70 Temporary Foreign Workers Hit Grand Slam as Court Certifies $10 Million Class Action Lawsuit Against Denny’s

Posted on April 3, 2012 by

My colleague Mike Weiler recently wrote this article on the class action lawsuit against Denny’s Restaurant:

With the changing demographics and skill shortages inCanadamany employers are forced to hire temporary foreign workers to fill positions that Canadians do not want or cannot fill.  The problem is especially acute in northern BC and Alberta.

The Federal and Provincial governments are making it easier for employers to hire temporary foreign workers, especially in unskilled positions.  Yet, employers are well advised to be careful in hiring foreign workers as the liability for failing to live up to statutory and contractual obligations may be very significant.

Litigation involving temporary foreign workers is on the rise.  In 2008 the company that built the  RAV line brought in a number of foreign workers. Those workers filed complaints with the Human Rights Tribunal and, as well, sought union certification at the Labour Relations Board.  Recently, UFCW Local 1518 filed unfair labour practice complaints against the Mexican government among others alleging it had discriminated against Mexican workers who come to Canada pursuant to the federal Seasonal Agricultural Workers Program. The complaint against Mexico was dismissed by the LRB as it enjoys state immunity but the union’s unfair labour practice complaints continue to be litigated.

On March 5th 2012 the BC Supreme Court certified a class action lawsuit on behalf of current and former Denny’s Restaurant temporary foreign workers.  The claim is for damages for alleged breaches of contract, breaches of good faith and fair dealing, breaches of fiduciary duties, unjust enrichment and punitive damages.  Counsel for the workers claim $10 million in damages.  It is important to note that the allegations have not been proven in court.

In her decision Madam Justice Fitzpatrick of the BC Supreme Court noted that a class action law suit:

…will substantially advance this litigation in terms of an overall resolution of the common issues which addresses the need for judicial economy in its approach.  In addition, recognizing the vulnerable situation in which these temporary workers find themselves, a class proceeding will provide the access to justice that they require in an environment that will be of assistance to them.  … It bears repeating that the investigations by the Employment Standards Branch in late 2010 and early 2011 had little effect on the practices of the defendants regarding payment of overtime and despite efforts to ensure that overtime was being properly paid, further breaches were recorded which resulted in a Determination on June 17, 2011 with penalties.

Dominguez v. Northland Properties Corporation
2012 BCSC 328
Para 263

The decision provides interesting insights as to the workings of the Temporary Foreign Worker program of the Federal Government administered by the Human Resources and Skills Development Canada.

Employers who require temporary foreign workers need to be very cautious in ensuring that all statutory and contractual obligations with respect to the workers are fulfilled not only by the employer but also any agencies they retain to recruit the workers.  If you are considering this option you might want to contact the writer and either Bruce Harwood or Saba Naqvi in Boughton’s Immigration Law Group before finalizing your plans.

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Substantial Damages Awarded to Wrongfully Dismissed Employee

Posted on February 2, 2012 by

The choice to terminate an employee for cause is a risky decision. Employers are often in a difficult spot balancing the interests of other employees with the problem employee or balancing the risk of a human rights complaint versus a wrongful dismissal claim. The B.C. Supreme Court recently awarded substantial damages to an employee who was dismissed after 30 years of service. In Vernon v. British Columbia (Liquor Distribution Branch), 2012 BCSC 133, the employer failed to prove cause for dismissal and was held liable for damages.

The court found a series of issues with the investigation into the employee’s conduct. It also criticised the lack of due process, in particular:

  • the employee was not informed of all of the allegations against her until after she was dismissed and thus was not given the opportunity to fully respond;
  • the report used as a basis for her termination did not disclose that in response to those allegations she was informed of the employee did not deny the allegations, but rather apologized and stated she would change her behaviour; and
  • the employee was not given a warning and the opportunity to improve before she was suspended and then terminated.

The court found that while there were problems with the employee’s language (swearing) and her treatment of employees (she was known as the “Little General”), it did not “strike at the root of or amount to a repudiation of the her employment contract” (para 353).

Thus, damages for lack of notice were awarded in the amount of 18 months, less a small amount she earned during the notice period, totalling damages of $97,173. She was also awarded pension entitlements for the period of notice, meaning the employer and the employee had to pay the contributions for the notice period. She was awarded special damages for out of pocket medical expenses and job training expenses.

The court also awarded $35,000 in aggravated damages based on the finding that the employer’s conduct in the course of dismissal was “unfair and unduly insensitive” (para 377). Punitive damages in the amount of $50,000 were also awarded taking into consideration the relative vulnerability of the plaintiff, the degree of misconduct by the defendant and any advantage gained by the defendant. Important to the punitive damage analysis was the fact that the employer had tried to get the employee to quit before firing her.

