Difference between revisions of "Employment Law Issues (9:V)"

*vi) Where an employer produced false evidence of the employee’s absence without leave in order to argue just cause for dismissal and only offered ESA minimum severance (Bailey v. Service Corporation International (Canada) ULC, 2018 BCSC 235)).

The Supreme Court of Canada affirmed the principle of good faith performance of contracts and its creation of the new common law duty of honesty in contractual performance in ''Bhasin v Hrynew'', 2014 SCC 71.   

If one suspects the employer acted in bad faith in the manner of dismissal, one should do further research to determine whether the employee has a strong case. For a table of cases in which aggravated or punitive damages were sought, and a list of the damages awarded, see “Aggravated and Punitive Damages and Related Legal Issues”, Employment Law Conference 2013, Paper 8.1, CLE BC.  

If the conduct of the employer was especially outrageous, harsh, vindictive, reprehensible, or malicious, then the court may award punitive  damages (see ''Honda Canada Inc v Keays''). The focus will be on the employer’s misconduct, and not on the employee’s loss; the damages are not designed to compensate, but rather to punish and deter. Generally, the discretion to award punitive damages has been cautiously exercised and  used only in extreme cases. Courts are wary of the risk of double-compensation where punitive damages and aggravated damages are considered in the same case.   

*The tort of intentional infliction of mental distress (''Strudwick v Applied Consumer & Clinical Evaluations Inc.'', 2016 ONCA 520).

Workplace investigations into misconduct must be carried out in a good faith manner without bias.  Unfair process may entitle an employee to aggravated or punitive damages.   

A flawed workplace investigation followed by a dismissal can attract aggravated damages; see ''Lau v. Royal Bank of Canada'', 2015 BCSC 1639; ''Kong v. Vancouver Chinese Baptist Church'', 2015 BCSC 1328; and ''George v. Cowichan Tribes'', 2015 BCSC 513.

Claimants in civil court should be aware that an employee has a common law duty to mitigate his or her losses. An employee does not have to take every action possible to mitigate; instead, reasonable effort is required; see ''Gust v Right-of-Way Operations Group Inc.'', 2016 BCSC 1527.  Searching for similar work is sufficient.  For a discussion of the relevant legal test for mitigation, see ''James v The Hollypark Organization Inc.'', 2016 BCSC 495.

In a legal dispute, the onus of proof as to whether the claimant former employee has properly taken efforts to mitigate their damages generally falls on the defendant former employer.

There is no duty to mitigate in order to receive statutory compensation for length of service  under the ESA. An employee is entitled to  statutory termination pay regardless of whether the employee finds new work.   

An employee is still required to mitigate his damages if he is constructively dismissed.  Sometimes, the employee will be required to mitigate by continuing to work for his current employer.  See ''Evans v Teamsters Local Union No. 31'' (2008 SCC 20) for a discussion of the relationship between constructive dismissal and the employee`s duty to mitigate.

There are some circumstances where an employee’s refusal to accept re-employment with the employer who fired him is found to be a failure to mitigate.  However, this might not be the case if the trust relationship is eroded as result of the employer’s actions.  See ''Fredrickson v. Newtech Dental Laboratory Inc.'', 2015 BCCA 357.

If an employee receives damages for wrongful dismissal, this money is treated as earnings, and the employee will be required to pay back the appropriate amount of EI benefits received while waiting for the court case to be heard (EI benefits are not deducted from the amount of the damage award). Note that the employee may be able to receive the EI benefits back again if they are still unemployed and searching for work  after the period covered by the severance award; call Service Canada at 1-800-206-7218 for further details if this situation may apply to the employee.  

If the contract becomes impossible to perform through no fault of the employee or the employer, then the contract is frustrated, and may be terminated without liability. The contract must be impossible to perform, not merely less profitable. The impossibility of performance must be  unforeseen, there must be no alternative to termination, and termination must not be self-induced. Frustration of contract is a separate  ground for termination of contract, separate from just cause, which is a breach of the employment contract by the employee.

== D. Post-Employment Issues ==

It is becoming increasingly common for employment contracts to include restrictive covenants that prevent former employees from doing certain things, including but not limited to: divulging company secrets, working for competitors, or setting up their own competing business. While restrictive covenants have historically applied to upper level employees, they are more and more common for all types of employees as specialization increases and more companies sell information as opposed to goods.   

