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Minimum Wage Increase Now In Effect in many Canadian Provinces

On October 1, 2015, the minimum wage in Alberta, Manitoba, Newfoundland and Labrador, Ontario and Saskatchewan has increased.

Province Current General Minimum Wage (as of October 1, 2015) Previous General Minimum Wage
Alberta $11.20/hour $10.20/hour
Manitoba $11.00/hour $10.70/hour
Newfoundland and Labrador $10.50/hour $10.25/hour
Ontario $11.25/hour $11.00/hour
Saskatchewan $10.50/hour $10.20/hour


Please note that there are different minimum wage requirements in many provinces that depend on the classification of the worker, such as liquor servers.

Employers are reminded to update their employment contracts and practices to ensure they reflect the new minimum wage

Minimum Wage Increase Now In Effect in many Canadian Provinces

Employer liability relating to fees in employer-sponsored retirement and savings plans

Employers who sponsor retirement and savings plans for their employees should ensure that the fees paid by their employees within the plans are reasonable and adequately disclosed.  Lawsuits in the U.S., and a recent regulatory undercover investigation in Canada, serve as a reminder of the risk of employer liability regarding fees.  This article will describe the risks for Canadian employers, and suggest a few simple things that can be done to reduce those risks.

What kinds of plans expose employers to the risk of claims over fees?

The kinds of employer-sponsored plans at issue here are workplace plans known as “CAPs”, meaning “capital accumulation plans”.  These are plans that do not promise a defined benefit pension.  Instead, they provide an individual account for each employee, where contributions are made by the employees, the employer, or both.  CAPs sponsored by employers include defined contribution registered pension plans, Group RRSPs (group registered retirement savings plans), deferred profit sharing plans, non-registered savings plans and tax-free savings accounts.

The employer selects a service provider and the line-up of investment funds to be offered in the CAP.  Employees decide which investment funds they want their account balances to be invested in.

It is common for the costs of the plan to be paid by way of fees charged to the investment funds and accounts of the employee members.  It is also common for employers to rely on the service-providers they have hired to describe to their employees what the fees are.

Exactly what are the legal requirements?

The legal obligation of employers regarding fees is not set out in detail in legislation.  For registered pension plans, generally speaking, there are broadly-worded legislative requirements that employers who sponsor defined contribution registered plans act prudently.  There is little detail in pension legislation as to exactly what that means, with respect to fees paid by plan members.

Eleven years ago a significant document was issued by three Canadian regulators who have jurisdiction over various aspects of CAPs.  The 2004 document, known as the “CAP Guidelines,” says that employers should ensure that employees are provided with a description and amount of all fees and expenses that are borne by the members, including investment fund management and operating fees, record keeping fees and fees for services provided by service providers.

The regulators stated in the CAP Guidelines that fees can be disclosed to plan members on an aggregate basis, “provided the nature of the fees, expenses and penalties is disclosed”.  This means that it is not sufficient to refer in broad terms to an approximate amount of total fees that members will be charged for a vague summary of services.  Rather, there should be a description of what kinds of services are being provided for a fee, what kind of a fee is being charged (a flat fee per participant? a percentage of assets?), who is providing the service, and how much those services cost.

Regulators have not stood still on the issue of fees since the 2004 CAP Guidelines were released.  A few weeks ago the Ontario pension benefits regulator issued a draft guidance note for public comment.  The draft states that statements of investment policies and procedures for registered pension plans should include a description of fees, including:  “which expenses and fees will be paid by the employer and which will be borne by plan members; expectations or limits on total plan expenses and fees; and guidelines for monitoring expenses and fees”.  It is likely that this draft guidance note will be issued in final form in the near future.

Secret regulatory probe into investment fees

In an undercover operation, three Canadian investment regulators sent 105 mystery shoppers to a variety of vendors of investment products such as mutual funds.  The operatives posed as potential individual investor clients, and reported their experiences to the Ontario Securities Commission, the Investment Industry Regulatory Organization of Canada and the Mutual Fund Dealers Association of Canada.  The regulators released their findings on September 17th, 2015.

