Employment & Labour Law 

Alberta employers are reminded that the general minimum wage in Alberta will be increased on October 1, 2016 to $12.20 per hour, up from $11.20 per hour. Additionally, the current liquor server rate will be eliminated effective October 1, 2016 and these employees will also now earn the general minimum wage. Employers are reminded to update their employment contracts and practices to ensure they reflect the new minimum wage.

The minimum wage will increase a further $1.40 to $13.60 per hour on October 1, 2017, and by $1.40 to $15.00 per hour on October 1, 2018.

In November 2008, the Alberta/British Columbia Joint Expert Panel on Pension Standards (JEPPS) released its report on pension standards in the two provinces. The report, Getting Our Acts Together, encouraged the two provincial governments to take a leadership position in pension reform and forge harmonized pension standards legislation which would provide a solid foundation for private sector pension plans and facilitate inter-provincial labour mobility.

The JEPPS’ vision of a fully harmonized joint-regulatory environment for Canada’s two westernmost provinces failed to materialize. The vision was left on the cutting-room floor, so to speak, as Alberta adopted its reformed pension standards legislation in 2014 and BC followed-suit with its own in 2015 – absent any joint regulator, joint tribunal or joint policy advisory council, as recommended in the JEPPS report.

That said, the new Acts themselves are principles-based, as opposed to rules-based, and there is a great deal of harmonization between the two, including the requirement for plan administrators to complete a triennial administrative assessment (TAA) for their pension plans.

TAA Timing

For private sector BC and Alberta pension plans with a calendar year-end, the first TAA must be undertaken with an effective date of December 31, 2016, and a written assessment completed by December 31, 2017. The exercise is to be repeated triennially thereafter.

Topics for Assessment

The TAA requirement is designed to force a plan administrator to do some soul-searching about how well it is administering the pension plan. At a minimum, TAA requires a review of the following:

• Legislative Compliance
• Plan Governance
• Plan Funding
• Plan Investments
• Trustee Performance (if any)
• Administrative Staff and Agent Performance

Administrators must retain a copy of the written assessment and make it available to the provincial pension regulator on request. There’s little doubt that regulators will undertake spot audits early in 2018 to confirm that the TAA requirements have been satisfied.

Where’s the stick?

The BC and Alberta pension legislation introduced a new enforcement tool to ‘encourage’ plan administrators to complete required tasks on time. The legislation empowers the Superintendent to order administrative penalties on corporations and administrators for contraventions of legislative provisions.  The maximum penalties range from $50K to $250K for corporations or administrators and from $10K to $50K for individuals, depending on which administrative provisions have been contravened. FICOM, the BC pension regulator, issued guidelines in June of this year suggesting that the higher penalties, which are discretionary in nature, will only be imposed where there has been significant delay in completing required legislated tasks.

Even without the administrative penalty provisions, plan administrators are required to comply with applicable legislation and regulatory requirements. Failure to do so, especially if the failure leads to significant losses to the pension fund, might be viewed in subsequent court proceedings as a breach of fiduciary duty.

Penalty and fiduciary implications aside, plan stakeholders and administrators should embrace the TAA as an opportunity to assess their administrative processes. While there’s never a good time to do soul-searching of this nature, if not on a triennial basis, when would be an appropriate time to ensure that employee pensions are being properly looked after?

Start now while there’s still time

Although plan administrators have until the end of 2017 to complete their written assessments, stakeholders need to recognize that a snapshot of administrative efficiency is to be taken at year-end, so there’s little time left in 2016 to ‘right-the-ship’. They need to determine if current administrative processes sufficiently address the enumerated list of assessment topics – for example, ensure that an updated Governance Policy, Funding Policy and Statement of Investment Policies and Procedures are in place – and, if not, take steps to address any shortfalls.  Failure to fill the ‘gaps’ now might lead to a failing grade when the assessment begins in earnest at year-end.

