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For Employers

Can I Terminate an Employee Who is Off Sick With the Flu?

Is influenza a disability under the Human Rights Code?
The answer may surprise you.

Ahhh, flu season.  That most charming time of the year, full of runny noses, stuffed sinuses, headaches, pain and soreness, often resulting in significant employee absence.

As an employer, flu season is often the source of great frustration.  You often need to juggle work schedules on short notice, requiring others step up and fill the vacancies, and just when it seems like you might be out from under the worst of it, another wave of flu and absences hits. In rare instances, this frustration can boil over and employers may even dismiss an ill employee.

You might think that dismissal of an ill employee would be considered discrimination and, consequently, that the Human Rights Code would into play. Section 13 of the Human Rights Code prohibits discrimination in employment on several grounds including physical or mental disability. Over the years, disability under the Human Rights Code and other similar pieces of legislation has been interpreted to include many ailments and conditions including depression, alcoholism, migraine headaches, kleptomania, drug addiction, obesity, and there is even one case where smoking was considered a disability.

So of course the flu would be considered a disability too, right?

Surprisingly, the answer is generally no.

There are numerous decisions where influenza has been held not to be a disability for the purposes of the Human rights Code. For example, in the case of Chang v. B.C. (Ministry of Small Business and Revenue) (No. 2), 2007 BCHRT 148 wherein the complainant alleged that she was discriminated against, in part, because she was suffering from influenza.

The Tribunal considered whether influenza constitutes a physical disability. In coming to a decision, the Tribunal considered the law with respect to a physical disability under the Human Rights Code and found that a physical disability must meet the following definition:

The concept of physical disability, for human rights purposes, generally indicates a physiological state that is involuntary, has some degree of permanence, and impairs the person’s ability, in some measure, to carry out the normal functions of life.

In the Chang case, the Tribunal concluded that that the flu did not meet the above definition, and was not a disability under the Human Rights Code.

In another case, O’Brien v. Phoenix Restorations and others (No. 2), 2009 BCHRT 203, the Tribunal held that flu generally does not have enough permanence to be considered a disability under the Human Rights Code.

To the surprise of many, the Human Rights Code only prohibits some types of discrimination, not all types of discrimination as illustrated by the above cases.

So does this mean that if you dismiss an employee as a result of absence related to the flu, you are within your rights and the employee is left without recourse?

The short answer is, again, no.

In most circumstances, termination of employment related to an employee’s flu or cold is in not termination for just cause, which means that an employee in such a scenario can pursue a claim for severance or pay in lieu of notice.

Do you have issues with an employee that is ill or away? Before taking steps that could lead to expensive consequences, and which you may later regret, you should seek legal advice. Contact us today for a consultation concerning your employee.

Computer Based Hiring and its Impact on Employers and Employment Law in BC

Why technology in the hiring process can help employers reduce their expenses at both the beginning and end of employment.

Last month, NPR published an interesting story that caught my attention – the story was about the increased use of computerized hiring practices around the world.

While it is by no means the norm, increasingly, employers are using computer software to decide who they hire. I thought it would be interesting to explore the impact this will have on employment law.

With a computerized hiring process, employers use computers to generate questions to gauge whether a potential employee is likely to be a successful additional to the business. Employers, and thus the computers and software they use, know whether an employee is more likely to be successful based upon particular characteristics of current and past employees who have been successful within their organization. By hiring employees with these same characteristics, employers are better able to successfully place employees and, in turn, reduce their turnover rate and the related training costs.

Although a system as described above does not guarantee that every hire will work out, it does increase the likelihood that an employee will be a good fit within the organization.

This trend is likely to have a far reaching impact on employment law, especially as the technology develops and becomes more common place.

The first impact that this trend is likely to have on employment law is that its use may reduce bias in the hiring process.  Not only does software-based hiring process have the potential to chip away at the age-old notion of it’s not what you know, but who you know, it also has the potential to reduce the number of human rights complaints (allegations of discrimination based on age, sex, race, sexual orientation, among others) related to hiring practices.