It was a lengthy trial and a lengthy judgment with substantial damages awarded. And thus, a reminder that close attention needs to be paid to both the process and the decision to terminate for cause.

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Boughton Winter 2012 Newsletter Published

Posted on January 18, 2012 by

The Boughton Employment & Labour Line Winter 2012 edition was published yesterday and can be found here or on the Boughton website. The newsletter is distributed three times annually directly via email and if you would like to be added to the distribution list, please see the details on the last page of the newsletter to sign up.

A complete list of all editions of the newsletter can be found on the “Boughton Newsletter” page of this blog.

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Federal Government Abolishes Mandatory Retirement

Posted on January 12, 2012 by

Mike Weiler, a colleague of mine at Boughton Law Corporation, distributed the following update yesterday as the part of our Employment & Labour Group’s E-Bulletins:

On December 15, 2011 the federal government gave Royal Assent to the omnibus Bill C-13. Included in that Bill was Part 12, which amended the Canadian Human Rights Act to repeal certain provisions that allowed for mandatory retirement. It also amended the Canada Labour Code to repeal a provision that denied employees the right to severance pay for involuntary termination if they are entitled to a pension.

BC eliminated mandatory retirement in 2008 following other jurisdictions such as Ontario. This recent amendment to the Canadian Human Rights Act brings the federal legislation in line with British Columbia human rights. The abolishment of mandatory retirement in the federal legislation will not take effect until December 2012, which will allow federal employers some lead time to transition. An employer may still implement mandatory retirement but must rely upon proving a bona fide occupational requirement. It is highly unlikely that most employers will be successful, in my view, in implementing such restrictions. The case of the retirement of airline pilots will have to be re-examined in light of this legislative change and it will be interesting to see if safety concerns trump age.

Without a cap on retirement, employers will be faced with a myriad problems in dealing with older employees. One of the fallouts from of the economic downturn beginning in 2008 is that many employees plan to work well beyond what they anticipated would be their retirement age. The inability to mandatorily retire employees makes employers vulnerable to human rights complaints such as discrimination on the basis of age or physical or mental disabilities. It will mean employers will have to manage all employees the same way and employers will not want to just let performance issues slide as an employee reaches what would otherwise have been the mandatory retirement age.  

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New Guidelines for Social Media Background Checks

Posted on January 3, 2012 by

Ever googled that candidate you just interviewed to find out more about his or her background? Or considered checking the LinkedIn, Facebook or other social media pages for the names on a stack of resumes to try to narrow the group? Stop – if you are conducting internet searches to gather information about potential or existing employees or volunteers, you are collecting and using personal information subject to privacy laws.

The Information & Privacy Commissioner of British Columbia recently released Guidelines for Social Media Background Checks (“Guide”) which can be found at http://www.oipc.bc.ca/ under Resources for Businesses and Organizations. The Guide’s stated purpose is “to assist organizations and public bodies using social media sites to conduct background checks of prospective employees, volunteers and candidates” (Press Release, October 12, 2011).

There are privacy law implications for gathering personal information whether or not the information is publically available online or is available online with limited access to “friends” or other allowed individuals. There are well known weaknesses of social media background checks, such as concerns regarding accuracy, relevance, and lack of consent. The Guide connects those issues to privacy law issues. For example, employers have obligations under PIPA and FIPPA to ensure that the personal information they collect is accurate. Employers must obtain consent (unless a specific exception is met) from an individual to collect, use or disclose personal information.

Employers need to consider the risks of gathering personal information from social media and have clear policies on how to go about any such searches. What if you find out information that is a prohibited ground of discrimination (such as seeing that a candidate is pregnant on a Facebook status update)? Does that raise the risk of a human rights complaint being filed even if the decision not to hire was based on lack of training? What if you make a decision based on completely inaccurate information? What if you did not obtain the consent of the potential employee for such a search and a complaint is made to the Privacy Commissioner? These risks can be minimized by creating clear policies on deciding when a search is necessary, obtaining consent and the details of how social media searches will be conducted. Specify what information you are looking for, include steps on efforts to confirm the accuracy of such information and be prepared to produce all information that was collected.

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Why wouldn’t a terminated labourer get the same treatment as a terminated CEO?

Posted on October 31, 2011 by

Courts consider a variety of factors in determining the length of reasonable notice an employee should have received upon termination without cause. In essence, the longer the length of reasonable notice, the greater the amount of damages awarded in lieu of notice to an employee. The four main factors the courts consider are set out in the leading case as follows:

  • character of the employment; 
  • length of service of the servant;
  • age of the servant; and
  • availability of similar employment
    (Bardal v. Globe and Mail Ltd., [1960] 24 D.L.R. 140 (Ont. H.C.), at p. 145).

