Much to the surprise of business leaders, the NDP introduced Bill 10 Labour Relations Code Amendment Act on Thursday April 6th, 2022.  Bill 10 eliminates secret ballot votes in most union certification applications *  by reintroducing a card check system and represents a fundamental change to the Code contrary to the recommendations contained in the Report  of the NDP’s expert Panel  (“ Expert Panel”) published in 2018.   It represents a return to the NDP’s 1992 policies of promoting union organizing much to the detriment of employees who now lose the right to decide in a secret ballot vote whether a union should represent them. The NDP has once again catered to the wishes of big unions with no apparent basis for making such drastic changes especially in light of the substantial changes to the Code in 2019.

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[*note: while a vote will still be held if union support is between 45% and 55% the reality is unions will now apply only when they have over 55% to avoid a secret ballot vote].

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Bill 10 accomplishes 3 major things:

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1. It eliminates the secret ballot vote that currently is required before a union can become the exclusive bargaining agent of employees in cases where the union can show card sign up or membership of at least 55% of the employees in an appropriate unit.   As noted above, a vote will still be held if union support is between 45% and 55%.
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2. It allows construction unions to replace an incumbent union by way of a raid application every year, not as per the current legislation that only allows such disruptive applications every three years.  The current provisions were recommended by the Expert Panel  and there appears to be no reason to make this change so soon after the Code amendments of 2019 except perhaps to allow the traditional building trades  unions the annual right to try to supplant what they believe to be employer friendly unions.
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3. It allows unions to get a sneak preview of their support and the employers’ business by allowing a precertification vote before the Board determines the appropriate bargaining unit thus allowing the union to define the bargaining unit based on its support.
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These amendments follow on the heels of significant amendments introduced in 2019 by the NDP on recommendations from the Expert Panel.  At that time the NDP was saddled by its agreement with the Green Party that allowed it to govern in a minority situation.  Andrew Weaver made it crystal clear that any amendments to the Code must preserve the democratic right of employees to decide the issue of union representation through a secret ballot vote. Most importantly the Expert Panel recommended continuing the secret ballot vote:  See Vaughn Palmer’s article in the Vancouver Sun on the history here.

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Business was blindsided by these changes and expressed their discontent in a news release at the failure of the NDP to engage in consultations as promised  before such a major shift would be implemented.

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It is interesting to note that a secret ballot vote will continue to be required if employees decide to decertify.  This shows in my view that the changes are intended to respond to the wishes of big unions not the wishes of employees.
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Déjà Vu All Over Again

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In my 40 + years of practicing labour law I have been amazed but not surprised by the constant pendulum swing in labour legislation since the Code was introduced in 1972.  The most significant swing was in 1992 when the NDP took power and introduced significant changes to the Code. That included major limitations on employer free speech, and it eliminated the secret ballot vote in precisely the way that Bill 10 does.  

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When the Liberals took power in 2001, they reversed many of these changes including broadening employer free speech and reintroducing the secret ballot vote.

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The combined effect of the NDP’s changes in 2019 and Bill 10 basically swings the pendulum back to 1992 with some additional amendments in favour of unions.  For example the LRB  can  certify now without a vote if it finds an unfair labour practice has been committed.  In one case where  only two out of almost 90 employees had expressed an interest in union representation and only one employee had signed a union card, the LRB ordered remedial automatic certification where the wishes of 88 employees were ignored: Salade Etcetera 2020 BCLRB 109 appeal of 2020 BCLRB 34 dismissed.

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Yet each and every time the governing party claims that the changes simply balance the scales.

News Release - Single-step certification

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The news release in my view is simply inaccurate and misleading.  Some of the errors are most egregious.

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For example, it never mentions that it is removing employees’ right to have a secret ballot vote.  Rather it speaks of going from a two-part certification process to a one-part system in order to protect employees.  It wrongly asserts that under the current system employees have two votes.  It justifies this major shift by stating incorrectly that one vote occurs when they sign up with a union and therefore the secret ballot vote is really just a second vote.  This is false.

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Unions do not hold secret ballot votes; rather they sign up employees (or use their membership evidence)  and use those membership cards to support their application.  

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Far from being a secret ballot vote the sign-up procedure discloses who is a member and who is not.  Many employees may well feel intimidated and forced to sign a card even though that does not reflect their true and informed wishes.  Yet the News Release states that this elimination of the secret ballot vote will avoid unfair labour practices such as “requiring employees to disclose their position on potential certification”—in fact it does precisely the opposite.

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And just like in 1992, the NDP unabashedly acknowledges that these changes are intended to make it easier for unions to organize without having to test their support in a secret ballot vote.

There are other misstatements in the New Release that undoubtedly will be used by employers in responding to a union organizing drive to set the record straight.

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What Should Business Owners Do?

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These amendments will undoubtedly pass given the elimination of the Green Party’s voice.  And it is the NDP’s right to govern as they see fit—after all they are following the Golden Rule “whoever has the gold makes the rules”.  So, business has to deal with this reality.

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If you are a non-union business or partially union/non union I recommend you familiarize yourself with the certification procedures and prepare in case a union comes knocking on your door. While the secret ballot vote may have been eliminated there are other objections that can be made to a union application for certification.