Secondly, as computerized hiring becomes more common and as the software and process is tweaked and fine-tuned, it is likely that more employees will be placed in positions that suit them. While this will by no means eliminate wrongful dismissals from occurring, such hiring could potentially reduce the number of wrongful dismissal claims as employees are more likely to be suitable for and successful in their positions.

Lastly, as software is used more frequently in the hiring process, it is more likely that such software will remind, or even require, employers to sign written employment contracts with their employees. This means more certainty for all parties involved, and it also means that employers can reduce their expenses upon terminating an employee (See my earlier post on severance entitlements when employees are let go).

In all likelihood, it means that there will be fewer employment disputes upon an employee’s employment coming to an end.

In the coming years, it will be interesting to see how this emerging technology and process affects employment law. Overall, it stands to benefit employers.

Should you have questions regarding a hiring process, severance, employment contracts or other employment law related matters, please contact us today.

Suing an Employee for Damages

My employee has made a costly mistake.
Can I sue for damages?

You may think that an employment contract is like any other contract: if one party breaches that contract, they are liable to compensate the other party for the breach. That is not necessarily the case with employment contracts, however. Employers may be surprised to learn that the answer to the above question is most often “no”.

Take for example the case of Kirby v. Amalgamated Income Limited Partnership, 2009 BCSC 1044. In that case, the Court considered whether an employer could sue an employee and claim compensation from the employee. The court concluded that mere error, incompetence or negligence was not enough to entitle an employer to claim compensation from an employee.

In the case of Douglas v. Kinger, 2008 ONCA 452, The Ontario Court of Appeal suggested that an employee could be liable in situations where there is wilful misconduct on the part of an employee. Overall though, the case law suggests that for an employee to be liable to the employer, there must be a breach of a fundamental term of employment, specifically referred to as a “fundamental breach”.

What is a “fundamental breach”?

Numerous cases have considered the definition of fundamental breach. In Hunter Engineering Co. v. Syncrude Canada Ltd. [1989] 1 S.C.R. 426, the Supreme Court of Canada indicates that a fundamental breach occurs:

“Where the event resulting from the failure by one party to perform a primary obligation has the effect of depriving the other party of substantially the whole benefit which it was the intention of the parties that he should obtain from the contract”.

To break that down in the employment context, a fundamental breach requires the following:

(a)          an employee must fail to perform a primary obligation of their employment; and

(b)          this failure on the part of the employee must, in turn, substantially deprive the employer of the whole benefit that the employer was to obtain from the employee.

Based on the above, fundamental breaches will not be common.

Employers should note that the above does not apply with respect to claims against independent contractors. Independent contractors may very well be liable for breaches of contract whether they are fundamental or not.

The above is not to say that employees are not responsible for their actions. Certainly, employees are responsible for their actions, and ought to be held accountable. However, employees are held responsible in different ways, most often through discipline, which can be administered even where breaches are not fundamental in nature.  Discipline can include warning letters, suspension, or even termination of employment.

If you have issues with a problem employee, and wish to find a solution to the matter, please do not hesitate to contact us for a consultation today.

 

BC’s New Limitation Act – What Employers Should Know

BC’s Limitation Act is the piece of legislation that sets out the amount of time that parties have to start court proceedings pursuing their claim. The time one has to sue is called a “limitation period”.

The previous Limitation Act (the “Old Act”), provided for two, six and ten year limitation periods depending on the type of claim, with most employment related claims subject to the six year limitation period.

On June 1, 2013, a new Limitation Act (the “New Act”) came into effect in British Columbia. Under this New Act, most employment related claims are now subject to a two year limitation period.

The New Act’s limitation periods will apply to claims arising from acts or omissions that occur and are discovered on or after June 1, 2013.

The Old Act’s limitation periods will apply to claims arising from acts or omissions that occurred and were discovered prior to June 1, 2013.

So what does this mean for employers?

It means that if you have employees who may have potential claims against you, you need to be aware of when those claims arise.

If the employee’s claim arises on or after June 1, 2013, the employee generally has two years to sue you in relation to that claim. If the employee does not sue within two years, that employee may lose his or her claim.

That being said, there are certain provisions under the Limitation Act that may allow an employee more time to sue in some cases, such as those involving a disability or minors. It’s also possible that an employee and an employer could agree to a limitation period that is different from that set out in the Limitation Act.

