Employment & Labour Law In British Columbia

Presented By:

Joe Shaw SFU Engineering Science

February 13, 2003 © 2003 Bull, Housser & Tupper

BULL, HOUSSER & TUPPER _______________ BARRISTERS & SOLICITORS Patent & TradeMark Agents 3000 ROYAL CENTRE • P.O. BOX 11130 • 1055 WEST GEORGIA STREET • VANCOUVER, BRITISH COLUMBIA • CANADA V6E 3R3 TELEPHONE: (604) 687 6575 • FAX (604) 641-4949 E-MAIL: [email protected]

EMPLOYMENT LAW I.

INTRODUCTION: EMPLOYMENT LAW FRAMEWORK

The relationship between a non-union employee and employer is governed by the following regimes: 1.

the common law, which include written contracts;

2.

the Human Rights Code, R.S.B.C. 1996, c. 210;

3.

the Workers’ Compensation Act, R.S.B.C. 1996, c. 492; and

4.

in some cases, the Employment Standards Act, R.S.B.C. 1996 c. 113.

From the above legal regimes, this paper will touch upon the following topics: • • • • •

A.

Common Law obligations • Confidentiality Employment Contracts • Non-Competition Agreements Employment Standards in British Columbia Human Rights Code Workers Compensation Act

THE COMMON LAW

Most employment relationships are not governed by a written employment agreement. Furthermore, in many instances where there are documents between an employee and employer, the document does not include all of the terms of the employment relationship. Where there is no written contract or where the written contract is not complete, the common law will imply terms into the relationship and impose duties onto both the employer and the employee. Under the common law, an employer owes the following duties to an employee: • • •

an employer must not dismiss an employee without cause or reasonable notice. in carrying out any dismissal, the employer must not act in bad faith. an employer must not force an employee to take a demotion, without notice or cause.

Under the common law, an employee owes the following duties to an employer: • • •

to attend at work; to carry out the lawful orders of an employer; to perform his or her duties in a competent manner;

Page 2 • •

to serve his or her employer honestly and faithfully; not to engage in a “conflict of interest”.

In addition to the above, some employees owe increased duties of confidentiality. Disputes arising under the common law are resolved through the Court. (a)

DUTIES OF AN EMPLOYER

(i)

Reasonable Notice

It is an implied term of every employment contract that, absent cause, an employer must provide an employee with “reasonable notice” of termination. Such notice, to be effective, must be clear and unequivocal. The purpose of providing “reasonable notice” is to provide the employee with time to find alternative employment. What constitutes reasonable notice varies from case to case. There is no set formula under the common law upon which to determine reasonable notice. The usual refrain of one month per year is not accurate. “Reasonable notice” under common law is also different from the notice required to be given under the Employment Standards Act, which will be discussed below. When determining what would be a reasonable notice period, employers often consider Court decisions in similar cases. The Court determines reasonable notice on an individual basis but considers the following factors: • • • •

age of the employee; length of service; character of the employment; and availability of similar employment given the training and education of the employee.

In some cases, the notice period will be lengthened where the employee was induced to leave secure or long-term employment to join the employer and was then terminated by the new employer without cause. Notice periods vary widely. Although the Court had indicated that the upper limit of the reasonable notice period was twenty-four months, recent awards exceeding twenty-four months have been made by the Court where the employer has acted in bad faith. (ii)

Cause

An employer is entitled to dismiss an employee without reasonable notice for cause. The employer will bear the onus in any subsequent litigation to prove that it had cause to dismiss the employee without providing reasonable notice. In British Columbia, the Court is generally very reluctant to find that cause exists. The onus placed upon employers is a high one. The employer must show that the employee’s conduct went to “the root of the employment JGS/1085664

Page 3 contract” with the result that the relationship was “too fractured” to expect the employer to provide a second chance. Examples of the type of conduct which has been found to warrant immediate dismissal include: • •

Theft Dishonesty such as lying, and in some instances silence. Not all acts of dishonesty will give the employer the right to dismiss an employee for cause. The Supreme Court of Canada has held that such a determination depends upon the nature and circumstances of the dishonest conduct. The court made the following comments: … I am of the view that whether an employer is justified in dismissing an employee on the grounds of dishonesty is a question that requires an assessment of the context of the alleged misconduct. More specifically, the test is whether the employee’s dishonest conduct gave rise to a breakdown in the employment relationship. … In accordance with this test, a trial judge must instruct the jury to determine (1) whether the evidence established the employee’s deceitful conduct on a balance of probabilities; and (2) if so, whether the nature and degree of dishonesty warranted dismissal. … *** Underlying the approach I propose is the principle of proportionality. An effective balance must be struck between the severity of an employee’s misconduct and the sanction imposed.

Dishonesty may take the form of omission of important information, particularly where the employee is in a position of trust or where the information is of fundamental importance to the employer. Whether the employee lied or whether the employer simply avoided the issue when she knew the issue to be important, the result is the same. •

Wilful disobedience to clear instructions or well-known policies or procedures, without reasonable excuse. The Court has stated: I begin with the proposition that an employer has a right to determine how his business shall be conducted. He may lay down any procedures he thinks advisable so long as they are neither contrary to law nor dishonest nor dangerous to the health of the employees and are within the ambit of the job for which any particular employee was hired. It is not for the employee nor for the court to consider the wisdom of the procedures. The employer is the boss and it is an essential implied term of every employment contract that, subject to the limitations I have expressed, the employee must obey the orders given to him. It is not an answer for the employee to say: “I know you have laid down a rule about this, that or the other, but I did not think that it was important so I ignored it”. But it may be an answer, on the question of whether disobedience is repudiatory, that the employer so conducted himself that the reasonable man would conclude, and the employee did in fact, conclude, that the employer considered the rule of little or no importance. For instance, if an employer had a rule that equipment was to be covered at the end of the day and

JGS/1085664

Page 4 the rule was ignored by the employees to the knowledge of the employer, he could hardly come to work one morning and discharge the lot for failing to obey the rule.

To justify the dismissal on such grounds there is an onus on the employer to establish there were acts wilfully carried out by the employee in defiance of clear and unequivocal instructions of a superior or refusal to carry out policies or procedures well known by the employee as being necessary in the fulfilment of the employer’s objectives. • • •

Insolence and insubordination Conflict of interest, by acting in a manner which adversely affects the interest of the employer; Incompetence Serious or gross incompetence gives rise to the right of an employer to dismiss the employee. Where incidents are sufficiently serious, the plaintiff may be dismissed without warning.

• •

Intoxication, causing harm to the employer. Absenteeism or lateness

Even with respect to theft and dishonesty, the employer must show that it has not “accepted or condoned” the conduct by not dismissing the employee or delaying in dismissing the employee. In most cases, to succeed in dismissing an employee for incompetence, absenteeism or intoxication, the employer must show that it has warned the employee of the consequences of his conduct (that is that the employee’s job is in jeopardy) and given the employee a reasonable time to correct the conduct. Again, the employer must not delay in taking action. (iii)

Bad Faith

In carrying out a dismissal, an employer must not act in “bad faith”. Bad faith has not been defined definitively. The Supreme Court of Canada, however, has stated: The obligation of good faith and fair dealing is incapable of precise definition. However, at a minimum, I believe that in the course of dismissal employers ought to be candid, reasonable, honest and forthright with their employees and should refrain from engaging in conduct that is unfair or is in bad faith by being, for example, untruthful, misleading or unduly insensitive.

The obligation not to act in bad faith is not an independent obligation, there must also be a wrongful dismissal. Therefore, if an employer provided reasonable notice but acted in bad faith when carrying out the dismissal, there is no course of action by the employee. Where an employer is found to have acted in bad faith, the notice period to which the employee is entitled is increased. The purpose of so doing is twofold:

JGS/1085664

Page 5 • •

to compensate an employee for the negative impact such conduct may have on his or her ability to find alternative employment (thereby mitigating his or her damages); and to punish employers for callous and insensitive treatment.