The results of the investigation were troubling.  Only 25% of the mystery shoppers were told how the vendor of the investment would be compensated.  And only 56% of them were told anything at all about the fees associated with the investment products they were offered.  Where fees were disclosed, more than one-third of the shoppers were given inadequate information about fees.

The investigation uncovered proof that many investment advisors are not properly disclosing fee information to individual investors.  The probe did not examine employer-sponsored retirement and savings group plans.  Nevertheless, the results of the investigation should prompt employers to confirm that their employees are getting appropriate information about the fees they are paying in their workplace retirement and savings plans.

Employers sued in the U.S. over fees

Dozens of lawsuits have been filed in the U.S. against employers in the past few years regarding fees charged to employees in workplace retirement plans.  Allegations included claims that service providers were receiving “revenue sharing” payments, fees were excessive because the plan sponsor had selected actively managed mutual funds as plan investment options when identical, less expensive institutional funds were available, fees were improperly allocated among participants, service providers should not be paid fees based on a percentage of assets, and fees were “hidden”.  Several high-profile cases were settled on the basis that employers agreed to pay amounts to plan members, and to change to the structure and disclosure of fees going forward.

What’s an employer to do?

Review the fees.  Benchmark them against fees charged in other employers’ plans; your service provider should have access to that industry information.  Are they equitably allocated among participants?  Are any service providers getting a percentage of assets when a less expensive, fixed fee is available in the marketplace?

Disclosure, disclosure, disclosure.  Ensure that information about the fees appears prominently in communications to your employees.  Can employees see who gets their money, and what services they receive for their fees?

Statement of Investment Policies and Procedures.  If you have a policy, or governance guideline of some kind relating to your CAP, include a description of the type and amount of fees charged, and how the fees are allocated among the various players (investment managers, record keepers, auditors, consultants, etc.).

Get it in writing.  Ask your service provider, or consultant, to confirm in writing that the fees are reasonable, and properly disclosed.  Ask for that comfort at least annually.

Employers rarely play a role in negotiating and disclosing fees charged to employees in their retirement and savings plans.  Employers usually rely on their service provider to do so.  Given the spate of lawsuits in the U.S., and the results of the recent regulatory undercover operation in Canada, it would be prudent for Canadian employers who sponsor CAPs to periodically review the information provided to members of their CAPS, in order to ensure that fees are reasonable, and that complete information about fees is being provided.

Employer liability relating to fees in employer-sponsored retirement and savings plans

Employee denied bonus payment on the basis of “somewhat draconian” termination provision

In the recent Ontario Superior Court of Justice decision, Kielb v National Money Mart Company[1], an employee was denied a bonus payment upon termination based on the provisions of the employment contract.  In the decision, Justice Akhtar confirmed that “the harshness of [a] provision does not make it invalid if both parties have agreed to it”.

The plaintiff, a lawyer named Jonathan Kielb, commenced employment with National Money Mart Company (“Money Mart”) in 2008. The employment contract that Mr. Kielb signed included a termination clause, as well as the following provision in respect of his bonus (the “Limitation Clause”):

Any bonus which may be paid is entirely at the discretion of the Company, does not accrue, and is only earned and payable on the date that it is provided to you by the Company. For example, if your employment is terminated, with or without cause, on the day before the day on which a bonus would otherwise have been paid, you hereby waive any claim to that bonus or any portion thereof. In the event that your employment is terminated without cause, and a bonus would ordinarily be paid after the expiration of the statutory notice period, you hereby waive any claim to that bonus or any portion thereof.

On April 21, 2010, Money Mart terminated Mr. Kielb’s employment on a without cause basis, and offered him 8 weeks of pay in lieu of notice (inclusive of the 2 weeks of statutory termination pay), in compliance with the termination clause of his employment contract.

With respect to the bonus, since Mr. Kielb was not an employee on the September 17, 2010 payment date, and the payment date was not within Mr. Kielb’s statutory notice period, Mr. Kielb did not receive any bonus payment in respect of the 2010 fiscal year. [2]

Mr. Kielb’s position was that the bonus was an integral part of his compensation, and therefore should be payable up to the last day worked and through the contractual notice period, despite the language in the Limitation Clause.  Mr. Kielb argued that because the bonus was an integral part of his compensation the Limitation Clause was unenforceable, because it was: contrary to public policy, inconsistently applied, and/or ambiguous, contradictory and illegal.

