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

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In January 2024, the government indicated certain commercial, pawn, and payday loans will be exempt from the new restrictions. Importantly for many private lenders, commercial loans over $500,000 will be entirely exempted from criminal interest rate laws. The reason being that these types of larger, sophisticated transactions should not affect vulnerable Canadians.

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

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Commercial loans between $10,000 and $500,000 will continue to have the existing criminal rates apply. This is to provide small business owners with some level of protection from loan sharks.

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

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

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It is often said that there are two certainties in life:  death and taxes.  When someone dies in BC, these two certainties become reality.

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One of the areas of law which I practice is probate law.  Probate refers to the legal process of settling someone’s estate after their death.  This process attracts a tax on the deceased persons’ estate known as probate costs or fees.

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One of the questions that I am often asked while acting as legal counsel on an estate matter in BC is: “what will my probate fees be?”  The legislation that allows lawyers to navigate the issue of probate costs in BC is the Probate Fee Act, SBC 1999, c4 (the “Act”).  The starting point is to determine the gross value (without deductions) of the estate according to the definition in the Act.  It is noteworthy that all real estate and tangible personal property (ie cash, vehicles, jewellery, etc) will need to be identified and valued to determine the value of the estate.

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To initiate the probate process, the personal representative of the deceased must file an Affidavit in Court exhibiting a Statement of Assets, Liabilities and Distribution which sets out the value of the estate.  This in turn determines the probate fees to be calculated.

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Section 2 of the Act provides the detailed guide for fees payable and they are as follows:

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• For Estates Valued up to $25,000: No probate fees are required.
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• Estates Between $25,001 and $50,000: These estates are subject to a modest probate fee of 0.6% of the estates value.
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• Estates Over $50,001: For estates exceeding $50,001, the probate fee is set at 1.4% of the estates value.
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In addition to the fees payable, Court filing fees are also applicable.
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The personal representative of the deceased is always required to pay any fees applicable at the outset of the probate process.  These probate costs are reimbursed once probate is granted.

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Navigating probate costs in BC and the probate process in general requires legal knowledge and it is in the best interests of the executor named in a Will to consult with a lawyer to understand the complexities of the process, one of which is the probate costs payable.

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Long-Term Disability insurers in Canada might be treading a little lighter these days, as the Ontario Court of Appeal has upheld a landmark $1.5 million punitive damages award, the largest in Canada for a Long-Term Disability claim, in the decision of Baker v. Blue Cross Life Insurance Company of Canada.

Facts

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Sara Baker was the Director of Food Services, Environment, and Porter or Transport Services at Humber River Hospital. In October of 2013, at just 38 years old, Ms. Baker suffered a stroke while exercising.

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Following her injury, Ms. Baker applied for, and was subsequently paid, short-term disability benefits through her employer’s policy with Blue Cross. In January of 2014, Blue Cross ceased Ms. Baker’s benefits, only to reinstate them just two months later after appeal.

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Following the completion of Ms. Baker’s short-term disability benefits, Ms. Baker was transitioned to Blue Cross’ long-term disability benefits (“LTD”). In order to be eligible for LTD benefits, Ms. Baker, like many insured persons under similar policies, had to demonstrate that she satisfied the definition of “total disability”.

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For the first two years, the first prong for Ms. Baker to satisfy the definition of “total disability”, was to prove that she was unable to perform the regular duties of her own occupation. Following the two-year period, in order to still qualify for benefits, Ms. Baker had to prove an inability to perform any occupation that would earn 60% or more of her previous earnings with her employer.

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Ms. Baker was paid two years of “own occupation” benefits following the conclusion of her short-term disability. During this period, Ms. Baker’s benefits were yet again cut-off by Blue Cross, only to be reinstated – again – after an appeal.

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When Ms. Baker hit the “any occupation” stage, Blue Cross cut her off again. This time, however, Blue Cross refused to reinstate Ms. Baker’s benefits after she exhausted Blue Cross’ appeal process. It was at this point that Ms. Baker elected to commence a civil action against Blue Cross, seeking her “any occupation” benefits, along with aggravated and punitive damages for Blue Cross’ conduct.

