Appealing employment tribunal decisions may be easier

by Joanna M. Carvalho

A recent decision by the Supreme Court of Canada may make it easier for employees and employers to appeal decisions of administrative agencies to the courts.

In Canada, and from an HR perspective, such agencies include labor boards, labor arbitrators, human rights tribunals, pay equity tribunals, and employment standards adjudicators.

Imagine an employee files a human rights complaint. The employee claims that he was denied a promotion because of his race. Imagine that your company fights the case before the human rights tribunal . . . and wins!! Imagine that before you can even put down your celebratory cocktail(s), the employee appeals the decision to the courts.

You thought the decision was final and that the matter was put to rest. In a panic, you immediately call your labor and employment lawyer and ask:

• I thought we weren’t in court. How can they appeal to a court now?
• Is the employee likely to win in court?
• How will the court decide whether the tribunal came to the right conclusion?
• Should a court be able to overturn the decision of the human rights tribunal?
• How can a judge, who deals with all kinds of matters, like contract disputes, divorces, or criminal prosecutions, be in a better position to decide whether the employee’s human rights were violated?
• Shouldn’t the human right tribunal members who have years of expertise in human rights law be in the best position to decide?
• And, of course, what is this going to cost me?

These are the questions that have plagued courts and lawyers for some time in “administrative law,” the body of case law that governs the activities of administrative agencies.

Traditional thinking is that courts are in the best position to decide questions of general law, and specialized administrative agencies are in the best position to decide factual questions and specialized legal issues related to their specialty.

For example, an employee alleges that a supervisor sexually harassed him or her. The case goes before the human rights tribunal. All the members of the human rights tribunal hearing the case must have several years of experience in human rights law. In this case, the tribunal is probably in a better position than a court to decide whether the employee was sexually harassed.

In contrast, take the example of an employee who alleges that the employer violated a term of the employment agreement, such as a stock option plan. In this case, a court is arguably in as good or better position to decide whether a breach of contract occurred than a tribunal because the courts are accustomed to interpreting contracts.

The following factors have been applied to determine the extent that a court should intervene in an administrative tribunal’s decision:

• whether the law governing the tribunal expressly provides a right of  appeal to a court;
• the purpose of the administrative agency (for example, is the primary purpose to educate the public or to resolve disputes?);
• the nature of the question at issue; and
• the expertise of the administrative agency.

And then there were two
Until recently, Canadian courts used those four factors to decide which of three “standards of review” should be applied to the decisions of administrative tribunals: (1) “correctness,” (2) “reasonableness,” or (3) “patent unreasonableness.”

The courts would look at the four factors to decide whether they should be more ready to intervene based on the “correctness” standard; more reluctant to intervene based on the “reasonableness” standard, or most reluctant to intervene based on the “patent unreasonableness” standard.

The recent decision by the Supreme Court of Canada changes this. In Dunsmuir v. New Brunswick, the court eliminated the “patently unreasonable” standard of review. From now on, decisions of administrative tribunals will be reviewed to determine simply whether they are “correct” or “reasonable.”

How does this impact you?
While it remains to be seen what the practical outcome of this decision will be, there is speculation that lower courts may see this change as a reason to give less deference to administrative agencies. Indeed, a court no longer has to find that the administrative tribunal’s decision was “patently unreasonable” to intervene and reverse a decision.

The bad news? Employees who were unsuccessful before an administrative tribunal may be more likely to give it “another kick at the can” as the standard to overturn such a decision may now not be as high.

The good news? In the same manner, employers who were unsuccessful before an administrative tribunal may also benefit from having a greater right to take the tribunal’s decision to court to be reviewed.

So put down your glasses and pick up your pens (and your Canadian lawyer will grab his or her robe). It may be time to go to court!

What company should employ your expats in Canada?

By Rachel Ravary and Brian P. Smeenk

When you send an employee to work in Canada, what company should be named as the employer? Your U.S. company? A Canadian subsidiary or affiliate? Perhaps your parent company?

Why is this important?
It’s important to be clear about which company is the legal employer because this may determine many of the employee’s rights and entitlements, such as:

• what country’s laws apply to the employment relationship while the employee is in Canada;
• what corporate policies apply to the employee;
• what benefit plans apply;
• whether the employee has the right to return to his or her job after the stint in Canada;
• where future disputes would be litigated or otherwise resolved;
• the length of service that will be recognized;  and
• the employee’s entitlements to severance pay and other benefits upon termination.

The company that is the legal employer doesn’t necessarily have to be the company that pays the employee’s salary and overhead. It’s not uncommon for one company (normally the one that benefits directly from the employee’s service) to pay, while another company is the legal employer. Appropriate inter-company billings or adjustments can easily be done.