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In the absence of a secret ballot vote employers should keep their ears to the ground and respond if it learns that a union is organizing the workplace.  Educating employees before a union starts an organizing drive may be critical.  Caution still prevails as employers do not want to commit unfair labour practices, but you still have the opportunity to communicate with your employees.  Educating employees and maintaining a positive work environment may be in the best interests of the employees and your business.  This includes updating and reviewing employee policies and handbooks.  As I recommend “Get rid of the garbage can under the suggestion box”.

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We will be offering webinars outlining these changes and discussing strategies to respond to union certifications in the absence of a secret ballot vote.  If you are interested in attending, please contact Chris Drinovz at [email protected].  Or give me a call.

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Mike Weiler - Contact Info Here

Friday, April 8, 2022

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Note to Readers: This is not legal advice. If you are looking for legal advice in relation to a particular matter please contact one of our group members. We communicate all these updates to our clients and readers on our Employer Resources Portal and through monthly Newsletters.

As an update to our earlier article “BC Paid Sick Leave – What Employers Should know”, the Minister of Labour, Harry Bains introduced Bill 19 – Employment Standards Amendment Act, 2022 (the “Bill”) amending the sick leave provisions in the BC Employment Standards Act (“Act”). The Bill addressed two issues that have been raised since the introduction of the five days of employer-paid sick leave:

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1. Replaces "employment year” with “calendar year” when assessing an employee’s annual paid sick leave entitlement; and
2. Ensures that employees under collective agreements are not excluded from the employer-paid sick leave.

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The Bill received the Royal Assent on March 31, 2022 and the amendments are now in effect.

We will include some information on these amendments below, and also include some important FAQs we have seen from clients to date.

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Calendar Year Instead of Employment Year

Employees are now entitled to five paid days of sick leave per calendar year. This change was brought about for ease of implementation. Establishing an employee’s annual paid sick leave entitlement based on employment year was cumbersome because it required a separate date for each employee based on the start date of their employment. With the use of the calendar year, the annual entitlement period is standardized for all employees regardless of the start of their employment.

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Unionized Workplaces

Employees who were previously excluded from the full five paid sick days due to existing language in collective agreements are now included and entitled to the paid sick days.

Other factors such as the total number of paid sick leave days per year and the eligibility remain unchanged.

The full Bill is available here.

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Frequently Asked Questions from Employers

Partial Sick Days and Sick Pay

Q&A #1:

Different people have different shift lengths, does that matter for days where employees are sick? For example, let's say one employee has a 5 hour shift, another has 8, another has 10, another has 12.  Are they all entitled to the same 5 days at 8 hours for a total of 40 hours of paid sick time?

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The length of shift actually does come into play because you have to calculate an average day’s pay over the past 30 calendar days (excluding overtime) for the individual employee to determine the amount to pay they are owed for each claimed sick day. The average day’s pay is determined by the following formula:

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• Average Day’s Pay = Amount Paid ÷ Days Worked
• Where:
• Amount Paid = the amount paid or payable to the employee for work that is done during and wages that are earned within the 30 calendar day period preceding the leave, including vacation pay that is paid or payable for any days of vacation taken within that period, less any amounts paid or payable for overtime
• Days Worked = is the number of days the employee worked or earned wages within that 30 calendar day period

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Q&A #2:

Similarly, for hourly staff can they take sick time in part hours per day?  Example, an employee works 4 hours of an 8 hour day and then takes 4 hours of sick time (leaves sick halfway through the day).

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On this second question, the Employment Standards Branch’s current Policy Interpretation is that there are no partial sick days. Therefore, if someone takes a sick day, they are paid the entire average day’s pay for that day, regardless of whether they take the entire day off or just a partial day. You can read more on this here if you scroll down to “Partial sick days”.

And yes, this in our view creates the absurd situation that an employee can work 7 hours and go home sick for the last hour, then claim the entire paid sick day plus 7 hours pay for the time worked. I note this is currently under review as various employer groups are lobbying the government to change this.

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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.

Many professional businesses such as dental clinics, law offices, accounting firms etc. engage professionals to provide services through their businesses.  Both parties usually assume the relationship is one of independent contractor. However, in many cases they are wrong, as courts often find that such professionals providing services through a clinic or firm are in fact and in law “Dependent Contractors”.  As such, they have rights and obligations like an employee. This concept was recently analyzed in the recent important BC Supreme Court decision of Siddhivarn v. Dr. John W. Nesbitt Inc., 2022 BCSC 394, where Chris Drinovz acted for the dental clinic owner, Dr. John W. Nesbitt, defendant/plaintiff by counterclaim in this case.

Dr. Chitpol Siddhivarn provided dental services in Cranbrook through the Peak Family Dental Centre (“Clinic”) owned by Dr. Nesbitt through his company Dr. John W. Nesbitt Inc.  In June 2017, Dr. Siddhivarn responded to an ad placed by the Clinic and was hired in September 2017.  Unfortunately, the agreement was not put inwriting and the parties disagreed on the specific terms of compensation, who the contracting parties were or what would happen should the relationship end.  As is the case in many “oral agreements” uncertainty of terms led to a Supreme Court lawsuit.

