An Agreement In Principle: Canada Pension Plan Expansion

Benjamin Aberant

Click here to view the post from our Ontario colleagues on the recent agreement in principle between 8 of the 10 provincial finance ministers and the federal finance minister to expand the Canada Pension Plan.  The post includes steps that Alberta employers could take to anticipate the expected changes.


At Least A Few Days After And Never At The Termination Meeting

Benjamin AberantShana Wolch

A recent case out of British Columbia provides a timely reminder of a best practice for Alberta employers. In Saliken v Alpine Aerotech Limited Partnership, 2016 BCSC 832, a relatively short service employee was dismissed, allegedly for just cause.

On the termination date the employee was told that he was fired and called to an office. He was then presented with the termination documents, which included a release, and pressured to sign that day.  He signed after about 15 minutes.  The Court found that while the employee “read” the termination documents, he did not understand them.  Further, it was found that the employee could not have understood the consequences of the release.  The Court stated:

…The atmosphere during the termination meeting was tense and awkward. The plaintiff was in shock he was being terminated…To hold the plaintiff to the termination documents in the circumstances would be unconscionable. Neither Mr. Pink nor Mr. Davis explained any of the termination documents to the plaintiff…It was a grossly unfair and improvident transaction. The plaintiff received no legal or other suitable advice. Ultimately, the circumstances and resulting stress of the termination resulted in an imbalance in bargaining power and the defendant knowingly took advantage of the plaintiff’s vulnerability to its advantage…The offer contained in the termination documents was presented in a way that was directed to getting the plaintiff to accept, and in a manner set to take advantage of the plaintiff’s vulnerability.

This case is a good reminder of a classic lesson: never let an employee sign the release at the termination meeting.  Never ever.  While it can be tempting, just don’t do it.  An employer could be dealing with an employee who is eager to sign a very generous package.  Perhaps the employee knows that he/she will find new work soon, making the package even more generous.  The employee may also be sophisticated and make comments that quite obviously show that he/she understands the situation and the fact that he/she will be releasing all of his/her legal rights.

Don’t be tempted. Our usual advice is to give the employee between 1-2 weeks to consider the severance package and, barring exceptional circumstances, not accept the returned release for at least a few days after the termination meeting.  While the above case had some exceptional facts, it shows that accepting it earlier creates a risk that it could be challenged on the basis of unconscionability.  This scenario may leave you in a costly legal fight that could have been avoided with a little more patience and good practice.

Yes Your Employees May Be Legally Entitled To Time Off Work To Watch Their Kids, Even If They Give You No Advance Notice

Benjamin AberantShana Wolch

We recently came across this new Ontario human rights decision in the course of advising an Alberta employer on an employee child care issue. There are relatively few Alberta decisions that speak to this issue, so Alberta employers often have to look for guidance from the Ontario, British Columbia, and Federal tribunals and courts, when trying to navigate this difficult area of law.

In Miraka v A.C.D. Wholesale Meats Ltd., a wholesale meat distributor made the poor choice of terminating a delivery truck driver’s employment after he missed 3 consecutive days of work.  2 of those days were missed because he had to take care of his two children after his wife, who normally watched them, became sick.  The Tribunal determined that the termination was unlawful and discriminatory.

It stated that “[i]n Canada (Attorney General) v. Johnstone, 2014 FCA 110 (CanLII), the Federal Court of Appeal clarified that the sorts of parental obligations that fall within the protected ground of “family status” under human rights legislation are substantive obligations that engage a parent’s legal responsibility to a child”.

Dealing with the employer’s argument that the Johnstone decision meant that the employee was obligated to arrange alternate child care , the Tribunal stated that it was “not convinced that the requirement to demonstrate reasonable efforts to make alternative childcare arrangements applies in cases like this, where there is only an infrequent, sporadic or unexpected need to miss work to take care of one’s children…Rather, what comes into play in cases like this one is the overarching principle that a “bona fide childcare problem” has resulted in an employee being unable to meet his or her work obligations….this is a highly fact-specific inquiry, and each case must be reviewed on an individual basis in regard to all of the circumstances.”

