labour and employment law conference 2009

Labour and Employment Law Conference 2009

Friday, March 6, 2009 Four Seasons Hotel Vancouver, British Columbia

Table of Contents Labour and Employment Law Conference 2009

Friday, March 6, 2009

TAB 1. Agenda

TAB 2. Biographies

Paul A. Boniferro Jordanna Cytrynbaum Tina Giesbrecht Christopher McHardy Tara McPhail Earl G. Phillips Donovan Plomp Rachel Ravary Erika Ringseis Nancy Trott Brian Wasyliw

TAB 3. Brochures Labour and Employment Immigration Information for Employers

TAB 4. BC Labour and Employment Update Earl Phillips and Christopher McHardy

TAB 5. The Highest Word on Human Rights Rachel Ravary, Brian Wasyliw and Tara McPhail

TAB 6. Supreme Guidance for Employers Jordanna Cytrynbaum, Donovan Plomp and Erika Ringseis

TAB 7. Technology and L&E Law Christopher McHardy and Tina Giesbrecht

TAB 8. HR in Hard Times Earl Phillips and Paul Boniferro

Table of Contents

TAB 9. Collective Bargaining in BC Earl Phillips and Paul Boniferro

TAB 10. Workplace Investigations Tina Giesbrecht, Donovan Plomp and Brian Wasyliw

TAB 11. Managing Medical Absences Christopher McHardy, Jordanna Cytrynbaum and Tara McPhail

TAB 12. Privacy Law – Five-Year Update Nancy Trott, Erika Ringseis and Rachel Ravary

TAB 13. Notes

Agenda

8:15 a.m. Continental Breakfast & Registration

8:45 a.m. Welcome, and Opening Remarks Paul Boniferro

9:00 – 12:15 p.m. PLENARY SESSIONS

9:00 a.m. BC Labour and Employment Update Earl Phillips and Christopher McHardy Quick hits on all the important and interesting cases and trends affecting human rights, employment and labour law in British Columbia.

9:45 a.m. The Highest Word on Human Rights Rachel Ravary, Brian Wasyliw and Tara McPhail Hear the latest word from the Supreme Court on human rights. Learn how Canada’s highest court has placed limits on the duty to accommodate and what this means for your organization.

10:15 a.m. Break

10:35 a.m. Supreme Guidance for Employers Jordanna Cytrynbaum, Donovan Plomp and Erika Ringseis What employers need to know about recent key employment law decisions from the Supreme Court of Canada, including Wallace damages, termination and mitigation, post-employment

competition and restrictive covenants.

11:10 a.m. Technology and L&E Law Christopher McHardy and Tina Giesbrecht Technology: the Wonder, the Terror! Your employees are using all the latest technologies. It is not always productive, and it can be downright dangerous. Learn how to balance employee rights of privacy and free speech with management’s rights to a productive and secure workplace.

11:45 a.m. HR in Hard Times Earl Phillips and Paul Boniferro Despite the legal requirements and obstacles, there are things employers can do to reduce labour costs while preparing for the better times to come.

12:15 p.m. Break for Lunch

12:30 p.m. Lunch and You be the Judge!

2:00 – 3:00 p.m. WORKSHOPS – see next page

3:15 p.m. Reception and Prize Draw Join us for refreshments and a draw for some great prizes.

Workshops

Workshop A

Collective Bargaining in BC Earl Phillips and Paul Boniferro

Reviewing the rules; planning for the best, preparing for the worst; and reviewing the latest trends and strategies.

Workshop B

Workplace Investigations Tina Giesbrecht, Donovan Plomp, Brian Wasyliw

Hell hath no fury like … an employee wronged. Learn how to stride confidently through the minefield of a workplace investigation and deal with the employment, human rights and privacy issues that will arise.

Workshop C

Managing Medical Absences Christopher McHardy, Jordanna Cytrynbaum, Tara McPhail

Learn the tips and techniques of managing medical absences from beginning to end: the gathering of medical information, accommodation and possible termination.

Workshop D

Privacy Law – Five-Year Update Nancy Trott, Erika Ringseis, Rachel Ravary

Privacy law has evolved rapidly in the past five years across Canada. We will work through key privacy law issues that employers face daily, such as gathering information for recruiting, surveillance, security, and discipline, as well as consider the challenges posed by the internet and e-mail.

Lawyer ProfilePAUL A. BONIFERRO

Biography

Paul Boniferro is a partner and the National Practice Group Leader of our Labour and Employment Group practicing in Calgary and Toronto. Paul is a past member of McCarthy Tétrault’s Board of Partners. Mr. Boniferro uses his unique combination of experience gained in the private and government/political sectors to advise clients on a wide spectrum of employment issues, including terminations, wrongful dismissals, grievance arbitration, collective agreement negotiations, human rights complaints, government relations, occupational health and safety issues and WSIB claims.

His advice has been sought by governments of all stripes to provide assistance in developing policy and legislation in labour and employment law. Mr. Boniferro is a bi-annual presenter to the Retail Roundtable Compensation Survey Group where he updates all major Canadian Retailers on developments in the area of Labour and Employment Law. He negotiates with trade unions in the retail sector on behalf of major shopping center managers.

Prior to joining McCarthy Tétrault, Mr. Boniferro was a Senior Policy Advisor to the Ontario Minister of Labour during one of the province’s most significant periods of labour relations reform, where he advised the government on changes to the Labour Relations Act, the Workers’ Compensation Act, the Employment Standards Act and the Pay Equity Act. Since joining McCarthy Tétrault in 1996, he has been retained by the government on a number of occasions to provide advice on labour relations and employment issues. In 2004, Mr. Boniferro was appointed to the Minister of Labour’s Employment Standards Action Group, and prior to that, was appointed by the Premier of Ontario to act as Special Negotiator with Québec on construction labour mobility.

He represents a wide number of private sector employers, both unionized and non-unionized, including those in manufacturing, energy, property management services, steel and hospitality.

Mr. Boniferro appears in the 2003 Canadian Legal Lexpert Directory, a guide to the leading lawyers in the area of labour and was selected as one of Lexpert’s Top 40 Under 40 in September 2003. A much-requested presenter at labour and employment conferences, he is also an instructor for the Human Resources Professionals Association of

TITLEPartner

OFFICECalgary

LAW SCHOOLOsgoode Hall Law School, LLB, 1991

DIRECT LINE403-260-3735

BAR ADMISSIONSOntario, 1993Alberta, 2007

[email protected]

McCarthy Tétrault LLP

Lawyer ProfilePAUL A. BONIFERRO

Page 2

Lawyer Profile

Ontario (HRPAO) and is the past-chair of the HRPAO Government Affairs Committee. He is also a member of the Human Resources Association of Calgary (HRAC) and the Canadian and Calgary Bar Association, Labour and Employment Subsection.

Mr. Boniferro received his BA (Political Science) from the University of Western Ontario in 1987 and his LLB from Osgoode Hall Law School in 1991. He was called to the Ontario bar in 1993. Mr. Boniferro has also studied in the MBA program at Lake Superior State University in Michigan.


Lawyer ProfileJORDANNA CYTRYNBAUM

TITLEAssociate

OFFICEVancouver


[email protected]

LAW SCHOOLUniversity of British Columbia, LLB, 2003

BAR ADMISSIONSBritish Columbia, 2005

Biography

Jordanna Cytrynbaum is an associate in the Vancouver office practising in the Litigation Group and the Labour and Employment Group.

Ms. Cytrynbaum advises employers on a broad range of issues relating to employment, human rights, employment standards and privacy matters. She has represented clients before tribunals, at mediation and at all levels of court in British Columbia.

Ms. Cytrynbaum received her BA (honours) in Psychology from Simon Fraser University in 2000 and her LLB from the University of British Columbia in 2003. Ms. Cytrynbaum was called to the British Columbia bar in 2005.

Ms. Cytrynbaum is a member of the Canadian Bar Association and the Vancouver Bar Association.

Lawyer ProfileTINA GIESBRECHT

Biography

Tina Giesbrecht has extensive experience in the practice of labour and employment law.

Ms. Giesbrecht advises a wide spectrum of both federally and provincially regulated clients on labour and employment matters including union organizing campaigns, collective bargaining, interpretation of collective agreements, grievance arbitration, human rights complaints, labour board hearings, strikes, employment related immigration matters, executive compensation employment contracts, personnel policies, fiduciary obligations, non-competition and non-solicitation agreements. She also advises clients on employment issues arising from the purchase and sale of businesses including group terminations and successorship rights. In addition, Ms. Giesbrecht advises employers on privacy, workers’ compensation, occupational health and safety matters and termination of employment.

Prior to joining McCarthy Tétrault, Ms. Giesbrecht practised in Winnipeg and taught employment law at the University of Manitoba. She regularly writes articles and presents seminars on a variety of labour and employment law issues.

Ms. Giesbrecht is currently the Chair of the CBA Labour and Employment Subsection, Alberta Bar Association and a member of the Canadian Bar Association, the Law Society of Alberta, the Law Society of Manitoba, the Manitoba Bar Association, the Canadian Association of Counsel to Employers and the Human Resource Association of Calgary.

She received her BA in 1990 and her LLB in 1993 from the University of Manitoba. Ms. Giesbrecht was called to the Manitoba bar in 1994 and to the Alberta bar in 2001.

TITLEPartner

OFFICECalgary

LAW SCHOOLUniversity of Manitoba, LLB, 1993


BAR ADMISSIONSManitoba, 1994Alberta, 2001

[email protected]



Lawyer ProfileCHRISTOPHER McHARDY

TITLEPartner

OFFICEVancouver


[email protected]



Biography

Christopher McHardy is a partner in the Vancouver Labour & Employment Group. He advises employers on a broad range of issues relating to labour, employment, privacy and immigration law. His experience includes:

advising US clients on labour, employment, privacy and immigration laws in connection with establishing business operations in British Columbia;

advising employers on, and preparing and negotiating, employment and consulting agreements, restrictive covenants; workplace policies, employee handbooks and other employment-related documents;

advising on labour and employment issues in corporate mergers, acquisitions and outsourcing;

advising employers on union certification drives and applications, decertification applications, unfair labour practices and collective bargaining; and representing employers in collective bargaining;

defending employers against employee claims in provincial and superior courts, the Human Rights Tribunal, the Employment Standards Tribunal, the Labour Relations Board, labour arbitration boards, the Workers’ Compensation Board and its Appeal Tribunal, the Privacy Commissioner and other administrative bodies;

representing employers in mediation and other alternative dispute resolution processes;

advising employers on human resource management practices, privacy laws, union avoidance, and employee hiring, layoffs and terminations; and

advising and assisting organizations and individuals with immigration matters, particularly work permits, Provincial Nominee Program applications and permanent residence.

Mr. McHardy received his B.Comm. (1997 Honours) and his LLB (2000) from the University of British Columbia. Mr. McHardy has focused his practice on labour and employment matters since his call to the BC bar in 2001.


Lawyer ProfileTARA McPHAIL

TITLEAssociate

OFFICEVancouver


[email protected]

LAW SCHOOLMcGill University, LLB, 2005

BAR ADMISSIONSBritish Columbia, 2007Ontario, 2006

Biography

Tara McPhail is an associate in the firms Labour and Employment Group.

Ms. McPhail advises employers on a variety of matters including employment standards, wrongful dismissal litigation, labour arbitrations, occupational health and safety, human rights and the labour and employment aspects of corporate transations.

Ms. McPhail received her BA (Hons.) in Political Science from Queen’s University in 2000 and her Bachelor of Civil Law and Bachelor of Common Law from McGill University in 2005. Ms. McPhail completed a portion of her legal studies at the Université Pierre-Mendès in Grenoble, France and is fluent in French.

Ms. McPhail was called to the British Columbia bar in 2007 and the Ontario bar in 2006.


Lawyer ProfileEARL G. PHILLIPS

TITLEPartner

OFFICEVancouver


[email protected]

LAW SCHOOLUniversity of Victoria, LLB, 1980


Biography

Earl Phillips is a partner in the firm’s Vancouver office practising in the Labour and Employment Group.

His recent experience includes:

labour arbitrations regarding substance abuse, collective agreement interpretation, medical information, privacy, attendance management, surveillance and theft;

labour board hearings regarding unfair labour practice complaints, true employer, successor and common employer issues, and certification and decertification applications;

labour and employment issues in restructurings and reorganizations;

human rights issues regarding attendance management, religious rights, substance abuse, disability, and the duty to accommodate; and

negotiating and drafting executive employment contracts.

Mr. Phillips regularly appears before federal and provincial tribunals and arbitration boards and the courts ofBritish Columbia. He is a frequent writer and speaker on various topics including, most recently, significant Supreme Court of Canada decisions, mandatory retirement, employment privacy, disability management, whistle-blowing, substance abuse in the workplace and general employment practices.

Mr. Phillips is a member of the Human Resources Management Association of British Columbia and of the BC Labour and Employment Sections of the Canadian Bar Association. He also serves as a director of the Regent College 2000 Foundation and The Children’s Foundation.


Lawyer ProfileDONOVAN PLOMP

TITLEAssociate

OFFICEVancouver


[email protected]



Biography

Donovan Plomp is an associate in our Labour and Employment Group in Vancouver. He has appeared as counsel in matters before the British Columbia Labour Relations Board, the Canada Industrial Relations Board, the British Columbia Human Rights Tribunal, the Supreme Court of British Columbia and grievance arbitration panels. He has also assisted clients in drafting employment contracts and policies, as well as advising on a wide variety of workplace issues including privacy, disability, and the application and interpretation of collective agreements.

His recent experience includes:

advising employers regarding various human resources and labour relations issues, including employee disability, attendance management, human rights and employment policies, and terminations;

representing employers in wrongful dismissal and other employment related litigation;

representing unionized employers in grievance arbitration and labour relations board proceedings, including discharge, discipline, interpretation of collective agreements, unlawful strike and unfair labour practice complaints;

advising employers regarding union organizing campaigns and certification and decertification applications; and

advising on labour and employment issues in corporate mergers, acquisitions and reorganizations.

Mr. Plomp received a BA (Hons) from the University of Ottawa in 1997, and his LLB from the University of British Columbia in 2000. After graduating from law school, Mr. Plomp served as a judicial law clerk with the Supreme Court of British Columbia. Mr. Plomp was called to the British Columbia bar in 2002.

Mr. Plomp is a member of the Canadian Bar Association and the British Columbia Human Resources Management Association. He is also a member of the executive of the BC Employment Law section of the Canadian Bar Association.

Lawyer ProfileRACHEL RAVARY

Biography

Rachel Ravary is an associate in our Labour and Employment Group in Montréal.

Ms. Ravary’s practice is focused exclusively on management-side labour and employment law, and she has advised and represented employers in various industry sectors, including manufacturing, health care, education, pharmaceuticals, non-profit, hospitality, mining, banking, finance and investment.

Ms. Ravary has developed an expertise in a variety of employment-related matters including labour standards, human rights, privacy, access to information, pay equity, and workers’ compensation. Ms. Ravary also regularly represents both provincially and federally regulated employers in litigation before the various administrative tribunals, as well as before the civil courts and labour arbitrators. A significant portion of Ms. Ravary’s practice is devoted to providing employment advice in all manners of corporate restructuring, mergers and acquisitions.

Ms. Ravary regularly speaks at conferences and conducts workplace seminars and training on a variety of employment matters. She participates actively in pro-bono matters and is a founding member of the Legal Education Program on Human Rights, organized in association with the Québec Branch of the Canadian Bar Association.

Ms. Ravary received her bachelor’s degree in political science from the University of Ottawa in 1998, and her BCL and LLB from McGill University in 2002. She was called to the Québec bar in 2003 and is a member of the Canadian Bar Association and of the Junior Bar Association of Montréal.

TITLEAssociate

OFFICEMontréal

LAW SCHOOLMcGill University


BAR ADMISSIONSQuébec, 2003

[email protected]


Lawyer ProfileERIKA L. RINGSEIS, Ph.D.

Biography

Erika Ringseis is an associate in our Labour and Employment Group in Calgary. With a Ph.D. in Industrial/Organizational psychology, Ms. Ringseis has a strong interest in workplace issues. Her practice focuses on all areas of labour and employment law, including grievance arbitrations, wrongful dismissals, workplace violence, discrimination and harassment issues, leave and employee relations issues, and privacy.

In addition to appearing before arbitration boards, mediation conferences and tribunals, and at various levels of courts in Alberta, Ms. Ringseis has taught and prepared a number of undergraduate and graduate courses, workshops, seminars and guest lectures on various employment, labour, psychology and legal topics including:

“Employment Standards Code in Alberta,” “Human Rights” “Privacy Law” and “Employment Records”

conferences prepared for Lorman Education Services, on an ongoing basis;

“The Fundamentals of Canadian Employment and Human Rights Law” workshop presented at the

Canadian Institute’s Western Canadian Forum on Employment Law, Calgary, 2008 and 2009;

“Discrimination in Employee Selection: The Canadian Legal Framework” presentation at the 26th

International Congress of Applied Psychology, Athens, Greece, 2006; and

“From the First Handshake to the Last Paycheque: Legal Aspects of Supervision”; workshop seminar

prepared and presented to employers throughout Alberta with the Northern Lakes College, 2005 – 2006.

In addition to oral presentations, Ms Ringseis’ written publications include:

“Damages Awarded at Trial are Reinstated: the Supreme Court of Canada Gives its Ruling in RBC

Dominion Sercurities Inc. v. Merrill Lynch Canada Inc. et al.” by E. Ringseis and H. Singh, in Ultimate

Corporate Counsel Guide, No. 22 (October, 2008); and

TITLEAssociate

OFFICECalgary

LAW SCHOOLUniversity of Calgary, LLB, 2002


BAR ADMISSIONSAlberta, 2003

[email protected]


Lawyer ProfileERIKA L. RINGSEIS, Ph.D.

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Lawyer Profile

Judicial Review of Arbitration Awards in Alberta: Frequency, Outcomes & Standards of Review” by E.

Ringseis and A. Ponak, in Canadian Labour & Employment Law Journal, Vol. 13 at p. 301 (2007).

Ms. Ringseis is an active participant in the Calgary legal community as Chair of the Canadian Bar Association southern Labour/Employment subsection. She is a member of the Canadian Bar Association and the Canadian Society for Industrial and Organization Psychology. She is also a member of the Association of Women Lawyers.

Ms. Ringseis is a volunteer lawyer with the Calgary Legal Guidance, Student Legal Assistance, and a volunteer judge for Jessup and McGillvray Law Moots.


ProfileNANCY TROTT

TITLEDirector, Professional Resources

OFFICEVancouverCalgary


[email protected]

LAW SCHOOLDalhousie University, LLB, 1986

BAR ADMISSIONSBritish Columbia 1987

Biography

Nancy Trott is the Director, Professional Resources for McCarthy Tétrault in both Vancouver and Calgary. She is responsible for the professional development of all of the Firm’s British Columbia and Alberta associates and students.

Formerly a member of the Labour and Employment Group, Nancy brings to her role a wealth of experience with a broad range of issues arising in the workplace.

A non-practicing member of the British Columbia bar, she was called in 1987 after completing her LLB at Dalhousie University in 1986 and obtaining a BA in Political Science from the University of British Columbia in 1983.

Lawyer ProfileBRIAN G. WASYLIW

Biography

Brian Wasyliw is an associate in our Labour and Employment Group in Toronto.

Mr. Wasyliw maintains a litigation practice with a focus on labour and employment related disputes. He represents management in a variety of labour and employment issues including employment standards, wrongful dismissal, labour arbitrations, occupational health and safety and labour and employment issues arising in corporate transactions. Prior to joining the Labour and Employment group, he spent five years in the firm’s litigation department, focusing on commercial litigation, class actions, medical malpractice and professional discipline.

Since joining McCarthy Tétrault LLP after law school in 2002, Mr. Wasyliw has appeared as counsel at all levels of court in Ontario and before many administrative tribunals. Mr. Wasyliw is also actively involved in the firm’s pro bono initiatives. Mr. Wasyliw has published several papers and case commentaries and has appeared on live television to discuss current issues in labour and employment law.

Mr. Wasyliw received his BA (Criminology/Psychology) from Simon Fraser University in 1999. He received his LLB from Dalhousie University in 2002. Mr. Wasyliw was called to the Ontario bar in 2003.

TITLEAssociate

OFFICEToronto

LAW SCHOOLDalhousie University, LLB, 2002


BAR ADMISSIONSOntario, 2003

[email protected]


Labour and EmploymentHands on support.

VANCOUVER • CALGARY • TORONTO • OTTAWA • MONTRÉAL • QUÉBEC • LONDON, UK MCCARTHY.CA

Labour and Employment MCCARTHY.CA

Page 1

Our objective advice in complex labour andemployment legal issues strengthens your positionin the workplace. Creating secure human resourcestrategies, we are with you every step of the way.

Increased globalization and competition in thenew economy require efficient management ofhuman resources and labour relations. McCarthyTétrault’s Labour and Employment Group hasextensive experience in all aspects of labour andemployment law at the provincial, federal andinternational levels.

As part of the nation’s premier law firm, we arecommitted to providing the best possible serviceand resources to our clients. With offices acrossCanada, our firm structure complements thenationwide business activities of many of our clients, enabling us to manage their needsacross the country through the strength of a single partnership.

McCarthy Tétrault’s Labour and EmploymentGroup includes lawyers who advise and act ascounsel with respect to all aspects of labourrelations and employment law. For unionizedemployers, our practitioners assist in thenegotiation of collective agreements and providerepresentation in labour arbitrations. At the sametime, we help clients avoid workplace disputes,fines and litigation. We provide counsel on unioncertification proceedings, unfair labour practicecharges and other union disputes.

For union and non-union groups alike, we adviseon corporate reorganizations, employmentstandards, human rights, employment equity, pay equity, pensions and benefits, workers’compensation and occupational health and safety.In addition, we handle executive employmentmatters, such as employment contracts, change-of-control agreements and severancearrangements. Our group regularly advises on current issues such as the Internet in theworkplace, novel working relationships and thelatest human rights rulings. This enables us to

provide the practical, knowledgeable andimmediate legal assistance required for yourorganization to face new challenges in theworkplace. Members of our team include litigators with considerable experience in labour and employment related matters.

Our lawyers are skilled in all aspects of business — from the front line to the bottom line.As provincial and federal laws and court decisionsaffect employment relations more and more, we constantly monitor new developments.Featuring some of the leading legal talents in the country, we are at the forefront of newdevelopments in labour relations, employmentpolicies, regulations and rulings. According to theCanadian Legal LexpertDirectory and Guide tothe Leading 500 Lawyersin Canada, our labour andemployment lawyers havea reputation for world-class legal experience.

Our Clients

We routinely adviseprivate and public sectoremployers on compliancewith federal andprovincial employmentregulations. Our labourclients cover a broadspectrum of economic activity, including financialservices, manufacturing and technology as well aspublic sector agencies, such as municipalities,universities and school boards.

How We Can Help

McCarthy Tétrault’s Labour and EmploymentGroup provides knowledgeable and immediatelegal assistance in all areas of labour relations,employment law and related litigation.

Creating securehuman resource

strategies andstrengthening your

position, we are with you every

step of the way.

Providing real solutions in labour and employment matters.


Page 2

As a result of the size and the focus of ourpractice, we have specialists in all areas relatedto labour and employment law, including:

Alternative Dispute Resolution (ADR)

Our labour and employment lawyers advise clientswith respect to alternatives to litigation, includingmediation and arbitration. We help develop ADRstrategies that can be implemented before claimsare filed. In addition, we draft ADR provisions in contracts, assist clients in designing ADRprocedures and appear as counsel at mediationsand arbitrations. Our lawyers recognize thespecial needs and circumstances of each client.We formulate and implement cost-saving ADRprograms to resolve claims without resorting to

expensive litigation. When litigation isunavoidable, we canprovide the expertise ofsome of the country’sleading litigators.

Collective AgreementBargaining

McCarthy Tétrault’sLabour and EmploymentGroup has extensiveexperience in acting foremployers in collectivebargaining. This includesacting as management’s

representative at the bargaining table, draftingproposals, developing negotiation strategies,advising on collective agreement language andachieving timely settlements. When necessary, our lawyers can provide advice and prepareclients for strikes and picketing and act onmanagement’s behalf before labour relationsboards and courts, with respect to illegal strikeand picketing activity.

Disability Management

Keeping employees healthy and productive andreducing the length of disabilities can lower your business’s disability costs significantly. Our lawyers take a comprehensive approach tothe legal aspects of managing and accommodatingdisabilities in the workplace. We provide guidanceto employers on the duty to accommodate and on disability management. Our team can adviseon the structure of wellness and attendancemanagement programs. We advise on how tointegrate short and long-term disability coverageand accelerated return-to-work incentives.

Educational Programs and Seminars

Our Labour and Employment Group is very activein the corporate community, frequently beingasked to provide educational programs andseminars. In addition, our practitioners regularlypublish articles in a variety of legal and humanresources journals and publications. We prideourselves on staying on the leading edge ofknowledge in all aspects of labour andemployment law and human resource practices.Practical seminars regularly led by members of our team deal with issues such as workplaceharassment, managing absenteeism, progressive discipline, human rights, the duty to accommodate, occupational health and safety and workers’ compensation.

Employment Standards

Our practitioners regularly advise clients in allareas of employment standards. This may include advice on the relationship between the employers’ obligations under relevantemployment standards legislation, collectiveagreements and other statutes. In addition, we appear as counsel on behalf of employersbefore employment standards tribunals.

As a result of the sizeand the focus of our

practice, we havespecialists in all areasrelated to labour and

employment law.


Page 3

Grievance and Interest Arbitration

We regularly assist our clients in planningstrategies, including training of supervisors, toavoid or resolve collective agreement disputeswithout resorting to arbitration. Where arbitrationis necessary, our lawyers represent clients beforearbitrators, boards of arbitration and tribunals atall levels. Our lawyers guide clients through eachstep of the grievance process. We believe in earlyinvolvement to help avoid litigation and minimizeits impact on the daily operation and profitabilityof your business.

Human Rights Issues

The Labour and Employment Group has extensiveexperience in a wide variety of matters withrespect to the development of human rightspolicies, including workplace harassment policies,internal human rights procedures and the duty to accommodate. We are regularly involved inreviewing organizational practices and policies of clients for conformity with human rightslegislation. Preparing responses to complaints andrepresenting clients at investigative conferencesand throughout the investigatory process is anadditional aspect of our service. Our lawyers actas counsel before human rights tribunals andboards of arbitration that deal with human rights issues.

Judicial Review and Appeals

We handle all levels of judicial review and appealwork before the courts.

Occupational Health and Safety

Members of the Labour and Employment Groupwork closely with clients to prevent health andsafety disputes and to help ensure compliancewith federal and provincial regulations. Werepresent clients in all areas of occupational

health and safety law, including contractorresponsibilities on construction sites, appeals from inspector’s orders, prosecutions, inquests,occupational health and safety audits, compliancepolicies and strategies and related litigation. Ourlawyers are supported in these matters by ourEnvironmental Group, which provides advice on environmental audits and compliance policiesand strategies.

Pay Equity

Clients sometimes need to evaluate and redressgender-based pay discrimination in the workplace.Our lawyers advise on pay equity plans and findobjective ways to determine whether there is asound basis for pay equity complaints. We adviseon how to define whatconstitutes “equal pay forwork of equal value.” TheLabour and EmploymentGroup can help youunderstand thecomplexities of thevarious forms of federaland provincial legislationregarding pay equity.

Pensions and Benefits

McCarthy Tétrault also haslawyers with expertise inpensions, retirement plansand other benefitscontracts. Members of our group advise clients on all aspects of pension and benefit matters,including tax implications. They can help establish and draft new pension and benefit plans or revise existing ones. Our lawyers alsoadvise on corporate reorganizations and plantclosures, acquisitions and dispositions, particularly with respect to the transfer ofemployees and pensions.

Our lawyers advise onpay equity plans and

find objective ways todetermine whether

there is a sound basisfor pay equity

complaints.


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Workplace Safety and Insurance

Our lawyers regularly represent clients withrespect to all workplace safety and insurancematters. This includes representing employers as counsel before hearing officers and at appeal tribunal hearings.

Wrongful Dismissal and Employment Contracts

We regularly advise on employment contracts.This includes their interpretation andadministration, termination of employment,settlement of cases, court litigation of wrongful

dismissal cases and, where appropriate,alternative dispute resolution of wrongfuldismissal cases. We have considerable experiencein drafting contracts of employment, as well asexecutive compensation packages, employmentpolicies and practices and termination letters.

McCarthy Tétrault’s Labour and EmploymentGroup has the experience and expertise to assistyou with all the complexities of labour andemployment law that affect your business. This isour strength and we’ll give you hands-on support.


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Immigration Informationfor EmployersOpening borders — Immigration Group


Immigration Information for Employers MCCARTHY.CA

Page 1

Background

This document is intended to act as a guide to assist employers in examining its practices with respect to compliance with applicableimmigration legislation in Canada. Although thedocument is based on requirements set forth inthe Immigration and Refugee Protection Act(IRPA) and its accompanying regulations, and itdoes summarize certain of its key terms andprinciples, it is not meant to be construed as an opinion on any issue related to Canadian orforeign immigration laws or what your companymust do to comply with such laws.

McCarthy Tétrault Can Help

Most industrialized countries in the world todayare facing the common reality of an agingpopulation and a declining birth rate. Canada’sability to remain competitive and grow in thisenvironment will depend upon its ability toattract and retain the skilled foreign workers thatbusinesses need. The Canadian Minister ofCitizenship and Immigration recently stated thatimmigration could account for virtually all labour-force growth in Canada by 2011. Given thecurrent demographic realities and skill shortagesthat key sectors of the Canadian economy arefacing today, it is no wonder that corporateimmigration is increasingly becoming the solution.

To remain competitive and master the corporateimmigration process, Employers depend on theskills and resources of their legal advisors.McCarthy Tétrault’s Immigration Group is anoutstanding resource for legal advisement on allmatters pertaining to foreign workers living andworking in Canada. Our group has a strong recordof success with regards to assisting Employerswith temporary foreign worker and permanentresident applications, and we are well placed toadvise on the latest developments in Canadian

immigration and citizenship law. Whetherpreparing a positive Labour Market Opinionapplication, assessing the work permit eligibilityof a foreign worker’s spouse, tax planning or anyother matter, McCarthy Tétrault can help yourorganization achieve its goals in the dynamiclabour marketplace.

Case Studies

To provide you with a greater understanding ofsome practical ways that we can help a client, we have prepared a few short case studies.

Case Study A

A Canadian based company is in desperate need of a specialized workerfor their operations, butcannot find a suitablecandidate throughnumerous advertisementsand employee campaignsconducted within Canadathrough search firms andon their own website.They finally find an idealcandidate but he is anIndian national who iscurrently working in theUnited States on a work permit. The companyinitially offers the candidate the position and hesubmits a work permit application on his own to aCanadian Consulate in the United States. Theyrefuse his work permit application and tell himthat they will not issue a work permit to himunless his prospective employer in Canada canobtain a positive Labour Market Opinion fromHuman Resources Development Canada (HRDC).The company now has a major problem becausethey need the candidate to start work in less than two weeks otherwise they will lose a majorproject and potentially one of their biggest clients

Given currentdemographic

realities, corporateimmigration has

increasingly becomethe solution.


Page 2

if they cannot keep to the prescribed timelines.McCarthy Tétrault is consulted and we determinethat the candidate does in fact qualify for a workpermit based on a HRDC exempt category and re-files the work permit application. The applicationis approved within 10 days and the company savesapproximately three weeks by avoiding the HRDCapplication route. The project keeps to itsprescribed deadlines and the company saves thecontract with the client. Later, we assist theclient to keep this valued employee on apermanent basis by overseeing the filing of hisapplication for Canadian permanent residence.

Case Study B

Bob works for a U.S. based company andscheduled to come up tothe Canadian subsidiary toassist with a specializedproject for an importantclient of the Canadianbranch. Bob is refusedentry to Canada on thebasis that he intends towork in Canada and doesnot have a work permit.In addition Bob is toldthat the Canadiancompany must apply foran HRDC pre-approvalbefore he is even eligible

to apply for a work permit. Bob calls the HRManager for the Canadian sub and the HR Managercalls the McCarthy Tétrault Immigration Group.We determine that Bob in fact does qualify for anHRDC exempt category and can go directly to theborder and apply for his work permit. We assistthe company to draft documents in support of hisapplication. Canadian Immigration officialsexamine Bob’s case, reverse their original decisionand issue a work permit to Bob on the spot.

Immigration Issues

Temporary Work Permits

In most circumstances if your organizationcurrently employs or intends to lawfully employforeign nationals in Canada, these foreign workersmust possess the necessary work permits underthe IRPA and related regulations or qualify undereither the North American Free Trade Agreement(NAFTA) or the General Agreement on Trade inServices (GATS).

How We Can Help

We can assist you and your employees byfacilitating the application process for a workpermit. We can also assist with your applicationsfor HRDC positive Labour Market Opinions wherethe eligible temporary foreign worker does notqualify under specific HRDC exempt categories.We can also assess whether your foreign workerqualifies for entry into Canada in a work permitexempt category. We have assisted manycompanies in the past with application for workpermits under the intra-company provisions ofNAFTA and the Global regulations.

HRDC Opinions and Hiring Plans

Your organization may be required to obtain apositive Labour Market Opinion from HRDC foreach of the employment positions you intend tofill with a foreign national before a work permitfor that position will be granted.

How We Can Help

We can help you prepare the positive LabourMarket Opinion Application and demonstrate toHRDC that despite sufficient efforts made to hireor train Canadians, there is no Canadian citizen orpermanent resident who is willing, available orqualified to fill the position.

We have assistedmany companies withapplications for work

permits under theintra-company

provisions of NAFTA and the

Global regulations.


Page 3

If your future plans require a large number ofskilled non-Canadian workers to enter Canada ona temporary or permanent basis, we can help.

How We Can Help

We can assist in preparing comprehensive hiringplans for submission to HRDC that justify the non-Canadian component of your employment needs.

Work Permit Extensions

Most work permits are only valid for a specific job,in a specific location, with a specific employer fora specified length of time and applications forextensions or modifications must be made beforethe expiration of the current work permit.

How We Can Help

We can help you design and implement acomprehensive system to ensure that youremployees’ work permits are extended ormodified in a timely manner.

Spousal Employment

Spouses of your foreign national employees(including common law or same-sex partners) maybe qualified to obtain open and job-specific workpermits under the Spousal Employment sections ofthe legislation.

How We Can Help

We can assist in determining whether theaccompanying spouse qualifies for a work permitand can assist with the application process. In addition, we can assist in applying for studypermits and visitor records for the familymembers of temporary foreign workers.

Penalties

Under the IRPA and accompanying regulations, the penalties for both general offences and

misrepresentation offences have increaseddramatically, affecting both employees andemployers in substantive ways.

Failure to comply with Canadian immigrationlegislation may result in penalties up to andincluding a maximum fine of $50,000 and twoyears’ imprisonment.

How We Can Help

We can assist clients in understanding the newpenal provisions and provide expeditious andconfidential service to minimize theconsequences.

Permanent Residence Transfer from Temporary to Permanent Status/Time-Limited Categories

A number of the temporarywork permits issued tocertain classes of workersare in time-limitedcategories and aretherefore unable to fulfill long-termemployment needs.

How We Can Help

We can assist you in bothidentifying these categoriesand in processing thepaperwork necessary to convert your essentialtemporary foreign workers into permanentresidents of Canada.

Permanent Resident Card

The IRPA contains new provisions requiringpermanent residents to be in possession of a newpermanent resident card called the “PermanentResident Card” in order to identify themselves aspermanent residents.

We can assist in preparing

comprehensive hiring plans that

justify the non-Canadiancomponent of

your employmentrequirements.


Page 4

How We Can Help

We can assist you in obtaining the new PermanentResident Card for prospective and currentpermanent resident employees. We can also assist with applications for the renewal of a Maple Leaf Card.

Residency Obligations

If your company plans on sending any of yourpermanent resident employees to work abroad fora significant length of time or is considering hiringa Canadian permanent resident as an employee,we can help.

The IRPA and accompanying regulations havefundamentally changedresidency obligations.Subject to limitedexceptions contained inthe IRPA and regulations,permanent residents willhave to be physicallypresent in Canada for acumulative period of 730days in each five-yearperiod following grantingof their status.

How We Can Help

In this globally competitive environment thatrequires increased labour mobility and outsourcingof employees, we can assist you by outlining thenew requirements regarding maintaining youremployees’ permanent resident status while stillallowing them the flexibility to engage in a widerange of long-term employment opportunitiesoutside of Canada.

For example, it is possible for certain employees tobe exempt from physical requirements since timespent abroad on behalf of a Canadian business willbe deemed to be time spent in Canada for thepurpose of maintaining permanent resident status.

Inadmissibility Issues

A medical examination, a temporary resident visaand a criminal history check may be required aspart of an admissibility assessment when applyingfor a work permit.

How We Can Help

We can assist you in understanding the changes inadmissibility criteria under the new legislationand in overcoming potential problems based onmedical or criminal issues.

We advise onmaintaining

permanent residentstatus with the

flexibility to pursueopportunities abroad.


Febr

uary

200

8

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BC Labour and Employment Update Earl Phillips Christopher McHardy

March 6, 2009

McCarthy Tétrault LLP P.O. Box 10424, Pacific Centre Suite 1300 - 777 Dunsmuir Street Vancouver, BC V7Y 1K2 Canada

www.mccarthy.ca

BC Labour and Employment Update


Introduction

There has been a remarkable run of significant labour and employment cases in the last couple of years. So much so, that they deserve separate treatment in these conference materials. The key decisions from the Supreme Court of Canada, and the cases that follow them, are reviewed in the later sessions on Human Rights and Employment Law, and they also show up in some of the workshop materials.

Another significant change in doing this annual update is how we categorize the cases to be reviewed. The days of neat compartments of wrongful dismissal, employment standards, labour board, labour arbitration and human rights cases are over. Also gone are the days when a non-union employer could ignore the labour board and labour arbitration cases, or a unionized employer could ignore a court decision on employment law. Now, human rights issues are pervasive regardless of the forum, and privacy issues are gaining similar status.

All of this makes it a challenge to group the cases in a meaningful way.

One thing that hasn’t changed – there is a lot to discuss in a short period of time.

Damages

Employers Fight Back

Here is a happy trend: damages being paid by employees and unions to employers.

Crime Doesn’t Pay

When a Safeway cashier was found to be processing fraudulent refunds and pocketing the cash, and then convicted of theft under $5,000, her employer sued. Safeway proved $6,000 had been taken and that another $24,512.26 had been spent on investigating the matter. The culprit was required to pay both amounts to Safeway.1

Canadian Freightways had a similar problem with large numbers of TVs and generators disappearing from its loading dock. The police were tipped off by an anonymous source who fingered an employee working largely unsupervised on the 3 am to noon shift. The employee pleaded guilty to theft, but when the employer filed a grievance to recover money from the employee, he claimed he didn’t know

1 Canada Safeway Limited v. Brown, 2007 BCSC 1619.


the goods were stolen. The Arbitrator decided there was sufficient evidence to prove the theft of seven TVs worth $9,000. The Arbitrator also ordered the employee to pay $19,961.39 in investigation costs and $5,000 in punitive damages.2

On the other hand…

While employers have had some success in recovering money from employees, they still have to take care in making the allegations, doing a thorough investigation, and being open about the evidence.

A former employee won a case in Ontario after his employer had terminated him for theft of cash and inventory of about $140. The employer had surveillance evidence that showed the employee taking cash and also taking a shirt out of inventory without payment. The evidence was given to the police and the employee was convicted. What the employer did not give to the police was further surveillance evidence which supported the employee’s defence. That evidence came to light on appeal and the conviction was overturned. The former employee then sued the employer for malicious prosecution.

A judge and jury found in favour of the former employee. The Ontario Court of Appeal agreed, noting that the employer had the exculpatory surveillance evidence from the outset but still “carried on the charade for 13 years” from the date of the incident to the date of the appeal. The Court saw the employer as “a calculating and insensitive company that was prepared, for its own purposes, to see an innocent man convicted of a crime he did not commit.” The jury award of over $2 million was upheld. ($100,000 general damages, $188,000 aggravated damages, $500,000 punitive damages, $308,000 past income loss and costs, $240,000 future income loss, $50,000 for his wife, and interest).3

Punitive Damages for Illegal Strike

The BC Labour Relations Board determined that a three-day strike was illegal and the employer brought a grievance claiming damages. The union conceded a breach of the collective agreement but argued for an in-kind remedy rather than monetary damages. The Arbitrator ruled that an in-kind remedy was not appropriate in the circumstances and ordered the union to pay $97,356.20, representing the fixed burden costs for the duration of the strike.4

An arbitrator awarded punitive damages of $100,000 against the Public Service Alliance of Canada in relation to its illegal strike of Limo Jet Gold Express.5 The Arbitrator found that the local union’s actions were oppressive and malicious and that local union officials had engaged in threats, intimidation and violence against the employer and against its own members.

2 Canadian Freightways v. Wayne Bruce Spence (Apr. 25, 2008, David G. Tattensor, Arbitrator, Can. Arb. Bd.). 3 McNeil v. Brewers Retail Inc., 2008 ONCA 405. 4 Babine Forest Products Ltd. (2007), 160 L.A.C. (4th) 53 (Munroe). 5 Limo Jet Gold Express Ltd., [2008] B.C.C.A.A.A. No. 40 (Larson).


