SEPTEMBER
2008
  THE BLACKBERRY DILEMMA: PAYING FOR THE 24/7 WORK CULTURE 
The arrival of BlackBerrys, PDAs and other forms of remote access has been hailed as a godsend for those looking for additional flexibility and options to keep in touch with our work. They provide more freedom to stay connected with work when away from the workplace and mean we are free to accept and handle work projects anytime and anywhere. While that prospect is attractive to many employers and employees, it raises difficult issues. One is the psychological issue: BlackBerrys create a feeling of the "24/7" working environment, which in turn may contribute to stress and "burn-out". Discussion of this issue is common in the career section of newspapers. In February of this year, Citizenship and Immigration Canada banned its employees from using BlackBerrys between 7 p.m. and 7 a.m., for the stated reason of cutting down work stress. A further issue, one not discussed as often, is compensation: is an employee entitled to be paid for using a BlackBerry or logging in for work purposes at night or on weekends? If so, what options are available to employers to minimise or manage that liability? The compensation issue is becoming a hot media topic. Indeed, it was a point of negotiation between the U.S. television network, ABC, and the Writers Guild of America. During the negotiations, the network had sought a waiver of all pay claims for work using BlackBerrys. The guild disagreed. Its spokesperson stated the case as follows:
The parties reached a compromise, wherein ABC agreed to pay workers for using their BlackBerrys at home, but only for work related usage. The compensation will not include use of the device to check email at night, but writers and producers will be compensated in certain circumstances, such as when an important news story breaks after office hours. For employers in British Columbia, the issue falls within two related areas of the law: overtime and payment for hours worked. Under the Employment Standards Act, the maximum hours of work are eight hours a day and forty hours a week. If an employer directly or indirectly allows an employee to work beyond those hours, the employer must pay overtime pay at one and one-half times the normal hourly rate. For salaried employees, the salary is converted to an hourly rate by dividing the salary by the "normal or average" hours worked by the employee. The overtime provisions do not apply to all employees. For example, they do not apply to managers or "high technology professionals". However, even if the employee is excluded from the Employment Standards Act overtime provisions, the employer may still be liable for claims by employees for additional compensation, if that employee has stated hours of work in an employment contract or an office policy. In that situation, the rate for the additional pay would be calculated by dividing the salary by the regular hours and then paying the same rate for the additional hours. An employee does not need specific permission to work outside regular hours before being entitled to additional pay. An employer may become liable if it provides the mechanism for BlackBerry use or remote access but says nothing more. Very often an employer is not aware of the potential liability until faced with a claim after the fact. The claim itself may span several months and the employer may have little in the way of a defence. A laissez faire approach to the issue is a risky and potentially expensive proposition for an employer. There are, however, several options available to an employer to address the potential liability for claims of additional pay for BlackBerry use or remote access:
BlackBerry/Remote Access Policy The following are questions an employer should consider when creating a BlackBerry policy.
Hours of Work As set out above, for salaried employees, the potential liability arises when employees have set hours of work, either by virtue of a contract or a workplace policy. In that way, the employer is defining the "normal or average" hours of work. To reduce or manage the potential liability, the employer should consider the following questions:
Enforcement As with all policies implemented by employers, policies will only be effective if they are applied and enforced rigorously. Consequently, ongoing monitoring is crucial. Having clear policies and enforcing them will go a long way to managing the employer's potential liability for additional pay. Clear policies and expectations may also deal with an employee's perception that they are expected to be available for the employer 24/7.