In British Columbia, at least one Court has commented that the duty imposed upon an employer is “not [to] treat an employee unfairly or to create impediments to his or her search for new employment”. The Court is careful not to define too rigidly the types of conduct which may constitute bad faith, nor does the Court merely look at the effect of the conduct on the employee’s ability to find alternative employment. Conduct which does not affect the ability to find alternative employment may be compensated if it caused humiliation, embarrassment or damage to the employee’s self-esteem. Some examples of conduct which amounted to “bad faith” are: • • • • • • • •

• • • •

•

dismissing an employee abruptly, shortly after he had received a favourable review and using “hardball” tactics, including alleging cause, which made it more difficult for the employee to find alternative employment; dismissing an employee one day after giving her a message complimenting her on her performance and making untrue and derogatory comments about her in the close-knit industry in which she worked; wrongfully accusing an employee of theft or fraud and telling potential employers; alleging fraud and refusing to provide a letter of reference; making knowingly false misrepresentations about future employment prospects upon which the employee relies; dismissing a disabled employee on the employee’s return to work from leave; hiring a replacement worker for an employee who was laid-off temporarily, without telling the employee of the termination; dismissing an employee for cause based upon allegations which were not investigated properly, were unsubstantiated and in some cases untrue; and where the employee was employed in a specialized industry with little hope of finding alternative employment in the circumstances; abolishing the employee’s position while the employee was on vacation, and alleging and maintaining cause against the employee after his termination when it was clear that there was no basis; alleging cause after the termination and telling persons outside the company that the plaintiff had been dishonest and had come to work under the influence of alcohol; giving the employee ninety days to improve her performance, but then firing her after forty days for ‘incompetence’; making false statements to potential and an actual future employers; alleging “illegality” and fraudulent conduct, which allegations were only abandoned shortly before trial; and suggesting, then withdrawing, an allegation that monetary incentives were being paid by the plaintiff to salesmen of the defendant; making unfounded allegations in the close-knit industry against the employee of forgery, insurance fraud, mortgage fraud, incompetence, unprofessional organisational abilities, disobedience, drug and/or alcohol abuse, and misuse of a cellular phone;

JGS/1085664

Page 6 •

carrying out the dismissal in public, alleging that the employee had resigned but alleging cause as an alternative, and subsequently offering the same employee a new job with much reduced responsibilities and salary.

The following are examples of conduct which did not constitute bad faith: • • • • • • • • • •

• • • • •

dismissing an employee without cause or reasonable notice; failing to negotiate a severance package; failing to provide a reference and making an allegation of cause which although not successful, was made on some objectively justifiable grounds, coupled with the fact that there was no evidence of emotional trauma or “hard ball” tactics on the part of the employer; maintaining an allegation of just cause until after examinations for discovery; maintaining an allegation of cause unsuccessfully, but where the employee had committed serious errors of judgment; telling an employee that he was being “laid off” when he was, in fact, being terminated, coupled with the fact that there was no significant impact of the conduct on the employee; offering a “take-it-or-leave-it” offer of income continuance, then later attempting to induce the employee to accept the minimum statutory payment in settlement of his claim, where the employer was forthright and did not allege cause; reducing the amount of severance pay offered after the employee refused to sign a release; delay in paying the statutory minimum severance pay and vacation pay; irritability or rudeness on the part of the employer prior to the termination, when the dismissal itself was conducted in private and the fact of the dismissal was kept confidential during the notice period, the employer gave the plaintiff an explanation for her firing which attributed no blame to the plaintiff and gave a laudatory letter of reference; failing to offer an employee who was being terminated at the age of 50, with 31 years service with the government, to ‘bridge’ him to retirement or pay out his accumulated sick time; making a comment to other employees after the termination that the employee “was given ‘umpteen’ chances to improve but never did; eliminating a bonus which constituted constructive dismissal and advising of the elimination in a written memorandum dropped in the employee’s mailbox, all in the context of a deteriorating relationship between the parties; failing to extend early retirement benefits to two employees who had resigned and were working through their notice periods; making an allegation of cause then withdrawing it soon thereafter, coupled with the sudden dismissal of an employee after a long-running dispute between the employee and her superior.

Quantifying the bad faith element of the dismissal is not an easy task. Typically the more egregious the conduct, the higher will be the award, particularly where the conduct hinders the employee’s ability to find alternate employment. In many of the decisions in British Columbia, the Court has not specified the extent to which the notice period was extended as a result of bad faith conduct and the Court of Appeal has stated that the existence of bad faith is just one more of the factors to be considered in determining a reasonable notice period. However, a few cases have indicated extensions of two to six months.

JGS/1085664

Page 7

(b)

DUTIES OF AN EMPLOYEE

All employees owe a general duty of good faith and fidelity to their employer. In addition, certain senior employees, known as fiduciaries, owe special duties to the employer. Such duties exist during the employment and after the employment relationship is terminated. (i)

Confidential Information and Trade Secrets

It is clear that employees are not entitled to use confidential information obtained during the course of employment. However, determining what information is truly confidential is often problematic. One particular type of confidential information which an employee may obtain from an employer is a “trade secret”. Trade secrets include a process, tool, mechanism, formulae, or recipe which is known only to the employer and the employees who are required to know it due to their employment The employer must in fact keep the trade secret “secret”, and must intend to protect the secrecy of the information. A classic example of a trade secret is the recipe or formula for making Coca Cola. It is difficult to establish that certain information is a “trade secret”, but when that is established, employees are bound by their obligations of loyalty and good faith not to disclose or make use of the trade secret in competition with the employer or in circumstances where that information may be used in competition with the employer. In contrast, customer lists often are not considered to be confidential. For example, if a list of customers can be generated from a public document, such as a telephone book or a trade journal, it is difficult for the employer to persuade the Court that the customer names are confidential. However, where a list of the employer’s customers would be difficult to generate, the Court is more inclined to consider the information to be confidential and to deserve protection. Absent a written agreement to the contrary, the current law allows a regular (non-fiduciary) employee to resign from his or her position with a company, start up or join a competitive business, and immediately begin soliciting clients of his or her former employer. This is provided that the employee does not remove any physical property belonging to the former employer, including physical or electronic customer lists, pricing information, client portfolio information or the like. The employee may memorize customer names, then later look up the names of customers in the telephone book, and contact them directly for the purpose of soliciting their business in competition with the former employer. In other words, ordinarily customer names are not necessarily confidential nor is the fact that they are customers of the company. What remains confidential is the document on which their names are printed or the database on which the names are stored.

JGS/1085664

Page 8 (ii)

Competition with Former Employer

Unless there is a written contract or the former employee was a fiduciary, the former employee is entitled to compete with the former employer and solicit the former employer’s customers, so long as the former employee does so without using the former employer’s confidential information. A fiduciary is more restricted in competing with a former employer. A fiduciary may not directly solicit business from customers of the former employer for a reasonable period of time following the termination of the employment. In most cases a fiduciary may not secure a business opportunity belonging to or offered to his or her former employer, even where the company did not and could not have taken advantage of the opportunity, and when the employee did not pursue the opportunity until after the termination of the employment relationship. It is often difficult to determine whether an employee was sufficiently senior to be considered a fiduciary. Senior executives of the companies are likely fiduciaries. Employees who were so involved in the direction and management of a company that he or she was equivalent to a director or officer will generally be considered fiduciaries. Usually a significant senior managerial role, involving greater responsibility than minor supervisory duties, must be established before an employee will be considered by the court to be a key employee with fiduciary obligations to the employer. Before an individual can be considered to be a “key” employee, the following circumstances must exist:

B.

1.

the responsibilities of the employee in question must include the exercise of some discretion or power;

2.

the employee must be able to exercise that power or discretion unilaterally so as to affect the legal or practical interests of the employer; and

3.

the employer must be peculiarly vulnerable to or at the mercy of the fiduciary holding the discretion or power.

EMPLOYMENT CONTRACTS

Employment contracts allow employers and employees to address up front the implied common law duties. Written employment contracts often address such issues: • • • •

what constitutes reasonable notice; confidentiality; ownership of intellectual property; unfair competition.