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Following a 22-day jury trial, Ms. Baker was awarded a whopping, $1.76 million dollars. Although Ms. Baker’s retroactive benefits was substantial, $1.5 million of the award was made up of punitive damages alone. On top of this award, Ms. Baker was subsequently awarded $1,083,953.50 in full indemnity costs.

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Blue Cross filed an appeal strictly against the punitive damages and costs awards.

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The Appeal Decision

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On appeal, Blue Cross argued that a contextual and fair reading of the record demonstrated that Ms. Baker’s claim was handled in a balanced and reasonable manner. The Court rejected this argument, providing Blue Cross with a wake-up call for handling of future claims.

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Early into the Court’s decision, it becomes immediately clear that this was not going to sway in Blue Cross’ favour:

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[9]         For the reasons discussed below, I would dismiss the appeal and grant leave to appeal costs but deny the costs appeal. In summary, the evidence at trial raised serious concerns regarding the manner in which several disability claim examiners and reviewers at Blue Cross processed Ms. Baker’s file. At best, it shows reckless indifference to its duty to consider the respondent’s claim in good faith and to conduct a good faith investigation, and at worst, a deliberate strategy to wrongfully deny her benefits.

…

[12]      Further, there is nothing about the quantum of the award that warrants appellate interference. It was open to the jury to conclude that Blue Cross engaged in systemic and deliberate misconduct in handling Ms. Baker’s claim and that a significant punitive damages award was necessary to deter Blue Cross from conducting themselves in that fashion in the future.

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The Court of Appeal detailed a number of factors which weighed heavily on the jury’s decision to award such a precedent-setting amount. These factors included:

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• Ceasing Ms. Baker’s benefits on three separate occasions. On each occasion, rather than warning Ms. Baker first, Blue Cross chose to cut-off her benefits and then request additional documentation to support her ongoing disability;
• Relying on opinions from contracted general practitioners which it knew or ought to have known were incorrect;
• Selectively relying on evidence that supported their decision to deny Ms. Baker’s benefits, while ignoring conflicting medical evidence. Then, in the face of conflicting evidence, Blue Cross delayed obtaining an independent medical examination (or “IME”) of Ms. Baker;
• Distorting various specialist reports; and
• Misreading a Transferable Skills Analysis report in a way which supported Blue Cross’ decision to deny Ms. Baker’s benefits.

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In upholding the punitive damages award, the Court emphasized the ample evidence that this was a systemic issue within Blue Cross, not simply an issue limited to the handling of Ms. Baker’s claim. The Court confirmed that a punitive damages award of such significance was required to deter similar misconduct by Blue Cross in the future.

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With respect to the pricey full indemnity costs award against Blue Cross, to the tune of just over $1 million, the Court chose not to hold back in detailing to Blue Cross how reprehensible its conduct truly was:

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[44]      There was undoubtedly misconduct by Blue Cross that was worthy of sanction by the court by awarding full indemnity costs. Without repeating the specific instances referenced above, it is fair to conclude that Blue Cross has markedly disregarded its good faith obligations to Ms. Baker. Although some of that conduct is addressed in the awards of damages, not all of it is. In addition to wrongfully denying the respondent coverage in the manner that it did, Blue Cross engaged in a litigation strategy wherein it shielded its employees from appearing at trial to explain themselves. This is one of those rare cases where there has been bad faith conduct that warrants costs on this scale: see e.g., Clarington (Municipality) v. Blue Circle Canada Inc., 2009 ONCA 722, 100 O.R. (3d) 66, at para. 40; Hunt v. TD Securities Inc. (2003), 2003 CanLII 3649 (ON CA), 66 O.R. (3d) 481 (C.A.), at para. 131.