How should you decide?
The decision of which company should be the employer is partly a human resources issue and partly a legal issue. Ask yourself how management would want to answer the questions listed above. And consider what the employee would be most comfortable with? Is the employee expected to return home in the near to medium term?

Sometimes the answers to these questions will lead you in opposite directions. You may want your Canadian subsidiary’s policies and bonus program to apply to the assignment, but you know the employee would be more comfortable remaining an employee of the U.S. company. You may want to avoid some of the more onerous obligations of being a Canadian employer, but you don’t expect the employee to return to the United States in the foreseeable future. What should you do?

Many of these issues can be resolved contractually. Check the laws of the province or other Canadian jurisdiction where the employee is assigned. Find out the extent to which the local laws will be binding. Then deal with discretionary issues in an employment contract.

After the decision
Once the decision is made, how do you put it into practice?

• Get legal advice to compare the legal consequences of applying the law of a particular Canadian jurisdiction versus U.S. employment laws. Consider at least the key issues like benefits coverage, tax consequences, and rights upon termination of employment.
• Once you decide, clearly identify who the employer will be in the offer of employment or transfer letter. The company that will be the employer should make the offer.
• Stipulate which country’s laws apply.
• Ensure the offer or contract complies with the laws of the jurisdiction you have chosen. Don’t say that the federal law of Canada applies and then write a contract that violates those laws!
• Be clear about where and how disputes will be resolved.
• If possible, the employing company should pay salary and benefits. Otherwise, advise the employee in writing that the company actually paying salary and benefits is acting as the agent of the employing company.
• Make sure that the employing company is identified correctly on any visa application or other immigration paperwork prepared by or for the employee.
• Be clear with the employee about whether the assignment is permanent. If not, set out what will happen when the assignment ends.
• Make sure that the administration of benefits and other programs is consistent with your decision about which company is the employer.

McCarthy Tétrault has a great deal of experience dealing with international employment arrangements and can assist you in sorting through this complex set of issues.

Getting a dismissed employee’s last meeting right

by Karen M. Sargeant and Donovan G. Plomp
Spring will soon be upon us, and with it may come the urge to do some “spring cleaning” in the home and the workplace. This might mean ending an employment relationship that isn’t working out.

In Canada, which has no concept of “at will” employment, it’s particularly important that employers handle the delicate issue of termination carefully. Messing it up can increase your liability substantially.

The termination meeting is awkward for everybody. It’s obviously tough on the employee. Facing an employee and telling him that he is dismissed is also difficult and stressful. Emotions can get the better of people. Mistakes get made.

The termination meeting is even more difficult in Canada because in recent years Canadian courts have established the principle that employers have a duty to act fairly and in good faith when dismissing an employee. If an employer fails to do this, a court may extend the period of reasonable notice of termination or pay in lieu of notice to which an employee is entitled. (See Don’t let ‘enhanced’ severance be a surprise during terminations Northern Exposure blog entry.)

What to do
This concept of fairness and good faith in handling a termination is a vague concept that can be confusing for employers. The following are some tips on how employers can meet their duty of good faith and fair dealing when conducting a termination meeting.

• If at all possible, conduct a face-to-face meeting. Avoid informing the employee of the termination by telephone, e-mail, or courier.
• Provide an employee with a letter confirming the termination including the employee’s last day of work and a summary of amounts to be paid to the employee.
• In Canada, employees must be issued a document called a “Record of Employment” upon termination to establish whether they are entitled to government Employment Insurance benefits. The termination letter should confirm that the dismissed employee will be provided with a Record of Employment.
• Inform employees accurately regarding all entitlements they may have upon termination, including insurance conversion and pension entitlements.
• Employment standards laws in most provinces in Canada provide for minimum severance upon termination unless the termination is for “just cause.” Don’t ask an employee to sign a release for amounts to which they are entitled under such laws.
• Have two members of management attend the meeting. One person should take extensive notes of what is said and by whom.
• Hold the meeting in a private location. Minimize attention from other employees to avoid interruptions and embarrassment to the employee being terminated.
• Try to avoid conducting the meeting on or near significant events such as birthdays, weddings, graduations, important religious holidays, or vacations.
• Consider offering outplacement counseling. Consider having outplacement counselors on site to meet with the employee afterwards for difficult terminations or particularly sensitive employees.
• Provide brief reasons for the termination, but don’t engage in a debate. The decision has been made. Arguments should be avoided.
• Don’t allege cause for dismissal if you can’t prove it.
• Keep the meeting short.
• Keep the meeting professional.
• Consider whether you really need to escort the employee off your premises. Where practical, allow the terminated employee to remove personal belongings, speak to co-workers, and leave your workplace in the least embarrassing or humiliating way possible.

In conclusion, follow the Golden Rule: Do unto others as you would have them do unto you.