Dr. Siddhivarn resigned with minimal notice to the Clinic in 2018.  He sued Dr. Nesbitt personally and his company for $48,000 being the shortfall in compensation owed at the time of his resignation.  He originally started his action in Small Claims court but then moved it up to the Supreme Court.

Dr. Siddhivarn claimed the deal was he would be paid 50% of billings minus lab expenses; the Clinic claimed he was entitled to 40% of billings less lab expenses. Sometimes the best defense is a good offense.  The Clinic counter sued Dr. Siddhivarn claiming he was a “Dependent Contractor. As such, the Clinic argued that the relationship was more akin to an employer/employee relationship and therefore Dr. Siddhivarn was required to give “reasonable  working notice” of his resignation.

The court dealt with a number of issues including:

• Finding that despite the disagreement on the evidence, the case could be decided in a Summary Trial fashion based on affidavits and discovery evidence.
• Dr. Siddhivarn’s oral agreement was with the Clinic (Company) and not Dr. Nesbitt personally.  The court applied the “officious bystander” test holding one would have “known or should have known that they were contracting with the Company.”
• The agreement on compensation was 50% of billings less lab expenses and not 40%.The court awarded Dr. Siddhivarn $48,880.42 against the Clinic.

It then turned to the counterclaim we filed for the Clinic. 

First the court concluded on the evidence that Dr. Siddhivarn was not an independent contractor but rather a “dependent contractor”.  The court reasoned as follows:

Additional broad categories of factors which have been applied by this Court, including in Lightstream Telecommunications Inc. v. Telecon Inc., 2018 BCSC 1940 at para. 125, in determining whether a relationship falls within a dependent contractor relationship include the following:

a)    The level of worker control;

b)    Ownership of equipment and tools;

c)     Profit and loss opportunity; and

d)    Business integration.

Lightstream at para. 125.

[49]         In this case the evidence indicates that Dr. Siddhivarn was providing dental services as an individual practitioner and nothing indicates that his work was supervised. On its own, this suggests an independent contractor arrangement.

[50]         Other factors suggest a dependent contractor relationship. Dr. Siddhivarn could not hire his own support staff but used the staff employed by the Company at the Clinic, he was expected to work a set number of days per week, did not bring his own equipment and was not responsible for paying expenses such as rent, utilities or supplies (except that lab fees which were deducted in the calculation of his compensation). In addition, his compensation can fairly be described as a commission on the dental services he performed, rather than being a share of the Company’s profits from the revenues generated by all the practitioners.

[51]Inconsideration of the factors described in Marby and in Lightstream I find that Dr.Siddhivarn’s relationship with the Company falls within the intermediate category. Therefore by operation of law, I find that it was an implied term of the oral agreement between Dr. Siddhivarn and the Company that he would provide reasonable notice before withdrawing his services at the Clinic.

Reasonable Notice

Most employees do not realize that they must give reasonable working notice of their departure, and this largely because there are so few cases that involve such claims.  In most cases it is usually the employee suing the employer for lack of notice of termination.

But what is remarkable and precedent setting in this case is that the court accepted our argument and found that Dr. Siddhivarn as a dependent contractor had to give “reasonable working notice” of his departure to the Clinic he worked at.

The argument was that notwithstanding his short service, 6 months would have been reasonable notice for him to provide to the Clinic.  We pointed to the fact that Dr. Nesbitt was 70 years old and was in poor health and that it was generally difficult to find replacement dentists.

The court held that 3 months was reasonable as that is how much time it took to place the ad and hire Dr. Siddhivarn in 2017.

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Damages for Failure to Provide Reasonable Notice of Resignation

This was a most difficult task here given the variables and the fact that the Clinic hired two dentists shortly after Dr. Siddhivarn left. We argued those dentists replaced another dentist who left, but the court found it was impossible to decide which new dentist replaced the Plaintiff.  Applying a very “rough justice calculation” we proved a loss for the Clinic in the amount of $21,000, and judgement was entered in that amount against Dr. Siddhivarn.  Although the amount of the award is relatively small the precedent in our view is enormous.

Takeaways

The head of our Group Chris Drinovz was counsel for the Clinic.  Here are three lessons we think you can take away from this case:

1. Oral agreements “are not worth the paper they are written on.”  Yet most employers and professionals often do not provide for clear written contract terms.  Not surprisingly costly litigation often results.  If you want to put us lawyers out of business, take the time to consider the actual terms of the contract whether it be with employees or dependent contractors and put it in writing.
2. Just because someone is described as a “contractor” does not mean that they are in law and in fact an independent contractor.  The fact that no deductions are made etc. does not alter the fact that in many such arrangements courts will find the relationship is really that of dependent contractor or even employee/employer.
3. Regardless of whether the relationship is that of employer/employee or business/dependent contractor, a court will in the absence of clear language to the contrary imply a term that reasonable notice must be given, and they will define what reasonable notice is in your oral contract.

To learn more about the differences between employees, independent contractors and dependent contractors, read our previous article here.

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.

Over the last couple of months (start of 2022), we have been assisting our clients with an increased number of audits and investigations done by the BC Employment Standards Branch. Some of the audits started off as a single Employment Standards complaint but then turned into an audit of the company's entire workforce for general compliance with Employment Standards Act. This comes after the article we prepared last year on Important Changes to BC Employment Standards Act, which you can read here. As part of recent amendments to the Act, the Director's powers to investigate compliance with the Act "at any time or for any reason" were increased at that time, and it seems have been put into force following the amendments.