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Takeaways

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The Baker decision is a warning to disability insurers across the country – if you do not act in good faith in the dealing on an insured’s claim, you will be sanctioned. Following this decision, insurers will likely be acting much more carefully in adjudicating individual disability benefit claims.

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For insured individuals, the important message here is that being denied short or long-term disability is not necessarily the end of the road. There could be thousands (or millions, in this case) being left on the table. If you are cut off from your benefits, or it feels as though the insurer is doing everything possible to try and get you cut off from your benefits, speak with a disability lawyer immediately.

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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.

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Sometimes bad facts make bad law.  The BC Human Rights Code (“Code”)  provides that if the Tribunal finds discrimination under the Code it can order a variety of remedies under section 37  including  under section 37(2)(d) (iii) ordering the respondent to:

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(iii)pay to the person discriminated against an amount that the member or panel considers appropriate to compensate that person for injury to dignity, feelings and self respect or to any of them. (Emphasis added)

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An order for such damages is particularly worthwhile for a complainant as the award is generally not taxable versus an award for lost wages.

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But such awards are very hard to estimate in advance of an actual award.   As one judge said in another context it is somewhat like judging “by the length of the Chancellor’s foot” . For example under the Code the complainant does not have to prove intent on the part of the Respondent but when intent to discriminate is found then the awards might differ.  In one case involving a McDonald’s restaurant the employer acted in a totally bona fide manner in finding that the complainant could not do the work due to a rash she had.  The Tribunal found discrimination and awarded the complainant $25,000 for injury to dignity, feelings and self respect, representing more than one year’s wages.  At the time that was considered by many of us as a significant escalation of such damage awards.

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In the recent case of Ms. L v. Clear Pacific Holdings Ltd. and others, 2024 BCHRT 14, the Tribunal raised the bar in awarding damages for injury to dignity, feelings and self respect by awarding the Complainant  $100,000.

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The case is highly unusual.  The respondent did not appear at the hearing so the Tribunal relied on the evidence of the Complainant and her witnesses including some experts.  The evidence of sexual discrimination, assault and abuse was extraordinary.  The Complainant suffered from a drug addiction that the respondent took advantage of.

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The Tribunal summarizes the decision in the opening paragraphs of the Award:

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I caution the reader that this decision discusses sexual assault and violence.

[2]               Ms. L worked as a personal executive assistant to Sydney Hayden and his companies, Clear Pacific Holdings Ltd. and Whitehawk Investments Ltd. During her employment, Mr. Hayden sexually assaulted and harassed Ms. L, withheld her wages, emotionally abused her, physically assaulted her, and abandoned her in a foreign country. He exploited her disability, a substance use disorder, to maintain control over her.

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Clearly the facts in this case are so egregious that there can be little sympathy for the respondents.  I will not summarize the facts beyond the opening passage quoted above but invite the reader to review the decision to see how outrageous the respondent’s conduct was.

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What was important about this decision was that the Tribunal analyzed the law under section 37(1)(d)(iii) and awarded the second highest amount ever, highest was awarded in Francis v BC 2021 BCHRT 16 (Remedy Decision), which I summarized in our article here: https://www.kswlawyers.ca/blog/bc-human-rights-tribunal-orders-record-damages-award-of-over-1-million-to-terminated-employee-following-racial-discrimination

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Injury to Dignity, Feelings and Self Respect

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The Tribunal provides a very thorough analysis of the law under this heading of damages.  It is worthwhile to consider the full legal analysis:

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[63]             A violation of a person’s human rights is a violation of their dignity. The primary way that the Human Rights Code addresses this violation is by giving the Tribunal discretion to order compensation for injury to a complainant’s dignity, feelings, and self-respect. The purpose of these awards is to compensate the complainant, and not to punish the respondent.