In considering Mr. Kielb’s arguments, Justice Akhtar came to the following conclusions:

  • Given Money Mart’s representations to Mr. Kielb at the time of hiring, the bonus did form an integral part of his compensation package. However, the Limitation Clause was not contrary to public policy and as such, it operated to restrict Mr. Kielb’s right to the bonus payment. Mr. Kielb was dismissed in April and since the bonus payment date did not fall within the 2-week statutory notice period, Mr. Kielb was not entitled to any bonus payment.
  • Additionally, while Money Mart’s treatment of Mr. Kielb’s bonus entitlement may have differed from its treatment of other terminated employees’ entitlements, Mr. Kielb was nevertheless ineligible for the bonus payment because of the terms of the Limitation Clause.
  • Lastly, the Limitation Clause was unambiguous. The language was clear that Mr. Kielb was only entitled to a bonus if the payment date fell within the statutory notice period, and since the payment date was well outside of this period, Money Mart was not required to make a bonus payment.

This case is a good example of how an employer can use clear and unambiguous language in an employment contract to restrict its liabilities upon termination, specifically with respect to bonus payments.  While Money Mart’s verbal representations to Mr. Kielb about its bonus program caused the bonus payment to be an integral part of his compensation package, Mr. Kielb accepted the position with full knowledge that on termination his entitlements would be restricted by the Limitation Clause, and was consequently bound by its terms.

[1] 2015 ONSC 3790.

[2] Had it been payable, the bonus would have amounted to 59.4% of his base salary (i.e. approximately $86,239.56).

Employee denied bonus payment on the basis of “somewhat draconian” termination provision

Medical Marijuana in the Workplace

With the recent expansion of legislation permitting the production, sale and use of marijuana for medical purposes, employers should begin to think about crafting a policy which addresses medical marijuana use in their workplace.

For example, the smoking of regular cigarettes is not permitted in buildings or near entrances and exists to buildings.  Employees who want a smoke usually need to head further afield during their breaks.  But is it proper to ask the same of employees who are smoking medical marijuana and may have a disability?  Is it proper to make them smoke in the presence of others, so that their disability is no longer a private matter?  Is it proper to have regular smokers ingesting medical marijuana smoke if all smokers are required to smoke in the same area?
These are but some of the questions which an employer should be considering  when drafting a policy to address the use of medical marijuana in the workplace.  Other questions to be considered include the following:

  • Should a designated room be provided on the premises in which medical marijuana users can smoke on a private and confidential basis?
  • What rules will apply to the employee?  Should he or she be required to cease working and report to a manager in the event of feeling unwell after medicating?  Should he or she be required to refrain from operating a motor vehicle or machinery for work purposes after medicating?
  • What documentation will be required from the employee’s treating healthcare professional?
  • What steps will be taken by the employer in order to ensure that the needs of the employee are being met, without compromising the employee’s ability to perform his or her job, or the safety of the workplace?
  • Who at the company must know about and approve an employee’s use of medical marijuana in the workplace?  What steps will be taken in order to otherwise keep that information confidential?

There are no guidelines in place to assist employers with drafting policies such as this, although reference to policies which provide for accommodations to disabled employees may be a good starting point.  The important thing for an employer is to be aware of the fact that it is best to have a policy in place in advance of these questions being raised by an employee seeking to medicate at work, and that we can assist with ensuring that your workplace policy strikes the proper legal balance with respect to meeting the needs of all potentially affected individuals.

Medical Marijuana in the Workplace

Creed and Association: Breach of Human Rights Leads to Harsh Penalties

The decision in H.T. v ES Holdings Inc. o/a Country Herbs (“Country Herbs”) 2015 HRTO 1067 (CanLII) (“Country Herbs”) serves as a reminder to employers of the significant liability that they face when a claim of discrimination is made out.

