Written by Michael J WeilerAs most readers will know, the essence of a wrongful dismissal lawsuit is a claim that the employer, absent a binding written agreement limiting its liability, terminated the employee without just cause and without “reasonable working notice”. The employee claims damages for lack of working notice. If the claim is proven, the court will put the employee in the same position financially as she would have been in if she had received reasonable working notice subject to reduction for mitigation.The Supreme Court of Canada has confirmed that the 4 basic criteria for determining what is reasonable notice are as stated in Bardal v Globe & Mail, a 1960 decision out of Ontario:In determining what constitutes reasonable notice of termination, the courts have generally applied the principles articulated by McRuer C.J.H.C. in Bardal, at p. 145: There can be no catalogue laid down as to what is reasonable notice in particular classes of cases. The reasonableness of the notice must be decided with reference to each particular case, having regard to the character of the employment, the length of service of the servant, the age of the servant and the availability of similar employment, having regard to the experience, training and qualifications of the servant.[29] These four factors were adopted by this Court in Machtinger v. HOJ Industries Ltd., [1992] 1 S.C.R. 986. They can only be determined on a case-by-case basis.These 4 factors are not exhaustive as other factors such as economic conditions or inducement might influence the notice period, but clearly these 4 criteria remain the most important.Over time the courts in Canada have found that there is a “rough upper limit” for the notice period of 24 months. Recently an Ontario decision held that 27 months’ notice was reasonable. In Markoulakis v SNC-Lavalin Inc., 2015 ONSC 1081, the court held that there were exceptional circumstances to make an award beyond the usual maximum of 24 months. The employee was a civil engineer who had been employed for nearly 41 years and was 65 years old when he was terminated. The court found that 27 months was a reasonable notice in these circumstances and noted among other things that “the Plaintiff is over 65, has more than 40 years of service with the Defendant, his only employer [and] is in my view exceptional”.Given the aging workforce and the fact that many established companies are letting go of long service employees with greater frequency, the question is, will BC Courts make 27 months the new “rough upper limit”? The matter should be of concern to employers as adding an extra 3+ months can amount to a very large damage award. Many senior executives earn substantial compensation in the form of salary, bonuses and stock options so adding 3 months might well add $100,000 + to the damage award. As well it is clear that “a rising tide raises all ships” so raising the upper limit would necessarily increase all awards. We have seen this for example in human rights cases where damages for hurt feelings have skyrocketed from $3,000 or so to the now new upper limit of $50,000 in some cases. In my view, the good news for employers is that the BC Courts will likely maintain 24 months as the very high end of the notice range and will not begin creating exceptions such as Ontario has done.The question of the “rough upper limit” was considered by the BC Supreme Court in Ansari v. B.C. Hydro & Power Auth., 1986 CanLII 1023 (BCSC). While there will be some anomalous exceptions the 24-month ceiling will likely apply in almost all cases. Chief Justice Alan McEachern summarized the law in BC as follows:[37] But the law is also clear that there is a “rough upper limit” for the notice period which has lately been substantially increased as in Suttie where a period of 24 months was approved for a 58-year-old employee who had exercised senior management responsibilities and had served his employer for 39 years, and in Sorel v. Tomenson Saunders Whitehead Ltd., [1985] B.C.W.L.D. 4260, B.C.S.C. Gibbs J., Vancouver No. C837279, dated 24th October 1985 (not yet reported), where a 60-year-old senior executive with 37 years’ service was awarded 30 months. [Editor’s note: This latter decision was overturned by the BCCA substituting 24 months’ notice for the 30 months’ notice awarded by the trial judge: see Sorel v Tomenson 1987 CanLII 154 (BCCA).][38] In other words, the law seems to place a cap of reasonableness upon the notice period and does not compensate a discharged employee to retirement age, whatever that may be, even if there is no likelihood of alternative equivalent employment. I believe this is because:(a) such a law would amount to a guarantee of lifetime income;(b) it would fix the employer with all responsibility for the lack of employment opportunities; and(c) the law presumes that no employer would accept such an onerous responsibility at the time of engagement.[39] Subject, therefore, to exceptional cases such as Suttie and Sorel [Editor’s note—See above reversal] where the degree of responsibility, age and years of service were very extensive, it seems to me that 18 to 24 months is the rough upper limit for reasonable notice, and other cases should be scaled downward from there unless there are extenuating circumstances which cannot all be enumerated in this crude attempt to provide guidance for the settlement of the many cases still outstanding. …[41] At the end of the day the question really comes down to what is objectively reasonable in the variable circumstances of each case, but I repeat that the most important factors are the responsibility of the employment function, age, length of service and the availability of equivalent alternative employment, but not necessarily in that order.[42] In restating this general rule, I am not overlooking the importance of the experience, training and qualifications of the employee but I think these qualities are significant mainly in considering the importance of the employment function and in the context of alternative employment.[43] What all this means, in my view, is that the general statement of factors quoted above from Bardal are the governing factors, and it would be better if other individual or subjective factors had not crept into the determination of reasonable notice. In my view, such other matters are of little importance in most cases.[44] I turn to a consideration of the individual cases [of the separate actions of the four plaintiffs against the defendant for damages for wrongful dismissal which were tried summarily together under R. 18A.]Mindful of the foregoing reasons of the then Chief Justice, I look to the following recent cases as support for my conclusion that the 24-month maximum will remain the law in BC:

• Liborion v IBM 2015 BCSC 1523 – Technical Services Professional, $63,000 p/a, 57 yrs old, 32 yrs service = 20 months notice
• Johnson v Marine Roofing 2015 BCSC 472 – Service Mgr, $144,000 p/a, 65 yrs old, 24 yrs service = 24 months notice
• Younger v CNR 2014 BCSC 1258 – Asst. Superintendent, $96,000 p/a, 50 years old, 32 yrs of service = 24 months notice
• Hooge v Gillwood 2014 BCSC 11- Production Supervisor, $82,000 p/a, 57 years old, 36 yrs of service = 18 months notice
• McBrearty v Cerescopr, 2009 BCJ 1843 – President, $300,000+ p/a, 70 years old, 39 yrs of service = 24 months notice

Written by Michael J WeilerMike Weiler is an active member and committee member of the BC Chamber of Commerce. Through that, Mike also participates as a member of the Employee Relations Committee of the Business Council of British Columbia. The Business Council’s December 2015 issue of “Human Capital Law and Policy” newsletter reviews the provincial government’s updated labour market supply-demand outlook publication.That issue of the Human Capital Law and Policy newsletter begins with the following HIGHLIGHTS:

• The new British Columbia 2014-2024 Labour Market Outlook report projects a cumulative 935,000 job openings in the province over the next decade.
• Over two-thirds (68%) of these job openings will be ‘replacement’ positions (mostly due to retirements among the current workforce).
• Overall, the projections suggest BC’s labour market will be in rough balance over the coming decade. Circumstances have shifted since the previous 2012-2022 Labour Market Outlook was produced. It foresaw aggregate labour shortages emerging by 2019.
• Most of the relevant variables, such as economic growth, retirements, and migration numbers, that enter into the forecasting process signal somewhat weaker demand and a greater supply of workers than was expected when the 2012 Labour Market report was developed.
• Tighter labour market conditions and moderate shortages of skilled workers are still expected in certain regions of the province by the 2020s.
• Consistent with increasing urbanization, a surplus of labour is anticipated in the Lower Mainland area.
• The 2014-2024 Labour Market Report includes detailed projections for 500 distinct occupations. Anyone interested in BC’s labour market or future job opportunities is encouraged to read the report [of the BC Ministry of Jobs, Tourism and Skills Training].

Follow this link to see the full Business Council of BC Human Capital Law and Policy December 2015 newsletter.

Written by Michael J WeilerFor many years Mike has been fortunate in being an active member of the B.C. Chamber of Commerce Policy Review Committee with input on all labour, employment, human rights, WorkSafe matters, etc.  As the voice of small and medium-sized businesses, in particular, the Chamber in many ways reflects my clientele.I thought readers would find this recent bulletin from Jon Garson, President and CEO of the Chamber, to be of particular interest.  The Canadian Chamber of Commerce recently released its latest 10 Barriers to Competitiveness Report.  From this list, B.C.’s Chambers have identified and localized the top five barriers faced in B.C. Follow this link to read the full B.C. Chamber of Commerce media release, February 18, 2016, BC Chamber calls for action on B.C.’s top five barriers to competitiveness.

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Chris Drinovz, head of the Employment & Labour Group at KSW Lawyers, had the pleasure of co-hosing an informative webinar for the Abbotsford Chamber of Commerce on May 26, 2020. We think there is important information that should be shared with our clients and friends, so we did a summary for you here in this blog post.

During the webinar, we focused on health and safety and reviewing COVID-19 Safety Plans and secondly, How to Deal with Work Refusals. There are also some of the live Q&As listed at the bottom of this blog.

Topic #1: COVID-19 Safety Plans

On May 8, 2020, the Province of BC rolled out its 4-phase “Restart Plan”. On May 14, 2020, we entered “Phase 2” of the Restart Plan. The condition for the reopening of the Phase 2 businesses was that every business must follow enhanced health and safety protocols established by the government to protect workers and customers.

This was made LAW by an Order of the Provincial Health Officer, Dr. Bonnie Henry issued on May 14, 2020 called “Workplace COVID-19 Safety Plans”

That Order invokes section 21(2)(c) of the Workers Compensation Act and directs ALL employers to establish a plan to ensure that the risk of transmission of COVID-19 at workplaces is minimized. This is called a “COVID-19 Safety Plan.”

The PHO also ordered that all employers must:

1. Post a copy of the COVID-19 Safety Plan on their website and at their workplace so it is readily available for review by workers and others; and
2. Employers must provide a copy of their COVID-19 Safety Plan to a health officer or a WorkSafeBC officer on request.

Remember, this is LAW it is not a suggestion, not following this Order can result in significant fines to your business, starting in the tens of thousands of dollars. These fines are reviewable, so if you do receive a fine or you have been contacted by WorkSafeBC regarding your Plan, be sure to seek guidance from your legal advisors or our team.

The other thing to note is that currently this Order does not have an expiration date so these obligations will continue until the Order is rescinded which likely will not be until 2021.

“What is required for my COVID-19 Safety Plan?”