Mitigation

A trend of holding terminated employees to their duty to mitigate is something we have commented on the last couple of years. The trend continues.

An employee in BC was terminated after 25 years of employment and offered 34 weeks severance. The employee rejected the offer and was paid out the eight weeks minimum required by the Employment Standards Act. Within two months of termination, the employee had two different offers of employment comparable to his past position, but he rejected them both to pursue a real estate career. He sued for wrongful dismissal. The judge found he would have been entitled to 15 months’ compensation, but refusing comparable employment was a failure to mitigate and he was not entitled to any damages.6

In another BC case, there was a finding of a period of reasonable notice of 16 months. But the evidence revealed substantial deposits to the plaintiff’s bank account – in excess of what he would have made in 16 months from his old employment. The trial judge was not convinced by the plaintiff’s attempts to attribute the deposits to something other than employment income and found that the plaintiff had suffered no loss from the termination of his employment. The Court of Appeal agreed.7

Whither “Character of Employment”?

The basic four factors for determining common law reasonable notice have been:

• age;

• length of service;

• character of employment; and

• availability of suitable alternative employment.

The traditional analysis called for those factors to be assessed together, without any factor being giving preference. So it was about 10 years ago in the case of a parking lot attendant who was terminated after almost 15 years service. The BC Court of Appeal increased the four months awarded at trial to eight months with a warning that character of employment and re-employability should not outweigh age and length of service.8

6 Hart. v EM Plastic & Electric Products Ltd., 2008 BCSC 228. 7 Strauss v. Albrico Services (1982) Ltd., 2008 BCCA 173. 8 Byers v. City of Prince George (Downtown Parking Commission), [1999] 2 W.W.R. 335 (BCCA).


But we have noticed length of service being given greater importance in the last several years, specifically in preference to character of employment. Character of employment typically covers the issues of how senior, or how highly paid, or how specialized the position was. More and more, we have seen long service, but junior level employees, being given judgments very close to what senior executives were getting, notwithstanding the character of employment and the much greater availability of comparable employment.

But character of employment is not dead, especially with short service employees in specialized work. A software salesperson with 10 years experience in the industry and special expertise in dealing with the U.S. government and its agencies was awarded five months even though her length of service was only nine months.9 The case can also be seen as another example to prove that formulas like one month per year of service will often fail. For many well-paid or senior positions, an employee is likely to start with a common law entitlement of several months, and length of service only becomes a factor of significance after several years of employment.

Class Actions

We have been following the Macaraeg case10 for some time now and are pleased to report a happy conclusion for employers in British Columbia.

Ms. Macaraeg wanted to bring a class action for overtime pay on behalf of all employees and former employees of a call centre where she worked up to 12 hours on weekdays and 8 hours on Saturdays. The employer challenged the claim on the basis that the Director of Employment Standards had exclusive jurisdiction. The BC Supreme Court ruled in 2006 that the overtime provisions of the Employment Standards Act were implied by law into employment agreements and that a claim for overtime could be brought in the courts.

That raised the spectre of massive class action claims against employers for any violation of the Employment Standards Act. As we have noted many times before, it is practically impossible to be in full compliance with the Act, with many technical violations being driven by the needs and wishes of employees.

Our Court of Appeal set things right in 2008, and the Supreme Court of Canada refused to hear an appeal by the employee. It is now clear, in BC at least:

• rights granted by employment standards legislation are not incorporated in employment contracts as a matter of law;

9 Saalfeld v. Absolute Software Corporation, 2008 BCSC 760. 10 Macaraeg v. E Care Contact Centers Ltd., 2008 BCCA 182.


• specifically, legislated minimum overtime pay requirements are not incorporated in employment contracts; and

• the statutory right to overtime pay cannot be enforced in the courts.

Employment Standards

Family Responsibility Leave

Who is a “child” for purposes of family responsibility leave under the Employment Standards Act?

An employee claimed the leave to help his 22 year-old son move back home from university. The employer denied the leave, the father grieved under the collective agreement and the Arbitrator upheld the grievance. The matter was appealed to the Court of Appeal which held that “child” means a person under the age of majority.11

Parental Leave

When may a parental leave be taken? The Act gives a birth father the right to:

up to 37 consecutive weeks of unpaid leave beginning after the child’s birth and within 52 weeks after that event. (s. 51)

The common understanding was that the parental leave had to be taken within the first year of the child’s life. The Director of Employment Standards determined that it only had to begin within the first year.

On judicial review, the BC Supreme Court refused to overturn the Director’s decision. It wasn’t a ringing endorsement of the decision, but said it was “within a range of possible acceptable outcomes which are defensible” under the law.12

Post Employment

The issue of what an employer can do to restrict the activities of its former employees continues to generate cases on a regular basis. In addition to a couple of the Supreme Court of Canada cases to be reviewed later, there are a few others worth noting.

11 West Fraser Mills Ltd. v. C.E.P., Local 298, 2008 BCCA 403. 12 British Columbia Securities Commission v. Burke, 2008 BCSC 1244.


Restrictive Covenants

When an employer believes there has been a breach of a restrictive covenant by a former employee, the most effective enforcement is by way of an injunction which will immediately stop the offending activity. But injunctions against former employees are hard to get, and the next two cases illustrate some of the reasons why.

Non-competition

In the first case, the former employer was seeking to enforce a non-competition covenant of 24 months covering all of North America. The Court was very concerned about the length and breadth of the restriction and the lack of evidence to show why such a sweeping restriction was necessary. The Court was also faced with an argument from the former employee that the agreement was not valid in the first place. That was enough to convince the Court not to exercise its discretion to grant an injunction, noting that to do so would effectively decide the outcome of the case at a preliminary stage. The Court also noted the problem that the former employer was a Nevada company operating in California and that a BC injunction would likely be unenforceable in California.13

In the second case, the former employee was subject to what the judge described as “prolix and complicated” non-competition and non-disclosure covenants with respect to the employer’s sophisticated software development business. The former employee went to work for another company that developed somewhat similar products. The former employer considered the new employer to be a competitor and expressed its concern that confidential information would be disclosed, intentionally or otherwise. The new employer disputed it was a competitor, the employee disputed that he was doing similar work, and there was no evidence of any use at the new employer of the former employer’s confidential information.

The Court quite easily determined that there was no evidence of irreparable harm to the former employer, especially compared to the consequences of an injunction on the employee. The Court did, however, grant a limited injunction to prevent disclosure of confidential information.14

Non-solicitation

A more modest non-solicitation clause has a better chance of enforcement, in the right circumstances.

13 Corporate Images Holdings Partnership v. Satchell, 2008 BCSC 525. 14 QuIC Financial Technologies Inc. v. Chang, 2008 BCSC 989.


An insurance agent agreed to neither solicit nor accept business from clients of the former employer for two years. The agent went to a competitor and communicated with a number of the former employer’s clients, most of whom renewed their Autoplan insurance with the new employer. The Court granted an injunction, noting:

• the covenants did not restrain competition generally;

• it was arguable that two years was reasonable because:

o personal contact with clients was necessary;

o that would only happen at annual renewals; and

o the former employer would have two renewals to cement its client relationships.15

These cases confirm the need for an employer to think carefully about restrictions it tries to place on former employees. For almost all positions, confidentiality covenants are advisable and, if properly drawn, will be enforceable. But if an employer wants to restrict for whom and how a former employee will work, much greater care is needed. The employer should seek covenants that are no broader than truly necessary to protect its legitimate business interest, and then be prepared to enforce them. In doing so, the employer should ask itself:

• is any restriction necessary;

• is anything beyond a non-solicitation covenant required; and

• what is the minimum length, breadth of activity and geographic scope that is necessary?

Fiduciary Duties / Duties of Good Faith

Undisclosed Purchase from Employer

A company had a used machine that it decided to sell for scrap. A manager of the company bought it through his sole proprietorship but with his signature on the cheque. The manager had the machine moved to one of his employer’s suppliers which had agreed the manager could keep it there for a time at no charge. The manager began repairing and restoring the machine in his spare time and the supplier became interested in buying it. The manager sold the machine at a profit to the supplier which completed work on the machine and put it into service.

15 AllWest Insurance Services Ltd. v. Phendler, 2009 BCSC 2.


The employer found out its old machine was being used by its supplier and discovered the role its manager had played. The employer claimed the manager had breached his fiduciary duty and his duty of good faith.

The court decided the manager was not a fiduciary: he was not a director, he did not hold equity in the company, and he did not have cheque signing authority. The court acknowledged the manager had a duty of good faith, like any employee, but decided the duty had not been breached. He had not hidden his purchase of the machine and he had rightly assumed his employer had no further interest in the machine. Finally, his personal profit was not at his employer’s expense.16

Terminations

Establishing New Terms for Termination

The Ontario Court of Appeal has created an unfortunate wrinkle in the ability of an employer to make changes to a contract of employment.17

It had been accepted as a general principle of common law employment that an employer can make changes to terms of employment if it gives reasonable notice of the change. The theory was that a change could be made just like employment could be terminated – with reasonable notice.

That is the theory that an Ontario employer worked with when it gave an employee two years’ notice that the generous termination provisions in his contract would be changed to a maximum of 30 weeks. The employee objected and refused to sign the modified agreement to take effect in two years’ time. The employer believed it had given reasonable notice of the change.

When the two-year notice period was complete, the employer again asked the employee to sign the modified agreement, saying “If you do not wish to accept the new terms and conditions of employment as outlined, then we do not have a job for you.”

The Court decided that an employer cannot simply rely on giving notice of the change, especially in the face of the employee’s clear rejection of the change. Instead, the Court decided that the employer in that situation must terminate the employee with proper notice and offer re-employment at the end of the notice period on new terms. The Court also suggested that simple silence on the part of an employee cannot be taken as acceptance of a unilateral change.

This case presents some problems. On its facts, it may be the right decision due to the way the employer carried out the termination. The employer advised the employee it would terminate his employment unless he signed the new agreement. As he did not sign the new agreement, his

16 Carmangh Design and Manufacturing Inc. v. Barszczewski, 2008 BSC 1066. 17 Wronko v. Western Inventory Service Ltd., 2008 ONCA 327.


employment was terminated. In so doing, the employer inadvertently terminated his employment under the terms of the original agreement because the employee never signed the new agreement and it did not come into force. Since the termination clause in the original agreement did not allow for termination on notice, but required payment of two years’ compensation, the two years’ notice was not effective and the court awarded the employee two years’ compensation. This demonstrates the unfortunate and potentially significant pitfalls of not paying close attention to express contractual terms.

Unfortunately, the case suggests a general principle that any change to a fundamental term of an employment contract can only be made with agreement or by first terminating the current employment contract. In our view, that principle is wrong. The case is not strictly binding on the courts of British Columbia, but it may well be followed in BC since the Supreme Court of Canada refused to hear an appeal. We will be watching closely to see how liberally BC courts interpret this decision.

Where an employer wishes to make unilateral changes to employment terms with reasonable notice, it should seek the signed agreement of the employee that the changes will take effect after the notice period. If the employee will not agree, the employer will have to give reasonable notice, or the notice specifically required by the contract of employment, of termination of employment. It can also (at that time or later, depending on the need to keep the employee) offer new employment on the revised terms to be effective immediately after the notice period.

Probation

We continue to recommend to employers who want to have a probationary period for new hires that such a term be fully documented. It should be part of a written employment offer and it should explain the rights of the employer to terminate during probation. Nevertheless, the courts seem willing to enforce their understanding of “probation”, even in the absence of a written term.18

The Court decided in favour of the employer’s version of the telephone exchanges between the employer and prospective employee about the terms of an offer of employment. The Court decided that a three-month probationary term was part of the offer and rejected the employee’s version of events.

The Court then went on to say regarding a term of probation:

…the employer may, unless the contract provides otherwise, terminate the probationary contract even if the employee does not so misconduct himself as to repudiate the contract of

18 Perkul v. Flexmaster Canada Lmited, 2008 BCSC 371.


employment, on the basis that he or she has proven, during the probationary period, unsuitable for the job.

The assessment and determination of unsuitability must be made in good faith, as the Court decided was done in this case:

…the employer reasonably and fairly considered the plaintiff within the context of her probationary period and concluded that the plaintiff’s assertive nature, her apparent inclination to pursue authority and control, her relationship with other employees, and a perceived tendency to ‘shade the truth’ in the pursuit of these goals made her unsuitable for the position within their organization.

Just Cause for Termination

Duty to Respond

The general duty of good faith owed by all employees is described in various ways. In a case of suspected but unproven theft, the duty was described as requiring “honesty and faithfulness”.

Safeway suspected an assistant manager of taking groceries from the store without payment. The employee simply denied doing so and denied doing any of the suspicious things that had been reported to the employer. The employer did not believe the denial and fired him.

Only at trial did the employee offer an explanation for what the other employees had observed. The employer had to admit it was a plausible explanation so theft could not be proved. But the Court decided the employee’s duty of honesty and faithfulness required him to respond in a complete and truthful manner when the employer first inquired into the matter. His failure to do so gave the employer just cause for dismissal.19

Breach of Relationship of Trust

The chain of command and the obligation of employees to treat their superiors with respect were important aspects of a case involving a social service agency.

One of three department coordinators of the agency had a conflict with her direct superior, the Executive Director. She left a meeting with the Executive Director about a problem in her department, went on medical leave and wrote a letter to the agency’s board of directors and the Executive Director. The letter complained of being compromised, overworked and kept in the dark, and that the Executive Director had become irate with her, intended to violate a client’s right to confidentiality, and was cold and uncaring about her health.

19 Obeng v. Canada Safeway Ltd., 2009 BCSC 8.


The Court decided the letter was inaccurate, exaggerated, disrespectful and inflammatory. The Court also decided that sending the letter to the Board without first giving the Executive Director the opportunity to address her concerns and salvage the working relationship was a breach of her trust relationship with the Executive Director and effectively ended the employment relationship.20

No Impropriety in Criticism of CEO

On the other hand, not all criticism of a superior will give cause for termination.

An employer was struggling financially. One of its investors, in whose premises the employer operated, made a financing proposal and urged one of the employees to urge the employer to accept the proposal. The employee did speak critically of the CEO to the investor and to fellow employees, but the court decided that there was nothing extraordinary or anything that others would not have heard or said in the small workplace. The employee also asked the employer for an equity stake in exchange for the reduction in salaries being proposed by the employer but that did not amount to an attempt to take over the company.

The Court concluded the employee’s conduct had not given the employer cause for dismissal.21

Conduct Away From Workplace and the Employer’s Public Reputation

An on-duty employee of Rogers Cable stopped at a Tim Horton’s for coffee. He got into an altercation with another customer as they were waiting in line. The other customer was at least partly to blame for instigating the incident, but he did not hit back. The incident ended with the police attending (or maybe they were already there) after the employee had punched the other customer several times in the face.

The employee called his supervisor right away to explain and to say he could not make his next scheduled call. He was interviewed the next day but simply said he had already explained to his supervisor. He was fired and brought a claim of unjust dismissal under the Canada Labour Code.

The Adjudicator accepted the employer’s argument that the behaviour was unacceptable and detrimental to the employer’s image. The trust between employer and employee was broken and the termination was justified.22

Off-Duty Blogging

Employees are also being held to account for off-duty conduct that receives a wide audience.

20 Van Der Meij v. Victoria Immigrant & Refugee Centre Society, 2008 BCSC 954. 21 Pires v. Vectic Technologies Inc., 2008 BCSC 891. 22 Rogers Cable Inc. and Dean, June 9, 2008, Canada, E.J. Noonan, Adjudicator.


A stressed out Alberta government employee took her doctor’s advice to heart and started to write down her feelings.23 But she did it by way of a blog and made personal and critical comments about some of her co-workers and supervisors. Showing a flare for writing and mixed metaphors, but with apparent ignorance of her employment obligations, she wrote things like:

I work in a lunatic asylum. Nurse Ratched (aka the supervisor) just sent the following email to staff [she then reproduced the memo]. Does anyone else out there live in a world like mine with imbeciles and idiot savants (no offense to them) running the ship … and is anyone else’s ship being sailed down the highway to hell?

The Arbitrator found the grievor took no steps to limit access to her blog, rejected her professed ignorance that the blog was public, and upheld the termination.

In a similar case, involving offensive, racist and hateful entries in a blog which named the employer, referred to employment activities, and was intended to be read by a number of co-workers, the grievor was terminated and was only reinstated, without back pay, by reason of other mitigating factors.24

Theft of Time and Property

There was no mercy for an employee who took company skids, digressed from his appointed route, and delivered them to strikers at one of his employer’s customers. He argued that he was doing so on the instructions of his union. The arbitrator noted that his conduct was pre-meditated and in violation of known and clear company rules, and that drivers worked largely without supervision. The termination was upheld.25

Settlement

There have been unfortunate cases in the past where settlements and releases between employers and employees have been ignored. But that is not always the case.

In a recent Ontario case, the Court was dealing with a termination without cause in 2000. The employer offered two months’ pay. The employee threatened a human rights complaint. The employer offered a further three and one-half months, which the employee accepted and for which she signed a release.

In 2006, the former employee sued. She claimed she had been coerced into signing the release and that her employer had callously disregarded information about her health. She sought $1 million in wrongful dismissal damages, $2 million for mental distress, and $500,000 for punitive damages. The

23 Alberta Union of Provincial Employees v. Alberta, April 11, 2008 (Ponak). 24 EV Logistics, [2008] B.C.C.A.A.A. No. 22 (Laing). 25 Grand & Toy Ltd. (2008) 176 L.A.C. (4th) 289 (Collicutt).


former employer successfully applied to have the claim dismissed, and $20,000 in costs was awarded against the former employee. The Court said the former employee’s financial hardship was not a bar to awarding costs, especially when serious allegations affecting the reputation of the employer were made but unsubstantiated.26

Human Rights

The SELI Case

One of the most talked-about cases from last year was the BC Human Rights Tribunal decision awarding foreign workers on the Canada Line project in excess of $2 million in damages for discrimination on the basis of race, colour, ancestry and place of origin. The Tribunal determined that Latin American workers, when compared to European workers, received about 40% less in wages, were housed in less desirable accommodations, were given less flexible meal arrangements, and were given less for expenses.27

With respect to wages, the employer argued that it had employees from all over the world who were paid more on each subsequent project, but never less than the local market rates. The effect was that the European workers started at higher rates on European projects, while the Latin American workers had started at lower rates on a project in Costa Rica. For almost all the Latin American workers, the increase to meet local market rates on the Canada Line project was substantial. They would then get an increase from that rate on the next project, no matter where that was.

The Tribunal did not accept the employer’s evidence of how it determined wages for its international workforce. More importantly, it did not care. For the Tribunal, the key fact was that the Latin American workers as a group were making substantially less, and were treated less favourably, than the European workers. The Tribunal was not swayed by the Labour Relations Board having found previously that the Latin American workers were making substantially the same, all things considered, as the Canadians working on the project.

The employer is going to court to have the decision reviewed. The result will be important for understanding prima facie discrimination in such a case, and how international workforces are to be regulated under human rights law.

Absenteeism, Frustration and Human Rights

Another significant decision of the Tribunal involved an employee who had been off work due to disability for exactly two years when her employer terminated her by email. The complainant was

26 Bjelakovic v. Accenture Global Services (2008), 69 C.C.E.L. (3d) 144 (Ont.Sup.Ct.). 27 CSWU Local 1611 et al. v. SELI Canada Inc. et al., 2008 BCHRT 436.


awarded $35,000 for injury to dignity (continuing the trend of increasing damages for that ground) and about $50,000 in legal and other costs. She would have been awarded amounts for lost income but for the fact that she remained unable to work.28

The case is helpful in confirming that the concepts of termination for non-culpable absenteeism and frustration of contract apply in human rights law. In the result, even a disabled employee may be terminated without compensation after an extended period of absence (usually at least two years), when it is clear the employee will not be able to return to work in the foreseeable future.

However, this case is another example of the need to properly follow the accommodation process in arriving at undue hardship or frustration. In particular, the Tribunal pointed out that the employer:

• did not have any medical reports or assessments;

• had not made any enquiries of the employee about her conditions or prognosis, or about when she could return to work;

• had not asked the employee for consent to make such enquiries of her doctor;

• did not put the employee on notice it was considering termination;

• did not give the employee an opportunity to provide further information; and

• simply relied on the passage of two years to terminate.

It is clear that with a little more diligence and patience, the employer could have terminated the employee not long after the two-year absence, but the employer’s failure to take the steps noted above resulted in a substantial damage award, not to mention the time and expense of a lengthy hearing at the Human Rights Tribunal.

Disability

The Tribunal decided the employer discriminated on the basis of disability when it agreed to pay severance to active employees affected by a partial closure, but not to employees absent from work on workers’ compensation or disability benefits. The BC Court of Appeal overturned that decision.29 The Court said it was a commercially sensible distinction that was based on availability for work, not physical or mental disability. The Court also noted that the absent employees lost nothing – they remained employed and receiving benefits – and they would return to work if able to do so or they would receive a severance payment if their employment was terminated.

28 Senyk v. WFG Agency Network (B.C.) Inc., 2008 BCHRT 376. 29 International Forest Products Ltd. v. Sandhu, 2008 BCCA 204.


There was a similar case and result in Ontario. The disabled employees had been accommodated to the point of undue hardship and then terminated because they were not able to return to work. They claimed severance pay under the collective agreement but the Arbitrator ruled it was only payable for terminations without cause. If they had not been disabled, they would have been at work and would not have been terminated.30

Dismissal of Human Rights Complaints

Refusing Reasonable Offer

It is not well known that it is possible to have a human rights claim dismissed if the complainant refuses a reasonable offer to settle. The Tribunal considers that proceeding with a claim that should have been settled does not “further the purposes of the Code” and therefore meets one of the limited grounds in section 27 for dismissing a complaint.31

To succeed, an employer will have to:

• make a reasonable offer to settle the entirety of the claim;

• make the offer “with prejudice”;

• give the complainant sufficient time to consider the offer prior to the hearing date;

• make it clear that if the offer is not accepted by a certain date, the employer will apply to dismiss; and

• if the offer is not accepted by the date, file an application to dismiss.

It is not necessary for the offer to give the complainant every remedy the complainant is seeking, but the offer needs to be reasonable and responsive to the whole of the claim.

No Reasonable Prospect of Success

Another ground for dismissal of a human rights complaint is when there is no reasonable prospect of success. Unfortunately, the Tribunal has generally found complaints to have sufficient allegations that, if proved, would support the complaint. Fortunately, the BC Supreme Court has recently overturned one of those decisions.32

30 National Grocers Co., [2007] O.L.A.A. No. 575 (Nairn). 31 Carter v. Travelex Canada Ltd., 2008 BCSC 405. 32 Workers Compensation Appeal Tribunal v. Hill, 2009 BCSC 107.


A member of the Workers Compensation Appeal Tribunal was told that her appointment would not be renewed. At the same time, she was offered a short-term extension to allow her to sort out her retirement plans. The complainant claimed that showed her termination was tainted by discrimination on the basis of age. In an affidavit, the complainant swore that the extension was offered “because of my age”. Based on that evidence, the Tribunal concluded the employer had said the complainant would not be re-appointed because of her age.

The BC Supreme Court concluded the Tribunal had misread the evidence which rendered its decision arbitrary and patently unreasonable. The Tribunal’s decision was reversed and the complaint was dismissed.

Already Decided

Yet another ground for dismissal of a human rights complaint has been called “mootness and issue estoppel”. In simpler terms, if the issues raised by the complaint have already been decided elsewhere, the complaint should be dismissed. Again, the Tribunal tends to find some particular human rights issue that it believes warrants its attention and it has been difficult to succeed in such applications to dismiss.

There were two grievances claiming that a collective agreement was discriminatory in barring accrual of seniority while the grievors were on disability leave. The second grievance was postponed pending the outcome of the first grievance, but the second grievor filed a human rights complaint. The first grievance was decided with a result such that the second grievor suffered no loss. Nevertheless, the Tribunal agreed to hear the human rights complaint. The BC Supreme Court decided that was patently unreasonable and dismissed the complaint.33

Substance Abuse in the Workplace

Last Chance Agreement/Testing (Marijuana)

An employer was unable to enforce a last chance agreement that prohibited an employee from coming to work with more than a prescribed amount of marijuana metabolites in his system.34 The fundamental problem with the last chance agreement was that the union signed “under protest and without prejudice” and therefore had indicated it was not in agreement.

Even though the agreement was not valid, the random test was, because of a previous post-accident test that was positive for marijuana. However, the positive random test did not justify dismissal. The Arbitrator noted the expert evidence that the test could not indicate actual impairment, only past use. For a casual user of marijuana, metabolites will stay in the system for two to seven days. The

33 British Columbia (Ministry of Competition, Science and Enterprise) v. Matuszewski, 2008 BCSC 915. 34 Suncor Energy Inc., 2008 A.G.A.A. No. 11 (Abells).


Arbitrator decided the griever was at no greater risk of showing up for work impaired than an employee who drank alcohol on days off. The grievor was reinstated with compensation, but received a written reprimand and was ordered to submit to random testing for another year.

U.S. Truck Driving Regulations

In another context, casual use of marijuana, even without evidence of impairment at work, can be a problem. Truck drivers entering the United States are subject to random testing and employers are allowed to do random testing to help prevent problems arising at the border. In this case, the employee had failed tests in 2001 and 2006. He was sent for counselling and was subject to further testing. He failed another test and his employment was terminated.

The Arbitrator noted that there was no evidence of impairment at work and that the grievor’s performance was otherwise satisfactory. However, the job required travel into the U.S. and the grievor had to choose between continuing his casual marijuana use or his job. He was given the opportunity to be reinstated if he passed a drug test in six months’ time.35

Accommodation

Addiction

An alcohol and cocaine addict was reinstated in 2001 under an 18 month recovery and monitoring program. He successfully completed the 18 months, but shortly after its completion his attendance began to slip. By 2006, his employment was terminated again. The union and employer agreed he should be reinstated on conditions but could not agree to the duration of the new recovery and monitoring program.

The Arbitrator imposed the conditions for the rest of the grievor’s employment. The grievor was 45 years old and one of the conditions was that his absenteeism not exceed eight days in any 12-month period. The union took the case to court, arguing that permanent conditions were not consistent with the duty to accommodate. The court refused to interfere with the Arbitrator’s decision.36

In another addiction case, the employer had tried to contact an absent employee for several weeks. The employee finally showed up in response to disciplinary letters. At that point, the employer learned of the employee’s cocaine addiction, but there was no indication from the employee that he needed time off because of it. The employee worked for three days and then left work early and never returned. One week later, his employment was terminated. The Human Rights Tribunal dismissed his claim saying that the employer had gone out of its way to deal with a difficult situation in a

35 Allied Systems Canada Co., 2008 C.L.A.D. No. 15 (Slotnick). 36 CUPW v. Canada Post Corp., 2008 BCSC 338.


consultative, considerate and respectful manner and that the employee had failed to assist the accommodation process.37

Employee Failure to Cooperate

An employee was disabled from her own job for a two-year period and received LTD benefits. At the end of the two years, she was assessed as being able to do other work. She was given three options: resign, retire, or be considered for another position by the Rehabilitation Committee during the next six months. She chose the third option but refused to provide the Committee with all the information it requested to assess accommodation possibilities. She then applied for 16 different positions but the Committee considered them to be incompatible with her medical limitations. The employee disagreed, but again refused to provide further medical information. She was terminated at the end of the six-month period. The Arbitrator dismissed her grievance, finding that “the grievor’s uncooperative conduct impaired the employer’s accommodation effort.”38

Reduced Wages

An important principle of the duty to accommodate was upheld in a case involving a bus driver who was unable to do his regular work. He was assigned to a different job with a lower pay rate. The union argued that was discriminatory. The Arbitrator decided it is not discriminatory to require work for wages, and it is not discriminatory to pay only what a job is worth. In this case in particular, it was not discriminatory when a disabled employee was given work he was able to do at less pay than he was making in his regular job that he was not able to do.39

As we have said before, as long as the employer has made every effort to accommodate an employee in comparably paid work, it can assign the employee to other work that the employee is able to do and does not have to pay more than the work is worth.

Religious Holidays

In another case on the theme of “work for pay; no pay for no work”, it was held that an employer did not have to show that giving a religious holiday off with pay would amount to undue hardship. Instead it was enough that the employer offered appropriate scheduling changes, such as a compressed work week or different days off, so there was no loss of compensation.40

37 Francoeur v. Capilano Golf & Country Club, 2008 BCHRT 171. 38 British Columbia v. BCGSEU, Lenihan Grievance, June 11, 2008 (Hall). 39 Greyhound Canada Transportation Corp., 2007 C.L.A.D. No. 435. 40 Turning Point Youth Services, [2008] O.L.A.A. No. 83 (Herman, Certosimo, Vorster).


Displacing an Employee / Modifying Equipment / Revising Contracting Out

A disabled Shiploader/Labourer was accommodated into a General Equipment Operator position until there was no more work in that position. Then the employer embarked on some equipment modifications to allow the employee to return to his regular position. The union grieved the loss of pay in the interim and argued the employer had not done enough to accommodate. Specifically, the union said the employer should have:

• done other equipment modifications in the interim;

• changed its contracting out practices; and

• displaced another employee.

The Arbitrator ruled that all of the options suggested were unduly costly or disruptive. Other equipment modifications would have imposed substantial cost, changing contracting out practices would have interfered with the operation of the business, and a disabled employee is not entitled to displace another employee.41

Severe Work Restrictions – No Obligation to Create a Position

An employee with several medical problems needed a gradual return to work to a maximum of three days per week, a clean and smoke-free environment, little physical movement and limited contact with people. The employer considered 21 different positions in several departments. The employee was given two short assignments for work from home, but there was no further work she could do. Her complaint to the Saskatchewan Human Rights Tribunal was dismissed as having no merit. The employer had an obligation to look for an appropriate position she could fill, but did not have an obligation to create a position.42

Safety Considerations

An employee with a long history of workplace injuries wanted a different job than the one to which he was assigned on his latest return to work. Experts testified that there was a “higher than normal” risk of injury from heavy and repetitive use of his right arm and that the job the grievor wanted required a greater degree of such movements. The Arbitrator was convinced that the grievor could not perform the desired job in a manner that would allow the employer to meets it occupational health and safety obligations, and that there was no way to safely accommodate him in the position.43

41 Eurocan Pulp & Paper, 2008 B.C.C.A.A.A. No. 252. 42 Tsang v. Department of Learning, Government of Saskatchewan, 2008 CLLC ¶230-013 (Sask. H.R.T.). 43 Cargill Canada (2008), 176 L.A.C. (4th) 306 (Jesin).


Commuting to Work

There has been a debate about whether an employer has any responsibility to accommodate the commuting needs of its employees. More and more, the debate is being won by the employees. An arbitrator in Ontario decided there was no absolute rule that the commute to and from work was beyond the scope of human rights protection. The Arbitrator went on to find that the commute of the secondary school teacher in this case was necessarily incidental to her employment, stating: “If she can’t get to work, she can’t work”. The school district did not satisfy the duty to accommodate because it only offered an elementary school position when there was an even closer secondary school.44

Privacy Cases

Solicitor-Client Privilege

The Supreme Court of Canada recently rebuffed the federal Privacy Commissioner’s attempt to limit solicitor-client privilege in connection with personal information access requests.45

Following termination of her employment and due to suspicions that the employer had improperly collected inaccurate information and used it to discredit her, an employee requested access to her personal employment information. The employer denied the request, leading to a complaint to the Privacy Commissioner. The Commissioner requested a broad disclosure of records from the employer. The employer complied, but withheld documents over which it claimed solicitor-client privilege. The Commissioner then ordered production of the privileged documents pursuant to s. 12 of the Personal Information Protection and Electronic Documents Act (“PIPEDA”), which permits the Commissioner to compel the production of any records “in the same manner and to the same extent as a superior court of record” and to “receive and accept any evidence and other information ... whether or not it is or would be admissible in a court of law”. The employer applied for judicial review, which determined that the Commissioner was empowered to compel production of documents over which solicitor-client privilege was claimed. The Federal Court of Appeal, however, set aside the review decision, which resulted in the Commissioner appealing to the Supreme Court of Canada.

The Supreme Court of Canada dismissed the Commissioner's appeal. It found solicitor-client privilege a fundamental aspect of the proper functioning of Canada's legal system. It noted that the complexity of the law is such that it cannot be easily navigated without expert legal advice, and that people with legal concerns will often not make a clean disclosure to their counsel without a level of confidentiality that is near absolute. The Court found this assurance necessary and that the free flow of legal advice

44 Catholic District School Board of Eastern Ontario (2008), 176 L.A.C. (4th) 193 (Newman). 45 Canada (Privacy Commissioner) v. Blood Tribe Department of Health, 2008 SCC 44.


needs to be encouraged or the fundamental principle of access to justice and the quality of justice would be seriously compromised.

Biometrics

Employers are increasingly using employees’ biological characteristics, such as finger, hand, voice or facial features, to identify and keep track of employees’ attendance and work hours. Two recent Investigation Reports from the Alberta Information and Privacy Commissioner provide guidance on the use of biometric technology in the workplace.

Empire Ballroom

A nightclub sought to use a thumbprint sign-in system to monitor employee attendance and calculate payroll. The employer previously used a punch-clock system; however, it allowed employees to access each others’ timecards and cover for other employees who were absent or late. The employer implemented a biometric thumbprint scanner for signing in and out.

Unlike older systems, new biometric technology does not actually store copies of employees’ thumbprints and identify them against the use-generated image. Rather, it measures the unique attributes of an employee’s thumbprint, calculates a unique algorithm-derived number using the measurements, and stores and encrypts the number in a database. The number cannot be reverse-engineered to create an image or obtain the measurements of the employee’s actual thumbprint.

Employees were told that their thumbprints were going to be used as a sign-in/sign-out procedure, but were not informed how the technology worked or what information it collected.

After investigating,46 the Commissioner confirmed that an employee’s biological characteristics and the unique number stored in the system are the employee’s personal information. The Commissioner confirmed that attendance and payroll are reasonable aspects of managing employees, and found that the additional personal information collected by the thumbprint sign-in system was reasonable for attendance and payroll purposes because the Ballroom’s previous systems did not work. A key to the Commissioner’s decision was that the Ballroom was not actually collecting employees’ thumbprints but simply the unique identifying number. However, the Commissioner also found the Ballroom had breached Alberta’s Personal Information Protection Act because employees were not adequately informed about what personal information was being collected and used, which is required under privacy legislation when collecting, using and disclosing employees’ personal information.

46 Empire Ballroom (1208558 Alberta Ltd.), Information And Privacy Commissioner Of Alberta Investigation Report P2008-IR-005 (August 27, 2008).


Southwood Care Centre

A very similar conclusion was reached in the Southwood Care Centre case,47 where the employer planned to introduce a hand scanner for clocking in and out of work. The Commissioner found this technology to be acceptable in part because:

• it did not actually record finger prints or palm prints — instead, an algorithm converted these images into one mathematical value, which was then stored in the system; and

• the employer had sufficient evidence to establish that alternative authentication systems would not meet its business needs (for example, there was evidence of employees manipulating swipe cards and evidence of an administrative burden when employees forgot, lost or damaged their cards).

However, the Commissioner found that the employer’s notice to the employees about the collection of the information was inadequate. The Commissioner concluded the employer could have avoided a negative decision by providing proper notice at the time the hand recognition system was introduced, and/or on a poster near the hand scanner. Proper notice would have informed the employees of (i) the purpose for which the information is collected; (ii) the specific legal authority for the collection; and (iii) the title, business address and business telephone number of an officer or employee of the public body who can answer the individual’s questions about the collection.

Labour Cases

Teachers and the Foundation Skills Assessment (FSA) Tests

The Teachers’ Federation and the Schools both won cases in the past year in the ongoing battle over FSA tests.

The Teachers prepared a pamphlet in opposition to the FSA tests and a form letter for parents to sign asking the principal to excuse their children from the tests. The Teachers planned to have students take the material home to their parents in sealed envelopes. They had previously communicated with parents in that way.

The employer prohibited the proposed method of communication and the Teachers grieved. The Arbitrator decided the Teachers’ freedom of expression rights had been breached.48

47 Southwood Care Centre, Intercare Corporation, Information And Privacy Commissioner Of Alberta Investigation Report F2008-IR-001 (August 7, 2008). 48 British Columbia Public School Employers’ Assn., [2008] B.C.C.A.A.A. No. 51.


But when it came time to administer the tests last month, the Teachers’ attempt to boycott the tests was ruled by the Labour Relations Board to be an illegal strike.49

Employers’ Right to Investigate

An employee has a general obligation to participate in an investigation being conducted by his employer. But there is an important exception to that obligation when the employee may be facing criminal charges. And there is an equally important exception to that exception, as shown by the case arising from the sinking of the “Queen of the North”.

The tragic sinking of the ferry resulted in several investigations being carried out, with the possibility of criminal charges against some crew members. BC Ferries also conducted its own inquiry. The two employees who had primary responsibility for navigation during the incident refused to answer any questions about the critical time just before the sinking unless their answers were considered privileged and kept confidential pending the completion of the criminal investigation. BC Ferries refused to give that assurance, and when the employees still refused to answer, they were suspended without pay.

The union grieved the suspensions and Arbitrator Foley ruled that the employees’ right to remain silent was trumped by the employer’s right to complete its investigation, to determine how the sinking happened, to take steps to avoid a future occurrence, and to make full disclosure to the public. The Arbitrator also noted the highly public and controversial nature of the tragedy. As the BC Supreme Court said on judicial review:

It can hardly be disputed that the circumstances of the present case were extraordinary. A ferry carrying members of the public grounded and sank in waters routinely travelled by vessels of the Company. Two passengers lost their lives. The evacuation of the remaining passengers and crew was harrowing. The vessel could not be recovered. In the circumstances, the Company had an obligation to account for the tragedy to the public as quickly as possible. It required the co-operation of the crew members – and, in particular, the navigational crew – to fulfill that obligation.50

49 British Columbia Public School Employers’ Assn., BCLRB No. B25/2009. 50 British Columbia Ferry and Marine Workers’ Union v. British Columbia Ferry Services, 2008 BCSC 1464.


Absenteeism Control

A transit company’s absenteeism control procedures were challenged by the Union, which argued:

• it was inappropriate to issue letters after three absence incidents;

• the letters needed to be modified; and

• individual circumstances were not being considered.

The Arbitrator ruled in favour of the employer. The letters were not disciplinary. Rather, they advised employees of the cost of absenteeism and of the need to improve attendance, they offered assistance, and they cautioned that innocent absenteeism could lead to termination. The policy also allowed for individual circumstances to be considered.51

Meanwhile, we await an important judicial review decision in BC with respect to the Attendance Management Program of Coast Mountain Bus Company Ltd. The case was heard last fall and there should be a decision very soon.

Notice of Change

In these tough times, with employers implementing changes and cost saving measures, unionized employers in BC have to remember their obligation to give 60 days’ advance notice of any measure that affects the terms, conditions or security of employment of a significant number of bargaining unit employees. How is section 54 of the Labour Relations Code to be interpreted? The Labour Relations Board has recently said:

• section 54 is intended to encourage cooperative participation in resolving workplace issues and adapting to changes in the economy;

• it should be given a broad and liberal interpretation;

• a change affecting one employee is not covered;

• a change that affects a small portion of the employees, if it has an impact on all the employees (for example, by “wiping out” a portion of the bargaining unit) is covered; and

• whether section 54 is triggered is assessed by looking at the dynamics of the bargaining unit as a whole on a case-by-case basis.52

51 Ontario (Greater Toronto Transit Authority – GO Transit), [2008] O.G.S.B.A. No. 71. 52 Renew Crew Foundation, BCLRB No. B18/2009.


In this case, a reduction in sales prompted a temporary reduction in hours from 35 to 25 per week for 25% of the employees. That did NOT trigger section 54. However, note that the employer had been in discussion with the union about changes that were going to be necessary. But for that fact, the outcome could have been different.

Unfair Labour Practices

Changes to be Union-free

The Labour Relations Board has given hope to employers who want to reorganize their businesses to be rid of union obligations. Construction unions had complained that PCL committed an unfair labour practice with its reorganization. PCL asked to have the complaint summarily dismissed. The company admitted that one of its purposes was to shed its craft bargaining obligations and operate non-union or with a non-building trades union. The original panel ruled that was an improper motive. The reconsideration panel decided to send the case back to the original panel to review the matter contextually, and specifically to determine if there would be a practical and meaningful remedy if there was in fact an unfair labour practice.53

Wal-Mart’s Reach

Can Wal-Mart’s actions in closing a unionized store in Québec support an unfair labour practice complaint in Saskatchewan? Apparently, yes.

