by Kate McNeill, Kelly McDermott and Donovan Plomp

On Friday, June 27, 2008, the Supreme Court of Canada (SCC) released its decision in Honda Canada Inc. v. Keays, reversing the largest award of punitive damages in a wrongful dismissal action in Canadian history. The decision is very favorable for employers.

Background
Kevin Keays was a long service Honda employee who was diagnosed with chronic fatigue syndrome in 1997. He returned to work after a period on long-term disability benefits. Honda exempted him from its attendance-related progressive discipline policy but required him to provide a medical note for each absence, which was not required of employees suffering “mainstream” illnesses.

Keays’ sporadic absences continued, and Honda hired Dr. B to assess Keays. Keays hired a lawyer, who wanted to clarify the purpose of the meeting with Dr. B. Honda refused to deal with Keays’ lawyer and made Keays subject to its attendance-related discipline policy. When he continued to refuse to meet with Dr. B without Honda clarifying the purpose of the meeting, Honda terminated his employment for insubordination. (more…)

by Barbara A. McIsaac, Helen Gray, and Daniel Pugen

An employee’s expectation of privacy in the workplace is a big issue these days, especially with respect to the use of company computers.

Employers are often faced with questions like these: Is an employee entitled to privacy over e-mail and other data created and stored on a computer used for work or personal purposes? What rights does an employer have to access that information? The answer to these questions can depend on whether the employee has a reasonable expectation of privacy over the information stored on a given computer.

What is a reasonable expectation of privacy?
Two criteria must be established to show a reasonable expectation of privacy. First, an employee must subjectively expect some level of privacy, which is usually demonstrated through steps taken to protect the information in question, such as making a password or moving the data off company servers. Second, the employee’s expectation of privacy must be objectively reasonable.

Determining whether these criteria are present involves asking key questions such as:

• Who owns the physical equipment on which the data is stored?
• Has the data been transferred to the employer’s system or network?
• Does the employer have an Internet or computer policy that provides for employer access to information?
• How is the data arranged on the computer? Is employer data segregated from other material on the employee’s personal computer?
• Has the employee attempted to password-protect his or her computer and/or selected files?

Employer’s ownership of the computer
An employer’s ownership of a computer used by an employee for work purposes is strong evidence that an employee does not have a reasonable expectation of privacy over data stored on that computer or other data generated by personal use.

Several Canadian arbitrators have ruled that employees who use an employer system to send and receive e-mail messages and to post messages on discussion boards have no right to privacy. It has been held that an employee cannot expect to have any right of privacy when using the employer’s e-mail and Internet facilities.

Ownership is such a significant factor that in one case the arbitrator found that where a terminated employee had used the employer-owned laptop both at home and at work to access his Hotmail e-mail account, any reasonable expectation of privacy over his Hotmail e-mail account was trumped by the employer’s right to search its own property.

Employer policies
Another significant factor in determining if a reasonable expectation of privacy exists is whether the employer has a policy governing e-mail and Internet use. In one case, the existence of an employer’s policy against the use of the e-mail system for unacceptable purposes, and a clear “log-on warning” that the system would be monitored in accordance with the policy, was found to undermine an employee’s expectation of privacy.
Employee’s ownership of the computer

If the employee owns the computer personally but uses it for work purposes, does a reasonable expectation of privacy exist with respect to the data stored on that computer? In Canada, the answer to this question is unclear.

In the United States, certain decisions have favored an employer’s right of access where an expectation of privacy is not objectively reasonable. For example, there was no reasonable expectation of privacy over the files stored on an individual’s own laptop that had been connected to a military base network with a shared drive.

Similarly, there was no reasonable expectation of privacy over the information stored on an employee’s computer where an employee voluntarily brought his own computer to work to use for work purposes and took no steps to password-protect the data.

Lessons for employers
Many employers wish to monitor employee use of computers and networks for a variety of legitimate reasons, including preventing the collection and dissemination of improper/illegal material (e.g. pornography) and preventing employee theft of time associated with prolonged personal use of the Internet and e-mail.

Even though there is some uncertainty in the law in Canada, there are some simple steps that can be taken to help prevent employees from claiming a reasonable expectation of privacy:

• Employers should implement clear-cut and comprehensive policies governing their right to access data and systems. If an employer does not want an employee to have a reasonable expectation of privacy over any data found on a computer, then this should be clearly stated.
• Employees should be required to acknowledge that they have read, understood, and agree to abide by the policies.
• “Log-on” or “I Agree” statements and acknowledgements, which must be accepted before the computer or Internet can be used, can be a useful tool in this regard.
• Employers should also make clear that copies of employer-owned data remain the employer’s property regardless of where the data is stored.
• Finally, employers may manage employee privacy expectations over information stored on laptops by providing company laptops to employees for offsite work, so that, if necessary, the employer can justify a search of the computer (because of its ownership interest).

By Simon-Pierre Hébert and Rachel Ravary

If you have employees in Québec, then you are likely familiar with the prohibition against “psychological harassment” that was added to the Act Respecting Labour Standards in 2004.

Managers initially reacted to the new provisions with a lot of apprehension, fearing that a disgruntled employee could turn any kind of employee ‘management’ into a psychological harassment complaint. And rightly so — because, until recently, there was no real guidance as to what exactly “psychological harassment” meant.

Now that the first wave of complaints has finally wound itself through the administrative process, we can draw some clear lines about what psychological harassment is, and what it is not, and finally give managers some comfort that they won’t be punished for simply exercising their managerial rights.