As a basic example, if an employee is dismissed on June 1, 2013, then that employee would typically have two years from that date to pursue a wrongful dismissal claim. On the other hand, if an employee was dismissed from his or her job on March 1, 2013, then that employee normally has six years from that date to pursue your claim as the Old Act, which has a six year time-limit for most wrongful dismissal claims, continues to apply.

In the end, you should be aware of the time limits relating to any potential claim against you.

This is particularly important with respect to record keeping, as you will want to ensure that you retain records relating to a potential claim long enough to be able to use them in a potential claim.

Employers should also be aware that once a claim is commenced, an employee can wait up to a year before serving that court document on you. In the some cases, employees could start claims just before the expiry of the limitation period, and then wait a year to serve that claim on the employer.

Finally, it should be noted that the new Limitation Act does not extend the usual six-month time limit for filing a complaint with the Employment Standards Branch in British Columbia.

If you are interested in learning more about protecting your business from employee related claims, or for assistance on an active or anticipated claim against you, please contact us to schedule an appointment.

Partnership Agreements

Those who have an interest in a partnership should take note of Fasken Martineau DuMoulin LLP v. British Columbia (Human Rights Tribunal), 2012 BCCA 313, in which the British Columbia Court of Appeal considered a Human Rights Tribunal decision about whether partners are considered employees.

The case involved John Michael McCormick, who was a partner at the law firm of Fasken Martineau DuMoulin LLP. As a partner, Mr. McCormick had to sign a partnership agreement, which gave him an ownership interest in the firm, and entitled him to a share of the firm’s profits. Mr. McCormick turned 65 in March, 2010, and pursuant to a partnership agreement, was obligated to retire on January 31, 2011. Mr. McCormick wished to continue to work for Fasken Martineau, but the firm and Mr. McCormick were unable to come to an agreement that would allow him to continue to practice.  Mr. McCormick then filed a complaint with the Human Rights Tribunal claiming that he was discriminated against on the basis of age in his employment.

The Human Rights Tribunal found that it had jurisdiction and that Mr. McCormick was discriminated against in his employment.

Fasken Martineau sought a judicial review of this decision in the Supreme Court of British Columbia arguing that the Human Rights Tribunal did not have jurisdiction as Mr. McCormick was not an employee.  A judicial review is not the same as an appeal. A judicial review considers the procedural fairness and correctness of the decision Human Rights Tribunal. The judge ruled that the Human Rights Tribunal had jurisdiction to consider the matter and that Mr. McCormick was discriminated against in his employment.

Fasken Martineau appealed further to the British Columbia Court of Appeal. The Court of Appeal ruled that partners are not employees of a partnership in which the person is a partner. In making its decision, the Court of Appeal ruled that a person cannot be their own employee. As such, the Human Rights Tribunal was without jurisdiction to consider the matter.

The McCormick case concerned the Human Rights Code. It is important to note that it’s possible that for a person to be an employee for the purposes of one piece of legislation, but not for another. That being said, courts and tribunals often use similar tests when determining whether an individual is an employee for various pieces of legislation.

In practice, particularly in mid to larger sized partnerships, some partners take on a role that is much more similar to that of an employee than a partner. However, this decision means that the rights available to a partner (an owner of the business) versus the rights of a non-owning employee upon being forced or required to leave the business can be quite different. While employees may be able to make human rights complaints and claim severance, it appears that partners are left without such remedies.

To deal with such a scenario, individuals should take great care when entering into a partnership. It often makes sense for partners to have a partnership agreement to minimize uncertainty. Partners should review their partnership agreements in detail to make sure that they are completely satisfied with the terms as it may not be possible to change those terms later on.

Are you concerned about claims being advanced by a former partner? Or are you considering ousting a partner pursuant to a partnership agreement? If so, we encourage you to get legal advice regarding that matter. Contact us today for a consultation.

BC’s Family Day Holiday on February 11, 2013: Are you aware of your pay obligations?

B.C.’s newest statutory holiday, Family Day, falls on Monday, February 11, 2013, and will take place on the second Monday in February every year thereafter.

