On June 25, 2020, the BC government decided to further extend the temporary layoffs provision in the Employment Standards Act to a maximum of 24 weeks, expiring on August 30, 2020: https://news.gov.bc.ca/releases/2020LBR0018-001174. Extending the temporary layoff provision saved countless businesses from having to pay out severence to their employees who have been temporarily laid off due to COVID-19, and provide them with more time to recall their employees as business is restarting.

However, once the maximum period is reached, many temporary layoffs will become automatic terminations under the Employment Standards Act, triggering the obligation to pay statutory termination pay. In addition, recent case law in 2021 confirmed employees who were laid off can still start a wrongful dismissal lawsuit at common law against employers claiming constructive dismissal.

If you have employees who have been laid off for 13 weeks or longer, or are considering a layoff, and the layoff is related to COVID-19, this may apply to you. There are many different considerations including: is there a written employment contract, what is the nature of employment, was the contract impossible to perform due to COVID-19, has your business started back up, can you reach an agreement to recall or furlough the employee at reduced hours or pay, do you qualify for CEWS or other government benefits including the recently modified CEBA, can you apply to the Director of Employment Standards for a variance authorizing a longer period under existing provisions of the ESA? These are the questions we cover in this article.

When is a laid-off employee entitled to severance pay?

This has been one of the top questions both employers and employees are asking. Generally, if an employer lays off non-union employees due to lack of work with a right to do so in the employment contract, then termination pay under the Employments Standards Act (“ESA”) or damages for wrongful dismissal at common law may be owing. However the world has changed in such a fundamental way that we need to talk about pre COVID-19 and post COVID-19. This article will cover common severance pay questions for employers and employees.

Continue Reading: 8min Read

WHEN IS A LAID-OFF EMPLOYEE ENTITLED TO SEVERANCE PAY?

Absent seasonal work and the right to lay-off in a written contract, any temporary layoff is generally treated as a constructive dismissal under the common law, triggering the employer’s severance pay obligations either under the employment contract or the common law.

The ESA provided that after 13 weeks in any 20 week period, any temporary layoff would automatically become a termination. However, the Courts have held that this does NOT prevent employees from exercising their common law rights to claim a constructive dismissal if the layoff is less than 13 weeks.

After COVID-19 started, there were mass layoffs and many workers were prepared to waive their rights and accept temporary layoffs and rely on government benefits such as the Canada Emergency Response Benefit in order to keep their jobs. Many of these workers are now being recalled back to work but some are not. The ESA was also amended to extend the temporary layoff from 13 weeks to 16 weeks for a limited period of time.

If the temporary layoff was caused by COVID-19, then determining whether an employee is owed termination pay under the ESA or has a claim for severance pay and wrongful dismissal is more complicated. Here are some things to consider:

The important question is whether at the time of the lay-off, the employment contract was impossible to perform due to an unforeseeable event or circumstance outside of the control of the employer and the employee (such as COVID-19)? If the answer is “yes”, then the exception under section 65(1)(d) of the ESA may apply so that no termination pay is owing in this circumstance. A good example of this is if the employer had to completely shut down or significantly reduce its operations such that it simply could not continue to provide work for its employees.

If an employer simply loses business (e.g. loses a big contract) such an exempting principle would not normally apply to relieve an employer of its fundamental obligations to provide working notice of termination or pay in lieu.

The Director of Employment Standards has issued a revised Interpretation Bulletin outlining the circumstances when the exclusion would apply when the layoffs were related to COVID-19.

Different considerations might apply depending what point of the layoff you are. So for example if an employer’s business starts up but some employees are not recalled then the layoffs might constitute a wrongful dismissal or otherwise attract severance pay under the ESA after 13 - 16 weeks of lay off.

If an employer can recall or arrive at an agreement with all employees before the 13 week period arrives then it is highly unlikely that any claims by employees will be made.

At this time, the maximum period for allowed temporary lay-offs due to COVID-19 under the ESA is 13 weeks, if the employee agrees. Since an employer cannot contract out of the ESA if it violates its minimum prosvisions, an employer cannot enforce any agreement that involves a layoff longer than 13 weeks in a 20 week period, even with an employee's consent.

As confirmed by the BC Labour Minister in his letter dated June 18, 2020 addressed to the Business Council of British Columbia, "in a specific situation where employers and employees require longer than 16 weeks (at that time, now back to 13) for a temporary layoff caused by COVID-19, an option that would be available to the parties if they agree would be to jointly apply to the Director of Employment Standards for a variance authorizing a longer period under existing provisions of the ESA. The Director may grant the requested variance if a majority of affected employees approve."

For more information, contact our Employment & Labour Group or visit the Employment Standards Branch website for detailed guidelines on the application of the ESA including recent updates in response to the COVID-19 pandemic.

If an employee has to be terminated and paid severance pay, the amount will be limited by the employment contract termination provision (if there is one and it is enforceable).

As previously mentioned, under the ESA, a temporary layoff longer than 13 weeks in any 20-week period (or about three months in a five-month period) was considered a permanent layoff or a termination. With a permanent layoff, employers are required to provide employees with written working notice of termination and/or pay severance to qualifying employees, based on their length of service (and issue a Record of Employment at the end of the employment relationship). Now, temporary layoffs relating to the COVID-19 pandemic can be extended through the application for variance process, if the employee agrees.

Although a longer layoff might be considered a termination for the purposes of the ESA, we strongly recommend communicating with your employees and trying to reach an agreement if further time is required due to COVID circumstances. A lot of employees are willing to work together to support their employer and keep their jobs and with the added support of the numerous financial aids from the Federal and Provincial governments (previously including CERB, CEWS, CEBA, Rent Assistance, Work Share, Sub Plan), this could be possible. We recommend reaching agreements where possible before terminating valued employees, and we can help you ensure the agreements are documented accordingly.

Since the decision in Bardal v Globe & Mail in 1960, courts have relied on the set of factors laid out when calculating the length of the reasonable notice period to be awarded to a terminated employee that does not have a written or implied term limiting severance pay. These “Bardal factors” include the length of the employee’s service, age, character of the job they have lost, and availability of similar alternative employment. The economic downturn caused by COVID-19 will likely impact how courts calculate reasonable notice. In previous economic downturns, the courts have provided for increased notice periods, however they have explicitly stated that this factor cannot be given undue weight. At present, we do not have any legal precedent for how our courts in BC will treat the pandemic when assessing the notice period.

If you are interested in an opinion regarding the amount of severance pay owing, please contact one of our team members and we would be pleased to assist you.

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 Chris Drinovz ([email protected]) of our Employment & Labour Group.

I will be relying on Chris and KSW for

all of my companies Employment Law

needs for many years to come

I was referred to KSW by our corporate lawyers because they said KSW was the most experienced firm for Employment Law in B.C. I reached out to KSW and was put in contact with Chris over a year ago. He spent over an hour with me on the phone and over email to help me with an issue that he never charged me for. About 6 months later, I reached back out to have Chris create our Employment Agreement contracts, and customer Letter of Agreement contracts. Chris is helpful, quick, and thorough. I will be relying on Chris and KSW for all of my companies Employment Law needs for many years to come. Thank you Chris!

Jessica Louise, Kitchen Makeovers

In March 2020 most businesses in BC ground to a halt with many laying off most, if not all, of their employees or dramatically reducing hours of work or wages. In many cases employers were able to carry on some portion of their businesses by having employees work from home.