JGS/1085664

Page 9 In most cases, but not all cases, the Court will enforce the terms of a written contract. In particular, the Court is wary of enforcing contracts which restrict an employee’s ability to earn income after being terminated by the employer. The Court will also not enforce a written contract which violates the Employment Standards Act, which issue will be discussed below. (a)

CONFIDENTIAL AND PROPRIETARY INFORMATION

Written contracts stipulating what information is proprietary, and what information the employee must treat as confidential, can assist an employer to protect its information. An employer can make clear to an employee its expectations of what is confidential and remove or minimize ambiguity. A strong provision in an agreement will also act as a deterrent to an employee who may be inclined to release such information. Simply describing particular information as confidential is not enough. Where the information was not treated as confidential or cannot reasonably be considered proprietary, the Court may decline to enforce the contract against the employee. Generally confidential information is defined in an agreement as widely as possible but confidential information does not include information which is in the public domain or information possessed by the employee before they commenced employment. Accordingly, it is important for employers to take steps to maintain the confidentiality of information it does not want third parties to know. Whether or not confidential information is protected in a contract, proving a breach will often be difficult. An employer may also use Confidentiality Agreements to protect and retain intellectual property developed by the employee during the course of his/her employment and require that any such interest be assigned or transfer to the employer. The scope of the protection can cover work conceived outside regular working hours and work not specifically instructed to be undertaken by the employer. This can remove any dispute as to whether the property was truly developed outside work. (b)

NON-COMPETITION AGREEMENTS AND RESTRICTIVE COVENANTS

In general, the Court seeks to protect employers against unfair competition while protecting a former employee’s ability to earn income through fair competition with the employer. The line between what the Court considers to be fair and unfair competition is exceedingly difficult to draw and will depend on the particular facts relating to the specific employment relationship in question. As a general rule, the Courts refuse to enforce contracts that are in restraint of trade on the basis that all interference with individual liberty of action in trading is contrary to public policy and therefore void. If a contract which interferes with trade falls within certain exceptions, the Court may enforce it. Restrictive Covenants will be enforceable only if they fall within an exception to the general rule, in that they are reasonable in the circumstances.

JGS/1085664

Page 10 Restrictive covenants typically will restrain an employee from engaging in a competitive business in any capacity for a certain period of time in a certain geographic area. The Court will allow enforcement of a non-competition agreement where the restriction is reasonable with reference to the interest of the parties concerned and the interest of the public at large. The employer’s primary interest is to prevent an employee from unfairly using the employee’s confidential knowledge or special relationship to compete. The scope of the restriction must be reasonable when viewed against each individual employee’s interests. “One size fits all” contracts are at risk of being too broad to be enforced against a specific employee unless the lowest common denominator is used. The courts will not fix the clause if it is found to be too restrictive. The whole clause will be unenforceable. The Court will not ‘blue pencil’ restrictive covenant clauses. The term ‘blue pencil’ refers to the practice of inserting alternatives into a restrictive covenant clause. For example, the clause may state that the employee will not compete in (a) Canada or, in the alternative, (b) British Columbia, for a period of (a) 5 years, or, in the alternative, (b) one (1) year. The Court often focuses on whether the scope of the restriction on the employee is overly broad. For example, an employer who seeks to restrain an employee from competing altogether with the employer’s business will often find that the Court will not enforce the contract. By contrast, the Court is more likely to enforce a contract which restrains an employee from contacting only those particular customers with which the employee had contact during a limited time before the termination of the employment relationship, or prohibits competition only in that aspect of the business in which the employee was involved or prohibits an employee from soliciting remaining employees. Other circumstances such as the source of the business connection may be relevant in determining whether such clauses would be enforceable. Restrictions which are too broad geographically, or too long in time will be unenforceable on the basis that they are an illegal restraint of trade.

C.

EMPLOYMENT STANDARDS ACT IN BRITISH COLUMBIA

(a)

INTRODUCTION

Employment standards in British Columbia are governed by the Employment Standards Act (the “Act”). The purpose of the Act is to provide employees in British Columbia with at least basic standards of compensation and conditions of employment. The Act provides minimum standards. Employers and employees are free to enter into agreements which provide higher standards than the Act but cannot enter into an agreement which offers less than the Act. (b)

TO WHOM DOES THE ACT APPLY?

JGS/1085664

Page 11 The Act applies to all employees in British Columbia unless the employee is specifically exempted from the Act. The exemptions are contained within the Employment Standards Regulation. Some employees, such as professional engineers and lawyers, are exempted from the operation of the Act as a whole. Other employees, such as managers and “high technology professionals” are exempt only from portions of the Act. (c)

WHAT IS THE SCOPE OF THE ACT?

The Act regulates the following areas: • • • • • • • • • • (d)

minimum wages pay days how wages are paid deductions and assignments wage statements and payroll records hours of work and overtime statutory holidays and vacations pregnancy leave and parental leave jury duty notice periods and termination MINIMUM WAGES

The minimum wage is currently $8.00 per hour. The only exceptions to the minimum wage are in respect of live-in home support workers, live-in day camp leaders, resident caretakers and farm workers. The minimum wage is calculated on a different basis for such workers. For employees who have no paid work experience before November 15, 2001, the first job/entry level minimum wage of $6.00 per hour applies. However, after they have worked for a total of 500 hours with one or more employers, these employees are entitled to the regular minimum wage.

JGS/1085664

Page 12

(e)

HOURS OF WORK AND OVERTIME

The following is a table which outlines the rights of various employees. REGULAR EMPLOYEES

Must pay overtime after: 8 hours per day OR 40 hours per week Must pay statutory holiday pay. Must give 24 hours’ notice of any change in shift. Must give a 30 minute meal break after 5 hours of work. Split shifts must be completed within 12 hours. Must pay a minimum daily pay of 2 hours. Must give 32 hours free from work each week.

(f)

LAWYERS, HIGH TECHNOLOGY PROFESSIONALS No overtime pay (But no excessive hours) No statutory holiday pay No notice required No meal break No limit on split shifts. No minimum daily pay. No work-free period.

OTHER EMPLOYEES OF HIGH TECHNOLOGY COMPANIES Must pay overtime after: 12 hours per day OR 80 hours per two weeks Must pay statutory holiday pay. Must give 24 hours’ notice of any change in shift. Must give a 30 minute meal break after 5 hours of work. Split shifts must be completed within 12 hours. Must pay a minimum daily pay of 2 hours. Must give 32 hours free from work each week.

VACATIONS

Under the Act, employees are entitled to two weeks of vacation per year after one year of employment and after five years of employment, the employee is entitled to three weeks. After one year of employment an employee is entitled to vacation pay of 4% of his annual income and after five years of employment, 6%. (g)

MATERNITY LEAVE

This part of the Employment Standards Act applies to most employees. An employee wishing to commence maternity leave may do so commencing no sooner than 11 weeks immediately before the anticipated date of birth. The employee must request the leave in writing at least 4 weeks before the day the employee proposes to begin the leave. The employer may require that the leave request be accompanied by a medical certificate stating the expected or actual date or the date the pregnancy terminated or the reasons requesting additional leave. The employee is entitled to up to 17 consecutive weeks leave of absence without pay which may commence at any time up to 11 weeks prior to the delivery. Additionally, if, for reasons related to the birth of the child the employee is unable to return to work, further leaves of absence may be taken for up to an additional 6 consecutive weeks. An employee shall not return to work before the expiration of 6 weeks following the actual date of birth of the child unless:

JGS/1085664

Page 13

(i) the employee makes a request in writing to the employer at least one week prior to the date of return to work; and (ii) if required by the employer, she furnishes the employer with a certificate from a medical practitioner stating that she is able to resume work. In cases where a pregnancy has terminated prior to actual birth or where birth was premature resulting in the employee being unable to make the normal written request for leave of absence, then upon the employee’s request, the employee may be granted a leave of absence without pay for up to 6 consecutive weeks. A request for maternity leave must be made in writing at least 4 weeks before the employee proposes to begin his or her leave. An employer may require requests for maternity leave be accompanied by a medical practitioner’s certificate stating the expected or actual birth date or the date the pregnancy terminated. The Employment Standards Act prohibits the employer from terminating an employee for reasons relating to the pregnancy. Additionally, an employer is prohibited from changing the conditions of employment for reasons related to the pregnancy unless it first obtained the employee’s written consent. (h)

PARENTAL LEAVE

In addition to the 17 weeks of maternity leave, a birth mother may take up to an additional 35 unpaid weeks as parental leave. A maternity leave and a parental leave must be taken consecutively for a maximum total leave of absence of 52 weeks. If no maternity leave is taken, a birth mother may take an unpaid parental leave of 37 weeks, to be completed within 52 weeks after the birth of the child. Birth fathers and adoptive parents are entitled to a parental leave of absence, without pay, for a period of up to 37 weeks, to be completed within 52 weeks after the birth of the child or after the child is placed with the adoptive parent. A birth father, birth mother, or an adoptive parent may take up to 5 additional weeks of unpaid leave, beginning immediately after a parental leave, if the child has a physical, psychological or emotional condition requiring an additional period of parental care. A request for parental leave, with the exception of a request for parental leave made by a birth father or an adopting parent, must be made in writing at least 4 weeks before the employee proposes to begin his or her leave. An employer may require requests for parental leave be accompanied by a medical practitioner’s certificate or other evidence of the employee’s entitlement to leave.