In essence, your Plan must demonstrate that you have properly assessed the risks of COVID-19 transmission in the workplace and taken the appropriate measures to reduce these risks. On its website, WorkSafeBC states that when it does a health and safety inspection, the question it will ask of employers is “what steps have you taken to protect your workers?”

WorkSafeBC has provided a very helpful six-step Guide for developing a Safety Plan – this is accompanied by a Planning Tool which provides guidance and checklists for each of the six steps which can be found here: https://www.worksafebc.com/en/about-us/covid-19-updates/covid-19-returning-safe-operation

Industry-specific guidelines and resources are now available for the following sectors:

• Arts and cultural facilities
• Child care
• Education K-12
• Gyms and fitness centres
• Health professionals
• In-person counselling
• Offices
• Parks
• Personal services
• Real estate
• Restaurants, cafes, and pubs
• Retail

The Safety Plan follows the six steps as provided by WorkSafeBC:  

Step 1: assess the risk at the workplace

Step 2: Implement measures to reduce the risk

Step 3-5: Develop Policies, Communicate Your Plan, and Monitor your Plan

Step 6: Assess and address risks from resuming operations

Topic #2: Work Refusals

Work refusals are a hot topic right now and we have received many questions from our employer clients wondering how to deal with a particular employee that is refusing to come into work.

What we focused on here are cases where the employee points to unsafe work conditions as the basis for the refusal, which must be handled carefully under health and safety legislation.

Right to Refuse Unsafe Work

Workers have the right to refuse unsafe work under section 3.12 of the Occupational Health & Safety Regulation. In essence, the test is this: “If a worker has reasonable cause to believe that performing a job or task puts them at risk of undue harm, they must not perform the job or task.”

The OHS Guidelines provide further guidance on what this test actually means. It boils down to two key words: undue harm and reasonable cause. So “undue harm” means "excessive or unwarranted”. We are looking at whether there is a condition that may expose a worker to an excessive or unwarranted risk of injury or disease. This is a very high standard and clearly just some risk or the average risk that everyone is exposed to will not be sufficient.

Second, the use of the term "reasonable" in "reasonable cause to believe" means that the worker must assess the situation as a reasonable person, taking into account relevant and available information and exercising good faith judgment. This means the test is “objective” and not just based on the worker’s own personal opinion, the concerns must be realistic and actually supported by evidence

In the era of COVID-19, most work refusals are based on the employee’s view that returning to the workplace will expose them to COVID-19. Now our view is that so long as you have established a Safety Plan in accordance with WorkSafeBC’s guidelines and industry-specific protocols, you have clearly communicated this Plan to your employees AND the plan is implemented and being followed, there is little risk that the employee can legitimately refuse to come to work.

The Process

If you are faced with a work-refusal, there is a four-step process mandated by the OHS Regulation:

Step #1: The worker must report the unsafe condition to the employer

Step #2: Once the safety concern is identified, the employer must investigate and report back to the worker

Step #3: If the worker still refuses – employer must do a repeat investigation in their presence

Step #4: If the refusal continues after the second investigation with the worker present, you must contact a WorkSafeBC Officer to investigate and make a ruling

According to Ministry of Labour statistics in Toronto, there have been more than 200 work refusals filed by workers concerned about contracting COVID-19 and none of them have been upheld. This statistic confirms the very high standard required to justify refusing to work.

What You Can and Cannot Do During Refusal Process

In terms of what you can and can’t do during the refusal process:

1. You CAN temporarily assign the worker to do alternative work with no loss of pay
2. You CAN assign another worker to do the work of the worker refusing to work on a temporary basis
3. You CANNOT lay-off, terminate or make any other type of negative employment action against the worker before completing these four mandated steps
4. If you did retaliate against the worker either during the process of afterwards, the worker can bring a Prohibitive Action complaint against the company and WCB can award reinstatement, lost wages and other damages to the worker so be very careful about this
5. Throughout the entire process, make sure everything is properly papered

Other Things You May Want to Consider

There are some alternatives and options to consider for valued employees with unsafe work concerns outside of the WorkSafeBC process:

• Consider whether the worker wants to use sick or vacation time or even take an unpaid leave until they feel safe again
• Consider whether you qualify for the Canada Emergency Wage Subsidy (CEWS) and if so, whether you can offer the worker a paid leave on a fully-subsided but reduced wage. We note that WorkSafeBC just announced that premiums would be waived on the wages paid to employees on leave with pay (furloughed employees). We also note that that the CEWS was extended to the end of August can be extended up to the end of September by regulation.

Final Comment: Protecting mental health

Our final comment is not to lose sight of mental health. Many of your workers are going to have increased anxiety about returning to work and being around co-workers. Make sure your workers know that you support them and ensure they are aware of the many mental health resources out there - for example, there is free virtual counselling service provided by registered psychologists through WorkSafeBC called the COVID-19 Psychological First Aid Service. Put this in your Safety Plan as a resource and let your employees know you care about them.

Webinar Live Q&As

1. Do I need to post Safety Plan on website?" open="on" _builder_version="4.4.6

Yes. Pursuant to the Order of the Provincial Health Officer, you must “Post a copy of your COVID-19 Safety Plan on your website, if you have one, and at your workplace so that it is readily available for review by workers, other persons who may attend at the workplace to provide services and members of the public.”

