Chris and Mike ran out of time to answer all the questions from our webinar on April 17th 2025 .  As promised here are the questions and answers.  As noted in our presentation this should not be considered as legal advice for your particular situation but rather general guidelines.  If you are intending to act or have a specific follow up question please contact us directly or your professional advisors.

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The following answers are premised on the assumption the employee is covered by provincial legislation.

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We apologize in advance for saying like lawyers do “Now that is an interesting question” but many of these issues are fact driven and often the law is unclear.  For example see our comments below regarding just cause.

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Question # 1

Question

When laid off, does the employer pay for the employee contributions for benefits or does the employee send in the money that would have been deducted off their pay?

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Answer

Depends—sorry about that!

If the employee is covered by a collective agreement then that agreement will likely address the employer’s obligations during the layoff.

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If it is a layoff of a non union employee then as Chris reviewed with you it can be treated as a constructive dismissal allowing the employee to quit and sue for wrongful dismissal.  The Employment Standards Act (“E S Act”) provides that if a condition of employment is substantially altered then the Director may deem the employment terminated:  section 66.   In that case there is no issue of maintaining benefits following termination although you should tell the employee that they may have rights to convert their benefits for their own use.

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If the layoff does not constitute a constructive dismissal because you have a contractual right to layoff up to the amount allowed by the E S Act or because the employee has agreed to the layoff, there is no obligation to continue the benefits although cancellation of benefits might be a deemed termination.  If the employee is agreeing to the temporary layoff you should negotiate for the continuation of benefits subject to the terms of your benefit policies.  You might pay their portion of the benefits on his/her behalf and get a signed agreement that if they are returned to work then you can deduct the benefits premiums you paid on their behalf. Another option is to request post-dated cheques from the employee for their portion of the premium. However from a practical point of view employers who want the employees to return should make arrangements to continue the benefits.

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You should be aware that if an employee is on a leave of absence under the E S Act versus a temporary layoff then different rules apply regarding benefits under section 56:

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Employment deemed continuous while employee on leave or jury duty

• 56   (1)The services of an employee who is on leave under this Part or is attending court as a juror are deemed to be continuous for the purposes of
  
  • (a)calculating annual vacation entitlement and entitlement under sections 63 and 64, and
  • (b)any pension, medical or other plan beneficial to the employee.
• (2)In the following circumstances, the employer must continue to make payments to a pension, medical or other plan beneficial to an employee as though the employee were not on leave or attending court as a juror:
  
  • (a)if the employer pays the total cost of the plan;
  • (b)if both the employer and the employee pay the cost of the plan and the employee chooses to continue to pay the employee's share of the cost.
• (3)The employee is entitled to all increases in wages and benefits the employee would have been entitled to had the leave not been taken or the attendance as a juror not been required.
• (4)Subsection (1) does not apply if the employee has, without the employer's consent, taken a longer leave than is allowed under this Part.
• (5)Subsection (2) does not apply to an employee on leave under section 52.2.

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Question #2

Question

Can a pay and position reduction be based on Performance and argued successfully ( i.e. to not be a constructive dismissal)?

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Answer

We assume the employee is not covered by a collective agreement. For a non-union employee a change in pay could well constitute a constructive dismissal even if there are legitimate performance reasons for making the changes.  Chris covered off in the presentation the type of changes in pay that might be a constructive dismissal.

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But changing an employee’s position (i.e. a demotion) coupled with a reduction in pay becomes more likely to be a constructive dismissal. Remember, if the employee agrees to the changes instead of electing to quit and sue, then such changes would not be a constructive dismissal.

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The best way to mitigate risk with respect to demotions is to have clear contractual language/policies on when the employer has a right to demote based on performance.

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Question #3

Question

How does this effect contract workers whose set end date is before the economic recovery is foreseen?

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Answer

If the non-union employee is on a fixed term contract then the employer is obligated to continue the contract until the end of the term (unless you have negotiated an enforceable early termination clause). The state of the economy will not impact the employer’s obligation to honour the agreement. Once the contract reaches the end date, the employer’s obligations end and there is no obligation to pay severance either at common law or under the E S Act (see section 65(1)(b)). Be aware that if the employee continues working past the end date of the contract, the employment is converted into an “indefinite term” contract.  

