2007 Labour and Employment Law Client Conference · 2007-11-14 · 2007 Labour and Employment Law...

2007 Labour and Employment Law Client Conference Québec Region

Wednesday November 7, 2007 Mount-Royal Centre 2200 Mansfield Street, Montréal

Table of Contents

A Agenda

B Labour and Employment Group Labour and Employment Group Brochure Biographies of Presenters

C What’s New in Labour Law? Richard Beaulieu and Hubert Graton

D CSST Claims Related to Events Occurring During Extracurricular Activities Simon-Pierre Hébert and Rachel Ravary

E The Relationship Begins: Hiring Pitfalls André Baril and Marie-Hélène Maheu

F Fixed-term Employment Contracts Nathalie Gagnon and Philippe Lacoursière

G Employment, Consultation and Intellectual Property Rachel Ravary and Véronique Wattiez Larose

H A Practical Guide to Alternate Dispute Resolutions and Hearings André Baril and Pierre Jolin

I Workplace Investigations Nathalie Gagnon and Jacques Rousse

J McCarthy Tétrault Co-Counsel: Labour and Employment Quarterly

2007 Labour and Employment Law Client Conference

Conference Program (presented in English)

8:00 a.m. Continental breakfast and registration

8:45 a.m. Welcome and Introduction Earl Phillips

9:00 a.m. What's new in labour law? Richard Beaulieu and Hubert Graton This presentation will address recent, legislative and case law developments in labour and employment law, including: - Supreme Court of Canada ruling on clauses regarding loss of seniority rights and employment and duty to accommodate; - dismissal and calculation of notice of termination - beware of company policies; - a federal bill to limit the use of replacement workers; and - recent rulings on confidentiality clauses.

10:00 a.m. CSST claims related to events occurring during extracurricular activities Simon-Pierre Hébert and Rachel Ravary An employee is injured during your Christmas party or during a volleyball tournament organized by the company’s social committee. Is the employee covered by the CSST plan? This presentation will provide insight into this issue by analyzing case law on CSST claims related to events occurring during extracurricular activities.

10:30 a.m. Break

10:45 a.m. The relationship begins: hiring pitfalls André Baril and Marie-Hélène Maheu You seem perfect for one another. But have you asked the right questions? Have you said too much? This presentation will discuss the challenges employers face during the hiring process, including: - recruiting and the use of "Headhunters"; - job interviews; and


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- background checks and pre-employment medical examinations.

11:15 a.m. Fixed-term employment contracts Nathalie Gagnon and Philippe Lacoursière This presentation will cover the basics of everything you need to know about fixed-term contracts including renewal, termination terms and conditions.

12:00 p.m. Lunch, team introductions and questions

1:30 p.m. Workshops

A. Enquêtes en milieu de travail (given in French) Nathalie Gagnon and Jacques Rousse

Dans le cadre de cet atelier, Nathalie et Jacques vous donneront un aperçu des paramètres régissant les enquêtes en milieu de travail en vous conseillant afin de les mener efficacement.

B. Employment, Consultation and Intellectual Property

Rachel Ravary and Véronique Wattiez Larose In this workshop, Rachel and Véronique will review the guiding principles in intellectual property within a context of employer-employee and company-consultant relationships, and give you advice on the best practices to follow in this area.

C. Guide pratique en matière d'auditions et de méthodes alternatives de résolutions

des conflits (given in French) André Baril and Pierre Jolin

André et Pierre traiteront, au cours de cet atelier, des différentes méthodes alternatives de résolution des conflits utilisées en droit du travail et de l'emploi telles la médiation et la conciliation. Ils vous donneront également des conseils pratiques dans la préparation de vos auditions.

2:30 p.m. Break

2:45 p.m. Workshops

A. Workplace Investigations Nathalie Gagnon and Jacques Rousse


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This workshop will outline the parameters governing workplace investigations and provide advice on how to conduct them effectively.

B. Emploi, consultation et propriété intellectuelle (given in French)

Rachel Ravary and Véronique Wattiez Larose Dans le cadre de cet atelier, Rachel et Véronique passeront en revue les grands principes de propriété intellectuelle dans un contexte de relations employeur-employés et entreprise-consultants, tout en vous donnant des conseils visant de meilleures pratiques en la matière.

C. Guide pratique en matière d'auditions et de méthodes alternatives de résolutions

des conflits (given in French) André Baril and Pierre Jolin

André et Pierre traiteront, au cours de cet atelier, des différentes méthodes alternatives de résolution des conflits utilisées en droit du travail et de l'emploi telles la médiation et la conciliation. Ils vous donneront également des conseils pratiques dans la préparation de vos auditions.

3:45 p.m. Reception

Lawyer Profile

ANDRÉ BARIL

Biography

André Baril is a partner in our Labour and Employment Group in Montréal.

Mr. Baril practises in the areas of administrative and labour law, collective bargaining, constitutional law and charters of rights and freedoms. He has extensive experience in university grievance adjudication matters, as well as federal labour law. His practice also extends to maritime law.

Mr. Baril acts before arbitration and administrative tribunals, as well as courts of law, on a regular basis.

He received his B.Sc. in 1987 from McGill University and his BCL in 1990 from Université de Montréal. He was called to the Québec bar in 1991. Mr. Baril is a member of the Canadian Bar Association.

TITLE Partner

OFFICE Montréal

LAW SCHOOL Université de Montréal, BCL, 1990

DIRECT LINE 514-397-4123

BAR ADMISSIONS Québec, 1991

E-MAIL [email protected]

McCarthy Tétrault LLP

Lawyer Profile

RICHARD A. BEAULIEU

Biography

Richard A. Beaulieu is a senior partner in our Labour and Employment Group in Montréal.

Having spent many years as a civil and commercial litigator, Mr. Beaulieu’s practice became focused on the fields of administrative and labour laws. He has considerable experience in all aspects of labour and employment law, including negotiation of collective agreements, grievance arbitration, health and safety litigation, plant acquisitions and closures, labour standards, human rights and executive terminations. He has developed strong and enduring relationships with several major clients in the private sector, principally in manufacturing, which is heavily unionized. In addition, Mr. Beaulieu has counseled clients in the public and parapublic sectors, including municipalities and institutions of higher learning.

Mr. Beaulieu has prepared and presented training and development programs for clients in closed sessions. He is involved in community affairs as a board member for charitable organizations as well as health care and educational institutions.

He received his BA (economics) from Loyola College of Montréal in 1964 and his BCL from McGill University in 1967. He was called to the Québec bar in 1968.

TITLE Partner

OFFICE Montréal

LAW SCHOOL McGill University, BCL, 1967





Lawyer Profile

NATHALIE GAGNON

Biography

Nathalie Gagnon is a partner in our Labour and Employment Group in Montréal.

In addition to her expertise pertaining to health and safety and labour law, Ms. Gagnon deals particularly with issues related to individual rights (employment contracts, employment standards, discipline, termination). She regularly appears before administrative and civil courts on behalf of private and public sector employers.

She has spoken frequently at various conferences and seminars on labour and employment related subjects, including management of issues particular to the Québec work environment such as reinstatement and harassment in the workplace.

Ms. Gagnon received her bachelor of laws from the Université de Montréal in 1993. She was admitted to the Québec bar in 1994.

TITLE Partner

OFFICE Montréal

LAW SCHOOL Université de Montréal, LL.B., 1993





Lawyer Profile

HUBERT GRATON

Biography

Hubert Graton is a counsel in our Labour and Employment Group in Montréal.

Mr. Graton’s practice focuses on collective bargaining, grievance adjudication pleadings and representations before administrative tribunals and courts of law in labour law matters both in provincial and federal jurisdictions. Part of his mandates also covers the impact of commercial transactions or changes in corporate structures or business activities on labour relations and employment.

Early in his career, Mr. Graton gained valuable experience in representing union organizations and since 1982, his practice has been exclusively devoted to the representation of employers. His clients include businesses of all sizes and industries in the private and broader public sectors.

Mr. Graton participates in various committees of the Conseil du patronat du Québec (CPQ) and more specifically represented the CPQ before the Parliamentary Commission on the proposed legislation to modify Section 45 of the Labour Code with respect to subcontracting.

Mr. Graton has been sitting as an employer representative on the Grievance arbitration Committee at the Conseil consultatif du travail et de la main-d'œuvre (advisory council on labour and manpower) since 2005.

Mr. Graton lectures on a regular basis and teaches executive training courses designed for managers of unionized personnel. He also taught at the vocational training centre of the Québec bar in administrative law, more specifically related to labour law and has been an instructor for the Moot Court of the Faculty of Law of Université de Montréal for several years. As published in the Financial Post, Mr. Graton was recently mentioned by BEST LAWYERS as one of the top Labour and Employment lawyers in Canada.

Mr. Graton holds an LLL from Université de Montréal and was called to the Québec bar in 1979.

TITLE Counsel

OFFICE Montréal

LAW SCHOOL Université de Montréal, LLL, 1978





Lawyer Profile SIMON-PIERRE HÉBERT

Biography

Simon-Pierre Hébert is an associate in our Labour and Employment Group in Montréal.

Mr. Hébert’s practice covers numerous aspects of labour and employment law including hiring, termination of employment, labour standards, wrongful dismissal, occupational safety and health as well and the interpretation and negotiation of collective agreements. He also practices commercial litigation.

He received his bachelor's degree in Civil Law in 2000 from Université Laval. Mr. Hébert was called to the Québec bar in May 2002.

TITLE Associate

OFFICE Montréal

LAW SCHOOL Université Laval, LL.B., 2000





Lawyer Profile PIERRE JOLIN

Biography

Pierre Jolin is a partner in our Labour and Employment Group in Québec City.

Mr. Jolin practises primarily in the areas of human resources, civil litigation and construction law. He pleads frequently before the courts.

For many years, Mr. Jolin was a partner in one of the major law firms in Québec City before joining McCarthy Tétrault.

Mr. Jolin is a board member and an advisory member for many institutions. He has also taught civil law at Université Laval.

He appears in several editions of the Canadian Legal Lexpert Directory, a guide to the leading law firms and practitioners in Canada. In the 2004 and the 2005 editions, he is recommended as a leading lawyer in the area of labour. Mr. Jolin appears in the 2006 edition of The Best Lawyers in Canada in labour law of the National Post.

Mr. Jolin was admitted to the Québec bar in 1969 after completing legal studies in the Faculty of Law at the Université Laval.

TITLE Partner

OFFICE Québec

LAW SCHOOL Université Laval, LL.B., 1968





Lawyer Profile PHILIPPE LACOURSIÈRE

Biography

Philippe Lacoursière is an associate in our Labour and Employment Group in Montréal.

Mr. Lacoursière earned his Bachelor's degree is History and Political Science from McGill University. He received his LL.B. from the Université de Montréal's Law Faculty in 2006.

Mr. Lacoursière was called to the Québec bar in 2007. He is a member of the Canadian Bar Association and of the Young Bar Association of Montréal.

TITLE Associate

OFFICE Montréal






Lawyer Profile MARIE-HÉLÈNE MAHEU

Biography

Marie-Hélène Maheu is an associate in our Labour and Employment Group in Montréal.

Ms. Maheu received her Bachelor's degree in public relations from the Université du Québec à Montréal in 2001. She then attended McGill University where she obtained both her B.C.L. and LL.B. in 2005.

Ms. Maheu was called to the Québec bar in 2006. She is a member of the Canadian Bar Association as well as the Junior Bar Association of Montréal.

TITLE Associate

OFFICE Montréal

LAW SCHOOL McGill University, BCL/LL.B., 2000





Lawyer Profile PIERRE-ÉTIENNE MORAND

Biography

Pierre-Étienne Morand is an associate in our Labour and Employment Group and in the Litigation Group in Québec City.

Mr. Morand’s practice mainly focuses on hiring, termination of employment, labour standards, occupational health and safety, human rights and freedoms, as well as interpretation and application of contracts of employment and collective agreements.

Mr. Morand also practices in medical professional liability, representing physicians in the court and administrative tribunals.

Mr. Morand has gained experience in administrative law being involved in cases of judicial review of arbitration awards and administrative or quasi-judicial decisions.

Mr. Morand received his Civil Law and Common Law degrees from McGill University in 2004. While enrolled in the McGill program, he traveled to France to study European Union Law at the Université Jean Moulin – Lyon III.

Mr. Morand is a member of the Junior Bar of Québec City and the Canadian Bar Association. He was called to the Québec bar in 2006.

TITLE Associate

OFFICE Québec

LAW SCHOOL McGill University, LL.B., BCL, 2004






Lawyer Profile

EARL G. PHILLIPS

TITLE Partner

OFFICE Vancouver



LAW SCHOOL University of Victoria, LL.B., 1980

BAR ADMISSIONS British Columbia, 1981

Biography

Earl Phillips is a partner in the firm’s Vancouver office practising in the Labour and Employment Group.

His recent experience includes:

• labour arbitrations regarding privacy, attendance management, surveillance and theft;

• labour board hearings regarding true employer, successor and common employer issues, certification and decertification applications and unfair labour practice complaints;

• dismissals and constructive dismissals;

• human rights issues regarding attendance management, substance abuse, disability, and the duty to accommodate; and

• negotiating and drafting executive employment contracts.