2.  What do you know about CEWS being extended further?" open="on" _builder_version="4.4.6

On May 15, the Finance Minister announced that the Government of Canada will extend the Canada Emergency Wage Subsidy (CEWS) to August 29, 2020. This is the first extension of CEWS. The legislation allows for extension by regulation up to September 30, 2020 so it is likely it will be extended again, but we do not have this information at this time.

3. Do I need to issue an ROE for employees who have been laid off for longer than 16 weeks?" open="on" _builder_version="4.4.6

Previously under the Employment Standards Act (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. 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 an ROE at the end of the employment relationship). Now, temporary layoffs relating to the COVID-19 pandemic can be extended to 16 weeks, if the employee agrees. 

Although a longer lay off 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, 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. You can read more about the other programs in our previous blog posts here: https://www.ksw.bc.ca/employment-labour-blog/

4. How will WorkSafeBC enforce and fine?" open="on" _builder_version="4.4.6

WorkSafeBC Prevention Officers have the authority to inspect workplaces and their Safety Plans, and issue penalty orders and fines for breach of the health and safety legislation and regulations. Our view and hope is that so long as the employer shows due diligence and general compliance with the WorkSafeBC Guidelines, the Prevention Officers will use their discretion to work collaboratively with employers rather than look to be punishing them.

If you are fined, the amount of the penalty is based on a company’s total assessable payroll and the nature of the infraction. Such fines will significantly increase in amount for repeated infractions. These fines are reviewable, and you can contact our team if you require assistance.

5. How much “common law” notice do people need to get because of the current workforce market?" open="on" _builder_version="4.4.6

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.

Note to our Readers: Information regarding COVID-19 is rapidly evolving. We are working to bring you up-to-date articles as the legal issues unfold. This is not legal advice. If you are looking for legal advice or are dealing with an issue in relation to COVID-19, please contact our Employment & Labour Group: Chris Drinovz at cdd@kswlawyers.wpengine.com, Mike Weiler mweiler@kswlawyers.wpengine.com

Written by Michael J Weiler

A step backwards

In June 2015 the Federal Conservatives passed legislation to ensure that all federally regulated employees would have a secret ballot vote in any union certification application.   As one of the first orders of business the new Liberal government will take away that right when Bill C-4 passes into law.CURRENT LAWThe Canada Labour Code (“CLC”) was amended in June 2015 by the Employees’ Voting Rights Act  (“Amending Act”) which required the Canadian Industrial Relations Board (“CIRB”) to hold a mandatory secret ballot vote in almost all union applications for certification as well as decertification applications.  This brought the federal legislation in line with mainstream provincial labour codes.  For example in 2002 the B.C. Liberals amended the BC Labour Relations Code to eliminate the card-based certification system and require a vote in almost all union certification applications in B.C.The CIRB has introduced expedited procedures that now protect unions and employees by requiring, inter alia, a vote usually within 12 days similar to the provincial procedures.  The CIRB summarized the new expedited procedures as follows:Highlights of the Changes

• All applications will be processed pursuant to expedited timelines.
• The applicant trade union must serve a copy of the application as well as a “certification package” on the employer and any incumbent bargaining agent on the same day the application is filed with the Board.
• The applicant trade union must file the original membership evidence relating to the application when filing it with the Board. An application is considered filed with the Board on the day the application and the original membership evidence are received. Failure to submit the required evidence may result in the summary dismissal of the application by the Board.
• All applications must be filed in person or by courier. Applications received by fax, mail or registered mail will not be accepted. Any subsequent documents can be filed by fax or through the Board’s e-filing portal which is accessible from its website.
• Applications can be filed in any one of the Board’s regional offices with the exception of the Winnipeg satellite office.
• The employer and any incumbent bargaining agent will have 5 calendar days from the receipt of the application to file a response and to submit all required information and documents to the Board.
• The applicant will have 2 calendar days from the receipt of the response to file a reply.
• All requests to intervene must be filed with the Board no later than 5 calendar days after the potential intervenor is notified of the application and must include, among other requirements, written submission on the merits of the application. The parties will have 2 calendar days from receipt of the request to intervene to file a response.
• Requests for extension of the time limits for submitting information, responding or replying will not be granted unless exceptional circumstances warrant it.
• All parties are required to complete and file a Vote Arrangements form with the Board.
• If ordered by the Board, a representation vote is likely to commence 12 days after the date the application is filed.

As well, unions under the CLC continue to have the protection of unfair labour practice prohibitions with strong remedial authority in the CIRB to remedy any such breaches including ordering remedial certification without a vote.‍

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NEW LAW

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‍The Federal Liberals introduced Bill C-4 on January 28th, 2016 which will turn the clock back and abolish the mandatory secret ballot in union certification for federal employers where the union can show it has signed up more than 50% of employees in an appropriate bargaining unit.  The explanatory note to Bill C-4 says it all:This enactment amends the Canada Labour Code, the Parliamentary Employment and Staff Relations Act and the Public Service Labour Relations Act to restore the procedures for the certification and the revocation of certification of bargaining agents that existed before June 16, 2015.    

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It also amends the Income Tax Act to remove from that Act the requirement that labour organizations and labour trusts provide annually to the Minister of National Revenue certain information returns containing specific information that would be made available to the public.

‍The Liberals are looking more and more like the NDP by not only making these changes that favour unions but also by placing such a high priority to fulfill its commitments to big unions to restore automatic union certification based on a card system without testing that support in a secret ballot vote.  