The UFCW was applying for certification for two Wal-Mart stores in Saskatchewan when Wal-Mart closed its recently unionized store in Jonquiere, Québec. The union complained that the Jonquiere closure was meant to intimidate employees in Saskatchewan and was an unfair labour practice there. Wal-Mart applied to have the Saskatchewan complaint summarily dismissed, but the Labour Relations Board ruled there was an arguable case to proceed.54

“Proud To Be Union Free” Video

Forcing employees to listen to an employer’s anti-union views may diminish the human dignity, liberty and autonomy of employees, and will invite close scrutiny of the content of the communication. The Labour Relations Board found the “Proud To Be Union Free” video contained false and misleading statements. The Board also concluded the false statement were intended to lead employees to conclude that trade union representation would produce a substantial risk of a reduction in wages and benefits, a reduction in net income, or a loss of employment. Forcing the employees to watch the

53 PCL Constructors Canada, BCLRB No. 162/2008. 54 UFCW, Local 1400 v. Wal-Mart Canada Corp, Saskatchewan LRB File No. 038-05, October 24, 2008.


video was not protected by the “free speech” provisions of the Code and was an unfair labour practice.55

Picketing

BC Courts continue to hold the line on what is, and what is not, allowed on the picket line. Some provinces have something like a “two minute rule” that allows picketers to stop the movement of people and vehicles for a set period of time. Recently, the courts in Newfoundland allowed “short and temporary interference”, while disallowing stoppages for “a substantial period of time”.56

As recently as last December, our BC Supreme Court confirmed that the law in British Columbia is clear: an employer is allowed unrestricted access to its property and picketing, while allowed as a form of persuasion, cannot constitute a physical blockade, even for a short period of time.57

Again, we urge employers to hold the line on lawful picketing. Do not agree with union requests for anything like a two minute rule in a picketing protocol, and do not accept such conduct on a picket line.

Political Protest or Strike / Picketing

The “bright line” between political or protest action and what is considered a “strike” or “picketing” under the Labour Relations Code has been affirmed.

The BC Teachers Federation and the Health Employees Union lost their argument at the Court of Appeal that a withdrawal of labour for political protest purposes was protected by the Charter.58

Meanwhile, we re-visit the Canadian Forest Products and HEU case.59 Last year we predicted it was headed for the Supreme Court of Canada. It didn’t make it to the highest court, but it did reach a satisfactory conclusion in 2008.

This case tested the BC Labour Relations Board’s bright line distinction between protest activity, which is protected by freedom of expression rights, and picketing, which is subject to regulation under the Labour Relations Code. The activity (in support of the health sector unions’ dispute with the provincial government over contracting out) started modestly and Canfor’s employees were told it was not meant to stop them from going to work. Very soon, however, the mood and method changed and, with the support of the union at Canfor, the employees knew they were not to cross the line.

55 Canadian Fibre, A Division of C.K. Fibres Corp., BCLRB No. B209/2008. 56 Toromont Cat, a division of Toromont Industries Ltd. v.I.U.O.E., Local 904, 2008 CLLC ¶220-014 (N.L.S.C.T.D.). 57 Canada Post Corp. v. Union of Postal Communications Employees, 2008 BCSC 1692. 58 British Columbia Teachers’ Federation v. British Columbia Public School Employers’ Association, 2009 BCCA 39. 59 Canadian Forest Products Ltd., BCLRB No. B275/2007.


The Board confirmed that the provisions of the Code regulating picketing continue to apply even though the definition of “picketing” no longer applied because of an earlier decision. Further, the Board confirmed that while the picketing provisions infringe on freedom expression, that infringement is justified under section 1 of the Charter.

Vicarious Liability of Unions

The best part of the decision was that the union could be vicariously liable for the conduct of its members in carrying out illegal picketing. The Board decided that, even if the union did not authorize the picketing, it must show that it took reasonable steps to prevent or end the illegal picketing. The matter was remitted to the original panel to decide if the union had met that test. The employer and the union then settled the case with a payment by the union of $500,000.

The Board’s decision that it is possible to hold a union vicariously liable if it did not take reasonable steps to prevent or stop illegal picketing by its members stands as good law in BC and is very important. And with a substantial payment being made to settle the case, unions will find it very hard to hide behind the illegal activities of its members.

It is not just unions that can be liable for activity that contravenes the picketing rules of the Labour Relations Code. Donna Peterson and a number of other people took independent action in support of the Teachers’ day of protest in October, 2005. Ms. Peterson decided to lead a group in a “protest” at the Burnaby Transit Centre of Coast Mountain Bus Company. They wore placards calling for the repeal of the back-to-work legislation. The union leader at the workplace said his members would not cross a picket line, to which Ms. Peterson smiled in response. The union and its members considered their workplace was being picketed and 100 employees left work. Ms. Peterson refused to comply with several requests of the employer to allow the employees to return to work. Thousands of commuters were inconvenienced for several hours as a result.

Coast Mountain sought a declaration from the Labour Relations Board that the activity was illegal picketing. That would allow the company to pursue a claim for damages in court. The Labour Relations Board agreed with the company, rejecting Ms. Peterson’s free speech, discrimination and injury to dignity arguments, and her arguments that she is not a “person” under the Code, and that the company should seek damages from the union first.60

Partial Strike

It is possible for legal strike activity to result in discipline of union members by the employer.

60 Coast Mountain Bus Company Ltd., BCLRB No. B73/2008.


The union for employees of the public library system in Victoria was in a legal strike position and carried out selective closures, stopped certain programs, terminated internet access and stopped collecting fines for late returns. The employer disciplined employees for waiving fines and the union complained to the Labour Relations Board of unfair labour practices. The Board agreed with the employer that the fines amounted to an asset of the employer, there was no authority for the employees to destroy or give away assets, and the conduct could not be justified as strike action.61

Closing Thoughts

The last year has seen some significant labour and employment cases, which fortunately have been more balanced than we’ve experienced in the recent past. Later in the program we will cover some very significant decisions of the Supreme Court of Canada, which have also emphasized employer rights and interests.

All-in-all, 2008 was a very significant year for employment, labour and human rights cases, and employers have reason to feel more confident about legal decisions affecting their interests. It may be that we will see more of the same in 2009, especially with the number of lay-offs, employer financial woes and the likelihood that more people will resort to litigation in difficult times. We look forward to talking to you about 2009 next year.

61 Greater Victoria Public Library Board, BCLRB No. B10/2008.

Every effort has been made to ensure the accuracy of this publication, but the comments are necessarily of a general nature, are for information purposes only and do not constitute legal advice in any matter whatsoever. Clients are urged to seek specific advice on matters of concern and not rely solely on the text of this publication.

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The Highest Word on Human Rights Rachel Ravary Brian Wasyliw Tara McPhail

March 6, 2009


www.mccarthy.ca

The Highest Word on Human Rights


Introduction

The Supreme Court of Canada has rendered an unusual number of employment and labour related decisions over the past year. Several of these decisions concern the duty to accommodate. Fortunately for employers, these decisions place limits on an employer’s duty to accommodate. Before we analyze how, and what these cases mean for your organization, we will review some of the basic principles of human rights law.

Duty to Accommodate

Employers continue to struggle with the duty to accommodate. When is the duty to accommodate engaged? What personal characteristics require accommodation? How should accommodation be managed and by whom?

Discrimination and Human Rights Legislation

Each Canadian province has laws prohibiting discrimination in employment on a number of grounds. In British Columbia, the Human Rights Code1 prohibits discrimination in employment on the basis of race, colour, ancestry, place of origin, political belief, religion, marital status, family status, physical or mental disability, sex, sexual orientation, age or criminal conviction that is unrelated to the employment or the intended employment of that person.

Employers may establish a defence to a charge of discrimination where the discrimination complained of relates to a “bona fide occupational requirement”.

Bona Fide Occupational Requirement

A bona fide occupational requirement (“BFOR”) is an employment requirement or qualification that is necessary by virtue of the character of the job. This defence applies only where the employer establishes that:

• the policy was adopted for a purpose rationally connected to the performance of the job;

• the policy was adopted in an honest and good faith belief that it was necessary to the work-related purpose; and

1 RSBC 1996, c.210


• the policy is reasonably necessary to the accomplishment of that legitimate work-related purpose. To show that a standard is reasonably necessary, it must be demonstrated that it is impossible to accommodate the employee without imposing undue hardship.2

This 3-part test is often referred to as the Meiorin test, named after the case in which the test was established by the Supreme Court of Canada.

The workplace requirement at issue may be as simple as a dress code, a safety rule, a shift schedule or even a requirement that employees attend work regularly.

The employer’s duty to accommodate is engaged where an employee is unable to comply with a workplace rule or requirement due to a protected personal characteristic. In order for an employer to be able to rely on the BFOR defence to discrimination, it must first determine whether a workplace requirement or rule is a BFOR based on the above test.

It is the third requirement of the Meiorin test that often causes difficulty for employers. Employers are required to accommodate disabled employees to the point of “undue hardship.”

The duty to accommodate places obligations on employers and is typically only limited by the meaning of “undue hardship” – a stringent standard. Employers must assess each employee individually to determine whether undue hardship would result if the employer accommodated that employee’s particular needs. What constitutes undue hardship varies from case to case.

The following factors, provided by the Supreme Court of Canada, are useful in determining whether undue hardship exists:

• the financial cost of the proposed accommodation (the assessment of financial cost will likely be influenced by the size of the employer’s operation);

• problems with morale of other workers;

• interchangeability of workforce and facilities (the assessment of which will likely be influenced by the size of the employer’s operation); and

• safety risk, including the magnitude of the risk and the identity of those who bear it.3

2 British Columbia (Public Service Employee Relations Commission) v. British Columbia Government and Service Employees’ Union, [1999] 2 S.C.R. 3 (“Meiorin”) 3 Central Alberta Dairy Pool v. Alberta (Human Rights Commission), [1990] 2 S.C.R. 489


Recent decisions from the Supreme Court of Canada expand upon the above list of factors. As we will analyze below, employers now have the approval of the country’s highest judicial authority to consider the following additional factors when assessing undue hardship:

• deemed termination provisions within a collective agreement;

• length of time for which accommodation has already been provided (the “global approach to accommodation”); and

• the impact of accommodation upon the basic employment bargain

Respect for Collective Agreements

In the past, many courts and tribunals have been dismissive of deemed termination provisions within collective agreements when determining whether undue hardship exists. As of the Supreme Court of Canada’s decision in McGill University Health Centre,4 this may no longer be the case.

In McGill the parties’ collective agreement contained a provision whereby an employee who was absent for 3 years would be deemed terminated. The employee in McGill had taken a leave of absence from work on account of health problems. The employee made many unsuccessful attempts to return to work. The employer, in an effort to assist the employee, granted her rehabilitation periods more generous than that provided for in the collective agreement. Finally, as the employee was still unfit for work at the end of the 3 year period provided for in the collective agreement, her employment was terminated.

The case made its way to the Supreme Court of Canada, which held:

“…it must be recognized that parties to a collective agreement have a right to negotiate clauses to ensure that sick employees return to work within a reasonable period of time. If this valid objective is recognized, the establishment of a maximum period of time for absences is thus a form of negotiated accommodation.”

“Considered from the perspective of the duty to accommodate, this clause, like the right to return to work part time, is among the measures implemented in the enterprise to enable a sick employee to be accommodated.”

“…such a clause can serve as evidence of the maximum period beyond which the employer will face undue hardship.”5

4 2007 SCC 4 (“McGill”) 5 McGill at paras. 18, 19 and 27


Take-aways from McGill:

• parties have the right to negotiate deemed termination provisions;

• although the period negotiated by the parties is a factor to consider when assessing the duty to accommodate, it does not definitively determine the specific accommodation measure to which an employee is entitled, since each case must be evaluated on the basis of its particular circumstances;

• deemed termination provisions are not prima facie discriminatory (minority opinion).

Refining the Duty to Accommodate

Time at which employer’s attempts at accommodation are assessed

In the past, some courts and human rights tribunals have assessed an employer’s attempts at accommodation at the time an employee is dismissed or terminated.

In McGill, the Quebec Court of Appeal held that the employer’s duty to accommodate must be assessed as of the time the employee was effectively denied an additional measure. In other words, in McGill, the duty to accommodate was to be assessed at the time of the employee’s termination, following her 3 year absence from work.

The Supreme Court of Canada disagreed with the approach of the Quebec Court of Appeal and held, instead:

“In my view, this approach is based on a compartmentalization of the employee’s various health problems. Undue hardship resulting from the employee’s absence must be assessed globally, starting from the beginning of the absence, not from the expiry of the three year period.”6

As a result, all of the employer’s attempts at accommodating this particular employee over her 3 year absence – including the fact that the employer had extended the rehabilitation periods provided for in the collective agreement – formed part of the analysis as to whether the employer had discharged its duty of accommodation.

Take-aways from McGill:

• always look for accommodation;

• document the accommodation process.

6 McGill at para. 33


Threshold for establishing undue hardship

In the past, some courts and human rights tribunals have assessed an employer’s attempts at accommodation in terms of whether an employer had established that it was impossible to accommodate an employee’s characteristics. As a result of the Supreme Court of Canada’s decision in Hydro Québec,7 the test has become less stringent.

Hydro Québec concerned the case of an employee who had missed 960 days of work during a period of approximately seven years. At the time of her dismissal, the employee had been absent from work for five months. The employee’s attending physician had recommended that she stop working for an indefinite period, and the employer’s psychiatric assessment stated that the employee would no longer be able to work on a regular basis without continuing to have attendance problems.

The case made its way to the Supreme Court of Canada. The Québec Court of Appeal disagreed with the arbitrator’s finding that the dismissal was justified on the grounds that the employer had demonstrated that the employee was unable to work regularly for the reasonably foreseeable future. The Québec Court of Appeal held that the employer had not proven that it was impossible to accommodate the employee’s characteristics.

Fortunately for employers, the Supreme Court of Canada disagreed. It held:

“Thus, the test for undue hardship is not total unfitness for work in the foreseeable future. If the characteristics of an illness are such that the proper operation of the business is hampered excessively or if an employee with such an illness remains unable to work for the reasonably foreseeable future even though the employer has tried to accommodate him or her, the employer will have satisfied the test.”8

The court explained that an employee who is “unable to work for the reasonably foreseeable future” is an employee that is no longer able to fulfill the basic obligations associated with the employment relationship.

Take-aways from Hydro Québec:

• the test for establishing undue hardship is not an impossibility standard;

• document the job requirements;

• consider getting a functional job analysis done.

7 2008 SCC 43 (“Hydro Québec”) 8 Hydro Québec at para. 18


Requirement for medical notes not discriminatory

The now infamous case of Honda Canada Inc. v. Keays9 concerned a fourteen year employee with chronic fatigue syndrome who, after receiving long term disability benefits for approximately two years, returned to work under the employer’s disability program. As part of the program Keays was exempted from the employer’s attendance-related discipline policy, but he had to bring a medical note to justify each absence. Other employees suffering from mainstream illnesses were not required to bring medical notes. Keays had frequent absences. When Honda requested that Keays meet with Honda’s physician, Keays refused and was terminated for insubordination.

The case made its way to the Supreme Court of Canada. While this case is noteworthy from many aspects, what is of interest here is the discussion around Honda’s requirement that, in order to be exempted from its attendance-related discipline policy, Keays had to provide medical notes to justify his absences. The trial judge concluded that the accommodation provided by admission to the disability program was itself discriminatory because Keays “had to ‘earn’ each dispensation from being ‘coached’ for any absences by presenting a ‘note’ from his doctor like some child who is suspected of ‘playing hookey’ from school”.

Again, fortunately for employers, the Supreme Court of Canada disagreed. It held:

“The requirement of [medical] notes was in effect part of the accommodation because it permitted absences without the possibility of the same leading to disciplinary action for failing to meet work requirements…There was no detriment in being part of the disability program and being treated differently from persons with “mainstream illnesses”. The differential treatment was meant to accommodate the particular circumstances of persons with a particular type of disability and to provide a benefit to them.”10

Take-aways from Honda:

• treating an employee differently does not automatically equal prima facie discrimination;

• there are circumstances in which different treatment may form part of an employee’s accommodation.

Room for Attendance Management

In the past some courts and human rights tribunals have been critical of employers’ attempts to manage the attendance of their workforce. Indeed, in Honda, the trial judge concluded that the

9 2008 SCC 39 (“Honda”) 10 Honda at para. 67


employer’s disability program was discriminatory. The Court of Appeal in Hydro Québec, notwithstanding that the employee in question had missed 960 days of work over an approximately seven year period and had been absent for five months at the time of dismissal, found that the employer had not established that it was impossible to further accommodate that employee.

Employers have reason to rejoice, therefore, that the Supreme Court of Canada has recognized that employers have a legitimate need to monitor and manage the attendance of their employees.

In Honda, the Supreme Court of Canada said:

“The suggestion that the program itself was discriminatory is not supported by the facts.”

…

“I accept that the need to monitor the absences of employees who are regularly absent from work is a bona fide work requirement in light of the very nature of the employment contract and responsibility of the employer for the management of the workforce.”11

In Hydro Québec, the Supreme Court of Canada said:

“…in a case involving chronic absenteeism, if the employer shows that, despite measures taken to accommodate the employee, the employee will be unable to resume his or her work in the reasonably foreseeable future, the employer will have discharged its burden of proof and established undue hardship.”12

Take-aways on attendance management:

• employers have a right to manage attendance and, in some cases, to discharge employees who are unable to attend work regularly;

• attendance management programs provide employees with a form of accommodation;

• it is important to remember that dismissals pursuant to an attendance management program will still be subject to a human rights review.

11 Honda at para. 71 12 Hydro Québec at para. 17


Recognizing the Basic Employment Bargain

In a very important recent development, the Supreme Court of Canada affirmed that the purpose of the duty to accommodate is not to provide an employee with the same pay for less work. In Hydro Québec the court held:

“However, the purpose of the duty to accommodate is not to completely alter the essence of the contract of employment, that is, the employee’s duty to perform work in exchange for remuneration.”

…

“The duty to accommodate is therefore perfectly compatible with general labour law rules, including both the rule that employers must respect employees’ fundamental rights, and the rule that employees must do their work. The employer’s duty to accommodate ends where the employee is no longer able to fulfill the basic obligations associated with the employment relationship for the foreseeable future.”13

In essence, the court recognized that employment agreements are contracts of employment, and that employees will have obligations under those contracts. Employers will not be obliged to indefinitely employ individuals who are unable to fulfill their obligations under the employment contract. For example, if an employee cannot perform his or her obligations under the employment contract, then the employer will ultimately be entitled to treat the contract as at an end.

Take-aways from Hydro Québec:

• don’t reduce performance standards;

• don’t pay more for less

Need Evidence of Prima Facie Discrimination

The Supreme Court of Canada decisions high-lighted above are already having an impact in British Columbia.

The BC Court of Appeal issued a decision on September 18, 2008 concerning an alcoholic employee named Brian Gooding who was fired from his liquor store job for theft.14 The case went back and forth from the arbitrator to the Labour Relations Board as the Board developed its approach to “hybrid” cases – i.e. cases where there is a mixture of culpable conduct (theft in this case) and non-culpable factors (such as alcoholism).

13 Hydro Québec at paras. 15 and 19 14 British Columbia (Public Service Agency), 2008 BCCA 357, September 18, 2008 (“Gooding”)


The arbitrator finally determined that alcoholism contributed to the theft and therefore played a part in the employer’s decision to terminate. The arbitrator then concluded that the employer had not met its duty to accommodate. The employer appealed.

The Court of Appeal said the issue was whether the Human Rights Code requires an employer to accommodate an employee who is guilty of theft because he suffers from an alcohol dependency. The case could be said to be limited to situations where the employee is guilty of criminal conduct, but it is likely to have broader application.

Most importantly, Gooding helps employers argue that the employee has not established prima facie discrimination. The court ruled:

I can find no suggestion that Mr. Gooding’s alcohol dependency played any role in the employer’s decision to terminate him or in its refusal to accede to his subsequent request for the imposition of a lesser penalty. He was terminated, like any other employee would have been on the facts, for theft. The fact that alcohol dependent persons may demonstrate “deterioration in ethical or moral behaviour” [quoting from the evidence of the addictions expert], and my have a greater temptation to steal alcohol from their workplace if exposed to it, does not permit an inference that the employer’s conduct in terminating the employee was based on or influenced by his alcohol dependency.”15

Gooding helps to emphasize that a complainant must always establish prima facie discrimination before the duty to accommodate arises. In many cases, this requirement has been effectively ignored. For example, when a disability contributes to a person’s absenteeism, it has been automatically assumed the disability played a role in the termination decision, leading to a finding of prima facie discrimination.

The BC Court of Appeal in Gooding adopted the reasoning of the minority in McGill, which said:

“It is not enough to impugn an employer’s conduct on the basis that what was done had a negative impact on an individual in a protected group. Such membership alone does not, without more, guarantee access to a human rights remedy. It is the link between that group membership and the arbitrariness of the disadvantaging criterion or conduct, either on its face or in its impact, that triggers the possibility of a remedy. And it is the claimant who bears this threshold burden.”16

Leave to appeal the Gooding decision to the Supreme Court of Canada was recently denied.17

15 Gooding at para. 11 16 Supra, note 13, at para. 12 quoting from McGill, supra, note • at para. 49 17 [2008] S.C.C.A. No. 460


Similarly, in Ryan v. Canada Safeway,18 the British Columbia Human Rights Tribunal (the “Tribunal”) dismissed a complaint by an alcoholic employee who had stolen money from her employer. The Tribunal quoted from the minority opinion in McGill and held:

“In the present case, Ms. Ryan would have to establish that her misconduct, in taking the money from the till and not returning it for some days, was related to her alcoholism. If it was not, then, regardless of the state of the Employer’s knowledge with respect to her alcoholism, it was not prima facie discriminatory for the Employer to terminate her employment for engaging in that conduct, and she could not succeed in her complaint.”19

The Tribunal held that Ms. Ryan would not be able to establish the necessary connection between her alcoholism and her conduct, noting specifically that she never raised the issue during the investigation even though she knew of the no-tolerance policy on theft, that her “borrowing” money from the till violated the policy, and that she was an alcoholic.

The reasoning of the minority in McGill was also endorsed by the British Columbia Court of Appeal in International Forest Products Ltd. v. Sandhu.20 The Complainants in Sandhu were a group of employees who were off work and receiving disability benefits when the mill they worked for was temporarily closed. The union and the employer negotiated severance packages for the mill’s active employees which provided for pay or relocation during the mill closure. The Complainants were excluded from the severance packages unless they became fit for work in the future. The Complainants argued that their exclusion was discriminatory on the basis of disability and the Tribunal agreed.

The British Columbia Court of Appeal, however, adopted the reasoning of the minority in McGill:

“not every distinction is discriminatory. It is not enough to impugn an employer’s conduct on the basis that what was done had a negative impact on an individual in a protected group. Such membership alone does not, without more, guarantee access to a human rights remedy.21

Importantly, the Court of Appeal stated that the differential treatment of active and non-active employees was not inherently discriminatory.22 The purpose of the severance packages was to provide compensation to active employees who would be negatively impacted by the mill closure. The complainants, who were receiving disability benefits and were not working, were not affected by the

18 Ryan v. Canada Safeway, 2008 BCHRT 12 (“Canada Safeway”) 19 Canada Safeway at para. 27 20 2008 BCCA 204 (“Sandhu”) 21 Sandhu (quoting from McGill) at para. 49 22 Sandhu at para. 29


mill closure. As a result, the distinction in Sandhu was fair and commercially sensible in the circumstances.23

Take-aways from the Gooding, Canada Safeway and Sandhu cases:

• the complainant must establish prima facie discrimination before the employer’s duty to accommodate arises

• not every distinction equals discrimination

Conclusion

The recent decisions of the Supreme Court of Canada in McGill, Honda and Hydro Québec place important limits on an employer’s duty to accommodate. By keeping the above-mentioned take-aways in mind, you will enhance your organizations’ ability to meet the challenges associated with the duty of accommodation.

23 Sandhu at para. 33

Supreme Guidance for Employers Jordanna Cytrynbaum Donovan Plomp and Erika Ringseis

March 6, 2009


www.mccarthy.ca

Supreme Guidance for Employers


Introduction

The labour and employment landscape has been dramatically reshaped by recent decisions of the Supreme Court of Canada. The past year the Court issued some significant decisions that will affect the legal position of employers and employees alike. What follows is an overview of these key decisions and practical advice for understanding the paths to take and pitfalls to avoid as you navigate this new employment landscape.

Post-Employment Competition by Non-Fiduciaries

RBC Dominion Securities Inc v. Merrill Lynch Canada Inc.1

Background

The duties and legal responsibilities of a departing employee vary depending on whether the employee is a fiduciary employee or a non-fiduciary employee. A fiduciary employee is a person who is in a legal relationship of trust or confidence with her employer because of her employment position. Fiduciary employees generally include the directors and senior management of a corporation.

In a recent case, RBC Dominion Securities Inc. v. Merrill Lynch Canada Inc. (“RBC”) the SCC clarified what obligations a non-fiduciary employee will owe to a former employer upon leaving to work for a competitor and whether a non-fiduciary employee is entitled to compete with her former employer during the notice period.

The Facts

A branch manager of RBC coordinated the mass resignation of virtually all of the RBC investment advisors in a branch in Cranbrook, British Columbia. The departing employees terminated their employment contracts without notice to RBC and immediately began to work for a competitor, Merrill Lynch. Furthermore, in the weeks prior to leaving RBC, the employees surreptitiously copied and transferred RBC’s client records to Merrill Lynch and convinced many of those clients to transfer their assets to the new employer. The RBC office was “effectively hollowed out and all but collapsed.”

1 2008 SCC54


The issues before the SCC were:

• whether or not the employees “unfairly competed” against their former employer during the time of reasonable notice, and if so, whether they were liable for RBC’s lost profits as a result; and

• whether or not the branch manager who orchestrated the mass resignation breached a duty of good faith owed to RBC, and if so, whether he was liable for RBC’s lost profits as a result.

The SCC accepted the trial judge’s finding of fact that the branch manager and other employees were non-fiduciaries. Therefore, the principles that follow relate to the broad range of non-fiduciary employees only – i.e. basically everyone who is not a director, senior manager or otherwise placed in a position of trust and confidence in their employment.

Court’s Ruling: Non-Fiduciary Employees Are Free to Compete with a Former Employer

In a blow to employers, the SCC held that, in the absence of a restrictive covenant, as soon as a non-fiduciary employee resigns, he or she is free to compete against a former employer. As such, the Court concluded that the employees did not “unfairly compete” against RBC during the time of reasonable notice even though they immediately assumed work with RBC’s competitor, Merrill Lynch. The employees were free to compete as soon as they resigned and could not be held liable for any lost profits caused as a result of this competition.

However, on a positive note for employers, the SCC held that even non-fiduciary employees owe a duty of good faith to their employers. This duty requires an employee to faithfully perform the obligations created by his employment contract. If he breaches that contract, then he may be held liable to his employer for any damages that result. In RBC, the branch manager owed a duty of good faith in the discharge of his employment contract. It was an implied term of the branch manager’s contract that he would retain employees of RBC who were under his supervision. By orchestrating a mass resignation of RBC employees, the Court found that the manager violated his duty of good faith to RBC.

As a result of the branch manager’s breach of contract, he was found liable for 5 years worth of RBC’s lost profits. This amounted to nearly $1.5 million in damages – well beyond the lost profits caused during the reasonable notice period alone. The Court reasoned that the magnitude of damages was not too remote because it was within the reasonable contemplation of the contracting parties (i.e. the branch manager and RBC) at the time of forming the employment contract that the orchestrated departure of substantially all of the office’s investment advisors would cause a loss in profits giving rise to damages.


What does this mean for Employers?

The SCC has clarified that there is no duty “not to compete unfairly” preventing non-fiduciary employees from competing with a former employer. Employers can manage the effects of competition from former non-fiduciary employees by:

• Including a definition of confidential information in employees’ written employment contracts and an obligation on employees not to use such confidential information from and after termination of the employment relationship.

• Expressly setting out the requirements that must be met for an employee to terminate employment and give notice of termination in written employment contracts.

• Consider obtaining restrictive covenants from employees such as non-competition and non-solicitation agreements, particularly in respect of those employees to whom the employer would be vulnerable to competition following termination.

So Long Notional Severance

New Restrictions for Enforcing Restrictive Covenants

Shafron v. KRG Insurance Brokers (Western) Inc.2

Background

Employers often include restrictive covenants in their employment contracts to restrict post-employment competition by departed employees. These covenants are generally seen as a restraint of trade, and for policy reasons, the courts have held that, in order for restrictive covenants to be enforceable, the restrictions on competition must be reasonable.

Problems with enforceability will arise when a restrictive covenant is ambiguous or unreasonable.

Prior to Shafron v. KRG Insurance Brokers (Western) Inc. (“Shafron”), in the case of an ambiguous restrictive covenant, courts could use the following curative mechanisms to resolve ambiguity in the employer’s favour:

• notional severance;

• blue-pencil severance; and

• rectification.

2 2009 SCC 6


Notional severance means “reading down” or narrowing the scope of a contractual provision to make it legal and enforceable. For example, notional severance has been employed to read-down contracts that mistakenly charge a criminal rate of interest by replacing the illegal rate with a rate of 60% (the legal maximum).

Blue-pencil severance involves removing the ambiguous part of a contractual provision where that part is clearly severable from the rest of the contract. For example, the ambiguous term “years fourteen days” could be severed to read as “fourteen days.”

Rectification, on the other hand, is sought where a party alleges that the language of a contract is mistaken and does not reflect the true intention of the parties at the time they entered into the contract. If rectification is employed, it involves the court altering or re-wording a contractual provision by restoring it to what the parties’ agreement actually was. For example, where the parties buy and sell a 15 foot boat, but mistakenly describe it in the contract as a 15 inch boat, rectification would be an appropriate remedy.

This area of the law changed with the SCC’s recent ruling in the Shafron case in which the SCC clarified how ambiguity in restrictive covenants may be resolved.

The Facts

Mr. Shafron owned and operated an insurance agency. In 1987, Mr. Shafron sold his insurance agency to KRG Insurance Brokers Inc. (KRG). Mr. Shafron was hired by KRG as an employee. His employment was subject to a restrictive covenant that prevented Mr. Shafron from competing with KRG within the “Metropolitan City of Vancouver” for a period of three years following the termination of his employment.

In 2001, Mr. Shafron left KRG to join an insurance broker practicing in the neighbouring suburb of Richmond. A significant number of KRG customers took their business to Mr. Shafron and his new employer. KRG alleged Mr. Shafron breached the restrictive covenant prohibiting competition and sued Mr. Shafron to enforce the restrictive covenant.

Mr. Shafron challenged the enforceability of the non-competition clause in his KRG employment contract on the basis that the “Metropolitan City of Vancouver” was not a legally defined term and that the restrictive covenant was ambiguous. Mr. Shafron’s argument succeeded at trial, but was overturned by the BC Court of Appeal. According to the Court of Appeal, it was possible to apply the doctrine of notional severance to construe the term “Metropolitan City of Vancouver” as applying to the City of Vancouver and the municipalities contiguous to it, including Richmond.



• whether or not the term “Metropolitan City of Vancouver” was ambiguous; and if so,

• whether or not the Court should apply notional severance, blue-pencil severance or rectification to resolve the ambiguity and to make an otherwise unreasonable restriction reasonable and enforceable.

What’s changed?

The SCC held that the term “Metropolitan City of Vancouver” was ambiguous because it had no legal meaning. It then turned to the question of whether or not this ambiguity could be resolved with the use of severance or rectification.

The Court clarified that notional severance is not applicable to cure an ambiguous restrictive covenant in an employment contract. Unlike other situations where notional severance may be applied, there is no bright-line test that a Court can use to determine what is a reasonable restriction and what is unreasonable. Applying any form of notional severance to a restrictive covenant would therefore require the Court to substitute its own idea of reasonableness in place of the actual agreement that was made.

Blue pencil severance was not available to cure the ambiguity on the facts of the Shafron case. However, the SCC did not rule out the use of this form of severance in future cases of ambiguous restrictive covenants. Blue-pencil severance may be available in rare cases if an employer can show that the contractual provision at issue is clearly severable, trivial and not necessary to give effect to the restrictive covenant. This will require proof that the employer and the employee would have unquestioningly agreed to the removal of the ambiguous term without varying other terms in the agreement.

Rectification was also not available on the facts in Shafron. However, it may be available in future cases to cure an ambiguous restrictive covenant if the employer can demonstrate that the text of the written contract does not accurately reflect the parties’ true intentions.

How will this affect Employers?

The SCC has effectively narrowed the circumstances in which severance may be available to cure an ambiguous restrictive covenant to make it enforceable. With this in mind, it is important to get it right the first time.


Employers should ensure that their restrictive covenants are not overly broad. This means restricting activities:

• to a reasonable geographic area;

• for a reasonable period of time; and

• for a reasonable scope of activities.

In this context, reasonable means that the restriction is:

• clearly stated and easily understood;

• defined as narrowly as possible; and

• does not effectively prevent the employee from earning a living.

If you are using restrictive covenants in your employment contracts or are attempting to enforce a restrictive covenant, given the recent developments in this area, we recommend that you seek legal advice as to whether the covenants are enforceable.

The Duty to Mitigate

Discharging the duty may include getting back with an “ex”

Evans v. Teamsters Local Union No. 313

Background

An employer may terminate an employee’s contract without cause, provided that the employer provides the employee with either reasonable working notice, or pay in lieu of that notice.

It is established law that a dismissed employee is expected to mitigate the extent of his or her damages by making efforts to obtain alternative sources of income, usually in the form of new employment. Although there is no requirement that a dismissed employee be successful in mitigating her damages, she must make reasonable attempts to do so. Where an employee refuses to mitigate her damages, and where an employer can prove this refusal to mitigate, the employee will lose some or all of her entitlement to compensation in lieu of notice.

Until recently, however, it was unclear whether the duty to mitigate meant that employees are required to accept work offered by a former employer. In Evans v. Teamsters Local Union No. 31

3 2008 SCC 20


(“Evans”), the Court held that, in some circumstances, the duty to mitigate will require a wrongfully dismissed employee to return to work for an ex-employer.

The Facts

In Evans, an employee who worked as a business agent for 23 years was dismissed without cause. The employee then hired legal counsel and demanded 12 months of continued employment and 12 months of pay in lieu of notice. Following receipt of the employee’s demand, the parties attempted to negotiate a resolution. In the interim, the employer continued to pay the employee his salary and benefits.

Several months later, the employee received a letter from the employer asking him to return to work and serve out the remainder of his 24 months notice period. The letter stated that if the employee refused to return, the employer would treat that refusal as cause for dismissal. The employee stated that he would return to work, provided that the employer rescind his original termination letter. The employer refused to do so and the employee commenced litigation.

At trial the judge concluded that the employee had been wrongfully dismissed and disagreed with the employer that, by failing to return to work, the employee had failed to mitigate his damages. The trial judge awarded $100,000 in damages to the employee. On appeal, the Court of Appeal overturned the decision. The Court of Appeal held that the employee acted unreasonably in refusing to return to work, which constituted a failure to mitigate damages. On that basis, the Court of Appeal concluded that the employee was not entitled to damages in lieu of notice.

The issue before the SCC was whether or not an employee’s duty to mitigate damages requires him to accept a job offer from his former employer.

What Evans means for Employers

The Court held that, in some circumstances, an employee will be required to return to work for a former employer as part of his duty to mitigate the damages caused by a wrongful dismissal.

This means that employers are no longer confined to simply continuing to pay damages in lieu of notice. The SCC recognized that an employer has the initial option of offering either working notice or pay in lieu of notice. To deny the later re-selection of working notice would essentially create an artificial distinction between the two forms of compensation that is not justified in law.

Whether or not an employee will be required to accept that offer of re-employment, however, depends on the facts. The overarching concern is that an employee not be obliged to mitigate his damages by working in an atmosphere of hostility, embarrassment or humiliation. This will be assessed on an objective standard based upon what a reasonable person would do in the employee’s position. Factors that will be taken into account include whether the salary offered to the employee is the same, the


working conditions are not substantially different or demeaning, the personal relationships involved are not acrimonious and litigation has not yet been commenced.

If an employee refuses an offer that would have been accepted by a reasonable person, doing so will amount to a failure to mitigate damages which, in turn, will cause the employee to lose any entitlement to damages in lieu of notice from the employer.

In Evans, the SCC held that the employee’s refusal to accept his employer’s offer of employment for the remainder of the notice period was unreasonable. The relationship had not been seriously damaged and there was no evidence that the employee would not be able to perform his duties upon returning to work. The employee’s refusal to return to work constituted a failure to mitigate his damages such that he forfeited those damages in lieu of notice.

Dumping the Wallace Bump:

Raising the bar for aggravated and punitive damages in wrongful dismissal claims

Honda Canada Inc v. Keays4

Background

Many employers have been waiting on the edge of their seats for the SCC’s take on the largest ever aggravated and punitive damages awarded for a wrongful dismissal ($500,000 at trial, reduced to $100,000 on appeal).

When an employee is wrongfully dismissed, he or she is entitled to working notice or damages in lieu of notice. In the past, courts have extended the notice period where the manner of an employee’s dismissal involved bad faith on the part of the employer, such as conduct in the manner of dismissal which damaged the employee’s reputation, unfounded allegations of wrongdoing on the part of the employee, or otherwise causing mental distress to the dismissed employee. These extensions to the notice period were called “Wallace damages,” after the SCC case Wallace v. United Grain Growers Ltd.

In addition to Wallace damages, an aggrieved employee could also claim aggravated damages and punitive damages to further compensate him for an employer’s bad faith manner of dismissal where the employer also committed an independent actionable wrong. Unfortunately, courts have often been inconsistent in their approach to what damages are available following a wrongful dismissal and the circumstances in which they should be awarded.

The SCC’s decision in Keays clarifies what damages may be ordered in wrongful dismissal claims and when they should be awarded. The aspect of the decision that will be most significant for employers is

4 2008 SCC 39


that the Court eliminated the Wallace-bump altogether. Aggravated and punitive damages may still be claimed, but the Court has set restrictive guidelines on when they will be awarded.

The Facts

In Keays, an employee had worked for 11 years for the same employer when he was diagnosed with chronic fatigue syndrome. He ceased work and received disability benefits for one year, at which point his employer’s insurer discontinued the benefits. The employee returned to work and was placed in a disability program that allowed him to take absences if he provided a doctor’s note confirming that the absence was related to his disability.

The employee’s absences continued and the employer began to suspect that the doctor’s notes provided were not based on independent evaluations of whether or not the employee missed work due to his disability. The employer asked the employee to meet with an occupational medical specialist to determine if the disability could be accommodated. On the advice of his legal counsel, the employee refused to meet with the doctor without an explanation of the purpose, methodology and parameters of the consultation. The employer responded with a letter advising the employee that, although the employer supported his full return to work, his employment contract would be terminated if he refused to meet the doctor. The employee refused and his employment was terminated.

At trial, the court determined that the employee had been wrongfully dismissed and was entitled to a notice period of 15 months. In addition, the trial judge held that the employer had committed acts of discrimination, harassment and misconduct and increased the notice period to 24 months to compensate for this manner of dismissal (Wallace damages). The court also awarded punitive damages in the staggering amount of $500,000 and granted special costs.

On appeal, the Court of Appeal reduced the costs premium and also reduced the punitive damages award to $100,000.The Court of Appeal otherwise upheld the trial judge’s decision.


• what damages may be awarded in a wrongful dismissal action; and

• in what circumstances should those damages be awarded?

What’s changed?

The biggest change that comes out of the Keays decision is the elimination of Wallace “bump”. This means that going forward courts may no longer increase wrongful dismissal damages awards with an extension of the notice period.

An employee can still be awarded damages for the bad faith manner of his dismissal, but only if he can prove that he suffered foreseeable, compensable damages and that the employer caused those


damages by acting in a way that was unfair, in bad faith, attacking the employee’s reputation, misleading or unduly insensitive. In other words, the bad faith damages available upon dismissal must meet the same requirements as any other moral damages – that is, the award must be based on compensating an employee for actual, provable losses suffered.

The SCC also emphasized that punitive damages may only be awarded in exceptional cases where the employer’s conduct is sufficiently egregious and outrageous to justify such an exceptional remedy. In addition, the employer must have committed an independent actionable wrong. This might include a tort (e.g. intentional infliction of mental distress, negligence) or the breach of another contractual obligation (e.g. breach of obligations under a pension agreement).

In Keays, the SCC found that the trial judge made over-riding errors of fact with respect to the employee’s manner of dismissal. In particular, contrary to the findings of the trial judge, the SCC found that the employer had acted fairly in the manner of dismissal. On this basis the aggravated damages award was overturned.

Similarly, the Court set aside the punitive damages award because it found that the employer had not acted in an egregious, high handed, malicious or outrageous manner required to justify such an award. In addition, the employee’s reliance on an allegation of discrimination to ground his punitive damages claim did not meet the requirement for an independent actionable wrong.

What this Means for Employers

The Keays decision curtails an employer’s liability for wrongful dismissal in the following manner:

• By eliminating the Wallace bump or extension to the notice period;

• Damages should serve to compensate employees for actual damage suffered. In order for an employee to obtain damages caused by an employer’s bad faith manner of dismissal, the employee will have to demonstrate that he suffered actual, compensable damages;

• By imposing a prohibition on double compensation such that courts are to refrain from awarding both bad faith and punitive damages; and

• In order to award punitive damages, the employee must establish that the employer committed an independent actionable wrong. Discrimination cannot constitute an independent actionable wrong if a comprehensive scheme is in place to address discrimination claims.


Bru v. AGM Enterprises Inc.5 is a recent British Columbia case applying the Keays analysis of Wallace damages. A key issue in the case was whether the Plaintiff, Ms. Bru, had voluntarily resigned her position with the Defendant, or been dismissed. The Court found that she had been dismissed.

The Plaintiff claimed Wallace damages for the manner of the termination of her employment. The Court found that the Defendant did not treat Ms. Bru fairly in dealing with a statement she had made to the effect that she was quitting. While she did say those words, the Court found the Defendant engaged in “stone walling” in response to her subsequent statements that she had not quit, and did not really mean to.