In conducting these audits, the delegates of the Director have the power to compel any record from the employer, speak to witnesses including other employees, and even physically attend the workplace to inspect records and investigate.

Some of the main focus of the audits are in the following areas:

• Overtime pay (especially around workplaces with informal agreements around hours and banked time and salaried employees),
• Vacation pay, and
• Statutory holiday pay.

Investigations related to unpaid wages include a review of payroll records. The Employment Standards Branch will:

• Audit the records directly
• Require an employer to conduct a self-audit and review it, or
• Review an audit completed by a third party hired by the employer

For further insights on the topic of salaried employees and overtime, we highly recommend taking a look at our article prepared by Jesse Dunning explaining Overtime and the Salaried Employee under the Employment Standards Act. Overtime for salaried employees can be an area of confusion for employers and workers in BC. Many assume that because an employment contract sets out a fixed salary for the year, the employer is not required to pay the employee for overtime worked. This assumption is incorrect, and can lead to significant problems in the employment relationship, as well as during an Employment Standards investigation.

Enforcement Through Employment Standards Investigations

Once the investigation is complete, if wages are owing, the Employment Standards Branch may make a written decision called a determination, if full voluntary payment is not made. If an employer has not followed B.C. employment standards, they will be ordered to pay wages owed along with interest and penalties.

The scariest thing is that if the breach is company-wide (or department-wide), during an investigation the Employment Standards Branch can order compensation be paid for entire affected workforce even if only one person complained and nobody else has issues. The Branch can go back 1 year by default, but up to 24 months in special circumstances.

If you are contacted by the Employment Standards Branch regarding an investigation, it is important that you obtain legal advice from experienced employment lawyers right away. Our Group has been successful in assisting clients reach settlements to reduce the financial impact of these audits, and are here to help.

In addition, as always, we recommend being proactive about protecting your business. If you are an employer concerned that you have salaried employees (or dependent contractors) who have been working significant amounts of unpaid overtime, it is important that you speak with a qualified employment lawyer regarding your situation. At this time, we are offering Audit Prevention services, including a review of your existing Employment Contracts, Workplace Policies and practices, with a focus on identifying any potential breaches or weak points, and working with you on remediation and ensuring compliance with the Act, before an investigation comes your way.

If you are interested or would like to find out more, please submit a Contact form or email Chris Drinovz.

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As of February 1, 2022, Kane Shannon Weiler LLP is rebranding. As part of our rebranding strategy, our business name has changed from Kane Shannon Weiler LLP to KSW Lawyers. This name change is part of our strategy targeted to providing high-quality, comprehensive legal services to all our communities.‍‍

Why Rebrand Our Firm

Kane Shannon Weiler LLP was founded in 1973 and primarily served clients in Surrey and the surrounding areas involving in matters of business law and real estate. Since that time, our firm has grown in size and scope to be in a position to represent individual and corporate clients across a wide variety of practice areas. Over the last few years, we have become one of the largest law firms South of the Fraser River, with recognized leading lawyers in multiple specialized practice areas.

Our partnership discussed how we can continue to nurture our evolving clientele. We know we have experienced and knowledgeable lawyers and support staff that have been providing and will continue to provide quality services to our clients. But we also want to effectively communicate that to our current and future clients. What a better way to do that then with a new brand and a new mission and vision statement to support what our new logo represents.

KSW Lawyers’ Vision and Mission are based on our three founding principles:

·       Dedication to quality

·       Commitment to community

·       Passion for serving others

Our Vision

KSW Lawyers’ vision is to provide a holistic, client-focused approach to law, that serves and supports our community.
To do this, we have been developing our existing practice areas into thriving departments by leveraging processes, education, and technology at the firm.

Our Mission‍

As a full-service law firm, our mission is to provide high-quality, comprehensive legal services to our community.

To achieve this, we have been growing our firm strategically, creating new, specialized departments in various practice areas to expand our capabilities and services.

What does this mean for our current clients?

Our clients can expect nothing less than the experienced legal services you’ve come to appreciate; you may just see a more modern look, more legal services and streamlined, easy to use technologies offered in the future. Our dedication and energetic working relationships with you will continue while we work on adding more services that are beneficial to our communities.

Some changes you will easily notice in the coming months will be our new website, email addresses, social media profiles, new logo and brand signatures.

Our New Logo

The new KSW Lawyers logo features 3 primary icons. These illustrations are representative of the following values:

‍Personal Law

Figures representing  community, our personable values, and personal legal services for individuals.

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Litigation

Geometric figures forming  Lady Justice: the allegorical scale within judicial systems. Representative  of the comprehensive litigation services KSW Lawyers offers to help you  resolve your disputes.

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Business Law

A staircase,  representing our ability to help our business clients achieve growth and  progress, by overcoming obstacles with our advice and support.

Thank you

We’d like to take some time and thank our loyal clients for your many years of support. We are grateful to be able to serve so many different communities in the FraserValley and look forward to growing alongside you in the future.