Mr. Phillips regularly appears before federal and provincial tribunals and arbitration boards and the courts of British Columbia. He is a frequent writer and speaker on various topics including, most recently, mandatory retirement, employment privacy, whistle-blowing, substance abuse in the workplace and general employment practices.

Mr. Phillips is a member of the Human Resources Management Association of British Columbia and of the BC Labour and Employment Sections of the Canadian Bar Association. He also serves as a director of the Regent College 2000 Foundation and The Children’s Foundation.

Lawyer Profile

RACHEL RAVARY

Biography

Rachel Ravary is an associate in our Labour and Employment Group in Montréal.

Ms. Ravary joined the firm in November 2003. She began her practice in our Litigation Group, working mainly on commercial and civil litigation cases as well as in medical liability. Ms. Ravary joined the Labour and Employment Group in July 2004.

Ms. Ravary received her bachelor’s degree in political science from the University of Ottawa in 1998. She then attended McGill University, where she obtained both her BCL and LL.B. in 2002.

Ms. Ravary is a member of the Canadian Bar Association and of the Junior Bar Association of Montréal. She was called to the Québec bar in 2003.

TITLE Associate

OFFICE Montréal

LAW SCHOOL McGill University





Lawyer Profile

JACQUES ROUSSE

Biography

Jacques Rousse is a partner in our Labour and Employment Group in Montréal.

Mr. Rousse provides advice on all matters with respect to human resources and in the event of litigation, he acts before arbitration boards, administrative tribunals and the civil courts in matters related to labour relations and contracts of employment. Mr. Rousse also appears before commissions in matters concerning workers’ compensation and occupational health and safety. Furthermore, he has acquired considerable experience in collective bargaining as well as in labour and employment matters related to mergers and acquisitions.

Mr. Rousse is a member of the Ordre des CRHA et CRIA du Québec. He has spoken at conferences and seminars related to labour relations, human rights and occupational health and safety.

He received his LLL from the Université de Montréal in 1981 and was called to the Québec bar in 1982.

TITLE Partner

OFFICE Montréal

LAW SCHOOL Université de Montréal, LLL, 1981





Lawyer Profile

MARTINE ST-LOUIS

Biography

Martine St-Louis is counsel in our Labour and Employment Group in Montréal.

For more than 10 years, Ms. St-Louis has assisted businesses in the admission of foreign workers into Canada. In addition, she counsels companies as well as individuals and their family through various stages of their establishment in Canada, either on a temporary or permanent basis. She works closely with a multidisciplinary team to provide solutions to related international taxation, social coverage and pension plans.

Ms. St-Louis received her LL.B. from the Université de Montréal in 1987 and was called to the Québec bar in 1988.

TITLE Counsel

OFFICE Montréal






Lawyer Profile

VÉRONIQUE WATTIEZ LAROSE

Biography

Véronique Wattiez Larose is a partner in our Business Law Group in Montréal and a Canadian Registered Trade-mark Agent. She focuses on intellectual property and technology law, as well as corporate and business law for technology-driven clients. She also has a particular interest for international investment funds.

Ms. Wattiez Larose acts for a wide variety of technology-driven clients, from academic institutions to start-up technology companies. She provides advice on all commercial aspects of intellectual property law, including the drafting and negotiation of technology transfer agreements, intellectual property due diligence and strategic intellectual property portfolio management, particularly trade-mark protection. She also assists her clients through their corporate reorganizations, mergers and acquisitions and financings.

Her recent accomplishments include:

• co-leading the acquisition of a Trois-Rivières-based technology company by a publicly-traded

American purchaser;

• co-leading the launch of a $200 million private equity investment fund in emerging economies;

• management of several international trade-mark portfolios in the life sciences sector; and

• secondment with two of the firm’s biggest clients, a venture capital institutional investor and a

contract manufacturing and pharmaceuticals company.

Véronique Wattiez Larose received her LL.B. in 1996 from the Université de Montréal and later pursued graduate studies with the Institute for Comparative Law at McGill University. She was called to the Québec bar in 1999.

She is a member of the Intellectual Property Institute of Canada.

TITLE Partner

OFFICE Montréal






What’s New in Labour Law? Richard A. Beaulieu and Hubert Graton

November 7, 2007

McCarthy Tétrault LLP Suite 2500 1000 De La Gauchetière Street West Montréal, Québec H3B 0A2 CANADA www.mccarthy.ca

What’s New in Labour Law?


Introduction

Once again this year, McCarthy Tétrault’s labour and employment law group would like to review certain recent changes in this practice area. In this section of the conference, we will address certain significant decisions in human resources management and legislative amendments that affect employers in a material way.

Clauses Regarding Loss of Seniority Rights and Employment in the Event of Disability and the Duty to Accommodate

Numerous collective agreements contain clauses designed to maintain, for a certain period of time, the employment relationship of employees absent due a disability not covered by the Commission de la santé et de la sécurité du travail (CSST) compensation plan. Under these clauses, an employer may validly terminate the employment of a worker at the end of the period therein provided. But are these clauses valid in light of the provisions of the Charter of Human Rights and Freedoms1 (the Charter)? In other words, does the automatic termination of employment of a worker absent due to illness, at the end of the maximum period of absence provided for under the collective agreement, violate the right of workers to non-discriminatory treatment and their right to reasonable accommodation?

McGill University Health Centre (Montréal General Hospital) v. Syndicat des employés de l’Hôpital général de Montréal

The Supreme Court answered this question in McGill University Health Centre (Montréal General Hospital) v. Syndicat des employés de l’Hôpital général de Montréal.2 This decision addressed the role of a collective agreement in the assessment of the employer’s duty to accommodate an employee who is absent from work due to illness.

The facts

Mrs. Brady was a medical secretary at the McGill University Health Centre. In March 2000, she took a leave of absence due to a nervous breakdown. She made several attempts to return to her job over the course of two years, but was unsuccessful. Two years into her leave of absence and her four rehabilitation periods, Mrs. Brady had a car accident. As a result, her leave of absence was extended beyond the 36-month delay provided for under the collective agreement. When the Health Centre terminated her employment, Mrs. Brady was still unable to return to work and her physicians could not determine a foreseeable date of return. Under grievance arbitration, the union representing the employee asked the employer to

1 R.S.Q., Chapter C-12. 2 2007 CSC 4, Supreme Court of Canada, January 26, 2007.


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accommodate Mrs. Brady by granting her an additional 10-week leave of absence without pay. Arbitrator Jean Sexton dismissed the grievance, first of all because of the employer had made efforts to accommodate Mrs. Brady’s return to work, and secondly, because medical proof demonstrated that Mrs. Brady, at the time of the termination of employment, would not have been able to return to work in the near future. The Superior Court upheld the arbitrator’s decision.

In March 2005, the Court of Appeal reversed this decision, ruling that because of the employer’s obligation to accommodate, the employer should have considered the union’s request for further accommodation and this, even if the terms of the collective agreement provided for the administrative dismissal once the 36-month period of disability expired. The Court of Appeal also ruled that the employer did not prove that the accommodation measure proposed by the union constituted undue hardship. The employer then appealed to the Supreme Court of Canada.

On January 26, 2007, the nine justices of the Supreme Court allowed the appeal lodged by the employer. The reasons for their ruling differ from judge to judge. On behalf of six justices of the court, Deschamps, J. explained that a clause on the loss of seniority rights and employment in a collective agreement is a form of negotiated accommodation since it preserves the employment relationship of the employee absent due to illness. This clause is negotiated in the mutual interest of the employer and the employees since the employer and the union considered the characteristics of the enterprise and agreed that, beyond this period, the employer would be entitled to terminate the employment of the person absent due to illness. This clause gives a clear indication of the parties’ intention with respect to reasonable accommodation. However, it does not definitively determine the specific accommodation measure that an employer must take, as each case of a sick and absent employee must be judged on its particular merits. The employer cannot therefore expect the automatic application of a clause from the collective agreement that would determine a maximum period of convalescence. Indeed, if the employee can establish that he will be able to work in the reasonable future and the employer does not prove that keeping this employee beyond the period provided for under the collective agreement constitutes undue hardship, the employer will not be able to dismiss the employee.

The Supreme Court specified that the employer's duty to accommodate starts at the beginning of the employee’s absence and not at the expiry of the period provided for under the clause (therefore, at the time of the dismissal). On the other hand, the employee must do his part to look for a reasonable compromise — if he considers the accommodation provided for under the collective agreement to be insufficient and he believes he can go back to work within a reasonable period, he must prove these elements that would enable such a conclusion. The employee therefore has the burden to demonstrate why the clause regarding the loss of seniority rights and employment is insufficient in order to protect rights recognized under the Charter.

Abella, J. agreed with the other judges, but argued other grounds. She found that the application of a clause regarding the loss of seniority rights and employment is not discriminatory as such. As a result, the employer would not have to justify its decision to terminate the employment of an employee who has


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reached the end of the term provided for under the clause of the collective agreement. According to this judge, there is therefore no need to address the accommodation issue. In the case at hand, Mrs. Brady did not demonstrate she was a victim of discrimination, meaning she was penalized by the employer’s behaviour towards her handicap.3 The clause provided for under the collective agreement was in no way discriminatory since it gave the employees protection by insuring that their employment relationship would be maintained for a determined period. The judge contended that the discrimination issue would have been addressed if, for example, the delay granted in the clause of termination of employment had been very short. In short, it must be decided if there is a prima facie proof of discrimination in appreciating this type of clause according to the nature of the employment and other relevant factors.

What are the consequences of this ruling?

It will now be difficult to convince a court that an administrative dismissal is well-founded for the sole reason that the collective agreement includes a clause regarding the loss of seniority rights and employment. Certainly, this ruling must be taken into consideration when negotiating future collective agreements; an employee may contest a clause regarding the loss of seniority rights and employment by way of a grievance by contending that it does not constitute a sufficient measure of accommodation to which he would be entitled under the Charter. However, as Deschamps, J. explained, we must remember that this type of clause is already a form of reasonable accommodation. The onus is therefore on the employee to demonstrate why, in a given case, this accommodation is insufficient.

Syndicat des employées et employés de techniques professionnelles et de bureau d’Hydro-Québec and Hydro-Québec4

The facts

In July 2001, an employee of Hydro-Québec was dismissed due to her high rate of absenteeism since 1994. Experts had assessed that she would be unable to perform regular and reasonable work in the near future. According to these experts, the employee did not suffer from functional limitation; her inability to go back to work was rather the result of a labour conflict. The experts had also recommended a progressive return to work and a complete change of work environment with psychotherapeutic support. In spite of the experts’ recommendations, the employer had proceeded with the administrative dismissal of the worker since it had attempted to accommodate her for the past seven years.

The grievance arbitrator Gilles Corbeil and the Superior Court agreed with the employer, as the employee’s health condition would have required the recurrent creation of a new work environment with new superiors and colleagues in another attempt to relieve the labour conflict that, according to the experts involved, resulted in her frequent absences. Conversely, the Court of Appeal sided with the employee, reaching its

3 The parties agree on this issue; Mrs. Brady was the victim of a handicap within the meaning of the Charter. 4 D.T.E. 2006t-188.


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conclusion by applying the Meorin case.5 Although Meorin does not specifically address excessive absenteeism, it resulted in the development of a three-step test to determine whether an employer has established, on a balance of probabilities, that a prima facie discriminatory standard is a bona fide occupational requirement (BFOR). Applied to the facts of this case, this method causes the employer to demonstrate that (i) its requirement for regular attendance at work has a purpose rationally connected to the performance of the job; (ii) it honestly believes that this attendance standard was necessary; and (iii) this standard is reasonably necessary to avoid causing undue hardship to the employer.

The Court of Appeal ruled that the employer had failed to demonstrate the third step as the employer had not demonstrated that the accommodation possibilities suggested by the experts caused undue hardship. According to the court, accommodation measures taken by the employer must be assessed on the date of its decision to administratively dismiss an employee who is excessively absent; the employer’s past patience or tolerance do not constitute a reasonable measure of accommodation.

The court stated the following at paragraph 91 of the ruling:

[Translation] Hydro-Québec did not demonstrate that it attempted an ultimate accommodation. This is not about blaming Hydro-Québec, which seems to have acted in good faith. Nevertheless, the evidence reveals that Hydro-Québec based its decision to dismiss (the employee) solely on the past situation and the unfavourable projections contained in the (expert) reports to dismiss (the employee), without taking into consideration the suggestions contained in these same two reports and without ever discussing possible accommodations with (the employee) and the union.

The Court of Appeal therefore annulled the arbitrator’s decision and reversed the decision of the Superior Court. Hydro-Québec appealed this ruling to the Supreme Court of Canada. Its application for leave to appeal was granted on February 8, 2007, and the case will be argued in 2008. Considering the precedent established in the McGill University Health Centre ruling, reported above, the Supreme Court’s conclusions will be interesting. Let us recall that in the McGill University Health Centre case, it was determined that the assessment of the accommodation measures taken by the employer starts at the very beginning of the employee’s first absence. According to this reasoning, the good faith, tolerance and patience demonstrated by the employer in the Hydro-Québec case should have more impact on the court’s ruling.

