2007
  HOSTING THE PERFECT HOLIDAY PARTY - BALANCING FUN WITH RESPONSIBILITY 
At this time of year, many businesses hold staff holiday parties to celebrate the season and to reward their employees for their hard work over the previous year. Not surprisingly, both employers and employees look forward to these events, and employers and the event planners will often go to great lengths to ensure the party is a success. The fact is however, that employers also have a duty of care to their employees and can be held liable for injury or damages arising out of such events. For that reason, it is also appropriate that holiday party plans take into account some simple measures to ensure employee safety and minimize risk of claims. Review of the Law Over the past 10 years there have been a number of significant cases which have examined the duty of care, and thus liability owed by social hosts (i.e., private party host) and commercial hosts (bars and clubs) for injuries to their guests or customers and other third parties. Key in the analysis of whether or not a legal duty of care exists is the examination of whether there is a sufficiently close relationship between the parties or “proximity” to justify imposition of a duty. Social Hosts In 2006, the Supreme Court of Canada in Childs v. Desormeaux, found that a social host of a party where alcohol is served is not under a duty of care to members of the public who may be injured by a guest’s actions, unless the host’s conduct creates or exacerbates the risk (i.e., the host promises or has a history of monitoring guests’ alcohol consumption and promises to ensure intoxicated guests do not then drive a vehicle). Commercial Hosts On the other hand, the courts have found that by virtue of the fact that:
commercial hosts owe a duty of care to their guests and to the members of the public who might reasonably be foreseen to be harmed by impaired guests. Is an employer a social host or a commercial host? Clearly, employers already have a duty of care to ensure the safety of its employees while at work. Employees rely on their employers to take positive steps to ensure that work places are safe. In the normal work context, the courts have affirmed that there is a sufficiently close relationship between employer and its employees or “proximity” to justify imposition of a duty of care on employers. The question then is, at employer sponsored parties, what level of separation from normal work place practices (if any) is sufficient to relieve employers of its usual duty of care to employees and to third parties who may be injured because of the tortious acts of its employees? In the 1996 case of Jacobsen v. Nike Canada, the BC Supreme Court held Nike 75% liable when an employee suffered injuries due to an accident attributed to impaired driving. In that case, a group of employees were working long hours setting up a trade display for Nike at BC Place Stadium. The project manager supplied the group with a large quantity of beer during working hours. After the work was complete, the employees left the job site and, after stopping briefly at another bar, one employee was rendered a quadriplegic when he drove his car into a ditch. The court found that in this situation, even though the employee had stopped at a bar prior to the accident, the employer was responsible for the injuries the employee suffered away from the workplace and after work hours because it had:
Nike failed to meet the standard of care imposed by law and was found liable for the employee’s injuries. The decision of Hunt v. Sutton Group Incentive Realty Inc. (2002, Ontario Court of Appeal) is also instructive. This case involved Linda Hunt, a receptionist, who sued her employer, Sutton after sustaining serious injuries in a motor vehicle accident following a Christmas Party thrown for clients at Sutton’s office. There, Hunt was attending both as a guest and as part of her employment as she was expected to answer the phones and to clean up. At this party, the guests (including Hunt) served themselves at an open bar but no one was designated to monitor alcohol consumption. At the end of the party Hunt went with several others to a nearby pub and consumed two more drinks. While driving home from this pub in a snowstorm, she lost control of her vehicle, crossed the centre line and was hit by an oncoming vehicle. The court found the employer partly responsible for her injuries even though the employer had offered to get her a taxi cab, offered to call Hunt’s husband to pick her up, and another guest had specifically offered her a ride home. The trial judge stated that Sutton should have taken more proactive steps by insisting Hunt leave her keys at the office, or taking a cab home at Sutton’s expense, or could have easily actually phoned her husband or even the police if need be. The Court of Appeal did not disturb those findings although the trial was remitted back for a new trial based on a different procedural issue. Steps Employers Should Take For work related events, employers clearly have a duty of care to both their employees and third parties such that employers will be liable for injuries to employees and third parties they injure if the accident can be causally connected to work activities. For that reason, employers will want to separate as much as possible, the holiday party from being considered a “work activity”. Further, despite efforts to separate the party from normal work related events (i.e., by making participation in the party voluntary, outside of regular work hours, and away from the employer’s usual place of work), employers will still have a duty of care to its employees for their safety. Consequently, employers should consider the following steps if planning holiday parties where alcohol will be served.