The Tribunal also did not accept the employer’s argument that the employee was obliged to try to hire, on short notice, a stranger from “Craigslist” or “Kijiji” to care for his young children, before the employee would fall within the Human Rights Code’s protections. It found that doing so may have been inconsistent with the employee’s legal obligations to ensure the safety and well-being of his children.

Alberta employers should keep this decision in mind when responding to an employee’s last minute request or demand for time off work to deal with childcare obligations, and even other family needs. Arguably, and if the right facts exist, employees could be protected under the Alberta Human Rights Act even if they have made no efforts to seek out alternate child care.  The result is that they could be entitled to the short period of time off, in most cases despite the negative impact that their absence will have on the employer’s operations.

More Bad News For Fixed Term Contracts

Benjamin AberantShana Wolch

A few months ago we commented on a case where a fixed term contract caused an employer significant liability because it did not allow for early termination prior to the end of the fixed term.  The Ontario Court of Appeal recently released a decision, Howard v. Benson Group Inc. (“Howard”), which provides a further warning about the use of fixed term contracts.

In Howard, the employer used a 5 year fixed term contract and terminated the employee, without cause, 23 months into the fixed term. The employment agreement contained the following clause that the employer sought to rely on: “Employment may be terminated at any time by the Employer and any amounts paid to the Employee shall be in accordance with the Employment Standards Act of Ontario.”

This clause was found to be ambiguous and unenforceable, meaning that the employee was entitled to the value of the entire fixed term. Interestingly, the Court of Appeal overruled the Trial Judge and also found that the employee was not obligated to search for new work or otherwise mitigate his damages, stating that “[i]n the absence of an enforceable contractual provision stipulating a fixed term of notice, or any other provision to the contrary, a fixed term employment contract obligates an employer to pay an employee to the end of the term, and that obligation will not be subject to mitigation.”

This case is a good reminder for Alberta employers about the use of fixed term contracts (also see Michela v. St. Thomas of Villanova Catholic School 2015 ONCA 801 where the teachers on fixed term contracts were awarded 12 months’ reasonable notice). They may sometimes be preferred over indefinite term contracts in certain situations, for example where an employee is hired for a short and definite time period or to complete a specific project.  Likewise, they can be used effectively, but it is crucial that they contain a properly drafted clause that allows for early termination on a without cause basis.  Without this clause, the employer can expect to be on the hook for the entire remainder of the contract, possibly with no duty for the employee to mitigate his or her damages.

How Much Should Big Brother Monitor (And Other BYOD Considerations)

Benjamin AberantShana Wolch

Given the popularity and prevalence of mobile devices such as smart phones and tablets in today’s world, it is no surprise that Bring Your Own Device (“BYOD”) programs have become an increasingly common arrangement for organizations. BYOD programs allow employees to use their own mobile devices for both personal and business purposes, blurring the traditional line between work and play. A recent report indicates that more than 75% of Canadian businesses support employee-purchased smartphones and tablets in the workplace.

Properly implemented BYOD programs are appealing to organizations for many reasons. First, they allow them to save substantially on equipment costs because the phones are purchased and owned by the employees. Second, they allow the organization to stay in touch with the employees at almost all times, because the employees are generally carrying the device with them even after work. Third, employees may well like the arrangement as it is much more convenient to carry one device than two (a personal device and a business one). Therefore, the program can result in lower cost, higher productivity and greater employee satisfaction, a win-win situation for both the organization and employees – you would think.

While BYOD programs may seem attractive to organizations, there are significant privacy, security and even overtime risks involved that must be carefully considered, such as:

  • With employees bringing in different devices, controlling the access and capabilities of such devices or ensuring the devices have adequate protection against malicious activities can be difficult.
  • Too much monitoring can infringe on employee privacy but not having sufficient monitoring to ensure organizational information is secure can have dire consequences.
  • Organizations often have confidential company information on their systems such as information on new products, new ventures and new initiatives. Any security risk leading to leakage of such information may severely compromise the competitive advantage of the organization.
  • Organizational systems may also contain private personal information of clients, which organizations are obligated to keep confidential. Having such information divulged to outsiders even if unintentionally, can result in personal information protection or privacy related lawsuits.
  • Finally, with employees being available 24/7, they might decide to try to claim overtime for the time that they are allegedly working outside of the workplace. The cost-savings of BYOD might not be so cheap after all. As such, any introduction of such BYOD programs must be properly managed, with due consideration given to both the cost-benefits and potential risks involved.