I have always thought that one of the factors makes absolutely no sense at all: the “character of employment”. The “character of employment” factor is simply a way of stating that more senior employees, such as CEOs, vice-presidents and managers, should be given relatively longer notice periods that labourers, assistants and non-managerial employees all other factors being equal. The policy behind this factor is questionable. Is it because it will take more time for senior level employees longer to find a job? Is it because the loss of the job is harder on CEOs? Is it to make sure they can maintain their lifestyle over the notice period? I for one have never understood. Because damages are calculated based on your compensation, more highly paid employees already get greater damages in lieu of notice.

The amount of weight that should be placed on the “character of employment” factor has been recently discussed by the courts. In at least one case, the court held that:

There is no evidence to suggest that an employee with the responsibilities of Mr. Systad will have an easier time finding suitable alternate employment than an employee having more “senior” duties.  I am satisfied that there are very few situations where the “character of employment” will be of paramount relevancy in the consideration of the appropriate notice period to be ordered.  I adopt the statements that giving undue attention to the character of employment represents “antiquated social values” and is “antithetical to the law’s ultimate goal, namely egalitarian justice”.  Character of employment is merely another matter which I take into account along with the other factors set out in Bardal, supra (Systad v. Ray-Mont Logistics Canada Inc., 2011 BCSC 1202 at para 19).

I am very glad to see the courts reconsidering the weight that should be placed on this factor and look forward to the law progressing such that it is no longer a factor at all.

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Hitting on a colleague is not always sexual harassment

Posted on September 23, 2011 by

If someone calls and tells me the basic facts of a boss telling his assistant that he is attracted to her and then the assistant quit, my first reaction would be that there is a serious risk of a human rights complaint. While the risk of the complaint alone is something to worry about, an actual finding of sexual harassment will be very fact specific. The B.C. Human Rights Tribunal recently considered what I would call a classic situation of a married boss hitting on his younger female assistant and found there was no sexual harassment (Kang v. Hill and another (No. 2), 2011 BCHRT 154). The complaint was based almost entirely on one event in which Ms. Kang asked her boss, Mr. Hill, what was wrong as he appeared agitated. During the conversation that ensued, he stated that he had feelings for her. The question was did his behaviour amount to sexual harassment?

The leading judicial definition of sexual harassment is:

Without seeking to provide an exhaustive definition of the term, I am of the view that sexual harassment in the workplace may be broadly defined as unwelcome conduct of a sexual nature that detrimentally affects the work environment or leads to adverse job-related consequences for the victims of the harassment
(Janzen v. Platy Enterprises Ltd., [1989] 1 SCR 1252).

Key factual findings to dismissing the complaint in this case were the following:

    • Mr. Hill did not proposition Ms. Kang; he expressed feelings for her.
    • There was no physical contact between them. 
    • Ms. Kang did not fear for her safety at any time. 
    • Mr. Hill did not repeat behaviour that Ms. Kang had communicated was unwelcome.
    • Ms. Kang did not invite or intend to encourage Mr. Hill’s sexual or romantic interest in her, but, very early in her employment, she did ask him highly personal questions about his marriage, from which he correctly concluded that she was not averse to discussing such intimate matters in the workplace.

If there had been repeated expression of the feelings (as in McIntosh v. Metro Aluminum Products and another, 2011 BCHRT 34 (CanLII), or also some physical touching (such as in Tyler v. Robnik and Mobility World (No. 2), 2010 BCHRT 192) the Human Rights Tribunal would have made a finding of discrimination on the basis of sex and awarded damages.

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Employment Contract Provisions: Be Careful

Posted on August 8, 2011 by

Often in wrongful dismissal lawsuits a simple employment contract would have prevented the litigation and saved the employer liability for a damages award. However, in other cases the wording of the employment contract can itself be interpreted as requiring the employer to pay greater damages than they would have without any contract. If there are no contractual provisions, then common law obligations apply. Common law obligations include an employer’s obligation to provide reasonable notice and an employee’s obligation to take reasonable steps to mitigate their losses.

In Manera v. HUB International (Brentwoord) Ltd., 2011 BCSC 1027, the court determined that a reduction in compensation amounted to constructive dismissal. In doing so it rejected the employer’s argument that while it was constructive dismissal at common law, it could change the compensation structure because the employment contract contained provisions stating that the commission structure could be unilaterally amended by the Company and that the Company reserved the right to change its commission structure from time to time. The court gave no weight to these provisions. In one provision the language used by the drafters described “commission bulletins”, which in reality did not exist. Also, the provisions contemplated company wide changes in commission, but not this type of employee specific changes.