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This step backwards will tip the delicate balance in labour relations in favour of unions to the detriment of not only federal employers but more importantly their employees as well.  Unions do have a real business concern about legislation requiring a vote in all cases.  In my experience under the BC Labour Relations Code the reality is that when employees get a chance to understand the issues without pressure from peers and professional union organizers they will in many cases vote against union representation, preferring to continue to deal with their employer directly.  

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The key is that the secret ballot vote ensures that employees’ true wishes are made known.  That, in fact, is in all parties’ interests including unions.  If the union wins the vote then employers cannot in my view challenge their legitimacy and will have to seriously bargain in good faith to achieve a collective agreement.I suspect there will be a short period of limited union organizing activity in light of this legislation, as unions will want to wait until Bill C-4 is passed into law before applying for certification and not have to face the prospects of winning a secret ballot vote.  Federally regulated employers who wish to remain non-union should not place much comfort in this short reprieve. We will keep you posted on the progress of Bill C-4.  In the meantime employers covered by the CLC  may wish to revisit their strategies in anticipation of the passage of this legislation.

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‍IMPACT ON B.C. EMPLOYERS GOVERNED BY THE B.C. LABOUR RELATIONS CODE

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‍The vast majority of employers in B.C. are governed by the B.C. Labour Relations Code.  The CLC applies to a limited number of employers such as banks, broadcasters, airlines, inter-provincial trucking companies etc. so it might be thought that this development at the federal level is of little consequence.  However with a provincial election in 2017 the fact remains that if the NDP is elected the abolition of the secret ballot vote will undoubtedly be part of their election platform just like it was part of the Trudeau Liberals’ platform in the last election.  This trend then at the federal level will not be good news for provincial employers.

Written by Michael J Weiler

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‍In my December 2015 blog post I reported on the increasing number of cases outside BC where damage awards were exceeding the normal “rough upper limit” of 24 months. I opined that likely the 24-month limit would continue to apply in British Columbia.  The trend of breaking the 24-month ceiling continues in Ontario but with a new twist—namely contractors who are considered to be “dependent contractors” have now received damages based on notice periods exceeding 24 months. In Keenan v Canac Kitchens 2015 ONSC 1055 (appeal dismissed 2016 ONCA 79) the plaintiffs were a husband and wife team who worked for Canac for many years installing and supervising the installation of kitchen cabinets.  After working as employees for a number of years the couple was required to enter into a new arrangement where they were to provide their own trucks and equipment, hire installers (fully paid for by Canac through the couple’s business) and they were paid piece work.  They worked almost exclusively for Canac.  They did not receive EI or WCB coverage and paid their own taxes.  They were called into a meeting in 2009 and told that Canac was going to close its operations and their services would no longer be required.  No notice or pay in lieu was given to either the husband or wife. The court made two very important findings.

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DEPENDENT CONTRACTORS

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First they held that the evidence overwhelmingly supported the conclusion that the couple were “dependent contractors” and as such were “entitled to reasonable notice of termination” [31].  This, in my view, was not a surprising conclusion as the court applied the usual 4 fold test plus the business organization and control tests developed in the case law.  The leading decision in B.C. on dependent contractors who are entitled to notice is Marbry Distributors Ltd. V Avrecan Int. Inc. 1999 BCCA 0172  where the Court of Appeal held that a distributor of  Reebok  products was entitled to notice of termination:For all of the reasons expressed above I would classify the relationship between Marbry and Avrecan as more akin to employee/employer than that of an independent contractor or strict agency.  As such, this relationship falls in that intermediate category as identified in Carter v. Bell, supra, where the agreement may only be terminated with reasonable notice.

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26 MONTHS NOTICE

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What is unusual about the Canac case in my view is the fact the court awarded damages to each of the husband and wife based on 26 months’ notice.  The Court of Appeal in upholding the trial judge’s decision stated:

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‍I agree that the trial judge failed to expressly make a finding of exceptional circumstances.  I note that as part of the agreed statement of facts, the parties presented an agreed damages calculation that included figures for up to 26 months of notice.  This may explain why there is no explicit finding of exceptional circumstances as it clearly indicates that an award beyond 24 months was in the contemplation of all parties.  In any event, however, given the Keenans’ ages and lengths of service, and the character of the positions that they held, I would not interfere with the award.

[32]      Lawrence Keenan and Marilyn Keenan worked for Canac for approximately 32 and 25 years respectively.  Together, their average length of service was 28.5 years.  They were 63 and 61 years of age at the time of termination.  They held supervisory, responsible positions in which they oversaw the installation of Canac’s products and met with Canac’s customers as its representatives.  For over a generation, they were Canac’s public face to the outside world.  Over a period of approximately thirty years – the entirety of their working lives – the Keenans’ income had come from Canac and they relied on that income to support themselves and their family.  Even during the approximately two years that they provided some services to Cartier, a “substantial majority” of the Keenans’ work continued to be done for Canac.  These circumstances justify an award in excess of 24 months and I see nothing wrong in the trial judge’s finding that 26 months’ notice was reasonable.