Family Day joins British Columbia’s nine other statutory holidays, which are:

  • New Year’s Day;
  • Good Friday;
  • Victoria Day;
  • Canada Day;
  • BC Day;
  • Labour Day;
  • Thanksgiving Day;
  • Remembrance Day; and
  • Christmas Day.

The Employment Standards Act sets out specific requirements for when employees are entitled to receive additional pay on statutory holidays, aptly named “statutory holiday pay”.


Determining eligibility for statutory holiday pay

For employees to be eligible for statutory holiday pay, they must have been employed for 30 calendar days before the statutory holiday and have worked or earned wages on at least 15 of the 30 days immediately before the statutory holiday. If your employees are covered by an averaging agreement or a variance at any time in the 30 days before the statutory holiday, then your employees will not have to meet the 15-day requirement.

For a unionized work environment, you should make reference to the collective agreement. Under the Employment Standards Act, a union and an employer may negotiate their own matters with respect to statutory holidays. If there is nothing in the collective agreement negotiated with respect to statutory holidays, then the standard statutory holiday requirements in the Employment Standards Act may apply as discussed in this post.

It should also be noted that statutory holiday pay may not apply to certain groups excluded by regulation. These include, but are not necessarily limited to, managers, agricultural workers, some commission salespersons, and high technology professionals.


Calculating statutory holiday pay

Statutory holiday pay is based on an “average day’s pay”.  An employee’s average day’s pay is calculated by dividing the employee’s “total wages” earned in the 30 calendar days before the statutory holiday by the number of days the employee worked.

You should note that vacation days taken during the 30 calendar days before the statutory holiday is considered as days worked.

“Total wages” includes wages, commissions, statutory holiday pay and vacation pay but does not include overtime pay.

Payment requirements

If an employee is ineligible for statutory holiday pay, then you may pay your employee for work on the statutory holiday as if it were a regular work day.

For an employee who is eligible for statutory holiday pay, your employee must be paid an average day’s pay if either they are given a day off on a statutory holiday, or if the statutory holiday falls on the employee’s regular day off.

If an employee is eligible for statutory holiday pay, and required to work on the statutory holiday, then you must pay your employee time-and-a-half for the first 12 hours worked and double-time for any work over 12 hours, PLUS an average day’s pay on top of that.

Substituted days

If a statutory holiday falls at an inconvenient time, or if you’d like to move the statutory holiday to a more convenient date, then you should be aware that under section 48 of the Employment Standards Act, an employer and an employee can agree to substitute another day off for a statutory holiday. You can also substitute another day off for a statutory holiday if the majority of your employees agree to it. In either case, the statutory holiday pay requirements apply in the same manner for the substituted day.

Should you have questions regarding your obligations or an employee’s complaint related to Family Day, or another Statutory Holiday, please do not hesitate to contact us.

Key employees who quit – what are your rights as an employer?

It is a common myth in British Columbia that employees can quit on just two weeks’ notice to their employer.

Many will be surprised to learn that two weeks’ notice is by no means the law with respect to resignation, and that the failure to provide one’s employer with adequate notice can actually result in the employee being subject to a lawsuit. While such lawsuits are a rarity, there are certainly instances when such as lawsuit is warranted.

Employees, particularly those who could be considered key employees, will, subject to the terms of an employment contract, have notice obligations to their employer before resigning. If a key employee resigns without giving you adequate notice, you may be able to sue the employee to recoup losses that you incur as a result of that key employee’s departure.

Who is a key employee? There is no clear cut answer, and it is often uncertain whether a particular employee is a key employee or not. The Ontario case of Laplante v. Hennessy-Craibe, 2011 ONSC 5601 recently defined a key employee as follows:

A key employee is one who generally is responsible for guiding the business affairs of the employer, is involved in the decision-making process or is someone having access to confidential information that if disclosed could impair competitive advantage that the employer enjoys.

In another case, Imperial Sheet Metal Ltd. v. Landry, [2007] N.B.J. No. 226, the New Brunswick Court of Appeal described a key employee as follows:

A “key” employee is: (1) an integral and indispensable component of the management team that is responsible for guiding the business affairs of the employer; (2) necessarily involved in the decision-making process; and (3), therefore, has broad access to confidential information that if disclosed would significantly impair the competitive advantages that the former employer enjoyed. 