The Court found it was unfair and insensitive of the Defendant to fail to communicate with Ms. Bru in a meaningful way following her attempts to recant her resignation, “especially considering their knowledge of her financial and emotional vulnerability. Their failed obligation to act fairly and sensitively are the foundation of an award of Wallace damages in this case.”

Specifically, the Court noted the Defendant’s failure to inquire after Ms. Bru’s emotional state; a manager’s “stern rebuke” when he called her after her termination; the failure to give any consideration to the Plaintiff’s financial, emotional and situational vulnerability, which the Defendant was aware of; and the failure to give regard to the fact that Ms. Bru had worked hard for the Defendant “in what was a demanding, fast-paced position, especially for a 59 year old woman”.

The Court assessed damages for wrongful dismissal of 3 months reasonable notice, then went on to assess Wallace damages.

The Court found that depression and other medical issues arising from Ms. Bru’s termination prevented her from finding employment for six months, and so awarded lost wages for a six month period rather than a 3 month period as the “pecuniary” component of Wallace damages.

The Court awarded a “non-pecuniary” component of Wallace damages, for “mental distress and related effects to [the Plaintiff’s] physical health” in the amount of $12,000, noting “acute mental distress and anxiety”, and an increase in pre-dismissal episodes of heart palpitations, vomiting, seats, migraine headaches and elevated blood pressure.

Conclusion

The past year has been an especially prolific year for significant SCC employment related judgments. Further developments in the law will take place as the principles established by the highest court filter down to the many situations employers face daily, and employers and employees alike adjust to this changed legal landscape.

5 [2008] B.C.J. No. 2380 (S.C.)

Technology and L&E Law Christopher McHardy Tina Giesbrecht

March 6, 2009


www.mccarthy.ca

Technology and L&E Law


Issues raised by computer usage, the internet, e-mail, Blackberries, laptops, instant messaging, cell phones, monitoring, surveillance, biometric data, employee blogging, e-discovery and document retention are creating new and complex challenges for employers. These new challenges necessitate a balancing of employee privacy rights and free speech with management rights and concerns regarding productivity and inappropriate usage of technology. Today employees are extremely technologically astute and employers are required to keep up with the technology, understand the risks and protect their organization against inappropriate usage.

Technology Usage

Duties of Employees

• Employees owe a duty of loyalty to their employer, which includes avoiding defamation or other harmful speech, insubordination, disparagement, competition, solicitation and disclosure of confidential information; and

• Employees are required to follow employer rules and policies such as e-mail and internet usage policies and cell phone policies;

• Employees are required to adhere to rules of conduct and policies prohibiting harassment, discrimination, conflict of interest, and release of IP or other confidential information.

It is well-established that unauthorized computer usage can result in discipline and even discharge of employees. In Telus Communications Inc. v. Telecommunications Workers Union (Madsen),1 Arbitrator Sims upheld a termination on the basis of theft of company time and unauthorized use of company assets in a case involving an employee who managed a personal travel business from his office at Telus.

In some U.S. states the right to discipline for inappropriate usage has developed into a positive duty on employers to investigate and stop criminal conduct. In Doe v. XYC Corp.,2 an accountant at the company’s headquarters was accessing pornographic internet sites at work. The company monitored computer usage and IT personnel were aware of the employee’s activities. A co-worker also complained about the employee shielding his computer when she walked into his work area. The company admonished the employee for visiting pornographic sites, but no further action was taken. The employee said he would stop, but resumed the activity a few months later. Although his supervisor knew about it, he did nothing. The company was then served with a search warrant and the results of the search revealed that the employee had child pornography on his work computer. The

1 143 L.A.C. (4th) 299. 2 Superior Court of New Jersey (Appellate Division) No. A-209-04T2, 2005.


employee admitted to downloading numerous pornographic images and uploading nude photos of his 10 year-old stepdaughter to a child pornography website while at work. The child’s mother sued the company for harm caused to her daughter on the basis that the company knew or ought to have known the employee was using the company’s computer to engage in child pornography activities. She successfully argued that the company had a duty to investigate and stop the misconduct, and report it to the authorities. The appellate court ruled that an employer with knowledge of an employee using workplace computers to access child pornography or engage in other criminal activity has a duty to investigate and must take action to stop the activity.

If Canadian courts adopt the reasoning of this case, it will have important implications for all employers. Even in the absence of any similar case law in Canada, it is prudent for employers to implement and enforce an appropriate computer usage policy, investigate suspected violations and take appropriate action against the employee for breaches. Even without civil liability for failing to act in such circumstances, employers risk serious reputational and business harm if such a situation becomes public. Even if there is no publicity, employers risk damaging the morale and loyalty of other employees when they fail to act in such circumstances. There is also the very real risk that the employers’ ability to manage the workplace will be undermined as employees will claim that their misconduct has been condoned or will claim discrimination on account of other employees not being disciplined for similar conduct.

Privacy

Employees have a limited right to privacy in the workplace

This right to privacy can be found in federal or provincial statutes such as PIPEDA and PIPA, the common law and the Canadian Charter of Rights and Freedoms. Privacy is also increasingly recognized as an important value in our society.

Except for limited exceptions, personal information about an individual may not be collected, used or disclosed without the knowledge and consent of the individual. Consent must be “informed,” meaning that an organization must, on or before collecting personal information, identify the purposes for which the information will be used and disclosed. The organization must disclose contact information for a person within the organization who can answer questions about the collection.3 Consent may be obtained orally or in writing and may be implied (including by way of “opt-out” consent) in some circumstances, depending upon the sensitivity of the information. Where information is particularly sensitive, such as medical or financial information, express consent for the collection, use and disclosure of that information may be required.4

3 Alberta PIPA, s. 13(1); B.C. PIPA, s. 10(1). 4 Alberta PIPA, s. 8(3); B.C. PIPA, s. 8(3).


Alberta’s PIPA and B.C.’s PIPA specifically address the unique issues posed by the employment relationship. “Employee personal information” in B.C. and “personal employee information” in Alberta are distinguished from “personal information” generally. In B.C., “employee personal information” is defined as personal information about an individual that is collected, used or disclosed solely for purposes which are reasonably required to establish, manage or terminate the employment relationship between the organization and the individual, including a volunteer relationship5. In Alberta, “personal employee information” means personal information reasonably required by an organization that is collected, used or disclosed solely for the purposes of establishing, managing or terminating an employment relationship or volunteer work relationship6. Both Acts provide that “employee personal information” and “personal employee information” do not include personal information that is not about an individual’s employment7 or is unrelated to that relationship8.

An employer may collect, use and disclose employee personal information without the consent of the employee as long as it is reasonable for the purpose of establishing, managing or terminating an employment relationship. However, before an organization collects, uses or discloses employee personal information without consent, the organization must:

1. notify the employee that it will be collecting, using and disclosing the information; and

2. identify the purposes for which the information will be collected, used and disclosed.9

Under PIPA and PIPEDA, before an organization collects, uses or discloses personal information, the organization must:

• Notify the employee of the collection, use and disclosure;

• Identify the purpose for which the information will be used, collected and disclosed;

• Ensure the overall purpose is reasonable; and

• Obtain consent – either deemed, express or “opt out”.

Employers also need to think about their use of employee personal information after the employment relationship has ended. In Poirier v. Wal-Mart Canada Corp.10, the British Columbia Supreme Court found that Wal-Mart breached the privacy of the manager of one of its stores in Surrey, B.C., by using his photo and welcoming message in widely-disseminated marketing materials after firing him for

5 B.C. PIPA, s. 1. 6 Alberta PIPA, s. 1. 7 B.C. PIPA, s. 1. 8 Alberta PIPA, s. 1. 9 Alberta PIPA, s. 15(3), s. 18(3) and s. 21(3); B.C. PIPA, s. 13(3), s. 16(3) and s. 19(3). 10 2006 BCSC 1138.


dishonesty. Although the Court dismissed Poirier’s wrongful dismissal action, it awarded Poirier $15,000 in damages for Wal-Mart’s breach of the Privacy Act.

The Court found that the consent Wal-Mart had to use the plaintiff’s image ended with the termination of the employment relationship. It found Wal-Mart had sufficient time to modify the marketing materials, after Poirier’s dismissal, before their scheduled distribution. As a result, Wal-Mart breached section 3(2) of B.C.’s Privacy Act, which provides: “It is a tort, actionable without proof of damage, for a person to use the name or portrait of another for the purpose of advertising or promoting the sale of, or other trading in, property or services, unless that other, or a person entitled to consent on his or her behalf, consents to the use for that purpose.” Although this case was not decided under PIPA, it demonstrates the risk of using employee personal information without consent.

Investigation Exception

Under PIPA, an employer may collect, use and disclose information without consent to investigate a breach of an agreement, which includes breach of express and implied terms of employment.

To do so, an employer must demonstrate that:

• The investigation is based on reasonable belief the employment agreement has been breached;

• There is an on-going investigation into a specific allegation; and

• Notification to the employee would compromise accuracy or availability of the information.

Workplace Monitoring and Surveillance11

Disclosed, Non-Surreptitious Surveillance

Four common factors have been considered by Arbitrators and the federal Privacy Commissioner in the analysis of what is reasonable video surveillance:

1. Is the surveillance necessary for a legitimate or reasonable business interest? Legitimate business interests often include loss prevention, and safety or security risks.

2. Is the information collected only that necessary to achieve the intended purpose? The scope of surveillance will be reasonable only if it is restricted to what is necessary for achieving the expressed purpose.

11 “Workplace Monitoring and Surveillance” by Christopher McHardy, Tina Giesbrecht and Peter Brady (March 11, 2005).


3. To what extent is employee privacy affected? Surveillance in areas of productivity or where employees have a reasonable expectation of privacy is usually held to be unreasonable, unless there is a serious, significant business interest at stake. Where employees have a low expectation of privacy, such as at entrance/exit areas, video surveillance may be reasonable for less pressing business purposes.

4. Were alternatives considered and will they be effective? Video surveillance is seen as a significant step or “last resort”. If there are other less privacy-intrusive ways of effectively achieving the same purpose, then it may be unreasonable to use video surveillance instead of those alternatives. However, an organization may not be required to use inefficient or costly alternatives, where all the other requirements of reasonableness and necessity are met.

These factors were considered by the Federal Court of Canada in Eastmond v. Canadian Pacific Railway (“Eastmond”).12 The application before the Federal Court was based on facts which were the subject of a complaint to the federal Privacy Commissioner.13 Canadian Pacific Railway (“CP”) installed six digital video surveillance cameras at various locations in its Toronto rail yard for the purpose of reducing vandalism and theft and minimizing threats to staff safety. The cameras were fixed, did not zoom and only recorded 48-hour periods. Employees were informed of the existence of the system, its purposes and camera locations. Productivity was not monitored and shields were installed or the camera position changed if cameras were inadvertently trained on working areas.

The Federal Privacy Commissioner, in his findings, applied a four-part test to determine the reasonableness of the video cameras in the circumstances. He asked:

1. Is the measure demonstrably necessary to meet a specific need?

2. Is it likely to be effective in meeting that need?

3. Is the loss of privacy proportional to the benefits gained?

4. Is there a less privacy-intrusive way of achieving the same end?14

The Privacy Commissioner found that, while there was a potential problem, CP had provided insufficient proof that a real and specific need existed to reduce vandalism, theft and improve the safety of employees.15 The Commissioner was not convinced that the cameras were a deterrent and speculated that signs warning of surveillance alone may have deterred would-be vandals. The

12 Eastmond v. Canadian Pacific Railway, 2004 FC 852. 13 PIPED Act Case Summary #114: “Employee objects to company’s use of digital video surveillance cameras.” (Radwanski, Privacy Commissioner, January 23, 2003). Online: Office of the Privacy Commissioner of Canada, http://privcom.gc.ca/cf-dc/2003/cf-dc_030123_e.asp. (last modified.31 March 2004) [“Case Summary #114”]. 14 Eastmond at para. 13. 15 Case Summary #114.


Commissioner found that the benefit was not proportional to the loss of privacy felt by employees and was concerned that the mere presence of cameras had given rise to the perception among employees of “being watched”.16 Finally, he held that there were less privacy-intrusive ways of effectively reducing vandalism that were not sufficiently explored, such as better lighting.17

The Federal Court disagreed. Noting that all parties had urged the adoption of the Privacy Commissioner’s four-part test, the Court stated that it was “prepared to take into account and be guided by those factors”.18 The Court went on to say that PIPEDA mandates a balancing of interests, by naming the competing interests at stake in the purpose clause of PIPEDA.19 The Court stated that “the factors which the Privacy Commissioner took into account in this case may not necessarily be relevant in other contexts”.20

The Court in Eastmond suggested that the “four-part test” is not a stringent test for the appropriateness of surveillance but instead lists important factors to be considered in balancing competing interests. The reasonableness of surveillance must be determined contextually, looking at the why, how, when and where collection takes place.21 The Court reviewed previous arbitral jurisprudence on workplace surveillance and emphasized a contextual and reasonable balancing of interests as the “test”, not a list of required elements.

The reasonableness of the video surveillance was evaluated using the four factors and the Court found that:

1. CP proved that there was a clear history of vandalism, theft and other minor crimes in the rail yard. Preventing it in the future was held to be a reasonable purpose under PIPEDA.22

2. The Court found, on a balance of probabilities, that surveillance was effective at preventing vandalism, theft and security risks. It did not agree that signs warning of the surveillance alone might have been an effective deterrent, stating that “warning signs and cameras go hand in hand — you cannot have one without the other.”23

16 Eastmond at para. 14. 17 Eastmond at para. 14. 18 Eastmond at para. 127. 19 Eastmond at para. 129. Section 3 of PIPEDA states: “The purpose of this Part is to establish, in an era in which technology increasingly facilitates the circulation and exchange of information, rules to govern the collection, use and disclosure of personal information in a manner that recognizes the right of privacy of individuals with respect to their personal information and the need of organizations to collect, use or disclose personal information for purposes that a reasonable person would consider appropriate in the circumstances”. 20 Eastmond at para. 130. 21 Eastmond at para. 131. 22 Eastmond at paras. 177, 178. 23 Eastmond at para. 179.


3. The loss of privacy was held to be low and proportional to the benefit gained by CP.24 The images recorded were viewed only upon a reported incident. Information was kept secure and viewed only by the manager or CP’s police. The images were recorded in “public places” where the individuals had a low expectation of privacy.

4. CP considered alternatives and demonstrated that, given its extensive operations over a wide area, fencing and security guards were not cost-effective and would be disruptive.25

On balance, CP’s use of video surveillance in the workplace was reasonable: its purpose was appropriate and the use of the camera fit reasonably within that purpose.

The Federal Court’s analysis in Eastmond is similar to that in arbitral decisions on video surveillance in the workplace. Prior to the enactment of personal information protection legislation, Arbitrators generally considered a number of factors in balancing employees’ right to privacy and employers’ right to manage and protect its business interests.

Arbitral Jurisprudence

An arbitral decision that dealt with the issue of non-surreptitious surveillance is International Longshore and Warehouse Union Ship and Dock Foreman, Local 514 v. Fraser Surrey Docks Limited.26 This case, which involved the dismissal of a head foreman after video surveillance caught him stealing gasoline from the company’s pumps, dealt with both the admissibility of video surveillance evidence and the coercion of witnesses during the arbitral process.

As a preliminary matter, the Union brought an application for an order excluding the video surveillance. The Union argued that it was inadmissible because there was no reasonable basis to conduct the surveillance and because the employer could have achieved its objectives by less privacy-invasive means. The issue before the Arbitrator was not whether the Employer was entitled to place the worksite under video surveillance generally - following 911, the Canada Border Services Agency required that cameras be installed - but whether the Employer was justified in using its video surveillance system in the manner it did. In the first instance, the Employer had caused a camera to follow the grievor's truck after a manager saw it entering the site with garbage bags in the back. In the second instance, footage was taken using a directed camera that was fixed on the gas pumps due to concerns about the theft of gas.

The Arbitrator found that the decision to alter the course of the cameras gave rise to a requirement to justify each instance of surveillance. He concluded that each instance of surveillance was justified and that there were no other reasonable alternatives. He found that there was a relatively low level of

24 Eastmond at paras. 180, 181. 25 Eastmond at para. 182. 26 International Longshore and Warehouse Union Ship and Dock Foreman, Local 514 v. Fraser Surrey Docks Limited, [2007] C.L.A.D. No. 48. Application for judicial review dismissed, 2007 BCSC 2262.


privacy infringement given that the area was already under 24-hour surveillance and employees were aware of the surveillance. Finding that the Eastmond test and PIPEDA tests were satisfied, the Arbitrator ruled that the evidence was admissible.

In turn, the Employer brought a preliminary motion to dismiss, asking the Arbitrator to consider whether the Employer had been denied a fair hearing. The Employer alleged the Union interfered with a potential witness by threatening Union discipline or some other adverse consequence. The Employer submitted that, in light of the effect on the potential witness’s evidence, it had been denied a fair hearing, such that the only appropriate remedy was dismissal of the grievance. Ultimately, the Arbitrator found there had been interference with the witness, and that the Union had destroyed the opportunity for a fair hearing. The Arbitrator was clear in his message:

A party cannot be allowed to achieve a victory in adjudication by using coercive means to affect the evidence. The rule of law exists to replace the rule of force. Adjudication must be fair in order to be legitimate. If it becomes a contest into who can coerce the witnesses, it is no longer adjudication at all. It is not the replacement of the rule of force with the rule of law; it is the former continuing under the guise of the latter.

As a result, the Employer's preliminary application was granted; pursuant to s.60 (1)(a.4) of the Canada Labour Code and the natural justice right to a fair hearing, the grievance was dismissed.

Surreptitious Surveillance

Arbitrators have drawn a bright line between surreptitious surveillance and surveillance by cameras whose locations and purposes are known to employees.27

Surveillance without consent or notification is permitted under Alberta’s PIPA and B.C.’s PIPA only if it falls under a “no consent” exception.28 Most arbitral jurisprudence and decisions under PIPEDA focus on surreptitious surveillance in the course of investigations.

27 Eastmond at para. 132. 28 Alberta PIPA, s. 14, s. 17 and s. 20; B.C. PIPA, s. 12(1), s. 15(1) and s. 18(1).


Surveillance without consent or notification is contemplated under the legislation if it is reasonable for the purposes of an investigation, which includes investigating a breach of an agreement.29 This essentially covers most, if not all, investigations of employee misconduct. The OIPCBC Discussion Paper proposes that if an employer engages in surreptitious monitoring, it must demonstrate that:30

1. The investigation is based on a reasonable belief that the employment agreement has been breached;

2. There is an ongoing investigation into a specific allegation; and

3. Notification would compromise the accuracy or availability of the personal information collected.31

PIPEDA Findings

The Federal Privacy Commissioner has stated that surreptitious video surveillance should only be taken as a last resort, even in an investigation. An employer must:

1. Only initiate surveillance based on substantial evidence of wrongdoing;32

2. First exhaust less-invasive ways of gathering the required information;33 and

3. Make the decision to engage in surreptitious surveillance of an employee at a senior management level.34

In Case Summary #269,35 an employee reported a number of work-related injuries in the course of his employment. The employee continued to work in positions consistent with his physical limitations, but the employer became suspicious of his health claims. He was frequently absent and failed to provide the company with updated medical assessments, despite verbal and written requests. Finally, an independent medical assessment indicated that he might be malingering. The employer commenced surreptitious surveillance of the employee to determine if he was being truthful about his physical limitations. After reviewing videotape showing the employee performing activities that contradicted his claims of incapacity, the employer concluded that the employee was not being truthful. Emphasizing that video surveillance should only be used as a last resort in an employee investigation,

29 Alberta PIPA, s. 1, s. 14(d), s. 17(d) and s. 20(m); B.C. PIPA, s. 1; s; 12(1)(c), s. 15(1)(c) and s. 18(1)(c). 30 “OIPCBC Discussion Paper” at 3.1.2. 31 “OIPCBC Discussion Paper” at 3.1. 32 Anecdotes do not qualify as “substantial evidence”: Case Summary #268. 33 Case Summaries #268 and #269. 34 Case Summaries #268 and #269. 35 PIPED Act Case Summary #269 “Employer hires private investigator to conduct video surveillance on employee” [2004] C.P.C.S.F. No. 14 (QL) (Assistant Privacy Commissioner, April 23, 2004). Online: Quicklaw Database PCCF; Office of the Privacy Commissioner of Canada, http://privcom.gc.ca/cf-dc/2004/cf-dc_040423_e.asp. (last modified: 22 June 2004) [“Case Summary #269”].


the Assistant Privacy Commissioner found that the employer had substantial evidence of malingering prior to engaging in surveillance. The employer had “reasonable and probable cause” to believe the employee was violating the employment contract. The employee was uncooperative and the employer was unable to get the information it required in a less privacy-invasive manner. The Assistant Commissioner held that the video surveillance was reasonable but noted that the decision to engage in surreptitious video surveillance of an employee should be made by senior management.

Case Summary #26836 also considered the reasonableness of surreptitious surveillance in an investigation. A manager of an airline attached a voice recording device to the underside of a table in the smoking lounge. Both employees and customers used the smoking lounge, but at this particular time, the manager expected to record only the conversations of certain employees. The manager suspected the employees of wrongdoing, but evidence was obtained only after the surveillance had taken place. The Assistant Privacy Commissioner found that, since the voice recording had been erased by one of the complainants, it was not proved that there was a collection of personal information. However, the Assistant Commissioner stated in obiter that, if the information had been recorded, the investigation would not have been reasonable under PIPEDA. She stated that an organization must have “substantial evidence to support the suspicion that the employee is engaged in wrongdoing or that the relationship of trust has been broken, must be able to show that it has exhausted all other means of obtaining the information that it required in less privacy-invasive ways, and must limit the collection to the purposes to the greatest extent possible.”37 There was, at the time of the recording, no substantial evidence of wrongdoing, only suspicion by the supervisor and reliance on “anecdotes”. There were less privacy-intrusive methods of investigating the incidents. Furthermore, the recording was highly indiscriminate, taking place in a room accessible to many other individuals. The Assistant Commissioner stated that a decision to conduct surreptitious surveillance of employees in an investigation should be made at a very senior level of management.

Arbitral Jurisprudence

Similarly, arbitral jurisprudence has generally considered surreptitious surveillance to be reasonable if there is:38

1. a substantial problem;

2. a strong possibility that surveillance will be effective; and

3. no reasonable alternative to surreptitious surveillance.

36 PIPED Act Case Summary #268 “Electronic monitoring does not yield any information, but practice is strongly discouraged” [2004] C.P.C.S.F. No. 13 (QL) (Assistant Privacy Commissioner, April 12, 2004). Online: Quicklaw Database PCCF; Office of the Privacy Commissioner of Canada, http://privcom.gc.ca/cf-dc/2004/cf-dc_040412_e.asp (last modified: 22 June 2004) [“Case Summary #268”]. 37 Case Summary #268, “Further Considerations”. 38 Unisource at para. 48.


Notably, the factors used by arbitrators to assess surreptitious surveillance are essentially the same as those considered by arbitrators to assess non-surreptitious surveillance. However, the difference lies in the higher threshold for reasonableness when the surveillance is surreptitious39. In Ross v. Rosedale Transport Ltd.,40 a complaint of unjust dismissal under the Canada Labour Code, the adjudicator analysed the reasonableness of surreptitious surveillance of an employee under PIPEDA. The employee had worked as a driver for nine years and was described as a “good employee” with no prior record.41 The employee sustained a back injury at work and was subsequently accommodated by the employer in clerical and administrative positions. As time progressed, however, the supervisor suspected that the employee was malingering. Four months after his injury, and still working in the accommodated position, the employee took a vacation during which time he and his family were moving. The supervisor hoped to obtain video surveillance evidence that the employee was malingering by video taping the move. The surveillance recorded the employee moving furniture, which appeared contrary to his claims of injury. The employee alleged that the surreptitious surveillance collected his personal information without his consent and was therefore contrary to PIPEDA. The adjudicator stated that general arbitral principles on surreptitious video surveillance used prior to the enactment of PIPEDA are also expressed in the circumstances set out in section 7(1), which permits collection of personal information without knowledge or consent.42 The adjudicator analysed the reasonableness of the investigation, using those general arbitral principles. The adjudicator found that the surveillance was not reasonable for the purpose of investigating Ross’ injury. There was no evidence of dishonesty prior to the initiation of surveillance, only suspicion on the part of the employer.43 The adjudicator held that the employer had other ways to verify the employee’s injuries rather than engaging in surreptitious surveillance, such as asking for an independent medical assessment. The adjudicator found that the employer’s surveillance was like “casting an electronic web” to see if the employer could catch something. The investigation by surreptitious surveillance was not reasonable and was inadmissible to prove cause for dismissal.44

While a reasonable purpose and reasonable scope will always be part of the test for reasonableness under personal information protection legislation, the analysis will differ between surreptitious and non-surreptitious surveillance of employees. An employer who wishes to use surreptitious surveillance will have to demonstrate a substantial problem exists and that the alternatives to surreptitious surveillance are incapable of addressing it.

39 Ross v. Rosedale Transport Ltd. [2003] C.L.A.D. No. 237 (Brunner) at para. 32 [“Ross”]; New Flyer Industries v. CAW Canada Local 3003, February 17, 2003 (Peltz) at para. 4. 40 Ross. 41 Ross at para. 6. 42 Ross at para. 34. 43 Ross at para. 35. 44 Ross at para. 36.


Collection of Biometric Data – Voice Prints

Federal Court of Appeal - Turner v. Telus45

A group of employees complained that they were being forced to consent to the collection of biometric information – their voiceprints. It is significant that voiceprints are not audio samples of an employee’s voice, but an algorithm-generated matrix of numbers that represent the characteristics of the employee’s voice and vocal tract. Telus wanted to use voiceprints for access to its business applications and for tracking absenteeism. Telus’ objective was to improve efficiency, reduce costs and improve safety.

The Assistant Commissioner of Privacy found that there was no violation of PIPEDA and that:

• The technology was more efficient and cost effective than other technologies (both of these reasons were considered rational goals in a competitive market);

• Voiceprints were needed to ensure security;

• Voiceprints were not unduly invasive;

• There was an appropriate balance between employee’s right to privacy and employer’s needs;

• A reasonable person would likely view the company’s purposes as appropriate; and

• The company had informed the employees of the purpose and had appropriate safeguards in place.

Biometric Data – Hand and Finger Scans

Cascadia Terminal and the Grain Workers’ Union, Local 33346

Hand prints were found acceptable for payroll and attendance purposes. The employer had the right to move from manual timesheets to biometric hand recognition. The employer argued that the manual system was fraught with fraud, problems and inaccuracies. It advocated the advantages of the hand print system, including more accurate payroll records and verification of who was in the plant at all times, for safety purposes. The union opposed the system on the basis of invasion of privacy and risk of disease spreading. The Arbitrator dismissed these arguments as the union failed to substantiate them with any evidence.

45 2007 F.C.A. 21. 46 (2004), 123 L.A.C. (4th) 403 (Ready).


Canada Safeway and UFCW Local 40147

The employer started to use hand scans in order to improve time and attendance management, eliminate “buddy punching”, and manipulating the time management system. The Arbitrator found this was a reasonable and defensible business decision and that there was a limited intrusion on employee privacy based on:

• An assessment of the method used to collect the information;

• The type of personal information retained;

• The potential for the information to be used for purposes other than those intended; and

• The method of storage and destruction of the personal information.

IKO Industries and United Steelworkers, Local 858048

In this case, the use of employee finger scans was not permitted. The Arbitrator found that the employer’s interest in efficiency and cost savings did not outweigh the privacy interests of employees because there was no evidence of security concerns, and the scan was found to be unduly invasive.

Tips for Employers

Collection of Personal, Medical and Biometric Data

• Establish comprehensive policy addressing what expectations employees should and should not have regarding privacy;

• Describe measures which are or may be taken to collect, use and disclose employee personal information;

• Describe which measures are or may be taken to monitor employee activities;

• Ensure the policy statement describes the purpose of collection of data, surveillance and monitoring such as monitoring appropriate use of equipment and resources;

• Obtain employee’s consent – express, implied or “opt-out”; and

• If using video surveillance, first consider less intrusive ways to achieve purpose and ensure grounds are reasonable.

47 (2005) 145 L.A.C. (4th) 1 (Ponak). 48 (2005) 140 L.A.C. (4th) 393 (Tims).


Social Media Sites – To Ban or Not to Ban

Arguments for Restricting Access

The main concern employers have when it comes to social media sites such as Facebook and LinkedIn is the potential impact on employee productivity. A study conducted last year by Dr. Richard Cullen, president of Australian internet security firm Surfcontrol, estimated that if just one employee spent an hour on Facebook a day it could cost a company $6,000 a year. Another, but potentially more significant, concern may be defamatory, harassing or criminal conduct resulting from employee posts or activities.

There is also considerable concern that the information being posted by employees on Facebook and LinkedIn could be used to infiltrate their employer’s computer networks. The fact that social media site users readily hand out personal information to complete strangers puts them at great risk of identity theft and increases their susceptibility to spam and targeted malware attacks.

Some employers have decided to confront the problem directly. Last year, the Province of Ontario barred government staff from accessing the Facebook website from their workplace terminals. When workers tried to log on to their accounts early last May, they were greeted with "access denied" messages on their screens in the same way as YouTube, pornography and gambling sites have been blocked on Provincial computers.

Arguments against Restricting Access

One argument against restricting access is that by completely banning social media sites employers are sending a message to staff that they cannot be trusted. A second argument is that if employees are not wasting time on social media sites, they will waste time on something else like smoking, texting on their cell phones or chatting with other employees. Even the best, most productive employees cannot work a full eight-hour shift without any idle time.

A third argument is that by banning social media sites employers may be passing up valuable opportunities to take advantage of the benefits that social media sites have to offer. Such opportunities include setting up a Facebook group to facilitate corporate event organization; setting up an internal blog to communicate company news to employees; setting up podcams; and developing internal wikis.

The Solution?

Perhaps the best option is to take the middle ground. Rather than put sweeping prohibitions in place employers can set up formal policies for acceptable use of social media sites in the workplace. Employers are advised to create policies which are clearly stated, frequently evaluated, and


distributed to everyone. Policies should clearly set an expectation of appropriate use of company time and they should state what the consequences of breaking the policy are.

Employers stand to benefit from attempting to understand the changing nature of relationship development today and consider ways that will enable employees to use sites like Facebook. Siemans, Dow Chemical, Nestle and Microsoft are just a few of the big-name companies who have found ways to embrace the new technology instead of running from it.

Employers wishing to embrace the social media frenzy need to do their homework. Employers should consider whether using a public site such as Facebook as the corporate social network would be preferable to buying a commercial product that offers similar functions, but added protection of being within the corporate firewall.

Background Checks

“Googling” prospective employees

Human resource practitioners and others are using the Internet to perform background checks. Similarly, prospective employees are doing their own checks on potential employers by searching for blogs and articles on-line. Employers should be cognizant of the following issues:

• Be careful about discrimination on unlawful grounds, mistaken identity and the collection, use and disclosure of personal information not relevant to the employment relationship;

• Remember all background checks must meet the reasonableness test;

• Under PIPA, organizations are permitted to collect, use and disclose information without consent solely for the purposes of establishing, managing or terminating the employment or volunteer work relationship;

• Be wary of collecting information you do not need; and

• Be wary of collecting or using information which may not be accurate.

In a recent example, an Alberta Privacy Commissioner decision,49 it was found that personal credit information was not reasonably required by an employer. The Commissioner concluded that managing one’s credit and finances is not necessarily correlated with managing finances in the employment context.

49 P205 0 IR – 008.


The New Frontier: Employee Blogs

It is estimated that there are over 45 million “web blogs” and that this number is doubling every six months. Employee blogs can be positive and are often used by prospective job candidates to research employers. Employee blogs can also be negative. They can be crude, rude and spontaneous, and often have a confessional quality. At their worst, they can be defamatory, hurtful, discriminatory, and can breach company policies and hurt a company’s reputation.

A recent arbitration decision confirmed that employees can be dismissed for work-related blogging activities.50 In this case, an administrative employee in the Alberta Public Service was terminated after her employer found her blog which contained unflattering comments about a number of her co-workers and management. The grievor used pseudonyms, but the level of detail and information readily revealed the identities of those targeted by her scathing comments.

The Board found that while the grievor had a right to create personal blogs and was entitled to her opinions about the people with whom she worked, publicly displaying those opinions had consequences within the employment relationship. The Board was satisfied that the grievor, in expressing contempt for her managers, ridiculing her co-workers, and denigrating administrative processes, engaged in serious misconduct that irreparably severed the employment relationship. The Board ruled that the discharge was justified and dismissed the grievance.

Risks for Employee and Employer

There are a host of risks associated with employees blogging, posting and otherwise engaging in Internet use:

• Defamation claims by co-workers, managers, suppliers, customers, clients and members of the public;

• Harassment claims by co-workers and members of the public;

• Disclosure of confidential information, trade secrets, which could cause employer economic damage or claims by competitors;

• Criminal charges against employees for accessing child pornography or committing fraud while using employer systems; and

• Reputational damage and vicarious liability relating to employee misconduct.

50 Alberta v. Alberta Union of Provincial Employees (R. Grievance), [2008] A.G.A.A. No. 20.


Employee Coaching and Discipline

To reduce the risk of liability, employers should:

• Be fair but firm and consistent if problems arise with the use of technology;

• Communicate and emphasize the company’s policy, and concerns with employees’ Internet usage or blogging;

• Where there are grounds for monitoring, or a policy in place, give notice that employee usage will be monitored, how it will be monitored, and that further violations will result in more serious discipline including termination for cause; and

• Educate employees about personal risks and liability for defamation, harassment, breach of the duty of loyalty, breach of confidentiality, and breach of employer policy.

Firing a Blogger

Many “Internet celebrities” are employees fired from well-known employers such Delta Airlines, Microsoft, Google, Starbucks and the Manitoba Health System. Most recently, a bus driver was dismissed by Coast Mountain Bus Company for blogging activities that breached his duty of loyalty. These employers became aware of content on employee blogs which they objected to and fired the employees, many of whom sued. Can an employer fire an employee for blogging? If a blog contains information that breaches a confidentiality agreement or reveals trade secrets an employer will likely be justified in terminating an employee. Similarly, an employer can take action against an employee who is blogging on company time, particularly if this is a violation of a written policy on computer usage. If the content of the blog breaches the employee’s duty of loyalty to the employer, I insubordinate or defamatory, discipline will also be justified and, if the breach is serious enough, dismissal for cause may be justified.

In EV Logistics v. Retail Wholesale Union, Local 580,51 arbitrator Laing overturned the grievor’s dismissal which followed from the employer’s discovery of the grievor’s blog. The blog contained hateful and racist remarks and commentary in support of Hitler, and photos of Nazi paraphernalia. The grievor specifically named his employer in the blog and referred to certain employment activities. For these reasons, arbitrator Laing accepted the employer’s submission that the grievor’s off-duty conduct was sufficiently connected to its business interests and was of such a serious nature that discipline was warranted. Arbitrator Laing reduced the dismissal to a disciplinary suspension, however, because the grievor’s hateful remarks were not specifically directed at his employer or his colleagues and because he immediately shut down the blog when it was discovered and issued an apology. In short, arbitrator Laing found that the grievor would be able to successfully reintegrate into the workplace.

51 [2008] B.C.C.A.A.A. No. 22.


Before disciplining or terminating a blogger, employers should consider whether such action might violate an employment or union agreement or whether the action could be construed as discrimination or retaliation for protected employee activity, including whistle blowing, union association and freedom of speech.

Many bloggers continue to blog after termination and some have even written books. The result is that they continue to draw attention to their former employers. This potential fallout is a consideration which should be taken into account. The employer should ensure that the employee is treated fairly in the manner of discipline and/or dismissal, and should take care not to act unfairly, dishonestly or maliciously in carrying out any termination. If a settlement agreement is entered into with a former employee blogger, the employer should include strong confidentiality language and non-disparagement terms preventing the individual from disclosing the terms of the settlement and disparaging the employer.

Tips for Employers

So what can employers do? Some options to manage this risk are:

• Set up internal mechanisms for employee communication and bringing issues forward internally to avoid employees turning to the Internet;

• Consider an internal blog to pass on information and obtain employee comments;

• Put controls on blog content and remove objectionable material;

• Deal with discipline/dismissal fairly and consistently;

• Ensure settlement agreements and releases contain strong confidentiality language and non-disparagement provisions;

• Protect intellectual property and confidential information with proper agreements and policies, and maintain monitoring and enforcement; and

• Develop a formal technology use policy and provide training to all employees.

Blackberries

Employers may soon need to rethink their expectation that employees be available via BlackBerry around the clock.


In the United States, legal experts warn that a new wave of overtime litigation can be expected. It is believed that we will start to see employees bringing overtime lawsuits against their employers for time spent working on their BlackBerry outside regular working hours.

It is not inconceivable that a similar trend could take hold in Canada. Overtime class actions worked their way North relatively quickly. Prudent employers may wish to start thinking about policies dealing with Blackberry use. Options include adding terms regarding BlackBerry use to employment contracts and banning the use of Blackberry devices during certain times of the day.

E-Discovery and Record Retention

Electronic discovery and issues of record retention have become big issues in the wake of Enron and other high-profile cases in which corporate records and e-mails were destroyed. The preservation and management of employer records is fundamental for statutory and other legal purposes. If an employer is involved in a lawsuit, civil procedure rules in each province impose a positive obligation on a litigant to disclose all relevant documents that are, or once were, in its possession and power.

The failure to preserve documents can result in severe sanctions from the Courts for contempt. Although this obligation exists in respect of pending litigation, it is prudent to bear it in mind once litigation is reasonably anticipated. In the United States, a separate tort resulting in independent liability for the destruction of documents has begun to emerge. A “record” includes paper documents and documents in their electronic form together with their metadata. Records must be potentially relevant to the issue at hand: employers should be careful not to take too narrow a view of relevancy. It is very important that an employer develop a formal record retention policy and that its management and IT professionals are educated in the policy and the associated legal issues.

Litigation Hold

If an organization becomes aware of potential litigation, a “litigation hold” ought to be implemented respecting all relevant records. This includes advising individuals outside of the organization who may possess such documents to retain the records to ensure they are not modified or deleted. Individuals within the organization should be advised regarding their obligations to retain and preserve relevant records. It is recommended that an individual in the organization be designated with responsibility for ensuring compliance, who can later testify as to the effective implementation of the hold. If litigation is contemplated, any programs or procedures for the automatic deletion of computer files and records, including e-mails, which pertain to the litigation should be suspended and the organization should retain all records, in every form, including those located or stored on personal computers of employees, Blackberry devices, mail servers, intranet and Internet servers, dictation tapes and machines, back-up and archive systems, external computer resources provided by service providers, etc.


Conclusion

Using Technology to Your Advantage

If you believe a certain line of advertising, the future is friendly. To help make it so, employers should consider the following with respect to technology:

• Aside from business and operational needs, technology has also increased employers’ ability to analyze business, and improve and monitor productivity, safety and security;

• Clear and user-friendly policies are necessary, as is monitoring and consistent enforcement;

• Encourage employee input – company blogs, idea rewards and town hall meetings can provide an internal “release valve” that can also produce tangible business benefits; and

• Technology preserves evidence and can be useful in gathering information and evidence for internal investigations and for litigation.

HR in Hard Times Earl Phillips Paul Boniferro

March 6, 2009


www.mccarthy.ca

HR in Hard Times

HR in Hard Times

Introduction

Despite the legal requirements and obstacles, there are things employers can do to reduce labour costs while preparing for the better times to come.

We start by looking at the legal requirements and hurdles that need to be met and overcome. The legal framework is important, but the practical realities may provide many of the answers to the legal questions. Put simply, employees may see their legal rights as less important than the practical need to stay employed and maintain a stream of income.

The Law

Common Law and Contract

If you don’t have a clear agreement on how employment can be terminated without cause. the common law implies an obligation to give reasonable notice. The required notice may be many months, and can only be estimated by considering age, length of service, the character of the position and the availability of suitable alternative employment. The last of these criteria is presenting new problems. Every demand we now see from the lawyers of terminated employees asks for more because of the state of the economy and poor re-employment prospects. Just when employers are feeling the pinch generally, the costs of downsizing are going up. If you do have an agreement about termination, you can expect close scrutiny. First, you will have to be sure it does not fall under the minimum standards established by the Employment Standards Act (or Canada Labour Code for federally regulated employers.) Second, you will have to show it was properly entered into with good consideration. For example, a standard form agreement signed after the employee had already accepted an offer of employment will not stand up. If you are looking for a temporary reduction in labour costs, not a permanent downsizing, you may be thinking about a layoff. Layoffs of union employees are common and most collective agreements spell out the specific requirements. (But federally regulated employers have to be concerned about possible deemed termination, even under a collective agreement.) Non-union layoff

If you want to layoff non-union employees, you will have to be able to show an express or implied contractual right to do so. Otherwise, the employee can claim a constructive dismissal from

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employment and claim both employment standards and common law or contractual rights as if the employee had been terminated. You may be able to negotiate a temporary layoff with non-union employees, but it requires individual agreements with clear terms. Even then, you have to ensure that the layoff is not a deemed termination under employment standards legislation. For example, in BC a layoff must not exceed 13 weeks in a 20 consecutive week period unless the employer and a majority of affected employees have applied for and received a variance from the Director of Employment Standards. Employment Standards

Individual terminations

Employment standards in both BC and the federal jurisdiction set minimum standards for notice or compensation to terminate individual employees. Federally regulated employers also have to pay a minimum amount of severance pay to employees with 12 months or more service.