5 British Columbia (Public Service Employee Relations Commission) v. BCGSEU, [1999] 3 R.S.C. 3.


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Dismissal and Calculation of Notice of Termination: Beware of Corporate Policies

The employer may unilaterally terminate a contract of employment with no fixed term as long as Article 2091 of the Civil Code of Québec (the Code)6 is respected:

2091. Either party to a contract with an indeterminate term may terminate it by giving notice of termination to the other party.

The notice of termination shall be given in reasonable time, taking into account, in particular, the nature of the employment, the special circumstances in which it is carried on and the duration of the period of work.

The notice of termination must therefore be given in reasonable time so that the employee can prepare for the upcoming termination of employment. However, when the employer terminates the contract without giving the employee a notice of termination in reasonable time or the total equivalent compensation, the employee may obtain compensation for the prejudice suffered. He can claim the equivalent compensation through the judicial system, subject to his obligation to minimize or mitigate his damages. The obligation to minimize damages implies that the earnings realized during the notice of termination period are deducted from the amount of the compensation calculated and to be paid to him.

Employers may establish company policies regarding the calculation of compensation in lieu of notice. However, the traditional view of the courts has been that the Civil Code of Québec rules take precedence over such policies. However, in Aksich v. Canadian Pacific Railway7, the Québec Court of Appeal brings a slight difference to the automatic and exclusive application of the Code. Now, when an employment contract is unilaterally terminated, the compensation calculated by the courts must take into account the employer’s compensation policy, if any, in lieu of notice. This has significant impact, in particular on the dismissed employee’s obligation to mitigate damages.

The facts

The appellant, Mr. Aksich, had worked for Canadian Pacific Railway (CPR) for 27 years, 20 of which were consecutive. On July 12, 2001, CPR announced that his employment contract would be terminated effective August 31, 2001. At the time of his dismissal, Mr. Aksich was just over 52 years old and held an upper management position with CPR. According to CPR’s notice of termination policy, the dismissed employee was entitled to compensation calculated using the following formula: three weeks per year of service multiplied by the number of years of service, plus 11 weeks to account for benefits. In Mr. Aksich’s case, this compensation amounted to $169,400 and was equal to a notice of termination of 71 weeks (or

6 L.Q., 1991, c. 64. 7 D.T.E., 2006T-679 (C.A.), July 12, 2006.


Page 6

16.4 months). This policy also provided that the employee sign a release discharging CPR of all claims and damages that could arise from his termination of employment.

Mr. Aksich, turned down this offer. He claimed both the right to the equivalent of a notice of termination of 27 months and the right to avail himself of the company’s pre-retirement policy, and he alleged that according to the policy established by CPR, his obligation to mitigate damages should only apply to the portion of compensation calculated pursuant to the Code.

The Superior Court granted Mr. Aksich a notice of termination equal to 15 months and applied the obligation to mitigate damages principle. Mr. Aksich’s earnings were therefore deducted from the compensation granted by the court.

The Court of Appeal upheld Mr. Aksich’s appeal and grievance, ruling that the employer’s policy for calculating compensation in lieu of notice was an integral part of the terms of the employment contract, even if the contract made no reference to it. According to Bich, J., the company policy offered a benefit that fully applied to Mr. Aksich’s employment. By introducing this policy, CPR had established a minimal standard for calculating compensation.

Interesting subsidiary issues

• It must be noted that the Court of Appeal set the period of notice to 24 months. Except in special cases, the Court indicates that the maximum period of notice is of 12 months. However, in this case, the exemplary work performed by Mr. Aksich for CPR led the court to grant him such an extended period of notice of termination.

• The majority of the court concluded that Mr. Aksich was not entitled to the pre-retirement plan since, upon termination of the employment contract, he did not meet the qualification criteria for this plan. However, in spite of this ruling, the courts remain moderate on this aspect, provided an employee can claim the benefits of the rights that are created during the notice of termination period.

What are the consequences of this ruling for employers?

The Court of Appeal ruling means that an employee whose contract of employment is terminated pursuant to Article 2091 of the Code benefits from the company policy on termination of employment, in spite of the application of this article. Thus, if this policy does not provide for the obligation to mitigate the employee’s damages during the notice of termination period, the employer cannot expect that this compensation be reduced under the employee’s obligation to mitigate damages imposed by the Code. Indeed, an employee is required to mitigate his damages, but solely during the period equivalent to the notice of termination calculated pursuant to the Code and not the policy.


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On the other hand, this ruling reminds employers that it is useful to specify in employment contracts and collective agreements whether an employee may avail himself of the rights created during the notice of termination period.

Recent Rulings on Confidentiality Clauses

In the business world, confidentiality clauses are necessary to protect certain types of information held by a company. This confidential information is included in the notion of ‘trade secrets’ that can be defined as being private information subject to measures to protect their confidentiality and offering a competitive advantage to the company holding them. These include:

• sales analysis and strategies;

• prices;

• names of company subcontractors;

• company suppliers;

• lists of clients and their preferences;

• financial structures of the company;

• client programs developed; and

• profit margin structures.

To avoid the disclosure of such information, the employer can require an employee to sign a confidentiality clause. According to an ever-growing number of cases, whether such a clause has been signed or not, the employer concerned with disclosure may apply to the courts for an injunction that will prevent its former employee from causing it harm through disclosure of confidential information. This injunction shall be granted as soon as there is a high possibility of inevitable disclosure.8

This notion was initially invoked by a Québec court in Lawrence Home Fashion Inc. v. Sewell, where Wery, J. of the Superior Court stated the following comments:

[Translation] From a cosmetic point of view, even with the best of intentions and presuming his good faith, it seems that it could be difficult, if not impossible, for (the former employee) not to use, in one way or another, confidential information.9

8 Doubleclick Inc. v. David Anderson & al. 1997, New York, NISC. Lexus 577. 9 S.C., Montréal, no. 500-17-015769-030, June 9, 2003, para. 40.


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The judge then cited the American Doubleclick ruling, which stated:

This finding is bolstered by the fact that there is a high probability of “inevitable disclosure” of trade secrets in this case. Injunctive relief may issue where a former employee’s new job function will inevitably lead her to rely on trade secrets belonging to a former employee.

Two recent rulings in Québec apply this notion of high probability of inevitable disclosure: ING Canada Inc. v. Robitaille10 and Alstom Hydro Canada Inc. v. Néron.11

ING Canada Inc. v. Robitaille

The facts

A motion for interlocutory injunction was filed by ING Canada Inc. The relief sought was to order a former ING employee, Mr. Robitaille, to respect the confidentiality clause he had signed as an ING employee. Mr. Robitaille was a portfolio manager at ING. On January 16, 2007, he announced his resignation to become effective on April 16, 2007. He also announced that he had, in the meantime, started his own management company and would be taking back certain AGF funds that AGF had entrusted to ING. Impleading AGF into the case, ING also alleged that AGF had breached the management contract it had entered into with ING on January 19, 2007, the same day ING terminated Mr. Robitaille’s employment. A short time later, AGF sent out a press release announcing the hiring of Mr. Robitaille and the changes in the management of its investment fund. When ING discovered this, it sent Mr. Robitaille a letter of demand calling on him to respect his confidentiality obligations. Although Mr. Robitaille stated that he had always respected them and continue to do so, ING considered that there was a high possibility of inevitable disclosure.

Trahan, J., who ruled in this case, concluded that ING had satisfied its burden of proof necessary to issue the requested injunction since the criteria under Section 752 of the Code of civil procedure12 had been met. These criteria are as follows:

• the urgency;

• the colour of right;

• serious or irreparable injury; and

• the balance of convenience.

10 D.T.E. 2007T-239. 11 D.T.E. 2007T-143. 12 R.S.Q., C-25.


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With regard to urgency, the facts led the court to believe that Mr. Robitaille could have, unpredictably, revealed confidential information on ING strategies, which would have permanent consequences for the latter. Once the confidential information is revealed, it loses its qualities, hence the urgency.

With regard to the colour of right, Trahan, J. concluded that ING did effectively have the right to ask for an injunction since there was an impending risk that Mr. Robitaille would disclose the “ING investment recipe” to AGF, his new employer. Let us point out that AGF was no longer a client of ING but now a competitor. For that matter, the facts suggest that Mr. Robitaille’s transfer to AGF had been anticipated for a long time, which only increased ING’s and the court’s apprehensions.

Evidently, if Mr. Robitaille disclosed confidential information, ING would suffer serious or irreparable injury. The “recipe,” known by Mr. Robitaille, ensured ING’s high return on funds and confirmed its position as leader in the industry.

Finally, with regard to the balance of convenience, the reasonableness of the motion for a 10-day interim injunction versus Mr. Robitaille’s right to make a living had to be established. On this subject, Trahan, J. concluded that preventing Mr. Robitaille from using or communicating confidential information over a period of 10 days would not cause him any prejudice, and would prevent the disclosure of ING’s key to success to the public or to the competing company. The application for leave to appeal was dismissed.

Alstom Hydro Canada Inc. v. Néron

The facts

This case involved an application for an interim interlocutory injunction. Two direct competitors, Alstom Hydro Canada Inc. (Alstom) and Litostrog Hydro Inc. (Litostrog), often bid for the same projects. Two such projects were the Island Falls project and the Upper Mattagami project, each worth several million dollars.

Mr. Néron was an engineer and a 10-year employee of Alstom. As a tenders co-ordinator, he was the ‘conductor’ of these two projects. On October 26, 2006, he left Alstom to work for Litostrog.

Although Mr. Néron reassured Alstom that he would not work on these two projects once he started working for Litostrog, Alstom found out that he was working on Litostrog’s competing bid for the Mattagami project. Mr. Néron stated in his affidavit that he effectively worked on the Mattagami project but did not disclose any confidential information on this subject. Alstom, Litostrog and the court did not doubt Mr. Néron’s honesty or good faith, but a risk of disclosure still existed, namely a high probability of inevitable disclosure.

The court therefore assessed the criteria leading to an interlocutory injunction and according to evidence, Alstom’s right to the conclusions asked, notably not to divulge information pertaining to the Mattagami project and not to work on that project, was obvious. Under these circumstances, the court did not deem


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it relevant to assess the other criteria previously addressed in the ING Canada Inc. v. Robitaille ruling and granted the injunction.

Class Action by CIBC Employees Regarding Overtime

An application to institute a class action against the Canadian Imperial Bank of Commerce (CIBC) was filed Tuesday, June 5, 2007, before the Superior Court of Justice of Ontario, with regard to unpaid overtime. This is the largest class action of its kind ever filed in Canada, and the financial institution could be forced to pay more than $600 million to some 10,000 former and current non-unionized salaried workers who work or used to work as tellers or customer service agents in CIBC branches across Canada.

The class action representative is Dara Fresco, a teller who has worked for the CIBC in Toronto in about a dozen branches for the past 10 years. Mrs. Fresco contends that CIBC rarely pays non-management employees for overtime hours worked, which represents an average of two to five hours of work per week per member. CIBC would therefore be contravening the provisions of the Canada Labour Code, which provides that federal companies cannot require their non-management personnel to work more than 40 hours/week, without paying overtime.

Another application to institute a class action regarding unpaid overtime was filed on August 31, 2007, again in Ontario, by employees of KPMG LLP. This class action seeks, notably, $20 million in punitive damages. The lawsuit alleges KPMG employees routinely work as many as 90 hours a week to complete assignments on behalf of clients. The firm allegedly requires employees to “eat their time” if they spend more hours on an assignment than KPMG can recover from the client.

The Superior Court of Justice of Ontario has not yet responded to these two motions to institute a class action in accordance with the Class Proceedings Act.13

Federal Bill to Limit the Use of Replacement Workers

Theoretically, when workers exercise the right to strike, the employer has the right to continue its operations by using personnel from another establishment or by hiring replacement workers. However, the Québec Labour Code14 limits this traditional right of the employer. British Columbia is the only other province to have adopted this approach. In October 2006, the Bloc Québécois presented to the Parliament of Canada a bill15 inspired by the Québec legislation regarding replacement workers. This bill aims to amend the Canada Labour Code16 (Part I) in order to enact provisions limiting employers’ right under federal jurisdiction to use replacement workers in the event of a strike or lockout.

13 1992, S.O. 1992, c. 6. 14 R.S.Q. c. C-27 ("Labour Code). 15 Bill C-257, An Act to amend the Canada Labour Code (replacement workers). Passed third reading by the House of Commons. 16 R.S.C. 1985, c. L-2.


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The proposed changes in Bill C-257 are as follows:

• to prohibit an employer from using the services of a person hired after the notice to bargain was given (restriction that would continue to apply until the last day of the strike);

• to prohibit an employer from using, in the establishment where the strike has been declared, the services of persons employed by another employer or a contractor;

• to prohibit an employer from using employees of the bargaining unit on strike in the establishment where the strike has been declared, except for the prevention of an immediate and serious danger to the safety or health of the public;

• to prohibit an employer from using an employee on strike in another establishment of the employer;

• to prohibit an employer from using in the establishment where the strike has been declared, the services of one of its employees working in another of its establishments;

• to prohibit an employer from using the services of an employee from the establishment where the strike has been declared, but who is not on strike, to discharge the duties of an employee on strike; and

• to prohibit an employer from using, in the establishment where the strike or lockout has been declared, the services of a person other than an employee it employs in another establishment except where employees of the latter establishment are also members of the bargaining unit on strike or locked out.