H.T. and J.T. were hired when they were 16 and 14 respectively. The undisputed evidence was that their mother, S.T., had advised the employer early on in H.T.’s employment that she could not work later than 9:30 or 10:00 p.m., to which the employer agreed. H.T. notified the employer twice that she was a Mennonite, and that she was unable to work on Himmilfaurt, which was a Mennonite religious holiday. H.T. was told that the attendance policy required that she come in at midnight on the holiday to complete her work if she did not work her scheduled daytime shift. H.T. declined the midnight shift, on the basis that she had already advised the employer that she could not work past 10:00 p.m. J.T. was not scheduled to work that day, so J.T. had no issue. While the applicants were at church, the employer called S.T. and, upon being told again that H.T. would not be working that day or at midnight, terminated both S.T.’s and J.T.’s employment.

Ultimately, the Adjudicator found that J.T. was fired “because of his association with his sister who had asserted her right not to work on the holiday, and with whom he shares the same religion”.

In terms of H.T., the Adjudicator found that the policy was discriminatory and there was a prima facie case of adverse treatment. Although the Adjudicator was satisfied that that the employer had adopted the attendance policy for a purpose rationally connected to the performance of the job and in an honest and good faith belief that it was necessary to the fulfilment of the legitimate work-related purpose, ultimately she held that the employer had not considered the procedural duty to accommodate; based on the evidence, the employer had not engaged in a discussion of how to accommodate H.T. after she twice raised the issue of not working on the holiday. Moreover, “with respect to the substantive duty to accommodate, the only alternative offered was for H.T. to work at midnight. Given her particular circumstances and the agreement of the employer that H.T. would not work past 10 p.m. because of her age, this was not a reasonable attempt to accommodate her”.

In contrast with an allegation of discrimination, a reprisal claim requires the applicant demonstrate that the respondent purposefully punished or retaliated against the applicant. The Adjudicator concluded that the reprisal complaint was made out, because the employer discussed with the applicants that they could be fired for not working on the holiday and gave evidence that they were terminated so that others would not disregard the attendance policy.

The HRTO awarded the following:

  • that the employer pay lost wages of one month to H.T. and five months to J.T., who had both mitigated by seeking work after their termination;
  • that the respondents (both the employer and the directing minds of the employer) pay damages for injury to dignity, feelings, and self-respect, in the case of H.T. the sum of $10,000, and J.T. the sum of $7,500;
  • that the respondents implement an internal Human Rights policy, specifically including a prohibition on discrimination on the bases of creed or association;
  • that the respondents undergo the Ontario Human Rights Commission’s online training “Human Rights 101”, and provide written confirmation to the applicants; and
  • that the employer post Code cards in central locations throughout their workplace, including any place where staff gathers for breaks or meetings, to encourage future Code compliance.

This decision underscores the importance of compliance with the Code, as well as the gravity of discrimination on the above-noted prohibited grounds. Employers are well-advised to ensure they implement policies that accommodate their employees to the point of undue hardship, from both a substantive and procedural standpoint, or risk significant monetary penalties and the involvement of the HRTO in their workplace.

Creed and Association: Breach of Human Rights Leads to Harsh Penalties

“You quit!” “No I Didn’t, I’m Sick!”

In Betts v. IBM Canada Ltd., the Court was faced with a dispute between Mr. Betts, who claimed he was legitimately absent from his employment due to illness, and his employer IBM, which claimed that Mr. Betts effectively resigned by not returning to work after his application for short-term disability (“STD”) benefits was declined.

Mr. Betts had been employed with IBM for approximately 15 years, most recently in New Brunswick.  During his employment, he had had absences in the past for depression and anxiety, for which he had received STD benefits from IBM.

In October 2013, Mr. Betts stopped reporting for work, claiming he was disabled due to illness, being a further incident of depression and anxiety.  Shortly thereafter, without informing IBM, he moved to Ontario to live with his girlfriend.  His move contravened IBM’s STD policy, which required approval of the third party STD adjudicator before a move away from the employee’s usual place of residence during illness.