In BC, the minimum is:

• 1 week for employees with 3 – 12 months of service;

• 2 weeks for employees with more than 1 but less than 3 years service;

• 1 additional week for each full year of service after 2 years, to a maximum of 8 weeks.

The employee’s entitlement is not subject to mitigation, so they get the full amount regardless of how soon they find other employment.

Group terminations

If you will be terminating 50 or more employees from a single location within any two month period in BC, there are further notice or compensation obligations: a further eight weeks for 50 – 100 employees, 12 weeks for 101 – 300 employees, and 16 weeks for 301 or more. Again, these amounts are not subject to mitigation. There are also obligations to give notice to government authorities in the event of a group termination. Those obligations are detailed below. The employer and a majority of affected employees may apply to the Director of Employment Standards in BC for a variance of the group notice provisions. A variance will likely be granted if it will help preserve the employer’s operations, assist an orderly reduction or closure, or allow for short term employment for special projects.

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In the federal jurisdiction, if 50 or more employees are terminated (or laid off and deemed to be terminated under the Canada Labour Code) within four weeks, the employer is required to give 16 weeks prior notice, cooperate with the Canada Employment Insurance Commission, and establish and participate in a joint planning committee. The Minister may waive some or all of the group notice requirements of the Code. Labour Law

Any changes you wish to make will have to be considered in light of your collective agreement, the applicable labour statute and the applicable employment standards legislation. A detailed checklist for BC employers is set out below.

Pensions

The current market conditions present an interesting scenario for future pension planning. While employees who have seen their pension stakes in defined contribution (“DC”) plans fall badly are less enamoured of their DC plan, employers seeing large funding shortfalls in defined benefit (“DB”) plans are much less inclined to set up DB plans in the future.

Meanwhile, there are two distinct challenges in the current economic situation, depending on the nature of the plan.

Defined Contribution Plans

Because most DC plan members select how the contributions to the plan will be invested, they are likely to have many questions about investment strategies going forward. Employers should be careful not to give investment advice, but at the same time employers cannot ignore the concerns of their employees. Consider having investor advisors come in to talk to employees about appropriate investment strategies. Employees who are close to retirement may need special care. Whatever can be done to provide information, and perhaps some comfort, to employees about their pension – without giving advice and making promises about the future – will be helpful. Defined Benefit Plans

Thoughtful DB plan members will be more concerned about the survival of their employer than about short-term funding shortfalls. That also seems to be the approach of the federal government. Its proposals will allow for 10 year amortization of solvency funding (presently limited to 5 years) with member consent or implementation of a letter of credit program. Employers will do well to help educate their employees on how their DB plan works so that any member consent that may be required will be more readily achieved.

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Personal liability

This is an issue in which you and other senior managers and directors in your organization will be interested. Understand the potential for personal liability and take appropriate measures to limit the risk.

Directors and officers

Directors and officers may be liable for up to 2 months unpaid wages for each employee under s. 96 of the British Columbia Employment Standards Act.

Directors

Directors of the Corporation may be liable:

(a) to employees of the corporation for up to 6 months unpaid wages for each employee under s. 119 of the Canada Business Corporations Act; and,

(b) to government authorities for:

(i) unpaid source withholdings such as employee payroll deductions;

(ii) unremitted Canada Pension Plan and EI withholdings.

Directors, managers or other principals

Directors, managers of other principals of the Corporation may be exposed to a lien for unpaid Workers Compensation Act assessments over any of their property used in, or connection with, the industry in respect of which the Corporation was assessed for WCB purposes.

Directors, officers and agents

Directors, officers and agents of the Corporation can be liable for a fine of up to $25,000 for contravening the BC Pension Benefits Standards Act if they direct, authorize, assent or acquiesce in a decision not to comply with the Act, which would include failing to pay required employer pension contributions to an employee pension plan.

The corporate law definitions of “director” and “senior officer” in the Business Corporations Act, S.B.C. 2002, c. 57, may be referred to:

“director” means,

(a) in relation to a company, an individual who is a member of the board of directors of the company as a result of having been elected or appointed to that position, or

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(b) in relation to a corporation other than a company, a person who is a member of the board of directors or other governing body of the corporation regardless of the title by which that person is designated;

“senior officer” means, in relation to a corporation,

(a) the chair and any vice chair of the board of directors or other governing body of the corporation, if that chair or vice chair performs the functions of the office on a full time basis,

(b) the president of the corporation,

(c) any vice president in charge of a principal business unit of the corporation, including sales, finance or production, and

(d) any officer of the corporation, whether or not the officer is also a director of the corporation, who performs a policy making function in respect of the corporation and who has the capacity to influence the direction of the corporation.

If the employer is a federally incorporated corporation, it is possible the ESA Tribunal would refer to the definitions in the Canada Business Corporations Act as follows:

“director” means a person occupying the position of director by whatever name called and “directors” and “board of directors” includes a single director;

“officer” means an individual appointed as an officer under section 121, the chairperson of the board of directors, the president, a vice-president, the secretary, the treasurer, the comptroller, the general counsel, the general manager, a managing director, of a corporation, or any other individual who performs functions for a corporation similar to those normally performed by an individual occupying any of those offices.

Surviving the Downturn

Closure or Partial Closure

Here is a general closure checklist, with items of concern for both union and non-union employers in British Columbia.

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Notice and Severance Requirements

s. 54(1)(a) Labour Relations Code

• triggered by introduction of, or intention to introduce, change that affects terms, conditions or security of employment of a significant number of union employees;

• 60 days of advance written notice must be given to the union.

s. 64 Employment Standards Act (ESA)

• group termination notice/pay;

• 50 or more employees terminated at single location within 2 months;

• not subject to mitigation (s. 68);

• 8-16 weeks depending on number of employees (note that notice is not effective for any employees on leave, temporary lay-off, strike, lockout or unable to work for medical reasons and therefore pay in lieu must be provided);

• notice must:

o go to affected employees, unions, Minister of Labour; and

o state number of employees affected, date(s), reasons;

• in addition to s. 63 individual notice rights and to any Collective Agreement rights relating to severance;

• NB: if unionized and any employees have previously been laid off but still have recall rights, then their employment will terminate and because notice is ineffective under s. 67, they may be entitled to pay in lieu under s. 64.

s. 63 Employment Standards Act (ESA)

• individual termination notice/pay (not applicable to union employees);

• ranges from 0-8 weeks depending on length of service;

• may be displaced by provisions in Collective Agreement relating to seniority retention, recall, termination of employment or layoff (s. 3);

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• not subject to mitigation;

• notice not effective if employee is not at work (s. 67).

Collective Agreement

• check for clauses re:

o permanent closure;

o partial closure;

o severance pay;

o notice or negotiations with union;

o loss of seniority; and

o recall rights.

Common Law

• varies, based on age, length of service, position, alternative employment;

• is not less than ss. 63 and 64 ESA minimums;

• subject to mitigation after ESA minimums met.

Bargaining

s. 54(1)(b) Labour Relations Code

• negotiate “adjustment plan” with union which may include:

o alternatives to closure;

o human resources planning, counselling, training;

o notice of termination;

o severance pay;

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o pension, early retirement; and

o bipartite implementation;

• adjustment plan becomes part of collective agreement.

Collective Agreement

• could changes to Collective Agreement make continued operation viable?

o if so, watch for timing, lockout issues, bad faith bargaining issues.

Closure / Adjustment Agreement

• a closure agreement may be entered into;

• consider issues such as:

o special terms and conditions of employment for the wind down period;

o continuing recognition of Union’s collective bargaining rights; and

o effect of re-opening in similar business

Downsizing

Many downsizings, whether permanent or temporary, can trigger some of the obligations set out above with respect to closures.

Remember, the trigger for notice in a union workplace in BC is the introduction of, or intention to introduce, change that affects terms, conditions or security of employment of a significant number of union employees. A “significant number” may be more than one, but does not imply any other minimum number or percentage of employees. A handful of employees out of a unionized workforce of 50 or more might be “significant” depending on the effect on other employees and all the circumstances of the intended change.

Also remember, group termination notice applies to both union and non-union employees and the trigger in BC is 50 or more at a single location in any two month period. The count and the timing can be complicated by a temporary layoff of non-union employees that then exceeds 13 weeks in any 20 consecutive week period, or, if the employee has a right of recall, that exceeds the period of recall. In those cases, the “layoff” is deemed a termination as of the original date of layoff.

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Temporary Downsizing

Temporary downsizing can present other issues. In most unionized workplaces, the obligations of the employer will be defined by the collective agreement. But if you are able to carry out, or get agreement to, a temporary layoff of non-union employees, you will have to consider:

• what, if any, benefits can be continued during the layoff;

• how will a recall to work be effected;

• what rights, if any, will an employee have to refuse a recall; and

• what rights will an employee have who is not recalled.

Reducing labour costs

Subject to the issues of constructive dismissal already discussed, and subject to specific provisions of a collective agreement, employers may be able to implement a variety of labour cost reduction measures.

In all cases, careful and comprehensive communication will be required to “sell” an austerity package, but there are some obvious things that can lead to immediate savings:

• across the board salary reductions;

• temporary salary reductions with some prospect of future repayment;

• salary freezes;

• conversion of vacation time in excess of employment standards minimums into unpaid leave;

• suspension or modification of bonus programs;

• reduced salaries while increasing the proportion of incentive based pay; and

• reduced hours, reduced work weeks, nine day fortnights.

Some changes may be implemented with the tacit approval or acquiescence of employees or simply in the hope that they will not prompt complaints or legal action. In other cases, it may be possible to negotiate actual changes that will have contractual force.

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Negotiated changes

Union

Mid-term changes to a collective agreement are possible, but they have to be structured carefully so that any eventual closure or reduction in work force does not trigger a claim of illegal lockout.

If a closure or some other reduction is likely required unless you are able to negotiate some changes to the collective agreement, the safest route is to give s. 54 Labour Relations Code notice (as discussed above) and then discuss changes as part of the adjustment plan discussions required. If, instead, the employer seeks some concessions, fails to achieve agreement, and then proceeds to close or downsize, the union can claim it is an illegal lockout – i.e. a reduction done to compel employees to agree to conditions of employment.

Non-union

Agreeing to changes with large numbers of non-union employees can be more difficult because of the need to ensure there is a properly documented agreement with each employee. Achieving such negotiated changes will be accomplished most easily after a comprehensive communications strategy that ensures employees understand the issues facing the employer, and the limited alternatives available to the employee.

The other major legal challenge is ensuring that each agreement is legally binding. In particular, the employer has to show that the employee is receiving some “consideration” for the agreement. Since the employer is looking for concessions, such as reduced hours or wages, it can be hard to show that there is some new benefit the employee is getting for their agreement. But if the employer can implement a new form of bonus, an enhanced benefit, or a promise of something new in the future, the agreement to make immediate changes to the detriment of the employee can be upheld.

Employers may find some assistance through an Employment Insurance approved Supplemental Unemployment Benefits Plan (SUB Plan). The details and requirements can be found at http://www1.servicecanada.gc.ca/eng/cs/sub/documents/sub.pdf.

In brief, an employer may supplement the maximum $423 per week EI benefits with further payments to provide laid off employees with up to 95% of their regular earnings. If a SUB Plan paid employees an extra small percentage of their regular earnings, it could make a layoff or training leave more palatable while substantially reducing the employer’s payroll costs.

Employers may also get help from a Work-Sharing Agreement. If the employer and employees apply together, they can go to a reduced work week, with the employer paying only for the hours worked and Employment Insurance paying for some of the reduced hours. The details can be found at: http://www1.servicecanada.gc.ca/eng/epb/sid/cia/grants/ws/brochure.shtml.

HR in Hard Times

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Retirement

For those employees whose retirement funds have not been too badly hit by the down market, there may be interest in retirement, whether at a normal age of retirement or earlier. A review of your pension and benefits plans may reveal some things you can do to encourage retirement with little up front cost and some longer term savings. One note of caution however: - take care to avoid any suggestion that might be used to make a claim of age discrimination. Mandatory retirement is no longer allowed in British Columbia and inappropriate pressure for retirement at any age, or for “early” retirement, may be considered age discrimination. Employers who make retirement packages available to their employees should try to avoid:

• conduct which suggests age discrimination, such as suggesting to an older employee that their position “takes a lot of energy”, or that it is time for the employee to “take things easy”;

• pressuring employees to accept retirement packages;

• associating retirement offers with job loss; and

• placing conditions on packages (that are not part of bona fide benefits or pension plans) that exclude certain employees.

Changes in duties

It is often necessary to change the duties of employees who remain after a downsizing. Any significant change of duties may lead to a constructive dismissal and could result in having to pay full termination costs to an employee you actually wanted to keep. A recent Supreme Court of Canada decision1 provides some help. In a situation where there is no shame to the employee staying in the newly defined or lesser job, the law now says that the employee’s duty to mitigate may require him to stay. In current circumstances, where changes are being made because of economic circumstances, an employee will have to seriously consider that option or possibly get nothing (except a bill for legal services) if the employee quits and claims constructive dismissal.

1 Evans v. Teamsters Local Union No. 31, 2008 SCC 20

HR in Hard Times

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Catching the Upswing

Weeding out the worst

Almost every employer has employees who have been allowed to coast along despite sub-par performance. A declining business may finally provide the impetus to deal with employment problems that have been festering for some time. Take stock of your employees. Identify those who will contribute to future success and focus on keeping them. That includes showing that you value high performance by dealing with poor performers. The cost of a generous severance for under-performing employees can be a good investment in building a high performance workforce. Retaining the best

Until some months ago, we were constantly hearing from employers about the lack of skilled employees. It's a basic demographic problem that is not going away. As soon as the economy picks up again, employers will be scrambling to find employees. Employers that need to temporarily reduce their workforce or labour costs will have to get creative so that they hang on to as many of their top performers as possible. As noted above, the Supreme Court of Canada provides some help.2 If you have to reduce your workforce, you may be able to convince your best employees to stay in lesser jobs, especially since their alternative is a constructive dismissal claim that may prove to be an expensive failure.

There are also some non-traditional ways of downsizing which may help to keep your best employees. Instead of laying off or terminating a number of employees, consider:

• offering voluntary travel or education leaves or sabbaticals;

• promoting job sharing;

• paying an employee some fraction of their regular salary to go work for a charity of their choice for awhile, or to give them a day off without pay every two weeks to work for a charity.

There may be a number of other things that employers and their employees can think of that will reduce labour costs while making some positive contributions to employee morale and retention of the best. Invite employees to make cost cutting suggestions and be flexible in considering their proposals.

Other ideas may help employees trim their costs, which in turn can alleviate some of the pain of reduced wages. For example, help employees coordinate their child care, utilizing time off from

2 Evans, ibid

HR in Hard Times

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work. Five employees could reduce to a four day week and each take turns providing child care. Or, employers could help employees come up with ideas to save on other living costs - such as car pooling.

Maintaining Morale

Once employers have planned and implemented measures to reduce the labour force or cut labour costs, they have to worry about the survivors. The survivors are those employees who have kept their jobs, or their full compensation. or their full time hours, while many of their colleagues and friends have lost some or all of those things. There are many things that will be necessary to maintain morale (and to retain the best of the employees). These morale boosters are both tangible and intangible. Consider:

• allowing the survivors to speak openly about their angers, fears and concerns;

• controlling the rumour mill by regular, consistent, open and honest communication;

• providing whatever level of assurance you can honestly provide about job security;

• engaging the survivors in discussing and planning the employer’s mission and future;

• providing the tools, resources and training to take on extra duties;

• coupling increased duties with increased responsibility and greater autonomy; and

• encouraging employee initiative and innovation.

A Final Word

Everybody is worried. Constant worry - about job security, about pension losses, about meeting the mortgage payment - does not enhance productivity. Employees who don't know what's going on worry the most. Employers have to work harder than ever at open and effective communication with employees. They have to listen carefully to understand what the concerns are. Then they have to speak consistently, clearly and truthfully to all the employees - and employers need to understand that it's better to say 'I don't know' than to say nothing at all. Then employers have to give some realistic encouragement and cause for hope. The final task is to express gratitude for everyone working their best to help the business succeed. A wise leader once summarized his task as this: speak truth, give hope, say thanks. That pretty much says it all for HR in hard times.

Collective Bargaining in BC

Earl Phillips Paul Boniferro

March 6, 2009


www.mccarthy.ca



The Rules

Bargaining Notice

Notice to commence bargaining can be served when four months or less are left in the term of the current collective agreement. However, if notice is not given, the Code deems notice to have been given 90 days prior to expiry of the collective agreement.

Once a notice to commence collective bargaining has been served, the union and the employer are to begin "good faith" bargaining within 10 days. However, it is common for the parties to agree to start bargaining at a later date.

Bargaining in Good Faith

The requirement for good faith bargaining generally means that both parties must be sincere in their attempts to reach an agreement. This includes meeting with the other side and making every reasonable effort to conclude an agreement. The bargaining process calls for a certain amount of give and take. Failure to agree with the other side's bargaining demands does not, in itself, mean that a party is not bargaining in good faith. However, a deliberate strategy by either party to prevent reaching an agreement is considered to be bad faith bargaining. If one party engages in that kind of conduct, the other party can lodge an unfair labour practice complaint with the Labour Relations Board.

Communicating with Employees

The employer is free to communicate its views on any matter provided that the person does not use “intimidation or coercion” under the Code.

The right of the employer to communicate directly with employees during collective bargaining will be interpreted in light of:

• the union’s exclusive bargaining authority, which generally means the employer cannot negotiate directly or individually with employees; and

• the unfair labour practice provisions of the Code.

See “Communication Strategy” below.


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Bargaining to Impasse

While the union and employer are given wide latitude to bargain concerning terms and conditions of employment, they are not permitted to bargain to impasse matters such as the protocol or format of bargaining, or matters that are inconsistent with provisions of the Code. Any attempt to bargain such matters to impasse may be found to be bargaining in bad faith.

Required Provisions

Duration

The Code provides that every collective agreement must have a term of at least one year, although the parties are free to agree to a longer term and usually do so. (Most collective agreements in BC have at least three year terms, and the trend has been for longer terms.) During the life of the agreement, changes to any of its provisions can be made only with the consent of both the union and the employer.

Joint Consultation

The Code requires all collective agreements to have a joint consultation process for the parties to deal with workplace issues that arise during the life of the collective agreement. The purpose of joint consultation is to:

• promote cooperative resolution of workplace issues;

• respond and adapt to changes in the economy;

• foster the development of work-related skills; and,

• promote workplace productivity.

If a collective agreement does not have such a provision, the Code deems the following to apply:

On the request of either party, the parties shall meet at least once every two months until this agreement is terminated, for the purpose of discussing issues relating to the workplace that affect the parties or any employee bound by this agreement.

Just and Reasonable Cause and Dispute Resolution

Section 84 of the Code requires all collective agreements to contain provisions requiring just and reasonable cause for dismissal or discipline, and settlement of grievances by some form of final dispute resolution process. Otherwise, section 84(3) will apply:


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If a collective agreement does not contain a provision referred to in subsections (1) and (2), the collective agreement is deemed to contain those of the following provisions it does not contain:

(a) the employer must not dismiss or discipline an employee bound by this agreement except for just and reasonable cause;

(b) if a difference arises between the parties relating to the dismissal or discipline of an employee, or to the interpretation, application, operation or alleged violation of this agreement, including a question as to whether a matter is arbitrable, either of the parties, without stoppage of work, may, after exhausting any grievance procedure established by this agreement, notify the other party in writing of its desire to submit the difference to arbitration, and the parties must agree on a single arbitrator, the arbitrator must hear and determine the difference and issue a decision, which is final and binding on the parties and any person affected by it.

Mediation

Either party may apply for mediation under s. 74 of the Code. The Mediation Division of the Labour Relations Board decides if a mediator will be appointed. An appointment will be made unless it is considered to be too early or too late in the process. It may be considered too early if it is not clear that there have been reasonable efforts by the parties to reach an agreement. And it will be considered too late if strike or lockout notice has been issued.

The Minister of Labour can also appoint a mediator in a collective bargaining dispute if he or she feels that a mediator will likely assist the parties in reaching a collective agreement.

The mediator meets with the parties and works on resolving the areas of disagreement for a new collective agreement. Unless the union and employer agree to an extension or the Minister orders an extension, the mediator must report out within 20 days of the mediation appointment. If requested by the parties, or directed by the Minister, the mediator must also give a report to the parties, and the report may include recommended terms of settlement.

Strikes and lockouts are not legal while a mediation officer is involved. The parties must wait at least 48 hours after the mediator reports out before there can be a lawful strike or lockout.

Last Offer Vote

If collective bargaining is unsuccessful, before a strike or lockout commences, the employer can ask for a vote by the employees in the bargaining unit on the employer's last offer received by the union during bargaining. Generally this is only recommended in situations where there is reliable evidence that the union bargaining committee is failing to represent the real views of its membership.


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Where the vote favours acceptance of the offer, the terms of the offer voted upon become the new collective agreement between the parties. The employer can only require one last offer vote in the same round of bargaining.

After a strike or lockout has begun, the Minister of Labour can order a vote on the last offer of either party when he or she considers it in the public interest to do so. Again, a vote in favour of the last offer is binding on the union and employer(s).

Strike or Lockout

Requirements for a Strike or Lockout

Before there can be a lawful strike or lockout:

• the term of the collective agreement must have expired

• the parties must have bargained collectively in accordance with the Code;

• the union must get majority support for a strike by way of a properly conducted secret ballot vote;

• the union must give 72 hour strike notice to the Labour Relations Board and to the employer, or the employer must give 72 hour lockout notice to the Board and the union, except that once a lawful strike or a lawful lockout has started and not been discontinued for 72 hours or more, an employer can lockout, or a union can strike, without advance notice; and

• when a mediator has been appointed, 48 hours must have elapsed from the time the mediator reports out of the dispute.

Once the 72 hours or 48 hours have elapsed, whichever comes later, the union or employer may, but need not, commence strike or lockout action at any time (except that the strike action must start within three months of the strike vote.)

If any of the preconditions mentioned above are not met, an application may be made to the Board. A variety of remedies, including cease and desist orders, are available to the Board. In the case of strike votes, the Board may order that a vote taken has no effect if the regulations governing such votes have not been followed.

What is a “Strike” and How Can the Employer Respond?

Any concerted cessation or slowdown of work with the actual or intended effect of limiting production or service is a “strike” and any such activity prior to meeting the requirements above is illegal. A complaint may be made to the Labour Relations Board in the event of illegal strike activity.


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Until the union is in a legal position to strike, the employer has every right to manage the workforce and require proper performance of work duties. An employer may also discipline in the ordinary course.

Once the requirements for a legal strike have been met, strike activity may be a complete walkout or limited strike activity such as occasional work stoppages, slowdowns, refusals to do certain types of work, overtime bans, etc. The employer’s ability to require the work to be done is restricted. The employer’s options are:

• have the work done by non-bargaining unit personnel (subject to restrictions on using replacement workers);

• lockout the bargaining unit employees.

Replacement Workers

During a strike or lockout, an employer may not use any person to do bargaining unit work, or to do non-bargaining unit work of someone who is now doing bargaining unit work, if the person was not hired on or before the date that notice to commence collective bargaining was given. Nor can the employer use an employee who ordinarily works at another of the employer’s places of operations.

Picketing

When there is a legal strike or lockout, the union can picket the place or places where bargaining unit work is done under the control or direction of the employer. It may also picket at another site within British Columbia where the employer is having bargaining unit work done that, but for the strike, would have been done at the employer’s premises, or where an “ally” (a person who is assisting the employer in a lockout or in resisting a strike) operates.

A union generally does not have the right to picket at other places but it may have the right to peacefully leaflet any place in support of its position, such as at the premises of customers or suppliers.

Filing the Collective Agreement

The Code requires each of the employer and the union to file a copy of the collective agreement with the Labour Relations Board within 30 days of execution. The Board’s practice is to post collective agreements on its website. The parties should agree on who will file the collective agreement and what needs to be redacted to avoid unnecessary disclosure of personal information. In every case, the names and signatures of the signatories should be removed.


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Planning For the Best / Preparing for the Worst

Do Your Homework

Prior to bargaining, there are a number of steps you should take to ensure that you have obtained and considered the information you need to be ready to bargain, to explain and evaluate your proposals or to respond to the union’s proposals.

1. Collect and review internal data on grievances/arbitrations.

2. Collect data with respect to the bargaining unit and relevant cost issues, including:

• benefits costs and claim rates, • sick leave costs, • overtime costs by classification, location and shift, • total average compensation per worker and breakdown by regular wage, overtime,

additional compensation (such as productivity bonuses, shift premiums) and benefits, • total number of employees with a breakdown by shift and classification, • overall cost of shift differentials, emergency recall and other special pay and

breakdown by classification and shift, • vacation costs, • absenteeism rate, • accident rate by classification, location and shift, and • demographic data of bargaining unit by sex, age and seniority.

3. Obtain a legal review of the existing collective agreement, particularly with respect to changes to applicable legislation such as employment standards and employment insurance, and the effect of recent arbitral/court decisions.

4. Gather and review current information on terms of settlement in the industry – useful sources include:

• BC Bargaining Database (www.bcbargaining.ca) • Human Resources and Social Development Canada, Workplace Bulletin (www.hrsdc.gc.ca/en/lp/wid/bulletin.shtml)

• Statistics Canada (www.statcan.ca)


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• Conference Board of Canada (www.conferenceboard.ca)

5. Review company short and long term business goals to ensure alignment of bargaining positions and goals.

Develop Company Goals and Proposals

Identification of the company’s goals in bargaining is a key part of the planning process. The goals should align with anticipated economic conditions and the company’s long range business plan.

In developing proposals and in bargaining, consider that the union and company usually have a fundamentally different view of the collective agreement.

Unions tend to look through the wrong end of the telescope. They believe a collective agreement is permissive, and that the employer cannot do something unless it says so in the collective agreement. The proper perspective is that the employer has the right to manage its business subject only to specific restrictions in the collective agreement and generally applicable law.

Accordingly, the employer’s key goal is to maintain a strong and expansive management rights clause and minimize the restrictions in the collective agreement.

Develop a Strategic Plan for Bargaining, Including a Potential Breakdown or Impasse

Prior to bargaining, you should develop a strategic plan for the management of the process of bargaining, including any potential breakdown or impasse in that process. Your goal is to control the process and be ready for any steps which the union takes. Planning and being prepared for a labour dispute, and showing the union that you are prepared for any eventuality, can dramatically increase your bargaining power.

To develop a strategic plan, you should consider the following factors:

Notice to Bargain

Determine the earliest date on which notice to commence bargaining may be given, and whether the company wishes to give notice in the event the union does not. Remember that the date notice is given is the key date for determining whether an employee will be an excluded replacement worker. (See “Replacement Workers” above and below.)


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Mediation

Either party may apply for mediation under s. 74 of the Code. Appointment of a mediator has the advantage of delaying strike action, but Employers should be sure that seeking mediation does not have a negative impact on bargaining strategy.

Remember that the Board’s practice is to refuse to appoint a mediator if strike or lockout notice has been issued.

An application for mediation has to identify all outstanding issues, so carefully document the process of bargaining as you go, and have a draft application for mediation ready so it can be completed quickly if necessary. The current form for an application for mediation is attached and can also be found at www.lrb.bc.ca/forms .

Last Offer Vote

Before a strike or lockout commences, the employer can ask for a vote by the employees in the bargaining unit on the employer's last offer received by the union during bargaining. Generally this is only recommended in situations where there is reliable evidence that the union bargaining committee is failing to represent the real views of its membership.

If you want to use this option, you need to be able to make the application within the 72 hour strike notice period, because you will lose your right to file the application once a strike commences. The current form for a last offer vote application attached and can also be found at www.lrb.bc.ca/forms .

Likelihood of a Strike or Lockout

Consider how likely it is that a strike or lockout will ensue. If there is likely to be a strike or lockout, consider in advance the extent to which the company can continue to operate and what preparation is required. (See “Continuing Operations” below.) If operations have to be partially or fully shutdown, consider the steps and timeline for an orderly shutdown.

Replacement Workers

Non-union employees generally are allowed to do bargaining unit work during a strike or lockout. However, an employer may not use any person to do bargaining unit work, or to do non-bargaining unit work of someone who is now doing bargaining unit work, if the person was not hired on or before the date that notice to commence collective bargaining was given. Nor can the employer use an employee who ordinarily works at another of the employer’s places of operations.


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Continuing Operations During Strike or Lockout

If you intend to continue some of the bargaining unit operations, assess in advance the impact a strike or lock-out may have upon deliveries as well as upon any contracted services. If alternate arrangements need to be made, develop a plan in advance and consider notifying all affected business partners. Consider the needs of the business including inventory availability (i.e. whether it should be increased or moved to another location) and ingress/egress from facilities. Also, taking into account the restrictions on replacement workers, consider what preparation is necessary (such as training or licensing) to enable non-union employees to do bargaining unit work.

Timing of a Strike or Lockout

Consider whether the company is better able to withstand a strike or lockout at a particular time, and factor this timing into the strategic plan and the bargaining dates and process.

Resolution of a Strike or Lockout

Consider the extent to which your workplace can sustain a strike or lockout and at what stage you may have to return to the table for business reasons. Knowing the threshold for the health of your business in advance will assist in identifying the point at which a new proposal or renewed bargaining may be necessary.

Benefits During a Strike or Lockout

The employer does not have to continue benefits during a strike or lockout unless the union will pay the cost. Consider what your position will be on this issue and whether you should tell the union of the requirement to pay as part of our response to threatened strike action.

Vacation Pay Before or During a Strike

Unions will often encourage their members to ask for payout of their vacation pay in advance of or during a strike. Generally, an employer does not have an obligation to do so and should refuse the request unless required by the collective agreement or statute.

Develop a Communications Strategy

The company’s communication strategy and protocol should be planned before starting the negotiations. There are four aspects of communications during bargaining:

1. Internal communication amongst the management team;

2. Communication during bargaining between the employer’s negotiating committee and the Union bargaining committee;


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3. Communication between the employer and bargaining unit employees; and

4. Communication by the employer to third parties, such as customers, clients, suppliers and the media.

Each of these types of communication should be controlled, in order to prevent unauthorized persons from making statements which may be detrimental to the bargaining process or to the company’s interests. While responsibilities for communication to various parties may be delegated to different persons, it is important that one person review and vet all communications to ensure consistency, accuracy and the appropriate degree of disclosure.

If the company intends to communicate directly with employees to keep them notified of the status of bargaining, a pattern of communication should be established early in the process and all communication must recognize the union as the exclusive bargaining agent. In particular, communications to employees should not contain anything that has not already been communicated at the bargaining table.

The company negotiating team should establish a protocol of who will be the key spokesman and whether any other members of the negotiating team will have authority to engage in “off-line” discussions or to make proposals.

Prepare for the Bargaining Process

To the extent possible, in advance of, or at the start of bargaining, you should reach an agreement with the Union on procedural matters. These procedural matters include:

• the place of bargaining, and if off-site, the responsibility for cost; • how many people will be on the negotiating teams;

• the process for release of employees on the union negotiating team; • the payment of employees on the union negotiating team (it is recommended that the

company not agree to pay employees on the union negotiating team in advance, as an agreement to pay can be useful leverage at the end of the bargaining process);

• identifying who will take minutes for the company negotiating team and consider

whether “joint” minutes will be kept which the union will be asked to approve; • determining dates for bargaining, providing adequate time between sessions to review

and respond to proposals; and


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• considering whether to have a media “black-out” on the status and content of negotiations by the employer and union.

Control the Documentation

Control of paperwork is a key factor in bargaining and good organization of paper makes the whole process much easier. Keep in mind the following tips for controlling the documentation:

1. Keep detailed minutes of bargaining, including identification of proposals which are tendered and the discussion or response around them. These minutes can prove very valuable in an arbitration if they demonstrate that one party provided an explanation of the intended effect of the proposal to the other party, and the proposal was accepted based on that understanding, as it demonstrates mutual understanding of the effect or application;

2. Use a footer for all company proposals which includes the date of the proposal;

3. Keep track of all accepted proposals. Some ways to do so are by having both parties sign off accepted proposals, printing them on a different colour of paper and placing them in a binder with a number tab which corresponds to each article of the collective agreement; and

4. Remember that “he who drafts, prevails”: take control of the drafting process to the extent possible.

Bargaining Process

The usual process is to bargain non-monetary matters first, as once monetary issues have been bargained the union has little, if any interest in the non-monetary matters and the company will have little leverage in bargaining. Accordingly, the union and company proposals should be broken into monetary and non-monetary and the company should not table any monetary proposals until the final stages of bargaining.

We may be in one of those extraordinary times when major economic concessions are sought by employers. That may change the usual order and dynamic of bargaining and require the monetary proposals to be tabled early in the process.

Monetary proposals should be tendered and negotiated as a package and not piecemeal.

Throughout the process the company should continue to consider the likelihood of a strike or lockout and negotiate to its own time preferences.


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“Housekeeping” Review

Provisions in a collective agreement often inter-relate such that changes to one article may necessitate changes to other articles in order to ensure consistency in language and effect. Accordingly, throughout bargaining it is important that the entire document be reviewed for consistency to avoid unintended interpretations.

1. If a word or phrase is defined to carry a particular meaning, then the defined term must be used throughout the collective agreement when that particular meaning is intended. For example, if “Probationary Period” is defined as meaning a 90 day period at the commencement of employment during which suitability for continued employment is assessed, it should be used throughout the collective agreement every time that period is referred to.

2. If a different meaning is intended, use different words. Arbitrators assume that a word has the same meaning throughout the agreement, and different words are assumed to mean different things (for example, “sick leave” is not the same as “sick day”, and “work week” is not the same as “week”).

3. It is key to avoid conflicting provisions, such as where overtime is defined in one article as meaning all hours over 8 in a day, but it carries a different meaning in a section on compressed work week.

4. Try to identify and flag housekeeping issues in the bargaining process to minimize conflict with the union when these housekeeping changes are made.

The “find” function on computers can make these housekeeping tasks much easier.

The Memorandum of Agreement

The final step in bargaining is usually drafting the Memorandum of Agreement. It can take one of two forms:

(a) a memorandum which outlines the additions or changes to the existing agreement; or

(b) a “covering” agreement to which the final version of the collective agreement is attached.

A number of terms should be in the Memorandum of Agreement, including:

• the term of the collective agreement; • that both bargaining committees unanimously recommend ratification of the

agreement;


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• that the agreement is subject to ratification and what constitutes ratification of the collective agreement (that is ratification by whom, and by what date);

• the triggering events by which the collective agreement takes effect; and • the date the collective agreement takes effect and whether any portion is retroactive.

If there has been a strike or lockout or other labour disruption, it is common to negotiate a return to work agreement which will often include provisions:

• outlining how and when the bargaining unit employees will return to work; • guaranteeing no discipline for picket line activity; • guaranteeing no union action against employees who crossed the picket line; and • confirming continuous service credit for things such as vacation and pension accrual.

Latest Trends

See attached power point presentation.


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Workplace Investigations Tina Giesbrecht Donovan Plomp Brian Wasyliw

March 6, 2009

McCarthy Tétrault LLP P.O. Box 10424, Pacific Centre Suite 1300 - 777 Dunsmuir Street Vancouver, BC V7Y 1K2 Canada www.mccarthy.ca

Workplace Investigations


INTRODUCTION1

A wide variety of occurrences may be classified as "workplace incidents" requiring an employer to undertake some kind of investigation. Employee injuries, human rights complaints, theft, fraud and drug and alcohol abuse are just a few examples.

The purpose of this paper is to provide employers with some general guidelines that will allow them to properly and appropriately investigate workplace incidents. While every aspect of workplace investigations cannot be covered here, this paper also briefly discusses some specific issues arising in 3 contexts; disciplinary incidents, human rights complaints and suspicious absences. This paper will also address some of the legal concerns that may arise in conducting these types of investigations.

Investigating Workplace Incidents: Preliminary Considerations

The purpose of an investigation is to gather information in an organized, complete and fair manner in order to arrive at accurate findings of fact, and to allow the employees involved to tell their side of the story, before any decision is made regarding discipline or other corrective action.

In many circumstances, an employer has a positive duty to investigate, particularly those circumstances in which an employee alleges that another employee has engaged in conduct contrary to the Human Rights Code or in circumstances where a workplace safety issue has arisen.2

(1) Deal with Exigencies:

The first step after any incident has occurred is to respond to the exigencies of the particular incident. For example, in a situation where a workplace injury has occurred, the medical and personal needs of the injured employee should take immediate precedence. Further, the integrity of the workplace should be ensured; property should be protected and any affected workplace processes should be attended to.3 However, the employer should not lose sight of the necessity for quick action at this time. The incident scene may provide an important source of evidence later on in the investigation.4 Further, where substance abuse or impairment is suspected, rapid testing and gathering of evidence may be required.

1 Every effort has been made to ensure the accuracy and timeliness of this publication, but the comments are necessarily of a

general nature. Clients are urged to seek specific advice on matters of concern and not rely solely on the text of this publication.

2 R.S.B.C. 1996, c. 210. 3 N. A. Keith, Human Resources guide to Preventing Workplace Violence, (Aurora: Aurora Professional Press, 1999) at 187. 4 Further, if investigating a serious health and safety incident, section 172(2) of the British Columbia Workers Compensation

Act, stipulates that the scene of the incident cannot be disturbed except so far as is necessary to: (a) attend to persons injured or killed; (b) prevent further injuries or death, or; (c) protect property that is endangered as a result of the incident.


It may be necessary or desirable to remove an employee or employees from the workplace pending an investigation. Collective Agreement arbitrators have said that employees may be removed from the workplace pending investigation when the employer’s interest, having regard to the particular circumstances, “could only be safeguarded by removing the [employee] from the workplace pending an investigation into whether discipline would be imposed.”5 At common law, an unreasonable suspension without pay could ground an action for constructive dismissal. Accordingly, if the employer feels an employee should be removed from the workplace, such a removal should be with pay until the employer can investigate further and obtain legal advice.

(2) Consider the Nature of the Incident:

The second step is to consider the nature of the incident. Does it expose the employer to potential for liability or the requirement of disciplining or terminating an employee? Are there potential human rights issues? Are policies of the employer engaged or triggered by the incident? This will assist in determining who should handle the incident, and how information should be gathered (i.e. should legal counsel or other experts be involved immediately).

(3) Note Legal Requirements that May Apply:

The third step is to consider whether the employer is under any legal restrictions with regards to the manner in which the investigation is carried out. For example, is third party notification or involvement required? In addition, if a collective agreement is in place, it should be consulted to determine whether there are provisions that affect the investigation. For example, a collective agreement may require that an investigation be conducted prior to suspension or discharge, stipulate that investigations be conducted expeditiously, set out notice requirements,6 permit an employee to have the assistance of a union steward at the investigation, or require written notification of certain types of allegations.

(4) Choose the Investigator(s):

The final preliminary step is to identify the investigator and/or investigative team. Care should be taken to ensure that the selected investigator(s) are unbiased and have the necessary expertise and authority to conduct a thorough investigation. As such, an employer may wish to seek external assistance if the investigation cannot be completed in an unbiased manner, or if some special expertise is required (such as forensic auditing experience or experience handling sexual harassment complaints).

5 Governing Council of the Salvation Army in Canada v. British Columbia Nurses Union (Smardon Grievance) [2003] B.C.C.A.A.A.

No. 265 (Sanderson). 6 i.e. s. 172 of the Workers Compensation Act requires immediate notice to the WCB in the event of certain types of accidents,

such as accidents involving the injury or death of a worker.


Checklist

• Prior to commencing an investigation, the employer should consider the following questions:

• Does the incident expose the employer to liability, either directly through negligence, or through the need to discipline or terminate employees?

• Are human rights issues involved?

• Did the incident involve a threat to health and safety of the employee or other individuals?

• Does the incident involve a complaint by another employee who would like the company to enforce the employee’s workplace rights?

• Is the incident criminal in nature or does it involve allegations of a quasi-criminal nature?

• Choose an appropriate investigator.

• Consider whether external assistance is necessary.

• Ensure the investigator is relatively unbiased.

• Ensure the investigator has the requisite authority to conduct the investigation.

• Select an individual with suitable interpersonal skills.

• Is there is a collective agreement? If so, it is imperative to review the agreement and ensure that any relevant provisions are complied with.

THE GENERAL INVESTIGATIVE PROCESS

An investigation usually involves some or all of the following steps:

• Interviews of people who were involved in the incident or who witnessed some or all of the incident;

• Collection of documentary evidence, such as time cards, work records, e-mails, accounting or inventory records, invoices or sales documentation, or building access records;

• Collection of actual evidence, such as recovery of stolen property, taking photographs of any evidence such as stolen or damaged property, preservation of damaged or vandalized items;

• "Creation" of evidence by means such as video surveillance; and


• Production of an “incident report.” If the purpose of the report is to defend against existing or anticipated litigation, its creation should only be undertaken at the behest of legal advice, so as to invoke privilege. Further, the confidentiality and intended use of the report should be made clear throughout the investigation.