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‍It is unlikely in my view that a BC Court would come to this same conclusion on the notice period. First as noted in my previous blog the likelihood of a damage award in a wrongful dismissal exceeding 24 months is remote. Secondly the B.C. courts have generally awarded less notice to dependent contractors than employees.  The factors taken into account are quite different.  So for example in Marbry Distributors Ltd. V Avrecan Int. Inc the Court of Appeal reduced the trial judge’s finding of 15 months’ notice and substituted a 9 month notice period. It remains to be seen if these types of cases especially those out of the Ontario Court of Appeal will eventually have an influence on British Columbia courts.  

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Regardless the advice I have given employers for decades remains valid in light of these potentially significant and increasing notice awards — have a binding, enforceable written agreement in place that reduces the amount of notice and the company’s exposure to a large damage award not to mention considerable legal fees.

Written by Michael J WeilerA Spanish court has ruled that a civil servant who failed to show up to work for years in the southern city of Cadiz must pay back nearly 27,000 euros in wages. The ruling said the employee of a city-owned water utility did not appear at the office for up to six years and “did absolutely no work” from 2007 to 2010 before his retirement in 2011. The judgment did not specify how the worker’s absence went undetected for so long.

Written by Michael J Weiler

Pepin v Telecommunications Workers Union 2016 BCSC 790

I always find it interesting to read cases where the employer is a union. There is somehow an irony in seeing a union qua employer taking a hard-nosed stand against its employees who may be represented by a union. In a recent court case where the Telecommunications Workers Union was the employer/defendant the result was quite unusual and opens up potentially a whole new area of punitive damages.Diane Pepin was employed by the TWU as a communication specialist. An issue arose as to whether she was included in the COPE bargaining unit. Two years after she was hired the TWU successfully argued before the Labour Relations Board that she should be excluded. Her contract contemplated that the parties would then negotiate certain terms. The parties negotiated for quite some time. The TWU refused to negotiate through Ms. Pepin’s lawyer. Negotiations finally broke down and Ms. Pepin resigned. She sued for damages including a number of items she claimed she was not properly compensated for. She initially claimed constructive dismissal but abandoned that claim. Finally she claimed punitive damages for the bad faith manner in which the TWU treated her in negotiating the terms of the contract two years after she was hired following the LRB decision confirming she was excluded from the COPE bargaining unit and collective agreement.The case comments on two areas of particular importance to employers. First there is a good discussion of the principles a court will follow in interpreting an employment contract. Secondly it extends the duty of honesty and good faith to the negotiation of the contract and awarded punitive damages to Ms. Pepin (which by the way are tax-free).