Chris and I spent much of the last 3 months counselling clients on how to deal with dramatic changes in their businesses and how to access the numerous Federal, Provincial and Municipal programs intended to keep businesses and employees afloat.

As we enter Phase 2 of BC’s Restart Plan, many employers are realizing that the light at the end of the tunnel might not be the oncoming train they saw in March. Chris and I are now fielding more questions on how businesses open up again, in many cases on reduced capacity, in order to maximize their chances of success post COVID-19 lockdown.

Here are 5 critical questions you might consider. The list of course is not exhaustive. We once again caution the reader to not consider these comments to be legal advice for your business. Each case must be considered on the particular facts of your business—did you totally shut down or were you partially shut down? Did you keep your benefits for employees while on lay off? Are you union or non-union? Do employees have binding written employment agreements? Are any of your employees entitled to COVID-19 leave under the Employment Standards Act? Given these limitations if you have any questions about your business or your employees and are seeking legal advice please consult your professional advisors. However the value of this article we hope is to help you identify what questions to ask those advisors as you search for the optimum avenue to return to business post COVID-19 lockdown.

Continue Reading: 8min Read

5 CRITICAL QUESTIONS TO ASK AS YOU RESTART YOUR BUSINESSES

We have been saying from the beginning that it is incumbent on employers to ensure they maximize all the financial benefits being provided by all 3 levels of government. That is something each business must do on an ongoing basis as the programs are changing almost daily. The programs are too numerous to describe here but include the initial amendments to EI to waive the waiting period, the $2000 a month CERB payments, to the 75% wage subsidy under CEWS, to all the other financial programs such as the Canada Emergency Business Account (CEBA) which provides for an interest free loan of up to $40,000 with up to $10,000 forgiven, to bank loans and deferrals, to deferrals of taxes such as the Employer Benefit tax and GST/HST remittances and rent relief. The Provincial government has introduced numerous programs to support employees and businesses including $1000 for each employee.

So do your due diligence and maybe assign one of the management team members to do a daily or at least weekly update. If you are part of a business association see if they are providing any useful information and assistance. For example the New Car Dealers Association of BC provides daily updates for its members and is proactive in lobbying government for changes.

The good news is the CEWS has been extended now for another 12 weeks to August 29th 2020. This is not surprising as the goal of government in introducing CEWS was to allow employers a runway to get back on their feet and maintain a strong work force.  Don’t be surprised if further extensions are provided.

We also note that the government has announced changes to the criteria for the CEBA to allow more businesses to access the program. In particular, the previous requirement that the business have at least $20,000 in payroll for 2019 is going to be waived so that self-employed persons and others that pay themselves in dividends can access the program provided they can show eligible non-deferrable expenses between $40,000 and $1.5 million. Eligible non-deferrable expenses could include costs such as rent, property taxes, utilities, and insurance.

If you need help in accessing information on all these programs give us a shout.

Generally if an employer lays off non-union employees due to lack of work then severance pay under the Employments Standards Act (“E S Act”) or damages for wrongful dismissal at common law may be owing. However the world has changed in such a fundamental way that we need to talk about pre COVID-19 and post COVID-19.

Pre COVID-19

If an employer laid off a non-union employee then under the E S Act that temporary layoff became a termination if it lasted more than 13 weeks within a 20 week period. Severance pay would then be owing. In addition at common law, absent an express agreement, laying off an employee due to lack of work would normally constitute a fundamental breach of the employment contract and thus the employee could claim her employment was terminated. She could then claim damages for lack of working notice as she was wrongfully dismissed. Those damages could far exceed the minimum severance payments under the E S Act which cap at 8 weeks after 8 years of service.

For example in Bessie v Dr. A. S. Machner Inc. 2009 BCSC 1316 the employer mistakenly relied on advice from the Employment Standards Branch that he could temporarily lay off an employee so long as it was less than 13 weeks. The court held that a temporary layoff constitutes, in the absence of a contractual provision permitting the same, a fundamental breach of contract. Dr. Machner breached an essential term of the contract of employment as the continued attendance of an employee at the place for work, for pay, is central to the employer-employee relationship.

Post COVID-19

However if the layoff was caused by COVID-19 then it is very likely that no severance pay under the E S Act would be owing nor would the employee necessarily have a claim for wrongful dismissal damages.

The E S Act was amended recently to expand the temporary layoff provisions from 13 weeks to 16 weeks within a 20 week period when the layoffs are related to COVID-19. But more importantly it is likely that the severance provisions under section 63 (individual severance) or section 64 (group termination) would not apply because of the exception under section 65(1)(d) of the E S Act that provides no severance is owing if the employee is:

(d) employed under an employment contract that is impossible to perform due to an unforeseeable event or circumstance.

The Director of Employment Standards has issued a revised Interpretation Bulletin outlining the circumstances when the exclusion would apply when the layoffs were related to COVID-19.

https://www2.gov.bc.ca/gov/content/employment-business/employment-standards-advice/employment-standards/forms-resources/igm/esa-part-8-section-65

 A similar principle may well apply to claims of wrongful dismissal based on layoffs caused by COVID-19. At common law a contract can become “legally frustrated” when the substratum of the contract is impossible to perform because of unforeseen events.

In Wightman Estate v. 2774046 Canada Inc., 2006 BCCA 424, 57 B.C.L.R. (4th) 79 (C.A.) Smith J.A., giving the decision of the Court, stated the concept of frustration at para. 1 as follows:

It has long been a tenet of our law that a contract may be brought to an end by operation of law and the parties discharged from further performance if, without the fault of either party, the circumstances in which it was expected to be performed have changed so radically that performance would be impossible or at least something fundamentally different than was initially contemplated. In such circumstances, the contract is said to be frustrated.

If an employer simply loses business (e.g. loses a big contract) such an exempting principle would not normally apply to relieve an employer of its fundamental obligations to provide working notice of termination or pay in lieu. But here COVID-19 is a game changer-- a pandemic that has suddenly shut down almost the entire province. Indeed it would be ironic for a plaintiff’s lawyer to argue that the layoff caused by COVID-19 was a dismissal when all levels of courts in BC are shut down because of COVID-19.

Different considerations might apply however at some point in the layoff process. So for example if an employer’s business starts up but some employees are not recalled then the layoffs might well constitute a wrongful dismissal or otherwise attract severance pay under the E S Act after 16 weeks of lay off.

If an employer can recall all employees before the 16 week period arrives then it is highly unlikely that any claims by employees will be made.

The first thing to do is check if any of the circumstances of the COVID-19 leave provided in section 52.12 of the E S Act applies (for example, is the employee providing child care due to school closure). If the employee meets any of these criteria, they are entitled to an unpaid job-protected leave as long as the circumstances persist.

The second thing to consider is whether the employee is making a legitimate work refusal for health and safety reasons. Employees have the right to refuse unsafe work under section 3.12 of the Occupational Health & Safety Regulation. A valid work refusal requires that the employee have reasonable cause to believe that performing the job or task will create an undue hazard to their health and safety. The term “undue hazard” means something that will expose the worker to an excessive or unwarranted risk of injury or occupational disease. Once the worker makes an unsafe work complaint, the OHS Regulation and Guidelines mandate a four-step process for investigating and responding. If you cannot resolve the issue with your worker, the final step and last resort is to call in WorkSafeBC to make a ruling. We recommend that take these complaints very seriously and be sure not to retaliate against an employee for making a complaint or you may end up with a prohibitive action complaint (previously called discriminatory action complaint) under the Workers Compensation Act.