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Question # 4

Question

What happens to those employees that have been with the organization for over 20 yrs and have very old contracts with really bad termination clause not good for the employer. How can we change these contracts to apply new E S Act clause etc.?

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Answer

You will have to negotiate new contracts to replace the old ones.  You have to provide what the courts call “fresh legal consideration” as Chris discussed.  For example you might offer the revised employment contract at the time you are providing a raise and/or a promotion that the employee would not have otherwise received.

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If the employee will not agree to the new terms then your options are to give him/her working notice and terminate the employment.  Once terminated you can offer new employment under the terms of the new contract.  We do not recommend simply giving them working notice that the changes will be implemented.

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Question #5

Question

What makes a termination clause enforceable/not enforceable?

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Answer

There might be a number of reasons. For example if the clause does not meet the minimum requirements for termination notice or pay under the E S Act it will be deemed void and unenforceable. This will be so even if the termination provisions comply with section 63 at the time of termination but the clause could be offside down the road (see for example Shore v Ladner Downs where a 30 day notice period did not comply with the E S Act because it would go below the minimum after 5 years of continuous employment).

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Ontario courts are really expanding the basis for striking down minimum standards termination clauses leading to more uncertainty whether a clause is enforceable. For example, if the clause tries to define “just cause” to a lower standard, this could be fatal. To date, the BC courts have been more employee friendly but challenges are in the works.  

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Fortunately in a case Chris took for an employer the contract does not have to specifically model the Group Termination provisions of section 64.

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The clause might also be void for ambiguity. If it has a very confusing formula or contradictory terms, this could be fatal.

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And as noted if the contract is not supported by proper legal consideration then it might be unenforceable.

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So you can see why you need to get professional advice when drafting such provisions.  You don’t want to be saying “oops” 20 years down the road!

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Question #6

Question

Is there such a thing as working notice?

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Answer

Yes in fact that is what the courts require an employer do to legally end the employment relationship if it is not for just cause.  As mentioned 95% of our business clients do not normally give working notice as they would rather not have the terminated employee around.  In that case the termination is a “wrongful dismissal” in that proper working notice was not given.  The employee then sues for damages for lack of working notice which is subject to reduction for mitigation.

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If you are going to give working notice you need to be careful regarding the form and wording of the notice in order for it to be enforceable.

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By the way if you give what the court subsequently finds to be less than reasonable notice if the employee quits then the court will reduce the damage award by the amount of that notice assuming good faith reasons for termination and no other changes.

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Question #7

Question

If a staff member gives his 2 weeks notice and the employer decides to ask them to leave right away are we required to pay the 2-week severance?

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Answer

Yes.  In fact that might arguably be a wrongful dismissal although if the employee gave 2 weeks notice then that would probably cap the notice entitlement.  Further if the employee was say an 8 year employee then the claim under the E S Act would be for 8 weeks severance pay that is not subject to mitigation.

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Question #8

Question

If you terminate an employee WITH cause, after having several meetings and have signed written notices from them acknowledging that they have been written up, are you still required to pay severance?

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Answer

Another interesting question that clients hate but the issue of what constitutes “just cause” to relieve an employer of its obligation to provide working notice or severance pay/pay in lieu has become very complicated as a result of the Supreme Court of Canada’s decision in McKinley v BC Tel.  Before that case, most employers would successfully argue that dishonesty would always be cause for dismissal.  The SCC disagreed and said that each case had to be considered on its own facts and that the approach has to be a “contextual” one.  

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It may be that following a process of progressive discipline as the question presupposes might ultimately be proven to be just cause but that still has to be considered under the McKinley test.

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I should note that “near cause” will not be used to diminish your liability—it is like being pregnant—either you are or you are not.

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Again given the complexity of this issue you are wise to get your professional advisors to review before you pull the trigger.

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Question # 9

Question

Can any union organize? for example, I haven't heard of a hairdresser union or retail worker unions?

Answer

Yes, any union that satisfies the definition of union under the Labour Relations Code can organize and apply for certification for any group of employees.  There may be some restrictions on who can apply for a craft certification under section 21 of the Code. By the way there is a retail worker union called UFCW!

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Question #10

Question

Can you terminate the benefits if the employee does not provide the cheque?