JGS/1085664

Page 14 (i)

EFFECT OF MATERNITY AND PARENTAL LEAVES

An employer is not required to pay an employee during maternity or parental leave. Employees can claim benefits for these leaves under the Employment Insurance Act. The service of an employee who is absent from work due to pregnancy is considered continuous for the purposes of vacation entitlement, vacation pay, severance pay and notice of termination, and any pension, medical or other plan beneficial to the employee. The employer shall continue to make payments to such plans in the same manner as if the employee were not absent if the total cost of the plan is normally paid by the employer. The employee may elect to continue to pay his or her share of any plan that is paid jointly by the employer and the employee, in which case employer contributions must continue as well. The employee is entitled to all increases in wages and benefits the employee would have been entitled to had the leave not been taken. (j)

NOTICE PERIODS AND TERMINATION

The following notice periods are required under the Act: Length of Service

Notice Required

0-3 months 3-12 months 1-2 years 2-3 years 3-4 years 4-5 years 5-6 years 6-7 years 7 years plus

0 1 week 2 weeks 3 weeks 4 weeks 5 weeks 6 weeks 7 weeks 8 weeks

The notice periods required by the Act are lower than the notice periods required by common law. Accordingly, an employee may seek both common law notice and notice under the Act.

JGS/1085664

Page 15 (k)

EFFECT OF WRITTEN EMPLOYMENT CONTRACTS

Written contracts may appear to offer a way to avoid some of the provisions of the Act. However, section 4 of the Act provides that any provision of an employment agreement which violates the Act is of no effect. Upon that basis, the Employment Standards Tribunal and the Court will only give effect to a contract which meets or exceeds the provisions of the Act Under section 4, an employee cannot agree to waive the protections guaranteed by the Act. Even if the employee agrees in writing to waive the protections under the Act, he can change his mind. Upon the basis of section 4, the Employment Standards Tribunal has struck down the following types of agreements: • • • • • • • •

waiver of minimum wage; working for free, on a trial basis; paying wages late; paying straight time for overtime worked; working as an independent contractor; permitting deductions for salary of such items as property damaged or lost by the employee; calculation of salary to include overtime; setting the reasonable notice period at thirty days.

An employer and an employee may enter into a contract which provides better terms than an employee would get under the Act alone. In such an instance, the employer would be bound by the contract. (l)

HOW ARE COMPLAINTS MADE UNDER THE ACT?

Beginning in 2002, in an effort to encourage employees to try to solve problems in cooperation with their employer, the Branch implemented a new complaint resolution process. The Branch now requires that, except under very unusual circumstances, a new Employment Standards Self-Help Kit be completed and given by the employee to his or her employer before a complaint can be made. The Kit attempts to help define the problem and provides materials to assist in resolving the problem prior to the formal complaint process. For example, in order to assist with wage problems, the Kit includes a letter to the employer, written by the Branch, along with a detailed Request for Payment form. If the use of the Self-Help Kit does not resolve the problem, the employee must make a written complaint to the Branch. Complaints may be made at any time while an employee is still employed but must be made within six months of the last day on which the employee worked. Complaints can go back for a period of six months. For example, if an employee claims she is entitled to overtime, she can make a claim for overtime pay up to six months after she stops working and that claim would cover the previous six months of her employment.

JGS/1085664

Page 16 After a complaint is made, the Director must accept and review the complaint and may conduct an investigation. Prior to making a determination, and in accordance with the complaint resolution process, the Director may arrange a mediation session between the parties. If the parties agree on a solution, the Director may draft a settlement agreement. Otherwise, the Director of Employment Standards will issue a Determination. A party may appeal a Determination to the Employment Standards Tribunal. The Tribunal may: • • • •

refuse to hear an appeal; decide the appeal on the information it already has before it; accept submissions in writing; conduct a full hearing.

If the Tribunal conducts a hearing, it will not hear evidence which was not made available to the investigator. Accordingly, the parties to a complaint should co-operate fully with the Director when an investigation is being carried out. (m)

REMEDIES UNDER THE ACT

Under the Act, the usual remedy is that an employees are paid compensation. However, if the employee is dismissed as a result of requiring leave under the Act or the employer misrepresents the nature of the position to a potential employee, that employee may be re-instated to the original position or paid compensation in lieu of reinstatement. The employer may also be required to pay the employee or other reasonable and actual expenses incurred because of the contravention. Section 79(4) provides the remedy: (4)

In addition, if satisfied that an employer has contravened a requirement of section 8 or Part 6, the director may require the employer to do one or more of the following: (a) hire a person and pay the person any wages lost because of the contravention; (b) reinstate a person in employment and pay the person any wages lost because of the contravention; (c) pay a person compensation instead of reinstating the person in employment; (d) pay an employee or other person reasonable and actual out of pocket expenses incurred by him or her because of the contravention.

In the Tribunal decisions thus far, reinstatement has not been awarded. compensation is awarded. The Tribunal has described the remedy as follows:

In most cases,

In our opinion, Section 79(4) is perhaps the most restorative remedial provision in the Act, giving the Director broad jurisdiction to place the terminated employee in the same position he or she would have been in but for the wrongful action of the employer. As a remedial provision, it calls for a liberal and broad interpretation: Machtinger v. Hoj Industries Ltd. (1992) 91 D.L.R. (4th) 491 (S.C.C.). In our view, the remedies under the Act must be fair, compensatory and promote compliance. These principles are reflected in the purposes of the Act set out in Section 2 and the Act itself. With respect to compensation, the general principle of damages must be to put the individual in the same position the individual would have been in but for the breach of the statutory obligation.

JGS/1085664

Page 17 Section 79(4) permits a remedy not available at common law. We are not in any way limited to, for example, such damages as might have been awarded in an action for wrongful dismissal. In our view, the statutory remedy should not be narrowly constructed and we have the power to fashion a remedy that is fair, compensatory and promotes compliance with the Act. In short, the remedy depends on the extent of the injury suffered because of the breach. Some of the factors we have considered are those relied on by the Tribunal in a recent decision Afaga Beauty Service Ltd. (BCEST # D318/97): length of employment with the employer; the time needed to find alternative employment; mitigation efforts undertaken; other earnings during the period of unemployment; projected earnings from previous employment; etc. The Tribunal is not limited to considering only those factors as which factors are appropriate will depend on the specific circumstances of each appeal. We do not agree with the Director that Ms. Prickrell's entitlement to compensation extends to the date of the Determination (November 4, 1997). As noted above, there was an inordinate and unexplained delay between the date of Ms. Prickrell's complaint and the date of the Determination. We consider that compensation for "loss of employment" is included in the total amount of compensation to which Ms. Pickrell is entitled when we adopt and apply the various factors enunciated above and in Afaga Beauty Service Ltd. (BCEST # D318/97).