[64]           To determine an appropriate award, the Tribunal generally considers three broad factors: the nature of the discrimination, the complainant’s social context or vulnerability, and the effect on the complainant: Torres v. Royalty Kitchenware Ltd., 1982 CanLII 4886 (ON HRT); Gichuru v. Law Society of British Columbia (No. 9), 2011 BCHRT 185 at para. 260, upheld in 2014 BCCA 396. Ultimately, the amount of injury to dignity damages is “highly contextual and fact-specific”: Gichuru at para. 256. While the Tribunal may consider awards in other cases, the exercise is not to identify a “range” established in other cases. Rather, it is to try to compensate a complainant, as much as possible, for the actual injury to their dignity: University of British Columbia v. Kelly, 2016 BCCA 271 at paras. 59-64; Francis v. BC Ministry of Justice (No. 5), 2021 BCHRT 16 at para. 176. In this case, Ms. L seeks an award of $100,000. I agree this amount is appropriate.

[65]           To begin, the nature of the discrimination was extremely serious. It was ongoing over a 21-month period and included sexual and physical assault, as well as rampant sexual harassment, and emotional and economic abuse. This Tribunal has frequently recognized that sexual assault by a supervisor is “at the extreme end of the spectrum” of sexual harassment: Ban v. MacMillan, 2021 BCHRT 74 at para. 39; MP v. JS, 2020 BCHRT 131 at para. 196. Physical assault is in the same category. The discrimination ultimately resulted in the loss of Ms. L’s employment and – for some period – her ability to work in any capacity. Because of the significance of employment to a person’s dignity, cases which involve the termination of employment have often attracted the top end of this Tribunal’s awards: see e.g. Senyk v. WFG Agency Network (No. 2), 2008 BCHRT 376 at paras. 463-470; Basic v. Esquimalt Denture Clinic and another, 2020 BCHRT 138 at para. 194.

[66]           Next, Ms. L was uniquely vulnerable to the impacts of Mr. Hayden’s conduct. In using the term “vulnerability”, I am mindful that the causes of this vulnerability are rooted in systemic social inequality and not factors endemic to Ms. L as a person: Nelson v. Goodberry Restaurant Group Ltd dba Buono Osteria and others, 2021 BCHRT 137 at para. 35; Ms. K at paras. 139-140.

[67]           The power imbalance between the parties was profound. Some of that imbalance was inherent to the relationship. Ms. L was vulnerable as an employee: Ms. K at para. 143. She had a history of traumatic sexual assault and domestic violence: Araniva at para. 135. When she began working for Mr. Hayden, she had an active substance use disorder and was engaged in expensive court proceedings with her abusive ex-husband over his refusal to pay spousal support. Mr. Hayden was 17 years older than Ms. L, and positioned himself as her “mentor” and caretaker. Most of Ms. L’s work took place in the isolation of Mr. Hayden’s home or boat: Basic at para. 202; Araniva, at para. 134; JS at para. 156.

[68]           Mr. Hayden then leveraged these power dynamics to his advantage. His conduct exhibited many of the markers that the Tribunal outlined in PN, which allow abusers to maintain power and control in a relationship: para. 68. He intimidated and threatened Ms. L, for example telling her that he had access to her medical records and had given his lawyers incriminating evidence about her. He denigrated and demeaned her, infantilized her by calling her a “good girl” and making her call him “sir”, took unflattering photos to embarrass her, and treated her like a servant that he “owned”. He manipulated her connection to his dog to make her feel guilty and beholden to him. He blamed her for the abuse, isolated her from her friends and family by constantly monopolizing her time, and controlled who she could interact with in Mexico. He justified his actions by his jealousy and concern for her, and his health problems. He exerted economic power over Ms. L by ensuring that she was dependent on him for money and drugs. He knew about Ms. L’s struggles with money. He put Ms. L in the position to constantly have to be asking for her wages. He encouraged and exploited her dependence on cocaine by encouraging her to use cocaine from his supply. He gave her drugs and alcohol and then assaulted her.

[69]           In this context, the impact on Ms. L was profound. I have set out some of that impact already. Here, I do not intend to repeat myself but rather to identify some of the most significant considerations. In determining the award, I have considered all the impact set out in this decision.