It is my view that so long as employers strictly comply with WorkSafeBC’s COVID-19 Safety Plan guidelines and industry-specific protocols, it is unlikely that an employee can make a valid work refusal based on general concerns about getting the virus at the workplace. You can read more on COVID-19 Safety Plans and work refusals in our previous blog entry here.

Absent a valid health and safety reason, if your employee refuses to attend work when scheduled then you can likely take the position they have abandoned their position and issue a Record of Employment stating “Quit”. This may well mean that the employee can no longer collect the CERB too, though it is their responsibility to report accurately.

We are carefully monitoring the recent federal government announcement regarding employers possibly having to provide all employees with 10 days of paid sick leave and will report further as this issue develops.

This is a good example of why we cannot provide employer specific advice as each case clearly depends on the facts plus the law regarding constructive dismissal and creating enforceable contracts is complicated.

Recall from Layoff

First if you are unionized and have a collective agreement in force then likely you must recall the employees in a certain order with seniority likely playing a major role.

For your nonunion employees, absent any contractual obligations, provisions in your employee handbook or promises you made when you laid them off, you are able to recall employees back in the order you wish. There are as you might expect some caveats to that.

First if you are not recalling a person in order of seniority in whole or in part because of (for example) that employee’s disability then you are likely violating the Human Rights Code. Therefore if you are going to deviate from recalling in order of seniority we suggest you have a valid reason.

Secondly if an employee is off on a COVID-19 related leave of absence under section 52.12 of the E S Act and the conditions that created that leave have expired then the employee has a right to be placed back in her position or if her position no longer exists then in a comparable position.

Finally even if you have a right to recall employees in any order you might want to consider that if a number of employees are upset by that decision they may seek union representation. Given the significant changes to the Labour Relations Code in 2019 in favour of unions making it easier for them to unionize your workplace you need to be careful to not create an environment where your employees might feel the need to obtain union representation. Unions are businesses too and their income is set by the number of members they have so they are likely motivated to find such organizing opportunities. A large part of your restart should involve proper communications with your employees.

Imposing a 10% wage cut

If employers simply want to unilaterally impose a wage cut then they run the risk of creating a constructive dismissal. A constructive dismissal will occur when an employer unilaterally imposes a fundamental change to employment terms or otherwise changes fundamental terms. The courts ask whether the conduct evinces an intention on the part of the employer to no longer be bound by the employment contract.

While pay and benefits are clearly central to the employment relationship it is clear that some reductions in remuneration will not constitute a constructive dismissal. In Pavlis v HSBC Bank Canada 2009 BCSC 498 the court considered how big a decrease in pay would have to be to constitute a constructive dismissal. Generally the court stated that a reduction in salary of up to 10% would not be a fundamental breach; a reduction 14—17 % may amount to a fundamental breach if another significant or substantial unilateral change occurs and any reduction beyond 20% will on its own will be a fundamental breach.

Again these cases will have to be decided in Post COVID world. In my view courts are going to be far more sympathetic to employers when these changes are necessitated in order to continue in business.

If the change does not constitute a constructive dismissal an employee may have a right to claim wages under the E S Act which now provides that claims can go back 12 months.

Employers should not take any chances in our view if they can get the employees to accept the reduction. Such an agreement in writing may well constitute a defence to a constructive dismissal claim. Further even in the absence of a written agreement if the employee continues on in the employ under the altered terms without complaint then likely she will have been found to have condoned the change.

Finally if the employee refuses to accept the reduction in pay then we recommend employers continue to offer that position as the employee may be bound to accept the new pay structure in mitigation of her damages.

2021 Case Law Update:

In Kosteckyj v Paramount Resources Ltd, 2021 ABQB 225, the Alberta Justice found that the Employer’s implementation of a COVID-19 related Cost Reduction Program imposing a salary reduction of 10%, a suspension of the RRSP contribution valued at 6% of the employee’s salary, and the “delay/cancellation of the 2019 Bonus Program” amounted to constructive dismissal. The employee was a 47 year old Engineer who had worked with the Employer for over 6 years, and was awarded 9 months notice.

Employment agreements

In most cases employees will be thrilled to come back to work and receive a steady income and benefits. Most will be glad to turn in their day pajamas and get back to work. They now have a lot more skin in the game when it comes to having the business succeed.

In my view this is a good opportunity to have employees sign employment agreements with a view to limiting their rights on termination as well as standardizing a number of key terms such as vacations, bonuses, benefits etc. Further, employers might want to obtain more flexibility to make changes to terms and conditions of employment and provide for the right to lay off or suspend employees. Employers can argue that it is best practices to standardize the employment agreements for all employees. Despite a recent court decision that suggest that legal consideration for amendments to employment agreements may not be necessary, we strongly recommend paying employees some bonus or otherwise improving their pay or benefits as the legal consideration for entering into the agreement. If an employee refuses to sign the agreement then you can consider your options including giving working notice of termination.

Mike responds

My son is in-house counsel for a large telecommunications company in Australia. Despite the fact I have worked from home for 4 years we have debated the issue of whether working from home is a good business model. He argues that it is an efficient, productive and cost effective way of doing work in the 2020’s. I, of course, note all the problems with such an arrangement from an employers’ perspective.

An excellent article by Eric Andrew-Gee in the Saturday May 30th edition of the Globe & Mail puts this debate in a different light. In “Is the office era over?” the author references a study/experiment conducted by James Liang CEO of Ctrip in 2010. He had employees divided in two groups—one worked from home and one worked from the office. His conclusions were rather surprising. He found after 9 months that, contrary to popular belief, those that worked from home were 13 % more productive than those that worked at the office. But the study also found that half the employees who worked from home were discontent and when offered the choice decided to come back to work. Apparently “loneliness” was the biggest factor.

There are many things to consider when instituting a program of working from home. This article got me thinking as much about the practical issues as with the legal issues.   In my view a much more nuanced approach needs to be taken given today’s workplace and employee. One size does not fit all for either the employer or the employees. I suspect that the optimum compromise is one that allows some days work from home but the majority of days’ work at the office or some other variation. Absent a vaccine COVID-19 also creates logistical and social problems in having employees return en masse to their workplaces. Employers might not want to rent more space or reconfigure work stations in order to provide for social distancing and other safety measures

Practical issues may well trump legal issues. Most importantly consider how in fact it did work during COVID-19—was it efficient and productive?   What do your employees think about it? What were the problems? What will the costs be to reconfigure your current workforce to have employees return with social distancing etc? Where are you in your lease ie can you walk away without penalty?

So in my view before any business considers putting in a permanent program of working from home (in whole or in part) this article is well worth reading. If you would like a copy of the article let me know and I will send the link.

There are as well some legal issues to consider that Chris will comment on. 

Chris responds

Thanks Mike, I too enjoyed working from home on a regular basis before the pandemic and plan to continue doing so at least part-time for the foreseeable future. For those employers that will be offering continued working-from-home (WFH) arrangements, there are several legal issues to consider.