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Answer

If the employee is on a consensual layoff or on medical leave and the employee does not provide the cheque or otherwise pay for their portion of the premium, then the employer can in our view cancel the benefits in most circumstances. BUT we would caution that should only be done in the clearest of circumstances and with proper notice. Again, the best practice is to have a clear policy about what happens with benefit premiums when an employee goes on layoff or leave.

With ongoing uncertainty around tariffs imposed by Canadian and U.S. governments, real estate developers and investors must determine how standard form contracts handle compensation adjustments. Most construction contracts in Canada don’t specifically mention “tariffs” but do refer to “taxes” and “duties.”

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For example, the CCDC 2-2020 contract, which is widely used in development and construction projects, allows for price changes if taxes or duties change after bid closing. Since tariffs are systems that impose duties, it could be argued that tariff-related cost increases fall within this clause. This means that the developer or homeowner, not the contractor, is the one who typically has to eat higher costs as a result of tariffs.

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Other standard form construction contracts, like CCDC 5B, allow for tariff-related compensation unless a Guaranteed Maximum Price (GMP) is in place, which typically does not permit price adjustments once set.

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Given that Canadian retaliatory tariffs in response to U.S. trade actions can impact material costs unpredictably, it’s challenging to foresee their effect on specific projects. Accordingly, contractors and owners should review existing contracts closely and consider including explicit tariff-related clauses in future agreements to reduce the risk of cost escalations.

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Newly imposed tariffs on Canadian goods pose a significant challenge to employers and the economy. In response, the Canadian government announced a number of temporary Employment Insurance measures on March 21, 2025, which will be implemented via pilot project. These new measures are intended to help workers impacted by the tariffs which have been imposed on Canadian goods.

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These new measures include:

• Suspending the rules regarding severance, vacation and other monies upon separation for six months. This will allow claimants to receive their EI benefits sooner, without being required to use up the benefits listed above. This applies to all new claimants between March 30, 2025 and October 11, 2025.
• Waiving the waiting period for six months, allowing workers to receive their benefits from the first week of unemployment. This applies to all new claimants between March 30, 2025 and October 11, 2025.
• Adjusting regional unemployment rates that determine duration and access to EI benefits for three months. This reduces the hours required to access benefits to a maximum of 630 hours. This measure also increases EI entitlements by up to four weeks. This applies to claims between April 6, 2025 and July 12, 2025.

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If you have any questions about how these changes might impact your business or your EI Claim, don’t hesitate to contact the Employment Law Team at KSW Lawyers.

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Buying or selling a home in BC is an exciting but complex process. It is important to approach the journey with the right professionals by your side. For a purchase transaction, having an experienced realtor, an informed mortgage broker, and a knowledgeable real estate lawyer can make all the difference.

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The process outlined below provides a general overview of the steps involved when purchasing real estate in BC.

Information Collection

At the beginning of your home-buying journey, you will need to gather a range of information. Your realtor and mortgage broker will be the key players to get you started.

• Realtor: Your realtor will help you find properties that meet your needs, negotiate the offer, and guide you through property inspections. Let your realtor know about your legal representation so they can coordinate effectively with your legal team. Your lawyer can assist with reviewing your offer and providing legal advice to remove certain subjects.
• Mortgage Broker: Your mortgage broker will help find the right financing and help you understand your budget, secure mortgage pre-approval, and fulfill the lender’s requirements. You will need to provide your mortgage broker with documents such as proof of income and tax returns to begin this process. Your mortgage broker will coordinate with your lawyer to ensure the lender’s conditions are fulfilled and you receive the mortgage advance on time.

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Ensure Your Lawyer is on Your Lender’s Approved Solicitor List

A crucial aspect of buying a home in BC is working with a lawyer who is also recognized by your lender. Lenders require that you use one of their approved solicitors to manage their closings, including registering the mortgage charge on title and fulfilling their other conditions. Having a lawyer who is already approved by your lender can save time and reduce any potential for delays during the closing process. Fortunately, KSW Lawyers is on most approved solicitor lists.

Buying & Closing Costs

Before you start the buying process, it is important to understand the costs involved. Being informed about your buying and closing costs will help you budget appropriately.