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I would hope that this case is an outlier based on the most egregious misconduct of sexual harassment and assault but I am afraid it is not.  In my view over the last number of years the Tribunal’s analysis and awards are moving very much towards findings that are favourable to complainants  both in the context of liability (including findings of what constitutes discrimination under the Code) and in making significant damage awards.  For a good recent example of this see my recent blog regarding the City of Nanaimo:  https://www.kswlawyers.ca/blog/mema-v-city-of-nanaimo-a-600-000-wake-up-call-on-human-rights

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Coupled with this trend  is the Tribunal’s struggle to process and adjudicate complaints—an employer might not find out for upwards of 2 or 3 years that there is even a complaint filed and then have to wait another few years before a formal hearing.  That creates  a huge problem for employers to marshall the evidence to defend themselves whereas the complainant and their lawyer can prepare the evidence in a timely manner.

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Employers may think that such cases would never happen to them perhaps because they are small employers.  But remember—it only takes one employee to have a Human Rights Complaint filed against you.  So the best course of action is to learn what the law requires and avoid any suggestion that you and your business discriminated under the Code.

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If you want to discuss this case or the practical steps you can take to limit the risk of liability  under the Code give me or my partner Chris Drinovz a call.

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January 31, 2024

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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.

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For federally regulated employers in Canada, there are several key recent and incoming amendments to the Canada Labour Code to note. If you are uncertain regarding whether your business is “federally regulated”, we recommend speaking to one of the members of our Employment & Labour Law team. Some examples of common types of federally regulated workplaces include the interprovincial/international transportation, maritime, and telecommunications sectors.

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Among the amendments to the Code, there are some that have already come into force in July 2023, and some that are coming into force in 2024.

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These are just some of the highlights of the new amendments to the Canada Labour Code that affect employers and employees in federally regulated sectors. We hope that this newsletter has given you some useful information and guidance on how to comply with these changes and what they mean for your business.

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2023 Amendments

1. Reimbursement for work-related expenses: Employers are now required to reimburse employees for reasonable work-related expenses, similarly to the existing requirements for provincially regulated employers in BC.

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a. What this means for your business: if you ask your employees to use their own equipment, tools, or materials for work purposes, you have to pay them back for the costs incurred.

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b. Example: if you ask your employees to work from home and use their own internet connection, phone line, or computer, you have to cover these expenses. The amount of reimbursement should be based on the actual costs or a reasonable estimate agreed upon by both parties.

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2. Providing information to employees: Under the new amendments, employers must provide employees with materials made available by the Ministry of Labour containing information regarding employer and employee rights (e.g. information on labour standards, occupational health and safety, human rights, and collective bargaining). This is similar to some existing provincial requirements.

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a. What this means:

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i. You have to provide these materials to your employees within 30 days of their hiring date or within 30 days of updated materials being made available by the Ministry.

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ii. You also have to make these materials accessible and visible in your workplace at all times.

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iii. Employers will also need to provide materials to terminated employees, no later than on their last day of employment, with materials made available by the Ministry relating to termination of employment.

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3. Employment Statements: Employers are also required to provide employees with written statements regarding certain terms and conditions related to their employment such as wage rate, hours of work, job title, duties, overtime pay, vacation entitlements, benefits, and termination.

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a. What this means:

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i. You have to provide these statements to your employees within 30 days of their hiring date or when there is a change in their terms and conditions.

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ii. You also have to keep these statements updated and accurate throughout the employment relationship.

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iii. The information can be provided in one or more of the employee’s employment agreement, offer letter, a policy manual, and/or collective agreement (if applicable).

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b. Example: Employment and Social Development Canada provides this template that can be used.

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4. Penalties: The amendments also establish administrative monetary penalties for a failure to comply with these new requirements.

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a. What this means:

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i. The penalties range from $250 to $50,000 per violation, depending on the severity and frequency of the non-compliance.

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ii. The penalties can be imposed on both employers and individuals who are responsible for the violation, and are in addition to any other remedies or sanctions that may apply under the Canada Labour Code or other laws.

