By: Trevor Armstrong, Tara Britnell, Robert Finlay

ILLUSTRATIONS OF COMMON PITFALLS

1. Duty to Accommodate: Your disabled employee returns to work, but can’t do the job she used to. If you terminate her, you are liable for damages.

• You are obligated to try to find a job that she can perform.

• You may have to reorganize the job duties of other employees so less demanding tasks can be given to your disabled employee.

• You need to keep on trying until you hit the point of undue hardship – basically, when you’ve done all you can.

1. The Underperforming Employee: Your employee was a poor performer before disability, and is no better afterwards. Can you dismiss?

• How are you going to prove you’re dismissing because of poor performance rather than disability?

• If you can’t prove incompetence, the risk is that you will be liable for dismissing for disability.

2. Alcoholic Employee: Your hard-drinking employee is unsafe on the worksite. He’s now been diagnosed as suffering from alcoholism.

• This is a disability

• You’ll have to accommodate, usually by allowing time off for rehabilitation

• If rehabilitation doesn’t work, or if he refuses therapy, you may be able to terminate employment

3. No Disability Plan - do you have to pay salary while your employee is off sick?

• Not if this is a contract of actual performance. This is usually when the employee is paid by the hour.

• Yes, if this is a contract where there is a “promise of performance”. This usually applies to salaried employees, skilled workers, professionals and management.

SUMMARY OF LEGAL PRINCIPLES

• The law governing disabled employees can be found in human rights legislation and the common law.

• Employment standards legislation is silent on disabled employees.

• Human rights legislation across Canada is similar.

• B.C. employers are governed by the Human Rights Code.

• “Common law” refers to judge-made law which comes about on a case-by-case basis. As each case arises, the courts add a new layer of common law which must then be incorporated into employers’ understanding of their obligations.

• Common law is made at three levels: trial (Supreme Court of B.C.); appeal (B.C. Court of Appeal); and final appeal (Supreme Court of Canada). Rulings of higher courts binds the level of court below it in theory; in practice judges “distinguish” binding cases and will often rule without regard to binding precedent. Accordingly, each case must be considered individually and on its specific facts.

• The Human Rights Code is administered by a separate quasi-judicial body: the Human Rights Tribunal. The Tribunal accepts complaints, hears evidence, and issues rulings. Such rulings can be significant and, with respect to employment, can require employers to pay damages or rectify discrimination in the workplace.

• The Tribunal’s decisions are subject to review of the courts (“judicial review”).

• The Tribunal only has jurisdiction in cases of “discrimination” on the protected grounds contained in the Code. For the purposes of this presentation, the most important protected ground is that of “disability”.

• “Discrimination” means distinct and adverse treatment, for example, different than the treatment afforded other employees without a disability.

• Discrimination is not by itself illegal. Discrimination on the basis of one of the protected grounds (disability, race, gender, etc.) is prohibited.

• If the employer can show that there was no discrimination, or show that the employee is not covered by one of the protected grounds under the Code, the Tribunal will have no jurisdiction and will decline to hear the complaint.

• The Code states that discrimination on the basis of disability is unlawful. The courts have reinforced this principle by holding that such discrimination is a civil wrong, most often framed as a “wrongful dismissal”, leading to an award of damages against the employer.

• Accordingly, discriminating against a disabled employee can lead to either a Human Rights complaint, a civil action for wrongful dismissal, or both.

• An employee is disabled when she cannot carry out, in whole or in part, her essential job functions.

• An employee who is disabled due to drug or alcohol abuse can claim the protection of the Code.

• As a result of the case-by-case nature of the law regarding disabled employees, there are no firm rules for employers to follow in the case of disabled employees. Each must be dealt with on an individual basis and with the benefit of specific legal advice.

• A failure by an employer to abide by Human Rights principles can lead to significant damages and legal costs given the relatively high burden placed upon employers by the Code and the courts.