An Ontario Court has ruled in Bevilacqua v Gracious Living Corporation, 2016 ONSC 4127 that even in cases where an employer has complied with the temporary layoff provisions of the Employment Standards Act, 2000 (the “Act”), the layoff does not protect the employer from a successful claim in constructive dismissal by the employee at common law. In the case, a 15 year Facilities Manager was told by his employer that he was being temporarily laid off and that he would be recalled in three months. His company benefits were continued during the layoff period. While the layoff was done in accordance with the Act, the employee immediately took the position that he had been effectively terminated when he was placed on layoff. The Court agreed with the employee, and held that absent a provision in the employee’s employment contract allowing for a temporary layoff, a unilateral layoff constituted a constructive dismissal, regardless of whether it was done in compliance with the Act. The employee in the case, who was unemployed for 15 months after he was placed on layoff, was less successful with the remedy that the Court ordered. The employee was entitled to be paid for the three months he was on layoff, but the Court found that he had failed to mitigate his damages when he declined the employer’s offer to return to his old job after the layoff period was over.

Employers who wish to place employees on unpaid layoff should use this case as a reminder to update their employment agreements to provide for the right to unilaterally impose temporary layoffs in accordance with the Employment Standards Act, 2000 without further notice or compensation.

To view the decision, click here: http://www.canlii.org/en/on/onsc/doc/2016/2016onsc4127/2016onsc4127.html.

British Columbia employers are reminded that the general minimum wage in British Columbia increased on September 15, 2016 to $10.85 per hour, up from $10.45 per hour.  The liquor server minimum wage also increased to $9.60 per hour. Employers are reminded to update their employment contracts and practices to ensure they reflect the new minimum wage.

General damages awarded by human rights tribunals are intended to compensate for discrimination and to act as a deterrent.

The Alberta Human Rights Act provides no statutory limit on how much general damages can be awarded.  However, in the past general damages awarded by the Human Rights Tribunal of Alberta (the “Tribunal”) generally ranged from $3,000 to a top end “cap” of $10,000.

This has changed since the Alberta Court of Appeal decision in 2013 of Walsh v. Mobil Oil Canada.  In Walsh, the court stressed that inadequate damage awards undermined the mandate of human rights legislation to recognize and affirm that all persons are equal, and to protect against and compensate for discrimination.  The court concluded that low damage awards could actually perpetuate discriminatory conduct.

Beginning in 2015 there has been a notable trend towards higher general damages awards, and the Tribunal has issued a number of decisions awarding general damages in the range of $10,000 to $15,000.

In Amir and Nazar v. Webber Academy Foundation the Tribunal found that it was not undue hardship to allow Muslim students to pray during the school day in a secular private school, and awarded general damages of $12,000 and $14,000 to each complainant.

Similarly, in Andric v. 585105 Alberta Ltd. o/a Spasation Salon & Day Spa, the Tribunal found that the employer had unjustifiably changed the complainant’s position and work location of 10 years after she was assaulted by a co-worker. The Tribunal concluded that the shared religious beliefs between the co-worker who assaulted the complainant and the employer were a factor in the respondent’s decision to transfer the complainant.  The complainant was awarded general damages of $15,000 and lost wages for a 24 month period.

More recently, on July 5, 2016 the Tribunal issued its decision in Thu Hien Pham v. Vu’s Enterprise Ltd. o/a La Prep, which continued this trend of higher general damage awards.  The complainant, Ms. Pham was awarded $15,000 in general damages by the Tribunal, who found that Ms. Pham had been harassed by her former employer.  On awarding $15,000 in general damages, the Tribunal chair noted that “it was important to ensure that damages are not so low as to trivialize the protection of human rights”, and “[w]hile I may have been inclined to consider a greater amount…this was the amount requested by the Director and the complainant”.

Accordingly, employers can expect to see larger awards in the future for both general damages and loss of income, and should not discount the risks and exposure of a human rights complaint.

These decisions of the Human Rights Tribunal of Alberta can be found here:

• Amir and Nazar v. Webber Academy Foundation, 2015 AHRC 8 (currently under appeal): http://www.canlii.org/en/ab/abhrc/doc/2015/2015ahrc8/2015ahrc8.html?resultIndex=1
• Andric v. 585105 Alberta Ltd. o/a Spasation Salon & Day Spa, 2015 AHRC 14: http://www.canlii.org/en/ab/abhrc/doc/2015/2015ahrc14/2015ahrc14.html?resultIndex=1
• Pham v. Vu’s Enterprises Ltd., 2016 AHRC 12: http://www.canlii.org/en/ab/abhrc/doc/2016/2016ahrc12/2016ahrc12.html?resultIndex=1

The Ontario Court of Appeal has held that the words “accept business”, in what the employer intended to be a non-solicitation clause, served to restrict competition and is therefore not merely a non-solicitation clause.