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5. Prohibition against replacement workers: The Code now prohibits the use of replacement workers during a strike or lockout.

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a. What this means: It means that unionized workplaces cannot hire or use any person to perform the work of an employee who is participating in a lawful strike or who is locked out by the employer. If an employer violates this prohibition, they may face a penalty of up to $50,000 per day or part of a day.

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b. Exception: the exception from this requirement is if the replacement worker is necessary to prevent an imminent danger to the life, health, or safety of any person.

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6. Menstrual Products: Effective December 15, 2023, employers are required to provide menstrual products in washrooms as part of their occupational health and safety obligations.

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2024 Amendments

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1. Increased Notice Period for Without Cause Terminations: As of February 1, 2024, employers will be required to provide employees with a increasing notice of termination based on the employees’ length of (continuous) service.

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a. What this means: The termination notice is the period of time that an employer has to give an employee before terminating their employment without cause. The statutory notice periods will vary from two weeks to eight weeks, depending on how long the employee has worked for the employer. These requirements essentially put the Canada Labour Code in line with existing requirements under the Employment Standards Act for provincially regulated employers in BC.

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Length of service completed Notice Period

3 months 2 weeks

3 years 3 weeks

4 years 4 weeks

5 years 5 weeks

6 years 6 weeks

7 years 7 weeks

8 years and more 8 weeks

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b. Warning: it is critical to keep in mind that these will only be the minimum requirements under the Canada Labour Code and therefore in many cases employees may be entitled to more notice. As always, we recommend speaking with one of our experienced employment lawyers prior to terminating any employee as it will almost always be more cost-effective to consult with us prior to terminating an employee rather than after the fact.

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c. Impact on existing employment contracts: It is important to also keep in mind that these new amendments may negatively impact the enforceability of existing agreements if the agreements do not account for potential amendments to the requirements under the Canada Labour Code. To prevent this issue, we recommend speaking with one of our lawyers prior to February 1, 2024

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2. Written Statement of Benefits: Employers will also be required to provide a statement of benefits to employees whose employment is terminated.

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a. What this means: The statement of benefits is a document that summarizes the benefits that an employee is entitled to receive upon termination, such as severance pay, vacation pay, pension contributions, and insurance coverage.

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b. Timing:

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i. If an employee is given written notice of termination, the written statement of benefits must be given at least two weeks prior to the termination date.

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ii. If the employee is given pay in lieu of notice, the statement must be given to the employee no later than their termination date.

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iii. If the employee is given a combination of written notice and pay in lieu of notice, the statement must be given on the termination date, unless the employee is provided with at least two weeks of written notice, in which case the statement must be given at least two weeks before the termination date.

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Other 2024 Amendments

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1. Modifications to Hours of Work Requirements: The amendments also provide additional exemptions from and modifications to the hours of work provisions of the Canada Labour Code in some sectors. The provisions regulate how many hours an employee can work in a day or a week, how much rest they are entitled to between shifts or days off, and how overtime pay is calculated.

a. Note: the “coming into force” for the changes to these provisions will vary by sector

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i. The amendments relating to the banking, telecommunications and broadcasting, and rail transportation sectors are set to come into force on January 4, 2024.

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ii. The amendments relating to the airline sector come into force on June 4, 2024.

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Up until 2001, our Court of Appeal held that dishonesty would always be just cause to dismiss an employee summarily.  Unfortunately for employers the Supreme Court of Canada modified the law of just cause to say that dishonesty won’t always be cause for dismissal; rather the court must embark on a “contextual” approach to see if the misconduct is sufficiently egregious to constitute cause: McKinley v. BC Tel, 2001 SCC 38.

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A recent case of the B C Court of Appeal provides an example of where dishonesty in respect of fraudulent business expenses can in and of itself constitute cause.