Essentially, the only replacement workers authorized by Bill C-257 would be managerial personnel hired prior to the sending of the notice to bargain.

Although the Canada Labour Code covers only around 10 per cent of the Canadian workforce, Bill C-257 would affect several economic sectors important to the Canadian economy, such as rail transportation, inter-provincial trucking, air transport, banks and telecommunications. Bill C-257 only affects labour disputes between employees and their employer. Indeed, this Bill could have a significant effect on certain industries as a whole, particularly as the changes proposed to the Canada Labour Code concerning essential services would not allow businesses to continue their principal activities during a strike. Only certain activities can be maintained, such as activities deemed necessary to prevent an immediate and serious danger to the safety or health of the public.


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Bill 51 and the Power of the Commission des relations du travail to Dissolve an Employee Association that Violated Section 12 of the Labour Code

Effective January 13, 2007 (with the exception of certain provisions that will come into effect on the date or dates set forth by the government), the Act to amend the Labour Code and other legislative provisions gives the Commission des relations du travail (CRT) the power to dissolve an employee association that has participated in the contravention of prohibitions against dominating an employee association or interfering in its activities.

Section 12 of the Labour Code reads as follows:

12. No employer, or person acting for an employer or an association of employers, shall in any manner seek to dominate, hinder or finance the formation or the activities of any association of employees, or to participate therein.

Interfering with employers’ association: No association of employees, or person acting on behalf of any such organization, shall belong to an association of employers or seek to dominate, hinder or finance the formation or activities of any such association, or to participate therein.

The idea behind Section 12 is that only an association comprising exclusively employees –- and entirely devoted to the defence of their interests –- can validly claim certification. Therefore, an association of employees that has joined an association of employers or has aimed to dominate, hinder or finance the formation of another association of employees, may be dissolved now under Section 118 of the Labour Code by the CRT. Therefore, Section 118 of the Labour Code now reads as follows:

118. The Commission may, in particular,

1) summarily reject any motion, application, complaint or procedure it considers to be improper or dilatory;

2) refuse to rule on the merits of a complaint where it considers that the complaint may be settled by an arbitration award disposing of a grievance, except in the case of a complaint referred to in section 16 of that Code or in Sections 123 and 123.1 of the Act respecting labour standards (chapter N-1.1) or a complaint filed under another Act;

3) make any order, including a provisional order, it considers appropriate to safeguard the rights of the parties;

4) determine any question of law or fact necessary for the exercise of its jurisdiction;


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5) confirm, modify or quash the contested decision or order and, if appropriate, render the decision or order which, in its opinion, should have been rendered or made initially;

6) render any decision it considers appropriate;

7) ratify an agreement, if in conformity with the law;

8) dissolve an association of employees if it is proved to the Commission that the association participated in a contravention of Section 12. Notice of decision: If an association dissolved under subparagraph 8 of the first paragraph is a professional syndicate, the Commission shall send an authentic copy of its decision to the enterprise registrar, who shall give notice of the decision in the Gazette officielle du Québec. (emphasis ours)

This possibility of forcing a delinquent association of employees to dissolve under Section 118(8) is a new line of intervention in case of interference. The two other existing lines of intervention are a recourse under Section 143 of the Labour Code, namely filing a criminal complaint before the Court of Québec, or further, the investigation under Sections 29 and 31 of the Labour Code. Until now, no case law has addressed the application of Section 118(8) of the Labour Code.

CSST Claims Further to Events Occurring During Extracurricular Activities Simon-Pierre Hébert and Rachel Ravary

November 7, 2007


CSST Claims Further to Events Occurring During Extracurricular Activities

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Introduction

The Act respecting industrial accidents and occupational diseases1 (AIAOD) provides mechanisms to compensate workers who have been victims of an industrial accident or an occupational disease. It is therefore essential that employers fully understand this Act and its scope in order to manage the risks attached to certain practices, including extracurricular activities organized by employers.

This presentation addresses an essential question: If an accident occurs during a social or sport event organized by the employer, will it be covered by the AIAOD?

To answer this question, we will take a look at the various definitions included in the AIAOD and how the tribunals interpret them. We will then analyze the jurisprudence pertaining to accidents occurring during extracurricular activities organized by employers. Finally, we will give you some practical advice.

Relevant Legislation

Industrial Accident, Occupational Diseases and Recurrence, Relapse or Aggravation

To receive benefits under the AIAOD, a worker must first be a victim of an employment injury. An employment injury is an injury or a disease arising out of or in the course of an industrial accident, or an occupational disease, including a recurrence, relapse or aggravation.

Industrial Accident

An “Industrial Accident” is defined under Section 2 of the AIAOD and includes four criteria that must all be met:

“Industrial Accident”: a sudden and unforeseen event, attributable to any cause, which happens to a person, arising out of or in the course of his work and resulting in an employment injury to him. (emphasis ours)

1) a sudden and unforeseen event...

This is usually an event that occurs within a very short timeframe, unexpectedly and instantaneously.

1 R.S.Q., Chapter A-3.001.


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2) attributable to any cause...

When an accident arises out of or in the course of work, no matter the cause, it shall be qualified as an industrial accident. There is, however, an exception provided for under Section 27 of the AIAOD. This section provides that, if an injury or a disease arises solely as a result of the gross and wilful negligence of the worker, it is not an employment injury unless it results in his death or causes him severe permanent physical or mental impairment.

3) arising out of or in the course of his work...

“Arising out of work” means that the worker is performing work, as part of his employment duties, when the incident occurs. The notion of “in the course of work” is more difficult to qualify. It is therefore the employer’s control and benefit criteria, as well as the connection with the work, that will have to be taken into account. This depends on a case-by-case analysis, according to the occurrence of the facts.

4) resulting in an employment injury to him …

In order to qualify as an industrial accident, a relation must exist between the injury, the sudden and unforeseen event and the work. This relation must be proven on the balance of probabilities.

Occupational Disease

An occupational disease is a disease contracted out of or in the course of employment, that is characteristic of the work or is directly related to the risks peculiar to that work. It is not the result of an industrial accident or injury.

Recurrence, Relapse, Aggravation

A recurrence, relapse or aggravation is the reappearance of symptoms by evolution of the condition or otherwise, the recrudescence of the condition or an increase of the sequels or symptoms.

Presumed Employment Injury

In order to facilitate a worker’s access to the AIAOD plan, the applicable legislation provides that, in certain circumstances, an employment injury can be presumed. This presumption enables the worker to establish the existence of an employment injury without having to prove the occurrence of a sudden and unforeseen event. The worker must meet the three conditions provided for under Section 28 of the AIAOD, which states:

“An injury that happens at the workplace while the worker is at work is presumed to be an employment injury.” (emphasis ours)


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It should be noted that the courts give a broad and liberal interpretation of this presumption. In addition, most cases hold that a delay between the occurrence of the injury and the declaration of the injury to the employer is not an obstacle to the application of presumption. It is, however, one factor to be considered in the determination.

1) an injury...

The AIAOD does not define “injury.” The courts therefore revert to the usual meaning of the term. According to Le Petit Robert, an injury is the attack of a living tissue by a detectable external cause. The latter may be a blow, a shock, a fall or an awkward movement, as opposed to an illness, which develops gradually.

2) ... that happens at the workplace...

“Workplace” is interpreted broadly. Therefore, it includes all places where the worker may be called upon to perform his duties.

3) ... while the worker is at work...

This expression must be given a broad and liberal interpretation that includes all elements and circumstances surrounding work. The presumption covers the injuries that take place while the worker is performing his duties. When the worker performs an action in the interest of the employer or the operations of the company, he is considered “at work.”

The presumption under Section 28 of the AIAOD is not absolute. Indeed, the employer may have it set aside by:

1. proving the existence of another cause or by demonstrating the absence of a relation between the event and the diagnosed injury;

2. proving the injury occurred while the worker was taking part in a personal activity.

Should a worker be unable to benefit from the presumption of an employment injury, he must prove the occurrence of a sudden and unforeseen event to have access to the AIAOD plan.

Presumed Occupational Disease

According to Section 29 of the AIAOD, a worker is presumed to have contracted an occupational disease if he can demonstrate that he has contracted a disease listed under Schedule I of the Act and performed work that is recognized to give rise to that disease (also provided under Schedule I of the Act).

The employer may also reverse this presumption by demonstrating that:


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1. The worker suffers from a disease that is not provided for under Schedule I.

2. The worker does not perform the work corresponding to that diagnosis.

3. The disease cannot be caused by the work performed.

Case Study

The Commission des lésions professionnelles (CLP) is the administrative tribunal of final recourse where workers apply to contest a CSST decision. At a contestation, the parties generally admit that an injury occurring during a recreational, social or sporting activity is a sudden and unforeseen event. The question in dispute is rather to determine whether the injury occurred “in the course of work.” The CLP uses the following criteria to determine if it did:

• where the event took place;

• when the event took place;

• whether the worker was remunerated during the activity being performed at the time of the event;

• if the event did not take place at the workplace or during working hours, the existence and degree of authority of, or subordination to, the employer;

• the purpose of the activity being performed at the time of the event, whether incidental, accessory or optional to the worker’s work; and

• the relevance or usefulness of the activity being performed by the worker in relation to his work.

It should be noted that the criteria are not cumulative and or determinative.

Social Activities

In Environment Canada and Lévesque,2 the injured worker was a receptionist at the St-Laurent Centre, a federal government research and development centre. Since she was a federal government employee, the AIAOD did not apply in this case; instead, the Government Employees Compensation Act3 applied. This Act provides compensation to employees injured in an accident arising “out of” or “in the course of” their work. The criteria developed to analyze the AIAOD are therefore similar. The worker injured both her wrists at a Christmas party, which took place in a bowling alley. The event therefore took place outside the

2 C.L.P., no 143288-72-0101, May 7, 2001. 3 R.S.C, 1985, c. G-5.


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workplace, but during the worker’s normal working hours. Although the activity had been organized by the employees’ social club, the employer was paying the taxi fares and remunerating the employees.

However, the CLP found the employer had no control over the choice of activity or the participation of the workers. The purpose of the activity was therefore recreational and no connection to work had been demonstrated. The CLP concluded that it was not an employment injury since the sudden and unforeseen event did not arise “in the course of work.”

In Ouellette and Centre Le Jeannois,4 the worker injured her knee while taking part in a recreational half-day for senior and middle management. The activity was organized and financed by the social club. The participants were remunerated by the employer. However, the CLP found that there was no relation between the activity and the company’s professional activities. Participation was a personal choice. The workers did not have to participate in this activity and did not risk any reprimand or penalty. Therefore, the worker did not suffer an injury “in the course of work.” The CLP concluded that this was not an employment injury.

In Hôtel Le Chanteclerc and St-Yves,5 the worker was the executive chef of the Hôtel Le Chanteclerc. At the Christmas party organized for the employees, the worker and other executives were in charge of the service and the smooth running of the activity. At this event, it was customary for the employees to invite their bosses to dance. The worker was therefore solicited to dance and he climbed on the sound column, but fell and injured his left knee. For this event, the worker was remunerated and was responsible for supervising the buffet offered to the employees. The accident therefore took place at the workplace at a time when the worker was performing his duties. Dancing was an activity encouraged by the employer, and even facilitated by it. Indeed, it was meant to bring the executives and the employees closer together. The injury therefore took place during an activity that the employer could certainly benefit from. Consequently, the CLP determined that the worker had been injured “in the course of work” and it was therefore an employment injury. According to the CLP, the circumstances of the event fully met the criteria established by the jurisprudence.

In Desjardins and EMD Construction Inc.,6 the worker was a foreman with a construction company. The employer had organized a Christmas party at an inn. The party was a recreational, non-mandatory activity, offered on a weekend. The worker participated in this activity. During preparation of the hall, the employer asked him to move two tables. While moving the tables, he injured his knee. In this case, the event did not occur at the workplace, nor did it occur at a time when the worker was usually at work. Since the event took place on a weekend, the worker was not remunerated for the activity. The fact that the employer had asked him to move the tables did not give rise to sufficient control. Indeed, the CLP considered that volunteering to participate is indicative of a personal initiative and is therefore not a work-

4 C.L.P., no 151514-02-0012, September 13, 2001. 5 C.L.P., no 200923-61-0303, 206540-61-0304, July 16, 2003. 6 C.L.P., no 289166-71-0605, January 24, 2007.


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related activity. As well, the employer did not profit from the presence of the worker at this Christmas party. Since none of the criteria were met, the CLP concluded that it was not a sudden and unforeseen event arising “in the course of work,” and the worker did not incur an employment injury.

In these decisions, the criteria that appeared to be determinative were the purpose of the activity and its relevance to the employment. Normally, social activities are not considered to be work-related activities. They are rather qualified as optional activities where the participants’ presence is voluntary.

Sports Activities

In Jacques and Ville de Québec,7 a police officer was injured in the gym set up by the employer in the workplace. The worker was training during his paid lunch hour. The CLP determined that no subordination link existed and that the police officer, who was in fact a patrol officer, did not need to be in shape to perform his work. Considering that no physical evaluation was required, training was therefore an optional personal activity. It must be noted that, according to the collective agreement, patrol officers were to remain in the workplace during lunchtime and be available if needed. In spite of this, the CLP believed that the worker had not suffered an employment injury.