In that decision, the pregnant employee was dismissed on September 20, 1995, ostensibly for cause. She gave birth to her child in October, 1995. The compensation she was awarded was in the Determination was lost wages from the date of her dismissal to the date of the Determination, some two years later. There have been determinations where damages have been awarded for emotional pain and suffering - usually under the heading of “expenses”. However, the Tribunal has found that such damages are not provided under the Act but fall within the scope of the Act. (n)

OVERLAP BETWEEN THE COURT AND THE ACT

The following actions are ones which can be pursued through the Court: • • •

a claim for damages for wrongful dismissal; a claim for damages for the breach of any term of an employment contract; an action in debt to recover amounts owing to the employee.

The above actions overlap with certain provisions of the Act: such as the right to severance pay, unpaid wages. There may also be overlap where there is a contract of employment which deals with vacation pay, overtime and statutory holiday pay. (o)

THE EFFECT OF SECTION 118 OF THE ACT

The Act itself contemplates that there will be an overlap of rights and avenues to pursue. Section 118 of the Act provides: Subject to section 82, nothing in this Act or the regulations affects a person's right to commence and maintain an action that, but for this Act, the person would have had the right to commence and maintain.

Section 82 of the Act provides:

JGS/1085664

Page 18

Once a determination is made requiring payment of wages, an employee may commence another proceeding to recover them only if (a) the director has consented in writing, or (b) the director or the tribunal has cancelled the determination.

Thus, section 82 prohibits concurrent actions to recover wages which are the subject of a determination. What claims may not be brought in the Courts? • •

D.

Claims in respect of which a determination is made: section 82. However, since the limitation period for unpaid wages extends back only two years under the Act, there may still be a right on the part of the employee to seek unpaid wages going back beyond that time. Claims for vacation pay, overtime, minimum wage, etc. where there is no contractual right to such pay.

HUMAN RIGHTS CODE

In 1974, the Human Rights Code came into operation. This legislation has now been superseded in 1984 by the Human Rights Code. (a)

DISCRIMINATORY PUBLICATION

The Human Rights Code prohibits any person (which includes an employer) from publishing or displaying before the public a notice, sign, symbol, emblem or other representation indicating discrimination or an intention to discriminate against a person or class of persons in any manner prohibited by the Act. (b)

DISCRIMINATION IN EMPLOYMENT ADVERTISEMENTS

The Human Rights Code prohibits any person from publishing an advertisement in connection with employment or a prospective employment that expresses a limitation, specification or preference as to race, colour, ancestry, place of origin, political belief, religion, marital status, physical or mental disability, sex, sexual orientation or age unless a limitation, specification or preference is based on a bona fide occupational requirement. (c)

DISCRIMINATION IN WAGES

The Human Rights Code provides that an employer shall not discriminate between his male and female employees by employing an employee of one sex for work at a rate of pay that is less than the rate of pay at which an employee of the other sex is employed by that employer for similar or substantially similar work. The concept of skill, effort and responsibility is used to determine what is similar or substantially similar work.

JGS/1085664

Page 19 The Human Rights Code provides that a difference in the rate of pay between employees of different sex based on a factor other than sex does not constitute a failure to comply with the Human Rights Code where the factor on which the difference is based would reasonably justify the difference. Examples might include a seniority system or an incentive program. The Human Rights Code also prohibits an employer from reducing the rate of pay of one employee in order to comply with this section. In situations where an employee is paid less than the rate of pay to which he is entitled under this section, he is entitled to recover from his employer the difference between the amount paid and the amount to which he is entitled, together with the costs, but no action can be commenced later than 12 months from the termination of the employee’s services and the action applies only to wages of an employee during the 12 month period immediately preceding the date of the termination of his services or the date of the commencement of his action, whichever date occurs first. (d)

DISCRIMINATION IN EMPLOYMENT

The Human Rights Code prohibits a person from refusing to employ or refusing to continue to employ a person or discriminating against a person with respect to employment or any term or condition of employment because of the race, colour, ancestry, place of origin, political belief, religion, marital status, family status, physical or mental disability, sex, sexual orientation or age of that person or because of his conviction for a criminal conviction charge that is unrelated to the employment or to the intended employment of that person. Age discrimination is prohibited only in respect of persons between the ages of 19 and 65. This provision does not apply as it relates to age, to any bona fide scheme based on seniority, or as it relates to marital status, physical or mental disability, sex or age, to the operation of any bona fide retirement, superannuation or pension plan or to a bona fide group or employee insurance plan. Also the provision does not apply with respect to a refusal, limitation, specification or preference based on a bona fide occupational requirement. (e)

THE QUESTION OF INTENTION

The prohibitions in the Human Rights Code apply to practices whether or not there was an intention to discriminate. (f)

WHAT IS A BONA FIDE OCCUPATIONAL QUALIFICATION?

The Human Rights Code provides for discrimination in employment decisions if it is based on a bona fide occupational qualification or requirement. Bona fide occupational qualifications or requirements, depending on the legislation in use, have been dealt with extensively in human rights cases. It is the employer’s obligation to show that a bona fide occupational requirement exists. This was addressed in Ontario Human Rights Commission et al. v. The Borough of Etobicoke (1982) 40 N.R. 159 (S.C.C.), where Mr. Justice McIntyre stated at pp. 165-66:

JGS/1085664

Page 20 To be a bona fide occupational qualification and requirement a limitation, such as a mandatory retirement at a fixed age, must be imposed honestly, in good faith and in the sincerely held belief that such limitation is imposed in the interests of the adequate performance of the work involved with all reasonable dispatch, safety and economy, and not for ulterior or extraneous reasons aimed at objectives which could defeat the purpose of the Code. In addition, it must be related in an objective sense to the performance of the employment concerned, in that it is reasonably necessary to assure the efficient and economical performance of the job without endangering the employee, his fellow employees and the general public. The answer to the second question will depend in this, as in all cases, upon a consideration of the evidence and of the nature of the employment concerned.

E.

WORKERS’ COMPENSATION ACT

British Columbia employers are required to register with the Workers Compensation Board (“WCB”) and abide by its scheme. The scheme set up under the Workers’ Compensation Act allows workers to be compensated for lost wages and expenses as a result of work place injuries and illnesses. The employer pays for this scheme through assessments as a percentage of payroll. The amount of assessments are based on the inherent danger of the employer’s industry and on the employer’s experience rating. The more accident prone the employer’s work place is, the higher its assessments will be. The benefit of the scheme to the employer is that the Act bars employees from suing their employers or other employers for additional monies as a result of a work place injury or illness. Occupational health and safety is also governed by this Act. The WCB has many inspectors responsible for enforcing safety standards and the WCB is given extensive powers to compel employers to provide a safe work environment.

JGS/1085664

Page 21

LABOUR LAW THE UNIONIZED WORKPLACE - THE EFFECTS OF UNION CERTIFICATION I.

INTRODUCTION: DEALING WITH LABOUR LAW

(a)

Why is Labour Law So Different From Employment Law?

Many aspects of the law can be understood intuitively, because they evolve out of a social consensus regarding what is right and wrong. It is not difficult, for instance, to understand that an employee cannot be terminated without notice unless there is just cause. It is a rule based on notions of fairness. Labour law, however, is different from many other areas of law. Unlike many other areas of law labour law is built around “collective” rights, not individual rights. This fundamentally changes the employer-employee relationship. Also, many of the contentious rules embodied in the British Columbia Labour Relations Code are not the result of social consensus, but rather represent a series of codified initiatives by powerful opposing political forces. (b)

Entering a Different World

This paper is written from the employer’s prospective and focuses on perhaps the two most important times in labour relations; the period leading up to and the period immediately after a union has successfully organized a workforce and has become certified as the representative for a particular group of employees, the “bargaining unit”. These are the periods when the workplace will come under the most intense scrutiny from outside. Short of a strike or lockout situation, it may also be the tensest period in the relationship between employees and management. II.