That being said, it is not only key employees who will have notice obligations.

How much notice must an employee give before leaving? There are several factors that are taken into consideration in answering this question.  The most important factor seems to be how long would it take to hire and train a suitable replacement. Other factors include the duties of the employee, the nature of the workplace, and the industry in question. Employees who hold crucial or difficult-to-fill positions will be required to give additional notice to their employer.

Where there is an employment contract dealing with the employee’s notice requirements before resigning, the amount of notice required will generally be determined by reference to that contract.

It should be noted that the notice requirements discussed here do not apply in cases involving a constructive dismissal. A constructive dismissal takes place when the employer unilaterally changes a term of the employee’s so that the employee’s employment is effectively terminated. Notice requirements also do not apply to employees who are involuntarily told that they must resign.

As an employer, you should also be aware that you will also have a duty to mitigate your damages. In other words, you must make a reasonable and diligent effort to locate a suitable replacement employee. You cannot idly let your losses mount and then sue the employee.

The law regarding the notice obligations of employees was recently reiterated in the Ontario Court of Appeal decision of GasTOPS Ltd. v. Forsyth. In that case, four key employees had left their employer on just two weeks’ notice. The employer sued the employees, and the Court held that two weeks was not adequate notice. In that case, the Court ruled that the employees should have given their employer ten months of notice of their resignation as that is approximately how long it would have taken the employer to hire and train replacements for the resigning employees.

If you are dealing with the aftermath of the resignation of a key employee, you may have options available to you to recoup your losses. To learn more about those options, please don’t hesitate to contact us today.

Employee Termination and the Importance of Being Fair

Employers should take note of the recent jury decision in Higginson v. Babine Forest Products Ltd., which illustrates the importance of treating employees fairly when they are let go. It also demonstrates that long term employees can be entitled to very large rewards for their length of service.

In the Higginson case, a jury awarded an employee, Larry Higginson, about $800,000 in compensation from his former employer, Babine Forest Products Ltd. (“Babine”). Mr. Higginson had been employed by Babine for about 34 years, at which point he was “let go” from his employment. Babine alleged that there was cause for the dismissal, however Mr. Higginson argued at trial that Babine had made up the cause for dismissal in order to avoid paying Mr. Higginson the great amount of severance he had built up after 34 years of service. Mr. Higginson also argued that Babine had attempted to make his job miserable just before he was terminated to encourage him to quit. In its decision, the jury sided with Mr. Higginson and awarded him $236,000 in compensatory damages (damages for his losses, including severance), and $573,000 in punitive damages (damages to deter and punish).  This is the largest punitive damages award in an employment law case in Canada.

It should be noted that punitive damages in employment cases are definitely the exception rather than the rule. While a court must consider many factors in deciding whether or not to award punitive damages, punitive damages can be awarded against an employer where the employer’s conduct departs markedly from the “ordinary standards of decency—the exceptional case that that can be described as malicious, oppressive or high-handed and that offends the court’s sense of decency.

The Higginson case demonstrates the risks of treating an employee unfairly and unreasonably. When an employee is treated fairly, you minimize the risk that punitive damages will be ordered against you. You also avoid the embarrassment and legal fees that can be associated with a legal proceeding. Further, by being fair and reasonable with your employees, you can often limit what you pay the employee to only the severance that is owed.

Are you about to let an employee go? You should be aware of your obligations to act in good faith in terminating an employee. To seek advice about how to avoid a punitive damages award being made against you, please contact us today.

Notice and Severance Requirements when Dismissing or Firing an Employee

Are you about to let an employee go?

Are you certain that you understand your obligations with respect to notice, and severance pay in lieu of such notice?

Generally, when an employee is let go without just cause, the employer must provide either advanced working notice of the termination or pay in lieu of such notice. Pay is lieu of notice is also known as severance.  An employer has the option of providing the employee with a combination of advanced working notice and severance.

It should be noted that severance is normally spoken of in terms of time rather than dollar figures. This is because severance is actually pay in lieu of the notice, which otherwise would have been provided to the employee. When severance is calculated, it is based upon the amount of notice the employee should have received.