Sincerely,

Partners of KSW Lawyers

Peter Unruh, Peter McCrank, Kevin Scott, Peter Hamilton, Tony Urquhart,
Chris Drinovz & Travis Brine

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Strata Corporations and Collection of Vaccination Status Information

The implementation of Vaccine Cards and proof of vaccination requirements to access certain events, services, and businesses in BC has raised questions for those living in strata properties. 

Many privacy-concerned residents are wondering whether their strata corporation has the authority to require them to provide proof of vaccination in order to use common facilities such as gyms, pools, and social rooms, and if so, how their privacy will be protected.

Without clear direction from the BC government, this can be a difficult topic for volunteer-run strata councils to navigate. 

A strata corporation may be able to impose vaccination requirements for common use facilities by passing a bylaw at a special general meeting or an annual general meeting at which the proposed bylaw receives a 3/4 majority vote. Strata corporations may also be able to implement a rule without the necessary requirements for passing a bylaw. 

Section 125 of the Strata Property Act, SBC 1998, c 43 allows strata corporations to make rules governing the “use, safety and condition of the common property and common assets”.  

If a strata corporation does decide to implement vaccination requirements, it means that the strata corporation will be collecting personal information of residents and is required to comply with BC’s privacy laws. 

Strata corporations are governed by the Personal Information Protection Act, SBC 2003, c 63 (“PIPA”). PIPA describes how corporations must handle personal information that they are collecting, using, and disclosing and allows for collection, use, and disclosure for reasonable purposes. Reasonable is defined by the context in which the information is collected and will vary in different situations. It is important that strata corporations clearly and specifically identify the reason that they are collecting personal information. 

Generally, PIPA requires that strata corporations: get consent from residents to collect information; have a reasonable purpose for collecting, using, and disclosing information; inform residents of that purpose; have adequate security in place to protect information; appoint someone to be accountable for PIPA compliance; and destroy information when it is no longer needed for its purpose. 

In the context of requiring proof of vaccination, strata corporations ought to be cautious about over-collection, disclosure and storage of information, and retention. The least amount of information collected to achieve the purpose is the best practice. For example, rather than collecting a copy of a resident’s proof of vaccination, a better option is keeping a list of resident’s names and placing a checkmark beside the names of residents who have shown their vaccination status to the strata member designated to ensure PIPA compliance. 

It will be important for strata corporations to consider who will have access to the collected vaccination information and limit the number of people to as few as possible to carry out the stated purpose. 

Storage of information is another key consideration. Strata corporations should consider where the information will be stored so it is protected from risks such as someone who is not supposed to see the information being able to see it, someone changing the information, or someone stealing or losing the information. Storing information in a locked filing cabinet that only designated people have access to is a good safeguard. 

Finally, strata corporations ought to consider how long they will need to retain the information and how they will dispose of it once it is no longer required for the purpose it was collected for. Strata corporations will have to grapple with when proof of vaccination will no longer be required. Once that day comes, the information collected must be destroyed or securely disposed of, for example, by shredding any documentation retained in the collection process. 

If you have any questions or need assistance in ensuring you are PIPA compliant, please reach out to Tiana Reid at [email protected]

A recent BC Supreme Court decision rendered that potential errors in termination letters could lead to having cost consequences to the employer. It also went over the consideration requirements needed when amending or introducing contracts for existing employees.

In Moffatt v. Prospera Credit Union, 2021 BCSC 2463, an employee of 22 months’ service who occupied no managerial role was terminated of her employment. In the termination meeting, the employee was presented with a termination letter and a proposed Release, which reduced her entitlements but increased her obligations, both to the significant detriment of the dismissed employee and benefit of the employer, had the employee signed it. The termination read in part:

Pursuant to your employment contract with Prospera…and in accordance with the BC Employment Standards Act, Prospera will pay you a lump sum of $1,374.28…which is equivalent to 2 weeks of your pay as termination pay. Prospera will also pay you a gratuitous lump sum payment of $206.14, less required deductions, which is equivalent to 15% of your termination pay in lieu of benefits.

The letter also advised the employee, “[y]ou are required to sign this letter and the full and general release (“Release”) attached to this letter…”. The termination letter further stipulated that “under your employment contract with Prospera you must not for 12 months following the end or your employment, solicit Prospera’s clients, employees and contractors.”

At the meeting, the employee was visibly upset and cried profusely. No opportunity to calm down was provided but she was required to collect her things and leave immediately. She was then escorted across the branch where the meeting occurred, in full view of other employees and members of the public, while crying and attempting to shield her face with the termination letter.

Consideration

The employee in this case commenced casual employment with the employer in 2018, then was offered a part-time position in 2019 with a contract (the “Part-Time Contract”), and then a full-time position in 2020 with another contract (“the Full-Time Contract”). The parties’ positions differed concerning the enforceability of these contracts.

The Court stated the relevant legal principles as follows:

[38] An amendment to an employment contract must provide a benefit to both parties. Continued employment alone is not enough to constitute consideration for termination clauses … Something more is required in the form of forbearance or some other benefit or incentive to the employee.