In the WFH scenario, the employee’s home workstation is an extension of the workplace and is therefore subject to the jurisdiction of WorkSafeBC and occupational health and safety laws and regulations. This means that if the worker is injured in the course of employment at home, the employer will still be held accountable for any unsafe working conditions and will be penalized with a premiums increase in the event of a claim. This of course presents unique challenges where you have little control over the home workstation or the employee’s actions while at home. In an ideal world, the employer would conduct home safety inspections, however some reasonable alternatives include inspection via video conferencing or having the employee complete a hazard assessment checklist. For more on this topic, see our previous blog entry here. You can also access these helpful WorkSafeBC resources:

Working from Home Guide

Workplace Setup Guide

Working Alone Procedures

We also recommend that you create WFH policy which includes tips on setting up an ergonomic workstation and outlines how employees should report workplace injuries or safety concerns. Also, ensure you have a mechanism for employee check-ins and monitoring and that you ensure you specify the employer’s right to end or suspend the WFH arrangement and require the employee to come back to the office if there are productivity issues or circumstances require. 

Some employees may make requests for specialized equipment such as ergonomic chairs, desk or other office equipment. These requests should be considered on a case-by-case basis. Consider human rights issues and whether you might be obligated to provide such equipment as part of the duty to accommodate a disabled employee. If the employee was already being accommodated at work, such measures ought to continue in the home workspace at the employer’s cost.

Several important issues arise regarding employment standards, including business costs and overtime. The E S Act prohibits employers from requiring employees to pay for their business costs. In the WFH scenario, the employee may be incurring additional costs they would not otherwise have, such as home-office items (scanners, printers, paper) long-distance charges, increased internet or data use, and software. These extra costs are likely business costs and must be borne by the employer. We recommend that employers carefully assess whether their employees are paying any such costs and ensure they are reimbursed. In most circumstances, a portion of the employee’s rent would not be considered a business cost.

Be mindful of overtime issues. In the WFH scenario, the line between on and off-duty can become blurry. If you are expecting the employee to be “on call” and available to answer calls and/or emails at all times while at home, this may create significant overtime pay liabilities. If appropriate, set clear hours and ensure the employee abides by them and logs out of the company system entirely at the end of the workday. 

Finally, be cognizant of privacy issues. Be careful with how you are tracking employee productivity when they are using personal devices. Also, ensure that employees are not downloading and/or sending sensitive or confidential information onto their personal devices or over personal email addresses or text message without proper security measures in place.

 In every case, we recommend you work collaboratively with your employees to design a WFH arrangement that works for both parties and achieves a balance between safety, productivity, and employee satisfaction and well-being.

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:

• Mike Weiler: [email protected]
• Chris Drinovz: [email protected]
• Melanie Booth: [email protected]
• Jesse Dunning: [email protected]

I've known and worked with Mike Weiler

for 35 years

I have changed firms at least 5 occasions during that time frame and have always brought Mike’s advice and experience along with me.

We have been successful on literally hundreds of cases. From Favorable Union negotiations, to de-certifying to legally foiling a corrupt collective drive. From defending unjust dismissal claims to a Human Rights case dismissed, Mike has always been a collaborative partner.

The key to success is a secure relationship between client and practitioner . I have always brought Mike into situations long before they blow up. In other words Most of our cases were thought out in advance rather than being reactive.

Needless to say I highly recommend Mike and his approach.

Bryan Edwards

Written by Michael J WeilerWhen I spoke to a large group of employers on April 16th, 2013 on the topic of NDP Employment and Labour Policies I assumed I would have the NDP platform well in advance.  After all, Shane Simpson and Adrian Dix had promised full disclosure prior to the election—no HST type surprises.  At the time of my presentation, I had to speculate on what I thought might be the key changes in Apprenticeship Training, Employment Standards, Labour Relations Code, WCB and Human Rights (to obtain a copy of the PowerPoint “Déjà vu All Over Again—NDP Employment and Labour Policies April 16th, 2013 click here).  My prognostications were based on my experience over the last number of decades when there was a change in government and the statements made by the NDP.Potential key changes to the Labour Relations Code were of particular interest to the attendees, as they will be to most employers in BC.  Two key and simple questions needed to be answered:

1. Will the NDP reintroduce the card-based automatic union certification system as they did in 1993?
2. Will the NDP make changes to the free speech provisions of the Code?

I did not think the NDP would punt these two questions and other changes to the Code to a panel or review committee based on what I heard and read from the senior officials of the NDP.  And I thought there was very little need for a committee review because that thorough review had been done by a 3 member committee chaired by Vince Ready whose report was issued a decade ago: “Recommendations for Labour Law Reform September 1992” (“Ready Report”).  Unfortunately, my Karnack-like speculation was wrong—no specific changes were announced and a committee will be struck.  Here is the full extent of the NDP policy on changes to the Labour Relations Code as published Wednesday, April 24th, 2013 (at pages #31 and #33):“The right of British Columbians to join unions is enshrined in the Constitution.  Unions play a positive role in building a competitive economy and a thriving middle class.  But work needs to be done to ensure that the rules around union certification are fair and to remove barriers for workers who wish to exercise their legal rights.…4. Unionized workplacesForm a special panel, under the Labour Code (sic), to recommend changes to ensure workers can freely exercise their right to join a union. Within 90 days, the panel will consult interested parties and recommend possible changes regarding certification options, including the card-check model, and ways to help employers and unions arrive at first contract settlements through mediation.Invest new resources to make the BC Labour Relations Board more efficient and effective in helping employers and unions to solve disputes.Repeal Bills 27, 28 and 29, the infamous legislation that tore up legal contracts, and restores free collective bargaining in the health and education sectors.”In my view, the outcome of this review will allow the NDP to either reintroduce automatic certification, as the Ready Report recommended in 1992, or make the sign up for votes easier and perhaps have an almost instant vote without the employees being able to hear both sides of the arguments for and against unionization.  I would also expect revisions to restrict employer free speech.   The offer of “assistance” to employers to arrive at a first contract settlement might suggest mandated arbitration for first time collective agreements to replace the current section 55 provisions.I certainly do not see any substantial changes that will favour employers such as the repeal of section 68 Replacement Worker Prohibition.  I agree with the observations of Vaughan Palmer who wrote:  “Based on past experiences with NDP-led makeovers of the labour code, one can readily presume that the rules will be rewritten to suit the unions”.  This certainly is consistent with what Adrian Dix said at the BC Fed biannual convention on November 28, 2012, as quoted in the Globe & Mail on the same date:“I want to make it clear that I am proud of the work I’ve done for years, side by side with labour unions,” Mr. Dix said. “The labour movement and the NDP have done great things, but our best days are still ahead of us.”If you want a preview of what the 90 day NDP Panel Report might conclude you should take a look at the 1992 Ready Report.The irony of all of this is the fact the NDP has promised to have the committee finalize its report in 90 days.  When the Liberals were elected in 2001 they also had a 90-day plan which included abolishing the automatic card-based certification and requiring a vote in all cases subject to the odd exemption to remedy particularly egregious unfair labour practices.The Ready Report noted that following the introduction of the secret ballot vote in 1985 union certifications declined by over 50%.  The return to a card-based system of automatic certification in 1993 reversed that trend.Déjà vu all over again.I was correct in some predictions about what changes to other areas of employment and labour statutes the NDP might consider.  To see the NDP platform on employment and labour issues click here.

Newsletter written by Michael J WeilerThis newsletter expands the May 10, 2019 blog post summary of amendments.MAILED TO SUBSCRIBERS OF THE NEWSLETTER OFMichael Weiler Employment + Labour Law on May 13, 2019Dear Clients and Friends,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 – see Bill 30 – Labour Code Amendment Act.  Bill 30 largely follows the recommendations of the Labour Relations Code Review Panel (the “Review Panel”) in its August 31st2018 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 later this week.