THE CERTIFICATION PROCESS

The British Columbia Labour Relations Code (the “Code”) provides that every employee is free to join a union and participate in its activities. It is an unfair labour practice under the Code for anybody to interfere, or attempt to interfere with an employee’s right to participate in a trade union by discriminating, threatening or penalizing an employee. The certification process commences when the union files an application for certification with the British Columbia Labour Relations Board (the “Board”). The Board is a independent, neutral administrative tribunal that decides matters involving, unions, employees and employers under the Code. When a union files an application for certification, what it is seeking is to be recognized as the exclusive representative or bargaining agent for a group of employees. Once certified, the employer can no longer bargain with individual employees with respect to terms and conditions

JGS/1085664

Page 22 of employment. Upon certification, an employer must bargain with the union who acts as the exclusive bargaining agent for the employees. The process by which a workplace becomes “orgainzed” usually begins long before an application is made to the Board. Sometimes employees in non-unionized workplaces contact a union to help organize the workplace. A growing tend has seen unions actively targeting traditionally non-unionized sectors in an attempt to increase certifications. An example of this is the attempts by the Canadian Autoworkers (CAW) to organize McDonald’s and Starbucks as well as other service sector employers. In order to increase there profile, unions will hold information meetings, distribute leaflets and partake in other forms of advertising to spread its message. During an organizing campaign, employees who support the union sign membership cards. By signing a membership card an employee is saying “yes, I want to join the union and have the certified union represent me and my co-workers.” If the union has support from at least 45%, the Board will order a secret ballot vote to determine certification. If a vote is held, the union will be certified if it gets a majority vote in favour of certification. The Code also gives the Board authority to grant automatic certification if the Board determines that unfair labour practices prevented the union for obtaining the required support. Employees who do not sign membership cards or who vote against a union will still be represented by the union if the union obtains the required support for certification. Employees who initially sign membership cards can revoke their support for the union. Employees have until the end of the day on which the union submits its application to the Board to revoke their membership card. To revoke membership, an employee must deliver a signed, written letter revoking their membership to both the union and the Board. The letter must state that the employee wants to cancel their membership in the union. The letter must be dated and include the proper name of the union, the union local number and the employer’s name. III.

PRE-CERTIFICATION ISSUES

(a)

Why Employees Join a Union

Many employers assume that the reason employees want to join a union is because of money and benefits. The fact is that theses are rarely the reasons for unionization. According to one study, the following are the top reasons given for employees to join a union: (i)

the company only gave employees a minimum amount of information about the company’s economic state, goals, achievements, etc.

(ii)

the company introduced changes in procedures and policies without advance notice or subsequent explanation

(iii)

the company made key decisions affecting employees without soliciting their opinions or advice

JGS/1085664

Page 23

(iv)

management downplays or ignores employee dissatisfaction

The underlying theme of theses factors is communication, or lack thereof. The problem of poor communication can often be traced to a poor manager or management team. Lack of effective upward and downward communication between employees and management is a prime reason for union success. Poor communication often results in employees feeling disenfranchised and leads to an “us/them” attitude towards management. Another survey conducted in 600 unionized companies revealed the motivation of employees who signed union cards in order of importance as follows: (i)

fair treatment of complaints

(ii)

good prospects of job security

(iii)

management awareness of employee qualifications and goals

(iv)

praise and credit for good suggestions

(v)

corrections made in friendly and constructive way

(vi)

raises in pay based on merit

(vii)

promotion of most qualified employee - no favouritism

(viii) praise and recognition for better than average performance

(b)

(ix)

management expectations of a reasonable amount of work

(x)

wages comparable to that of the going rate in the community

Union Organizing Techniques

Most unions employ “organizers” who’s job it is assist and encourage non-unionized workplaces to become certified. Organizers are specialist in their field. The know the industry they are organizing and know what employees are looking for. Organizers are usually skilled sales people who speak the language of workers and are able to trigger the sour spots of disgruntled workers. Organizers will research both the employees and the company. Employees can usually be divided into three groups: those ready to join with little or no effort; those ready to join after convincing; those that will never join. They will also research the company, including: its history, financial condition, management style, customers, work practices and wages and benefits.

JGS/1085664

Page 24 Any successful campaign requires secrecy, expediency; information (list of employees, phone numbers, addresses) and intensity. Organizers goal is to get employees to sign membership cards. Some of the tactics employed to induce sign-ups include: (i)

use of people of influence to campaign

(ii)

logical persuasion

(iii)

peer pressure - everyone else has signed

(iv)

threats (this is illegal)

(v)

promises (e.g. wage increase; job security)

(vi)

persistence

(vii)

ego gratification

(viii) misrepresentation (e.g. sign up for more information) (c)

The Cost of Unionization

Employees who join a union are generally required to pay union dues to the union. These amounts are often a % of wages or set amount that is deducted by the employer and remitted to the union on the employees behalf. The cost to management however, is often far greater. There are the obvious costs, including strikes and compensation increases, but there are other costs. Some surveys have indicated that in newly unionized organizations, administrative expenses increased by as much as 20%. Some of the increased “costs” to management include: (i)

creation of divisiveness in the workplace due to splitting of employees into pro-union and anti-union groups

(ii)

loss of flexibility in dealing with employees

(iii)

loss of flexibility in serving customers

(iv)

productivity and efficiency losses due to the classification of jobs and restrictions on work assignments

(v)

loss of individual compensation determinations

(vi)

selection of people for promotion weakened: seniority may take precedent over skill and ability

JGS/1085664

Page 25 (vii)

ease and speed of handling employee discipline erodes including difficulty in removing problem employees

(viii) costs of preparing for and carrying on bargaining, including lost employee time (d)

What Management Can and Cannot Say to Employees - Pre-Certification

The Code, in protecting the right of employees to join a trade union, restricts what management can say to employees. A company that wants to make its views known must not only be careful about what is said but also the way in which it is said. Recent amendments to the Code appear to be intended to allow for greater free speech in the area of employer communications, however, we are still awaiting guidance from the labour relations board on who the amendments will be interpreted. Generally speaking, the Code allows employers to communicate to employees information concerning the employer’s business. The employer is not supposed to get involved in the decision of employees to support or not to support a union and therefore any comments made on the issue of whether to join the union or not to join the union are potentially unlawful. Employers must be careful to ensure that any comments that they can say are said in circumstances that are not coercive or threatening. (i)

What employers can say to employees:

•

Employers can tell employees how an application for certification by the trade union to the Board will be decided.

•

Employers can tell employees that joining a trade union is their own decision, that it is an important decision and that no one has the right to coerce, threaten or intimidate them.

•

Employers can tell employees that it cannot advise them about their obligations and that they should ask for a copy of the trade union constitution in order to understand the trade union’s rules, disciplinary powers and membership dues requirements.

•

Employers can tell employees that they can choose whether or not to talk to trade union organizers.

•

Employers can explain existing Company policy on wages, promotion, layoffs and other matters.

• Employers can advise employees of their freedom of choice to join or not to join a trade union and that they do not have to sign membership cards to maintain their current employment.

JGS/1085664

Page 26 • Employers can tell employees that there will be no automatic increase in wages or benefits just because a trade union is certified to represent employees. •

Employers can explain how bargaining works and that both sides would be required to bargain in good faith but good faith bargaining does not require either party to agree to all the other’s demands.

•

Employers should listen to employees concerns or grievances but not make any immediate promises.

(ii)

What employers cannot say to employees:

•

Cannot threaten a loss of jobs if a trade union becomes certified.

•

Cannot make promises to employees conditional upon the outcome of the trade union’s organizing effort.

•

Cannot threaten employees with the loss of fringe benefits or a reduction in wages.

•

Cannot tell employees that the Company will refuse to bargain with the trade union if it is certified.

•

Cannot ask employees to wear “pro Company” or “anti-trade union” insignia.

•

Cannot allow anti-trade union or pro-union employees to use the company facilities such as fax machines or e-mail for campaign purposes.

•

Cannot suggest to employees that they ask the trade union to return, or otherwise suggest that they revoke, their trade union cards.

•

Cannot tell employees not to sign a membership card, or that not signing a membership card is an expression of confidence in the Company.

•

Cannot ask employees whether they or other employees have signed trade union membership cards.

•

Cannot cause or encourage rumours that management knows who has signed trade union membership cards.

•

Cannot treat anti-trade union employees more favourably than pro-trade union employees.

•

Cannot treat employees who are sympathetic to a trade union any differently from other employees with respect to work assignments, overtime, discipline or other matters.

JGS/1085664

Page 27

IV.