[39] In Singh v. Empire Life Insurance Co., 2002 BCCA 452 the Court of Appeal found that where there was no promotion, new job opportunity, or other advantage offered to the plaintiff, other than continued employment, there was no fresh consideration and the modified employment contract at issue was unenforceable. The Court affirmed the general principle that modification of a pre-existing contract will not be enforced unless there is further benefit to both parties: at para. 15. The need for consideration reflects the vulnerability of an employee dependent on their continued employment who has an inequality of bargaining power when an employer amends an existing employment contract: Hobbs v. TDI Canada Ltd., 2004 CanLII 44783, at para. 42, 246 D.L.R. (4th) 43 (O.N.C.A.).

…

[41] This Court in Krieser v. Active Chemicals Ltd., 2005 BCSC 1370 [Krieser], set out the three steps of analysis to determine if there is a fresh consideration element required when an employment contract is amended, at para. 24:

First, did the Contract contain new terms which were detrimental to the plaintiff? Second, if it did, what is required at law to provide adequate consideration for such changes to the employment relationship? Third, has the defendant established adequate consideration on the facts here?

[42] If an employer wishes to amend an employment contract, it has generally been held that fresh consideration is required in the form of a benefit to both parties. In the absence of a benefit, the contract will be unenforceable for lack of consideration.

[43] In applying the test to the facts in Krieser, Justice Neilson (as she then was) found that introducing new terms that were detrimental to the employee in the form of new termination provisions and anti-competition clauses activated the first step. Second, the intention of the employer that the employee would be terminated if he refused to sign the new contract for an unknown employment period was not enough of a benefit to the employee. An added benefit, such as greater security of employment through forbearance for a specified time, or a new term beneficial to the employee, would be adequate consideration. Third, there was nothing in the contract that conferred a benefit to the employee. There was no increase in job security, the employee was still a probationary employee, and the termination provision, while more generous than the Employment Standards Act, R.S.B.C. 1996, c. 113 during the employee’s probation, would not be advantageous when he passed his probationary period: Krieser, at paras. 25, 32, 35.

Applying the foregoing to this case, the Court ruled that a more restrictive termination clause in the temporary Full-Time Contract was not enforceable due to lack of fresh consideration: the switch from part-time to full-time was only temporary and provided no real benefit to the employee.

The Full-Time Contract included the phrase that “either party may end this agreement with one weeks’ notice” and that “[a]t the end of this term position, you will return to your own or a comparable position”. Finding inconsistencies between the Part-Time and Full-Time Contracts, the Court upheld the most reasonable reading, that the Part-Time Contract, the original contract, remained in place, despite the temporary reassignment under the Full-Time Contract. While the Full-Time Contract temporarily altered the employee’s position, it was held that the Part-Time Contract continued. Further, the Court noted that, for practical purposes, the employee’s salary and hours of work remained relatively the same. 

Damages

Aggravated Damages

Having first awarded three (3) months’ notice to the employee for her dismissal, the Court discussed damages relating to the manner of dismissal. The Court considered the claim regarding manner of dismissal under aggravated damages and the claim for damages regarding the termination letter errors under punitive damages.

The Court provided that an employee seeking to recover aggravated damages must establish two conditions: (1) the employer has breached its duty of good faith and fair dealing in the manner of dismissal, where examples of conduct that may constitute a breach of the employer’s duty of good faith and fair dealing include being untruthful, misleading or unduly insensitive in the course of dismissal, or attacking the employee’s reputation with declarations made at the time of dismissal, and (2) the employee suffered compensable damages as a result of the breach, which requires an employee to prove that something beyond the normal distress and hurt feelings that invariably accompany the loss of employment occurred.

In Hrynkiw v. Central City Brewers & Distillers Ltd., 2020 BCSC 1640, the employee corroborated his claim of mental distress through his family doctor and his wife. His employer had accused him of misconduct, leaving him devastated and humiliated, especially considering that acts of dishonesty and fraud could have professional impacts on his career as a Chartered Accountant. The Court awarded aggravated damages for the manner of dismissal.

In Sifton v. Wheaton Pontiac Buick GMC (Nanaimo Ltd.), 2010 BCSC 353, an employee who was constructively dismissed claimed that his employer spoke to him in a manner that caused him mental distress. The Court found that, while the employer was assertive and perhaps could have handled the situation better, the employer was not intimidating the employee. The Court dismissed the claim of mental distress in the manner of dismissal. It was noted that conduct can be insensitive but not amount to “unduly insensitive”.

Considering the foregoing and other cases, the Court found that the employee was no doubt distraught and humiliated by her sudden termination, and by the fact that she had to exit in front of customers; however, this did not rise to the level of public humiliation that would warrant aggravated damages.

Punitive Damages

In contrast to aggravated damages, which are compensatory in nature, punitive damages are restricted to advertent wrongful acts that are so malicious or outrageous that they are deserving of punishment on their own. The goals of punitive damages include deterrence and denunciation.

The termination letter at issue in this case contained errors, including the following:

• the notice offered to the employer consisted of two (2) weeks’ pay in accordance with the Employment Standards Act, rather than payment consistent with either the full-time contract (one (1) month) or the part-time contract (determined under standards similar to the common law);
• a lump-sum payment of $206.14 was offered, less deductions, which was identified as a “gratuitous lump sum payment…equivalent to 15% of your termination pay in lieu of benefits”; and
  
• it provided a non-solicitation provision restraining the Plaintiff from soliciting the Defendant’s business for a period of 12 months, rather than the six (6) months provided for within the part-time and full-time contracts.
  