Non-union 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.Some will argue that Bill 30 does nothing more than restore balance to the Code.  I disagree.  These amendments are politically motivated as the NDP continues to favour its traditional union constituents (to the exclusion, for example, of other non-traditional unions such as CLAC through its “Building Trades only” project agreements).  In fact, the NDP would have eliminated the secret ballot vote in favour of a card check system and taken labour relations back to 1992, but for the Greens’ objection.  Labour Minister Harry Bains made this point very clearly—one wonders what will happen if the NDP is returned for a second term with a full majority.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 will likely produce more legislation. One thing remains certain—the changes in Bill 30, for the most part, are intended to increase union density and security and will likely be interpreted by the LRB with that in mind.In order to assist our readers in understanding the critical elements of Bill 30 when it becomes law, we have prepared two reports.First, we have provided a summary of the changes to the Code.  Some are fairly innocuous, but others are very significant.  See: summary that is posted on our blog on our website. We suggest you review the summary and if you need further information on any aspect, send me an email at [email protected]“Summary” may also be accessed by copying and pasting this URL in your browser:https://www.ksw.bc.ca/2019/05/10/bill-30-labour-relations-amendment-act-2019-summary-of-provisions-first-reading-april-30th-2019/Second, I have expanded the analysis on 3 key areas of Bill 30 that I think will have a significant impact on both union and nonunion employers.  Those three key areas of analysis are:

1. Changes to the certification process, employer free speech and remedial certifications
2. Successorship and retendering of contracts.
3. First collective agreements, the extension of the statutory freeze and remedial certifications.

Our analyses on these three areas are reported below, in this newsletter.1.  Changes to the certification process, employer free speech and remedial certifications Nonunion employers need to take note of the cumulative effect of these changes against the backdrop of the NDP’s goal of increasing union density.  Although Bill 30 has retained the secret ballot vote (for now), the process has been changed to favour unions.In 2002, the Liberal government made two critical changes to the Code.  First, it reintroduced the secret ballot vote and eliminated the automatic card check certification process.  Second, it amended sections 6(1) and section 8 of the Code to expand employer free speech.  These two changes combined to ensure that employees made intelligent, careful decisions when making the very important choice of whether their workplace should be unionized, or should it remain nonunion.I don’t want to diminish the importance of retaining the secret ballot vote in Bill 30. The employer input on that issue and its representative on the Review Panel made compelling arguments as to why the secret ballot vote should be retained.  Employees will still be the final arbiter on whether their workplace becomes unionized through the democratic process of the secret ballot vote.But Bill 30 includes other fundamental changes that will undoubtedly assist unions. The Review Panel, at page 12 of the Report, made it clear it would only maintain the secret ballot vote if there were added protections for unions:“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 processing of certification applications and unfair labour practice complaints, together with the 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.”I take this to mean, if union certifications do not increase dramatically, the Code will be changed to revert back to the 1992 concept of a card check system and the elimination (for all intents and purposes) of the secret ballot vote.Despite the retention of the secret ballot vote, Bill 30 makes a number of changes to the certification process to deter employer interference and broaden the LRB’s remedial authority.  These changes include:

• A shortened period between the filing of the application for certification and the secret ballot vote (the period will be 5 business days from the current 10 calendar days).  An employer who is not prepared may well find it impossible to communicate effectively within a significantly shortened period.
• Employer free speech has been curtailed.  Sections 6(1) and 8 have been amended to reduce employer free speech and widen the scope of what can be considered unfair labour practices.  Bill 30 reverses the 2002 amendments and takes us back to the restrictions of 1992.
• The LRB will have expanded powers to order a certification without a vote if there are unfair labour practices. Bill 30 allows the Board to order such certifications where the Board “believes it is just and equitable in order to remedy the consequences of the prohibited act”. It will take some time for employers to know how the Board will exercise its discretion and by then it may be too late. As a further enhancement of a union’s ability to organize a workplace and achieve a collective agreement, Bill 30 extends the statutory freeze on changing terms and conditions of employment and the prohibition from disciplining or terminating employees unless there is “proper cause” from the current 4-month period to 12 months. Further, a union cannot be decertified until 12 months after certification.

2.  Successorship and retendering of contracts.Prior to Bill 30, if an employer contracted out services and then retendered that contract, the successful bidder would not be bound as a successor employer under section 35 to any union certification or collective agreement.Bill 30 makes the bold move of allowing successorship orders if the contract is retendered, resulting in the new contractor being bound by any certification or collective agreement in force.The service contracts that are included in this provision are very broad and not defined with any precision.  They include building cleaning services, security services, bus transportation services, food services and “non-clinical services in the health sector”.  The NDP left themselves lots of room to add to the list of services that will be covered as prescribed under section 159(2)(f) of the Code.  I note that this list of services goes well beyond what the Review Panel recommended.What this effectively means is that, once your contractor of the type of non-core services is unionized, all such contractors will be unionized.  The union certification and collective agreement effectively become attached to the work and not the employees of the contractor. This is contrary to the whole premise of the Code.There are many practical problems resulting from this ill-advised provision.  Ironically, unionized service contractors will now find it much harder to get contracts for fear of the successorship provisions.3.  First collective agreements, the extension of the statutory freeze and remedial certifications.Section 55 of the Code allows a union to apply to have a first-time collective agreement imposed by the LRB.  Currently, a union must get a strike vote to make such an application, but Bill 30 removes that requirement.  Most importantly, a mediator or the LRB can consider the conduct of an employer who is subject to a remedial certification both before and after certification.  This might well mean that unions lacking strong support from their membership are able to get a first collective agreement through arbitration rather than a strike.We suggest you consider how these three provisions might affect your business, in the contexts of these analyses above together with the detailed Summary of the specific amendments contained in Bill 30.These provisions in Bill 30 are complex and nuanced.  They may well have unintended consequences.  For the nonunion employer, especially, it is imperative to develop a strategy that deals with the very real possibility that your operations may be the target of a union organizing drive and your response to such an application is limited to 5 business days.Depending on interest I will consider conducting seminars on both Bill 30 and Bill 8 once they have become law.  If you are seriously interested in attending such a seminar, please email me so I can gauge interest.Warm regards,Mike

Newsletter by Michael J WeilerMAILED TO SUBSCRIBERS OF THE NEWSLETTER OFMichael Weiler Employment + Labour Law on May 21, 2019Friends,Bill 8: Employment Standards Act Amended Again – Some “Tips” For You – On April 30th, 2019, the NDP government introduced amendments to the Employment Standards Act (the “Act”) see: Employment Standards Act.  The amendments are proposed in Bill 8, the Employment Standards Amendment Act, 2019 (“Bill 8”), which has passed First Reading Bill 8.  These amendments follow on the heels of the amendments made last year under Bill 6 (the Employment Standards Amendment Act, 2018) that were covered in my blog on October 15, 2018 NDP Agenda – Update.  The 2018 Bill 6 amendments:

1.  extended certain leaves; and
2.  introduced graduated increases to the minimum wage by increasing the minimum wage by $1.30 effective June 1st, 2018 with the final increase to $15.20 to take effect June 1st, 2021.