Mr. Betts failed to submit medical information by the deadline as stated in the Plan.  Ultimately, Mr. Betts submitted notes from a psychotherapist located in Mississauga, but again this contravened the terms of the Plan, which required that medical information be submitted from a registered physician (which the psychotherapist was not).  As a result, Mr. Betts’ claim for STD was declined, and on December 2, 2013, IBM wrote to Mr. Betts, advising him that he would have to either return to work or submit medical documentation to substantiate his appeal.

This pattern continued, with Mr. Betts submitting several appeals with further documentation from his psychotherapist, but without submitting documents from a registered physician.  Each time, IBM wrote to Mr. Betts to advise him that if he failed to submit the necessary medical documentation to support an appeal, he would have to either return to work or be considered to have voluntarily resigned.

IBM even extended the time for appealing, and after Mr. Betts complained that his manager was harassing him, assigned him a new manager.  Still Mr. Betts did not provide a note from a physician, and failed to return to work, despite IBM’s warnings that failure to do so would result in his deemed resignation.  Ultimately, Mr. Betts exhausted all levels of appeals, but refused to return to work, claiming that the note from the psychotherapist justified his continued absence.  IBM proceeded to end his employment, claiming abandonment.

The Court first cited the recognized test for determining resignation/abandonment, as follows:

Do the statements or actions of the employee, viewed objectively by a reasonable person, clearly and unequivocally indicate an intention to no longer be bound by the employment contract.

In cases of claimed abandonment, this is often an extremely difficult hurdle for an employer to meet.

Although the Court accepted that Mr. Betts suffered from depression and anxiety disorders, the Court also recognized that an employee suffering from medical issues is “not immune from being found to have abandoned his/her employment”.  The Court ultimately held that Mr. Betts was well aware of what was required of him, and that IBM made clear that the consequences of non-compliance would be loss of employment.  As such, notwithstanding that Mr. Betts argued that he did not intend to give up his employment, the Court held that the facts demonstrated that Mr. Betts had no real intention to return to work.  Mr. Betts’ undisclosed move to Ontario clearly factored into the Court’s analysis.

The Court specifically rejected the argument that IBM was under an independent duty to accommodate Mr. Betts over and above the terms of the Plan, and held that IBM was under no obligation to provide Mr. Betts with a leave of absence while it independently assessed Mr. Betts’ claim by retaining an independent physician to assess him.  Since Mr. Betts had not produced a note from a doctor as required by the terms of the Plan, IBM had no obligation to undertake such steps.

Since IBM’s expectations were clear and reasonable and IBM provided ample time and opportunity for Mr. Betts to comply, coupled with Mr. Betts’ failure to provide a reasonable explanation for failing to comply, the Court held that Mr. Betts had in fact abandoned his employment.

This case is a good example of how to proceed with an uncooperative employee.  At every turn, IBM was clear in its expectations, patient (and even generous) when dealing with time lines and “bent over backwards” to assist Mr. Betts.  IBM only proceeded with ending the employment relationship after its clear instructions were ignored, it provided Mr. Betts with ample warnings of the consequences of failing to comply, and it responded to his concerns about the workplace.  For employers dealing with such employees, this case is a good road map for successfully managing the relationship.

Betts v. IBM Canada Ltd., 2015 ONSC 5298

“You quit!” “No I Didn’t, I’m Sick!”

New details about the ORPP

On August 11, 2015, the Ontario government released long-awaited details about the Ontario Retirement Pension Plan (ORPP). Although there are design issues that need to be settled and many unanswered questions on how the ORPP will work, employers with Ontario employees are one step closer to understanding the impact of the ORPP on their businesses.

All Ontario employees age 18 and older (except federally-regulated workers) will be required to participate in either the ORPP or a comparable workplace pension plan by 2020. The timing for enrolment in the ORPP depends on which category an employer falls within:

Wave 1: Employers with 500 or more employees, without a registered pension plan, will be required to participate in the ORPP starting January 1, 2017.

Wave 2: Employers with 50 to 499 employees, without a registered pension plan, will be required to participate in the ORPP starting January 1, 2018.

Wave 3: Employers with 50 or fewer employees, without a registered pension plan, will be required to participate in the ORPP starting January 1, 2019.