The Court noted that these errors would have limited the employee’s entitlements and increased her obligations. By contrast, the employer stood to benefit from the misleading errors contained in the termination letter. Further, had the employee signed the termination letter as presented she would have released her legal claims against the employer.

The Court discussed:

[99] The two weeks pay in lieu of notice listed in the termination letter was less than the one month the Plaintiff was entitled to under the Full-Time Contract (if that contract applied), or the notice commensurate with the Plaintiff’s “age, tenure, position and employment opportunities” set out in the Part-Time Contract (and which this Court has held to be three months’ notice in the circumstances). The gratuitous lump sum payment was in fact less than the amounts that the Defendant owed the Plaintiff under either the Full- or Part-Time contract. The wording of the termination letter suggested that the Defendant was offering the Plaintiff a kindness (a gratuitous payment). The termination letter asserted that the Plaintiff was “required” to sign it. Finally, the termination letter imposed a non-solicitation period of 12 months, when both the Part- and Full-Time Contracts each contained only a six month non solicitation period.

The employer posited that it was not deliberately dishonest and misleading in the termination letter, that it was not designed in bad faith to mislead the employee. The employer further pointed out that it was willing to correct the errors as soon as the employee’s lawyer pointed them out.

While the Court noted that the employer was processing over 100 termination packages for reorganized employees, it stated:

[101] The volume of termination letters an employer issues does not lessen the obligation to ensure they are correct. There is no volume discount on correctness for termination letters.

…

[104] The Defendant was undertaking a large number of terminations in a short time period. However, there is an obligation on an employer terminating an employee in such circumstances to act in good faith and reasonably. A “cookie cutter” termination letter drafted without regard to the individual circumstances of each employee falls short of the standard required.

[105] The Defendant argues that the errors in the termination letter were not reprehensible, vindictive, malicious, harsh, high-handed, and egregiously objectionable, and further, that the errors were inadvertent. The Defendant accepted and corrected the errors as soon as the Plaintiff retained legal counsel who pointed those errors out.

[106] The Defendant’s argument highlights the crux of the problem. In this instance, the Plaintiff hired a lawyer. Had she not, these errors may not have been discovered and corrected. Given the circumstances of a termination, and its highly emotionally charged nature, it is equally as likely that the Plaintiff, or others in her position, could have simply signed the termination letter.

[107] This is a situation concerning recently terminated employees who are potentially significantly vulnerable, and in distress. The Defendant’s lack of attention to detail in the termination letter, especially where the errors fall so clearly in their favour, is unacceptable, and draws an award of punitive damages.

[108]   I award the equivalent of two-and-one-half months’ salary to the Plaintiff in punitive damages for the errors in the termination letter. This is the amount that the Plaintiff would have lost had she signed the erroneous termination letter as presented.

The employer’s errors in the termination letter could have resulted in the employee signing away entitlement to additional notice, doubling the period of her non-solicitation prohibition, and releasing all claims against the employer. Had the employee not consulted a lawyer, her rights may have been significantly impacted. In view of the circumstances, 2.5 months’ award in punitive damages was granted.

Takeaways

This case serves as a good reminder for Employers to treat employment contracts and terminations very seriously.

Our first takeaway is to keep in mind that in order to amend existing employment contract, you need to provide fresh consideration.

Second, when it comes to termination letters, act in good faith and honestly, and respect the terms of existing contracts. In this case, the termination letter didn’t match the terms of the employment contract, and this error led to an additional 2.5 months’ award against the Employer, for a total of 5.5 months’ award (instead of 3 months otherwise).

An important takeaway is to always get advice from experienced professionals specific to your circumstances and your employees when amending and implementing employment contracts or planning a termination.

Note to our Readers: This is not legal advice. If you are looking for legal advice in relation to a particular matter, please contact our Employment & Labour Group.

When the NDP introduced in 2019 numerous changes to the Labour Relations Code (“Code”) largely in favour of unions, it opted to keep the secret ballot vote in union certification applications where unions seek to become the exclusive bargaining agent for all the employees in the bargaining unit.  This was largely seen as a concession to the Green Party who insisted on keeping the secret ballot vote and preserving democracy in the workplace.

At the same time the government introduced a number of changes to the Code that made it more difficult for employers to defeat a certification drive.  This included shortening the time frame to hold a secret ballot vote and greatly reducing employer free speech.   One of the key changes in 2019 was found in section 14 (4.1) which allows the LRB to certify a Union without a vote where it finds there has been an Unfair Labour Practice (“UFLP”) committed by the employer and the LRB “believes it is just and equitable in order to remedy the consequences of the prohibited act.”

In its first decision on section 14 (4.1) the LRB automatically certified a union for a bargaining unit of more than 80 employees because the employer had terminated the two inside union organizers. Only one employee had signed a union card.  The LRB justified this extra ordinary response by saying that this involved “hit hard, hit early” tactics that were intended to and did in fact achieve stopping the organizing “in its tracks”.  Given these considerations the LRB found that it would be impossible to remedy the UFLP by a vote which would  not disclose the true wishes of the employees:  Salade Etcetera Inc v UFWC 1518 2020 BCLRB 109 (appeal of 2020 BCLRB 34 dismissed) 2020 BCLRB 109.pdf.