In Parker and STCUM Réseau des autobus,8 the worker was a bus driver. He injured himself during a ping-pong match that took place in the STCUM drivers’ lounge, during his waiting period. When a driver is in the lounge, he can accrue overtime. At the time of the accident, the worker was not remunerated directly but was gaining an advantage since he was accruing overtime. It is clear that the employer had no control over the worker. He was in a place where he could relax and rest on the premises. However, considering that an employee present on the premises remains available to the employer, this allows the employer to maintain regularity in the operations of his company. The CLP therefore decided that the worker had suffered an employment injury since he was “in the course of work,” in spite of the fact that all criteria were not met.

In Eppe v. Commission scolaire des navigateurs,9 the worker, who was a teacher, was injured during an inter-school volleyball tournament with other teachers. The issue was therefore to determine if the sudden and unforeseen event had taken place “in the course of work.” The event was held in the workplace during regular working hours, meaning during a professional development day. The worker was therefore remunerated, so seemed to meet the required conditions. However, the employer’s degree of authority and control was not proven. Indeed, the activity was fully organized by the social club and the administration did not require the teachers to participate in this activity. There was also no direct or indirect link with work requirements. This was therefore a purely recreational activity. The CLP considered that, since only one out of five employees participated, the volleyball tournament was not intended for the

7 C.L.P., no 101149-32-9805, November 16, 1998. 8 C.L.P., no 139392-62C-0005, June 6, 2001. 9 C.L.P., no 234943-31-0405, July 26, 2005.


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purpose of fostering a good working environment. Therefore, it was ruled that the injury suffered by the worker was not an employment injury.

One of the deciding criteria with respect to sports activities is still the connection to routine work. If the activity is a prerequisite for the job, it will be easier to establish a link. For example, physical education teachers, police officers and prison guards may readily meet “in the course of work requirement.” However, physical condition must truly be a central element of the position held. If the sports activity is recreational, e.g., playing ping-pong or volleyball, or skiing, the connection will be more difficult to demonstrate. Control, purpose and relevance of the activity will have to be established. One decision held that a sports activity during a paid break constituted an activity “in the course of work,” as the break is itself a working condition.10 This being said, sports activities organized as part of social activities are generally not considered to be “in the course of work.”

Practical Advice for Employers

In reviewing cases, it is possible to identify guidelines.

What the employer must avoid:

• mandatory activities;

• solicited and encouraged activities;

• retaliation if the worker does not participate in the activity;

• activities taking place in the workplace;

• activities taking place during regular working hours;

• paid attendance at the activities; and

• employer control and authority (the employer’s social club should organize activities).

What the employer should remember:

• If it is a sports activity, make sure that physical fitness is not an employment condition.

• If it is an activity carried out during a break, it may be considered as an implied working condition.

• If it is an activity provided for in the collective agreement, it may be considered as an implied working condition.

10 Brodeur and Buanderie centrale de Montréal, C.L.P., no 153143-72-0012, October 19, 2001.


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• If it is a professional training activity, it may be considered as an implied working condition.

Conclusion

Several factors can be considered when it comes to the qualification of an injury as an employment injury within the meaning of the AIAOD. The employee must be a victim of a sudden and unforeseen event, attributable to any cause, which arises out of or in the course of his work and resulting in an employment injury. The disputed issue at hand during social or sports activities is to determine if this is an accident that happened “in the course of work.” This is mainly a question of fact. As an employer, you must therefore be careful when organizing these activities or when making premises available for sports or recreational purposes.

The Relationship Begins: Hiring Pitfalls André Baril and Marie-Hélène Maheu

November 7, 2007

McCarthy Tétrault LLP Suite 2500 1000 De La Gauchetière Street West Montréal, QC H3B 0A2 www.mccarthy.ca

The Relationship Begins : Hiring Pitfalls

The Relationship Begins : Hiring Pitfalls

Introduction

You seem perfect for one another. But have you asked the right questions? Have you said too much?

The pre-employment process is one of the most critical points in an employment relationship, yet it is often overlooked by employers to their detriment.

This presentation outlines the eight most important elements to consider in order to ensure a potentially lasting relationship gets off on the right foot.

Stage One – Attracting The Right People

Consideration #1 – Job Postings and Advertising

The Québec Charter of Human Rights and Freedoms1 (Charter) aims to prevent both discrimination and harassment on prohibited grounds such as race, colour, sex, pregnancy, sexual orientation, civil status, age (except as provided by law), religion, political convictions, language, ethnic or national origin, social condition, and a handicap or the use of any means to palliate a handicap2. The Charter applies directly to the employment experience and must be a key consideration in all stages of the pre-employment hiring process. With respect to the advertising of employment opportunities, s. 16 of the Charter reads as follows:

“16. No one may practise discrimination in respect of the hiring, apprenticeship, duration of the probationary period, vocational training, promotion, transfer, displacement, laying-off, suspension, dismissal or conditions of employment of a person or in the establishment of categories or classes of employment.”

As such, when drafting a job ad, employers must be careful not to directly or indirectly ask about any of the prohibited grounds listed above. While some prerequisites may seem innocent, they can discourage certain people from applying for a job by inadvertently suggesting certain people are not welcome based on their race, gender, etc.

Further, requirements or duties of employment as described in an ad should be reasonable, genuine and directly related to the job. For example, it is reasonable and job-related to require that a candidate may

1 R.S.Q. c. C-12. 2 Ibid., s. 18.

The Relationship Begins: Hiring Pitfalls

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understand, speak, read or write in the language(s) required by the job, but it is not acceptable to require a “Québécois accent.”3

Finally, when creating a job posting or advertisement, employers must ensure they are not inserting any misrepresentations. As will be discussed in greater detail below, an employment relationship based on false promises and misrepresentations of any sort is bound to end unhappily and with the potential of legal exposure for the employer.

Consideration #2 – Recruiting

In order to reduce the risk of liability, an employer should keep in mind the following guidelines when choosing to use the services of a headhunter:

• Get the facts. Make sure the agency provides details of the manner in which it sources potential candidates.

• Ensure the agency’s recruiting policies and practices are not in violation of the Charter. Your agency is an extension of your company and their practices should reflect positively on you. Further, any violation of the Charter by your agent is a violation by you.

• Make sure the agency is informed. Ensuring the agency is provided with accurate and complete details of the job being offered means you stand a better chance of finding well-suited candidates.

• Make sure no misleading information is provided. It is your responsibility to ensure the agency understands that no misleading information concerning the job being offered or the company itself is to be provided to any potential candidates.

• Do not allow a breach of an existing employment contract. The agency must not engage in conduct that would result in a breach of any contracts of employment between the potential candidate and his current employer.

• Get informed regarding an applicant’s choice to leave secure employment. As an employer, it is in your best interest to make sure the agency knows that if they are inducing or enticing an employee away from secure employment, they must inform you, the employer, of this fact. Inducement away from long-term employment is one of the key hot spots in recruiting, and can often add significant expense in any future termination decision.

• Make sure the contract between you and the agency is clear, notably on the conditions regarding payment in case of hiring a candidate.

3 Québec (Commission des droits de la personne) c. Dupont, Desmeules et Associés inc. (June 17, 1994), Montreal 500-53-000001-949 (H.R.T.).


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Stage Two – Making Sure You Get The Right Person

Consideration # 3 – Creating the Job Application

In keeping with the fundamental premise of protecting individuals from discrimination on prohibited grounds, the Charter imposes strict constraints on what employers are permitted to communicate or obtain through a job application, unless it is a distinction based on aptitudes or because an affirmative action program is implemented. The Charter states the following at ss. 18.1 and 20:

“18.1. No one may, in an employment application form or employment interview, require a person to give information regarding any ground mentioned in Section 10 unless the information is useful for the application of Section 20 or the implementation of an affirmative action program in existence at the time of the application.

20. A distinction, exclusion or preference based on the aptitudes or qualifications required for an employment, or justified by the charitable, philanthropic, religious, political or educational nature of a non-profit institution or of an institution devoted exclusively to the well-being of an ethnic group, is deemed non-discriminatory.”

On an employment application form, questions inquiring about one of the prohibited grounds of discrimination, either directly or indirectly, are prohibited, except if a connection can be made with the aptitudes or qualifications of the position sought.

Further, with respect to criminal records and convictions, it is not permissible to ask whether an applicant has ever been convicted of any offence generally, but an employer may ask whether the applicant has ever been convicted of a criminal offence that relates to the job and that has not been pardoned. Section 18.2 of the Québec Charter reads as follows:

“18.2. No one may dismiss, refuse to hire or otherwise penalize a person in his employment owing to the mere fact that he was convicted of a penal or criminal offence, if the offence was in no way connected with the employment or if the person has obtained a pardon for the offence.”

Here is a short list of questions that can be asked in the context of an employment application:

• What is your name, address and telephone number?

• Are you legally able to work in Canada?

• What is your employment history? (It is permissible to ask for full details.)


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• What is the highest level of education you have completed?

• Have you ever been convicted of a penal or criminal offence that relates to the job and that has not been pardoned?

Here is a list of questions that cannot be asked in the context of an employment application:

• What is your birth date? (Unless a legal provision fixes a minimum age for a specific kind of work. For example, to work as a bouncer.)

• Do you have any disabilities?

• What is your social insurance number? (This might contain information about a person’s citizenship status or place of origin.)

• Which primary and secondary schools did you attend and why? (This could elicit identification of religious observance.)

• Are you married?

• Are you pregnant? If not, do you intend to have children in the near future?

• Do you own any real estate property in Canada? (This could reveal information about the social condition of the applicant.)

Consideration # 4 – Conducting the Interview

As with the job application, the job interview process is subject to the provisions of the Québec Charter. However, at the interview stage of the employment process, the employer may expand the scope of job-related questions if it is necessary to determine, for example, the applicant’s qualifications or his ability to objectively perform the essential duties of the position being offered. That being said, the following caveats should be considered:

With respect to race, colour, sex, ethnic or national origin, questions are generally not permissible. However, some employers who provide special services may be permitted to ask questions where specific answers to those questions are useful and may be necessary for the job.

Questions concerning religion are generally prohibited, however it may be permissible to deal with accommodation issues regarding an individual’s religious observance. For example, a retail store may need to deal with the issue of whether an applicant’s observance of the Sabbath will impact on their ability to work the hours required.

Questions concerning disabilities during an interview will be permitted only to the extent necessary to establish whether an individual is capable of performing the duties of the job. If he is not, an employer


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must determine whether any accommodation could be made to allow the applicant to perform the essential duties of the job.

Questions concerning an applicant’s ethnic or national origin cannot be asked in most cases, and should be limited to whether the applicant is legally entitled to work in Canada. However, for some jobs, such as senior executives’, further questioning about the applicant’s ethnic or national origin may be appropriate as there may be restrictions on the applicant’s ability to assume the position as an officer of the corporation based on provincial or federal corporate legislation.

Questions that concern civil status or age are inappropriate and must be avoided. Employers should be aware that even by asking seemingly innocent questions on these subjects, they can give the applicant the impression these are issues of concern to the employer. However, it may be appropriate for the employer to inquire into an applicant’s civil status or social condition if the employer serves a particular group identified by civil status, such as single women.

In order to ensure a job interview process is efficient, appropriate and legally compliant, an employer should keep the following tips in mind:

• Establish objective criteria to govern the hiring decision. A job interview is a dynamic environment, and it is not only helpful to the interviewer, but a legally sound practice, to develop a uniform set of questions to ask applicants. This ensures fairness and lends objectivity and credibility to an otherwise subjective endeavour.

• Interview in pairs. Sharing the task of interviewing can be beneficial because you have two sets of eyes and ears to assess the candidate more objectively. Having two interviewers can also provide verification of what was said during the interview. It also increases the applicant’s perception of fairness and assists in a defence to discrimination complaints should they arise.

• Invest in training interviewers. It is invaluable to have interviewers who are familiar with techniques to elicit useful and appropriate information from candidates. Not only will such interviewers put the applicant at ease and impress them with the competence and organization of your company, but having someone conduct the interview who is able to read and assess non-verbal communication and other nuances relating to how a candidate answers questions can provide insight into whether this candidate is the best person for the job.

• Select interviewers who are acquainted with the job requirements. The interview process is really a mutual one during which you not only assess whether the candidate is the best person for the job, but the candidate also assesses whether your workplace is the best place for him . It is helpful if there is someone knowledgeable about the requirements of the job who is available to answer a candidate’s questions.

• Vet questions in advance of the interview. Ensuring your interview complies with the Charter is critical to ensure a successful and legally sound process. It is also important to ensure interviewers


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understand what they can and cannot ask during the course of the interview, and that they should avoid straying from the pre-approved script whenever possible.

• Take detailed notes of the interview. A written record of what was said may help differentiate candidates from one another, allow other people who were not present during the interview to provide input about who they think the best candidate is, and provide protection against allegations of unfair dealings.

Consideration # 5 – Conducting Medical Examinations, Reference & Background Checks

Often employers do not go the extra step to confirm their initial impressions of a candidate, choosing instead to trust their intuition and the applicant. While in many cases this is successful, in others, failing to follow up can lead to adverse consequences. Medical examinations, references, and background checks can be a good way to ensure you have the right person for the job.