Wave 4: Employers with a registered pension plan that is not comparable to the ORPP, or that have Ontario employees who are not members of their “comparable” pension plan, will be required to participate in the ORPP starting January 1, 2020.

Under the ORPP, the required employee and employer contributions will be phased in, depending on the applicable enrolment “wave”. By 2021, all participating employers and employees will be contributing 1.9% each (total 3.8%) of employees’ base salary to the ORPP annually.

Employers and employees that participate in a pension plan that is comparable to the ORPP will be exempt from participating in the ORPP. An employer that currently does not participate in a registered pension plan can establish a comparable plan prior to its scheduled ORPP enrolment date to qualify for exemption. Defined benefit (DB) and defined contribution (DC) plans will be considered comparable if they satisfy certain requirements. A DB plan that provides a minimum benefit accrual rate of at least 0.5% of an employee’s earnings will be comparable, while a DC plan must have annual contributions of at least 8% of an employee’s earnings (with at least 4% employer funded) in order to be comparable. Other group savings arrangements, such as group registered retirement savings plans (RRSPs) and deferred profit sharing plans, will not be considered comparable to the ORPP.

The government has stated that the ORPP Administration Corporation will “contact all Ontario employers in early 2016 in writing to verify their existing pension plans and assess the coverage offered by employers to their employees.”

What’s next:

The Ontario government continues to work on the design details of the ORPP, including developing appropriate comparability tests for other types of registered pension plans, exploring options for the self-employed, developing a buy-back mechanism for employees to purchase past service credits, and examining options to allow all Ontario employers with comparable plans to opt-in and participate in the ORPP. Other plan-specific information, such as the minimum earnings threshold, also must be confirmed. Additional details will need to be released prior to the implementation of the ORPP in 2017.

In the meantime, employers with Ontario employees should review their current retirement savings arrangements and determine whether changes should be made in light of the ORPP. For example, sponsors of non-comparable DC pension plans may want to increase mandatory employee and employer contribution rates in order to be comparable, and group RRSP sponsors may want to consider converting their plan to a DC pension plan given the many similarities of those plans. Before making changes, employers need to decide if participation in the ORPP is desirable for some or all of its Ontario employees and, if so, whether participation will be an alternative, or in addition, to the current workplace pension plan.

New details about the ORPP

Transgender Employees: Best Practices

Transgender rights are a burgeoning area of law across Canada. Most recently, amendments made to the Alberta Bill of Rights on March 10, 2015, which came into force on June 1, 2015[1], recognize gender identity and gender expression as being explicitly protected.[2] Newfoundland & Labrador recently promised to introduce a bill to amend provincial legislation so gender assignment surgery would no longer be required to change the sex designation on identity documents.[3] Likewise, the Yukon NDP tabled a petition for transgender equal rights in April, and in May, the Legislative Assembly debated amending legislation to allow changes of gender assignment on birth certificates without surgery.[4] Although British Columbia was the first province to eliminate the surgical requirement for amending sex designation, the Liberal government has repeatedly declined to sign a pledge supporting transgender equality legislation, attracting the ire of the Vancouver Pride Society. All of this follows on the heels of changes in human rights legislation in Ontario, Manitoba, and, at an as yet undetermined date, Nova Scotia.

In April 2014, the Ontario Human Rights Commission published its Policy on preventing discrimination because of gender identity and gender expression[5] (the “Ontario Policy”). The Ontario Policy defines gender identity as an individual’s sense of being a man, a woman, both, neither, or anywhere along the gender spectrum, which may be the same as or different from his/her birth-assigned sex. Gender expression is how a person publicly expresses or presents their gender, including behaviour, outward appearances such as dress or hair and makeup, and chosen name and pronoun.

Many other provinces have endorsed the Ontario Policy, recommending its guidelines as a useful resource for employers. The following are a few suggestions for Canadian employers supporting new transgender employees or current employees in the process of transitioning:

Accepting Gender Based on Self-Identification

The Ontario Human Rights Tribunal made it clear in 2012 that it is discriminatory for an employer to insist that an employee be treated in accordance with the gender assigned at birth for employment purposes, because such behaviour fails to treat that person in accordance with his/her “lived and felt” gender identity.[6] Tribunals/Courts in Ontario[7] and Alberta[8] have held that the former requirement for changing sex designation on birth documents (sexual reassignment surgery and corroborating statements from two physicians) is discriminatory and unnecessary.