The courts are unwilling to re-write restrictive covenants if they contain uncertain and ambiguous terms; these covenants are deemed prima  facie unreasonable and unenforceable (''Shafron v KRG Insurance Brokers (Western) Inc''). It can often be a simple matter to find an ambiguity:  the length of time or geographic area might not be specified, or there may be a prohibition against soliciting clients that the employee did not work with, or the employer may have used a non-compete clause when a non-solicitation clause would have adequately protected their legitimate business interests.  See ''Powell River Industrial Sheet Metal Contracting Inc. (P.R.I.S.M.) v Kramchynski'', 2016 BCSC 883.

There is no statutory requirement under the ''ESA'' for an employer to provide a reference. Employers are required to provide former employees  with a record of employment, which includes information such as the length of service, wage rate, but does not include anything about the employee’s performance.  

If an employer tells an employee that they will only receive a reference letter if they resign, in order for the employer to avoid liability for severance payments, the employee may be able to make a claim for both wrongful dismissal and punitive damages (''Vernon v British Columbia (Liquor Distribution Branch)''), 2012 BCSC 133).

Generally, it is rare for an employer to sue an employee. This might occur if an employee breaches a term of a contract (including an implied term), or if an employee breaches a fiduciary duty. Sometimes, after an employee brings an action against an employer, the employer will make a counterclaim against the employee as a strategic move to encourage the employee to settle for a lower amount; the strength of the employer’s case should be carefully considered if this occurs.  

The duties listed below are generally implied in employment contracts. This list of duties is not exhaustive.  

Employees owe a duty of good faith to the employer; this is an implied term of employment contracts. An employee might breach this by actively working against one of their employment duties; for example, a supervisor who is supposed to retain employees could breach this duty by inducing the employees they supervise to resign in order to complete against the employer. See ''RBC Dominion Securities Inc v Merrill Lynch Canada Inc'', 2008 SCC 54, and ''Consbec Inc. v Walker'', 2016 BCCA 114, for further details.  

An employee must give their employer reasonable notice if they are resigning. “Reasonable notice”, in the case of resignations, is much shorter than the notice that employers must give to employees who are being dismissed. Although giving two weeks’ notice is the usual practice, the  courts may require more or less than that amount, depending on the employee’s responsibilities. If an employee breaches this duty, they may be held liable for the profits that their continued employment would have generated for the employer; this is generally only of concern if the employee generates significant profits for the employer. For further details, see ''RBC Dominion Securities Inc v Merrill Lynch Canada Inc'', 2008 SCC 54.  

If an employment contract contains a restrictive covenant (such as a non-competition clause or a non-solicitation clause), see [[{{PAGENAME}}#1. Restrictive Covenants | section IV.F.1: Restrictive Covenants]], above. Employees without a valid non-competition clause (and who are not in a fiduciary position – see [[{{PAGENAME}}#5. Fiduciary duties | section V.E.3: Fiduciary duties]], below) may compete against  an employer as soon as they are no longer employed by the employer (''Valley First Financial Services Ltd v Trach'', 2004 BCCA 312). However, employees should be careful not to compete unfairly, or compete using confidential information obtained from their former employer.

If an employment contract contains a restrictive covenant (such as a non-competition clause or a non-solicitation clause), see Section V.D.1: Restrictive Covenants, above.

It is an implied term of an unwritten employment contract that the employee will not misuse the employer’s confidential information. A common example of confidential information is the employer’s list of customers. Employees who take a customer list by printing it out or putting it on a USB key and taking it with them, or by emailing it to themselves, would be in breach of this duty. One notable exception is that an employee may use any part of the customer list that they have simply memorized (per ''Valley First Financial Services Ltd v Trach'', 2004 BCCA 312). Additionally, employees such as financial advisors, who have developed ongoing relationships with clients, may be entitled to take a list of  their own clients to inform them that they are departing, and where they will be working in the future (''RBC Dominion Securities Inc v Merrill Lynch Canada Inc et al'', 2007 BCCA 22 at para 81, reversed in part at 2008 SCC 54; ''Edwards Jones v Voldeng'', 2012 BCCA 295). Note however that this may be prevented if the employee is in a fiduciary position, and there may be limits on the permitted contact or other complications if the employee signed a non-solicitation agreement.  