How much advanced working notice or severance is an employee entitled to?

In British Columbia, the Employment Standards Act sets out minimums for notice and pay in lieu of notice. It is important to emphasize that the Employment Standards Act only sets minimums. Frequently, the entitlement to advanced working notice or pay in lieu of notice is determined by precedent — that is, previous court decisions. Based upon the precedents set out by courts, employees are often entitled to advanced working notice or pay in lieu of such notice exceeding the minimum in the Employment Standards Act. The most useful precedent court cases are those dealing with employees similar to the employee in question.

In determining notice or severance entitlements, the Courts have considered four main factors:

  • character of the employment
  • employee’s length of service
  • employee’s age, and
  • availability of alternative employment.

Of these four, primary consideration has been given to the character of the employment and the employee’s length of service. Courts have tended to adjust the notice or severance entitlement up for employees that have a longer length of service, and for employee’s that had more responsibility in their employment. By looking at cases dealing with an employee similar to the one in question, there will typically be a range of severance awards that can be used to predict the severance entitlement for an employee.

Finally, and perhaps most importantly, notice and severance entitlements can be dealt with by way of an employment contract between the employee and the employer. Subject to limited exceptions, these clauses are often enforced by the courts providing they meet the minimums set out in the Employment Standards Act.

As mentioned, advanced working notice or paid in lieu of such notice must be given to an employee where an employee is dismissed for reasons other than just cause. If there is just cause for the dismissal of an employee, then the employee is not entitled to severance. And what is just cause for dismissal? Well, that is a very intricate and complicated question for later blog posts.

If you considering the dismissal of an employee, and need advice about your obligations, please don’t hesitate to contact us for a consultation. We can advise you about your rights and responsibilities and provide options for making your personnel transition go more smoothly.

 

 

Overtime: Are You Paying Enough?

Are you paying your employees all the overtime to which they are entitled?

As an employer, it is important that you are familiar with, and comply with, the overtime requirements set out in the Employment Standards Act.

Failure to comply with the Employment Standards Act can result in a complaint being filed against you, a substantive payout to a disgruntled employee, and perhaps even a fine for contravening the Employment Standards Act.

Overtime entitlements are applicable to the number of hours worked in a day or the number of hours worked in a week:

Daily Overtime

Overtime calculated on a daily basis is not payable on the first eight hours your employee works in a day. Once your employee has worked eight hours in a day, you must pay that employee time-and-a-half for up to the next four hours he or she works. Once your employee has worked 12 hours in a day, you are obligated to pay that employee double time. This applies even if your employee has worked less than 40 hours in a week.

Weekly Overtime

Once an employee has worked more than 40 hours per week, he or she is entitled to overtime pay at time-and-a-half. This is true even if your employee has not worked more than 8 hours on any given day. So if your employee worked seven hours a day for six days during a week, then your employee would have worked 42 hours during the week. Your employee would then be entitled to two hours of overtime, paid at time-and-a-half.

It is important to note that you cannot contract out of the overtime provisions of the Employment Standards Act. Rather than paying straight overtime, there are a number of alternative options that employees and employers can agree upon.

Employees and employers can, for example, agree to enter into an averaging agreement where the employees’ hours per week are averaged out over a period up to four weeks. You should note, however, that the requirements for averaging agreements are quite strict.

Alternatively, at an employee’s request, a time bank be established. With a time bank, overtime hours are credited to the time bank instead of being paid to the employee for the pay period where the overtime takes place. An employee can then use this time bank to take paid time off. When the time bank is closed, then the outstanding balance in the time bank must be paid to the employee.

The overtime provisions in the Employment Standards Act apply to most employees, but some employees, such as managers, may be excluded.

To determine whether the overtime provisions of the Employment Standards Act apply to you and your employees, we welcome you to contact us for a consultation.

This blog is produced by Waterstone Law Group LLP. This blog is intended for information purposes only and is not offered as legal advice for a specific claim. Subscription to or use of this site does not establish a solicitor – client relationship between the user and Waterstone Law Group LLP or any of the individual contributors. For advice relating to your employment law claim, please contact us to arrange for a consultation.