The amendments in Bill 8 draw extensively on the recommendations and analysis found in the British Columbia Law Institute’s extensive Report on The Employment Standards Act December 2018 (the “Report”). This Report of over 300 pages was compiled by a blue-ribbon panel of experts and was chaired by my former colleague Tom Beasley.  It is a well-researched and comprehensive analysis of employment standards legislation (although it does not review the Regulations to the Act).  I believe that it will serve as an important resource for future amendments.Bill 8 does not include all of the recommendations in the Report.  This suggests that further amendments might be forthcoming.  Further Bill 8 does not always follow the specific recommendations of the Panel even where the recommendation is unanimous—e.g. see section 22(4) of the Act dealing with wage assignments to meet credit obligations.  Finally, many of the matters covered by Bill 8 are left to be defined in the regulations (which are yet to be tabled).Many of the changes in Bill 8 are fairly modest in scope but some will have a significant impact on employers especially the small and medium-size employers. Here is a non-exhaustive summary of some of the provisions that may have a significant effect and others that have become part of the “news cycle”:

• Extension of Liability for Wages: The most concerning change for employers is the extension of liability for wages and claims under section 80 of the Act from 6 months to 12 months across the board (see section 29 of Bill 8). This amendment is coupled with the ability of the Director to extend that period for a further 12 months.  The possibility of extending employers’ liability to 24 months, coupled with the Director’s ability to broaden the scope of an inquiry (see below), could result in a significant monetary judgment against an employer who perhaps unwittingly failed to comply with the Act or, worse, where an employer relies on a bona fide agreement with his employees that is rendered void under section 4 of the Act.

• Investigations by the Director: Bill 8 also amends section 76 of the Act that gives the Director power to conduct investigations following a complaint that an employer has breached a provision of the Act or certain Regulations to the Act.  In section 25(b) of Bill 8, where the Director decides that a complaint could affect employees other than the employee who made the complaint, the Director is given the power to “conduct a broader investigation that addresses the subject matter of the complaint”.  Although the Act remains essentially an individual complaint-driven procedure, this provision will now give the Director authority to ensure that all employees in the business are covered by any order.  That may mean that the wishes of some individuals, who do not support the complaint, are ignored.

• When the Act Governs Unionized Employers:  Unionized employers usually don’t care too much about the Act.  There are some sections that still apply to unionized employers but generally, since 2002, unionized employers can simply rely on their collective agreement.  However, Bill 8 introduces one crucial change that will affect unionized employers.  Section 3 of Bill 8 amends section 3 of the Act to provide that the collective agreement will trump the Act only where the collective agreement provisions “meet or exceed” the provisions of the Act.  If this sounds familiar it is because this amendment takes us back to the previous provisions of the Act in 2002 – like some proposed changes to the Labour Relations Code, it is more “déjà vu all over again”.  Time to dust off those old decisions of arbitrators and/or the LRB.

• New Provisions Relating to Gratuities: Many of the changes in Bill 8 are fairly narrow in scope in terms of the employers affected.  For example, in section 15 of Bill 8, new rules have been added to the Act regarding gratuities (these rules are required because gratuities are not “wages” and thus are currently outside the protections of the Act). Under Bill 8 employers will not be able to withhold gratuities or otherwise make unauthorized deductions or require that they be turned over to the employer.  Tip pools will be regulated such that employers cannot participate except in certain limited circumstances.  Specific narrow exceptions are made for sole proprietors, partners in a partnership, directors and shareholders.

• New Provisions Relating to Hiring of Children:  Another example of amendments that are unlikely to apply to many employers are found in the amendments in Bill 8 that introduce a number of new protections for child workers.

• Extension of Time Period for Record Retention, Etc.: Unlike the narrow changes regarding tips and child workers, there are changes that will affect most employers.  The period for which certain employment records must be retained is extended from 2 years to 4 years (see sections 13, 14, 16 and 17 of Bill 8). There are changes to section 22(4) of the Act that governs written wage assignments that allow an employer to deduct from wages funds to meet certain types of credit obligations (see section 12 of Bill 8).

• New Statutory Leaves:  Bill 8 (see sections 18 and 19) creates new unpaid leave provisions for employees offering care and support of family members whose life is at risk as a result of a serious illness or injury as well as certain unpaid leaves where an employee or certain family members or persons close to them are victims of domestic violence.  While one can feel very sympathetic to employees in these situations, the proliferation of leaves, even where unpaid, can cause great disruption to employers, especially small and medium-size employers.

• Provision to Inform Employees of their Rights: Section 5 of Bill 8 adds a new section 6 to the Act under which employers will be required to make available or provide each employee, in a form provided or approved by the Director, information about the rights of the employee under the Act.  This will likely lead to more complaints being filed as employees become more aware of their rights.

• Waiver of Penalties for Directors and Officers in Some Circumstances: There is some good news for employers.  Currently, if a Determination is issued against an employer, the Act requires a mandatory imposition of penalties that can reach $10,000.  Bill 8 will give the Director discretion to waive the penalties.  This will include cases where the employer (or a director or officer of the employer, where applicable), provided an arguable interpretation of the Act or there was a valid dispute on the facts.

There are a number of procedural changes including abolishing the “self-help kit” that the employee was required to use before filing a complaint.  There are some changes to the successorship provisions of section 97 providing for successorship in the case of receivers or receiver/managers who continue to operate the business and certain extensions of the liability of directors and officers in section 96 of the Act. Bill 8 provides for transitional provisions that will need close scrutiny in considering how such changes might affect a particular business.Given the changes in the Act (and the Labour Code under Bill 30), I understand the government will be hiring a number of additional Investigating Officers.What is disappointing is that there are no substantial changes to the averaging provisions.  Employers and employees in today’s world need more flexibility in defining their work schedules and compensation structures but Bill 8 does not address this concern.The above summary is not exhaustive.  As Bill 8 will likely undergo some changes before it is proclaimed, we will not, at this time, provide a detailed analysis.  As soon as we have the final version of the legislation, we will post a more detailed summary on our web site.Warm regards,Mike

Newsletter by Michael J WeilerFriends,Labour Code and E S Act AmendmentsIn our recent newsletter and blog posts we advised that the NDP/Green coalition government introduced significant amendments to the Labour Relations Code (“Bill 30”) and the Employment Standards Act (“Bill 8”):

• Labour Relations Amendment Act 2019 – SUMMARY OF PROVISIONS  (BUT notice that the link to Bill 30 in that blog is the First Reading version –  instead see the link in green below to Third Reading version of Bill 30.)

• Labour Relations Amendment Act 2019  –EXPANDING SUMMARY & ANALYSIS – 3 KEY AREAS  (BUT see the link in green below to Third Reading version of Bill 30.)

• Employment Standards Act Amended Again  – SOME TIPS FOR YOU  (BUT see the link in green below to the Third Reading version of Bill 8.)