Health and safety legislative and regulatory responses

by Daniel M. Pugen

Workplace violence has become a hot topic among labor, employment, and health and safety regulators in Canada. Of course, workplace violence is hardly a new phenomenon. Certain workers like police officers have an inherent risk of workplace violence. Also, put enough people in an enclosed area under stressful conditions (i.e., the typical office scenario) and some form of conflict is bound to result.

Whether it’s actual physical aggression or other forms of workplace violence like threats or harassment, some research suggests that such conduct is on the rise.

Some stats
The statistics on workplace violence are revealing.

The Canadian Initiative on Workplace Violence found that 66 percent of employers surveyed reported an increase in aggressive acts in their workplace over the past five years. On February 16, 2007, Statistics Canada released a report titled Criminal Victimization in the Workplace. Some of the findings:

• Nearly one-fifth of all physical and sexual assaults in Canada in 2004 happened in the workplace.
• Of the 356 violent incidents that occurred in Canadian workplaces in 2004, 71 percent were physical assaults.

These statistics, and various high-profile incidents at Canadian and U.S. universities and workplaces, have prompted legislators and regulators to take action. In Canada, the result has been:

• imposing duties and liabilities regarding workplace violence on employers under health and safety legislation; and
• requiring employers to implement standards and practices to reduce the risk of workplace violence.

What is workplace violence?
Workplace violence is not limited to acts of physical aggression. The Canadian Centre for Occupational Health and Safety defines workplace violence as:

• Threatening behavior – such as shaking fists, destroying property, or throwing objects.
• Verbal or written threats – any expression of intent to inflict harm.
• Harassment – any behavior that demeans, embarrasses, humiliates, annoys, alarms, or verbally abuses a person and that is known or would be expected to be unwelcome. This includes words, gestures, intimidation, bullying, or other inappropriate activities.
• Verbal abuse – swearing, insults, or condescending language.
• Physical attacks – hitting, shoving, pushing, or kicking.

The Ontario Ministry of Labour has defined workplace violence as “the attempted or actual exercise of any intentional physical force that causes or may cause physical injury to a worker. It also includes any threats that give a worker reasonable grounds to believer he or she is at risk of physical injury.”

Workplace violence may occur within a traditional workplace or off-site at conferences, work-related social events, or even at a home office via telephone or e-mail.

Regulation of workplace violence
Federal and provincial occupational safety legislation, like the U.S. Occupational Safety and Health Act, contain general prohibitions to ensure that the workplace is safe. These prohibitions may be broad enough to recognize (and impose liability for) violence, threats, or any such conduct that makes the workplace unsafe. Such legislation also usually contains provisions protecting persons who work alone or in remote locations.

More specifically, employees in Quebec are also protected against “psychological harassment” in the workplace. The Canadian provinces of Alberta, British Columbia, Prince Edward Island, and Saskatchewan also have enacted specific provisions on workplace violence in their health and safety laws.

In addition, there is a proposed federal regulation and a proposed amendment to Ontario’s health and safety law. These provisions go further than the general provisions and spell out specific standards and requirements for employers. Under most of these laws employers must generally:

• create a comprehensive workplace violence prevention policy;
• conduct “risk assessments”;
• to the extent reasonably practicable, develop “controls” and “procedures” to eliminate or minimize workplace violence;
• provide training for managers;
• develop procedures for investigating and reporting incidents and calling for assistance when required;
• allow employees to refuse to work where they reasonably believe they may be in danger of workplace violence; and
• maintain various records.

Regulators taking note
Regulators have taken their cue from the increased legislative action.

For example, the Ontario Ministry of Labour, in a joint effort with the Ontario Workplace Safety and Insurance Board, has made workplace violence a priority through their workplace violence prevention initiative.

Health and safety officers have been instructed to make orders and issue directives to employers in certain industries either because there is no workplace violence prevention program in place or because the program is lacking in some way.

Government health and safety officers have broad powers under health and safety legislation to allow them to enter a workplace and perform various activities to enforce compliance with health and safety legislation.

For example, officers may conduct safety audits and inspections. They may also investigate the circumstances surrounding the report of a contravention, work accident, refusal to work, or hazardous occurrence. Offenses can lead to significant fines, and in some cases, imprisonment.

What should employers do?
Unfortunately, workplace violence seems to be on the rise. In addition to the legal risks, incidents of workplace violence take their toll on organizations in other ways. These may include lower worker morale, turnover, blemished company image, and loss of clients.

Some things that employers should consider doing are as follows:

• Review legislative and regulatory requirements to ensure compliance.
• Establish a comprehensive workplace violence policy.
• Undertake the risk assessment and other measures outlined above.
• Offer a confidential Employee Assistance Program to allow employees subject to workplace violence or those with personal problems to seek help.
• Ensure that proper security measures are in place.
• Keep detailed records of any workplace violence, investigation or work refusal.
• In short, as employers you should be vigilant and you should ask your employees to be vigilant.