SUPREME COURT OF CANADA BREATHES NEW LIFE INTO FIGHT OVER CLOSURE OF WAL-MART'S (UNIONIZED) QUEBEC STORE
Citing "financial reasons", on February 9, 2005 Wal-Mart announced it would close its Jonquière store less than 6 months after the United Food and Commercial Workers Union, Local 503 was certified to represent the employees of that store, and the same day that the Quebec Ministry of Labour referred the union and Wal-Mart to arbitration in order to establish the first collective agreement. As a result of the closure of the store, 79 employees filed complaints that they had lost their jobs because of their union activities, contrary to section 15 of the Quebec's Labour Code. The complaints of four employees, represented by 2 claims (Gaetan Plourde v. Wal-Mart Canada Corp. et Commission des relations du travail and Johanne Desbiens, Ingrid Ratté and Claudine Beaumont v. Wal-Mart Canada Corporation et Commission des relations du travail) were then selected to proceed to hearing. After a series of rulings mostly in favour of Wal-Mart, on August 7, 2008 the Supreme Court of Canada has now granted the employees' applications for leave to appeal the two decisions, thereby setting the stage for one last attempt by the employees to demonstrate that they were dismissed because of their union activities, as opposed to Wal-Mart's position that the Jonquière store was closed for "good and sufficient reason", namely, the real and permanent closure of the store for financial reasons. The rights and obligations under the Code are similar to labour relations legislation in force elsewhere in Canada, including British Columbia. Employers are prohibited from unfair labour practices including retaliating against one or more employees who are seeking to participate in activities designed to organize union representation in the work place, or, once certification has been granted, for the furtherance of establishing or defending employee rights under a collective agreement. For that reason, employers and unions will be watching to see whether the Court decides in favour of Wal-Mart, like one of the Commissions, and the Superior Court and Court of Appeal, or in favour of the employees. Needless to say, employers should be mindful when or if they are making any decisions to shut down an operation or take other similar measures of terminating employees at the same time that union membership or certification efforts are underway. Even if employers are not considering shutting down their businesses, there are rules established through various decisions of Labour Relations tribunals which prescribe what an employer can and cannot communicate during these times. Thus, employers should seek proper legal advice prior to taking any action when faced with similar situations. Pratibha Sharma & Nicole Byres
HAS THE BUSINESS CASE FOR EMPLOYMENT PRACTICES LIABILITY INSURANCE BEEN UNDERMINED BY THE EFFECT OF THE HONDA V. KEAYS DECISION?
Until very recently, the extent to which courts were willing to punish an employer for bad behaviour in the course of termination of an employee was relatively unknown. The spectre of significant punitive damages has led some employers to purchase employment practices liability ("EPL") insurance coverage, designed to provide protection against damages arising out of an employer's wrongful acts such as sexual harassment, discrimination and wrongful dismissal. However, the Supreme Court of Canada's recent decision in Honda Canada Inc. v. Keays, 2008 SCC 39, which significantly reduced the lower courts' damage awards, may have a chilling effect on the popularity and necessity of this type of insurance. Employment Practices Liability Insurance: The Basics While there is no standard EPL policy wording, the basic purpose of this kind of insurance is to provide an employer with coverage for "wrongful acts" performed in the employment context, including wrongful dismissal (actual or constructive), breaches of human rights legislation such as discrimination and harassment, defamation, infliction of mental distress and retaliatory treatment. It should be noted that the practicality of EPL insurance covering claims for wrongful dismissal (i.e. where a breach of the employer's implied obligation to provide reasonable notice of termination is alleged) has been questioned and as a result, some EPL polices have explicit exclusions for such claims. EPL policies are usually "claims made" policies, meaning that coverage will depend on the employer receiving a claim and reporting it to the insurer within the time specified in the policy. Unless the claim is received within that time period, there will be no coverage. Thus, an employer would have to maintain its coverage for at least the amount of time in which an employee could bring legal action against the employer (in most cases, under BC's Limitation Act, 6 years) - which in many cases, is long after the employment has been terminated. Insureds under EPL polices typically include both the corporate employer and its directors, officers and employees. Also, even where employees are not explicitly covered under the policy, there may still be de facto coverage as a result of the vicarious liability of an employer for the acts of its employees (who participated in the wrongful conduct towards the claimant). Lastly, in Canada, unlike the U.S., some EPL policies provide coverage for both compensatory and punitive damages. This makes sense in light of the fact that many of the acts (such as harassment) which are expressly covered under EPL policies, are those which may attract punitive damages. The Facts in Honda v. Keays Kevin Keays started out with Honda as an employee working on an assembly line, later moving to data entry. Eleven years later, he was diagnosed with