I. The Matter of Privilege and Confidentiality

Before undertaking an internal investigation of a workplace incident, an employer should be aware that the evidence collected and the report created may later have to be disclosed and/or produced if litigation is undertaken.7 If the evidence is relevant to the issues in dispute, the arbitrator, court or regulatory body charged with hearing the matter may order its production to opposing counsel. An employer may be able to prevent this outcome if the investigation is conducted in a manner which affords privilege over the collected evidence and/or report.8 “Privilege” means the right to refuse to disclose confidential information when giving testimony or producing documents. Although privilege may act as a fetter on the discovery of truth, it demonstrates the priority given to the inviolability of solicitor-client communications.9 The onus is on the party asserting privilege to establish its existence on a balance of probabilities.10

There are two categories of privilege which could potentially be used to support non-production of an investigative report created during an employer-driven investigation: (1) solicitor-client privilege and (2) litigation privilege. To establish solicitor-client privilege, the party asserting it must prove, on a balance of probabilities, three factors:

1. That the information is a communication between solicitor and client;

(a) Canadian courts have held that in the context of a corporate client, protection is extended to communications of corporate employees, regardless of their position in the corporate hierarchy, who are engaged to pass on information to solicitors on the corporation’s behalf.

2. The communication entails the seeking of legal advice; and

7 For instance, in a civil court action, the parties are usually required to disclose relevant documents. The scope of such

disclosure depends upon the nature of the action. Certain actions in Supreme Court (Rule 68) and Small Claims Court actions have more limited discovery requirements. Collective agreement arbitrators in British Columbia have the power to require the production of potentially relevant documents before or during arbitration: Overwaitea v. Christian Labour Assn. of Canada, Local No. 66, [2004] B.C.A.A.A. No. 162, as do Human Rights Code adjudicators In the federal jurisdiction, section 16(f.1) of the Canada Labour Code, R.S.C. 1985, c. L-2., gives the Canada Industrial Relations Board the power to order production of any relevant document and section 141(h) of the Canada Labour Code gives health and safety officers the power to order production of any document related to health and safety. S. 179(3) of the Workers Compensation Act gives an officer the power to require a person to produce records in the person’s possession or control that may be relevant.

8 However, it should be noted that a party cannot conceal a fact or piece of evidence merely by revealing it to his or her lawyer.

Privilege extends only to communications and not to facts or evidence. 9 See Manes and Silver, Solicitor-Client Privilege in Canadian Law (Toronto: Butterworths, 1993) at p. 5. 10 i.e. That there is more than a 50% probability that the document is covered by privilege.


3. The communication is intended to be confidential.

With regards to litigation privilege, protection is also extended to documents when two conditions are met:

1. Litigation is existing or reasonably contemplated; and

2. The documents were created with a view to such litigation, for the ‘dominant’ or ‘substantial’ purpose of either obtaining evidence to be used in litigation, or for obtaining advice in regards to said litigation.

Litigation privilege extends to documents prepared for litigation, including factual reports, opinions and memoranda. In addition, protection is also extended by litigation privilege to communications between a third party and a lawyer in relation to existing or contemplated litigation. However, attention must always be paid to what ‘hat’ in-house or outside counsel is wearing when they are involved in the investigation. The Courts have said that communications with legal counsel who are acting as “investigators,” rather than “lawyers”, are not privileged.11

II. Interviews

Conducting post-incident interviews of involved employees is perhaps the most important part of any investigation for three reasons. First, interviews help the employer gain a clear and comprehensive picture of what occurred, providing valuable information that can be utilized to ensure the employer remedies the incident in an appropriate manner. Second, interviews, if conducted properly, provide an invaluable source of evidence if litigation later becomes involved; interviewees can be committed to a story and/or helpful admissions may be gathered. Finally, if the only evidence of a workplace incident are the two conflicting stories of the complainant and alleged offender, interviews provide the employer with an opportunity to assess the credibility of both parties involved.

Interviews should be conducted as soon as possible after the incident when memories are vivid.

Before the Interview

Where an interview is appropriate, it is prudent to obtain a general description of the incident prior to commencing the interview. Similarly, all relevant documents should be gathered and reviewed.

At the preliminary stages of the investigation, a list of potential interviewees should be made and then consideration should be given to whether there is any possible legal restriction or ramification from interviewing them. If some interviewees are members of the union, the employer should check to see if the collective agreement affects its ability to interview them or the manner in which the interview is

11 College of Physicians of British Columbia v. British Columbia (Information and Privacy Commissioner) [2002] B.C.J. No. 2779

(C.A.)


conducted. For example, many collective agreements provide that the union steward should be present to represent the employee during interviews with management.12

Technically, an employee is insubordinate if he or she unreasonably refuses to attend an interview. Employees may be reluctant to answer the employer’s questions regarding an incident to avoid incriminating themselves. It has been held that a simple failure to explain misconduct by an employee does not amount to independent cause for discipline,13 although it could result in the employer drawing unfavourable conclusions about the incident and imposing discipline accordingly.

Serious incidents may prove an exception to this rule. In a recent arbitration decision in British Columbia,14 two employees who had control of the Queen of the North ferry before its widely publicized grounding and sinking refused to answer questions regarding a critical period prior to the incident. Their refusal was based upon the advice of independent legal counsel due to potential criminal charges and subsequent legal proceedings. The employees were held out of service without pay due to their failure to answer any of the employer’s questions regarding a critical period of time.

Arbitrator Foley held that the employees’ right to silence was abrogated in the circumstances. A tragic incident had occurred, resulting in the presumed death of two passengers. The Company had very legitimate business reasons and a compelling business interest in determining what all crew members saw and did at all times during the vessel’s voyage. This outweighed the employees’ right to remain silent, and the employer was justified in holding them out of service without pay for their “serious and continuing act of insubordination” in refusing to answer the employer’s questions regarding the incident. Applications by the Union to overturn the decision were made to the Labour Relations Board, then to the British Columbia Supreme Court on Judicial Review, but were denied.15

An employee has no “right” to demand to have a lawyer present when speaking to management although, practically speaking, a reasonable request to have a lawyer present should be considered depending on the facts of each case.

In cases where the employer faces the prospect of litigation, or where it would be inappropriate or awkward for management to conduct an investigation (such as allegations of sexual harassment or discrimination made against a member of senior management), it may be wise to have external legal counsel conduct the investigation to maintain privilege over communications and to provide prompt, accurate advice to the employer.

12 Even if not required by the collective agreement, it would be wise to have union representation present at the interview so as

to help avoid any later argument that the interview was conducted in an unfair manner. 13 See, for example, Tober Enterprises Ltd. [1990] B.C.L.R.B.D. No. 51 (British Columbia Industrial Relations Council). 14 British Columbia Ferry Services Inc. v. British Columbia Ferry and Marine Workers’ Union (Hilton Grievance) [2007]

B.C.C.A.A.A. No. 45 (Foley). 15 [2008] B.C.L.R.B.D. No. 5; [2008] B.C.L.R.B.D. No. 23; [2008] B.C.J. No. 2066 (S.C.).


Checklist

• A list of potential interviewees has been made.

• Interviews have been scheduled as soon as possible.

• The time and the place of the interviews ensures confidentiality.

• A general description of the incident has been obtained.

• All relevant documents have been gathered and reviewed.

• An interview strategy has been developed.

• Legal advice has been sought if the company faces the prospect of liability or terminating employees.

• The collective agreement has been complied with.

• An appropriate interviewer or interview team has been selected.

At the Interview

At the interview, the interviewer should commence by explaining his or her role, the purpose and structure of the interview, and relevant company policies. The interviewer should stress that confidentiality will be respected, but cannot be guaranteed. The interviewee should be advised to keep records of any relevant events. If interviewing a complainant, the interviewer should highlight who will be responsible for making decisions about the investigation and what remedies, if any, are potentially available. Further, the complainant should be kept appraised of the status of the investigation as it progresses. If interviewing an alleged offender, the allegations should be explained to the alleged offender and he or she should be given a copy of the written complaint, if one was made.

The interviewee should be allowed to explain the incident in his or her own words. Open ended questions should then be used to elicit more information. Employers should avoid using leading questions, that is, questions which suggest the answer. For example, rather than asking whether the interviewee reported the incident immediately after it occurred, it would be better to ask what the interviewee did immediately following the incident. However, at later stages of the interview, once the interviewee has committed to a basic ‘story’, more pointed questions may be required to obtain the requisite amount of detail to conduct a thorough investigation. Likewise, the use of probing questions at the later stages of the interview may be helpful to test the employee’s response against the evidence you have already collected. If you have documentary, photographic or video evidence,


you should disclose that fact to the employee. If any employee has been filmed on video, it is effective to show the video and then ask the employee to provide an explanation.

While the level of detail required will depend upon the nature and severity of the incident, aside from the expense, there is no downside to gathering too much information. The interviewer should elicit a description of the incident; the date, time and place that it occurred; whether there have been similar/related occurrences; who was involved, including who witnessed the incident; whether anyone else was informed of the incident and, if so, the details of their response; and so on. Care should be taken to press behind those statements which involve a conclusion rather than a statement of fact: for example, "He stole the torque wrench," when in fact what the witness saw was someone who looked like the suspect exit the side door of the building with a large rectangular cardboard box. Imprecise, exaggerated or vague witness statements may lead an employer to make a decision based on "evidence" that may later turn out to be less strong than was believed. The interviewer should also repeat the facts back to the interviewee to ensure accuracy, and clarify any discrepancies.

With regards to interviewing the alleged offender, it is very important that he or she be given a fair opportunity to explain his or her side, to offer an explanation that shows his or her innocence, and to offer any mitigating explanation. Accordingly, either at the time of the interview or prior to it, the employee should be given adequate information of the allegation(s) against him or her, in order to permit the employee a full and fair opportunity to make a defence. The allegations should be briefly set out, having regard to who, what, where and when. It is not necessary to tell the employee the names of all the witnesses, or all of the details of the evidence that has been collected. In some circumstances, it is preferable to provide such a statement in writing, particularly if the alleged misconduct may lead to termination.

All answers and comments made by the parties present at the interview should be recorded. Notes should also reflect when the interview was conducted, by whom and who was present. Accurate notes should be kept of all discussions (i.e., who the witnesses are, exactly what they saw or heard). As it is difficult to conduct an interview and take adequate notes at the same time, consider having someone there to take accurate and thorough notes. If there are any company forms previously designed to record the particular type of incident involved, they should be utilized whenever appropriate. Witness statements should be taken. If a person refuses to sign a statement, read their statement to them and ask that they sign an acknowledgement to that effect.

Close the interview by asking the interviewee whether he or she has any other information that might be important, and whether there is anyone else who may have information about the incident.


Checklist

• The purpose and structure of the interview have been explained.

• At the opening of the interview with the alleged offender, it may be prudent to ask the following two questions:

• “We have asked you to come in today to discuss a situation that has arisen in the workplace. It is extremely important that you answer the questions which we are going to ask you in an honest and forthright manner. Your future employment with the company may depend on the honesty of your answers to the questions which we plan to ask you. Do you understand?”

• “Do you have any questions?”

• Employees are advised that confidentiality is not guaranteed.

• If the investigation is being undertaken with a view to litigation, confidentiality with regards to the report has been assured.

• All the relevant facts have been obtained.

• Use open-ended questions to elicit an overview of what the witness saw. Avoid asking questions that suggest the answer, otherwise you may "taint" the statements.

• Elicit adequate detail, having regard to distances, the location of the witness and suspect, what was actually observed. Remember to probe about "who, what, when, where and how." Have the interviewee describe his or her positioning and/or movements with the aid of maps or pictures of the scene of the incident.

• Press behind statements that are conclusions, particularly those asserting the guilt of a person, to get the facts that support the witness’s conclusion.

• Ask the witness who else was present or may have any information.

• Where appropriate, obtain a map or diagram.

• The facts have been repeated to the interviewee to ensure accuracy; any discrepancies have been clarified.

• Witness statements have been taken and signed by the witness (or at least acknowledged).

• Prepare a written statement of the witness’s evidence and have the witness sign it. Make sure the written statement is accurate and does not overstate the witness’s evidence.


• All facets of the interview have been well documented.

• Have someone there whose sole task is to take accurate notes of everything said at the interview.


• End the interview with a "scoop" question, such as "Is there anything we haven’t talked about which I should know about?" In addition, at the close of the interview, the following statement may also be prudent:

• “We would like to have the opportunity to review carefully the answers to the questions which you have provided to us in this meeting. We may have further questions that we may wish to ask you. If we do, we will call you and ask you to come back to see us. If you have any questions for us, or wish to provide us with any further information, please do not hesitate to telephone us. Thank you for meeting with us.”

After the Interview

After the interview, a written report of the incident as outlined by the interviewee should be prepared. It should then be determined whether further investigation is required. If the interviewee has proffered any other potential sources of relevant information, further investigation should be conducted to obtain it. If the situation necessitates further interviews with the particular interviewee, they should be scheduled.16

Checklist

• The interviewees have been kept apprised of the status of the investigation, if necessary.

• A report of the interview has been completed.

• Other sources of potential information have been followed up.

III. Documents/Records

Documents and records may be crucial evidence that can have significant impact on the veracity of evidence collected from witnesses. This evidence may include:

• notes;

• correspondence; 16 When scheduling additional interviews it should be kept in mind that most investigations should be concluded as quickly as

reasonably possible after the incident.


• memoranda;

• e-mail;

• computer recorded data;

• pictures;

• video;

• floor plans;

• time cards; and

• Workplace logs.

When collecting records or documentation kept independently by an employee, for example a human rights Complainant, ask detailed questions including:

• When and why the employee began making notes or collecting documentation;

• Whether the notes were made contemporaneous or after the fact; and,

• Whether all relevant facts and/or additional incidents of a similar nature were recorded.

Checklist

• Secure all documents (i.e., records, pictures and videos) that may relate to the incident.

Employee testing

When impairment or substance abuse is suspected, the employer may wish to test the employee for alcohol or drug use. The nature of the incident, the workplace and existing policies will affect what steps the employer can take in gathering evidence. For example, if the workplace is safety sensitive, a policy requiring drug or alcohol testing following a significant incident, accident or near miss would likely be permissible. Further, an employer may be permitted to require alcohol or drug testing of an individual where the facts underlying the incident give the employer reasonable cause to do so.17 Employers with safety sensitive workplaces or positions should consult legal counsel to devise a clear policy so that management is not required to make quick, uninformed decisions which may be successfully grieved by the union.

17 Imperial Oil Ltd. and C.E.P., Loc. 900 (Re) (2006), 157 L.A.C. (4th) 225 (Picher).


Employee searches

Arbitrators will balance an employee’s privacy with the employer’s ability to require a search of the employee’s person or personal effects. Employees generally cannot be disciplined for refusing to submit to a physical search of their person or property unless the collective agreement authorizes such a search, the practice of conducting such searches had made it an implied term of employment, or the employer has a real and substantial suspicion justifying such a search.18 The employer must therefore be prepared to establish that adequate cause to justify the search existed, that available alternatives were exhausted and that reasonable steps were taken to inform the employee (for example, of a search of an employee’s locker). Further, the employer must ensure that such searches are conducted in a systematic and non-discriminatory manner. Searches based solely on circumstantial evidence, universal searches in the absence of reasonable suspicion or wrongdoing and purely random searches will, in principle, violate this rule.

Checklist:

• There is adequate cause to justify a search.

• All available alternatives have been exhausted.

• Reasonable steps have been taken to inform employees.

• The search was conducted in a systematic and non-discriminatory manner.

• Police assistance has been sought if criminal activity is suspected.


V. Surveillance

There are many general surveillance devices and methods currently used to monitor employees. These include telephone accounting systems, monitoring employee telephone calls, video surveillance, computer "footprint" records that record the use of a computer, computer pass cards which monitor employees’ entrances and exits, and interception of electronic mail.

It is generally accepted in Canada that employees are entitled to a certain level of privacy in the workplace. As a result, generally, surveillance evidence will only be admitted in arbitration if it was undertaken as a necessary response to a serious problem. Arbitrators will attempt to balance the employee’s right to privacy against the employer’s interests and right to investigate. To establish that

18 In Larsen Packers Ltd. (2004), 135 L.A.C. (4th) 313, a search of the grievor’s jacket revealing marijuana was found to be

justified in light of the employer’s reasonable suspicion of marijuana use, and other efforts made to control the problem in the workplace.


the employer’s interests outweigh the employee’s right to privacy, the employer must demonstrate that it was reasonable to resort to surveillance and also that the surveillance was conducted in a reasonable manner. Arbitrators will consider the purpose of the surveillance; the location and type of surveillance (the more invasive and continuous the surveillance, the more it infringes the employee’s privacy rights); the reasonableness of the surveillance; whether there were other ways to obtain the evidence; and the terms of the collective agreement. The employer has the burden of establishing that these conditions were met.

Surveillance also engages privacy legislation. For federally regulated private-sector entities, the Personal Information and Electronic Documents Act would apply to govern surveillance. In British Columbia, the Personal Information Protection Act would apply.

In Eastmond v. Canadian Pacific Railway, [2004] F.C.J. No. 1043, the Federal Court reviewed the interpretation of PIPEDA and its application to video surveillance. In December 2001, Canadian Pacific Railway (“CP”) installed a video recording surveillance system in its diesel and car maintenance yard located in Scarborough, Ontario. The cameras were located in areas of general access, including parking areas, and had fixed angles, without rotating or zoom capacity. The cameras recorded the coming and going of employees, contractors and other visitors in a 48-hour loop in order to deter theft, vandalism, trespassing and other mischief. On January 15, 2002, Andre Carriveau, shopcraft leader in the diesel shop, filed a grievance under the human rights provision of the collective agreement between CP and the Union. On January 17, 2002, Erwin Eastmond, a human rights representative and unionized employee in the diesel shop, filed a complaint with the Office of the Privacy Commissioner of Canada, alleging a violation of PIPEDA. The application was based on subsection 5(3) which provides that “an organization may collect, use or disclose personal information only for purposes that a reasonable person would consider are appropriate in the circumstances.” The Privacy Commissioner found that the complaint was well-founded, and so CP made an application for a hearing to the Federal Court pursuing to section 14 of PIPEDA. The Court had to decide in what circumstances an employer is allowed to install a video monitoring system without offending PIPEDA.

Justice Lemieux had to decide if the video surveillance installed by CP was a violation of PIPEDA. He stated the two questions that had to be decided: (1) Is the surveillance an appropriate measure; and (2) Was the consent of the employee required?

Justice Lemieux held that the video surveillance installed by CP did not offend subsection 5(3) of PIPEDA. First, Lemieux J. focused on the cameras themselves, their purpose and the way they were used. The Court noted that the monitoring was known to the employees, while surreptitious monitoring is generally prohibited19; that it was used for security purposes and not for controlling the workers’ productivity, which is mostly condemned; that it was not continuous as the cameras only captured a person’s image when the person was within the focus of the camera; that it was not limited to employees, but also caught third persons; and, lastly, that it was not used as an “electronic web, cast like a net, to see what it might 19 For the very strict conditions see Unisource Canada Inc. and C.E.P. Loc. 433 [Re] (2003), 121 L.A.C. (4th) 437.


catch”,20 but rather the tapes were held under lock and key and only viewed when an incident had been reported, being otherwise destroyed within an appropriate time frame of 96 hours.

Secondly, Justice Lemieux, agreeing with the Privacy Commissioner on this point, held that the issue depends on a balancing of interests, which can be realized by a four-part test:

– Is the measure demonstrably necessary to meet a specific need?

– Is it likely to be effective in meeting that need?

– Is the loss of privacy proportional to the benefit gained?

– Is there a less privacy-invasive way of achieving the same end?

The monitoring system installed by CP passed the test. Indeed, Justice Lemieux stated that the cameras as well as their specific location responded to a legitimate need, justified by past incidents, and that they seem to be able to deter theft, vandalism and trespassing and to enhance the security of the employees. The loss of privacy was “minimal” and “proportioned to benefit gained,” according a particular weight to the fact that the recordings were only reviewed when an incident had occurred. Lastly, the Court noticed that alternative measures, such as fencing or security guards, would not be cost-effective.

The Eastmond test was described as “essentially similar” to the arbitral test for admitting surveillance evidence in Fraser Surrey Docks Ltd. and I.L.W.U., Loc. 514 (Skibo) (2007) 159 L.A.C. (4th) 72 (Taylor). In Fraser Surrey Docks, the Employer trained onsite surveillance cameras to follow an employee suspected of theft of gasoline. The arbitrator applied a “reasonableness” test for admissibility, balancing the legitimate interests of employers with an employee’s privacy interest.

The arbitrator referred to the Eastmond test and other jurisprudence and determined that the video in this case was admissible. He noted that there were no reasonable alternatives, given the expenses and likely effect of those alternatives, and the relatively low level of privacy infringement involved in diverting the camera from other areas of the worksite onto this particular open and public area. Employees knew that the site was under 24 hour surveillance. Surveillance, particularly surreptitious surveillance, is an investigative tool that employer’s should use cautiously. Arbitrators will consider such issues as (1) Was it reasonable, in all of the circumstances, to request surveillance? (2) Was the surveillance conducted in a reasonable manner? (3) Were other alternatives open to the company to obtain the evidence it sought?21

20 Arbitrator Picher in Canadian Pacific Ltd. and Brotherhood of Maintenance of Way Employees (91996), 59 L.A.C. (4th) 111. 21 Greater Vancouver Regional District and Greater Vancouver Regional District Employee’s Union [2006] B.C.C.A.A.A. No. 160

(QL).


The Disadvantages of Surveillance

Aside from the legal issues involved, the decision to monitor employees in the workplace may present a variety of practical problems. For example, employee monitoring may be counterproductive by increasing job stress and decreasing morale and production. It can have a negative impact upon an employee’s sense of dignity and self-esteem, which in turn may create an atmosphere of distrust in the workplace. Surveillance can also invoke disassociation from, and a lack of respect for, the employer. Another practical problem with surveillance is the potentially significant cost. In addition to the purchase price of surveillance equipment, computer hardware, software programs, etc., it can be costly to maintain the appropriate staff to do the monitoring.

Given the variety of legal and practical problems with surveillance, it is important to understand both why and how it should be implemented.

Why Use Surveillance?

Surveillance is used to prevent workplace incidents. One of the primary reasons for using surveillance is prevention of theft, or the general misappropriation of company resources. Since the evidence obtained by surveillance enables an employer to document an action over a period of time, it can also be used to document employee behaviour that is otherwise difficult to intercept (since it is usually surreptitious), such as harassment and acts of aggression. One employer successfully used video surveillance to ensure that its employees conformed to health and safety standards. Video surveillance was also successfully used by an employer to dismiss a long-term employee who was sleeping during his night-shift. The tape was admitted as evidence that was probative of a matter in issue, and made in the context of the company’s "legitimate right to investigate."

Surveillance may be used to protect network security. For example, monitoring employees’ computers can prevent employees from downloading contaminated software through network-based terminals. Monitoring e-mail messages has revealed employees engaged in contractual relationships contrary to their employer’s interests, employees who have compromised trade secrets, as well as the publication of copyright-infringing and confidential material. Similarly, surveillance can be used to prevent employees from using company e-mail and Internet access to visit sites and/or send external e-mail messages which could tarnish the company’s image. Employers may also wish to prevent employees from utilizing corporate resources for actions that may incur legal liability such as sexual harassment, racial discrimination, trademark/copyright infringements, defamation/trade libel, electronic harassment and corporate espionage.

Checklist

• Alternatives to obtain the evidence have been considered.

• The employee has been confronted with the suspicions.


• Surveillance is a necessary response to a serious problem.

• The purpose of the surveillance has been identified to employees, and the surveillance has been restricted to that use.

• The surveillance is necessary, reasonable and intrudes on employee privacy as little as possible.

• The surveillance documents the acts in question and portrays the facts clearly, without bias and without manipulation.

• The surveillance has not been edited.


GENERAL POST-INVESTIGATION CONSIDERATIONS

I. Admissibility of Evidence

Evidence is admissible in a court of law if it is relevant and not excluded by any rule of evidence. To be relevant, there must be a relationship between the evidence and the issue before the trier of fact: evidence must be "probative of a matter in issue." However, not all relevant evidence is admissible; the probative value of the evidence must outweigh any prejudicial effect.

Like the courts, the admissibility of evidence in arbitrations will depend, in part, on factors such as relevance, probative value, prejudicial effect and reliability. Unlike the courts, arbitrators enjoy considerable discretion in determining the admissibility of evidence.

An out of court statement, either written or oral, uttered by someone other than the person testifying to it, is usually not admissible in court to prove the truth of its contents. The rationale for this rule of evidence is that this kind of “hearsay” evidence is often unreliable. As such, courts will generally exclude hearsay evidence unless it passes strict tests regarding its necessity and reliability. Unlike the courts, arbitrators are not required to exclude hearsay evidence. However, employers should conduct all investigations as if the rule against hearsay will be strictly enforced. Again, due to concerns over reliability, arbitrators have generally refused to base a finding of critical facts on it, and will not generally ascribe much weight to it even when it is admitted. Moreover, an arbitral decision may be reviewed by the courts.

There is an exception to the hearsay rule for business and medical records. Business and medical records are admissible notwithstanding their hearsay character, if adequate advanced notice is given to the other party, so as to provide it with the opportunity to inspect the records. The weight to be


afforded to such evidence will vary depending upon the nature of the document, the detail that it contains, and the circumstances in which it was made and procured.

While admissibility of evidence has been addressed here as a post-investigation consideration, it is also advisable for an employer to consider this issue when preparing investigative strategies. By keeping rules of admissibility firmly in mind at all times, an employer can increase the likelihood that the evidentiary value of collected evidence will be maximized during any possible litigation.

Checklist:

• The evidence is admissible.

• The evidence is relevant, that is, it is probative of a matter in issue.

• The probative value of the evidence outweighs its prejudicial effect.

• The evidence is reliable.

• The evidence is not hearsay.

• Opposing counsel has been given notice that business or medical records will be relied upon.

II. Reporting the Investigation

If the incident requires an investigation, it also requires an investigation report. However, consult with legal counsel regarding the form the report should take if litigation is anticipated. The report should include background information such as the names of those involved, the date of the incident, the names of those interviewed and any materials reviewed. The report should also detail the findings of the investigation. The findings should include a description of what happened, the seriousness of the incident, details of any harm or injury, whether anyone is culpable, the position of the parties involved, any previous warnings, the effect on the workplace and the type of evidence considered. Finally, the report should outline any recommendations generated from the incident or the investigation.

Checklist

• An investigation report has been completed.

• The report includes all relevant information.

• The report details the findings of the investigation.

• The report outlines any recommendations.


III. Making a Decision

At the conclusion of the investigation, a decision must be made. Generally, the standard of proof required with respect to work place incidents is proof on a balance of probabilities.22 However, where the allegations are very serious and would constitute criminal conduct, the proof required will have to meet the higher standard of "clear and cogent" evidence.

Checklist

• A final determination of the issue has been made.

• The final determination flows logically from the results of the investigation.

THE DANGERS OF A FLAWED INVESTIGATION

Whether workplace incidents are properly investigated can have serious implications for employers. A flawed investigation can lead to the inability of an employer to accurately determine how and why an incident occurred. Not only does such a result render an employer incapable of properly remedying the particular incident, it also inhibits an employer’s ability to establish effective pro-active measures in order to prevent similar incidents from occurring in the future. For example, an inadequate and/or improper investigation of a health and safety incident may not identify the “root” cause of the incident, possibly exposing an employer to future occurrences of a like situation. Further, if a similar health and safety incident occurs again, a due diligence defence may be unsuccessful.

If an employer acts on the results of a flawed investigation and terminates an employee, insurmountable evidentiary problems and/or harsh financial consequences for the employer may follow if litigation is undertaken. For example, an employer may not be able to establish just cause, and may even be penalized with further damages, if an employee’s employment is terminated following a disorganized, incomplete investigation. If the integrity of the investigation is in question, it will become more difficult to uphold a dismissal, whether or not just cause exists.

THE INVESTIGATIVE PROCESS IN FOCUS

This section seeks to highlight various factors that should be kept in mind when conducting workplace investigations in the following three contexts:

1. Disciplinary Investigations;

2. Investigations of Human Rights Complaints; and

3. Suspicious Absences.

22 i.e. It is more likely than not that X occurred.


Of course a workplace investigation may not fall neatly into any one category, but the 3 contexts noted above are very common.

I. Disciplinary Investigations

• Act quickly! An employer risks condonation of the incident if they do not investigate and respond as soon as possible. If the investigation is likely to be lengthy, ensure that the alleged offender is notified of the investigation and its timeframe as soon as possible.

• When conducting interviews, the following considerations are important:

• In a unionized context, consider inviting a union representative even if one is not required under the collective agreement.

• Ask the alleged offender about any mitigating circumstances, such as provocation, personal or health problems, economic circumstances, etc.

• Always have a second employee to act as a witness and take notes during interviews.

• In a unionized context, disciplinary investigations and/or imposed discipline is usually addressed in the collective agreement. Make certain that the collective agreement is thoroughly canvassed to ensure that its provisions are followed during the investigation and/or imposition of discipline.

• For example, care should be taken to determine whether the collective agreement contains any time limits regarding investigations and discipline. Some collective agreements stipulate time limits at the investigation stage, e.g. “No discipline shall be enacted after 5 days from the date of the incident or the date the Company becomes aware of the incident.” In addition, some collective agreement also stipulate time limits once an investigation is complete, e.g. “No discipline shall be imposed more than 5 days after the conclusion of the Company’s investigation.”

II. Investigating Human Rights Complaints

• The relevant sections of the Human Rights Code, and applicable regulations should be consulted.

• An internal investigation into human rights complaints is advisable because the regulated complaint process may be lengthy and an employer may not be advised of its outcome for quite some time. An internal investigation can help the employer decide how to conduct itself in the meantime. For example, an internal investigation may highlight that a particular workplace policy is required to prevent similar incidents from occurring in the future.


• An investigation should be completed expeditiously.

• Treat the matter in as confidential a manner as possible, to protect both the privacy of the employee filing the complaint and the reputation of the employee against whom the complaint is made. However, do not guarantee confidentiality. Further, when interviewing employees regarding the complaint, inform the interviewee that the investigation is confidential and that they must treat it confidentially.

• As human rights complaints involve allegations of bias, selection of an appropriate investigator to look into a human rights complaint is critical. For example, when investigating allegations of sexual harassment against management, be sensitive to the position and gender of the investigator.

• Not only must an investigator be as independent and objective possible, they must be viewed as such. The perception of bias can be just as damaging as actual bias.

• The Complainant should be interviewed first. When conducting the interview, if possible, ensure that all those present are individuals who will put the complainant at ease.

• The accused employee should be interviewed second.

• When conducting interviews the following points should be taken into consideration

• Always describe to the interviewee the internal discrimination and/or harassment investigation procedure, including the timeframe involved, who will investigate the complaint and who will be responsible for decisions related to the complaint.

• When interviewing the Complainant, it is advisable to:

• Ask the Complainant whether they confronted the accused employee concerning his or her conduct and asked that it stop.

• Probe for reasons or ulterior motives that may have caused the Complainant to file a complaint, e.g., a poor performance review given by the accused employee.

• Consider asking the Complainant to reduce the complaint to written form. If the Complainant refuses to do so, consider doing so and providing the document to the Complainant for a defined period within which he or she can review and provide comments on the document.

• Ask the Complainant what he or she hopes will result from the complaint.


• When interviewing the accused employee, it is advisable to:

• Provide the accused employee with sufficient information to enable him or her to understand the specific nature for the complaint.

• Give the accused employee the opportunity to respond to allegations and to provide other relevant information, including the names of other persons who may have information, an ulterior motive the Complainant may have in making a complainant, etc.

• When interviewing witnesses, it is advisable to:

• Provide the potential witness with sufficient information to enable him or her to understand the specific nature of the complaint and to answer questions about it.

• Limit the information provided to potential witnesses to a “need to know” basis. Circumscribe information where possible to protect the identities and reputation of the Complainant and the accused employee.

• Consider whether there is a human rights policy or other applicable policy in place, which affects the investigation.

• Consider whether criminal charges may arise from the alleged conduct and whether police involvement is required.

III. Suspicious Absences

How should the employer investigate absences from work when the employer suspects falsehood or malingering?

Investigating absenteeism is, perhaps, the most challenging type of investigation because an employer cannot directly supervise, or easily verify, what an employee is engaged in away from work. Further, personal information in the hands of the employee, their physicians, and in some cases Worksafe BC may all be relevant to determine whether an employee is validly absent from work. Finally, if the employer is incorrect, and an employee has a legitimate disability preventing him or her from working, a failure to acknowledge and accommodate this can lead to a human rights complaint.

Claims of illness are the most common claims underlying suspicious absences. When these bracket weekends or holidays, occur during peak vacation demand times, or are otherwise suspicious, the employer should ensure that such claims are verified through requests for medical information.


Requests for Medical Information

What medical information can the employer request?

Medical information regarding an employee’s limitations can help an employer determine if absences are valid. Generally, there is no right to compel disclosure of personal medical information from an employee or a medical professional or require an employee to submit to a medical examination without the employee’s express consent.

An employer may require medical information to:

• verify whether an absence is legitimate;

• verify a claim for sick pay or disability benefits;

• verify entitlement to workers’ compensation benefits;

• verify fitness to return to work;

• ensure the safety of the employee, other employees, clients and the environment;

• determine what forms of accommodation might be necessary; and

• determine the anticipated duration of the accommodation.

What should an employer request and how?

An employer should only request medical information about an employee where that information is required for the employer’s legitimate interests and is necessary to assess how the employee can or cannot perform legitimate work-related functions. The request must be fair and reasonable in the circumstances.

Medical information can be obtained directly from a healthcare professional if the employee signs a consent authorizing the release of the medical information to the employer.

The healthcare professional may be asked, through the employee, to provide job-specific medical information. If the healthcare professional is unfamiliar with the job, the employer should provide as much information about the job as possible, such as a job description, a job demands analysis and, if there is a duty to accommodate the employee, a description of the accommodation options available.

• Consent should be express, written and informed.

• Consent must relate to the information being disclosed.


Appropriate collection, use and disclosure of the medical information

• Confine the use of the information to that authorized by the collective agreement, employment contract, statute or the employee’s consent.

• Protect the employee’s privacy by ensuring that the information is only disclosed to those who need to have it.

• Ensure that the information is stored securely, taking measures to prevent unauthorized copying, modification, or destruction; the security measures should reflect the sensitivity of the information.23

• Ensure that all employees who are given access to confidential medical information understand their obligation to keep the information confidential.

• Be especially careful not to base decisions about an employee on unreliable or out-of-date information or consents.

• Under personal information protection legislation, the information collected from the employee or doctor may only be used or disclosed for the purpose to which the employee has been notified or consented. If the purpose is to accommodate the employee, the employer may not then use the information for another purpose (e.g. insurance purposes) without notifying the employee or obtaining his or her consent.

• It may be unreasonable to require medical certificates for each and every absence of all employees but, applying a consistent policy, an employer may reasonably request a medical certificate to justify an absence.

• The medical certificate and the information contained on it must be reasonably necessary for the administration of sick leave or disability benefits.

Independent Medical Examinations

Asking an employee to engage in an independent medical examination (“IME”) may be appropriate if the employer has concerns or doubts about the medical information provided by the employee.

The IME should be conducted by an appropriate expert or specialist.

23 It is advisable to keep medical documentation separate from the person’s general corporate or personnel file

and maintain it in a secure filing system.


The focus should remain on the functional limitations and abilities for the purposes of accommodation, not the condition or nature of the disability.

The IME should only be as invasive as reasonable necessary.

Interaction with WorkSafe BC

If a WCB claim has been initiated by the employee, the employer must have access to certain information, such as how long the worker will be absent from work and how the employer may be required to accommodate the employee. Where there is a suspicion of fraud or malingering, an employer may wish to obtain access to surveillance or other information held by WorkSafeBC, or collect such information itself. However, the employer’s ability to request, access and use such information is constrained by law.

WorkSafeBC is subject to the provisions of the Freedom of Information and Protection of Privacy Act (“FOIPPA”), which governs the collection, use and disclosure of personal information by public bodies, such as WorkSafeBC. “Personal Information” is broadly defined in FOIPPA to include “recorded information about an identifiable individual other than contact information” and, accordingly, would include information about an employee collected by WorkSafeBC.

The British Columbia Information and Privacy Commissioner has recognized the tension between an employee’s right to privacy and an employer’s interest in managing the employment relationship in the context of the WCB claim process. In 1996, the Commissioner issued an Investigation Report24 (the “Report”) containing a number of recommendations regarding WorkSafeBC’s policies and practices in handling employee personal information.

One of the key recommendations made by the Commissioner was to change WorkSafeBC’s previous practice of disclosing a worker’s entire claim file to an employer, even before an appeal of a decision was initiated.25 Before an appeal is initiated, the Commissioner recommended that WorkSafeBC release information only on a “need to know” basis as required for the adjudication and administration of the employee’s claim.

24 P96-006 25 Section 3(2) of FOIPPA states that FOIPPA does not limit the information available by law to a party to a “proceeding”. The

Commissioner held that a “proceeding” does not take place until either the worker or the employer has initiated a formal review or appeal.


WorkSafeBC’s practices and policies were modified accordingly. WorkSafeBC’s current policy regarding disclosure of employee claim information is set out in Volume 2, Chapter 12, Policy Item #99.00 of the Rehabilitation Services and Claims Manual:26

Before a review or appeal is initiated, [WorkSafeBC] must apply [FOIPPA] to requests for claim

information. . . . Before a review or appeal is initiated, an employer is not entitled to a copy of the

workers’ claim file. Disclosure to an employer in such circumstances, is limited to that information

necessary for the adjudication or administration of the claim, that is on a “need to know” basis. Once a

review or appeal has been initiated, full disclosure is available to either a worker or an employer. These

disclosure rules are considered to be in accordance with [FOIPPA] and the rules of natural justice.

This raises the question: what information falls within the “needs to know” category, and will therefore be disclosed by WorkSafeBC prior to a formal appeal of a decision being launched? In the Report, the Information and Privacy Commissioner confirmed a limited scope to “need to know” disclosure:

For example, it would not make sense for an employer to inquire as to when the employee is expected to

return to work and be denied this information based on privacy grounds. This type of disclosure is

typically in the form of verbal information from the adjudicator to the employer regarding when the

worker is expected back to work, what the basic injury is, what caused the injury (so the employer can

take remedial action in the workplace), and whether the worker will need light duties upon return to

work.

This scope does not contemplate medical and surveillance information that may assist an employer investigating suspicions of fraud or malingering. Further, even if an employer obtains such information, through initiating a formal appeal of a decision or otherwise, the Workers’ Compensation Act places restrictions on the use the employer can make of an employee’s WCB claim information.27

26 See also WorkSafeBC Practice Directive #8, Disclosure of Personal Information, March 3, 2003 for further background to

current WorkSafeBC Policy. 27 S. 95 (1.1) of the WCA states: (1.1) If information in a claim file, or in any other material pertaining to the claim of an injured or disabled worker, is

disclosed for the purposes of this Act by an officer or employee of the Board to a person other than the worker, that person must not disclose the information except

(a) if anyone whom the information is about has identified the information and consented, in the manner required by the Board, to its disclosure,

(b) in compliance with an enactment of British Columbia or Canada, (c) in compliance with a subpoena, warrant or order issued or made by a court, tribunal, person or body with jurisdiction to

compel the production of information, or (d) for the purpose of preparing a submission or argument for a proceeding under this Part, Part 3 or Part 4. (1.2) No court, tribunal or other body may admit into evidence any information that is disclosed in violation of

subsection (1.1). (2) Every person who violates subsection (1) or (1.1) commits an offence against this Part. (3) The workers' advisers, the employers' advisers and their staff must have access at any reasonable time to the complete

claims files of the Board and any other material pertaining to the claim of an injured or disabled worker; but the information contained in those files must be treated as confidential to the same extent as it is so treated by the Board.


In the unionized context, labour arbitrators have issued summonses under s. 95(1.1)(c) of the WCA to allow the information to be obtained from WorkSafeBC at grievance arbitrations.28 In the absence of such a summons, however, information from an employee’s WCB claim file has been ruled inadmissible at arbitration pursuant to s. 95(1.1).29

Further, a person tendering such information in a formal hearing or grievance process without the employee’s consent or a subpoena in compliance with s. 95(1.1) commits an offence.30 It should be noted, however, that in A.J. Forsyth & Co. and United Steelworkers of America, Local 2952 (Manzo Grievance),31 Arbitrator Ready held that s. 95 of the Act did not bar an employer from providing WCB documents to its legal counsel in a labour arbitration matter.

If an employer intends to procure an expert report based on WorkSafeBC documents which it may wish to rely upon in later arbitrations or court proceedings, then either the consent of the employee or an order of a court or arbitrator allowing disclosure for the purposes of such report must be obtained in advance of the report being made.32 An order of an arbitrator may contain a condition requiring third parties (such as experts) to take steps to maintain the information in confidence.33

Two recent arbitration decisions illustrate the intersection of WorkSafeBC claim information with employment and privacy considerations. In Greater Vancouver Regional District v. Greater Vancouver Regional District Employees Union (“GVRD”),34 an employee filed a WCB claim for allegedly substantial injuries, and began receiving benefits. WorkSafeBC authorized video surveillance which appeared to strongly contradict the employee’s claim. The grievor’s benefits were terminated, and criminal charges for fraud were approved. The employer obtained from WorkSafeBC a copy of the surveillance video, and fired the employee. The employee grieved his discharge. At the grievance arbitration, the employer sought an order permitting it to rely on WorkSafeBC’s video to support its allegation of fraud. The employer also sought leave to release the video to the employer’s medical expert, for use in the arbitration. The arbitrator granted both orders, holding that the privacy provisions of the WCA and FOIPPA permitted the employer’s intended uses of the video.