From a privacy perspective, the Federal, Alberta and British Columbia privacy commissioners have compiled a set of guidelines to address the privacy and security risks for organizations considering a BYOD arrangement, a full copy of which can be found here. The following highlights some of the key points of the new guidelines on BYOD:

1.               Privacy Impact Assessment (“PIA”) and Threat Risk Assessment (“TRA”)

As different organizations have different types and volumes of sensitive or private information, PIA is needed to identify risks related to the collection, use, storage, retention, and disclosure of such information, while TRA addresses the specific organizational risks involved in adopting a BYOD program. Such assessments help to determine if and how the program should be implemented.

2.               Developing and Implementing a BYOD Policy

A specific BYOD policy should be developed, addressing issues such as user responsibilities, acceptable company monitoring practices, application management, security requirements and access requests, as well as necessary restrictions regarding which devices, systems and storage services are authorized, who can be on the program and what information can be accessed through it. The policy must be clearly communicated in order for it to be understood and enforced. Proper training to employees on managing various types of risks can also aid in the implementation of a good BYOD policy.

3.               Mitigating organizational risks

Organizational information should be stored in a centralized location within the organization and not on individual personal devices. Specific software, such as MDM software, can be installed to manage connections of the device to the organizational server. An agreement on the device administration responsibilities should be signed by both the employee and the organization. Another way of reducing risk is containerization, which involves creating two compartments on the device, one for personal purposes and one for business purposes. Containerization enables the organization to effectively manage the business compartment.

4.               Addressing software vulnerabilities

Encryptions and patch updates can prevent malicious cyber activities that can adversely affect the organization. Responsibilities must be clearly established in the policy and agreed to by the BYOD users. A list of approved apps should also be developed, with an accompanying policy and procedure for their installation and management, to prevent misconfigured or improper apps from being used. Effective authentication can be implemented at the device, container and/or user levels.

5.               Incident Management

A clear incident management process should be available so that when something goes wrong, immediate remedial actions can be taken to protect organizational information, such as remote removal of information or information access on the device. To do so effectively, a good inventory management system maintaining the current authorized devices and apps is essential.

Implications for businesses

Organizations need to be cognizant of information security when using BYOD programs, not only because of potential financial and reputation losses due to leakages of sensitive company information, but also because they have the legal responsibility to keep personal information confidential. BYOD is not for all organizations as it depends on the risks involved as well as the cost implications. Technology is forever changing and BYOD policies and procedures need to keep up with latest developments. Effective development and management of BYOD programs requires devoted resources and ongoing commitment at all levels of an organization. An appropriate balance needs to be struck to ensure that measures to protect organizational information are not unnecessarily infringing on employee privacy or excessively compromising usability.

In developing any BYOD policies, organizations ought to pay particular attention to this set of guidelines by the privacy commissioners. When there are privacy complaints or litigation related to the BYOD programs, these guidelines may be used to determine if proper measures have been adopted by the organization to avoid security risks and privacy breaches.

If you have any questions please contact Ben Aberant or Shana Wolch.

My Former Employee Left Behind Some Personal Property. What Can I Do With It?

Benjamin AberantShana Wolch

Employees occasionally leave behind personal property following termination of employment. Whether it is discovered immediately or long after the employee has departed, many Alberta employers would be surprised to learn that they have certain obligations to that former employee with respect to the treatment of the personal property.

The Unclaimed Personal Property and Vested Property Act (the “Act”) applies to Alberta employers with respect to most tangible and intangible personal property worth more than $1,000.00 or $250.00, respectively.  Intangible property is defined in the Act as any interest held, issued or owing by a business, government or government institution, and includes items such as money, cheques, securities, dividends and bonds.  Tangible property is defined in the Act as anything that is not intangible property.  Generally, however, tangible property is physical property such as an employee’s personal belongings, equipment or tools.

If an employee leaves behind property meeting the definitions found in the Act, employers must store the property for 5 years, notify the individual in a prescribed form and at a prescribed time, and then, if it remains unclaimed, deliver that property to the Minister of Finance. The employer also has to retain all records relating to the property for a period of 10 years following delivery.

