enact regulations which enhance buyer protection in the real estate market. The regulations will come into force by January 1, 2023, and will add a right of rescission (cancellation) to the Property Law Act, under which a buyer of residential real estate will have 3 business days (the “cooling-off period”) following an accepted offer to conduct research on the property, such as carrying out inspections, securing mortgage loan financing, and seek ng legal advice, before deciding whether to rescind their offer. The new cooling-off period is intended to apply to resale property and newly constructed homes. Cooling-off periods for pre-construction sales of multi-unit development properties, like condominiums, are already in place under the province’s Real Estate Development and Marketing Act.

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Buyers can still make offers conditional at any time (for example, on things like obtaining financing or a satisfactory home inspection). The cooling-off period is meant to offer homebuyers the opportunity to conduct research on the property at times when their offer does not have any conditions in place, as was often the case during the booming market over the past several years.

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The new cooling-off period includes a rescission (cancellation) fee of 0.25% of the property’s purchase price, or$250 for every $100,000, for those buyers who choose to back out of a deal. For example, if the buyer exercises its right to cancel its offer on a $1-million property, they would be required to pay $2,500 to the seller. Commentators have noted that the penalty could be small enough that there could be increased activity in buyers backing out of deals after big announcements, such as substantial Bank of Canada interest rate hikes or particularly jarring inflation reports.

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The cooling-off period is one of several recommendations which the B.C. Financial Services Authority  (BCFSA) made in May 2022 to cool down the province’s white-hot residential real estate market. The B.C. government had initially pitched a 7-day cooling-off period, but the B.C. Real Estate Association had pushed back. Instead, the realtors’ association proposed a5-day pre-offer period, which would require that a listing remain on the market for at least 5 days before an offer could be accepted, which should theoretically have the intended effect of stemming bidding war by desperate buyers. The BCFSA included the real estate sector’s proposed 5-day pre-offer period in its list of recommendations in May.

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Contrary to the BCFSA’s recommendations, the new legislation does not include the 5-day pre-offer period, legal provisions to ensure that a buyer gets reasonable access to the property during the cooling-off period to conduct an inspection, or a requirement for a buyer to have to inform the seller whether or not the buyer has active offers on other properties before the seller accepts the buyer’s offer.

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Although the new regulations are intended to protect individual buyers of houses and condos, they use the term“ residential property”, which is quite broad. This means that sales of apartment buildings and seniors homes may be caught by the changes, even though such sales are typically considered business transactions. If the regulations that come into force at the end of this year do not provide exemptions, commercial brokers and investors will need to be aware of the new cooling-off provisions and account for them under their contracts of purchase and sale. As the new laws will come into force at the end of the year, the full details, including potential exemptions for residential properties such as apartment buildings and seniors homes, are not yet clear.

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If you have any questions regarding the new cooling-off period, please contact Christine Wang or Aman S. Bindra of our Surrey office, or Tyler Evans or Dan Grice of our Abbotsford office.

Two recent cases from the BC Supreme Court involving employees over 60 highlight two important employment law principles.

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Okano v Cathay Pacific Airway Limited, 2022 BCSC 881

In Okano v Cathay Pacific Airway Limited, 2022 BCSC 881 ("Okano"), the plaintiff was 61 years old and worked for the defendant airline company for just under 35 years when she was terminated without cause during the pandemic. At the time of dismissal, the plaintiff was in a middle management position where she was responsible for some financial decisions and had the ability to hire and fire employees.    

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The plaintiff did not have a written contract dealing with severance. Therefore, she sought a notice period of 26 months at common law. The court ruled that apart from exceptional cases, the upper limit for reasonable notice is 24 months:

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[45] Our courts have been clear that, absent exceptional circumstances, the upper limit for reasonable notice is 24 months: Ansari at 42. The mere fact that the plaintiff was a long-term valued management-level employee does not constitute an exceptional circumstance that would lead to an increase in the upper limit of 24 months: Waterman v. IBM Canada Limited, 2010 BCSC 376 at paras. 20–24, aff'd on other grounds 2011 BCCA 337.

The court determined this case was appropriate to award the maximum 24 months given the employee’s long service, age, and management status.

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Importantly, the court reduced the plaintiff’s damages by 3 months for failure to mitigate (with an additional contingency reduction of 15% to the 7 months remaining in the notice period). The plaintiff made no efforts to find work in the first two months, then made passive efforts until the next summer. Most significantly, she decided not to apply for work in the airline industry. In making this deduction, the court confirmed that reasonable mitigation requires that terminated employees actively pursue employment in their field of employment and/or industry.

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Toy v 0954516 BC Ltd., 2022 BCSC 1161

In Toy v 0954516 BC Ltd., 2022 BCSC 1161, a 62-year-old fuel and scale attendant making about $40,000 pear year with 5 years of service brought a wrongful dismissal claim. In considering the Bardal factors, the court determined that 5.5 months of notice was appropriate.

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However, this employee also failed to mitigate his damages by only applying for 3 jobs in the year following the dismissal. The judge found that had the employee made reasonable efforts, he would have found work sooner. As a result, the court reduced damages by 2 months. After factoring in the one month already paid at the time of dismissal, the employee only ended up with an award of 2.5 months pay or less than $10,000.

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Takeaways

Employers can take some comfort in knowing that 24 months continues to be the common law maximum for reasonable notice, absent exceptional circumstances. However, 24 months is no small number especially for a senior manager! The best way for employers to avoid such exposure is to have well-drafted termination clauses that limit your liability to something less than the common law. If you would like your contract reviewed or if you would like to have contracts drafted, please contact your KSW lawyer today

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Read more of these updates on our Employer Resources Portal and through monthly Newsletters. If you have any questions or need assistance revising your employment contracts or policies, please reach out to Chris Drinovz at [email protected], or submit a Contact form.