In Elk Valley Coal Corp. v. I.U.O.E., Local 115,35 an employer sought an order permitting it to disclose a grievor’s medical information to a medical expert for analysis. The employer did not identify the expert or his or her area of expertise. The arbitrator refused the order, holding that the employee’s right to privacy was not adequately protected by disclosure to an unidentified person. The arbitrator

28 Fording Coal Ltd. and United Steelworkers of America, Local 7884 [1996] B.C.C.A.A.A. No. 94 (Dorsey); 29 MacMillan Bloedel Ltd. (Powell River Division) and Communications, Energy and Paperworkers Union, Local 76 (1997), 67

L.A.C. (4th) 443 (Taylor). 30 S. 95(2) states that every person who violates subsection (1.1) commits an offence. 31 (1999), 79 L.A.C. (4th) 47 (Ready). 32 MacMillan Bloedel, supra; Crown Packaging and Communications Energy & Paperworkers Union of Canada, Local 951 (Lutz

Grievance) (2002) 111 L.A.C. (4th) 279 (Moore). 33 Crown Packaging, supra. 34 (2006), 155 L.A.C. (4th) 353 (Moore). 35 [2006] B.C.C.A.A.A. No. 196 (Munroe)(Q.L.).


required the company to inform him and the union of the identity and field of expertise of the medical doctor to whom the company proposed disclosure before he would consider making such an order.

Employers should note that obtaining surveillance video from WorkSafeBC is only a first step; employers must also satisfy the arbitrator that such surreptitious surveillance should be admissible. In Greater Vancouver, supra, the panel held that the appropriate consideration in making such a determination is an assessment of the Employer’s conduct (rather than WorkSafeBC’s) commencing at the point when the employer became aware of the evidence or its import.

Checklist

• A consistent policy, consistently applied, will ensure regular gathering of information and help defend claims of bias or discrimination.

• The employee is asked, on each occasion, for the reason for his or her absence.

• If illness is claimed, medical verification is requested;

• If illness is prolonged, further medical information is requested regarding extent of limitations and appropriate accommodations;

• If medical information is insufficient, or suspect, an independent medical examination is considered;

• In very suspicious circumstances, consider requesting third party information to verify claims that can be verified (i.e. “I had a car accident”)

• Take note of information from within the workplace. Other employees are often resentful of those who play the system, causing more work for them (i.e. He wasn’t sick, he’s really doing a renovation on his house”).

• Consider what information can be obtained from third parties (i.e. WCB) and how it can be used.

Conclusion

The goal of a workplace investigation is to obtain accurate facts about a workplace incident. The key to ensuring that the investigation is conducted properly is ensuring that it is, and is perceived to be, organized, complete and fair. This means following predetermined policy, collecting adequate information, allowing employees to respond to any allegations against them and making a decision that is supported by the results of the investigation.

Managing Medical Absences Christopher McHardy Jordanna Cytrynbaum Tara McPhail

March 6, 2009


www.mccarthy.ca

Managing Medical Absences


Introduction

Disability management is an increasingly complex process. When faced with an employee who is unable to perform his duties because of a disability, employers can find it difficult to know what to do and when. In this workshop, we will examine how to manage the disabled employee from beginning to end.

The Legal Framework

The legal framework giving rise to employers’ and employees’ rights with respect to disability management involves three areas: statutory, contractual and common law.

Statutory

The manner in which disabilities should be managed at work is governed by the legislation in any jurisdiction. Although there are some similarities across Canada, the law does differ from province to province and warrants careful consideration. Further, some employers, such as banks, are regulated federally instead of provincially.

Once it is clearly established which provincial or federal laws apply, the employer should consult five areas of law: human rights, workers’ compensation, occupational health and safety, employment standards and privacy. Human rights legislation requires that employees with a disability be reasonably accommodated to the point of undue hardship. The terms physical disability and mental disability in Canadian human rights legislation have been broadly interpreted by the Human Rights Commissions and the Courts. Physical disability is usually defined as any degree of physical disability, deformity, malformation or disfigurement that was caused by injury, birth defect or illness. Examples include epilepsy, amputation, visual, hearing or speech impediments, paralysis, reduced physical coordination and reliance on an appliance or aid, including a guide dog or a wheelchair.

Mental disability includes any mental, developmental or learning disorder regardless of whether caused by defect at birth or injury through life, and regardless of the duration of the disorder. Agoraphobia (fear of public places), alcoholism, addiction to drugs, learning disabilities and panic disorders are but a few examples.

Provincial workers’ compensation legislation may be applicable if the employee has a compensable injury. Occupational health and safety legislation is concerned with the disabled employee’s safe return to work as well as the investigation of any workplace accidents. Finally, privacy legislation affects the manner in which an employer may collect, use, disclose, store and retain an employee’s personal information, including health information.


Contractual

To manage a disability issue, employers need to consider whether or not any contracts contain provisions affecting sick leave or disability leave entitlement. In a unionized environment, the collective agreement may contain relevant provisions. Employment and independent contractor contracts may also contain provisions regarding sick leave entitlement or automatic termination after a certain number of days.

Existing benefit policies may also affect an employee’s sick or disability leave entitlement. Short and long-term disability provisions should be carefully examined in the management of a disabled employee. Also, an employer’s policies, including sick leave policies, should be examined for information such as notice required and the ability to request independent medical evaluations.

Common Law

When managing disability, the most relevant issue arising under the common law is whether or not an employee’s employment contract has been “frustrated” - that is, when the disability prevents the employee from doing the job. If a contract is frustrated, employers do not have a positive duty to give notice of termination of pay in lieu of notice or severance pay (although some provinces’ statutory notice or severance requirements may still apply). When determining whether an employee’s disability has frustrated the employment relationship, an employer must remember its human rights obligation to accommodate reasonably to the point of undue hardship.

An Employer’s Guide to Requesting Medical Information

Employers are often frustrated by the uncertain parameters that surround a request for an employee’s medical information. This frustration is particularly heightened by the fact that an improper request for medical information may expose an employer to claims of discrimination on the basis of disability, breach of privacy laws or breach of the terms of an employment contract or collective agreement.

In order to understand this issue, one has to consider the interests that adjudicators must balance. On the one hand, adjudicators must consider the employee’s privacy interests which attach to their medical information. On the other hand, an employer may have a legitimate business interests which justifies access to medical certification. While the arbitral jurisprudence seems to support the proposition that an employer is allowed to intrude on the privacy of an employee’s personal medical information in some instances, the scope and timing of this inquiry is often unclear.

It is important to note that although much of the case law in this area has developed in the arbitral world, the basic tents apply to both union and non unionized work places.


Verifying an Absence

There is no question that an employer has a right to inquire into an employee’s absence from work and that an employee has an obligation to account for that absence. However, the case law is less clear when it comes to assessing how far an employer’s inquiry can stretch.

For instance, where an absence is for a relatively short duration, some arbitrators insist that an employer is limited to simply receiving a confirmation from a physician that the employee is suffering from a condition that prevents her from attending work. Some arbitrators have resisted the idea that employers can require employees to automatically provide medical certificates after every illness or absence unless there is some contractual, statutory or compelling business reason that justifies doing so.1

In contrast, other arbitrators have confirmed that an employer is entitled to a confirmation that includes the general nature of the illness or disability, the prognosis and the expected date of return to work. These arbitrators have reasoned that this information is reasonably necessary for the employer to determine whether the absence is justified. For instance, in Victoria Times-Colonist2, Arbitrator Hope noted:

The employer is entitled to require all employees to provide particulars of each absence attributed to illness or disability. Whether the information provided is sufficient will depend on the particular facts. Certainly there can be no objection to routine information as to the nature of the illness or disability, the prognosis, if any, and the expected date of return of the employee. Generally, the employer is entitled to require all information necessary to equip management to determine whether the illness or disability is bona fide and what impact it will have on the attendance of the employee.

Based on the foregoing, employers are often left guessing as to whether they have requested too much. While it is accepted that an employer is allowed to substantiate a medical absence, there is no clear consensus on the scope of the information that can be requested.

Reasonable Doubt

Despite this uncertainty, there appears to be some consensus that it is improper for employers to outright reject a medical certificate without explaining to the employee the basis for its doubts and specifying exactly what information is missing.3 Once an employee has provided medical information, an employer requires reasonable grounds to question the completeness or accuracy of the information before seeking

1 Re St. Michael’s Extended Care Centre and Canadian Health Care Guild, (1994) 40 L.A.C. (4th) 105 (Smith) at p. 120. 2 Unreported, February 12, 1986 (Hope) at p. 20. 3 Nelsons Laundries Ltd. (1997), 64 L.A.C. (4th) 120 (Somjen).


further clarification. In St. James-Assiniboia School Division No. 2, the arbitration board suggested that an employer bears a stringent onus in seeking additional disclosure.4

However, some arbitrators are beginning to recognize that not all doctor’s notes are created equal and should not be given unquestioned deference. In CUPE, Local 966 v. Caledon (Town) (Deforest Grievance),5 the grievor presented the employer with a note from his family doctor which requested that the patient be placed on stress leave without further explanation. The grievor also submitted a note from his psychiatrist which did not appear to support the grievor’s request for stress leave.

After assessing the medical information submitted by the grievor, Arbitrator MacDowell found that the paperwork prepared by an employee’s family doctor may be questioned. He relied upon Arbitrator Surdykowski in Hamilton Health Sciences, who commented that:

In the ideal world, doctors would have perfect knowledge of the relevant medical matters, their patients and their patient’s workplaces, and would be completely objective. If that were so, a doctor’s simple statement certifying that an employee was ill and unable to work…would be good enough…The fact is that they are not always entirely objective. It is quite appropriate for medical health professionals to act as advocates for their patients in medical matters within their competence, but not when advocacy extends beyond their medical expertise or to matters which they have no direct knowledge, such as when they have little or no knowledge of the workplace or their patient’s job or employment situation other than what their patient decides to tell them.6

Similarly, in City of Brampton and CUPE Local 831, Arbitrator MacDowell himself noted that:

In the “real world”, a busy family physician may not be fully informed about the employment context and may not probe the truth or completeness of what s/he is being told by the patient; nor may s/he be inclined to express an opinion that is contrary to that patient’s wishes.7

Arbitrator MacDowell emphasized that arbitrators must critically examine medical notes. An employee’s family doctor “may not have the whole picture, partly because he/she is likely to be very busy with other things, and partly because he/she may not be inclined to resist the wishes of the patient or the role of advocate.”8 Furthermore, “if doctor’s who create these documents are not prepared to explain and

4 (2004), 131 L.A.C. (4th) 313 (Peltz) at p. 364. 5 [2008] O.L.A.A. No.388 (McDowell). 6 Hamilton Health Sciences & Ontario Nurses Association (2007) Canlii 7388 (Surdykowski) at para. 40. 7 City of Brampton and CUPE Local 831, [2008] O.A.A.A. No. 359 (MacDowell) at para. 29. 8 CUPE, Local 966 v. Caledon (Town) (Deforest Grievance), supra, at para. 117.


support what they have written, then the utility of such reports is correspondingly diminished.”9 The medical notes in this case were cryptic and called for more explanation, which the grievor was unwilling to provide. As a result, Arbitrator MacDowell held that the evidence before him did not meet the requirements of the short term disability plan. Based on the foregoing, there appears to be some arbitral movement towards assessing these notes with a more critical eye.

Fitness to Return to Work

Almost all arbitrators would agree that an employer is entitled to a confirmation by a qualified medical practitioner that an employee is fit to return to work. Although this right is commonly recognized in most collective agreements, it arises from the employer’s duty to ensure that its working environment is safe and does not risk the health and well being of either the returning employee or his or her colleagues.

In Firestone Tire & Rubber Co. of Canada Ltd. and U.R.W., Local 113, Arbitrator Weatherill held that the employer “has both the entitlement and the obligation to satisfy itself as to the fitness of its employees to carry out the tasks to which they will be assigned”.10 However, this award also established that an employer’s demand for better documentation is improper unless the employer has reasonable and probable grounds to question the employee’s return to work verification or can demonstrate a business interest arising out of a health and safety concern.

In Air Canada and I.A.M.,11 Arbitrator Beck discussed the magnitude of the risk which the employer must prove in order to justify its refusal to permit an employee to return to work following an illness or injury. He noted that the risk must be above average and immediate, and must relate to the employee’s ability to perform his or her job effectively and safely. In particular, Arbitrator Beck noted that it is not for the employer to assert that the job will be detrimental to the employee’s long-term health, because that is a choice for the employee to make.

Where the employer can establish reasonable grounds to doubt the medical certification provided by an employee, the employer’s remedy is to continue to keep the employee off work until satisfactory medical evidence has been provided.12 In Greater Toronto Airport Authority and P.S.A.C. (Tremblay)13, Arbitrator Simmons supported this reasoning by rejecting a claim that the employer had delayed the grievor’s return to work by seeking unrestricted access to medical information. Arbitrator Simmons observed that there is a “price” to be paid for asserting a right to privacy in such circumstances. An employer, he ruled, is entitled to information from the treating physician in order to satisfy its legitimate interest in ensuring the employee’s fitness to perform the assigned work.

9 Ibid at para. 118. 10 (1973), 3 L.A.C. (2d) 12 (Weatherill) at para. 13. 11 Unreported, October 5, 1998 (Beck). 12 Masterfeeds and U.F.C.W., Local 1518 (2000), 92 L.A.C. (4th) 341 (Kinzie). 13 [2004] C.L.A.D. No. 50 (Simmons).


Accommodation Cases

The earlier cases on the employer’s right to require certification of “full” fitness from an employee must now be read in light of human rights legislation and the prohibition against discrimination on the basis of disability. In the case of accommodating a disability within the meaning of human rights legislation, the initial informational onus rests with the employee and has been described by Arbitrator Barrett in ATU, Local 1573 v. Brampton (City):

The individual, or his Union, must make the first moves. Before an employer is required to respond, the individual must prove that he has a disability; that he cannot perform his old job (in whole or in part) by reason of the disability; and what abilities he retains to perform other duties the employer may reasonably have available. In most cases the individual will have to produce medical evidence sufficient to allow the employer to match abilities of the individual with the demands of a job. It is only when the employer is in receipt of the necessary information that the duty to respond reasonably, within a reasonable time, arises.14

It is important to remember that the duty to accommodate is a multi-party inquiry and an employee has a duty to cooperate in the accommodation process.15 Many adjudicators have found this to mean that the grievor must take steps to obtain and provide reasonably informative medical information, which should include complainant specifics on how the employer can accommodate the employee. As such, an alleged failure to accommodate must be considered against the background of information available to the parties at the time.16

In United Steel Workers, Local 1-500 v. Dashwood Industries Ltd.,17 the grievor had a history of absenteeism and raised sleep apnea as the cause for his absences. The employer accepted its duty to accommodate the grievor’s condition and informed the grievor that it would not count absences for the days that the grievor could provide medical documentation explaining why his sleep apnea caused him to miss work. The grievor provided a year-old report from a doctor at a sleep clinic which confirmed the diagnosis, but did not state the degree of the impairment or what impact the sleep apnea had on the grievor’s ability to work. As such, the grievor was denied a seasonal position because of his absenteeism.

The union grieved the company’s refusal to award the grievor the position. They submitted that the grievor had a disability within the meaning of the Human Rights Code and the Collective Agreement. Arbitrator Newman dismissed the grievance finding that although the doctor note “informed” the employer that the

14 (1998), 75 L.A.C. (4th) 163 (Barrett) at p. 171. 15 Central Okanagen School District v. Renaud, [1992] 2 S.C.R. 970. 16 Besner v. Canada (Correctional Services), [2007] F.C.J. No. 1391 at para 32; aff’d [2008] F.C.J. No. 855 (F.C.A.). 17 [2007] C.L.A.S. 18 (Newman).


grievor was suffering from an ongoing medical condition, the grievor had a positive duty to provide “sufficient information to advise of what the problem [was], and what accommodations [were] required.”18 Ultimately, Arbitrator Newman found that it was reasonable to ask why the grievor’s condition caused him to miss work.

Similarly, in United Nurses of Alberta, Local 33 v. Capital Health Authority (Royal Alexandra Hospital),19 the grievor provided a letter from her doctor requesting that she be exempted from the new shift rotation citing numerous “medical problems” which were influenced by her hours of work. The employer requested additional information and asked the grievor to sign a consent to allow the employer to contact her doctor directly.

The employer ultimately held that the grievor had not produced sufficient information to support the accommodation request. The union grieved the denial alleging that the employer had breached the collective agreement and Alberta’s Human Rights, Multiculturalism and Citizenship Act by failing to accommodate her disability.

An arbitration board chaired by Arbitrator Ponak dismissed the grievance holding that there was insufficient information to trigger the employer’s duty to accommodate. In particular, the medical notes did not indicate what illness or injury caused the grievor’s symptoms, what the treatment was, whether it was temporary or permanent, and what the link was between the new rotation and her symptoms. Furthermore, Arbitrator Ponak noted that the doctor’s letter “was so cautiously stated that it invited more inquiry”.20

The union brought an application for judicial review to the Alberta Court of Queen’s Bench.21 The Court dismissed the application. The Court noted that the only medical information provided to the employer was that the grievor suffered joint pain, fatigue and had related eye problems. The Court found that this list of symptoms did not provide the employer with any information with respect to her ability to work a different rotation. There was simply no information provided that linked the symptoms to the accommodation being requested. The information was a reflection of what the grievor determined was in her best interest.

Similar to the arbitral case law, various Human Rights Tribunals have denied human rights complaints where the Complainant in question failed to take the minimal steps necessary to assist the accommodation process. For instance in Francoeur v. Cailono Gold and Country Club Ltd.,22 the British Columbia Human Rights Tribunal dismissed a complaint noting that a request for better medical information was not a form of harassment when the information provided was retroactive and devoid of any detail that would assist the employer in accommodating the Complainant’s disability. Similarly, in Daley v. Emergency and Health 18 Ibid at p. 140. 19 [2006] C.L.A.S. 134 (Ponak). 20 Ibid at para. 59. 21 United Nurses of Alberta, Local 33 v. Capital Health Authority (Royal Alexandra Hospital), [2008], A.J. No. 202 (A.Q.B.). 22 [2008] B.C.H.R.T.D. No. 171.


Services Commission23, the British Columbia Human Rights Tribunal held that the employee failed to provide enough information about the disability in question for an employer to assess what steps were needed to accommodate it.

Based on the foregoing, it is safe to conclude that an employer seeking to engage in the accommodation process is entitled to more than just notice of a disability. The employer is entitled to medical information that is relevant and sufficient to enable the employer to explore a range of suitable accommodations.

How much is too much?

Some types of employee medical information are beyond the reach of an employer. For instance, there are few circumstances where an employer would be entitled to information with respect to diagnosis or medical treatment. In West Coast Energy Inc. (c.o.b. Duke Energy Gas Transmission) and C.E.P., Local 44924, Arbitrator Hall expressly overturned a requirement that the employee’s physician disclose a specific medical condition or diagnosis. The arbitral jurisprudence demonstrates that the only circumstances where such detailed medical information may be allowed includes cases where the employer has reasonable concerns about sick leave abuse, where the employer is required to deal with return to work issues or where a communicable disease is involved. However, the onus for an employer to demonstrate such a need will likely be stringent.

In addition to the arbitral limits on the scope of medical information sought, there are few circumstances where an employer can make an employee undergo a medical examination by a doctor chosen by the employer. In Monarch Fine Foods Co. Ltd. and Milk & Bread Drivers, Dairy Employees, Caterers & Allied Employees, Local 64725, Arbitrator Picher affirmed that in the absence of specific authority under statute or the collective agreement, the employer has no power to demand that an employee submit to a medical examination unless the purpose is to ensure that the employee is physically fit to perform his or her work safely and efficiently, and there are reasonable and probable grounds for questioning the employee’s capacity. As may be expected, the more invasive the nature of the examination that is demanded, the stronger the employer’s reasons for the demand need be.

It is important to note that orders to submit to a physical examination or to disclose confidential medical information are not subject to the “work now, grieve later” rule because the grievance procedure would be incapable of redressing the invasion of privacy suffered by the employee.

23 [2008] B.C.H.R.T.D. No. 63. 24 [2004] C.L.A.D. No. 504 (Hall). 25 (1978), 20 L.A.C. (2d) 419 (M.B. Picher).


Employer’s Guidelines for Requesting and Using Medical Information:

General Principles

• An employer cannot engage in an overly searching inquiry to simply verify an employee’s medical absence.

• An employer generally has a right to seek further information beyond an initial certification where the employer has reasonable grounds to doubt the accuracy or completeness of the certificate, or requires additional information to manage the absence or return to work. In such cases, the employer must clearly indicate the limitations of the initial certification, or provide the basis for requesting additional information.

• An employer may only receive information pertaining to diagnosis or course of treatment in very limited circumstances. In these limited circumstances the employer will have to demonstrate compelling reasons to obtain such information.

• An employer can only make an employee undergo a medical examination if contractually provided for or where the purpose is to ensure that the employee is fit to perform his or her duties safely and efficiently and there are reasonable grounds to question the employee’s capacity or doubt the veracity of the medical information supplied by the employee.

• An employer can request medical information that speaks directly to the fitness or limitations of the employee, the accommodation process and the nature of appropriate accommodative measures.

Principles concerning appropriate collection, use and disclosure of the medical information

• Confine the collection of medical information to only information that is reasonably necessary to manage the employee’s absence, her return to work and the health and safety of the workplace.

• Confine the use of the information to that authorized by the collective agreement, employment contract, statute or the employee’s consent.

• Protect the employee’s privacy by ensuring that that information is only disclosed to those who need to have it.

• Ensure that the information is stored securely by taking measures to prevent unauthorized copying, modification, or destruction; the security measures should reflect the sensitivity of the information.


• Ensure that all employees who are given access to confidential medical information understand their obligation to keep the information confidential.26

• Be especially careful not to base decisions about an employee on unreliable or out-of-date information or consents.

• Under personal information protection legislation, the information collected from the employee or doctor may only be used or disclosed for the purpose to which the employee may not then use the information for another purpose (e.g. insurance purposes) without notifying the employee or obtaining his or her consent.

It may be unreasonable to require medical certificates for each and every absence of all employees but, applying a consistent policy, an employer may reasonably request a medical certificate to justify an absence.

The medical certificate and the information contained on it must be reasonably necessary for the administration of sick leave or disability benefits.

Assessing the medical information

In assessing the medical information, employers should ask several questions and may consider retaining an expert to review the opinion:

• Do the doctor and the employee have an established doctor-patient relationship or is there a concern that the employee is doctor-shopping?

• Does the doctor know the workplace and the employee’s duties?

• Did the doctor respond to the questions asked?

• Is the doctor’s opinion consistent with other information in the employer’s possession?

• Is the doctor qualified to give the opinion, i.e. is the doctor a specialist?

After Receipt of Medical Information - Duty to Accommodate

After medical information regarding the employee’s abilities, limitations and prognosis is received, the employer can begin taking steps to manage the sick or disabled employee. Employers are prohibited from discriminating against employees on the basis of disability, unless an employee cannot perform the essential duties or requirements of the position. Even where an employee is unable to perform essential

26 It is advisable to keep medical documentation separate from the person’s general corporate or personnel file and to maintain it in a secure filing system.


duties, an employer is obligated to accommodate the employee to the point of undue hardship, usually in the form of an extended leave of absence.

Is it a Disability?

First, the employer must determine whether the employee’s illness or injury is a “disability,” subject to human rights legislation. In assessing whether or not any physical or mental condition is a “disability”, adjudicators will take into account a number of factors,27 such as:

• the individual’s physical or mental impairment;

• the functional limitations which result from that impairment; and

• the social, legislative or other responses to that impairment or limitations.

The third factor is particularly important and will be assessed in light of the concepts of human dignity, respect and the right to equality. The employer must assess the nature of the condition or illness giving rise to the claim in order to determine if it is a disability that must be accommodated.

If the medical information clearly shows that the employee’s illness or injury has or may have an impact on their functional capacity to do their work, it is likely a disability that must be accommodated under human rights law.

Disability Management Checklist

1. Find out which federal and/or provincial laws apply to the organization.

2. Review and comply with applicable OH&S and workers’ compensation requirements.

3. Consult the employment contract for sick leave or disability provisions.

4. Review the employer’s policies for applicable terms and conditions applying to medical leaves and reporting duties.

5. Check if the contractual terms and conditions of applicable benefits and insurance plans are applicable and supply the employee with the necessary application requirements and paperwork.

6. Comply with applicable human rights legislation:

(a) Employer’s can’t refuse to employ an individual or terminate or discriminate against any employee on the basis of a perceived or actual disability; and

27 Morris v. British Columbia Railway Co., 2003 BCHRT 14.


(b) Employers must accommodate the disabled employee to the point of undue hardship, which includes notifying employees of their duty to:

(i) establish they are disabled, and supply supporting medical information where requested;

(ii) keep the employer apprised of their status or any change thereof; and

(iii) take reasonable steps to facilitate the employer’s accommodation efforts.

7. Comply with applicable privacy legislation with respect to medical and other personal information and documentation.

8. If the employment contract has been “frustrated”, the employer may terminate the employment.

The Duty to Accommodate

Meiorin and BFORs

In British Columbia (Public Service Employees Relations Commission) v. British Columbia Government and Service Employees Union (“Meiorin”),28 the Supreme Court of Canada defined requirements employers must meet in fulfilling their duty to accommodate.

A discriminatory standard can be justified if it is a bona fide occupational requirement (“BFOR”). The test for establishing a standard as a BFOR is stringent. The employer must prove that:

(a) the standard is rationally connected to the function being performed;

(b) the standard was adopted in good faith, in the belief that it is necessary for the fulfillment of the purpose or goal; and

(c) the standard is reasonably necessary to accomplish its purpose or goal, in the sense that the employer cannot accommodate persons with the characteristics of the claimant without incurring undue hardship.

Usually, employers have little difficulty demonstrating that the first two requirements of the Meiorin test have been met. But the third is the focus of most judicial consideration and the most difficult for employers.

28 [1999] 3 S.C.R. 3.


“Undue hardship” is a high standard and requires direct, objective evidence of:

• quantifiable higher costs,

• the relative interchangeability of the workforce and facilities; and

• interference with the rights of other employees or health and safety risks.

The employer must assess each employee individually to determine whether it would be an undue hardship to accommodate her particular needs.

Questions that a court, tribunal or arbitrator will ask where an employer is being judged on whether it has met the duty to accommodate include:

(a) Has the employer performed a fulsome and reasoned review of the situation, including collecting sufficient information from internal and external sources, providing the employee and her doctor (and the union if applicable) with the opportunity to participate in the accommodation process, and properly considering the information supplied by the employee and her doctor?

(b) Has the employer fully investigated alternative approaches that do not have a discriminatory effect, such as individual testing against a more individually sensitive standard?

(c) If alternative standards were investigated and found to be capable of fulfilling the employer’s purpose, why were they not implemented?

(d) Is it necessary to have all employees meet the single standard for the employer to accomplish its legitimate purpose or could standards reflective of group or individual differences and capabilities be established?

(e) Is there a way to do the job that is less discriminatory while still accomplishing the employer’s legitimate purpose?

(f) Is the standard properly designed to ensure that the desired qualification is met without placing an undue burden on those to whom the standard applies?

(g) Have other parties who are obliged to assist in the search for possible accommodation fulfilled their roles?


What does the duty to accommodate require?

The duty to accommodate requires that all possible measures be analyzed. These measures must be highly individualized and tailored to meet the particular circumstances and needs of the disabled employee. Care should be taken not to rely on incomplete or outdated information, stereotypical views or unsubstantiated notions of cost or difficulty.

Examples of actions required to meet the duty to accommodate include:

• modifying workstation;

• providing special equipment;

• rescheduling shifts;

• rehabilitation programs;

• removing more taxing parts of the job;

• adjusting policies;

• bundling tasks; and

• providing reduced or flexible hours or a leave of absence.

The duty to accommodate is a “two- or three-way street”:

(a) The employee is required to:

• make his/her needs known to the best of his/her ability;

• participate in discussions regarding possible accommodation solutions;

• answer questions or provide information regarding relevant restrictions or limitations (including information from doctors where appropriate and needed); and

• accept reasonable accommodation;

and


(b) The union is required to:

• facilitate the accommodation efforts between the employer and employee;

• participate in discussions regarding possible accommodation solutions;

• answer questions or provide information regarding accommodation options; and

• accept reasonable accommodation.

It is worth noting that “reasonable accommodation to the point of undue hardship” does not necessarily mean “providing the disabled employee with the accommodation that he or she prefers.” Thus, it may be, for example, perfectly appropriate to provide a wheelchair-bound employee with ramp access to the workplace rather than a technologically advanced lift system as may be requested by the individual.

Five Tips for Effective Accommodation Planning

1. Create, implement and follow a company accommodation procedure.

2. Ensure that people making accommodation decisions have:

(a) a thorough understanding of, and knowledge about, the workplace; and

(b) access to information required to make an informed accommodation decision.

3. Adopt a “team approach” to accommodation by involving all interested parties (i.e. human resources, employer, employee, and union).

4. Engage and compel employee and union cooperation with the accommodation process and outcome.

5. Consult and educate employees who will be affected by the accommodation.

Refusing Accommodation

Before reaching the conclusion that an employee cannot be accommodated short of undue hardship, ensure that the following steps are taken:

• Consider, discuss and document all reasonable alternatives

• Reply to requests on a timely basis

• Request all documentation required


• Document any attempts to accommodate

• Provide details that justify refusal to accommodate

• Meet with the employee and union representative

• Be willing to reconsider if facts change

After Accommodation – Ready for Dismissal?

In the case of managing a sick or disabled employee, dismissal may become a possibility, either because the employee’s disability cannot be accommodated short of undue hardship or the employee’s absenteeism for sickness or disability amounts to frustration of contract for non-union employees or excessive innocent absenteeism for unionized employees.

In a unionized workplace, subject to the express terms of the collective agreement, an employee can be terminated for innocent absenteeism on a non-disciplinary basis where:

• the employee’s past record of absenteeism is undue or excessive;

• there is no reasonable prospect for improvement in the foreseeable future; and

• if the employee’s absences are related to a disability, the employer can show that the attendance expectations required are a BFOR, and that the employer has accommodated the employee’s disability to the point of undue hardship.

In a non-unionized workplace, an employee may be terminated for frustration of contract where the employee’s incapacity makes the performance of his obligations under the employment contract in the future either impossible or radically different from the agreed terms of his employment.

The factors considered to determine if there is a frustration of contract are:

• the terms of the contract, including any provisions as to sick pay;

• how long the employment was likely to last in the absence of the illness or injury;

• the nature of the employment and, in particular, whether the employee occupies a key post which must be filled on a permanent basis;

• the nature and duration of the illness and the prospects for recovery; and

• the employee’s length of service.


There should be non-disciplinary warnings given prior to terminating the employee’s employment for excessive absenteeism, even if it is beyond the employee’s control. If no accommodation could allow an employee to return to work, the employer may be able to dismiss for innocent absenteeism.

The employer must ensure it has established the required elements for excessive innocent absenteeism and, particularly, the prognosis for future attendance and the duty to accommodate a disability. Before a decision is made to terminate an employee, the employer should review the record of absenteeism, including the reasons for the absences, and the most current medical information available to see if there has been or may be an improvement in attendance in the future, or if accommodation is possible.

The employer should not rely on periods of absence arising from a disability or a workplace injury for which WCB benefits were payable in order to justify a discharge, unless the employer can demonstrate that it has accommodated the employee to the point of undue hardship.

The Test for Termination

Courts and arbitrators are not inclined to regard the employment relationship as terminated until it can be said that a disability or an absence caused by an illness or incapacity has “undermined”, “fundamentally breached” or "frustrated” the employment relationship. Whether the circumstances have reached this point is always a question of fact.29

With regards to the first element of the test – excessive absenteeism – there are a number of factors that are considered when an arbitrator is making this determination:

• The nature and duration of the absence:

• There is no clear threshold as to what length of absence may warrant termination, however, there is some consensus that employers should tolerate longer absences for employees with longer service.

• A cautious approach would suggest that a single absence of two or more years, particularly where the absence constitutes a significant percentage of the employee’s total length of employment, would likely be considered excessive.

• However, the employment of an employee who has been absent for a period of two or more years cannot automatically be terminated when the employee hits the two-year mark. Prior to making the decision to terminate, the employer must verify the employee’s prognosis, conditions and ability to return to work in the foreseeable future. Where this is not done, an employer may be found to have

29 Brown and Beatty at para. 7:6110


discriminated against an employee on the grounds of disability for failing to properly follow the accommodation process.30

• Whether the absence is a single extended absence, or a sporadic and unpredictable absence:

• Adjudicators have generally recognized that recurring, intermittent absences are more difficult for an employer to tolerate and manage than a single, sustained absence.

• In the case of intermittent absences, adjudicators generally consider the frequency of the absences, whether they constitute a consistent pattern and whether the cumulative total of the absences is significantly higher than the workplace average.31

• The nature of the work performed by the employee and the impact on production resulting from the absence.

• The employee’s absenteeism record in comparison to that of his co-workers:

• It is not required that the employee in question have the worst absence record, but rather it is only necessary for the employer to show that it treated the employee in a non-discriminatory fashion vis-à-vis the treatment of other absent employees.

With regards to the second element – whether there is a reasonable prospect of regular attendance in the future – the key issue is where the onus lies. Generally speaking, the view is that the onus is on the employer to demonstrate that there is no such reasonable prospect. As per Molson’s Brewery (Ontario) Ltd. and U.B.W., Local 304 (Re),32 the onus is discharged where the employer is able to establish, considering what has occurred in the past, a reasonable inference that there is no prospect for change. The union must then introduce evidence to rebut that inference.

The likelihood that the employer will be able to establish that a particular employee is incapable of regular attendance in the future, will depend largely on the inference that can be drawn from the employee’s past attendance record, the diagnosis of the employee’s medical condition (i.e. the nature and history of the

30 This is exactly what occurred in Senyk v. WFG Agency Network (B.C.) Inc., 2008 BCHRT 376, where the employer was under the mistaken belief that it could automatically terminate the employment of an individual whose absence hit the two year mark. The employer did not bother obtaining up-to-date medical information at the time of termination. 31 See for example, Northern Telecom Canada Ltd. and C.A.W., Loc. 1915 (1991), 19 L.A.C. (4th) 362. 32 Molson’s Brewery (Ontario) Ltd. and U.B.W., Local 304 (Re), 13 L.A.C. (3d) 112.


infirmity), and the prognosis for the employee’s return to work as contained in related medical reports.33 Arbitrators will often admit post-termination medical evidence where it informs the issue of whether the employer’s decision to terminate was reasonable and appropriate.34

In some cases, the disability may be so severe that it puts into question whether the employee can recover sufficiently to allow him to return to productive employment without endangering the health and safety of himself and others, and/or whether the employee's disability or incapacity is so severe as to irreparably damage the employment relationship and deprive it of its validity.35 In the case of an employee who is unable to perform the work contemplated by the collective agreement because of a permanent ongoing disability or illness, the employer must establish that the employee’s condition has prevented and in the future will likely continue to prevent him or her from returning to productive employment without endangering his health and safety, as well as that of other employees.36

In addition to meeting the two-part test, many adjudicators have stated that the employer’s ability to terminate an employee for innocent absenteeism is also dependent on the following:

• whether the termination would deprive the employee of his rights to sick leave or LTD benefits;

• whether the employee was warned that his attendance was unsatisfactory and that a failure to improve his attendance record might result in disciplinary consequences, including termination;

• whether there are any unique circumstances surrounding the absenteeism;

• whether there is consistency of treatment among employees; and

• whether the employer has met its duty to accommodate the employee under human rights law.

Sick-Leave or LTD Benefit Considerations

Before terminating an employee on the basis of innocent absenteeism, an employer must be certain that termination will not deprive the employee of his sick leave or long-term disability benefits. Arbitral case law generally holds that an employer is precluded from terminating an employee who is disabled or suffering from an illness if the termination would deprive that employee from his right to exhaust STD or

33 Brown and Beatty at para. 7:6110. 34 See Cie Miniere Québec Cartier v. Québec (Grievances Arbitrator), [1995] 2 S.C.R. 1095. 35 Brown and Beatty at para. 7:6110; See for example Ottawa-Carlton District School Board (2005), 141 L.A.C. (4th) 41 (Bendel). 36 Brown and Beatty at para. 7:6110.


LTD benefits.37 The reasoning is that it would be inconsistent with the existence of sick leave and LTD benefits if discharge were permitted on the same ground that those benefits are provided.38

Deemed Termination Provisions

Many collective agreements include deemed termination provisions which allow the employer to terminate an employee for a failure to attend at work for a certain period of time. Generally speaking, these provisions set out not only the period of time that must be missed (e.g. 3 consecutive regularly scheduled shifts), but also the requirement that the employee failed to provide a reasonable explanation and/or supporting documentation for her absence. As such, these provisions are not “automatic” per se, and the employer must ensure it meets the elements required in the agreement language before relying on such a clause.

When considering the application of a deemed termination provision, thought should be given to the duty to accommodate. When the duty to accommodate has been satisfied (i.e. undue hardship has been reached), then a deemed termination provision may be a viable option for the employer.

The Supreme Court of Canada has held in MUHC39 that a deemed termination clause in a collective agreement which provides for automatic termination after three years’ absence due to disability did not breach the employer’s duty to accommodate an employee’s disability.40 The majority of the court stated that the period of time negotiated by the employer and the union when crafting a deemed termination clause is a factor to consider when determining if an employer has met its duty to accommodate. However, the majority also held that such deemed termination clauses are not in themselves determinative and cannot be applied automatically.

Long-term disability files should be closely monitored throughout, and all accommodation measures should be well-documented. Also, before making the final decision to terminate an employee on sick leave, make sure that you have an up-to-date evaluation of the employee’s medical status and that you have made a last attempt to see whether additional accommodation measures could reasonably be extended.

For example, if the employee advises you at the expiry of the specified time period that he or she will be able to return to work on a progressive basis or within a short time, then you may be well-advised to bend the rules and avoid future problems. If, on the other hand, the employee is still completely unfit to work at the end of the specified time period, and there is no indication that the situation will improve in the foreseeable future, you may have reasonable grounds to conclude that your duty to accommodate has been satisfied.

37 See for example De Havilland Aircraft of Canada Ltd. and U.A.W., Loc. 112 (1982), 9 L.A.C. (3d) 271 (Rayner). 38 See Newfoundland Farm Products Corp. and N.A.P.E. (1993), 27 L.A.C. (4th) 1 (Browne). 39 McGill University Health Centre (Montreal General Hospital) v. Syndicat des employés de l’Hôpital general de Monteéal, 2007 SCC 4 (“MUHC”). 40 Supra.


Finally, don’t forget that the employee and the union (if there is one) must collaborate in the accommodation process.

Final Take-Aways

• Stay on top of employee absences – use a “bring forward” system to follow up with the employee and medical professionals on a regular basis

• Establish a paper trail

• Think accommodation from the outset

• Document all efforts at accommodation

Conclusion

Management of sick and disabled employees will continue to be an area in which human resources professionals spend a considerable amount of time. Each case is determined on its facts, but with careful consideration and analysis, effective management that also meets the needs of the organization can be achieved.

Privacy Law – Five-Year Update Nancy Trott Erika Ringseis Rachel Ravary

March 6, 2009


www.mccarthy.ca

Privacy Law – Five-Year Update


Introduction

In the context of employment law, privacy issues require a balancing of rights: employers’ legitimate requirements for personal information must be weighed against employees’ rights to privacy. To protect their business interests, employers need to know who they are hiring, ensure security in the workplace, and monitor performance and efficiency. New technologies and media often facilitate these tasks, allowing employers to monitor and collect information on their employees in efficient and cost-effective ways. However, the wealth of information available makes it easy for employers to go “too far”, even without intending to, and to thereby breach privacy legislation.

Over the past five years, new legal issues and developments have arisen which employers should consider. This paper will give a general outline of key privacy laws and principles, followed by a discussion of issues that have developed recently, particularly in the context of recruiting, surveillance, security, discipline and internet and e-mail use.

The Current Privacy Law Landscape in Canada

Overview

Currently, there is a patchwork of privacy legislation across Canada applying to different organizations in varying degrees. In all Canadian jurisdictions, there is some form of privacy legislation that protects the confidentiality of personal information and limits the manner in which private-sector organizations may collect, use, disclose and retain personal information in the course of their commercial activities and, in some jurisdictions, in relation to their employees.

Federal Private-Sector Privacy Legislation

On January 1, 2001, the first privacy legislation applicable to private-sector organizations in Canada came into force - the Personal Information Protection and Electronic Documents Act (PIPEDA).

Between January 1, 2001 and December 31, 2003, PIPEDA applied only to private-sector organizations which fell within the definition of a “federal work, undertaking or business” under Canada’s Constitution Act, 1982 (e.g. banking institutions, airlines, railways and telecommunications companies). With respect to these types of organizations, PIPEDA applied to personal information collected, used and disclosed:

• in the course of their commercial activities; and

• in relation to their employees.