What does “psychological harassment” mean?
If you want the legal answer, psychological harassment is defined in the Act as “any vexatious behaviour in the form of repeated and hostile or unwanted conduct, verbal comments, actions or gestures, that affects an employee’s dignity or psychological or physical integrity and that results in a harmful work environment for the employee.” The Act also says that psychological harassment can be the result of a single serious incident, if it has a lasting harmful effect on the employee.

The experience so far
The statistics that have come out so far are encouraging: 97% of psychological harassment complaints are settled either at the investigation stage or through early mediation, and very few ever end up in a formal hearing.

That said, for those complaints that are heard employers must be prepared for a long haul. Experience has shown that employers have to devote significant time and resources to handling complaints, and they often require several days of hearing. It can also take a great deal of time and attention for a good work environment to be restored after a complaint has been filed.

Where is the line between management and harassment
As noted earlier, some employers have been concerned that the normal exercise of their management rights may lead to claims of psychological harassment. The decisions rendered to date have now made it clear that employers still have the right to manage their businesses and their employees – but they cannot do so arbitrarily or in a way that is abusive or harmful to the employee. The decisions have also made a clear distinction between legitimate performance management and psychological harassment.

While it is clear that the provisions on psychological harassment do not trump management rights, they do put some limits on them. Understanding these limits will help employers reduce the risk of complaints and improve their work environments.

Lessons for employers
Based on experience to date, here are some tips on how to prevent regular employee management from turning into psychological harassment complaints:

1. When criticizing an employee’s performance, make sure to also provide the support necessary to correct the problems.
2. Try as much as possible to treat all employees similarly when it comes to disciplinary measures for similar behaviour. Don’t single people out!
3. Take the same approach when handling performance issues. Only require an employee to provide the same level of performance as you expect and accept from other employees.
4. When commenting on performance, make sure your comments are both legitimate and respectful. Do not make comments in a disdainful way or in a way that humiliates the employee.
5. Make your managers aware of what is and is not permissible, as they are the main targets of psychological harassment complaints. Taking the time to train managers properly is an investment that will reap many benefits in labour relations, productivity and other areas.

New top 10 rules for video surveillance in Canada

By Barbara A.  McIsaac and Rachel Ravary

By now, we all know that video surveillance of employees is a touchy subject and should be used only as a last resort. But when you’ve examined all of the alternatives and have come to the conclusion that no other solution will do, we can at least give you some guidance on how to do it right.

Recently, the Federal, British Columbia, and Alberta Privacy Commissioners got together to issue new guidelines for the use of video surveillance.

Who is covered under the guidelines? Well, technically, they apply to all federally regulated employers such as banks, railways, air transportation, and inter-provincial trucking companies, as well as employers in British Columbia and Alberta. That being said, the guidelines are general rules that can and should be considered no matter what Canadian jurisdiction you’re operating in.

The guidelines set out a top 10 list of factors to consider when deciding whether to use video surveillance and when putting your video surveillance plan in place. Remember that under most provinces’ privacy laws, as well as the federal law, the rule is that personal information cannot be collected, used, or disclosed unless it’s reasonable in the circumstances, and even then, only with the consent of the individual involved. In Québec, the standard is a little higher and requires that the information be necessary.

Here is our summary of the guidelines.

Top 10 guidelines for video surveillance
1. Consider the alternatives. Before you resort to video surveillance, consider whether you can achieve your goal with a less invasive alternative.

2. Set the ground rules. Develop a policy on the use of video surveillance.

3. State your purpose. Narrow down the specific business reason for using video surveillance – and use it only for that reason.

4. Don’t go overboard. Limit the use and viewing range of cameras as much as possible.

5. Smile! You’re on camera. Inform your employees – and the public if the camera is in a public area – that video surveillance is taking place.

6. Guard the evidence. Store any recorded images in a secure location, with limited access, and destroy them when they are no longer required for business purposes.

7. Be transparent. Be ready to answer questions from employees or the public. They have the right to know who is watching them, why, what is being recorded, and what is being done with recorded images.

8. Hand it over. Give individuals access to information about themselves. This includes video images.

9. Train your people. Educate camera operators about the obligation to protect the privacy of those who are being filmed.

10. Re-evaluate. On a regular basis, reconsider whether you still need video surveillance.

The guidelines also offer some practical tips for setting up your video surveillance system to collect the minimum amount of information necessary to be effective. For instance:

• Have cameras record for only limited periods in the day rather than having them on continuously. Even better, if you’re targeting a specific problem – such as theft by a particular employee or in a particular area – only turn the camera on when the targeted activity is suspected or observed.
• Try to position cameras to avoid capturing images of individuals who aren’t being targeted.
• Don’t put cameras in places where people have a heightened expectation of privacy, for example, washrooms or into windows.
• Make sure that your system doesn’t allow camera operators to manipulate or reposition cameras to capture inappropriate images.
• Sound should not be recorded unless there is a specific need to do so.

If you have questions about these guidelines or related issues, lawyers in McCarthy Tetrault’s Labour and Employment and Privacy groups can help you. We regularly advise clients on issues relating to various forms of employee surveillance and/or monitoring and compliance with federal and provincial privacy legislation.

McDonald’s fails to accommodate employee unable to wash hands

by Daniel M. Pugen and Earl G. Phillips
In Canada, human rights legislation provides that employers have a duty to accommodate disabled workers unless such accommodation would cause “undue hardship” on the employer.

A recent case involving McDonald’s Restaurants before the British Columbia Human Rights Tribunal illustrates the high standard of accommodation expected of employers. It also shows the kinds of proactive measures employers may have to take before accommodation is considered “undue hardship.”

In the case, the tribunal found that McDonald’s improperly terminated the employment of a long-time employee. McDonald’s didn’t do enough to accommodate the employee who developed a skin condition that prevented her from working and meeting the restaurant’s hand-washing policy. (more…)

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.