On May 30th, 2019 Bill 30 as passed Third Reading, and Bill 8 as passed Third Reading, they were given royal assent and became law.The legislation was passed with just two fairly minor changes Bill 30 was amended with respect to raids in the construction industry.  The original bill was going to allow unions to raid in the construction industry in July and August of each year of the collective agreement.  That was changed to only allow raids in the last year of the collective agreement consistent with other raid provisions.Bill 8 was amended to provide for both domestic and sexual violence leaves of absences.I was surprised to see that the legislation allowing successorship for contracted out services such as food was not amended.  As I noted that provision will hurt not only employers/owners who contract out work but also unionized service companies who now might find it more difficult to get new contracts. Recall that these particular amendments allowing successorship for contracted out services became effective retroactive to April 30, 2019, the date when Bill 30 was given First Reading in the Legislature.It is my view that these amendments will have a major negative impact on businesses in BC—both union and nonunion.  Employers would be wise to review the legislation and determine how it might affect their operations.Note that effective June 1st, 2019 the minimum wage increased to $13.85 and the minimum wage for liquor servers, resident caretakers and live-in camp leaders also increased.  Note also the trend in Ontario and now Alberta to reverse these types of changes.WorkSafe changes will likely create further problems for employers Significant changes to the Workers Compensation Act and policies have already been implemented as a result of the extensive review undertaken by Paul Petrie who was appointed to conduct a review of WorkSafe’s Rehabilitation and Claims Services policies.  Mr. Petrie was directed to consider what changes needed to be made to provide a more worker-centred approach.  His report was published on April 25th, 2019 and contained 41 recommendations for change.  The title of the Report will give you some idea of the content:  “Restoring the Balance:  A Worker-Centred Approach to Workers’ Compensation Policy”.The government has now appointed retired labour lawyer Janet Patterson to do a further study of the workers’ compensation system to advise on how “to shift the workers’ compensation system to become more worker-centred.”The government web site goes on to note that the review by Ms. Patterson will assess:

• the system’s policies and practices that support injured workers’ return to work;
• WorkSafeBC’s current policies and practices through a gender- and diversity-based analysis (commonly referred to as GBA +);
• modernization of WorkSafeBC’s culture to reflect a worker-centric service delivery model;
• the case management of injured workers; and
• any potential amendments to the Workers Compensation Act arising from this focused review.

You should read the Terms of Reference for this review.The Review is due September 1st, 2019.  In my view, employers have reason to be concerned about the changes that will likely flow from the Patterson Report.  Employers can go to the Terms of Reference website and fill out the questionnaire and attend the public hearings to make sure their voices are heard.Human Rights Commissioner appointedIn November 2018 the government amended the Human Rights Code.  Included in those amendments was the establishment of the position of Human Rights Commissioner.On May 30th, 2019 the government announced that Kasari Govender was appointed Commissioner.  Ms. Govender is a practicing lawyer and serves as executive director of the non-profit organization West Coast LEAF (Women’s Legal Education and Action Fund).The Code sets out the powers of the Commissioner as follows:

Powers of commissioner

47.12(1) The commissioner is responsible for promoting and protecting human rights, including by doing any of the following:(a) identifying, and promoting the elimination of, discriminatory practices, policies and programs;(b) developing resources, policies and guidelines to prevent and eliminate discriminatory practices, policies and programs;(c) publishing reports, making recommendations or using other means the commissioner considers appropriate to prevent or eliminate discriminatory practices, policies and programs;(d) developing and delivering public information and education about human rights;(e) undertaking, directing and supporting research respecting human rights;(f) examining the human rights implications of any policy, program or legislation, and making recommendations respecting any policy, program or legislation that the commissioner considers may be inconsistent with this Code;(g) consulting and cooperating with individuals and organizations in order to promote and protect human rights;(h) establishing working groups for special assignments respecting human rights;(i) promoting compliance with international human rights obligations;(j) intervening in complaints under section 22.1 and in any proceeding in any court.Have a happy and safe summer.Mike

Newsletter by Michael J WeilerMAILED TO SUBSCRIBERS OF THE NEWSLETTER OFMichael Weiler Employment + Labour Law on January 23, 2019Friends,Happy New Year folks.  I trust everyone had a break over Christmas and hit the refresh button getting ready for what will undoubtedly be a very important year for employers and employees in BC.  Assuming the NDP is still in power come the February sitting of the House, we can expect major legislative changes to employment and labour laws in the Province.  As well the courts will continue to play a major role in defining the rules governing the employer/employee relationship. Unlike Ontario which is reversing the labour and employment law reforms, BC will make these major changes that will be mostly in favour of employees, and 2019 will certainly become “The year of the employee”.  I hope that the following information and recent postings on my blog will be helpful to you in navigating your way through 2019.

NOTICE PERIODS ROUNDUP FOR 2018

Each 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. READ

COURTS ONCE AGAIN STRIKE DOWN NON COMPETITION CLAUSE

Given the shortage of skilled workers and senior management, it is not unusual to see employers trying to protect their interests by having their employees sign contracts that restrict the employee from competing or soliciting customers after the employee leaves.  These restrictive covenants are frowned upon by the courts but can be effective if properly drafted.  Telus recently found out the hard way that the non-competition clause they included in a senior executive’s employment contract that Telus said it paid $1 million to achieve was found to be unenforceable.  The fact the employee had breached his fiduciary duties to Telus did not affect the result.In finding that the clause was unenforceable the court noted:“In my view, the restrictive covenant is the product of overzealous drafting by Telus’ 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. READ

ONTARIO JUDGE BLOWS THE LID OFF THE 24-MONTH NOTICE CAP

In my December 2015 blog, I commented on the increasing number of decisions in Ontario that awarded notice periods beyond the normal “cap” of 24 months:  http://weilerlaw.ca/will-the-rough-upper-limit-of-24-months-notice-be-increased-in-bc/.  I opined that the 24-month cap will remain the law in BC.  However, Ontario courts continue to push the envelope in extending notice periods beyond 24 months.  See for example:  http://weilerlaw.ca/26-months-notice-for-husband-and-wife-contractors/.Now an Ontario court has held that 36 months’ notice would have been reasonable. READ

WEILER LAW SEMINARS ON LABOUR CODE AND EMPLOYMENT STANDARDS CHANGES

Assuming the NDP/Green coalition goes ahead with changes to the Labour Relations Code and the Employment Standards Act, we will send out a reporting email once the legislation passes third reading highlighting the changes and how they might affect employers.In addition, we will offer half-day seminars likely to be scheduled a month after the legislation passes.  Stay tuned for notices on the date, time and place.If anyone in your organization would be interested in attending please send me an email with their contact information and we will put their names on our priority list of attendees.Link here to KSW's Law blog full Table of Contents and all posts, or use individual links above to go to a particular post.

Gerry Massing has become a regular contributor to our Blog.  In this article, Gerry summarizes recent changes to the Workers Compensation Act that will have a real impact on your business.  I have known Gerry for almost 40 years as he and I locked horns on a file dealing with a WCB matter very early on in my career.  Gerry has recently retired from the WCB where he has been senior legal counsel in its litigation department.  Gerry will continue to practice in the area of WCB law and related aspects such as judicial review applications, etc.  He has a strong interest in providing training on claims matters, health and safety matters, assessment matters, policy matters and appeals.  If you have any WCB matters requiring advice or wish to explore an enhanced WorkSafe training program please feel free to contact me at [email protected] and I will put you in touch with Gerry.  ********Recommendations in a report to the government following the explosion and destruction by fire of two sawmills in British Columbia (the Macatee Report) resulted in amendments to the governing legislation.  The Workers Compensation Amendment Act, 2015 (Bill 9) is the most recent legislative implementation of these recommendations.  WorkSafeBC and the government both accepted the Macatee recommendations.  Most of the changes took effect on September 15, 2015.  A provision for citations of the employer will be implemented in 2016.Among other things the Macatee Report noted that

• WorkSafeBC needs greater access to health and safety and enforcement expertise,
• the Prevention investigations, penalty processes and appeals took too long, and
• some employers were able to avoid paying assessments including health and safety penalties and continue their business operations without remedying unsafe conditions.