Pre-employment Medical Examinations

Pre-employment medical examinations are a good way to make sure the candidates are in an appropriate state of health for the job sought. This approach is used more and more by employers, but it must be conducted in compliance with human rights legislation4. That being said, the employer not only has the right, it has the duty to make sure a candidate is able to take on the responsibilities of the job5.

From an applicant’s point of view, a medical examination may constitute an intrusion of privacy or harm to their physical integrity. Therefore, employers should limit their examination to verifying candidates’ abilities to accomplish the duties efficiently and safely.

A pre-employment medical examination is not a resource for selection of candidates; it must not be used with the intent of finding the healthiest candidate, since that would constitute a discriminatory practice. Therefore, employers should only ask their final candidates to submit to a pre-employment medical examination.

Reference & Background Checks

Conducting reference or background checks, while often recommended, is not always a straightforward decision. In many cases, the nature of the job available will dictate whether such checks are necessary, either because it is explicitly required by a particular piece of legislation or by the rules of a self-governing profession, or because the job carries a risk of harm to third parties. In other cases, it may simply depend on the preferences of the employer and their policies and practices. Either way, if you do choose to engage in background or reference checks, there are a few critical points to keep in mind: 4 Ss. 10, 16-20 of the Charter; Civil Code of Québec, R.Q. 1991 c. 64, art. 3, 10-11 [C.C.Q.]; An Act respecting the Protection of personal information in the private sector, R.S.Q. c. P-39.1, s. 5. 5 An Act respecting Occupational health and safety, R.S.Q. c. S-2.1, s. 51.


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• Always follow through. If you make a practice of asking for references, regardless of the nature of the job offered, it is in the best interests of all parties to always follow through with reference checks –- failure to do so brings an increased risk of liability if any harm occurs.

• Ensure you are not in violation of the Charter. If you decide to require a comprehensive background check (e.g., criminal record checks, credit checks or attendance record checks), you must comply with the Charter. Employers are restricted from basing employment decisions on certain prohibited grounds and these grounds may be disclosed in the context of a background check.

• Ensure you are meeting all required notice and consent requirements. When obtaining a comprehensive background check, always remember to comply with the various notice and consent requirements. The C.C.Q. and legislation such as An Act respecting the Protection of Personal Information in the Private Sector6 seek to protect personal information by requiring candidates to authorize background checks; they also prohibit the refusal to respond to a request relating to the employment by reason of the applicant’s refusal to disclose personal information, unless the information is necessary for the execution of the contract or is authorized by law.

• Be careful when making an offer. If you intend to conduct a background check after making an offer of employment, be sure the offer is clearly conditional upon the attainment of a satisfactory background check. This practice will help to lessen the risk of breaching the Québec Charter.

Stage Three – Closing The Deal

Consideration # 6 – Conveying your Interest to the Applicant

Again, in the context of the hiring process, it is imperative that an employer avoid false promises and misrepresentations. There is a wealth of case law dealing with the concept of “wrongful hiring.” These cases often involve interviewers making inaccurate statements about a job to heighten a potential employee’s interest in the job. If the inaccurate statements result in the potential employee taking the job, the employer may have exposed itself to significant liability.

In 1993, the Supreme Court of Canada in Queen v. Cognos Inc.7 (Cognos) held that an interviewer has a duty to take reasonable care to avoid making false or misleading statements to potential employees. If employers make such statements, they may be found liable. In Cognos, the employer misrepresented the security of the job being offered and the nature of the position the employee would have. Based on the employer’s representations, the applicant accepted the offer of employment. Although the contract of employment between the parties contained a disclaimer that allowed the company to dismiss him on minimal notice, the company was nonetheless found liable for making false promises and was required to

6 supra, note 4. 7 [1993] 1 S.C.R. 87.


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indemnify the employee for lost income, the loss suffered on the purchase and sale of his new home, emotional stress, and the cost and expenses incurred in finding a new job.

According to the Supreme Court of Canada in Cognos, the following five factors are necessary in common law to establish “negligent misrepresentation”:

1. There must be a special relationship between the person making the representation and the job applicant sufficient to give rise to a duty of care.

2. The representation must be untrue, inaccurate or misleading.

3. The person making the representation must have been negligent.

4. The job applicant must have relied on the misrepresentation in deciding to accept employment.

5. The reliance must have caused the job applicant to suffer a loss.

The factors developed in Cognos have received a positive application in Québec8.

The other key consideration when conveying your interest in hiring an applicant is the concept of enticement. Employers who recruit an employee from another employer may face added liabilities if they dismiss that employee without cause in the future9. This increased risk of liability generally stems from the fact that employees who are enticed away from one job to another may be sacrificing the security of their existing employment as well as giving up their seniority, benefits and chances of advancement.

In order to ensure any communication of interest is above-board, the employer should keep the following tips in mind:

• Ensure the individuals communicating with the applicant are consistent, truthful, candid and accurate in their comments. This might require a written job description, or in essence, a script for them to rely on in order to ensure they do not misrepresent the available position or the terms on which employment is being offered.

• Ensure all communications made to the applicant are documented and reviewed. This may help to ensure that if such representations are relied upon at a later date by the applicant, that the employer is prepared for them and has made provisions to ensure they are met.

8 Latraverse c. Centre hospitalier St-Eustache, [2002] R.J.Q. 1056, para. 70 to 76 (S.C.); Lessard c. Fédération des producteurs de volailles du Québec (Volbec), J.E. 93-991 para. 22 to 31 (S.C.). 9 Larivière c. O.E. inc., compagnie canadienne d’équipement de bureau, D.T.E. 97T-155 (C.S.); St-Germain c. Pro Optic inc., D.T.E. 88T-293 (C.S.).


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• Be sure to understand the applicant’s situation. If a certain communication by the employer ends up enticing the employee away from secure employment, it is beneficial to know about this up front, rather than to be surprised by it at a later date.

Consideration # 7 – Making the Offer

The most important thing to keep in mind at this stage is that whatever conditions or promises the employer wants to be able to rely on in the future must be a part of the employment offer when it is first made. Further, any terms that an employer does not want to be bound to must be avoided at this stage.

In order to ensure this process goes smoothly and both the employer and candidate are on the same page as to what the proposed employment relationship will look like, an offer of employment should be:

• In writing –- Offers made orally are difficult to confirm at a later date and make future conflicts troublesome to resolve.

• Clear, concise, and tailored to the position being offered –- There should be no potential for misunderstanding as a result of poor drafting or undue length.

• Accurate –- Misrepresentations to a candidate at any point during the pre-employment process can be fatal to the employment relationship.

• Reviewed and finalized by all appropriate personnel, including Human Resources and any relevant members of the management team –- If a party is going to be bound to the terms of the offer at a later date, they should have an opportunity to vet those terms at this stage.

• Explained, understood and agreed to before acceptance –- It is in no one’s interests to communicate poorly at this or any other stage.

Consideration # 8 – Executing the Employment Contract

A common problem that occurs in the context of a new hire is caused by the so-called “welcome aboard letter.” Quite often, employers offer the candidate employment without specifying the terms and conditions of that employment. Then, when the employee reports for his first day of work, he is given the details of his employment. By that point, however, the employment contract may have already been formed by consent, and additional consideration may be required to make the later terms and conditions binding.

In order to avoid this scenario, it is recommended that an employer turn its mind to papering the employment relationship at its outset. While it may seem like something that can be done upon arrival, it is worthwhile to not only establish the terms and conditions as described in the context of making the offer, but to execute a formal employment contract prior to the new employee’s first day on the job. This


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ensures that all parties are on the same page vis-à-vis the parameters of the job, as well as preventing any confusion upon the employee’s arrival at the company.

When putting together a formal employment contract, an employer must keep in mind that for any contract to be valid and binding, it must be entered into voluntarily, understanding the terms of the contract. In order to meet this requirement, employers should provide candidates with adequate time to carefully review, consider, ask questions, and if desired, obtain independent legal advice before entering into the employment contract.

Finally, employers often neglect to have their employment agreements reviewed by legal counsel prior to execution. At the time of hiring, when the parties are in agreement and on friendly terms, it may seem like an unnecessary cost to have the contract reviewed, but this can be quite costly in the end. The courts will resolve any ambiguity in interpreting an employment agreement against the author (the employer), therefore it is recommended that the agreement be reviewed by legal counsel. Legal counsel can also ensure the employment agreement is valid and in compliance with the Charter, the C.C.Q. and other legislation.

Conclusion

Compliance with the above recommendations will ensure that you have increased protection from a legal perspective and that you have a strong basis on which to found a long-lasting employment relationship. Attached is a checklist to assist in the process.


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A Checklist For Hiring Employees

Steps to Follow to Ensure a Successful Start to the Employment Relationship

Job Postings and Advertising

Have I avoided the use of statements in the job posting or advertisement that violate the Québec Charter by either directly or indirectly asking about a prohibited ground?

Have I described the requirements or duties of employment in a manner that is reasonable, genuine and directly related to the job?

Have I ensured the job posting or advertisement does not contain any misrepresentation or false promise?

Recruiting

Do I have all the details regarding how the headhunter is going to source potential candidates?

Have I ensured that the headhunter’s recruiting policies and practices are in compliance with the Québec Charter?

Have I provided the headhunter with an accurate and complete description of the job?

Have I told the headhunter not to offer misleading information about the job or the company?

Have I ensured that the headhunter will not engage in conduct that would breach an existing employment contract between a candidate and his current employer?

Have I told the headhunter to tell me immediately if a candidate is being enticed away from secure employment?

Job Applications

Have I avoided the use of questions in the job application that violate the Québec Charter by either directly or indirectly asking about a prohibited ground?

Have I appropriately tailored the questions to the job being offered?


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Candidate Interviews

Have I established objective criteria with which to govern the hiring decision? Have I provided these criteria to the interviewers?

Have I scheduled at least two interviewers to conduct each interview?

Have I ensured that the interviewers are properly trained, acquainted with the job requirements and ready to conduct a formal interview?

Have I vetted and approved all questions to be asked by the interviewers to ensure compliance with the Québec Charter?

Have I instructed the interviewers to take detailed notes throughout the interview?

Reference and Background Checks

Is this an appropriate position for which I should be asking for references and/or a background check? Does it involve issues of safety or potential risk.

If I have asked for references, have I followed up on all references offered by the candidate?

Have I ensured I am in compliance with the Québec Charter by not basing an employment decision on prohibited grounds via information obtained from a background check?

Have I met all of the notice and consent requirements contained in the relevant legislation?

If this is a position where a background check is appropriate, have I made the job offer conditional on obtaining a satisfactory background check?

Conveying Interest to the Candidate

Have I ensured that all individuals communicating with the candidate are consistent, truthful and accurate in their comments?

Have I ensured that all communications made to the candidate are documented and submitted to me for review?

Have I asked for and understood the candidate’s reasons for being interested in the job being offered?


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Job Offers

Have I made the offer to the candidate in writing?

Have I drafted the offer in a way that is clear, concise and tailored to the position being offered?

Is the offer accurate and free of misrepresentations?

Has the offer been reviewed and finalized by all appropriate personnel, including the human resources department and any relevant members of the management team?

Has the offer being explained to the candidate fully, so that the candidate understands and agrees to the offer prior to accepting it?

Employment Contracts

Have I ensured all terms I want included in the contract of employment are included in the “welcome aboard” letter?

Have I had legal counsel review the contract prior to its execution?

Have I ensured that the candidate has a full and accurate understanding of the terms of the contract, and that he is entering into the contract voluntarily?

Fixed-Term Employment Contracts Nathalie Gagnon and Philippe Lacoursière

November 7, 2007


Fixed-Term Employment Contracts

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Introduction

Employment contracts are an intrinsic part of a business as they govern legal relationships between employers and employees. The following presentation will address a specific employment contract, namely the fixed-term employment contract.

The fixed-term employment contract is generally a practical means of meeting episodic labour needs. It is important to fully understand the characteristics of these contracts to properly respond to the company’s needs.

What is a Fixed-Term Employment Contract?

Article 2086 of the Civil Code of Québec1 (CCQ) provides that “A contract of employment is for a fixed term or an indeterminate term.” The interpretation given to this provision is that a fixed-term contract exists when the parties have fixed a time limit to their contractual relationship, either by specifying an end date or by reference to the occurrence of an uncertain but specified event.

One major element that differentiates the fixed-term contract from an indeterminate-term contract is that, unless either party has serious grounds, both are generally precluded from terminating the contract prior to the expiry of the term. In contrast, an indeterminate-term contract may be terminated at any time by giving a notice or paying an indemnity in lieu of notice.2 To that end, Article 2091 of the CCQ reads:

Either party to a contract with an indeterminate term may terminate it by giving notice of termination to the other party.

The notice of termination shall be given in reasonable time, taking into account, in particular, the nature of the employment, the special circumstances in which it is carried on and the duration of the period of work.

As discussed below, there is no equivalent provision dealing with fixed-term contracts.

1 Civil Code of Québec, QS 1991, c. 64. 2 Merlitti v. Excel Cargo, [2002] R.J.Q. 995 (S.C.).


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Explicit Agreement

A contract of employment is presumed to be for an indeterminate term.3 It is therefore necessary for a company wishing to commit to a fixed-term employment contract to do so expressly, either by verbal agreement or, preferably, by a written contract.4 The party claiming the existence of a fixed-term contract has the burden of proving it.5

Extinctive Term

The parties may provide for the contract to end on a specified date: This is an extinctive term, yet its inclusion does not always mean the contract is a fixed-term contract.