In determining the amount of damages for the wrongful dismissal, the employer argued that the employee had failed to mitigate her losses. She had taken a part time position at less pay in the same insurance sales industry. The employer argued she should have stayed working for the employer or found a better paying position. Again, the court considered the employment contract and found that the termination was effectively done as allowed under the termination provision. It stated the employer could provide severance in lieu of notice on certain terms. The court concluded that the contractual provision did include a reduction in payment for any amount earned from other sources, but there was no requirement for the employee to take reasonable steps to mitigate. The court relied on a previous decision to support its finding that the termination provision removed the duty to mitigate:

[19]           I find support for this reading of the contract in cases such as Borkowich v. Canadian Membership Warehouse Ltd., [1991] B.C.J. No. 195, where Prowse J. (as she then was) found:

… the question of whether an employment contract gives rise to a claim in debt or in damages will depend on the precise wording of the contract itself, and that it is open to the parties to provide for a severance payment upon termination to which the principles of mitigation do not apply …

Thus, again, the interpretation of the employment contract provisions was critical. The court noted that in any event, the employee had met the duty to mitigate. After deductions, the employee was awarded $31,834 after a 2 day trial.

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WorkSafeBC claims among the fall out from the Vancouver riots

Posted on July 19, 2011 by

The Globe and Mail recently reported on the number of claims filed with WorkSafeBC as a result of the Vancouver riots (Frances Bula, “Workers’ compensation claims from the Stanely Cup riot mount“, The Globe & Mail, July 18, 2011). The article stated that:

Two dozen people who were working in downtown Vancouver that night have filed claims with WorkSafeBC for injuries ranging from cuts and bruises to post-traumatic stress disorder in the past month, said spokeswoman Donna Freeman…
“I wouldn’t be surprised to see more PTSD claims come in,” said Ms. Freeman. “It is likely that a PTSD diagnosis would not be made by a physician immediately [after the riot], that longer-term effects would have to be assessed.”

WorkSafeBC claims are only one of the many costs of the riots, and for injuries such as PTSD, only time will tell what the full cost of the claim will be. The Workers Compensation Act applies to all employers and all workers in B.C. Employer’s are required to self register and employees can make a claim to WorkSafeBC for compensation relating to an injury at work. Generally, employees hurt on the job cannot start a civil law suit for personal injury and are limited to the WorkSafeBC system. What this means in practice, is that the legislation has created a mandatory insurance system so that people have direct access to a claims process when they are hurt at work. On the other hand, in one way or another, we are all contributing to WorkSafeBC and have an interested in keeping accidents and claims to a minimum.

The WorkSafeBC website lists a selection recent accidents reported and I always find it amazing how many serious injuries happen at the workplace. Currently there is no injury summarized that appears related to the Vancouver riots, but as claims work through the system we may hear of claims and decisions on compensation that tell us more about what employees suffered during the riot.

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Can your employer use your internet browsing history as evidence to fire you?

Posted on June 9, 2011 by

Is your employer watching? Are they monitoring the time you spend on the internet? But more importantly, can they use what they find out as evidence to fire you? In a recent decision, the answer to all of the above was YES.

A nearly 10 year employee was terminated for excessive internet usage – basically for not working while on duty. The union grieved the termination and made an application in advance of the arbitration that the internet investigative report be excluded as inadmissible because it infringed the employees privacy and was in violation of the B.C. Freedom of Information and Protection of Privacy Act (“FIPPA”). In the decision, Fraser Health Authority v. H.S.A.B.C., 2011 CarswellBC 1174 (B.C.A.B.), Arbitrator Glass held that there was no privacy violation and the report was admissible

One of the key facts in the decision was that the employer had a clear policy that the computers and the data on them were the property of the employer and that they would be monitored. The policy also stated that personal use of the computers was to be done while on breaks and was not to interfere with the employer’s operations.

The internet investigative report was generated based on data pulled from the employer’s proxy server, which included log records of the URL visited, web category, date and time, IP address of the source computer and the user account when the internet was accessed through the proxy server. The internet report was only requested after the employer had several pieces of evidence from other employees about the individual’s excessive use of the internet.

The employer in this case was a public body and therefore under FIPPA including the following:

26  No personal information may be collected by or for a public body unless
(a) the collection of that information is expressly authorized under an Act,
(b) that information is collected for the purposes of law enforcement, or
(c) that information relates directly to and is necessary for an operating program or activity of the public body.

The Arbitrator found that the internet investigative report fell within the exception of s. 26(c) and was not in violation of FIPPA. The Arbitrator found that the purpose of the audit was “legitimate and necessary” and the basis for looking into it was “reasonable”. I would suggest that a key factor was that the Arbitrator held that the scope of the internet investigative report was reasonably limited. It was not simply a copy of all the personal data of that employee, it was basically a list of websites visited and the time spent browsing.

There is no published decision yet on the substance of the grievance, but I imagine the employer is glad to be able to rely on the report. The list of URL’s visited over a 6 month period was 2783 pages long.

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