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The employee TM was employed as President of Operations of a large used car dealership and RV dealership in the Lower Mainland and on Vancouver Island.  While on a business trip to Parksville the Plaintiff and his wife had dinner.  TM wrote the names of two employees on the receipt and submitted for payment by the company.  The next morning he and his wife had breakfast and he wrote the name of another employee on the receipt and submitted for payment.  The total amount for which the Plaintiff was reimbursed was $250 (“Parksville expenses”).  The employer’s policy was that the name of the employee had to be written on the receipt.  

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A week later TM was having dinner with the owner and TM picked up the tab.  He then submitted the bill for payment claiming the owner had agreed it was a “team building event” and was justified as a business expense.  The owner denied that she agreed it was a business expense.

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The owner then did a spot audit and learned of the Parksville expenses.  She confronted TM and instead of admitting the fraudulent expense claims he said could not recall any discussion of the Parksville expenses in that meeting.  He also claimed that he was told by the CFO controller to put the names of the employees on the receipts “to keep it simple”. The CFO who approved expenses testified that he was unaware that the Parksville Expenses were for dinner and breakfast with TM’s wife.

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The trial judge found that the Plaintiff’s conduct with respect to the Parksville Expenses constituted just cause.  The Plaintiff appealed.

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The Court of Appeal described the trial judge’s findings as follows at paragraphs 19 and 20:
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The judge then turned to the issues of dishonesty and just cause. He found on the evidence that Mr. Mechalchuk submitted the Parksville restaurant receipts as business expenses when he knew they were personal in nature, and tried to deceive Galaxy Motors into thinking they were for a business purpose. He was also dishonest about the expenses when he was confronted by Ms. and Mr. Jones about this during the July 11, 2022 meeting.

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[20] The judge observed that Galaxy Motors bore the onus to establish just cause, and concluded it had done so. He noted that dishonesty does not automatically comprise just cause for dismissal, but in these circumstances where Mr. Mechalchuk was in the most senior management position at the company, that position commanded authority, responsibility and trust, and he breached that trust. Accordingly, “his conduct was such that the defendant’s loss of faith and trust in him was justified”: at para. 65.

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The employer had relied on a pattern of conduct broader than the Parksville Expenses but only proved the events regarding those expenses.  The Court of Appeal held  that Parksville Expense evidence was sufficient in and of itself to prove just cause.

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In dismissing the appeal the court held that the trial judge did not err when he found:

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[65] I agree with the submissions of counsel for the defendant that the facts in Roe are analogous to those before me in this case. Although the total amount of the Parksville restaurant dinner and breakfast receipts (approximately $250) was relatively small, the misconduct went to the very root of the plaintiff’s employment relationship with the defendant. He was in the most senior management position at the defendant. His position commanded a high level of authority, responsibility, and trust. He breached that trust by submitting false expense receipts and thereafter being untruthful about them when given an opportunity to explain them on July 11, 2022. Moreover, he failed to “come clean” when he had a second opportunity to do so during the meeting on July 13, 2022. His conduct was such that the defendant’s loss of faith and trust in him was justified.

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The court of appeal concluded:

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[39] In conclusion I am of the view that there is no principled basis upon which this Court could or should interfere with the judge’s conclusions, in particular that Mr. Mechalchuk’s conduct was such that Galaxy Motor’s loss of trust and faith in him was justified. The judge correctly applied the contextual analysis which was required in considering Mr. Mechalchuk’s position and level of responsibility. He assessed the severity of the misconduct, that is submitting false expense receipts and being untruthful when given a chance to explain and found that in all the circumstances, termination of employment for cause and without notice was a justifiable response by the employer.

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The lesson to be learned for senior employees and owners is fairly obvious.  Cheating on expense accounts and then lying about it is not the same thing as telling a little white lie.  There are consequences for dishonesty regardless of the amount involved. Here the Plaintiff’s income in the year in which his termination occurred “was between $750,000 and $1,000,000”.  For the value of $250 it cost TM up to a $1 million a year income plus the legal fees in pursuing is claim as well serious mental stress and finally significant reputational damage.