All of the above strongly supports the notion that regardless of an individual’s birth-assigned sex, employers should be accepting of an employee’s self-identified gender and should not request further documentary proof.

Use of Preferred Name/Pronoun

Employers should support a new transgendered employee or a currently transitioning employee by using the employee’s preferred pronouns and names and, where possible, updating corporate records to reflect the same (including email signatures and letters of reference). Where documents reflecting an individual’s legal name/gender are issued, such as a record of employment or a T4, the individual’s preferred name/gender should be included alongside the legal name, wherever feasible. The Ontario Policy recommends that employers question whether there is a legal requirement for the collection of information about gender, and if such information is legally required (e.g. legally accurate SIN information is required for income tax purposes), there should be policies in place to ensure the confidentiality of the information.[9]

A Flexible Dress Code

If an employer has a dress code in place, such rules should not have a negative effect on transgendered employees. Employees must be allowed to dress in accordance with their expressed gender, and dress code policies should be flexible and accommodate transgender or gender non-conforming individuals (e.g. employees should not be required to wear clothing stereotypical of their birth gender, such as ties for men or skirts for women).[10]

Human rights legislation pertaining to transgender rights in all of the provinces is evolving at a rapid pace and Canadian employers would be well advised to ensure their workplace policies are inclusive and up to date. Developing transgender-friendly guidelines and rules will both foster a positive and productive work environment, as well as shield an employer from liability for discrimination, intentional or unintentional.

[1] Trans Equality Society of Alberta Fact Page, “Human Rights Across Canada,” last updated: July 2015, available online: http://www.tesaonline.org/human-rights-across-canada.html (“TESA Fact Sheet”).
[2] RSA 2000, c A-14.
[3] CBC News, “Transgender activist Kyra Rees wins court battle over IDs,” posted: July 22, 2015, available online: <http://www.cbc.ca/news>.
[4] Yukon Legislative Assembly, Official Report of Debates (Hansard) 33rd Legislature, 1st Session, No 212 (13 May 2015) at 6375-6376.
[5] Ontario Human Rights Commission, Policy on preventing discrimination because of gender identity and gender expression, released: April 14, 2014, available online: http://www.ohrc.on.ca/en/policy-preventing-discrimination-because-gender-identity-and-gender-expression (the “Ontario Policy”).
[6] Vanderputten v Seydaco Packaging Corp., 2012 HRTO 1977 at para 66 (available on CanLII).
[7] XY v Ontario (Government and Consumer Services), 2012 HRTO 726 (CanLII).
[8] CF v Alberta (Vital Statistics), 2014 ABQB 237 (CanLII).
[9] The Ontario Policy at p 35.
[10] Ibid at p 41.
Transgender Employees: Best Practices

What If Your Independent Contractor Is Really a Dependent Contractor?

Many employers hire independent contractors to assist in their workplace and in most cases, the assumption is that doing so will result in minimal or no notice of termination having to be paid at the end of the relationship.  A recent case has confirmed that that assumption can be a risky one to make.

Earlier this year, the Ontario Superior Court of Justice released its decision in the case of Keenan v. Canac Kitchens.  For those familiar with employment law in Ontario, the name Canac Kitchens will be familiar as it has been on the losing end of a number of employment law cases.

In this particular case, Lawrence and Marilyn Keenan were employed by Canac Kitchens beginning in 1976 and 1983 respectively.  In 1987, both were advised that their employment was coming to an end but that they could carry on as independent contractors.  Independent contractor agreements were signed and the Keenans carried on as before.  They continued working for Canac until the company closed its operations in 2009.  No notice of termination or pay in lieu of notice was provided.