In this case, the personal defendant, Mary Murphy, was employed by the plaintiff Donaldson Travel Inc. (“DTI”) as a travel agent from October 2004 to April 2007 and then again from June 2007 to February 3, 2012, when she resigned from that employment. On February 6, 2012, Ms. Murphy commenced employment as a travel agent with the defendant, Goliger’s TravelPlus (“Goliger’s”).

Following Ms. Murphy’s resignation, DTI brought claims of breach of contract, misappropriation of confidential information, inducing breach of contract and interference with contractual relations against Ms. Murphy, Goliger’s and its President and director. Its claims were dismissed on a summary judgment motion, and DTI appealed to the Court of Appeal.

One of the issues on appeal was whether the motion judge erred in finding that the restrictive covenant in Ms. Murphy’s contract with DTI was in fact a non-competition clause rather than a non-solicitation clause, and therefore that it was unreasonable and unenforceable.

The clause at issue stated:

Mary agrees that in the event of termination or resignation that she will not solicit or accept business from any corporate accounts or customers that are serviced by Uniglobe Donaldson Travel, directly, or indirectly.

The Court of Appeal agreed with the motion judge that, based primarily on the language “or accept business”, the restrictive covenant did in fact restrict competition and was therefore a non-competition clause. Further, the Court of Appeal held that since this non-competition clause contained no temporal limitation, there was no basis on which to interfere with the motion judge’s conclusion that the clause was unreasonable and therefore unenforceable.

DTI’s appeal was dismissed with costs of $7,500.00 awarded to each defendant.

The key takeaway from this case is to ensure that the language of restrictive covenants is carefully chosen, so as to avoid inadvertently going beyond what is considered sufficient in the circumstances (in this case a non-solicitation clause) to protect an employer’s proprietary interest.

The Court of Appeal’s decision in Donaldson Travel Inc. v. Murphy, 2016 ONCA 649 (CanLII) can be found here:  https://www.canlii.org/en/on/onca/doc/2016/2016onca649/2016onca649.html.

Both the British Columbia and the Federal Government have recently introduced legislation to amend their respective human rights legislation to include gender identity and gender expression among the protected grounds of discrimination. These amendments will mean that individuals will have a right under the respective legislation to make a complaint if they have been discriminated against because of their gender identity or expression, including in employment settings.

Federally regulated employers and employers in British Columbia should review and update their policies on non-discrimination to ensure that these two new prohibited grounds of discrimination are covered.

British Columbia’s Human Rights Code Amendment Act, 2016, S.B.C. 2016, c.26 was passed on July 25, 2016 and came into force on July 28, 2016 whereas the Federal Bill C-16 passed first reading in the House of Commons on May 17, 2016 and has yet to become law.

Ontario is on the verge of implementing new rights for members of registered pension plans. Members will have the right to form committees that will have broad rights to review information about all aspects of plan administration including investments.  Employers who sponsor or administer a registered pension plan should familiarize themselves with these new Ontario legal requirements.  They are not yet law, but likely will be in a matter of months.

Last week the Ontario government released revised draft regulations about these new legal requirements, seeking comments by September 12^th, 2016.  The new requirements have been kicking around in draft for the past six years and will replace current Ontario legislation regarding member advisory committees.  Most employers probably haven’t heard of the current requirements regarding such committees, because the current rules have no teeth.  The new ones will.  You can find the new requirements here.

The new requirements will apply to pension plans that have at least 50 members (including retirees). For those plans, if 10 members (or their union) notify their plan administrator of their desire to form a member advisory committee, a process must be launched to inform all plan members and conduct a vote.  If a majority of members vote in favour of establishing an advisory committee, it should be established in a matter of months.  The plan administrator will have no right to representation on the committee.  Reasonable expenses of the committee are payable from the pension fund.

Once a new committee is formed, the plan administrator must:

• arrange for the plan actuary (for defined benefit plans) to meet with the committee at least annually;
• give the committee access, at least annually, to an individual who can report on the plan’s investments; and
• give information to the committee, and allow it to examine the plan records.

These new legal requirements will not give plan members a say on how their plan should be administered, but they certainly will change the landscape of members’ access to information about their pension plan. The new requirements will come into play only where there is sufficient interest among members, or unions, in forming a member advisory committee.