• Deposit: The amount you need for a deposit will depend on the price of the home and what you negotiate with your realtor in your offer to the seller. The balance to complete will be provided at the time of closing when you meet with your lawyer.
• Closing Costs: In addition to your deposit, there are other costs associated with closing your home purchase. These can include property transfer tax, legal fees, insurance costs, property tax, strata maintenance adjustments, and other administrative fees. Your lawyer will provide you with an accurate estimate of your closing costs and ensure that all the necessary legal steps are completed on time.
• Goods and Services Tax (GST): GST is applicable when purchasing some homes. For example, when you purchase a home from a Developer, GST will apply on the purchase price. GST is usually exempt when the property is used residential housing. It is best to ask your lawyer if you have questions related to the applicability of GST.
• Property Transfer Tax: This one-time tax is calculated based on the price of the home. Your lawyer will help you understand how this tax works and ensure that it is properly calculated and paid at the time of closing.

Potential Tax Exemptions

There are several tax exemptions and rebates available to homebuyers in BC that can reduce your overall costs. For example, the First-Time Home Buyers’ Program can exempt you from paying property transfer tax on homes up to a certain value. Other exemptions may apply depending on your specific situation. It is best to speak to your lawyer about possible tax exemptions that may apply in your transaction.

Final Thoughts

Buying a home in BC is an exciting milestone, but it is important to have right legal support. Working with a reputable law firm ensures that your legal rights are protected and that all aspects of your transaction are handled efficiently. Your lawyer will guide you through every step of your real estate transaction to ensure you close the deal successfully.

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KSW Lawyers is proud to announce that partner Chris Drinovz has been recognized as one of Canada’s Leading Legal Practitioners in the 2025 Canadian Legal Lexpert Directory. This prestigious accolade is the result of an extensive peer-review process that identifies top legal professionals across the country.

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Known for his commitment to advising employers on a variety of issues, including termination, human rights, and workplace harassment, Chris was recognized in the 2025 Canadian Legal Lexpert Directory as Best Employment Lawyers in Canada  (Consistently Recommended) lawyer for Employment Law - Employers. His extensive experience in the field, combined with his commitment to providing high-quality legal services to clients, has earned him this prestigious recognition.

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For over three decades, the Canadian Legal Lexpert Directory has conducted an annual survey to highlight outstanding lawyers and firms. Rankings are determined through recommendations from law firm leaders and industry peers, acknowledging those who demonstrate excellence, leadership, and influence in their respective fields.

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This distinction reflects Chris’s dedication to delivering exceptional legal services and advancing the profession through expertise and commitment.

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About the Canadian Legal Lexpert Directory

First published in 1997, the Canadian Legal Lexpert Directory is a highly regarded resource for identifying Canada’s top legal practitioners and firms. Covering 68 practice areas for individuals and 42 for firms, the directory offers a comprehensive view of the legal landscape. It also features articles by leading legal professionals discussing significant developments and key issues in the field.

In Nunez-Shular v. Osoyoos Indian Band, 2025 BCSC 491, the plaintiff employee brought a claim for constructive dismissal against her employer. She had been the Tax Administrator for ten years when she went on a medical leave. When she returned, she found that her position had been replaced by another individual. The plaintiff came back on a graduated return to work, but the Court found that the employer never intended to return her to her old job. She was ultimately demoted to a tax officer position that had half the responsibilities. The plaintiff therefore resigned and claimed constructive dismissal. The Court applied the law of constructive dismissal and found that removing the plaintiff from her position was a fundamental change to her employment that she did not authorize and therefore she was wrongfully dismissed. In light of her age of 52 years, 20 years of service, and the specialized nature of her job, the plaintiff was awarded 24 months pay. She was also awarded $50,000 in aggravated damages as the Court found that the employer had breached its duty of good faith by being untruthful, misleading, and unduly insensitive and that this had resulted in serious psychological injuries to the plaintiff including anxiety and PTSD-like symptoms. This decision demonstrates the dangers of trying to replace a senior employee following a medical leave and shows the consequences that can arise when the employer is not above board in its dealings with employees.

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In Hoem v Macquarie Energy Canada Ltd., 2025 BCSC 446, the plaintiff employee was employed as a salesperson for 17 years before he was dismissed. The plaintiff was a very successful salesperson and earned several hundred thousand per year in commission above his base salary of $100,000 for the sale of equipment. The termination was initially done on a “without cause” basis and the plaintiff was paid 52 weeks base pay ($100,000) due to a severance clause in his agreement. However when the plaintiff started the lawsuit, the employer claimed it had discovered “after acquired cause” after reviewing the plaintiff’s emails – the two primary grounds relied upon were 1) the employee had lied during the employer’s investigation into litigation between the employee and an Airbnb guest at his vacation rental suite; and 2) the employee had ingested Cannabis gummies on one occasion during work hours.