In Thibodeau v. Corporation municipale Ste-Julienne,6 a key ruling on the subject, the municipality of Ste-Julienne had provided for an extinctive term with a specified end date. However, the municipality had also included a provision allowing either party to terminate the contract unilaterally by giving a 30-day written notice. Justice Fish of the Court of Appeal, as he then was, summarizes the situation as follows:

[Translation] Even if each case is a specific case, the fact remains that the determination of a term does not automatically make an employment contract a fixed-term contract […]

Beyond the words used, it is adequate to identify the true intention of the parties and to give a general sense to the contractual provisions as a whole.7 (Emphasis added)

Moreover, the court held that a contract “of approximately 24 months” was not a fixed-term contract considering the flexibility of its term.8 In these two cases, the courts interpreted the contracts as indeterminate-term contracts, with the consequences these entail, particularly regarding termination. These rulings teach us that if an employer wishes to establish an employment relationship for a given period, its intention must be clearly and expressly reflected in the contract.

Cancellation Clause

To qualify as a fixed-term contract, a contract not containing an extinctive term must include a cancellation clause, meaning a clause by which the contract will be terminated if an uncertain but

3 Dinelle v. Université de Montréal, J.E. 90-76 (S.C.). 4 GAGNON, Robert P., Le droit du travail au Québec : pratiques et théories, 4th Edition, Éditions Y. Blais, p. 90. 5 Dinelle v. Université de Montréal, supra note 3. 6 Thibodeau v. Corporation municipale Ste-Julienne, [1994] CanLII6125 (C.A.). 7 Idem, p. 4. 8 Shawinigan Lavalin Inc. v. Espinosa, D.T.E 90T-261 (C.A.).


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specified event occurs.9 Events that could be the object of cancellation clauses could include the destruction of production equipment, a cutback in business activities or profits below a pre-established level.10 The conditions of the cancellation clause must remain outside of the parties’ control for a contract to qualify as fixed term. The application of a cancellation clause that does not fall outside of the parties’ control could be considered a unilateral termination provision, and consequently, the court could qualify the contract as an indeterminate-term contract.11

Fixed Term and Indeterminate Term within the Same Contract

The courts have also established that a contract could be a fixed-term contract for one party and an indeterminate-term contract for the other.12 This could be the case when the parties include a cancellation clause in an employment contract. For example, the company hires an employee for a fixed term but reserves the possibility of cancelling the contract. In this case, the employee is bound by a fixed-term contract; however, the company does not have this obligation. The courts have declared this type of employment contract valid, providing that the party retaining the right to terminate be required to give a valid notice of termination to the other party.13 In the Aganier14 case, the employer had included an extinctive term as well as the following provision in Mrs. Aganier’s contract:

[Translation] It remains understood that we can terminate your employment if your performance does not meet the requirements of the position or for administrative reasons.15

This clause in the contract is not a true cancellation clause because it depends on the employer’s subjective will. This is rather a unilateral right to terminate that is typical in an indeterminate-term contract. In this case, the court ruled that the employer was bound by an indeterminate-term contract, while the employee was bound by a fixed-term contract. If the employer wanted to terminate the employment contract, it had to do so under Article 2091 of the CCQ, which provides for reasonable notice of termination or an indemnity in lieu of notice if the termination is without serious reasons. In the Aganier case, the employer did not have serious reasons to justify the termination of employment and the employee had not been given notice of termination. The court ordered the employer to pay a termination indemnity.

9 GAGNON, supra note 4, p. 89. 10 GAGNON, supra note 4, pp. 89-90. 11 Merlitti v. Excel Cargo, supra note 2. 12 149244 Canada Inc. v. Selick, [1994] R.J.Q. 2822 (C.A.). 13 Idem. 14 Aganier v. Compensation BNC Inc., [2001] CanLII 246 (C.Q.). 15 Idem, para. 5.


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This interpretation can be beneficial to the employer. Indeed, it allows the company to hire an employee for a required and predetermined time period, while retaining the flexibility of being able to terminate the employment before the end of the term. If the employer terminates the employment contract prior to the end of the term, it will only be required to pay an indemnity in lieu of reasonable notice, which is typically lower than the employee’s salary for the balance of the contract, which the employer would have to pay if the contract were fixed term.16 In addition, if the employer does not want to renew the contract once it expires, the employer will not be required to pay a termination indemnity as it would in the case of an indeterminate-term contract.17 The employer therefore finds itself in a very favourable position.

Termination of a Fixed-Term Employment Contract

As with every contract, the employer and the employee bound by a fixed-term contract must continue to perform their obligations until the end of the contract. The employer who decides to terminate the contract prior to the end of the term without a serious reason must compensate the employee for the injury suffered between the time of the termination and the end of the term for which the contract provides.18 Usually, the employer must pay the salary for the balance of the term of the contract, subject to the employee mitigating his damages.19 In addition to the basic salary, the employer must compensate for all of the quantifiable employment benefits, such as bonuses, vacation leave, social benefits, car allowance and so forth. 20

As for the employee’s duty to mitigate his damages, it is provided for under article 1479 of the CCQ:

A person who is liable to reparation for an injury is not liable in respect of any aggravation of the injury that the victim could have avoided.

The honourable Justice Tachereau, in Lesage v. Lama Transport & manutention ltée,21 summarizes the duty to mitigate as follows:

[Translation] […] the employee is entitled to an indemnity equal to his income provided for under that contract up to the end of the term. The employee has nevertheless the obligation to mitigate his damages and to make all reasonable efforts to look for and accept new employment suitable to his qualifications.

16 AUDET, Georges, BONHOMME, Roger et al., Le congédiement en droit québécois : en matière de contrat individuel de travail,

3rd Edition, Éditions Y. Blais, pp. 5-76. 17 Idem, pp. 5-76. 18 Idem, p. 86 19 AUDET and BONHOMME, supra note 16, pp. 5-58 and following. 20 Marsh Canada ltée v. Crevier, [2006] QCCA 484, page 5. 21 Lesage v. Lama Transport & manutention Ltée, [2003] CanLII 13656 QCCS


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Although the dismissed employee must, first of all, establish his damages, it is by rebuttal evidence that the employer must demonstrate that the employee has not met his obligation to minimize damages. However, if it is demonstrated that the dismissed employee has not found employment after a reasonable delay, the burden of proof can then be reversed. 22

Thus, the employment income earned by the employee elsewhere during the period that he should have worked under his contract of employment will be deducted from the amount due by the employer.23 The jurisprudence has developed a detailed approach for how compensation for breach of a fixed-term employment contract should be calculated.24 However, in a case where proof of mitigation was insufficient and not very credible, the Court of Appeal acknowledged that a global appreciation of the compensation to be paid was acceptable. 25

Compensating an employee for the termination of a fixed-term contract without serious reason can be expensive for an employer. It is therefore advisable to include a unilateral termination clause in the contract that would limit its responsibility for notice of termination in the case of termination of employment without serious reason.

However, we note that public order must be respected in employment contracts. To that end, Article 2092 CCQ provides that:

The employee may not renounce his right to obtain compensation for any injury he suffers where insufficient notice of termination is given or where the manner of resiliation is abusive.

Article 2092 sets out an employee’s right to be compensated where the notice of termination is insufficient.26 An employer that terminates the employment relationship by giving the notice of termination provided for in the contract may therefore still be brought before the courts to determine whether it constituted sufficient notice of termination. Justice Wery summarized the application of Article 2092 to fixed-term contracts in Merlitti v. Excel Cargo:

[Translation] The Déry case should also be set in the context of a true fixed-term contract, which normally cannot be terminated, without good and sufficient cause, prior to the expiry of the term. Indeed, it is difficult to justify the need for a specific term in a contract when it

22 Idem, paragraphs 74 and 75. 23 AUDET and BONHOMME, supra note 16, pp. 5-60. 24 Marsh Canada ltée v. Crevier, supra note 30, page 5. 25 Marsh Canada ltée v. Crevier, supra note 30, page 6. 26 GAGNON, supra note 4, p. 88.


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contains a clause providing for the possibility of terminating it without good and sufficient cause upon the giving of a specific notice of termination. Normally, in fixed-term contracts, there is no notice of termination and this is why we could be tempted to conclude that Article 2092 CCQ does not apply. This does not mean, however, that Article 2092 CCQ does not target the contract anyway.27

Indeed, a notice of termination clause in an employment contract indicates that one of the parties has a unilateral right of termination. If the employer had reserved its right to terminate the contract unilaterally, then it is an indeterminate-term contract from the employer’s point of view and a fixed-term contract from the employee’s point of view. By applying Article 2092, the court can thereby intervene to determine whether the notice provided for in the contract is reasonable in the circumstances of the case.28

Termination of Contract: Non-Renewal or Contractual Extension

Usually, a fixed-term employment contract ends at the expiry of the term fixed by the parties. This characteristic of the fixed-term employment contract has considerable impact on the employer’s responsibility: it is not required, in principle, to provide any notice of termination.29 The expiry of the term puts an end to the legal relationship. However, there are exceptions.

First of all, the parties may have provided for terms and conditions to extend the contract. The parties may continue the initial contract or create a new one entirely. Since the contract is the law of the parties, they may provide for a subsequent fixed-term or indeterminate-term contract. In principle, this contractual extension does not add any obligations to the parties other than those laid down in the new contract.

Under the Act respecting Labour Standards (ARLS), successive fixed-term contracts may, under certain conditions, constitute “uninterrupted service.”30 In Brandwein v. Congrégation Beth-El,31 the Commission des relations de travail (CRT) wrote:

[Translation] An employer can no longer settle for claiming that the termination of employment is the result of the expiry of a contract that has reached its term. If the circumstances of the case indicate that the complainant could legitimately expect his contract to be renewed as it

27 Merlitti v. Excel Cargo, supra note 2, para. 88. 28 Idem, para. 89 and following. See also Lantagne v. Groupe S.M. international Inc., [2004] CanLII 1076 (QC S.C). 29 CCQ, supra note 1, article 2091. 30 Act respecting Labour Standards, R.S.Q., chapter N-1.1, Section 1 (12). 31 Brandwein v. Congrégation Beth-El, [2003] R.J.D.T. 294, pp. 21-22 (confirmed by C.A. 2005 QCCA 330). See also Moore v. Cie

Montréal Trust, [1988] R.J.Q. 2339 (C.A.).


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had been in the past, it is the responsibility of the decision maker to determine whether the employer had serious reasons to terminate it.

In this case, a rabbi was negotiating for the renewal of his employment contract with the congregation. After negotiations failed, he assumed his fixed-term contract would be extended on the same terms, as it had been before. Indeed, in the past the rabbi’s fixed-term employment contract had previously been extended despite failed renewal negotiations. This time, the congregation, still bitter about the failed negotiations, decided not to renew his contract. In these circumstances, the non-renewal was akin to an unjust dismissal. The CRT ordered the congregation to compensate the rabbi for loss of employment.32

In Commission des normes du travail v. Commission scolaire de Laval.33 the CRT adopted a different approach. It noted that the employee’s fixed-term contract had never been automatically renewed. Although she was hoping for a renewal, it was subject to a number of conditions set out in the contract. Each year, the company reviewed the necessity to maintain her contract and sent her its decision. In this case, the employee had been informed that her employment might be terminated. The CRT ruled that the employer did not have to give her a notice of termination of employment.

It is interesting to note that even under civil law, some authors seem to assimilate a period during which fixed term contracts succeed one another without interruption to the transformation of the employment relationship into an indeterminate-term relationship.34

Termination of Contract: Tacit Renewal

The tacit renewal of an employment contract is another exception to the rule that a fixed-term employment contract ends with arrival of its term. If an employee continues to carry on his work for a period of five days after the expiry of the term, without any objection from the employer, the contract is tacitly renewed.35 The employer’s silence amounts to the acceptance of the renewal. In the event of a tacit renewal, the initial fixed-term contract becomes an indeterminate-term contract, with all of the legal implications resulting from this qualification.36 One of the main consequences of this new qualification is the right to a notice of termination within the meaning of Article 2091 CCQ if employment is terminated without serious reason.37

32 See also Lapointe v. J.R. Benny enr., [2004] QCCRT 0382. 33 Commission des normes du travail v. Commission scolaire de Laval, [2003] CanLII 41011 (S.C.). 34 AUDET and BONHOMME, supra note 16, pp. 5-64 and following; GAGNON, supra note 4, p. 91. See also Moore v. Cie Montréal

Trust, [1988] R.J.Q. 2339 (C.A.). 35 CCQ 2090. See also LLUELLES, Didier. "La tacite reconduction : cette méconnue", [2004] 38 R.J.T 761-779. 36 GAGNON, supra note 4, p. 91. 37 BENAROCHE, Patrick L., Le congédiement déguisé au Québec : fondements théoriques et aspects pratiques, Éditions Y. Blais,

p. 85


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Non-Competition Clause

Both fixed-term and indeterminate-term contracts may include a non-competition clause. As required by the CCQ, this clause must be reasonable as to the nature of the activities prohibited, and the duration and territorial scope of the restriction.38 Although the appreciation of what is reasonable is left to the courts, the CCQ places the burden on the employer to demonstrate the validity of the clause.39

When an employee resigns during a fixed-term contract, the non-competition obligation is enforceable against him.40

However, it would appear that an employee dismissed before the end of the term and without serious reason will not be bound by a non-competition obligation provided for in his contract of employment. The CCQ provides that:

2095. An employer may not avail himself of a stipulation of non-competition if he has resiliated the contract without a serious reason or if he has himself given the employee such a reason for resiliating the contract.