chronic fatigue syndrome and ceased work. He received disability benefits from an independent insurer until those benefits were terminated as a result of the insurer's conclusion that Mr. Keays was able to return to work. Upon his return to Honda, Mr. Keays was placed in Honda's disability program which allowed him to take absences from work so long as it was related to his disability. However, Mr. Keays's absences began to exceed that which were supported by his doctor's notes. His doctor's explanations for his absences also "changed in tone". Honda became suspicious. Honda arranged for Mr. Keays to meet with an independent physician hired by Honda to investigate the reason for Mr. Keays's absences. Mr. Keays was subsequently asked by Honda to meet with an occupational medicine specialist to determine how Mr. Keays's disability could be accommodated. Mr. Keays then retained a lawyer because he was worried that his employment was going to be terminated. His lawyer sent Honda a letter outlining his concerns and offered to work towards a resolution. Honda did not reply. Two members of Honda's management, including Mr. Keays's direct supervisor, met with Mr. Keays to explain their concerns about the doctors' notes he had produced in support of his absences. Mr. Keays was asked yet again to meet with the occupational specialist. Mr. Keays agreed to meet with the occupational specialist but subsequently refused on the advice of his counsel. He requested that Honda confirm the purpose, methodology and parameters of the consultation. Mr. Keays was then absent from work for a week. Upon his return, he was given a letter from Honda which stated, among other things, that Mr. Keays would be terminated if he refused to meet with the occupational specialist. The information requested by Mr. Keays as to the nature of the consultation was not provided and so Mr. Keays remained unwilling to meet with the specialist. As a result, Honda terminated Mr. Keays's employment. The Trial and Appeal Decisions in Honda v. Keays The trial judge found that Mr. Keays had been wrongfully dismissed and held that he was entitled to damages in lieu of reasonable notice of 15 months. The judge also extended the length of notice to 24 months as a result of the manner in which the termination had taken place (such damages commonly being referred to as "Wallace damages" awarded for bad faith by an employer). Finally, the judge awarded Mr. Keays $500,000 in punitive damages. This was based on the trial judge's finding of "egregious bad faith displayed by Honda in the manner of the termination and the medical consequences flowing therefrom". The Ontario Court of Appeal dismissed Honda's appeal and found that, given Honda's conduct, an award of punitive damages was reasonable, however, that Court did reduce the sum of punitive damages from $500,000 to $100,000 because it found that the trial judge's award was not proportional to the wrong that had actually been perpetrated. The Supreme Court of Canada's Decision in Honda v. Keays The Supreme Court of Canada (the "SCC"), however, disagreed with both of the lower Courts. First, the court commented on the scope and applicability of so called "Wallace damages". The court found that Honda's conduct when it terminated Mr. Keays did not constitute bad faith, and therefore no Wallace damages were payable. Specifically, the SCC held that the type of conduct which would attract such damages (attacking the employee's reputation at the time of dismissal, misrepresentation regarding the reason for termination, dismissal meant to deprive the employee of a benefit or other right, etc.) was simply not present. Of particular note was the SCC's confirmation that Wallace damages should only be awarded if the employer's conduct directly caused a loss to the employee. Thus the appropriate focus, therefore, is on the compensation required to address the loss directly flowing from the employer's actions. The calculation of Wallace damages does not focus on the degree of wrong of the employer. Second, the SCC held that a clear distinction must be drawn between damages for conduct in the matter of dismissal (Wallace damages) which are meant to be compensatory, and punitive damages which are meant to punish wilful wrongful acts which are malicious and outrageous. The SCC found that Honda had not engaged in behaviour that should attract punitive damages because its conduct had not been harsh, vindictive, reprehensible or malicious. This was not an "exceptional case" in which punitive damages was appropriate. Thus the lower courts' awards of Wallace damages and punitive damages were set aside by the SCC, leaving Mr. Keays with only damages for wrongful dismissal. The decision will also make it more difficult in future, for all former employees to successfully make claims for damages for bad faith in the manner of dismissal (Wallace damages), or for punitive damages. The Effect of the Supreme Court's Decision in Honda v. Keays on the Necessity of EPL Insurance Many supporters of EPL insurance relied on the large amount of damages awarded against Honda in the trial and appeal decisions in the Keays case, to make the argument that a prudent risk management plan justified such coverage. However, the SCC has significantly undercut that line of reasoning. It would seem that only in the most extreme and rare circumstances will damages result to an extent that insurance coverage is necessary. EPL insurance may still be relevant and necessary for certain organizations, such as non-profit societies, which do not have assets or resources to defend employment practices claims or satisfy judgments for related damages. The average employer, however, may simply not have the exposure to warrant the expense of this type of insurance.