If the total of the unclaimed tangible property left behind is worth less than $1,000.00, then the common law will likely apply. Under those circumstances, an employer is typically required to retain the property for a reasonable period of time before it is deemed to have been abandoned by its owner, and could then be sold or otherwise disposed.  In such circumstances, should an owner object and bring an action to recover its converted property, the court would consider four factors: the passage of time, the nature of the transaction, the owner’s conduct, and the nature and value of the property.

We recommend that Alberta employers implement a written policy to deal with employees’ personal property to restrict the instances of personal property being left at work, to ensure compliance with all requirements under the Act and the common law, and to ensure that the chain of documentation regarding property left with the employer is complete and accurate. In particular, such a policy could:

  • Restrict employees from bringing unnecessary personal property to work, particularly high value property;
  • Require employees to obtain permission prior to bringing higher valued personal property valued to work;
  • Require employees to take all personal property with them following termination of employment. Implement a supervision, checklist or packing process to ensure property is removed on departure;
  • Identify when property valued at less than $1,000.00 and not governed by other applicable legislation will be deemed abandoned;
  • Notify employees that the employer may impose a charge for any costs associated with storage or valuation of personal property left behind, for the cost of providing notice, and any for costs associated with the payment, transfer or delivery of personal property to the Ministry if required under the Act;
  • Implement a regime for contacting a former employee regarding his/her property and properly documenting all attempts and any successful contact. Efforts should commence immediately and be documented (time/date/method/who). Sending a recorded letter may provide additional proof of both best efforts on the part of the employer, and that the former employee has been receiving the information about his/her property, and
  • Provide a methodology for properly documenting the chain of custody of the personal property (including where it is being stored and any expenses that are being incurred for storage).

If you have any questions please contact Ben Aberant or Shana Wolch.

This Employer’s Case Had 99 Problems – Proving Cause Was One

Benjamin AberantShana Wolch

A recent case out of Calgary, Karmel v. Calgary Jewish Academy (2015 ABQB 731), presents some valuable lessons for Alberta employers. This case involves a wrongful dismissal lawsuit by a terminated School Principal, Mr. Karmel, who was alleged to have been disobedient.  Ultimately, the Court found that the School did not meet its burden in proving just cause and that it pursued “a strategy of papering a path to Mr. Karmel’s termination in such a way as to spare the CJA from paying the balance of Mr. Karmel’s salary under the remaining term of his contact. This was a wrongful dismissal carried out in bad faith”.  Mr. Karmel had a 5 year fixed term contract (without an early exit clause), which meant that he was entitled to the value of the remainder of his contract.

While the facts are interesting, they are not particularly novel – there are many cases where employers have angered judges by alleging cause and then failing to prove it. What is more interesting is paragraphs 89-103 of the decision where the Court also awarded Mr. Karmel $200,000 in “aggravated damages” despite the fact that it appears that he did not present any evidence (other than his own testimony) that he actually suffered mental distress.  Obviously the Court was highly displeased with the Employer’s behavior and felt it acted in bad faith.  It cited 3 well known Supreme Court of Canada cases (Wallace v. United, Keays v. Honda, and Bhasin v. Hrynew) as authorities for the aggravated damage award.

We understand that this case is being appealed and think that it is the perfect case for the Alberta Court of Appeal to clarify the law in this area and answer the following questions:

  1. Was the Wallace v. United analysis replaced by Keays v. Honda? We had always thought so but this case casts doubt on that view.
  2. Given Keays v. Honda, should an employee be awarded a significant damage award when they do not present any objective medical evidence that they have actually suffered mental distress?
  3. How do Bhasin v. Hrynew and Keays v. Honda work together? If an employer acts in bad faith, is an employee (because of the Bhasin v. Hrynew analysis), no longer required to prove mental distress to receive a significant aggravated damages award?  This would seem to take us back to the Wallace era.

We will monitor the outcome of the appeal. For now, this case reaffirms 2 age old lessons that Alberta employers should remember: Don’t allege cause unless you can prove it.  And remember that, barring exceptional cases, you won’t prove it.  Also don’t hire an employee on a 5 year fixed term contract without an early exit clause!