1. Contract Interpretation

The court provided a very succinct statement of the current law in interpreting contracts as it relates specifically to employment agreements. While the quote below is a bit lengthy, it is such an important subject that it is worth quoting in full:[65] As the issue between the parties concerns the interpretation of the plaintiff’s contract, it is first necessary to discuss the approach the court should take when interpreting contractual language. In Miller v. Convergys CMG Canada Limited Partnership, 2014 BCCA 311, leave to appeal referenced [2014] SCCA No. 424, Madam Justice Neilson reviewed the law at para. 15:[15] The court should strive to give effect to what the parties reasonably intended to agree to when the contract was made. The starting point is the language of the contract, which should be given its plain and literal meaning, and be interpreted in the context of the entire agreement. Consideration may also be given to the factual matrix surrounding the creation of the contract. If the contractual language reveals two possible interpretations, the court should seek to resolve this ambiguity by searching for an interpretation that reflects the true intent and reasonable expectations of the parties when they entered the contract and achieves a result consistent with commercial efficacy and good sense. Considerations of reasonableness and fairness inform this exercise. If these principles do not resolve the ambiguity, extrinsic evidence may be admissible to assist in ascertaining the parties’ intent. As a last resort the principle of contra proferentem may be invoked to favour the construction of the ambiguity against the party that drew the agreement. This principle may not be used, however, to create or magnify an ambiguity. As to employment contracts, in particular, these will be interpreted in a manner that favours employment law principles, specifically the protection of vulnerable employees in their dealings with their employers. Nevertheless, the construction of an employment contract remains an exercise in contractual interpretation, and the intentions of the parties will generally prevail, even if this detracts from employment law goals that are otherwise presumed to apply: Geoff R. Hall, Canadian Contractual Interpretation Law, 2d ed (Markham, Ont.: LexisNexis, 2012) at 9-52, 66-70, 187-88.[66] In Sattva Capital Corp. v. Creston Moly Corp., 2014 SCC 53, Justice Rothstein elaborated on the approach to contract interpretation at paras. 47-50. He noted that the overriding concern of the decision-maker was to determine the intent of the parties and the scope of their understanding adopting a “practical, common-sense approach not dominated by technical rules of construction” and that ascertaining contractual intention from the words alone can be difficult because “words alone do not have an immutable or absolute meaning” absent a consideration of the surrounding circumstance (at para. 47). He quoted Lord Wilberforce from Reardon Smith Line Ltd. v. Hansen-Tangen, [1976] 3 All E.R. 570 at 574 (H.L.), at para. 47:No contracts are made in a vacuum: there is always a setting in which they have to be placed. … In a commercial contract it is certainly right that the court should know the commercial purpose of the contract and this, in turn, presupposes knowledge of the genesis of the transaction, the background, the context, the market in which the parties are operating.[67] Justice Rothstein at para. 48 said:[48] The meaning of words is often derived from a number of contextual factors, including the purpose of the agreement and the nature of the relationship created by the agreement (see Moore Realty Inc. v. Manitoba Motor League, 2003 MBCA 71, 173 Man. R. (2d) 300, at para. 15, per Hamilton J.A.; see also Hall, at p. 22; and McCamus, at pp. 749-50). As stated by Lord Hoffmann in Investors Compensation Scheme Ltd. v. West Bromwich Building Society, [1998] 1 All E.R. 98 (H.L.):The meaning which a document (or any other utterance) would convey to a reasonable man is not the same thing as the meaning of its words. The meaning of words is a matter of dictionaries and grammars; the meaning of the document is what the parties using those words against the relevant background would reasonably have been understood to mean. [p. 115][68] He went on to state that the goal of contractual interpretation is to ascertain the objective intent of the parties by considering the words of the contract in light of the factual matrix surrounding them at the time the contract was made (at para. 49).[69] As to the role of the facts surrounding the making of the contract the Court said at paras. 56-58:[56] I now turn to the role of the surrounding circumstances in contractual interpretation and the nature of the evidence that can be considered. The discussion here is limited to the common law approach to contractual interpretation; it does not seek to apply to or alter the law of contractual interpretation governed by the Civil Code of Québec.[57] While the surrounding circumstances will be considered in interpreting the terms of a contract, they must never be allowed to overwhelm the words of that agreement (Hayes Forest Services, at para. 14; and Hall, at p. 30). The goal of examining such evidence is to deepen a decision-maker’s understanding of the mutual and objective intentions of the parties as expressed in the words of the contract. The interpretation of a written contractual provision must always be grounded in the text and read in light of the entire contract (Hall, at pp. 15 and 30-32). While the surrounding circumstances are relied upon in the interpretive process, courts cannot use them to deviate from the text such that the court effectively creates a new agreement (Glaswegian Enterprises Inc. v. B.C. Tel Mobility Cellular Inc. (1997), 101 B.C.A.C. 62).[58] The nature of the evidence that can be relied upon under the rubric of “surrounding circumstances” will necessarily vary from case to case. It does, however, have its limits. It should consist only of objective evidence of the background facts at the time of the execution of the contract (King, at paras. 66 and 70), that is, knowledge that was or reasonably ought to have been within the knowledge of both parties at or before the date of contracting. Subject to these requirements and the parole evidence rule discussed below, this includes, in the words of Lord Hoffmann, “absolutely anything which would have affected the way in which the language of the document would have been understood by a reasonable man” (Investors Compensation Scheme, at p. 114). Whether something was or reasonably ought to have been within the common knowledge of the parties at the time of execution of the contract is a question of fact.[Emphasis added]The court then applied those principles and the rule of contra preferentum and found largely in favour of Ms. Pepin, although finding she was estopped from claiming overtime.

2. Punitive Damages

The court rejected Ms. Pepin’s claim for punitive damages based on breaches of the Employment Standards Act. However the court found that TWU’s conduct during negotiations including the hardball tactics and raising baseless performance issues deserved an award of punitive damages. The court stated:[112] As stated, the TWU executive may have felt the plaintiff was not performing her job duties as they had expected and they were paying her too much. Her job performance issues were not addressed with her at any time during her employment other than during the negotiations she initiated. In my view they were addressed at that time to pressure her into abandoning her contractual rights. I am also of the view the TWU’s ‘take it or leave it’ demand that she defer any wage increase to 2016 was strategically chosen to frustrate the Contract and the plaintiff. I find her responses were not “insubordinate”: rather they were made out of her frustration at being rebuffed and an employer’s offer that was far from the initial Contract she entered into. In my view TWU’s conduct of negotiations with the plaintiff was characterized by delay, by a lack of good faith and with little sensitivity for her and warrants an award of punitive damages. In essence, the plaintiff had been constructively dismissed and was justified in resigning her employment under the circumstances.[113] The TWU was put on notice in Ms.Pepin’s letter of February 20, 2013 the plaintiff’s health was being adversely affected by its refusal to honour its contractual obligations and that she was seeking professional help for stress and anxiety.[114] I award the plaintiff $25,000 as punitive damages for the unduly insensitive treatment she was subject to during her attempts to exercise her rights to renegotiate the Contract.The law in respect of an employer’s obligation to act honestly and in good faith not just at the time of termination but during the employment is developing rapidly in light of the Supreme Court of Canada’s decision in Bhasin v Hrynew 2014 SCC 71. Although the Bhasin decision was not relied on by the court in awarding punitive damages it reflects the views of the courts to protect employees who are vulnerable and subject to stress and anxiety and unfair treatment during their employment and at termination. I suspect this area of the law will expand and there will be more and more cases where such damages are awarded. Stay tuned!