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END NOTE

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When I first began practicing I juniored a senior lawyer as he prepared to defend a wrongful dismissal action.  It was a without cause termination.  Shortly before the trial the employer for some reason late in the day decided to look in the employee’s desk.  It found a blank receipt book that matched many of the expense receipts submitted by the employee.  Senior counsel invited the opposing counsel over for coffee with us—the case was settled for a nominal amount shortly thereafter.

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Employers are wise to do their due diligence following termination with or without cause.  That includes ensuring all IT information and any business records are retained, reviewed and preserved.

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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.

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To increase the supply of housing and address the affordability crisis, the BC provincial government has introduced 3 new laws which could result in the most significant housing reforms in decades. Once enacted, these laws will allow up to 6 units on single-family lots, increasing density near transit hubs, and streamlining how cities collect fees from developers.

Bill 44 (Residential Housing) will permit secondary suites or accessory units on every single-family lot and allow for 3, 4, or 6 units depending on the lot size and proximity to transit. Bill 44 will also ban public hearings for any residential rezonings which are consistent with Official Community Plans.

Bill 46 (Development Finance) will allow cities to collect Development Cost Charges (DCCs) from developers for items currently funded through taxation and Community Amenity Contributions (CACs). It will also introduce Amenity Cost Charges (ACCs) to replace CACs for certain items.

Bill 47 (Transit-Oriented Areas) will allow development of buildings with minimum heights of 8, 12, or 20 storeys, depending on their proximity to transit hubs. It will also remove parking minimum requirements for residential projects near transit hubs.

There is no document, per se, to confirm the date of a legal separation.

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You are separated from your common law or marriage spouse as soon as one of you makes your intention to end the relationship clear to the other.

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To be absolutely clear to your spouse that you are separated, you should put the date of separation in writing to your spouse. This can mean by text message or e-mail.

As recently highlighted in various publications including the Toronto Star, there has unfortunately been an increasing amount of layoffs recently in the tech sector.

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In times like these, it is essential for employers and employees to understand their rights (and obligations).

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Recent layoff have not been confined to startups feeling the pinch of venture capital drying up, but also affects established tech giants streamlining their operations (including here in the Lower Mainland). Regardless of the reasons behind these layoffs, the impact of a layoff or termination on employees can be significant and often stressful.

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One key aspect to understand is that although they’re used interchangeably colloquially, “layoff” and “termination” mean two separate things from a legal standpoint. A “layoff” as in a “temporary layoff” is a situation where an employee is told to not report to work for a period of time due to a shortage of work. A “termination” on the other hand, is where the person’s employment is ended.

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Both a “temporary layoff” and a “termination” can potentially entitle an employee to a significant amount of severance pay, depending on the terms of their employment agreement (if any).

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Understanding Severance Packages

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When layoffs occur, companies, particularly larger organizations, typically will offer severance packages to affected employees. However, it’s important to note that these packages may not fully reflect an employee’s legal entitlements.

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Your Legal Entitlements

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In British Columbia, employees (in the absence of an enforceable termination clause), are entitled to reasonable notice or pay in lieu of notice when terminated without cause. This also applies where an employee has been “constructively dismissed” due to being placed on a temporary layoff without their consent (and without a clause in their contract that allows the employer to do so).

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Because employees’ severance entitlements vary based on a wide range of factors, what is offered in a severance package may not reflect the employee’s actual entitlements (for example, an employee who is in fact entitled to over 9 months’ pay in lieu may only be offered 3 months).

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Conclusion

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If you’re facing a temporary layoff or termination, it’s crucial to seek legal advice before agreeing to or signing anything. Once you sign a release accepting the severance package, it’s usually impossible to go back and ask for more.

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An experienced employment lawyer can help you understand your rights and potentially negotiate a better package on your behalf.

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At KSW, our employment law team has extensive experience representing both employers and employees, including tech sector employees and executive-level employees. We understand the unique challenges of this industry and are here to help. If you’re facing a challenging employment situation, don’t hesitate to reach out to us for a consultation.

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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.