The court looked back at the 2009 Ontario Court of Appeal decision in McKee v. Reid’s Heritage Home Limited and confirmed that employment relationships exist on a continuum, with employees at one end, independent contractors at the other, and dependent contractors in the middle.  The court also confirmed that unlike independent contractors, dependent contractors are entitled to reasonable notice of termination.  In determining the status of the Keenans, the court looked to the following:

  • Whether the individuals were limited exclusively to the service of the company;
  • Whether the individuals were subject to the control of the company, not only as to the product sold, but when, where and how it was sold;
  • Whether the individuals had an investment in the “tools” relating to their service;
  • Whether the individuals undertook any risk in relation to their business, or had an expectation of profit apart from a fixed fee or commission; and
  • Whether the business was that of the individual or the company.

While there were some factors in this case which suggested an independent contractor agreement, the court was particularly fixated on the fact that the Keenans worked exclusively for Canac until 2007.  Although they did some small amount of work for a competitor between 2007 and 2009 due to a shortage of work at Canac, the judge accepted that Canac turned a blind eye to same.  In other words, for all intents and purposes the Keenans provided services only to Canac for almost the entire duration of the relationship.  Moreover, Canac had almost complete control of the work performed by the Keenans.

As a result, the court found that although the Keenans were contractors, they were in a dependent relationship to Canac and therefore entitled to notice of termination.  Due to the 32 and 25 years of service provided by Lawrence and Marilyn respectively (which resulted in an average length of service of 28.5 years between the two of them), the court found that a whopping 26 month notice period was reasonable.

As always, independent contractor agreements should be entered into with careful consideration as to the true nature of the relationship between the parties.  As the saying goes, “if it walks like a duck and talks like a duck, the chances are good that it’s a duck”.  In such a case, no amount of contractual drafting will lead to another conclusion.


What If Your Independent Contractor Is Really a Dependent Contractor?

Ontario pension plan sponsors: it’s time to look at your SIPPs

Employers that provide registered pension plans to their Ontario employees should review their Statement of Investment Policies and Procedures (“SIPPs”) within the next few months.  New Ontario SIPP requirements are coming into force:  SIPPs will have to be filed with the Ontario pension regulator, and they will have to address new issues described below.

Electronic filing of SIPPs with the Ontario regulator will be mandatory in 2016.  You shouldn’t  assume that your pension service provider will attend to the filing for you.  It’s the legal responsibility of the registered administrator of the plan – usually the employer – to ensure that the SIPP is adopted and filed on time.  For most plans, the filing deadline is March 1st, 2016.

There is no change to the requirement that SIPPs be reviewed and confirmed, or amended, at least annually.  If your company has not yet conducted its 2015 SIPP review, now is the time to become familiar with the new SIPP requirements and address them as part of your 2015 review.  Doing so will avoid having to do another review in early 2016.

Under the new rules SIPPs must state whether environmental, social and governance (“ESG”) factors have been incorporated into the pension plan’s investment policies and procedures and, if so, how those factors were incorporated.  There is no legal or standard definition of  “ESG factors”.  On June 30th the Ontario regulator released draft “Investment Guidance Notes” (here)  which provide background information on the new rules.  Notably, the regulator expects the administrator to “establish and document its own view or understanding on what is meant by ESG factors” and “consider whether or not it will incorporate ESG factors and document the basis for its decision.”  The regulator expects such documentation to appear in meeting minutes or in an “internal memorandum”.

SIPPs for defined contribution (“DC”) registered pension plans will have to contain a significant amount of new information.  The Ontario regulator released a separate draft “Investment Guidance Note” (here) for “Member Directed Defined Contribution Plans”.  It lists eight categories of information that should be included in SIPPs for DC plans, including the requirement to disclose how investments are selected, communicated and monitored.  Most interesting is the proposed requirement that the SIPP specify “the frequency and type of reporting” that the administrator will require from the plan’s service providers.  The regulator provides an example:  the SIPP may have a statement that quarterly reporting will be provided by the record keeper on fund performance, fund allocation, web-site usage, and other service-level statistics.  This level of disclosure regarding monitoring of service providers should cause administrators to take a fresh look at how they govern their DC plans.

The Ontario pension regulator has invited public submissions on both of its draft Investment Guidance Notes.  All feedback will be made public.  Click here for information about how to comment on the drafts.

Ontario pension plan sponsors: it’s time to look at your SIPPs