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The Court found that although the plaintiff had been dishonest with the employer, the lie was not sufficiently connected with the workplace. The Airbnb guest had left the plaintiff a negative review and refused to remove it. The plaintiff sued the guest. The plaintiff had sent the guest a threatening text from his spouse’s phone which became a matter of public record when the guest tweeted the threatening text. When the employer learned of the lawsuit, it investigated, and during the investigation, the plaintiff told the employer that it was his spouse that had sent the text and not him. The employer argued there was a connection to the workplace because the guest was a professor at UBC, which was a client of the employer (although a dormant one). Ultimately the judge found that this was not a close enough connection to the workplace for the dishonesty to be a fundamental breach of the contract. Regarding the CBD gummies, the plaintiff provided evidence that he had taken them for health reasons and that they did not impair him in any way. The judge largely accepted this evidence so this was not grounds for cause.

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Based on the above, the plaintiff was found to be wrongfully dismissed. In assessing his damages, the Court found that his termination clause was not enforceable. Even though it provided for 52 weeks of base pay, the Court found that this could potentially violate minimum employment standards, which requires determining the 8-week average of all wages including commission when calculating termination pay. Therefore, since the minimum 8 weeks of the plaintiff’s commission + base salary could potentially be more than 52 weeks of base pay in the event of high sales volume before termination, the clause was found to be unenforceable. The Court awarded 19 months pay based on the common law and used the plaintiff’s average income in the 6 years before his termination, including commission, which was $528,268 per year! The plaintiff’s damages were therefore assessed at a whopping $836,424 plus another $106,329 in vacation pay. Finally, the plaintiff was awarded an additional $35,000 in aggravated damages due in part to the emotional distress he suffered because of the fact that the employer had made serious allegations against him in the response to the lawsuit, which it ultimately chose to abandon before trial or was unable to prove.

In Vancouver Island Health Authority v Safaei and British Columbia Human Rights Tribunal, 2025 BCSC 340, the employee was terminated during the probationary period. The employee then filed the “trifecta” of complaints against the employer: a union grievance, human rights complaint, AND a WorkSafeBC claim for mental disorder arising from alleged bullying and harassment in the workplace. The WCB claim was adjudicated first, and WorkSafeBC found the employee was not credible and that there was no bullying and harassment that would amount to a “traumatic” workplace event which is required by the legislation before a claim will be allowed. The employee appealed all the way to WCAT (the highest level of appeal for WCB matters) and her appeal was denied.

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When the BC Human Rights Tribunal finally got around to reviewing the complaint, the employer applied to dismiss the case on the basis that the matter had already been adjudicated through the WCB process and the employee should not a get a “second kick at the can” through the human rights process. The Tribunal declined to dismiss the claim, saying that the WCB process did not consider the Human Rights Code and therefore the case was not the same. The employer sought a judicial review through the courts and the BC Supreme Court agreed with the employer. Of importance, the Court said the law is clear that where one administrative decision-maker decides facts and reaches conclusions about the workplace, those conclusions will be binding on subsequent decision-makers from other tribunals and/or courts. For example, if WCB or WCAT decides that there was no bullying and harassment after hearing the employee’s evidence, then the employee cannot seek to get an opposite ruling from the Human Rights Tribunal.

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As the WorkSafeBC process is often the first one engaged in employee complaints (including Prohibited Action, bullying and harassment, or the new Duty to Maintain Employment/Duty to Accommodate) it is extremely important for employers to pay careful attention to the process and participate meaningfully in the claims process. The decisions of WorkSafeBC could have far-reaching ramifications beyond the WCB claim, including creating a binding precedent for future complaints made through other processes.