On January 1, 2004, PIPEDA’s scope expanded to apply to provincially-regulated organizations in relation to personal information collected, used and disclosed by such organizations in the course of their commercial activities. PIPEDA will continue to apply to personal information collected, used and disclosed by provincially-regulated organizations in the course of their commercial activities unless and until a Province in which such an organization is located or is otherwise subject to the laws of such Province, passes legislation “substantially similar” to PIPEDA.

Notably, PIPEDA does not apply to any provincially-regulated organizations with respect to personal information collected, used and disclosed in relation to their employees, even if a Province in which such an organization is located does not enact privacy legislation which is “substantially similar” to PIPEDA.1

Provincial Private-Sector Privacy Legislation

Currently, there are only three provinces in Canada that have enacted generally applicable private-sector privacy legislation:

1. An Act Respecting the Protection of Personal Information in the Private Sector (“Quebec PIPA”). Quebec PIPA came into force in 1994.

2. Alberta’s Personal Information Protection Act (“Alberta PIPA”). Alberta PIPA came into force on January 1, 2004; and

3. British Columbia’s Personal Information Protection Act (“B.C. PIPA”). B.C. PIPA came into effect January 1, 2004.

Under Section 26(2)(b) of PIPEDA, the Governor in Council is empowered to exempt provincially-regulated organizations from the application of PIPEDA if they operate within a Province where legislation is declared “substantially similar” to PIPEDA. Quebec PIPA, Alberta PIPA and B.C. PIPA have all been declared “substantially similar” by the Governor in Council. Although the underlying policy and goal is generally the same, there are specific differences between the privacy legislation passed by these provinces which must be taken into account when developing privacy policies.

In British Columbia, the B.C. PIPA is designed to govern the collection, use and disclosure of personal information by organizations in a manner that recognizes both the right of individuals to protect their personal information and the need of organizations to collect, use or disclose personal information for purposes that a reasonable person would consider appropriate in the circumstances.

1 The gap in the applicability of PIPEDA to employee personal information, although not expressly stated in PIPEDA (but confirmed by the federal Privacy Commissioner), is rooted in the constitutional division of powers between the federal and provincial levels of government in Canada. The federal government does not have the constitutional power to legislate provincially-regulated employers with respect to matters relating to their employees.


“Personal information” means information about an identifiable individual and includes employee personal information but does not include a) contact information (i.e. name, position or title, business telephone number, business address, business email or business fax number), or b) work product information (i.e. the information prepared or collected as a part of the responsibilities or activities related to that individual’s employment).

Subject to very few exceptions (such as the use of information for journalistic, artistic or literary purposes) the B.C. PIPA applies to all provincially-regulated organizations in B.C.

Principles Underlying Canadian Private-Sector Privacy Legislation

The federal and provincial privacy legislation described above is premised on the fundamental principle that an organization cannot collect, use or disclose personal information about an identifiable individual without the knowledge and consent of that individual, subject to the limited exceptions described within the privacy legislation (e.g. for use in a legal proceeding).

The term “personal information” is broadly defined in Canadian privacy legislation as including any information about an identifiable individual, or information which allows an individual to be identified, but does not generally include business contact information (i.e., name, title, business address, telephone, facsimile, and e-mail address). Interestingly, “business contact information” is not excluded from the definition of “personal information” under the Quebec PIPA. There are other variations of, exceptions to and exclusions from the definition of “personal information” set out in Canadian privacy legislation which must be taken into account when developing privacy policies.

There are ten guiding principles which are described in PIPEDA and which must underlie any provincial privacy legislation before it will be declared “substantially similar” to PIPEDA. These principles should also underlie any privacy policies.

These ten principles are as follows:

1. Accountability

• Organizations are responsible for all personal information within their control and must designate an individual (or individuals) to oversee compliance with applicable privacy legislation. This includes implementing policies and procedures, and training employees to protect personal information, and responding to complaints that may arise.

• Organizations remain responsible for all personal information in their custody or under their control, including where the organization engages a service provider to act on behalf of the organization.


2. Identifying Purposes

• Organizations must identify the purposes for which they intend to use and disclose personal information at or before the time of collection, including the use of previously collected information for a new purpose that is not otherwise permitted or required by law. The purposes must reflect what a “reasonable person” would consider appropriate under the circumstances.

3. Consent

• Knowledge and consent are generally required for the collection, use, or disclosure of all personal information. There are certain exceptions, such as when required by law, for the purpose of collecting a debt, investigating a breach of an agreement, or in cases of emergency, etc.

• Consent may be provided after collection, but it must always be obtained before use, with the exception of certain circumstances.2

• Purposes must be clearly stated and organizations must make a reasonable effort to ensure they are understood.

• Depending upon the circumstances, consent and disclosure may be implied or deemed rather than express.

• Individuals can withdraw their consent at any time, subject to legal or contractual restrictions (e.g. employment agreements) and reasonable notice, and organizations must inform the individual of the likely consequences of withdrawing consent.

4. Limiting Collection

• The amount and type of information collected must be limited to what is necessary for the reasonable purposes identified to the individual, and by fair and lawful means.

5. Limiting Use, Disclosure, and Retention

• Personal information can only be used and disclosed for the reasonable identified purposes for which it was collected with the consent of the individual or as permitted by the applicable privacy legislation or required by another law.

2 notably significant exceptions for employee personal information under the Alberta PIPA and B.C. PIPA.


• Separate legal entities, even if they are related corporate affiliates, are considered to be third parties. Thus, transfers of personal information between affiliates that are separate legal entities are considered to be disclosures to a third party.

• Personal information must be retained only as long as necessary to fulfil the identified purposes until it is no longer needed for legal or business purposes. Formal guidelines and procedures are required for information destruction.

6. Accuracy

• Organizations must make a reasonable effort to ensure that any personal information collected, used or disclosed by or on behalf of the organization is accurate and complete, particularly when used to make a decision about an individual. See also the “Individual Access” principle below.

7. Safeguards

• Organizations must protect personal information by making reasonable security arrangements to prevent unauthorized access, collection, use, disclosure, copying, modification, disposal or destruction.

8. Openness

• Organizations must make information about their personal information policies and practices readily available upon request, including the name or title of each person accountable for compliance with the privacy legislation, and the process for requesting access to personal information or making a complaint.

9. Individual Access

• Subject to some exceptions, individuals have a right to examine their personal information and challenge its accuracy and completeness.

10. Challenging Compliance

• Individuals have the right to make a complaint to an organization, and if not satisfied with the response, may escalate the complaint or any other decision, act or failure to act by an organization to the appropriate Privacy Commissioner. The Privacy Commissioner will then notify the organization and will either seek to settle the matter or conduct an inquiry.

• Orders made by the Privacy Commissioners are final, and organizations are under a duty to comply.


Steps Required to Ensure Compliance with Federal and Provincial Privacy Legislation/“Best Practices”

This section will discuss the measures to be followed by organizations implementing privacy policies and practices to comply with applicable privacy legislation.

Appoint a “Privacy Officer” or “Privacy Committee”

Organizations must designate an individual or individuals to be responsible for personal information handling practices. These duties may be further delegated to one or more individuals. Many organizations satisfy this requirement by creating the position of “Privacy Officer” or a “Privacy Committee” comprised of representatives from areas of the business which are involved in the collection, use, disclosure and retention of personal information (e.g. purchasing, sales, records management, information technology and human resources). The name or title and business contact information of the responsible individual(s) must be made readily available upon request.

In the initial stages, the individual(s) responsible for privacy compliance will assist in:

• undertaking a privacy audit (discussed below);

• implementing policies and procedures designed to protect personal information (discussed below);

• establishing policies and procedures to receive and respond to complaints and inquiries;

• training staff and communicating information about the applicable privacy policies and practices; and

• developing and making available information to explain privacy policies and procedures.

Organizations will also need to build in processes for dealing with requests for access to personal information, and for interacting with Privacy Commissioners in the event of an investigation.

The ongoing role of the Privacy Officer or Privacy Committee will be to analyze privacy issues and implement action plans in circumstances where the organization is not compliant with applicable Canadian privacy legislation. The Privacy Officer or Privacy Committee should also be responsible for acting as a champion for privacy protection within the organization and for ensuring that privacy issues are taken into account when considering new or amended business processes.


Undertake a Privacy Audit

In order to accurately assess: (a) what personal information an organization collects, uses, discloses and retains; (b) how, why and where such personal information is collected, used, disclosed and/or retained; and (c) to whom such personal information is disclosed, an organization is required to undertake an audit of its current personal information handling practices, both in relation to its commercial activities and in relation to its employees.

In the course of completing the privacy audit, an organization’s Privacy Officer or Privacy Committee should:

• identify all of the personal information currently held by the organization;

• ascertain where this personal information is kept, whether in paper files or in electronic databases;

• identify why the personal information is collected and how it is being used;

• identify whether any information other than personal information could be collected which would serve the purpose for which the personal information is collected;

• identify any third parties from whom the personal information is collected, if not directly from individuals;

• identify any third parties to whom the personal information is disclosed or transferred;

• identify who within the organization has access to the personal information and why;

• ensure that any personal information collected by the organization is collected for purposes which are reasonable in the circumstances;

• ensure that the purposes for which the personal information is collected are communicated when the information is collected;

• ensure that individuals have provided their informed consent to the collection of their personal information and for any subsequent use or disclosure of that personal information; and

• ensure that the personal information collected by the organization is accurate, complete, up-to-date and secured in a manner appropriate in all the circumstances, with regard to the sensitivity of the personal information obtained.


Develop and Implement Privacy Policies

Once the privacy audit is complete, the organization should use the information gathered through the audit process to develop:

• an “external” privacy policy - applicable to personal information it collects, uses, discloses and retains in the course of its commercial activities; and

• an “internal” privacy policy - applicable to its employees.

The privacy policies developed by the organization must reflect the ten privacy principles described above. Accordingly, such policies must:

• identify the types of personal information collected, used and disclosed by the organization;

• identify the purposes for which such personal information is collected, used and disclosed by the organization;

• identify the third parties to whom the organization may disclose the personal information, and why such personal information is disclosed to these third parties;

• identify the security safeguards which the organization has in place in order to ensure the security and confidentiality of the personal information;

• advise individuals as to how they may obtain access to their personal information and as to how they may withdraw their consent to the collection, use, retention or disclosure of their personal information; and

• advise individuals as to how they can make inquiries regarding the organization’s personal information handling practices and the personal information held by the organization.

Once developed, the privacy policies will have to be made readily accessible. As noted above, one of the obligations imposed by applicable Canadian privacy legislation is to make readily available to individuals specific information about the policies and practices that the organization has adopted with respect to the management of personal information, including:

• the name or title and the address of the person(s) who is/are accountable for the organization’s privacy policies and practices and to whom complaints or inquiries can be forwarded;

• the means of requesting access to personal information held by the organization; and


• a copy of any brochures or other information that explain the organization’s policies and practices.

Develop and Implement Safeguards

Organizations are required to make reasonable security arrangements to prevent unauthorized access, collection, use, disclosure, copying, modification, disposal or destruction of personal information. As an example, PIPEDA states that the methods of protection may vary according to the sensitivity of the information, and should include:

• physical measures, for example, locked filing cabinets and restricted access to offices;

• organizational measures, for example, security clearances and limiting access on a need-to-know basis; and

• technological measures, for example, the use of passwords and encryption.

Develop and Implement Policies for Responding to Privacy Inquires

Organizations are also required to establish a process whereby an individual can obtain access to his or her personal information that is held by the organization.

This can be achieved by providing employees involved in receiving and responding to requests for access to personal information with written guidelines as to the procedure for dealing with such requests. The guidelines should include:

• an outline of the organization’s policy with respect to responding to privacy inquiries, specific requests for access to personal information, and complaints; and

• time-lines for responding to such inquiries, requests and complaints.

Train Staff and Roll-Out Privacy Policies

Once the privacy policies and procedures described above are ready for implementation, any staff who are or may be involved in the collection, use or disclosure of personal information, or who may be required to respond to an individual’s inquiry regarding the handling of their personal information by the organization, or regarding the organization’s general personal information handling practices, should receive training regarding the organization’s privacy policies and procedures.

In addition, the organization should ensure that its employees, suppliers, customers, etc. are made aware of the organization’s privacy policies.


Monitoring

Following the implementation of these policies and procedures, an organization will also be required to review them on a periodic basis in order to ensure that they remain accurate, complete, up-to-date and compliant with applicable Canadian privacy legislation.

Current Privacy Issues: A Right to Privacy?

Even in the absence of privacy legislation in provinces such as Ontario with respect to the collection, use and disclosure of employee personal information, some legal right of privacy may still exist in both unionized and non-unionized workplaces. Recognizing advancements in technology and public sentiment over the perceived erosion of individual privacy rights, the law is developing to provide increasing levels of privacy for individuals. Below we will discuss some current issues concerning an employee’s right to privacy.

Common Law Right to Privacy

At present, there is no right to privacy recognized under the common law. Historically, in order to find that there had been a breach of privacy, courts needed to find a tort or offence (e.g. trespass or nuisance) in order for there to be a valid cause of action. However, the case law in this area is developing and courts are coming increasingly close to finding that a common law tort of breach of privacy or a right to privacy exists on its own. Most recently, a series of employment law cases have suggested that a self-standing common law right to privacy may exist.

In two recent cases before the Ontario Superior Court of Justice, an employer moved to have the pleadings struck and the case dismissed on the basis that there was no cause of action, as there was no self-standing right to privacy.3 In both cases, the Court held that it was not fully settled that such a right to privacy did not exist. Consequently, the Court refused to strike out the statement of claim and dismiss the action.

It is important to note that Canadian law requires that a claim should not be struck or dismissed simply because it is “novel.” These cases therefore stand for the proposition that such a cause of action may exist and do not necessarily mean that the courts have openly recognized such a common law right to privacy.

However, the commentary in two of the three employment cases suggests that such a right may exist. In Somwar v. McDonald’s Restaurants of Canada Limited,4 Justice Stinson followed the development of the law and noted that technological advances and other factors have created an increased need for a

3 Jackson v. Canada (Attorney General), 2005 CarswellOnt 2790 (S.C.J.); Somwar v. McDonald’s Restaurants of Canada Ltd. (2006), 263 D.L.R. (4th) 752 (Ont. S.C.J.) 4 (2006), 79 O.R. (3d) 172 (S.C.J.)


right to privacy. Justice Stinson further noted that while the Charter does not apply in this instance that Charter values ought to be applied in the development of the common law. Justice Stinson then went on to state that “the time has come to recognize invasion of privacy as a tort in its own right” .5 Similarly, in Shred-Tech Corp. v. Viveen,6 Justice Gordon relied partly on the McDonald’s case in holding that the “recognition of such a tort in law is a logical result of the acknowledgement of privacy rights. There must be a remedy available for the breach of any right.”7

As a result of these cases, it appears likely that an Ontario Court may eventually conclude that a common law right to privacy exists. In collecting information from or about job applicants and current employees, employers must ensure that they collect, use, disclose and retain personal information regarding employees in a way that is least likely to violate any potential right to privacy. In this regard, employers are advised to follow the “best practices” described above. If an employee can show that he or she suffered actual damage, an employer may be liable to compensate the employee for that damage. The McDonald’s case provides some guidance in this regard, as it lays out four potential criteria for a finding of a breach of privacy:

1. There must be something in the nature of prying or intrusion.

2. Intrusion must be something which would be offensive or objectionable to a reasonable person.

3. The thing into which there is prying or intrusion must be, and be entitled to be, private.

4. The interest protected is primarily a mental one, which fills in the gaps left by other torts (e.g. trespass, nuisance, intentional infliction of mental distress). It is likely that where a traditional tort can protect any potential privacy interests, that tort will still be found to have been committed rather than the tort of breach of privacy.

Given the trend reflected in these recent cases, it is more important than ever for all employers and organizations to implement the “best practices” noted above.

The Scope of Privacy Protection under the BC PIPA

A recent decision by the Office of the British Columbia Information and Privacy Commissioner (“OIPC”),8 and a judicial review by the Supreme Court of British Columbia,9 clarified the extent to which individuals may initiate a complaint about an alleged breach of the BC PIPA when they are not personally affected.

5 Ibid. at Para 31 6 [2006] O.J. No. 4893 (S.C.J.) 7 Ibid. at para 30. 8 Order P07-01. 9 Sochowski and Office of the Information and Privacy Commissioner for British Columbia 2008 BCSC 1390 (QL)


The Complainant, David Sochowski, a heavy duty mechanic and long-time employee of Finning Canada, complained to the OIPC regarding a Finning policy requiring certain categories of employees who may operate company vehicles to produce their drivers abstracts.

Finning agreed to exempt Mr. Sochowski from producing his drivers abstract. Mr. Sochowski maintained his complaint, claiming that Finning’s exemption was aimed at blocking scrutiny of the policy. No other affected employees, or his union, joined his complaint.

The Commissioner dismissed the complaint, finding that Mr. Sochowski lacked the necessary individual interest in the complaint. The Commissioner did not allow Mr. Sochowski to pursue a complaint “in the public interest”, saying that such a role under PIPA falls to the Commissioner, and not to a complainant.

The Supreme Court of British Columbia dismissed Mr. Sochowski’s petition for judicial review. Mr. Sochowski argued that he should be permitted to challenge the policy, even though it did not apply to him, because it is a condition of his employment. The Court held that this was not sufficient to give Mr. Sochowski direct interest standing:

To conclude otherwise would entitle any employee to complain about anything that his or her employer does or fails to do, even if it has no direct effect upon him or her, simply because he or she is an employee of that employer. That would entitle the “mere busybody” involvement that was said to be insufficient even on public policy grounds in Finlay v. Canada (Minister of Finance), [1986] 2 S.C.R. 607.”

The court rejected the Commissioner’s finding that it was solely the role of the Commissioner to bring complaints in the public interest; however, the Court found that Mr. Sochowski had no genuine personal interest in the resolution of the complaint, as the policy did not apply to him, and so did not allow him to pursue a complaint in the public interest.

Recruiting

Conducting Reference Checks

Under personal information protection legislation, consent is generally required prior to collecting or disclosing a person’s personal information. This includes collecting, using, or disclosing an opinion about the person. However, in British Columbia and Alberta, “employee personal information” is treated differently. Alberta and British Columbia’s PIPAs allow employers to collect, use or disclose “employee personal information” without the consent of the employee or prospective employee if reasonable for the purposes of establishing, managing or terminating an employment relationship.

Accordingly, when conducting a reference check, the prospective employer may not need the applicant’s consent.


When conducting reference checks, the prospective employer must:

1. give the applicant notice in advance that it intends to contact previous employers or conduct background checks;

2. explain to the applicant in advance the purpose or reason for collecting, using or disclosing the information (i.e. to make a hiring decision); and

3. ensure that the collection and use of the information is “reasonably required” for the establishment of the employment relationship (i.e. to determine the job applicant’s suitability for the position).

As a tip, even though consent from the applicant is not required for reference checks under PIPA, a prospective employer may still wish to obtain written consent, especially if the prospective employer intends to contact previous employers who are not listed as referees.

If an applicant lists a former employer as a reference, then he or she has implicitly consented to that former employer disclosing his or her employee personal information to the prospective employer. However, if a former employer is not listed as a referee, then that former employer may be in breach of PIPA if it discloses the applicant’s employee personal information without consent. For this reason, it may be prudent to get an applicant’s consent up front, for example on the application form, before contacting persons other than those listed by the applicant as referees. In regards to the employees you currently employ, if you suspect that they may ask you to provide a reference in the future, you may also ask them to sign a consent that will allow you to provide that information to their prospective future employer without breaching PIPA.

Obtaining information about prospective employees through social networking sites such as Facebook or MySpace

The recent phenomenon of new modes of communication such as Facebook and MySpace raises potential privacy issues. As an example, the posting of information on the web presents the possibility for obtaining information about potential job candidates. While we know of no cases that have dealt with this issue to date, it is possible that the use of information obtained from such social networking sites will be scrutinized upon the same principles that are applied by arbitrators and privacy commissioners to information obtained by more traditional means.


Handling information obtained about a prospective employee

Once personal information has been collected, used or disclosed in the hiring process, all other requirements of PIPA apply to that information, including:

1. Making reasonable efforts to ensure that the personal information collected is accurate and complete;

2. Making reasonable security arrangements to protect the collected reference information from unauthorized use, disclosure or destruction; and

3. Retaining information used to make a decision for at least one year after the use so that the applicant has a reasonable opportunity to obtain access to it.

Allowing prospective employee’s access to their personal information

Prospective employees can also request to see and correct information that your organization has collected during the recruiting process. This includes:

1. Personal information under the control of the prospective employer;

2. Information about the ways in which that personal information was obtained and how it is being used by the prospective employer; and

3. The names of individuals and organizations to whom the personal information has been disclosed.

Surveillance

An employee maintains a right to privacy even while at work and while using his employer’s equipment. Therefore, any intrusion by an employer that could constitute an infringement on an employee’s dignity or sphere of personal autonomy must be justified by reasonable motives, and must meet the criteria of proportionality and rationality. Such justifications cannot be validated retroactively; an employer must have reasonable reason to monitor employees before beginning to do so. The requirement of proportionality ensures that the method of monitoring adopted minimally infringes the employee’s right to privacy. Ultimately, it is a balancing exercise.

Video Surveillance

Labour arbitrators (in unionized workplaces) and privacy commissioners have on many occasions been required to decide as to the admissibility of surveillance evidence.


Arbitrators are split as to when such evidence may be admitted. Arbitrators have found that such evidence is admissible:

• when it is relevant and reliable; and

• when it was collected reasonably and for a reasonable purpose.

The first line of arbitral decisions holds that the principles of natural justice require that any evidence relevant to an issue before a court or tribunal ought to be heard. In these cases, the approach of the courts is taken. It is largely irrelevant what evidence was collected or how the information was collected. Arbitrators are simply concerned with whether the evidence is relevant and reliable to decide the issue before them. This line of arbitral decisions suggest that particularly where no other evidence is available and the evidence is absolutely necessary, then such surveillance evidence will be admissible.10 Many of these cases have also noted that there exists no right to privacy (even in the unionized setting). As one arbitrator noted, there is “no right to privacy” in Ontario and, barring the existence of such a right, there is nothing prohibiting the surveillance of employees.11

The second line of arbitral decisions (which make up the majority and which are applied by privacy commissioners under privacy legislation) have held that video surveillance evidence should only be admitted where it would be reasonable to do so and where the surveillance was conducted in a reasonable manner. These cases have adopted various tests, which involve deciding whether (in all the circumstances) the intrusion into the privacy of the employee was reasonable. A common list of factors considered by arbitrators and privacy commissioners is as follows:

• Is the surveillance necessary for a legitimate or reasonable business interest? Legitimate business interests often include loss prevention, safety and security risks, or investigating employee abuse of sick/disability leave.

• Is the information collected only that which is necessary to achieve the intended purpose? The surveillance should be limited in time and scope to only what is necessary.

• To what extent is employee privacy affected? This will include an examination of the length of time the employee was under surveillance, the type of surveillance equipment used, and the location of the surveillance. Surveillance in areas where employees have a reasonable expectation of privacy (e.g. employee rest areas or lunchrooms) is usually held to be unreasonable, unless there is a serious, significant business interest at stake. Where employees have a low expectation of privacy (e.g. in public), video surveillance may be reasonable for less pressing business purposes.

10 General Electric Canada v. Communications, Energy and Paperworkers of Canada, Local 544 (Tanner Grievance) [2007] O.L.A.A. No. 8, 89 C.L.A.S. 28 11 Canadian Timken Limited (2001), 98 L.A.C. (4th) 129 (Welling)


• Were other alternatives open to the company to obtain the evidence it sought? If there are less privacy-intrusive ways of effectively achieving the same purpose, then it may be unreasonable to use video surveillance. The employer should exhaust all alternatives.

Despite the two approaches, by taking the following steps, employers may increase the likelihood that such evidence will be admissible in an arbitration setting and not in breach of applicable privacy legislation:

• wait until a reasonable justification for surveillance has been established;

• collect concrete usable evidence which suggests an employee is being dishonest or that there are legitimate business interests which must be protected (e.g. production and safety issues);

• exhaust all alternatives to surveillance;

• choose the least intrusive form of surveillance as possible; and

• conduct the surveillance only to the minimum extent necessary.

Video Surveillance Guidelines Issued by Privacy Commissioners

In 2008, the Federal, British Columbia and Alberta Privacy Commissioners jointly issued new guidelines for the use of video surveillance by private sector organizations. While recognizing that private sector organizations do have certain legitimate reasons to use video surveillance techniques, the Commissioners note that (i) privacy laws impose restrictions on the collection, use and disclosure of personal information, and (ii) video surveillance involves the collection of personal information.

The guidelines are directed to organizations subject to the Personal Information Protection and Electronic Documents Act (PIPEDA), which applies to organizations carrying out commercial activities in all provinces except B.C., Alberta and Québec; to all organizations carrying out commercial activities where personal information is transmitted across an international or provincial border, no matter where the organization is located; and to the employment relationship between federally regulated organizations such as banks, airlines and railway companies and their employees.

The guidelines are also directed to organizations that are subject to the B.C. and Alberta Personal Information Protection Acts.

Under these legislative regimes, the key legal test for the collection, use or disclosure of personal information is that these should be reasonable in the circumstances and done only with the consent of the individual involved.


The guidelines list 10 factors to contemplate when considering using video surveillance and when implementing a video surveillance plan:

1. Determine whether a less privacy-invasive alternative to video surveillance would meet your needs.

2. Establish the business reason for conducting video surveillance and use video surveillance only for that reason.

3. Develop a policy on the use of video surveillance.

4. Limit the use and viewing range of cameras as much as possible.

5. Inform the public that video surveillance is taking place.

6. Store any recorded images in a secure location, with limited access, and destroy them when they are no longer required for business purposes.

7. Be ready to answer questions from the public. Individuals have the right to know who is watching them and why, as well as what information is being captured and what is being done with recorded images.

8. Give individuals access to information about themselves. This includes video images.

9. Educate camera operators about the obligation to protect the privacy of individuals.

10. Periodically evaluate the need for video surveillance.

Email and Internet Surveillance

The law with respect to email and internet surveillance is still evolving, and thus somewhat unclear. However, similar concepts with respect to an employee’s reasonable expectation of privacy in the workplace will be considered.

Where there is an internet and email use policy in place which provides that such use will be monitored and where email is sent using work equipment on work time, there is likely no expectation of privacy and the email communication and internet use can be monitored. The policy acts as consent to such monitoring. There can be no expectation of privacy, particularly where an employee explicitly agrees to the terms of the policy before first using the employer’s computer. It is important to ensure that employees know of such internet policies. However, some arbitrators have held that, lack of knowledge


of the policy will not assist an employee where the internet use is such that common sense would suggest that the employee not use the internet or email in such a manner.12

It is less clear that there is an expectation of privacy when employees send email at work via non-work email accounts (e.g. g-mail, yahoo, hotmail). In those cases, the employee may still have an expectation of privacy given that the employee uses a private password and is using his or her own email.

Email on a non-work account, which is sent outside of work time likely cannot be monitored, as there is an expectation of privacy.

Therefore, the ability to monitor such communication largely depends upon when the employee is being monitored (e.g. during working hours), how that employee is being monitored (e.g. pursuant to a policy with the employee’s consent) and what is being monitored (e.g. emails from the employee’s business address).

In a recent complaint to the federal Privacy Commissioner,13 a government employee complained about the employer’s “online statement” which indicated that the employer may monitor his use of the internet and e-mail. The complainant argued that the use of email should receive the same privacy considerations as the telephone and that monitoring email violated his privacy rights. The employer argued that its email was a corporate communications tool provided to employees for the purpose of conducting official government business. The policy provided for limited personal use when it complied with the employer’s policies and where employee performance was not adversely affected. The Privacy Commissioner found that the complaint was “not well-founded” and noted that the employer’s policy displayed “fairness and transparency by informing its employees of its monitoring practices through the online statement, and by making the electronic network policy guidelines readily available on its intranet.” Employees therefore had “clear expectations of the level of privacy they can expect from the employer.”

To avoid uncertainties, employers should provide for internet and email use policies. Moreover, specific consent should be obtained from employees prior to commencing work on an employer’s computer or over the employer’s network.

GPS in Company Vehicles

Another area of concern for arbitrators and privacy commissioners concerns the use of Global Positioning Satellite (GPS) systems in company vehicles. GPS systems are able to monitor the whereabouts of a company vehicle using satellite technology. Given the potential for monitoring or conducting surveillance of employees who use company vehicles during the course of their duties,

12 Consumers Gas v. Communications, Energy and Paperworkers Union, unreported, August 5, 1999 (Kirkwood) at para. 71. 13 http://www.privcom.gc.ca/cf-dc/pa/2005-06/pa_200506_06_e.asp


many of the principles noted above are equally applicable to adjudicators concerning this issue. As an example, arbitrators and privacy commissioners will look at the business justification or interest sought to be protected by the use of GPS and whether the use of GPS is limited in scope to only what is necessary. Moreover, if the employee is in a unionized facility, an arbitrator will evaluate whether the employee has a reasonable expectation of privacy.14

In a recent federal Privacy Commissioner case15, the Privacy Commissioner was troubled by the possibility that GPS could be used as a surveillance device. However, the employer had a policy to limit the use of the GPS to situations involving a complaint from the public, an internal concern, or an issue relating to productivity. Moreover, the employer’s stated purposes for using GPS (e.g. improving dispatch, ensuring the safety of employees and the public, locating lost vehicles) were found to be acceptable. While the case may generally suggest that employers would not have the right to use GPS to constantly monitor their workforce (especially if the purpose is to ensure productivity), in this case the Privacy Commissioner was satisfied the system would be used to manage employees only in “limited, exceptional and defined circumstances.” The Privacy Commissioner commented that the use of GPS as an employee surveillance tool may be acceptable in certain situations, which are defined and communicated to employees beforehand in an employer policy. Moreover, the information collected by the use of GPS should only be used for its defined purpose.

Discipline

Biometric Hand Scanners

Everyone is familiar with the use of fingerprints in the criminal context. But are you also aware that employers are increasingly using employees’ biological characteristics, such as a person’s finger, hand, voice or facial features, to identify and keep track of employees attendance and work hours? The use of biometric technology in the workplace gives rise to a number of privacy issues.

Biometric type systems (such as the biometric hand scanners) involve taking a part of the body, such as a hand, and treating it as the distinctive feature of the individual concerned for identification purposes. The system is effective from a security and identification standpoint because each person’s hand is sufficiently distinct (like a fingerprint) to ensure that only those individuals whose hand measurements “match up” with a hand measurement already recorded in the system will gain access.

Biometric scanners work by taking a measurement of the employee’s hand and then converting the information into a binary template or a mathematical formula against which each employee’s hand can be matched when it is subsequently scanned on the scanner. The hand scanners usually only store the mathematical formulae and not the actual handprints.

14 As an example, an employee may have a reasonable expectation of privacy when the use of the company vehicle is not during working hours. 15 PIPEDA Case Summary #351


In British Columbia, Quebec, and Alberta, as the biometric scanners are storing an employee’s “personal information,” privacy legislation applies. As a result, employers will only be permitted to enact such systems in these provinces where it can demonstrate (in Alberta and British Columbia) that it is reasonable or (in Quebec) necessary to do so. An adjudicator will balance the employer’s legitimate business needs, the manner with which the information is collected and stored, the intrusiveness of the scanners, and the employee’s “right to privacy” in making such a determination. In Quebec, employers must obtain the employee’s consent to enact biometric scanners. Moreover, if the biometric system creates a database of biometric measurements and characteristics (which is likely), the employer must obtain the prior approval from the Quebec government body overseeing the application of Quebec privacy and information technology legislation.

Although there is no privacy legislation in Ontario, unions in Ontario workplaces have challenged the employers’ right to install biometric scanners, claiming that the scanners violate an employee’s “privacy rights” in the workplace.16 Although there have been arbitration decisions both upholding and dismissing these grievances,17 some arbitrators have found that there is a “right to privacy” in unionized workplaces, which must be balanced against the employer’s legitimate business and security interests. Arbitrators will therefore examine the reason for the introduction of the biometric scanners (i.e. security reasons, to curb time fraud, to increase productivity) in determining their legitimacy in the workplace. Similar to the cases on video surveillance, arbitrators will also examine whether less-intrusive means were exhausted or evaluated before the introduction of biometric scanners. Most importantly though, arbitrators will look to see whether the union has brought forth any evidence as to how and why the biometric scanners infringe upon an employee’s “right to privacy.” In this sense, biometric scanners will not automatically violate an employee’s “privacy” as a matter of course.

Finally, some arbitrators (particularly in Alberta and British Columbia in applying privacy legislation) have found that, because the hand scanners: (a) are not physically intrusive; and (b) store information as a number or formula which reveals nothing about the employee’s character, the personal information collected and retained by the hand scanning system falls at the “low end of the scale” with respect to the intrusion into employee privacy. As a result, the employer will only have to show some legitimate business purpose for enacting the hand scanners to overcome an employee’s “privacy right.”18

16 Unions have also successfully challenged the legitimacy of biometric scanners in the workplace by arguing that forcing employees to use the biometric scanner contrary to their religious belief is contrary to the Human Rights Code as discrimination on the basis of creed. See: 407 ETR Concession Company Limited (2007) CanLII 1857 (ON L.A.) 17 See Iko Industries Ltd. (2005), 140 L.A.C. (4th) 393 (Tims); Good Humour [2007] O.L.A.A. No. 406 (QL) (Murray) 18 Canada Safeway Ltd. (2005), 145 L.A.C. (4th) 1 (Ponak)


To help you comply with provincial and federal privacy laws with respect to the use of biometric hand scanners, we offer the following tips:

1. Use newer biometric technology that does not actually collect or store employee’s physical information, as it is more likely to pass privacy muster.

2. Give proper notice of collection to the employees, as described above. Explain to employees exactly what personal information is being collected, used and disclosed by the technology, as well as the purposes for doing so. In addition to being required by PIPA, employees who do not understand the limitations and safeguards of the technology are more likely to feel like their privacy is being invaded and may refuse to co-operate.

3. Be prepared to justify the introduction of biometric technology by pointing to deficiencies experienced with other time-keeping systems, such as “buddy punching” or lost data.

4. Do not immediately discipline an employee who refuses to co-operate with the introduction of new technology without investigating his or her concerns. Employees may have religious objections to such technology that must be accommodated. Alternatively, employees may have a reasonable belief that the technology infringes PIPA. It is important to remember that PIPA prohibits adverse action against an employee who refuses to do something he or she reasonably and in good faith believes is contrary to PIPA.

Security

Responding to Privacy Breaches

With increasing volumes of employee and customer personal information being stored on employer computers, those employers need to know what to do when a privacy breach occurs. Ideally employers should also take preventative steps prior to any breach occurring.

A privacy breach occurs when there is unauthorized collection, use, disclosure or disposal of personal information. Common examples of privacy breaches include when the personal information of employees, customers or clients is lost or mistakenly disclosed. This may occur when a computer containing that personal information is lost or stolen, or where personal information is mistakenly emailed to the wrong recipient.


In British Columbia, the BC Office of the Information and Privacy Commissioner recommends the following four steps in responding to a privacy breach:

1. Contain the breach

Take whatever immediate common sense steps you can think of to limit the breach. This may include:

• Immediately stopping the unauthorized practice that created the breach, recovering records, shutting down the system that was breached, revoking or changing access codes or passwords or correcting weaknesses in physical security.

• Activate your breach management policy. If you do not have a breach management policy:

o Designate an individual to lead an initial investigation and make reccomendations.

o Contact your Director or Manager of Privacy or your Privacy Officer.

o Notify the police if the breach involves theft or criminal activity.

• Do not compromise the ability to investigate the breach. Be careful not to destroy evidence that may be valuable in determining the cause or that will allow you to take appropriate corrective action.

2. Evaluate the risks associated with the breach

Ascertain what types of personal information were involved in the breach. Generally, the more sensitive the data, the higher the risk (e.g. higher risk data includes social insurance numbers, driver’s licence and health care numbers and financial account numbers). A combination of personal information is typically more sensitive than a single piece of personal information.

Also, determine how many individuals were affected by the breach, whether the information lost or stolen can be recovered and whether there is a risk of ongoing or further exposure of information.

Identify what the foreseeable harm may be as a result of the privacy breach. Has a personal security risk been created (e.g. physical safety), or is there a risk of identity theft or fraud, loss of business or employment opportunities, or hurt, humiliation or damage to an individual or organization’s reputation? Consider whether your organization will lose public trust, assets or business because of the breach.


3. Notify affected individuals

Notification of affected individuals may be an important damage mitigation strategy in the right circumstances. Review your risk assessment to determine whether notification would be appropriate. Would notification reduce the chances of one of the risked harms occurring?

In deciding whether or not to notify individuals, consider whether your contractual obligations require notification, whether there is a risk of identity theft or fraud that could be avoided, or whether there is a risk of physical harm to that person. These are all factors which may point towards notification.

If you do decide to notify affected individuals, do so directly – by phone, letter or in person. Using multiple methods of notification may in certain cases be the most effective approach. Include in your notification, the date of breach, a description of the breach, and the steps you have taken so far to control or reduce the harm and to prevent further privacy breaches.

In some circumstances it may be prudent to also notify the police (if theft or fraud is suspected), insurers (if required by contractual obligations), professional or other regulatory bodies (if required in your industry) and the Office of the Information and Privacy Commissioner (generally where sensitive information could be used to commit identity theft, there is a reasonable chance of harm and where your organization requires assistance in developing a procedure for responding to the privacy breach).

4. Take preventative steps to avoid future breaches

After immediate measures have been taken to mitigate the risks associated with the breach, it’s time to take a step back and thoroughly investigate its cause. This could require an audit of both technical and physical security.

As a result of your audit, you should develop new long term safeguards against future breaches. Policies should be reviewed and updated to reflect the lessons learned from the investigation and regularly after that. Train staff to know your organization’s updated privacy policies and periodically check that your privacy plan is being fully implemented.

Internet and Email Use

Facebook

Facebook is a social networking website that allows “friends” to post messages, pictures and other attachments on a “wall” for other users to see and comment on. A user’s “wall” is visible to anyone with the ability to see the user’s “full profile”, and different users’ “wall” posts show up in an individual’s “news feed.” Private discussions can also be conducted via Facebook by sending messages


to a person’s inbox similar to email. There are also settings on Facebook which allow users to make their profile “private.” As a large amount of information about one’s “friends” is transmitted to one’s “news feed” (and since many users do not set up their “privacy” settings to only let “friends” see their “profile”), it is very easy to stay in touch with (or to investigate) one’s “friends” or other Facebook members.

Use of Facebook at Work

Just as an employer can limit access to other types of websites to ensure its employees remain productive, an employer may similarly restrict access to Facebook while an employee is at work.

Privacy Issues

The recent phenomenon of new modes of communication such as Facebook raises potential privacy issues. As an example, the posting of information on the web presents the possibility for obtaining information about job candidates and employees alike. While we know of no cases that have dealt with this issue to date, it is possible that Facebook and other social network websites may be subject to rules similar to those applied in the field of email and video surveillance evidence by arbitrators and privacy commissioners. Thus, it can be expected that the use of information collected through mediums such as Facebook by employers may be allowed where there is no expectation of privacy.

The type of privacy that an individual can expect will likely depend upon whether they have kept their information public or restricted access using privacy settings. With respect to an employee’s expectation of privacy, the following is worth noting:

• It could be argued that just as in the email surveillance field, where such materials are accessed at work on work computers, there can be no reasonable expectation of privacy.

• However, it can equally be argued that where Facebook is accessed by password there remains an expectation of privacy that is not disturbed by the fact that it is accessed at work.19

• Facebook is arguably more of a public form of communication than email. As a result, particularly where information is posted without limiting who has access to that information, it can be argued that there is no reasonable expectation of privacy. It is arguably similar to cases where employers have monitored employee behaviour outside of work. As such, it is more likely that information accessed by any user of Facebook is not subject to any expectation of privacy.

• Perhaps a more complicated issue is the use of Facebook information which a user of Facebook has not made available to the general public but that the user has made accessible to a limited

19 This line of reasoning is similar to how many labour arbitration cases have dealt with email use.


group of people (i.e. a small group of “friends”). In these situations, it is arguable that the user has an expectation of privacy similar to that of an individual in his or her home or away from work. The use of a password of another or even the monitoring of someone else’s Facebook account in that situation could amount to a breach of privacy and any evidence collected in that manner might be inadmissible in an arbitration hearing on the same basis that other video or private investigator evidence has been deemed inadmissible in the unionized setting.

It remains to be seen just how arbitrators and privacy commissioners will deal with information and evidence gathered by employers via Facebook. In the meantime, employers can protect themselves by creating internet use policies and by obtaining clear consent from employees to monitor the use of company computers.

Conclusion

Privacy law is a developing field and no more so than with respect to employee “privacy rights” in a technologically advancing workplace. In British Columbia specific privacy legislation has enshrined “privacy rights” for employees and has restricted an employer’s ability to collect, use and disclose employee personal information without employee consent. In Ontario, recent case-law has suggested that non-unionized employees may have a right to privacy that is actionable in the courts. The majority of cases in the unionized setting with respect to biometric scanners and video surveillance have demonstrated that employees do have “privacy rights” in the workplace which must be balanced against an employer’s legitimate business interests.

It is prudent to follow best practices in protecting and respecting employee privacy and employee personal information, and a specific and detailed policy on email and internet use can protect employers and create certainty as to an employee’s obligations. Employers should continue to monitor developments in this area of the law and should review their existing privacy policies and procedures.