Bill 9 implements tools for improving enforcement and addressing those concerns. PAYMENT OF ASSESSMENTSThe worker's compensation system pools the cost of claims in the workplace.  The collective liability of all employers is adjusted by placing similar employers into groups and the groups of employers into similar risk categories to provide rate categories that reflect relative risk.  Collecting the assessments owing from the employer who owes them rather than their unpaid debt being added to the base cost of other employers also enhances equity between employers.The amendments provide additional tools to promote that equity.  The Workers Compensation Act permits the board to seek an injunction stopping an employer from continuing to operate if they do not pay their assessments.  This is generally a remedy of last resort and has not been used frequently by the board.The Workers Compensation Amendment Act, 2015 (Bill 9) expands this tool by detailing when a President, Director, officer or their equivalent or a person performing similar functions in an incorporated business can be prohibited by the court from continuing an industry or an activity in an industry until the assessments are paid.  It remains to be seen what the board and the courts will consider amounts to continuing an activity in an industry but the potential could be quite broad.

QUICKER RESOLUTION OF HEALTH AND SAFETY RISKS

Bill 9 also legislates measures to speed up health and safety enforcement and provide a new layer of response to what might be considered less serious violations of the health and safety regulation.1.  Incident Investigations:A preliminary investigation and report of an incident must be completed within 48 hours of the incident.  Any proposed corrective action must be undertaken without delay and a report provided to the health and safety committee or posted as soon as practicable.  The board describes the purpose of this report as follows:Employers must identify what interim corrective action they plan to take between the date of the incident and the time the full investigation report is due, which is 30 days from the incident. During that interim period, they must take all actions reasonably necessary to prevent a recurrence of the incident. If an employer is only able to identify some, or only able to identify in broader or more general terms, the unsafe conditions, acts or procedures that significantly contributed to the incident, the interim corrective action may include a full or partial shutdown of a workplace, removing equipment, or reassigning workers.While this investigation is preliminary in nature the measures required to ensure safety can be extensive.  The immediate need to protect the safety and the desire to provide continued employment and business continuity will require a thoughtful and informed response.A full investigation and more formal report must be undertaken immediately upon the conclusion of the preliminary report and completed within 30 days of the incident.  The board has the discretion to extend the due date for the full investigation.  The Bill does not provide for an extension of time on the preliminary report.2.  Compliance Plans:A compliance plan developed in collaboration with the board allows a solution to be developed rather than having an order imposed.  The compliance plan is at the board’s discretion provided certain conditions are met.  The conditions are that the violation is the first one under that regulation, no immediate risk exists and an agreement is considered appropriate.  The health and safety committee or worker safety representative is provided with a copy. 3.  Enforcement Responses:The Bill provides for a “summary” penalty of up to $1000.00 for a violation which is much lower than the maximum amounts available under the regular process now in place.  The implementation of these employer citations is planned for 2016.  Theoretically, these citations can be decided and appealed more quickly than the current process for determining penalties for health and safety violations.Also regarding enforcement, the appeal period for Prevention decisions has been shortened to 45 days from 90.4.  WorkSafeBC’s board of directors is expanded to include one new member with law or law enforcement experience and one with occupational health and safety experience based on recommendations from community organizations in those businesses.WorkSafeBC has published primers on these topics at:  http://www.worksafebc.com/regulation_and_policy/legislation_and_regulation/new_legislation/bill_9/default.aspCONCLUSION:Bill 9 expands the statutory tools to address incidents more quickly and to provide for quicker incident investigations, lower penalties on a “summary” basis, and compliance agreements.  Where financial sanctions are not sufficient, injunctive relief can be sought against some corporate decision-makers as well as the employer.  Equity in relation to insured risks is increased by injunctive relief as a result of increasing the limitations on continued business operations in the event of failure to pay.The Board reports that the majority of the Macatee recommendations have been completed.  Bill 9 is the most recent implementation of those recommendations.  Some work towards full implementation remains but Bill 9 has brought the full implementation much closer.

Written by Michael J WeilerCanadian employers continue to downsize in light of the collapse of the commodities market. Anglo-American announced earlier this week that it will terminate 85,000 employees worldwide due to poor economic circumstances. 1500 employees work for Anglo-American in Canada. So one would think maybe in these extraordinarily difficult times employers would catch a break in court in wrongful dismissal cases resulting from bona fide downsizing. Unfortunately, a recent Ontario Court of Appeal decision reaffirms that courts will not reduce notice periods when the terminations result from serious economic problems.In Michela v. St. Thomas of Villanova Catholic School, 2015 ONCA 801 the employer terminated 3 teachers because a lower than anticipated enrollment at the school would have likely resulted in a $300,000 shortfall in revenue. The employer tried to limit its exposure in the wrongful dismissal actions by the 3 teachers in two ways. First, the employees were subject to a series of one-year fixed-term contracts and therefore the school argued that, as the employees were subject to fixed-term contracts, no further notice was required. Secondly, it argued that if the teachers were entitled to reasonable notice, the notice periods should be reduced due to the financial circumstances of the school.The trial judge found that the teachers were employed for indefinite periods and therefore the fixed-term contracts did not apply to limit the common law notice for each teacher. This finding was not appealed. The trial judge also held that the reasons for the termination should result in reduced periods of notice.On appeal the court overturned the trial judge’s decision to reduce the notice stating:[17]…….[The court] is not concerned with the circumstances of the employer. An employer’s financial circumstances may well be the reason for terminating a contract of employment – the event that gives rise to the employee’s right to reasonable notice. But an employer’s financial circumstances are not relevant to the determination of reasonable notice in a particular case: they justify neither a reduction in the notice period in bad times nor an increase when times are good.[22] It is important to emphasize, then, that an employer’s poor economic circumstances do not justify a reduction of the notice period to which an employee is otherwise entitled having regard to the Bardal factors. See Anderson v. Haakon Industries (Canada) Ltd. (1987), 48 D.L.R. (4th) 235 (B.C.C.A.), at pp. 238-41 (Lambert J.A.), pp. 243-44 (Wallace J.A.); Farquhar v. Butler Bros. Supplies Ltd. (1988), 23 B.C.L.R. (2d) 89 (C.A.), at pp. 92-93; and Sifton v. Wheaton Pontiac Buick GMC (Nanaimo) Ltd., 2010 BCCA 541, 12 B.C.L.R. (5th) 90, at paras. 34-35, 47-50.[23] Thus, even assuming that the respondent was suffering financial difficulties when it dismissed the appellants, the motion judge erred in concluding that the period of notice to which the appellants were entitled should be reduced as a result. That conclusion is neither required by the case law nor consistent with the nature and purpose of an employee’s right to notice.As noted this reflects the law in BC.For employers in BC, there is even more bad news as our courts go one step further and find that economic circumstances may be relevant in favour of employees to increase the notice period. In Hunter v Northwood Pulp 62 BCLR 367; 7 CCEL 260 at the height of the forest industry recession Mr. Hunter was terminated due to economic reasons. He was 36 years old and had a responsible management position “although at the lowest rung” and earned $36,000 per year. He made 200 job inquiries and sent out 180 resumes. The trial judge awarded 8 months which is a very high award given the 4 Bardal factors. In upholding the trial judge’s decision to award 8 months’ notice the Court of Appeal stated:(1) The lack of available employment opportunities resulting from a depressed economy is a factor to be taken into account.(2) The economic factor must not be given undue emphasis.