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In Pickering v Workers’ Compensation Board, 2025 BCSC 376, the BC Supreme Court ruled that the "labour relations exclusion" for a WCB mental stress claim was unconstitutional. The exclusion normally functions to prevent a worker from getting WCB benefits on the basis of a mental disorder if the mental injury was caused by a decision of the worker’s employer relating to the worker’s employment i.e. a decision relating to performance management, termination, investigations, etc. In a long and complex decision, the Court ruled that this the labour relations exclusion was arbitrary because it did not distinguish between employer’s actions that were taken in good faith and those that were not. In the result, section 135(1)(c) of the Act must be "read down" to correct the arbitrariness. This means that the provision must be read to only apply to management decisions on "generic processes" and actions that are taken in good faith. As a result of this change, employers must now show that the decisions relied on for the exclusion were in good faith and fell within the category of generic processes, such as routine performance management. We expect that this change will result in a lower barrier for the acceptance of mental stress claims and ultimately higher costs for the employers who pay the premiums.

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In 2023, British Columbia introduced the Short-Term Rental Accommodations Act, with new regulations set to take effect in 2025. As of January 20, 2025, short-term rental hosts must enroll in a provincial registry if they advertise on platforms such as Airbnb or VRBO.

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Hosts must register online via a BC Registries or BC Services Card account. Upon approval, they’ll receive a provincial registration number, which must be displayed on all of their listings by May 1, 2025, or the listings will be removed.

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Starting June 1, 2025, short-term rental platforms such as Airbnb and VRBO must block, prevent new bookings, and cancel existing bookings for unregistered rentals.

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Annual registration fees vary depending on the property’s occupation status, and are as follows:

• $100 – If the host resides at the property.
• $450 – If the host does not reside at the property.
• $600 – For an entire strata hotel.

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There are early registration discounts of 50% off if registered by Feb 28, 2025, and 25% off by March 31, 2025. To avoid disruptions, hosts should register before May 1, 2025.

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Thinking about buying a business in British Columbia? Take heed of the lessons learned by an employer in a recent decision by the BC Employment Standard Tribunal (“Tribunal”) in Overstory Media Inc. (Re), 2024 BCEST 109. Despite never agreeing to hire the vendor’s employees, the purchaser of a business was nonetheless found liable to the employees for unpaid wages of over $270,000.

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Facts

On September 21, 2022, Overstory Media Inc. (“Overstory”) closed the purchase of the physical operating assets and intellectual property of Vancouver Free Press Publishing Core (“VFP”). The purchase agreement was an asset purchase agreement and required that VFP terminate its employees as Overstory would not be taking them on after the closing.  However, VFP failed to terminate the employees until approximately a week after the closing date. In terminating their employment, VFP did not provide its employees with their entitlements under the BC Employment Standards Act (the “ESA”), including wages and termination pay.

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Unsurprisingly, nine VFP employees filed an employment standards complaint against Overstory for unpaid wages and termination pay.

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Employment Standards Tribunal Decision

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Even after taking into consideration the explicit terms of the purchase agreement and the fact that Overstory did not offer employment the VFP employees, the Tribunal found that section 97 of the ESA deemed the VFP employees to have continued their employment with Overstory on the closing date. The Tribunal further found that section 97 does not require the negotiation of new employment contracts between affected employees and the purchaser. In other words, there is no requirement for a formal offer of employment to be made and accepted for section 97 to apply. Section 97 reads as follows:

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If all or part of a business is disposed of, or the business continues to operate under a receiver or receiver-manager, the employment of an employee of the business is deemed, for the purposes of this Act, to be continuous and uninterrupted by the disposition or receivership, as applicable.

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As a result of section 97 under the ESA, Overstory was found liable to nine VFP employees for a total of over $270,000. This award represented unpaid wages, termination pay, and even earned vacation pay from when the employees were on VFP’s payroll (i.e. prior to the closing).

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‍Takeaways

In structuring asset purchase agreements, the parties should carefully plan and consider the employment law implications of the transaction. If purchasers do not want to keep the vendor’s employees, steps must be taken to terminate the employees prior to closing the transaction and the parties must clearly outline who is responsible for the cost of the termination in the purchase agreement. Purchasers should be mindful that in BC, even if they do not offer or agree to employ the vendors’ employees, they could still be found liable for breaches of employment standards committed by the vendor.

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Our employment and labour lawyers are heavily involved in various local BC Chambers and Policy Committees, attend roundtable discussions and present webinars regularly on the Employment Standards Act and related legislation. We communicate all these updates to our clients and readers on our Employer Resources Portal and through monthly Newsletters. If you have any questions or need assistance revising your employment contracts or policies, please reach out to Chris Drinovz at [email protected], or submit a Contact form.

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