If you have any questions about this or related topics, please contact Ben Aberant or Shana Wolch

Keep It To Yourself: Ontario Court Introduces Tort of Public Disclosure in Doe v D, 2016 ONSC 541

Roland Hung

The Ontario Superior Court of Justice in Doe v D (“Doe”) recently introduced the tort of “public disclosure of private facts”, expanding the scope of privacy protection in Canadian common law.[1]  In this case, the Plaintiff brought an action against the Defendant, her ex-boyfriend, for posting a private video of her onto a pornography website.  Importantly, the Court found that the Plaintiff established a cause of action for the invasion of privacy by way of a new tort: the tort of public disclosure of private facts.  The elements of the tort of public disclosure of private facts are as follows:

One who gives publicity to a matter concerning the private life of another is subject to liability to the other for invasion of the other’s privacy, if the matter publicized or the act of the publication

(a) would be highly offensive to a reasonable person, and

(b) is not of legitimate concern to the public.[2]

The Plaintiff was awarded damages in the amount of $100,000, and was granted injunctive relief.

This case creates a novel tort that is especially likely to arise in the employment context. For instance, it is foreseeable that embarrassing facts relating to employers, clients, or colleagues, could be publicly disclosed by employees in a way that would meet the elements of this tort.  Further, employers could be held vicariously liable for offensive disclosure by their employees.  As such, Alberta employers may want to consider taking steps to mitigate against such privacy claims, such as:

  1. Preparing confidentiality agreements respecting sensitive information in the workplace;
  2. Limiting sensitive corporate information to authorized personnel only; and
  3. Developing and implementing “best use” practices for online platforms, particularly social media.

If you have any questions about this or related topics, please contact Roland Hung.

[1]      Doe v D, 2016 ONSC 541 (“Doe”).

[2]      Doe, supra note 1 at paras 41 & 46.

A Brave New World? – Probably Not But Employers Sometimes Have To Deal With 26 Months’ Notice and “Dependant Contractors”

Benjamin AberantShana Wolch

The Ontario Court of Appeal has further shattered the “24 month maximum” myth.  In Keenan v. Canac Kitchens Ltd., the Court of Appeal upheld a Trial Judge’s finding that two long service workers were “dependent contractors” and therefore entitled to 26 months’ reasonable notice on termination.

We do not think that this appeal decision is particularly ground-breaking. While unusual, it is not the first time that a Court has awarded more than 24 months’ notice (we are aware of at least one case where a court awarded 30 months).  Also, dependant contractors have long been a recognized category of worker.  However, the decision does provide Alberta employers with some valuable reminders:

  • Before engaging a worker as an “independent contractor”, consider that the label that the parties agree to and put on the relationship will most likely be irrelevant to a Court’s view of whether the worker is an employee or contractor. Most contactor agreements contain a clause stating something like “the parties agree that [NAME] is an independent contractor and not an employee”.  That clause is of no value to an employer when trying to defeat the worker’s wrongful dismissal lawsuit.
  • A court will look at the true nature of the relationship. As shown by the Trial Judge in Canac, this means examining a series of factors including: “exclusivity, control, investment, risks, expectation of profit and, whose business is it?”  Even after these factors are analysed and an employer believes that it is appropriate to treat a worker as an independent contractor, that employer really has no comfort that when the relationship ends the worker will not claim that he or she is an employee and sue for wrongful dismissal.
  • In our experience, it is usually the worker that wants to be treated as an independent contractor, mostly likely because of the tax advantages. Employers should make this decision carefully and after a thoughtful analysis.  It often provides the employer with no advantages.  Most employers are already set up to make employment related deductions and pay statutory entitlements such as vacation pay so there may be little advantage to the employer – especially if the intention is to retain the worker for the long term.
  • Certainly, there are many times when it is very appropriate to treat a worker as an independent contractor.  In cases that appear to be on the line, employers may want to treat the worker as an employee.  If an employer is concerned about possible severance obligations (that independent contractors are not entitled to), it has the option of (a) hiring the employee with a written employment agreement that limits the employee to the statutory minimum pay in lieu of notice, or (b) hiring the employee on a short fixed term contract.  Both of these options may be increasingly appropriate in today’s economy where there may be no need for those specific services indefinitely or a few months down the road.