Only a small fraction of employees are in a fiduciary position. They may have fiduciary duties if they are directors of the company, or if they are senior officers in a top management position (per ''Canadian Aero Service Ltd v O’Malley'', [1974] SCR 592). A fiduciary position is generally one where the fiduciary (the employee) has some discretion or power  that affects the beneficiary (the employer), and the beneficiary is peculiarly vulnerable to the use of that power (per ''Frame v Smith'', [1987] 2 SCR 99).  

== F. Other Employment Law Issues ==

For provincially regulated employees, the ''Human Rights Code'' prohibits discrimination in employment on the basis of the following prohibited grounds (ss 13, 43):  

Federal equal pay provisions in the ''Canadian Human Rights Act'' are somewhat broader than those found in B.C.’s ''Human Rights Code''. It is discriminatory under the ''Canadian Human Rights Act'' to pay male and female employees different wages where the work that they are doing is of comparatively equal value. This means that even if the work itself is not demonstrably similar, the pay equity provisions may still be enforced if the value of the work is similar. Factors that are considered in determining whether work is of equal value include: skill, efforts and responsibility required, and conditions under which the work is performed (''Canadian Human Rights Act'', s 11(2)).

Bullying and harassment in the workplace are developing areas of the law.  There are several possible avenues for addressing a complaint in this area if the issue cannot be resolved within the workplace.  

Finally, if the bullying or harassment is of an extremely serious nature, such as serious sexual harassment, consider whether the behaviour might be criminal and whether the police should be contacted.  

Generally, employers are not permitted to retaliate against an employee who files a statutory complaint.   

A provincially regulated employee might file a complaint against an employer at the Employment Standards Branch, the Human Rights Tribunal, or  with WorkSafe. The ''Employment Standards Act'', the ''Human Rights Code'', and the ''Workers Compensation Act'' each contain provisions which prohibit retaliation for filing complaints.   

An employer may not threaten, terminate, suspend, discipline, penalize, intimidate, or coerce an employee because the employee filed a complaint under the ''ESA'' (s 83). If this does happen, the Employment Standards Branch may order that the employer comply with the section,  cease doing the act, pay reasonable expenses, hire or reinstate the employee and pay lost wages, or pay compensation (s 79). A complaint may be filed with the Employment Standards Branch.  

A person must not evict, discharge, suspend, expel, intimidate, coerce, impose any pecuniary or other penalty on, deny a right or benefit to  or otherwise discriminate against a person because that person complains or is named in a complaint, gives evidence or otherwise assists in a complaint or other proceeding under this Code (s 43). If a person is discriminated against in such a manner, they may file a complaint at the  Human Rights Tribunal in the same way that they would complain about any other discriminatory practice; see [[BC Human Rights Code (6:III)#C. The Complaint Process | Chapter 6: Human Rights, Section III.C: The Complaint Process]].  

Employers and unions must not take or threaten discriminatory action against a worker for taking various actions in regards to the Act, such  as reporting unsafe working conditions to a WorkSafe officer (s 151). Remedies include the ability to reinstate the worker to their job (s 153). Additional details are set out in the ''Workers Compensation Act'', Division 6 – Prohibition Against Discriminatory Action.  For more information on the Workers Compensation Act and WorkSsafeBC, see Chapter 7 of this manual.

An employee may face retaliation for bringing an internal complaint, possible through a formal complaint process outlined in an employment policy.  If the employer retaliates against the employee in a significant manner, this could constitute a constructive dismissal.  In addition, if the employer dismisses the employee following a legitimate complaint, this may form grounds for an aggravated damages claim as a result of a bad faith dismissal.   

There are three statutes in BC that concern privacy.  

The ''Personal Information Protection Act'', SBC 2003, c 63, [''PIPA''] applies to almost all organizations that are not public bodies covered  by ''FOIPPA''. It governs the collection, use, and disclosure of personal information, including employees’ personal information.   

Generally, employers can collect information that is reasonably necessary in the circumstances. Some of the factors to be considered are whether the collection of the personal information is required to meet a specific need, whether the collection of information is likely to meet that need, whether the loss of privacy is proportional to the benefit gained, and whether there are less privacy-invasive methods of achieving the same end, per ''Eastmond v Canadian Pacific Railway'', 2004 FC 852. In that case, surveillance of a rail yard was permitted after there  were a number of incidents of theft, trespassing, and vandalism. GPS tracking of employees’ work vehicles has also been permitted (''Schindler Elevator Corporation'', Order P12-01, 2012 BCIPC 25), though it generally necessary for the employer to inform the employee of the GPS tracking.