THE IMMEDIATE IMPACT OF CERTIFICATION IN THE WORKPLACE

(a)

New Duties Imposed on Employer

As soon as a union is certified, a host of new duties are imposed upon the employer. Some of the more significant considerations are set out below. (i)

Freeze on Discipline / Termination

Section 45 of the Code prevents an employer from terminating or disciplining an employee within four months of certification or until a collective agreement is reached. The purpose for this provision is to balance the interest of employees rights to join or participate in lawful union activities and management’s rights to manage the business. The four month statutory freeze period has been found necessary because of the potential for abuse during the sensitive periods of certification and collective bargaining. Subsection 45(4) of the Code however, allows an the employer to suspend, transfer, lay off, discharge or otherwise discipline an employee for “proper cause”. In this context, “proper cause” is not the same as the concept of “just cause”. An employer may consider in its decision to terminate ‘valid and reasonable’ economic reasons, but can be called upon to establish at the Board that the economic reasons were valid. The Board has held that an employer must establish some “reasonable relationship” between the alleged employee misconduct and the employer response. The test is whether the employer can advance a reasonable explanation which objectively demonstrates a rational connection between the alleged misconduct and the discipline which was imposed. An employer must go further than establishing there was “some cause” for the imposition of discipline. The Board must be satisfied that there was “proper cause”. The Board will go beyond looking at the incident that directly led to discipline. The Board will review the steps taken by the employer to investigate the incident, the relevant factors taken into account by the employer and the rationale for the penalty chosen. This can require an examination of the nature of the employer’s operation and manner in which similar circumstances have been addressed previously by the employer. The employer must show that it acted in a bona fide manner and that it was not influenced by extraneous or improper factors. The Board will also consider the employee’s involvement in the union, the employer’s knowledge of the union of the employee’s activity and whether or not the employer gave the employee an opportunity to explain the circumstances behind the conduct. The test is not the same as the “just cause” requirement in the Code. The Board will show greater deference to the employer’s decision than would an arbitrator. If there has been a serious breach of the employment relationship, the Board will not likely interfere with the employer’s decision. The Board will not substitute its own personal view for that of the employer except in situations such as those where a persuasive mitigating factor was not considered or the penalty was out of proportion to the misconduct. The Board will still examine discharge cases closely

JGS/1085664

Page 28 because of the significant consequence to the employee, as well as broader implications for effective collective bargaining. Of course, if anti-union animus is any part of the employer’s motivation, the discharge will be found to be unlawful. For instance, an employer who dismissed its entire catering division after certification was held to have breached the provisions of the prior Industrial Relations Act; even though it had valid economic reasons for contracting out the catering work, it did not need to do during the freeze period: Cheni Gold Mines Inc. and International Union of Operating Engineers Local No. 115 and Tunnel and Rock Workers Union, Local No. 168 (May 10, 1989, No. C105/89). However, in that same case, the employer was found to be within its rights to dismiss an employee in the catering division who had consumed the employer’s alcohol on the job. The Board has sent a clear message that, if an employer wishes to make a change during the freeze period, it should have the matter adjudicated before proceeding with the implementation of its plans: see Cheni Gold Mines, above. In fact, in one case where an employer had laid off employees and sold or moved equipment to its US operations, the Board found that, had the employer made an application pursuant to (now) section 45, it would likely not have been in breach, although some conditions may have been attached. Despite the fact that the layoffs and sale of equipment were for valid business reasons, the company’s failure to seek prior approval was fatal to its argument. (ii)

Freeze on Other Changes

Section 45 of the Code provides that once a union is certified, the employer must not increase or decrease the rate of pay of an employee in the bargaining unit, or alter another term or condition of employment for a period of 4 months, or until a collective agreement is executed, whichever occurs first. There is discretion in section 45 for the Board to authorize a change upon an application by the employer, with whatever conditions the Board sees fit to impose. The Board has stated that section 45 will be given a fair, large and liberal interpretation, to provide a period of calm following certification and to facilitate the beginning of collective bargaining. This obligation is often described as creating a “level playing field” for bargaining. This is premised on the concern that employers may try to “punish” employees who form a union by changing terms and conditions of employment, or at least to “chill” bargaining and undermine the union. This issue often arises in respect of planned or annual wage increases that come up shortly after a certification. The concern can arise with both the importance of increases and the denial of increases in wages. The general rule of thumb is that the employer must adopt a ‘business as before’ policy. An employer may be required to implement regularly-scheduled wage increases after certification, even though the employer is about to enter collective agreement negotiations over all issues including wages. However, if wage increases (such as ‘cost of living allowances’) are at the sole

JGS/1085664

Page 29 discretion of the employer, and none have been announced for the freeze period, the employer need not implement them: Redwood Plastics Corp and CAIMAW Local 1 (B.C.), BCLRB No. C98/90, Appeal dismissed BCLRB No. 165/90. It has also been held that, under some circumstances, an employer must implement a “new” wage increase plan for the bargaining unit during the freeze period, if the employer is implementing such a plan in its other places of business. The point is that there must be no implied “message that the Union is responsible for decreasing a raise”: Rogers Cablesystems Ltd. (Re), BCLRB Letter Decision No. B283/97. The Board is particularly sensitive to situations where the employer gives the increase to non-union employees but withholds it for union employees. As in discipline during the freeze period, an employer may cite an economic rationale for any changes, but if part of the reason for changes is an ‘anti-union’ animus, this defence will be unsuccessful. Some changes that have run afoul of section 45 have included: •

changes to lunch breaks or smoke breaks: Ventur Steel (1990) Ltd. and United Steelworkers of America, Local 8637 (BCLRB No. B310/96); and

•

refusal by employer to implement discretionary performance bonus programs used in its other, non-union locations: The Canada Trust Company and B.C.G.E.U, (BCLRB No. B173/97).

•

a change to the manner in which tips were calculated: Isadore’s Cooperative Restaurant, (BCIRC No. C119/87).

(iii)

Exclusive Bargaining Agency

The Code stipulates that, once certified, the union becomes the exclusive bargaining agent for its member employees (s. 27). This means that the employer must deal directly with the union on matters which may be subject to collective agreement negotiation. (iv)

Duty to Bargain in Good Faith

Sections 11 and 47 of the Code require that the employer and the union must not fail or refuse to bargain in good faith, and make every reasonable effort to conclude a collective agreement. This does not require that the parties agree, only that they make good-faith and reasonable efforts to agree. When addressing allegations of ‘bad faith bargaining’, the Board will examine the facts to see if both sides had a “subjective intention” to reach an agreement. Because of this potential for review, the parties must not only bargain in good faith, they must be seen to do so. The Board will be looking for signs that either party, while paying lip service to “hard bargaining”, are in fact only going through the motions, participating in what is called “surface bargaining” while in fact entertaining no desire to successfully conclude an agreement. Some examples of “bad faith” bargaining have included: • JGS/1085664

attempting to bargain with employees individually

Page 30

•

employer making illegal proposals or unlawful business closures

•

failing to disclose relevant information, such as an intention to sell or move part of the business, or steps the employer had taken to terminate a pension plan

•

sending uninformed negotiators to the bargaining table

•

participating in conduct destructive of the collective bargaining atmosphere

•

reneging on previous proposals or agreements

•

otherwise delaying excessively

(v)

Restrictions on Communications with Employees

Sections 8 and 9 of the Code give employers the freedom to express their opinions provided that they do not use undue influence, intimidation, coercion, or threats to prevent individuals from exercising their rights under the Code. The Board will review on a case-by-case basis the content and the context of the communication to determine whether it constitutes “undue influence” or is otherwise improper. An employer must be extremely careful in what it says to employees about the union, the bargaining process, and even about the business itself. Timing is also critical; a statement made at the beginning of the negotiating process may be perfectly fine, but repeating the same statement in the heat of a lockout or strike can run afoul of the Code. Some factors considered are: Accuracy:

Is the communication “a matter of opinion reasonably held” by the employer?

Rhetoric:

A communication will more likely be approved if it does not include undue rhetoric, particularly anti-union positions.

Intent:

Was the communication made in a deliberate way to apply pressure on the employees, or was is instead simply information dissemination?