These new Ontario rules will create an entirely new type of scrutiny of pension plan administration. Prepare now.

The end of summer is (unfortunately) just around the corner, which for many employers means saying goodbye to student employees and seasonal workers. Most employers know that they need to complete a record of employment (ROE) when an employee terminates, but there are a number of other circumstances that require an ROE. Now is as good a time as any for a quick refresher on when employers need to complete a record of employment (ROE) for an employee and why it is important to do so correctly. My goal is not to give detailed instructions about completing ROEs; but to highlight the importance of properly issuing them and the potential liability from failing to do so.

ROE Overview

The ROE is the form employers complete when an employee receiving insurable earnings stops working such that he/she experiences an interruption of earnings. Service Canada considers ROEs to be the single most important documents in the Employment Insurance (EI) program.

When to Complete an ROE

You may have noticed I used the term “interruption of earnings” above and not “termination of employment” when describing when an ROE is required. That is because, as mentioned, ROEs are required in a wider range of circumstances (I will not get into the technical definition of “insurable earnings”, but suffice to say it includes most employees’ salary or wages).

An interruption of earnings occurs in the following situations:

• when an employee has had or is anticipated to have seven consecutive calendar days with no work and no insurable earnings from the employer (the “seven-day rule”);
• when an employee’s salary falls below 60% of his/her regular weekly earnings because of certain absences (illness, injury, quarantine, pregnancy, parental leave, compassionate care leave or family responsibility leave); or
• when an employee starts receiving wage loss insurance payments.

In addition to the above interruptions of service, employers must also complete ROEs in the following instances:

• when Service Canada requests an ROE for an employee;
• when an employee’s pay period type changes (e.g., weekly to bi-weekly);
• when an employee is transferred to another Canada Revenue Agency (CRA) payroll number;
• when there is a change in ownership leading to a change in the employer;
• when the employer declares bankruptcy;
• when a part-time, on-call or casual worker is no longer on the employer’s active employment list or has not done any work or earned any insurable earnings for 30 days; or
• when an employee is on a self-funded leave of absence.

The Importance of ROEs

There is not a great deal of litigation relating to ROEs, but incorrectly completing (or failing to complete) an ROE has attracted common law liability for employers.

One type of case occurs when an employer intentionally misrepresents the reason for the interruption of service or withholds an ROE from a departing employee. Allegations of misconduct on an ROE can disqualify an employee from eligibility for EI. If the allegations are untrue, or if an ROE is withheld, the employer can be liable to the employee for the resulting loss of EI payments and potentially for additional damages for bad faith conduct towards the employee.

Liability may also arise in cases where an ROE is used as evidence that a seasonal or fixed-term employee is in fact a permanent employee and therefore entitled to common law notice.  Courts have found that using the word “unknown” instead of “not returning” on an ROE for a seasonal worker indicated that the employment was permanent and that the seasonal return date was simply unknown at the time. Similarly, failing to issue an ROE at the end of each of a series of fixed-term contracts has been evidence that an employee was a permanent employee.

ROEs may be a hassle to complete, but it is important that employers keep track not only of when they need to be issued, but to ensure that they are completed correctly and accurately. For more information about completing ROEs, the CRA provides a helpful guide (Guide) and, of course, you may get in touch with a member of Dentons’ Labour and Employment group.

Further to our series of posts on Ontario’s new Sexual Violence and Harassment Legislation, which amends the Occupational Health and Safety Act, the Ontario Ministry of Labour has recently issued a Code of Practice to Address Workplace Harassment under Ontario’s Occupational Health and Safety Act. The Code of Practice deals with the OHSA’s new Workplace Harassment provisions, which come into force on September 8, 2016. The Code of Practice is effective as of that same date.

Importantly, although employers are not legally required to comply with the Code of Practice, those who do will be considered by the Ministry to have complied with the harassment provisions of the OHSA. As such, the Code of Practice is a practical tool that employers can use to ensure compliance.

The Code of Practice is divided into four Parts, each of which is further subdivided into a “General Information” section, which provides guidance on the interpretation of the OHSA’s Workplace Harassment provisions, and a “Practice” section, which details requirements that employers may follow to comply with the OHSA.