• There are currently no plans to streamline or harmonize the law in this area. Accordingly, employers must be aware of their obligations and remain current on significant developments in the law if they wish to avoid the potential liabilities of this area.

• Employers should also obtain legal advice before taking action against an employee. Preventative steps are much easier (and less expensive) than litigation or the complaints process.

EMPLOYMENT AGREEMENTS: VALUABLE STRATEGIES FOR EMPLOYERS

COMMON REASONS FOR WRITTEN CONTRACTS

• Limiting warranties and representations;

• Outlining probationary periods;

• Limiting notice periods;

• Providing for the case of the disabled employee

• Creating fixed term contracts;

• Protecting proprietary information; and

• Protecting against the former employee working in the same market by adopting restrictive covenants/non competition and non solicitation provisions.

PRE CONTRACTUAL CONSIDERATIONS

The Employment Standards Act

The Employment Standards Act of British Columbia provides that an employer must not induce, influence or persuade a person to become an employee or to work or to be available for work, by misrepresenting any one of the following:

• The availability of the position;

• The type of work;

• Wages; or

• Conditions of employment.

In creating a written employment contract, general rules of contract law apply:

• There must be certainty and a clear statement of the basic terms of the agreement;

• The agreements must comply with the rules governing contract law;

• There must be compliance with the Employment Standards Act and other rules prescribed by law.

The Employment Standards Act of British Columbia sets out the minimum provision regarding severance pay for termination. Those terms include:

• An employee terminated without cause is entitled to:

• 63(1)-an amount equal to one week’s wages after three consecutive months of employment;

• An amount equal to two weeks’ wages after 12 consecutive months of employment;

• An amount equal to three weeks’ wages after three consecutive years of employment together with one additional week’s wages for each additional year of employment to a maximum of eight weeks’ wages.

Contractual provisions limiting notice requirements must be:

• Clear and unambiguous; and

• Equal to or greater than the provisions in the Employment Standards Act.

• The notice period must comply with the Employment Standards minimum throughout the term of employment.

• The employer is entitled to rely on the minimum notice provisions of the Employment Standards Act. An example of clauses permitting termination include:

(a) “Giving the team member written notice of termination or pay in lieu thereof and severance pay, if any, in accordance with the requirements set out in the Ontario Employment Standards Act..”

(b) “The parties agree hereto that the notice of termination of employment provided for in this agreement constitutes reasonable notice.”

• Any proposed written agreement to the employee before the commencement of the employment. If the written agreement is presented after commencement of employment, the agreement may be unenforceable as lacking any new consideration separate from the oral agreement extant when the employment began.

Disabled Employees

Terms in written contracts can not eliminate the provisions of statutes designed to protect the interests of citizens. Human Rights legislation prevents employers from terminating employees due to physical disabilities. However, the existence of a term in a written agreement providing for termination after making reasonable accommodations for a disable employee will be helpful evidence in permitting the termination of an employee disabled for an indeterminate period.

Fixed Term Contracts

In the absence of a fixed term contract, an employment contract is presumed to be of an indefinite term. Fixed term contracts limiting the term an employee works for an employer to a specified period of time are another option for limiting these risks of substantial payments in lieu of notice.

Employers should ensure that:

• The contract contain specific start and end dates;

• The contract state clearly that no other notice of the termination of the contract will be issued to the employee;

• Employment records and communications with the employee always reflect or contemplate the end date of the existing contract;

The employee not be allowed to work beyond the end date and if there is to be a new term, that contract ought to be signed before the new term begins.

Non-Competition Clauses/Non-Solicitation Clauses/Restrictive Covenants/Protecting Proprietary Information

Courts have enforced non competition agreements where:

• The employer has a proprietary interest entitled to be protected;

• The prohibition covers a period of time and distance which are not excessively broad;

• The covenant is not against competition generally and preventing solicitation of clients of the former employer will not be adequate protection.