Bypassing union:

Was the communication an offer or position that was first communicated to the union as the exclusive bargaining agent of the employees, or is the employer bypassing the union?

Undermining union: If the employer’s communication is aimed at undermining, demeaning, or discrediting the union, it will likely to be regarded as breaching the duty of the employer to bargain in good faith.

JGS/1085664

Page 31 Implied threats:

(b)

For example, communications discussing the possibility of closure, issued shortly after certification, may be viewed as an implied threat.

Rules Regarding Unfair Labour Practices

It is important to remember that all the rules and principles regarding unfair labour practices that were in force before certification will continue to apply after certification and after the four month freeze period expires. V.

THE LONG-TERM PICTURE

(a)

Collective Bargaining

After certification, the union or the employer may give notice to the other side to begin collective bargaining. Section 47 of the Code requires that the parties must begin to commence bargaining in good faith within 10 days after notice is given. Forming a negotiating team is the first step in the collective bargaining process. The team must have people who can perform the following functions: •

Financial analyst

•

Minute-takers (to preserve negotiating history)

•

Expert on the industry (must have real world knowledge about the day to day functioning of the bargaining unit)

•

Chief Spokesman (both to articulate one side’s position, as well as to control the flow of the team)

•

Decision Maker (the team must contain someone with bottom-line authority to decide)

All members of the team will ideally possess the attributes of mental flexibility, mental discipline, both mental and physical stamina, good ‘people skills’ and, last but not least, a sense of humour. The key to success in collective bargaining is preparation. Members of a negotiating team must have experience in and up-to-date knowledge of: •

labour law

•

human rights legislation

JGS/1085664

Page 32

•

arbitration law

The last of these is particularly important, and often overlooked. Arbitrators have attached special meaning or obligations to certain clauses. If such a clause is proposed by the other side, someone on the team must know how it will be interpreted and the potential affects it may have before agreeing to it. A negotiation team should, prior to the commencement of the bargaining:

(b)

•

identify the objectives to be sought in the negotiations both short and long term

•

anticipate the demands of the other side and the problems likely to be encountered

•

develop tentative responses

•

discuss strategically the timing of the negotiations

•

identify strengths and weaknesses of both sides

•

consider a communications strategy

•

identify any PR or media issues, and decide who will handle them

•

create an agenda

First Contract Imposition

If negotiations fail to arrive at a successful first collective agreement, and if a union strike vote has been successful under section 60 of the Code, then either party may seek to have the Board impose a collective agreement through a mediation process. This process, described in section 55 of the Code, can result in the imposition of a collective agreement with which neither side is happy. If a party applies and the situation meets these criteria, a mediator will be appointed. The appointment of a mediator suspends the rights of the parties to strike or lock out. The mediator has 20 days in which to produce an agreement. Should that fail, the mediator makes recommendations to the associate chair at the Board; the associate chair decides whether more mediation or arbitration is required, or whether a strike or lockout is called for. After a further 20 days, the Board has the power to direct a method of resolution.

JGS/1085664

Page 33 The mediator will often issue recommendations for settlement. The Board has a strong preference to follow the mediator’s recommendations where it imposes a first collective agreement. The power to impose a collective agreement under section 55 has been applied sparingly. The Board recognizes that negotiated settlements have more legitimacy between the parties and a better chance of resulting in a long-term relationship. Imposed agreements are seen as a last resort. The Board has even allowed parties to resort to economic weapons (in one case an 8month strike) before implementing a contract. This remedy is used to prevent the irreparable break down of the relationship. Thus, the Board will try to intervene prior to the complete failure of bargaining. In determining whether to impose an agreement, the Board will consider the following:

(c)

•

any bad faith or surface bargaining;

•

conduct of the employer that shows a refusal to recognize the union;

•

the adoption of any uncompromising position by either party;

•

failure to make reasonable efforts;

•

unrealistic demands or expectations that are either intentional or the result of inexperience;

•

whether there is a bitter protracted dispute that is unlikely to be solved by the parties.

Strikes and Lockouts

The final weapon in the arsenal of the parties is the threat of a strike or a lockout. Both sides bargain from positions of relative strength or weakness based on who could best survive a work stoppage, and for how long. From the employer’s perspective, it is imperative that it has an accurate picture of how a strike or lockout will effect its business. This requires a thorough knowledge of: •

picketing laws

•

restrictions on the use of replacement workers

•

the potential impact on the employer’s “allies”

•

“hot” declarations and boycotts, and their potential effect

•

the intentions, loyalties and attitudes of non-striking workers

JGS/1085664

Page 34

• (d)

the terms of other material collective agreements, particularly provisions regarding crossing picket lines

Economic Weapons (i)

Picketing

A union is entitled to picket the place of operations or business of the employer where they normally carry on the bargaining unit work. They are not permitted to picket any other location or place of operation of the employer so long as bargaining unit work is not performed at those locations. An employer who moves bargaining unit work to another location during a dispute would be subject to picketing at that other location. The Board has authority to relieve innocent third parties against picketing at common sites (i.e. a site share with a struck employer). The Board will either regulate or restrict the picketing. Third parties who assist a struck employer in resisting a strike or furthering a lock out may become subject to picketing. The intention of the third party to assist the struck employer is not determinative but the Board will consider whether the third party is engaged in self help in its conduct. (ii)

Replacement Workers

Prior to 1993, there was nothing in the Code which prohibited the use of replacement workers. Their use is now prohibited through the operation of section 68 of the Code. The Code defines replacement workers as those who perform the work of striking or locked-out employees and who were either: •

hired or engaged after the notice to commence collective bargaining is delivered (or after bargaining began, if that was earlier); or

•

transferred to the struck or locked-out location or supplied by another person and who were transferred after the notice to commence bargaining was given (or after bargaining began, if that was earlier).

These provisions apply to managers as well. For instance, if a manager is hired after notice to bargain was given, but was hired to replace a manager who had resigned, that new manager is forbidden from performing ‘struck work’, even though the manager he replaces would not have been. This can be a significant issue given the narrow scope of exclusions and the often extensive time period between notice to bargain and any dispute. The law also catches ‘indirect replacement workers’, in that if a manager is legitimately doing the work of a striking worker, the employer cannot replace that manager. An employer is also forbidden from using volunteer workers to do struck work, and any nonstriking employee is free to refuse to do the work of a striking worker without fear of retribution.

JGS/1085664

Page 35 (iii)

Hot Edicts and Consumer Boycotts

Hot edicts, which result in actions by other unions against the employer, are currently legal, provided that they satisfy the requirements of section 70 of the Code. If a hot edict is “substantially affecting trade and commerce in a commodity or service or substantially affecting the business” of the employer, the Board may issue a declaration restricting or nullifying the edict. However, the section goes on to require the Board to consider the broad objects of Part 5 of the Code, including “the necessity for reasonable protection and advancement of a trade union or employer” in deciding whether to intervene. A hot edict is permissible in furtherance of a strike or lock out. Perhaps the fullest explanation of the law regarding ‘hot edicts’ is found in Pacific Press Ltd. v. Vancouver-New Westminster Newspaper Guild, Local 115 (1987) 14 B.C.L.R. (2d) 298. In that case, Famous Players theatres was engaged in a dispute with its employees. The B.C. Federation of Labour declared Famous Players “hot”, which meant that unionized workers at Pacific Press refused to place ads for the movies in its newspapers. The Board allowed the hot edict to stand, and the B.C. Supreme Court declined to overrule the Board. Even though Mr. Justice Bouck found the ‘hot edict’ to be unlawful under the Code, he held that the Board’s error was not ‘patently unreasonable’ under administrative law. Consumer boycotts are another valid economic weapon used by unions to further its own ends and gain an advantage over the employer in a labour dispute. For instance, a union can place advertising encouraging people not to patronise a business during a labour dispute. Unions will also use ‘leafletting’, ‘information stations’, or other activities to exert pressure on an employer. (e)

Grace Period Following Certification

A newly certified union enjoys a ‘grace period’, within which it cannot be decertified or ‘raided’. This grace period generally lasts 10 months from certification in the case of decertification (s. 33(3)), and six months in the case of raiding by another union (s.18(2)).

JGS/1085664