In Waste Control Services Inc v. OE’s Local 115, 2022 BCLRB 13 2022, the LRB dismissed a Union’s request for remedial certification in circumstances very similar to the facts in Salade Etcetera Inc.

The employer learned of a union organizing drive and promptly fired the lead union organizer, an employee of 1 ½ years with 22 years experience in the waste management business.  He had never been disciplined by the employer. There were 100 employees at the location where the organizing drive commenced.  Shortly after learning of the organizing drive the employer fired the union organizer without cause.

The LRB found that the dismissal of the Union organizer was without proper cause and more importantly was tainted by anti-union motivation while a certification drive was ongoing in contravention of section 6 of the Code.  It held that the Employer’s witnesses’ evidence “regarding the issues they testified to about the Dismissed Employee’s performance was unreliable and did not establish proper cause for dismissal.” (para 41)

Turning then to the issue of remedial certification as a remedy for the UFLP the LRB found that this case was distinguishable from Salade Etcetera Inc.  It stated:

“In the case before me, I find the Employer's actions were relatively severe in that they involved the dismissal of the Union's chief organizer at the very start of an organizing campaign. However, I find the dismissal was not done in a way which would make it impossible for the Dismissed Employee to return to the workplace. No cause for dismissal was alleged at the time, and it was not done in front of other employees. I find the likely effect of dismissal on the employees and the Union's ability to organize them is not such that only remedially certifying the entire workforce would constitute a just and equitable remedy. With this decision, the Employer's dismissal of the Dismissed Employee will quickly be reversed and remedied. I further find any damage to the Union's ability to organize can be remedied by the orders given below. I am satisfied the following remedies are just and equitable as well as appropriate for the facts before me.” (para 50)

However the LRB did make a number of orders intended to rectify the damage done by the blatant UFLP committed by the employer.  It ordered:

“I make the following declarations and orders:

I declare the Employer has breached the unfair labour practice provisions of the Code, contrary to Sections 6(1), 6(3)(a), 6(3)(b), 6(3)(d), and 9. I order the Employer to immediately cease and desist from committing further breaches of the Code.

I order the Employer to immediately reinstate the Dismissed Employee to employment with compensation for all wages and benefits lost by reason of the unlawful dismissal.

I order that within 5 calendar days of the receipt of this decision, the Employer shall post a copy of the Board's decision in a conspicuous place at the worksite and mail a copy of the decision to each of the employees at the Employer's expense.

I order that within 30 calendar days of the date of the decision, the Employer must allow the Union to have a 60-minute meeting with the Employer's work crews at the Employer's expense during work time and in the workplace without management or relatives of persons related to the owner present.”

TAKEAWAYS

Unions continue to utilize the tools given to them in 2019 to enlarge their membership base and certifications.  Avoiding a vote is very important as unions are not always successful in winning the employees over when they are entitled to express their views in a totally secret ballot vote.  So, a remedial certification is very useful in assisting in their organizing efforts.

The circumstances when a remedial certification will be granted are now very unclear.  The facts in both these two cases are very close yet a remedial certification was denied in Waste Control. As an employer you do not want to be rolling the dice at the LRB.  Further even though no remedial certification was ordered, the employer in Waste Control was subject to many orders all geared towards providing the union with a platform to organize the employees.  Further any action taken by the Employer will be highly scrutinized in light of the findings of UFLP.

One other key factor to note in this case.  Under section 5(2) a union can demand a hearing into an  UFLP complaint within 3 days.  So that means the employer has very little time to instruct counsel and prepare for the hearing. Therefore, employers are advised to take steps to familiarize themselves with the provisions and procedures under the Code before a union comes knocking on its door.

The Labour and Employment Group at Kane Shannon Weiler will be glad to provide you with an overview of the provisions and procedures and suggest steps to be taken to avoid an UFLP complaint and consequent remedial certification.

Note to our Readers: This is not legal advice. If you are looking for legal advice in relation to a particular matter, please contact our Employment & Labour Group.

THE EMPLOYMENT & LABOUR GROUP IS PRESENTING AT CPHR BC LEGAL SYMPOSIUM 2021 ON FEBRUARY 4, 2021

The effects from the pandemic in 2020 have brought both novel and challenging employment law shifts, unlike in previous years. As we prepare for the new year, employers will be required to continually monitor and stay informed of new legal developments as they plan to effectively manage their workplace obligations in 2021.

The Chartered Professionals in Human Resources (CPHR) BC & Yukon have put together the Legal Symposium 2021 Series from January 28 to February 18, 2021, where expert lawyers including KSW’s Melanie Booth will address the most pressing employment law and workforce challenges, accommodation updates, health and safety and all the potential impacts employers may face as the pandemic continues to affect organizations.

Join the presentation on February 4, 2021 to learn How Organizations Can Navigate Remote Work and Its Risks.

With the pandemic’s shift from office centred work to remote work, employees are making due by using devices and spaces that may not be ideal. There are additional risks that remote work brings to organizations and this session will provide some helpful tips to safely and effectively navigate remote work in your organization.

Melanie will cover the following topics related to remote work:

• Legal considerations
• Employee performance management
• Occupational health and safety considerations
• Family status and accommodation
• Privacy concerns

Read More about the Symposium and Register Here.

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