Written by Michael J Weiler

Fair v Hamilton-Wentworth District School Board 2016 ONCA 421

There are a number of statutes that give various boards the authority to order reinstatement of an employee. For example, the Labour Relations Board, arbitrators under a collective agreement, the Canada Industrial Relations Board, an adjudicator under the Unjust Dismissal provisions of the Canada Labour Code, the Director of Employment Standards and the Workers Compensation Board can all order reinstatement as a remedy for a violation of their statutes or agreements. Not surprisingly the BC Human Rights Tribunal can order reinstatement of an employee although that specific remedy is not spelled out in the statute. The Tribunal derives its authority from the broad remedial powers under section 37(2)(d)(i) of the Code: see for example J.J. v. School District No. 43 (No. 5), and Kalyn v Vancouver Island Health Authority (No. 3).Reinstatement is only rarely claimed as a remedy and even more rarely is it ordered. In Parent v. St. James Community Services Society, 2008 BCHRT 182, the Tribunal noted reinstatement is not a remedy commonly sought (para. 28):… At the same time, as reinstatement in employment is not a remedy commonly sought, nor often ordered, complete submissions and information on the appropriateness of the order are to be preferred ….But when a Complainant is successful the consequence can be devastating for the employer.In Fair v Hamilton-Wentworth District School Board 2016 ONCA 421 the Ontario Court of Appeal upheld the decision of the human rights Tribunal in ordering that the Complainant be reinstated with back wages. The termination had taken place some 15 years earlier reflecting the snail pace in which these types of cases take to get final adjudication (assuming no successful appeal to the Supreme Court of Canada).Ms. Fair was terminated in 2004 after her LTD had run out. Following amendments to the Ontario Human Rights Code she transferred her case to the Tribunal and in 2009 requested reinstatement as a remedy for the first time. The Tribunal found that the employer had failed to accommodate Ms. Fair by failing to consider other appropriate positions available in the workplace. She was awarded 9 years back pay, and $30,000 for compensation for the injury to her dignity, feelings and self-respect. The employer was also ordered to reinstate her as soon as reasonably possible to a suitable, equivalent position for which she had the basic general qualifications and that she was to receive up to 6 months of training.Like the BC Code, the Ontario Code does not contain explicit reference to reinstatement as a remedy. The Court confirmed that the Tribunal had the jurisdiction to order reinstatement and upheld the Tribunal’s decision to order it in this case. It stated:[92] As the Divisional Court correctly noted, “The Code provides the Tribunal with broad remedial authority to do what is necessary to ensure compliance with the Code.”[93] The determination of remedy falls within the specialized expertise of the Tribunal, and as such is accorded a high degree of deference: Phipps v. Toronto Police Services Board, 2010 ONSC 3884 (CanLII), 325 D.L.R. (4th) 701 (Div. Ct.), at para. 42, aff’d 2012 ONCA 155 (CanLII), 347 D.L.R. (4th) 616.[94] Further, Ford Motor Co. of Canada Ltd. v. Ontario (Human Rights Commission) (2001), 2001 CanLII 21234 (ON CA), 209 D.L.R. (4th) 465, where this court set aside the reinstatement of an employee, is distinguishable from the present case. Although in Ford Motor, this court pointed to the time that had passed since the employee’s dismissal, it also relied on the internal inconsistencies within the Board’s decision and the lack of consideration of an arbitrator’s prior decision upholding the discharge: see paras. 68-73.[95] The passage of years is not, by itself, determinative of whether reinstatement is an appropriate remedy. Rather, the decision as to whether to order reinstatement is context-dependent. In the present case, the Tribunal found none of the barriers to reinstatement that foreclosed reinstatement in the Ford Motor case. Specifically, Ms. Fair’s employment relationship with the School Board was not fractured and the passage of time had not materially affected her capabilities.[96] Moreover, the Divisional Court’s reference to the labour relations context was not unreasonable or unusual. For example, the Tribunal in Krieger v. Toronto Police Services Board, 2010 HRTO 1361 (CanLII), espoused similar principles. This case involved an application by a terminated employee for reinstatement following alleged discrimination. In examining the issue of reinstatement, the Tribunal noted, at para. 182:While reinstatement orders are rarely requested or ordered in human rights cases, they are “normally” ordered in arbitral cases where a violation of a grievor’s rights has been found, unless there are “concerns that the employment relationship is no longer viable” A.U.P.E. v. Lethbridge Community College, [2004] 1 S.C.R. 727, 2004 SCC 28 (S.C.C.) (CanLII), at para. 56. The goal of human rights legislation, which is remedial in nature, is to put the applicant in the position that he or she would have been in had the discrimination not taken place. See Impact Interiors Inc. v. Ontario (Human Rights Commission) (1998), 35 C.H.R.R. D/477 (Ont. C.A.). Where viable, reinstatement is sometimes the only remedy that can give effect to this principle.[97] Finally, there was no error in the Tribunal’s requiring the School Board to determine the appropriate position. The School Board remains in the best position to determine what positions are available or could be made available, and the adjustments that it will be required to make in order to accommodate Ms. Fair.What does this mean for B.C. employers? Will the remedy of reinstatement continue to be rarely requested and rarely ordered? Each case will be determined on its own facts so it is hard to say whether this Ontario decision will prompt more employees to seek this remedy in the non-union sector (ironically if there is a human rights violation under a collective agreement reinstatement would be the normal remedy imposed by an arbitrator). In many cases the delay in adjudicating the complaint often leads to the complainant finding new employment so reinstatement, even if sought initially, is not practical by the time the hearing is completed. But given the increased economic woes facing Alberta and on the horizon for B.C. I suspect this case will prompt more complainants’ lawyers to push for reinstatement as the appropriate remedy. The cost of settlement without reinstatement will then go up.