The Code of Practice’s Preface indicates that following its requirements is “just one way in which employers can meet the legal requirements regarding workplace harassment” and a failure to comply with all or part of the Code of Practice may not be a breach of the OHSA. However, the Code of Practice also states that, while employers may choose to adhere to one or all of the Code of Practice’s Parts, if an employer does adhere to a Part, it must adhere to all of the Practice requirements under that Part in order to be deemed in compliance with the related Workplace Harassment provision in the OHSA.

The Code of Practice’s “General Information” sections provide guidance on the interpretation of the OHSA’s Workplace Harassment provisions, as follows:

• Part I: Workplace Harassment Policy – This section outlines the contents of a Workplace Harassment Policy and explains that employers may choose to prepare a separate Workplace Harassment Policy or combine it with their workplace violence, occupational health and safety and/or anti-discrimination and anti-harassment policies. A template Workplace Harassment Policy is included in the Code of Practice (Sample Workplace Harassment Policy)

• Part II: Workplace Harassment Program – This section considers reporting mechanisms for incidents and complaints of Workplace Harassment. In particular, it clarifies that a person who receives a complaint of Workplace Harassment should not be under the alleged harasser’s direct control. Further, in instances where the worker’s employer or supervisor is the alleged harasser, an alternate person who can “objectively address the complaint” must be designated to receive reports of Workplace Harassment, such as an employer’s board of directors and/or a consultant. Further, the Workplace Harassment program should set out whether this person would only receive the complaint, or whether this person would be expected to carry out an investigation.

  This section also considers the consequences of incidents of Workplace Harassment. In incidents arising from individuals who are not the employer’s workers, the section suggests that employers could either modify or refuse its services to such people. Consequences for workers could include: apologies, education, counseling, shift changes, reprimands, suspension, job transfer, termination or, in instances where workplace harassment is prevalent or commonplace, training for everyone in the workplace.

•  Part III: Employer’s Duties Concerning Workplace Harassment – This section relates to investigations into Workplace Harassment and provides that: an “appropriate investigation” must be “objective”; the investigator must not be “directly involved in the incident or complaint” or “under the direct control of the alleged harasser”; and the investigator should have knowledge of how to conduct an investigation appropriate in the circumstances. The parties to the complaint should be updated periodically on the status of the investigation. The Code of Practice includes a sample investigation template, which can be found here: Sample Investigation Template

• Part IV: Providing Information and Instruction on a Workplace Harassment Policy and Program – This section outlines the scope of the “Information and Instruction” that an employer must provide to its workers under the OHSA. Employers provide information and instruction on “what conduct is considered workplace harassment” and supervisors need to receive specific instruction on “how to recognize and handle a workplace harassment incident”. The employer should keep records of the information and instruction provided to its workers for at least one year.

Notably, the “Practice” sections list additional requirements that are not contemplated by the OHSA’s new Workplace Harassment provisions, including, but not limited to:

•  Indicating, in a Workplace Harassment Program, when an external person will be retained to conduct a workplace harassment investigation (for example, but not limited to, when the alleged harasser is a president, owner, high-level management or senior executive);
• A timeframe of 90 calendar days or less to complete an appropriate investigation, unless there are extenuating circumstances warranting a longer investigation (e.g. more than five witnesses or key witnesses unavailable due to illness);
• Listing seven steps to an investigation that an employer must complete, at a minimum, including giving the alleged harasser(s) the opportunity to respond to allegations raised and, in some circumstances, providing the worker who has experienced Workplace Harassment with a reasonable opportunity to reply; and
• That corrective action, if any, that is or will be taken as a result of the investigation, must be communicated in writing within 10 calendar days of the investigation being concluded.

The Code of Practice attaches a Sample Workplace Harassment Program, which provides guidance on addressing the Code of Practice’s requirements.

The Ministry of Labour indicates that the Code of Practice is “designed to help employers meet their obligations” with respect to the OHSA’s Workplace Harassment provisions. As such, it provides insight on the Ministry of Labour’s expectations for developing, implementing and maintaining Workplace Harassment Policies and Programs. While employers do not need to comply with the Code of Practice’s requirements to ensure compliance with the OHSA, a consideration of the information and requirements set out in the Code of Practice will help employers address Workplace Harassment in a manner that is consistent with the Act and the Ministry’s expectations. The full text of the Code of Practice can be found here.