FEDERAL GOVERNMENT INTRODUCES LEGISLATION ALLOWING PHASED RETIREMENT
On October 2, 2007 the federal government introduced draft legislation to revise the Income Tax Regulations which deal with phased retirement provisions. The amended regulations would allow employees with defined benefit registered pension plans to receive up to 60% of their accrued pension while they continue to work and continue to accrue additional pension benefits. If approved, these changes to the Income Tax Regulations are expected to come into force on January 1, 2008. The federal government has also indicated that it will make changes to the Pension Benefits Standards Act, 1985 which applies to federally regulated employers. British Columbia’s pension legislation does not currently permit phase retirement however it is expected the province will also introduce legislative changes to enable the implementation of the federal Income Tax Regulations in the spring of 2008. These proposed legislative changes will give employers an additional tool to encourage their older workers to continue to work past the normal retirement age. By removing the financial disincentive to continue working and allow employees to continue to accrue benefits is often cited as one of the significant factors hindering employers’ ability to retain its older workers. For those employers who do not have a defined benefit pension plan, and instead rely on some type of registered retirement savings plan, the federal government earlier this year increased the age upon which RRSP funds must be converted to either a RIF or annuity from age 69 to 71. BUYING OR SELLING A BUSINESS: THE "PEOPLE FACTOR"
If you are buying or selling a business, you are embarking on one of the most challenging adventures in your working career. Even business people with experience buying and selling business will tell you that no two deals are alike and that there are no shortage of “minefields” to navigate. Employment and labour relations is one such minefield that presents challenges and opportunities for both buyers and sellers. The difference between a share purchase and asset purchase is important in relation to the obligations and liabilities assumed by the buyer and retained by the seller. Unless the parties agree otherwise, in a share transaction the buyer acquires all employment related liabilities and obligations with the target company. An asset purchase is often more complex. In an asset deal, the extent to which the buyer takes on employee related liabilities and obligations is largely open to negotiation and is most often dependent on the nature of the assets purchased, their significance to employment, and relevant provisions of governing employment and labour legislation. By way of example, if a purchaser acquired all of the equipment of a unionized road builder and then continued operations without interruption after the acquisition, the buyer would likely be considered a successor employer under British Columbia labour relations legislation and would therefore be bound by the collective agreement between the seller and the union representing the seller’s employees. In contrast, if the road builder was to acquire certain specialty equipment of the seller, it might not give rise to any significant labour and employment issues. One important issue the parties will want to consider is how the parties can mitigate severance liability (both at the time of closing and afterwards). Section 97 of the Employment Standards Act RSBC 1996, ch. 113 provides that if all or substantially all of all of the assets of a business is sold, the employment of an employee of that business is deemed to be continuous and uninterrupted by the disposition. Thus, if the purchaser is prepared to offer employment on the same or better terms and conditions to the seller’s employees, there will not be a severance obligation. This also means, however, that absent any other agreements otherwise, the buyer will inherit all of the severance rights the employees may have acquired for their service with the seller before closing. A key to successfully completing a transaction is to have good information and knowledgeable advisors. It is essential that a buyer obtain full disclosure from the seller of all matters related to the seller’s employees. Whether a share or asset sale, any purchase agreement should contain a number of appropriate seller representations and warranties disclosing all matters involving the seller’s employees, trade unions, pensions and benefits, and other relevant employment related issues. The purchase agreement should also include appropriate indemnities which apply post closing, to provide protection to each party receiving such representations and warranties. If you are the purchaser, ensure that your legal counsel understands your target business and future objectives. Labour and employment issues are numerous in an acquisition transaction. A thorough discussion of each is beyond the scope of this article. Instead, we will list some of the material employment and labour relations matters that you should consider when buying or selling a business:
If the business you are proposing to buy or sell has a significant number of employees, employment issues can make or break a deal. Employee related issues are complex and must be considered very carefully at the early stages of a transaction. A transaction is most likely to succeed if the buyer and seller have knowledge of and have come to terms with all of the labour and employment issues at the early stages of the transaction. Employees are both an incredible asset and the potential source of significant liability. It is critical that both buyer and seller be fully apprised of their rights and obligations in connection with employees once the transaction completes. Aaron B. Singer
DID YOU KNOW? December 10 is Human Rights Day
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Each year on December 10th, the United Nations’ International Human Rights Day commemorates the 1948 signing of the Universal Declaration of Human Rights, the document upon which Human Rights legislation is based. [In BC, the Human Rights Code RSBC 1996, ch. 210 is the legislation that governs us.] December 10th is a day to acknowledge that all Human Beings are born free and equal in dignity and rights.
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