The Supreme Court of Canada, in Québec (Procureur général) c. Syndicat de la fonction publique, recently struck down a clause in a collective agreement. The clause in question prevented certain employees from challenging discipline through grievance arbitration. The Court declared the clause void because it contravened a statutory minimum standard.
Four years ago in Ottawa, the Federal Canadian Government nipped a nascent spending scandal in the bud when it fired two employees of the Canadian Department of Public Works, Douglas Tipple and David Rotor. Tipple successfully grieved his termination before the Public Service Labour Relations Board, winning the largest individual damage award in Canadian labor arbitration history this past July — $1.3 million. While Tipple waits for the ordeal to be over (the government has appealed the decision), employers can take stock of the immediate fallout.
The transfer of employees from foreign-based companies to Canadian-based affiliates is an increasingly common feature of the Canadian labor market. Many employers are familiar with the often complicated process of obtaining the necessary work permits for such employees at the beginning of the transfer. However, ending the relationship between the transferred employee and the Canadian-based employer can present its own challenges. Some of these challenges are illustrated by the British Columbia Supreme Court’s recent decision in Nishina v. Azuma Foods (Canada) Co., Ltd.
When an employee is absent because of long-term disability, employers naturally wonder how long they must wait before the employment contract has been “frustrated.” If it has, the employment contract can be terminated. According to the recent Ontario decision of Naccarato v. Costco Wholesale Canada Ltd., however, the question isn’t “how long” but rather “what is the prognosis?”
Michael McCracken’s claim against Canadian National Railway (CN) recently got the go-ahead to proceed as a class action. The third in a trilogy of high profile overtime cases in Canada, McCracken v. Canadian National Railway Company brings the score to 2 to 1 for certification of the class action — at least in the first round. Appeals are in progress. So stay tuned.
All three cases involve federally regulated employers. The basic issue is entitlement to overtime pay under the Canada Labour Code (the Code). Fresco v. Canadian Imperial Bank of Commerce and Fulawka v. The Bank of Nova Scotia are “off the clock” cases — claims by non-managerial employees for unpaid overtime work. These were discussed in an earlier article in this newsletter.
In British Columbia and Quebec, the use of replacement workers during a strike or a lockout is restricted. Replacement workers aren’t restricted in other Canadian provinces and the federal sector although they were banned in Ontario from 1992 to 1995. Quebec may be moving toward a more stringent law, as its anti-replacement worker legislation is being debated this summer.
Quebec’s anti-scab legislation
The Quebec provisions in question have been part of the legal landscape since 1977. They restrict the right of an employer to use replacement workers to replace employees on strike or lockout. They don’t, however, prevent an employer from having work carried out by a third party — as long as the third party isn’t doing work ordinarily done by employees on strike or lockout in the establishment where the strike or lockout has been declared.
By Bill Duvall
As the prognosis for Canada’s economy remains uncertain, the Canadian court system continues to churn out employment cases arising from distressed employers. On this front, two recent cases are of interest. In the first, an Ontario court concludes that employees may not be entitled to statutory severance pay when they are provided with pension bridging and supplementary benefits. In the second, a British Columbia court is more employee-friendly, giving a broad interpretation to the definition of wages.
Ontario employees not entitled to severance pay
In Ontario, employees with at least five years’ service are generally entitled to up to 26 weeks’ severance pay when their employer discontinues its business. Employers are exempt from this severance pay obligation when an employee retires on termination and receives an “actuarially unreduced pension benefit that reflects any service credits which the employee, had the employment not been severed, would have been expected to have earned in the normal course of events for purposes of the pension plan.”
Recently, we learned of a scandal out of the United States that cost a top CEO his job. On August 6, Mark Hurd, the chair, CEO, and president of Hewlett Packard for the past five years, “resigned” under intense pressure from the board.
While it was an allegation of sexual harassment that set the wheels of this resignation in motion, it turned out to be a relatively modest item that caused his demise: the fudging of expense reports. The story as reported by the media has application in Canada and reminds us that employees’ conduct at work can have unintended consequences.
In our March 22, 2010 article, we explained the simplified and expedited processes for obtaining a temporary work permit for foreign employees transferred from outside Canada to a Canadian parent, subsidiary, branch or affiliate company. These intracompany transfers provide a significant benefit for companies — they exempt them from demonstrating their reasonable efforts to fill the position with a Canadian citizen or permanent resident.
One of the requirements to meet the intracompany exemption is that both the Canadian and the foreign company are doing business at the time of the application. They must be regularly, systematically and continuously providing goods and services in their respective countries. What about when the Canadian company is being set-up and not yet doing business in Canada at the time of the application? In that case, special guidelines for a start-up may apply.
In Canada, pre-employment background checks are generally permissible. With some exceptions in some provinces, these checks can include information about a candidate’s employment history, education, credit, fingerprints, and criminal record. Though Canadian employers can generally conduct such checks on potential or current employees if they have their consent, the legitimacy and permissibility of the use of criminal background checks by employers has come under fire.
In several recent decisions, unions, employees, arbitrators, and courts have questioned whether an employer’s need to access this information outweighs an employee’s right to privacy. The recent decision of Arbitrator Watters in Re Diageo Canada Inc. and C.A.W.-Canada, Local 2098 has added to the criminal background check dialogue.