CW LAWYERS TO ARGUE IMPORTANT CASE BEFORE THE SUPREME COURT OF CANADA
Valerie Dixon, from the Labour & Employment Group, and Neo Tuytel will appear before the Supreme Court of Canada on October 16, 2008 arguing the case of KRG Insurance Brokers (Western) Inc. v. Shafron. The case concerns the issue of whether a Court may alter a vague or ambiguous non-competition clause in an employment agreement so as to render it enforceable. Mr. Shafron was employed by KRG from 1987 until 2000. His employment agreement included a non-competition clause which purported to restrict him from carrying on the business of insurance broker for a period of three years within the "metropolitan City of Vancouver". At trial, the restrictive covenant was found to be unenforceable, due in part to the fact that the spatial area over which the covenant was to apply was uncertain. The Court of Appeal overturned the trial judgment and, applying the "doctrine of notional severance", altered the language of the covenant so as to give it effect. Given that the Supreme Court of Canada has not considered the issue of non-competition clauses in the employment context since 1978, the Court's decision in this case will be of great interest to employers and employees across Canada.
DISMISSAL OF ADDICTED EMPLOYEE FOR THEFT RULED NOT DISCRIMINATORY
It is well-known that employers must not discriminate against an employee on the basis of an employee's disability. It is equally well-known that alcoholism and drug addiction are disabilities. A challenge arises for employers when alcoholic or drug-dependent employees steal to feed their addictions: is it discrimination to terminate the employment? In recent years, decisions of the British Columbia Courts have offered support to employers in handling this difficult issue. That trend has continued in a recent decision of the British Columbia Court of Appeal in British Columbia (Public Service Agency) v. British Columbia Government and Service Employees Union, 2008 BCCA 357, where the majority of the Court of Appeal held that the employer did not discriminate when it fired an alcoholic employee who stole liquor from his employer. The key finding was that the alcoholism was not a factor in the decision to terminate the employment. The employee in question was a manager of a liquor store. Unbeknownst to his employer, he developed an alcohol problem. Over an extended period of time, the employee began stealing alcohol from the store. Eventually, the employer confronted the employee about the thefts. After being assured no criminal charges would be laid, the employee admitted the thefts and advised his employer for the first time that he was an alcoholic. He then attended a rehabilitation programme at his own expense, and abstained from alcohol thereafter. The employer terminated the employment, and the employee challenged the dismissal in a grievance procedure. After a lengthy arbitration and appeal process, the arbitrator found that the thefts were related to alcoholism, the dismissal was discriminatory and the employer was required to accommodate the disability, which in this case meant continuing the employment. A majority of the Court of Appeal overturned the arbitrator's decision. It remitted the decision back to the arbitrator to determine whether the decision to dismiss was excessive, under the Labour Relations Code, an analysis not related to the employee's alcoholism. The Court reaffirmed that to establish discrimination, a complainant must establish that he has a disability, the employer refused to continue his employment, and it is reasonable to infer from the evidence that his disability was a factor in that refusal. The Court found that in the present case, there was no suggestion that the employee's alcohol dependency played any role in the employer's decision to terminate him or in its refusal to accede to his subsequent request for the imposition of a lesser penalty. Instead, the Court found that the employee was dismissed, "like any other employee would have been on the same facts, for theft". In reaching its decision, the Court stated:
In so commenting, the Court rejected the notion that theft by an alcoholic is automatically linked or even caused by the alcoholism. The Court also drew an analogy between the criminal law context and the human rights context. The Court noted that the employer had the right to complain to the police. Had the employer done so, the employee's alcoholism would not have been a defence to the charge. Indeed, the employee acknowledged that the facts were present to have led to a conviction and it was acknowledged by the arbitrator that but for the human rights issue, the conduct "clearly warrants discharge". If the employee had been convicted of theft, the employer could have dismissed the employee. In that scenario, the Court opined that the employer could have successfully argued that the dismissal was not discriminatory because it was based on a conviction that was related to employment. The Human Rights Code only prohibits discrimination on the basis of a conviction if the conviction is unrelated to the position. In the result, the Court found that the decision to dismiss the employee was not arbitrary or based upon any preconceived ideas concerning his alcohol dependency. Instead, the decision was based on criminal misconduct. The fact that the theft was related to the alcoholism was irrelevant because it played no part in the decision to terminate, and the employee suffered no adverse impact as a result: he was treated the same as a non-disabled person who stole. Finally, the Court commented that, on a policy basis, rendering dismissals discriminatory in such circumstances could lead to a backlash against addicted employees. Employers would be encouraged to lay criminal charges, addiction would be no defence, and then employers could lawfully terminate the employment. Employers could achieve the same result but now the employee would also have a criminal record. The decision represents a significant clarification of how employers should approach theft by addicted employees. However, employers should still remain cautious. First, the evidence established that the alcoholism was not a factor in deciding to terminate the employment. Second, it was admitted that the level of misconduct was at a criminal level and could have resulted in a conviction. Third, it was admitted throughout that the employer did not know of the alcoholism until after it discovered the thefts.
CLARK WILSON SPONSORS INAUGURAL WOMEN'S LEADERSHIP FORUM
Themed Shine: Radiate Your Leadership, the Forum was designed to assist women to achieve their full potential as leaders and future leaders within their organizations. Participants were challenged and inspired through thought-provoking and inspirational keynote sessions, presentations, panel discussions and workshops. The forum also included many opportunities for participants to network and share ideas and experiences with their peers. For more information, visit the Women's Leadership Foundation website at: www.wlf-womensleadershipfoundation.ca.
CLARK WILSON TO PARTICIPATE IN CLIMATE SMART
This fall, Clark Wilson will be participating in Climate Smart, a new service developed by Ecotrust Canada and sponsored by West Coast Air. As part of the service, we will be attending a three part workshop series focused on measuring, reducing and offsetting our carbon footprint. The service also offers new tools for tracking greenhouse gas emissions. With Clark Wilson's own Green Program launched this summer and several initiatives underway, we are enthusiastic to participate, share ideas, and gain some new tools for our program.
LABOUR & EMPLOYMENT SEMINARS
We do seminars! Whether you are interested in general topics relating to labour, employment or human rights, or are looking for a program tailored to your business, one or more of our group members can speak at one of your business functions or develop a private seminar. For further information, please contact Nicole Byres at 604.643.3173 or by email at nmb@cwilson.com. On August 27, 2008, Gwendoline Allison, Allyson Baker and Valerie Dixon participated in an employment law seminar entitled "Employment Law from A to Z in British Columbia", organized by Lorman Education Services (www.lorman.com). Lorman is a leading provider of continuing education services to businesses across North America. Gwendoline presented on the topic of Understanding and Applying the Employment Standards Act, while Allyson and Valerie presented on the topic of Managing Change in the Workforce.
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