What about the non-competition clause in an expired contract? We have not found any decisions on this issue. While indications are that such a clause may be valid, the analysis of the scope of the clause will be greatly subject to the duration of the contract. Save for exceptional circumstances, it would be unrealistic to think that a one-year non-competition clause would be reasonable if it is included in a three-month fixed-term contract.

Conclusion

A fixed-term employment contract is a valuable tool, as it enables the employer to address a specific need for labour.

Moreover, the employer must notably be cautious if he renews the same fixed-term employment contract for successive terms; this could transform it into an indeterminate-term employment contract, with all its consequences.

38 GAGNON, supra note 4, pp. 64-66. See also Cameron v. Canadian Factors Corporation Ltd., [1971] S.C.R. 148. 39 CCQ, supra note 1, Article 2089. 40 Dupuis v. ProVie Assurance, [2004] CanLII 20937 (QC C.S.); Lesage v. Lama transport & manutention Ltée., supra note 31.

Employment, Consultation and Intellectual Property Rachel Ravary and Véronique Wattiez Larose

November 7, 2007

McCarthy Tétrault LLP Suite 2500 1000 De La Gauchetière Street West Montréal, Québec H3B 0A2 www.mccarthy.ca

Employment, Consultation and Intellectual Property

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Introduction

Intellectual property forms the very essence of any business. Because it is an asset of paramount economic and strategic value, an employer must ensure its adequate protection.

In this document, we will first address the guiding principles in intellectual property. These principles will serve as the basis to better identify the various notions of intellectual property in a context of employer-employee and company-consultant relationships.1 We will then provide advice on best practices to adopt in order to preserve the value of these intellectual property assets. It is important to specify that this presentation only covers the main types of intellectual property (patents, copyrights, trade-marks and trade secrets). Other types of intellectual property, such as industrial designs and integrated circuit topographies have been voluntarily excluded considering their more limited relevance to labour and employment law.

Intellectual Property 101

Patents2

A patent may be described as a contract between the inventor and society. The inventor is given exclusive rights to exploit his invention during a maximum period of 20 years. In exchange, the inventor makes his invention public, which enables all Canadians to benefit from the innovation created by this invention. It is important to note that the disclosure of the invention by the inventor is complete, which requires the integral disclosure of the invention and the way in which it operates.3 Conversely, this complete disclosure forces some businesses to keep their inventions secret to avoid disclosure of such to the public (which includes their competitors).

Under the Patents Act,4 any new and useful art, process, machine, manufacture or composition of matter, or any new and useful improvement in any art, process, machine, manufacture or composition of matter, is considered a patentable subject-matter. This subject-matter must respect the three following conditions:

1. The invention must be new, meaning the very first one in the world.5

1 It is important to note that in the province of Québec, the term "worker" is used in various acts, but considering that the term

"employee" is used in federal laws governing intellectual property, we shall use "employee" only for consistency.

2 For further information on patents, visit the website of the Canadian Intellectual Property Office at http://cipo.gc.ca/.

3 Pioneer Hi-Bred Ltd. v. Canada (Commissioner of Patents), [1989] 1 S.C.R. 1623.

4 R.S.C. 1985, c. P-4.


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2. The invention must be useful, meaning having some type of use, being functional and exploitable.

3. The invention must not be obvious, meaning it must not seem to be obvious to a person skilled in the art or science to which it pertains.

When these three conditions are met, the Patent Office grants the patent to the first inventor who files the application. The granting of a patent gives the patentee the right to bring an action against anyone who uses or offers for sale the patented invention, without the patentee’s authorization. After the patent has been granted, the patentee may also claim any damages suffered further to the illegal use.

Copyrights6

A copyright may be defined as a reward given to the author of a work. Under the Copyright Act,7 the author benefits from the sole right to publish or use the work at his convenience during his life and 50 years following the end of the calendar year of his death. The owner of the work may also prevent a third person from reproducing his work or may decide to assign all or part of his rights to a third person.

These rights apply to all original literary, musical, dramatic or artistic work. It is important to specify that a copyright does not protect the idea but the expression of this idea in a fixed manner (a text, a recording or a drawing).

Any Canadian citizen who has created a work as discussed above automatically benefits from copyright protection. The registering of this right entails an additional advantage of presumption of ownership in favour of the owner of the registration. This presumption implies that in the case of contestation, the owner of the copyright does not have to prove his copyright.

The author who has decided to assign his rights to a third person maintains moral rights on his work, unless he has renounced them.

Trade-marks8

A trade-mark is a word, a symbol, a design, a form, packaging, one or more colours or a combination of these elements that distinguishes the wares or services of a person or an organization from those of others offered in the marketplace. Trade-marks are used to distinctively indicate for consumers the source of a product, process or service. Therefore, trade-marks represent in essence the reputation of a business.

5 Sub-section 28.2(1) of the Patent Act.

6 For further information on copyrights, visit the website of the Canadian Intellectual Property Office at http://cipo.gc.ca/.

7 R.S.C. (1985) c. C-42.

8 For further information on trade-marks, visit the website of the Canadian Intellectual Property Office at http://cipo.gc.ca/.


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Under the Trade-Marks Act,9 the owner of a trade-mark is protected against the illicit commercial appropriation of the trade-mark and the goodwill attached to it.

It is possible to distinguish three categories of trade-marks:

1. “Ordinary marks” are words or symbols that distinguish the wares or services of a specific company or individual, e.g., Coke, Toyota, Starbucks.

2. “Certification marks” identify wares or services that meet a defined standard, e.g., biological products such as BioCert, Québec Bio.

3. “Distinguishing guise” identifies the shaping of wares or their containers or is a mode of wrapping or packaging wares used by a person to distinguish his wares from that of others (e.g., the shape of a perfume bottle).

Registration of a trade-mark gives its owner the exclusive right to use the mark across Canada for 15 years in association with the merchandise or services that are the object of the registration, as well as a right to recourse for any violation of said right. Under common law, the use of a trade-mark for a certain length of time can establish an ownership right. Registration of a trade-mark with the Trade-marks Office gives the presumption of the right of ownership to its owner in the case of a dispute.

Trade Secrets

The confidentiality of information that a company owns is forever expanding in importance, due particularly to an increasingly mobile workforce. Although trade secrets are not a type of intellectual property per se, they are frequently treated the same way since they often target the same type of asset. Trade secrets can be defined as non-public information submitted to protection measures to safeguard their confidentiality and offering a competitive advantage to the company that owns them. Considering that patent rights aim to disclose the invention to the public, a company may instead decide to keep its invention or any other information secret. This exercise can be very interesting, but it also carries certain risks. Each company must therefore take all adequate measures to eliminate any risk of disclosure of its trade secrets in order to benefit from a longer protection period.

Application to the Context of Labour and Employment Law

Patents

First, only a “natural person” can create an invention. A “legal person” cannot invent in the literal sense. Unlike the Copyright Act,10 the Patent Act is silent on legal provisions that automatically give the

9 R.S.C. (1985), c. T-13.

10 Section 13.


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ownership of an invention to an employer. The employer may become the owner of an invention in three different ways:

1. The employer can acquire a specific invention by the assignment of the inventor’s rights. Indeed, under Sections 49 and 50 of the Patent Act, the owner of a patent may assign his rights to his employer, with the requirement that the assignment be in writing.

2. The employer may require the employee to sign a contract stating that the employer is the owner of all inventions created by the employee in the context of his duties.

3. The employer can become the de facto owner of the invention that is developed, designed or implemented by his employee. Two conditions must be met for the employer to become the owner of the invention:

a) The employee must have been hired to create inventions or innovations. In this case, the nature and context of the employer-employee relationship must be addressed. The employment contract must be scrutinized to see if it expressly provides that the employee has been hired to create inventions. In the absence of an express agreement, the following factors will help to determine if an employee has been hired to create an invention11:

▪ Was the employee hired specifically as an inventor?;

▪ Had the employee, at the time of his recruiting, already created inventions?;

▪ Did the employer offer an incentive program for the creation of new products?

▪ Does the conduct of the employee, after having created an invention, lead the employer to believe that it has the right of ownership?

b) The invention must be realized within the performance of the function for which the employee was hired. Whether or not the invention was created during working hours or is not a determining criterion. When an employer is able to demonstrate that the invention created has a direct link with the functions for which the employee was remunerated, the employer has ownership of this invention. In other words, the employer owns the employee’s invention only when the employee, by creating his invention, has fulfilled an innovative mission that is part of the work he has undertaken to provide under his employment contract.

11 Comstock Canada v. Electec Ltd., 38 C.P.R. (3d) 29.


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Case law provides several examples of situations where the ownership of a patent has been questioned. According to the Supreme Court of British Columbia,12 a mechanic foreman who had invented improvements on a machine for which he provided maintenance was not the owner of these inventions. Given that the duties of the mechanic did not include the creation of inventions, these inventions belonged to the employer.

Contrary to American law, no presumption exists that would enable the employer to take away from his employee, without compensation, the fruit of his labour from the simple fact that he is an employee. In Canada, the law requires that verification be made as to the existence of an agreement on inventions that can be objectively provable or reasonably inferred. Failing this, the circumstances of the job must be examined. If there is no reliable indication that the employee was hired to invent, the benefit of the invention goes to the employee.

Generally, the best policy is to require employees to sign contracts stipulating that they undertake to assign their rights on future inventions. Furthermore, this agreement could provide for the sharing of profits with the employee-inventor in order to stimulate creativity.

The above explanations relate only to employees and not consultants. An employer can only obtain ownership of an invention if it was created by an employee within the meaning of employment law. An employer cannot therefore benefit from inventions created by a consultant or by a person with whom he has signed a contract of enterprise or for services, in which case an assignment of intellectual property right must be executed between the parties.

Copyright

The Copyright Act provides for a presumption that gives ownership of a work to its author. However, the Act has provided for an exception to this principle, which attributes the ownership of any work created by an employee in the course of employment to the employer. Section 13(3) of the Copyright Act provides:

“Where the author of a work was in the employment of some other person under a contract of service or apprenticeship and the work was made in the course of his employment by that person, the person by whom the author was employed shall, in the absence of any agreement to the contrary, be the first owner of the copyright, but where the work is an article or other contribution to a newspaper, magazine or similar periodical, there shall, in the absence of any agreement to the contrary, be deemed to be reserved to the author a right to restrain the publication of the work, otherwise than as part of a newspaper, magazine or similar periodical.”

12 Spiroll Corp. Ltd. v. Putti, C.P.R. 261.


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Three criteria must be met for the employer to obtain ownership of the work (with the exception where the work is a contribution to a newspaper, magazine or similar periodical):

1. There must be a valid employment contract. The Copyright Act uses the expression “contract of service” to designate what Québec legislation acknowledges as being an employment contract. In copyright matters, the courts13 usually use four factors to distinguish an employee from a self-employed worker:

• the ownership of the tools;

• the subordination relationship or control of the employer;

• the risks of the company (profit or loss); and

• the integration of the employee in the company.

We must therefore distinguish this type of contract from the contract of enterprise or for services. In these cases, the employer does not become the owner of copyright; the contractor or the service provider remains the owner of the work, including the one ordered by his client.

2. The work must be realized in the course of employment. The work will be owned by the employer if it can establish that the work created has a direct link with the duties of the employee. For example, it has been ruled that the creation of a website by an employee, in the performance of his duties, did not give him any ownership of copyright.14

3. There must not be any agreement contrary to the presumption provided for in favour of the employee. This condition also appears under Section 13(3) of the Copyright Act. The agreement could be explicit (written or verbal), but could also be implied and be the result of the behaviour of the parties or of common use in the industry.

If these criteria are not met, the employer must ensure that an assignment agreement is in effect between the parties if it wants the ownership of the copyright on the work. Similarly, when the company deals with a consultant, it must obtain an assignment from the consultant and from any other person who could be considered the author or co-author of the work. These situations are frequent when consultant services are retained for the creation of software, trade-marks, logos and related material.

13 Les Amusements Wiltron inc. v. Mainville, (1991) R.J.Q. 1930 (S.C.)

14 D’Astous v. Sesno, D.T.E. 96T-988.


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Moral Rights

Under the Copyright Act,15 the author of a work has moral rights thereon. There are two types of rights:

1. The right to paternity of the work. This right enables the author to claim copyright of the work. He can also require that his name is associated with the work, as he can ask to remain anonymous. Finally, the right to paternity of the work enables the author to avoid false attribution of his work to another person.

2. The right to the integrity of the work. This right enables the author to prevent the prejudice of his honour or reputation if the work is distorted, mutilated or otherwise modified, or used in association with a product, service, cause or institution without his consent.

It is important to differentiate moral rights from “economical” copyrights. Economical copyrights aim to guarantee the copyright owner retains exclusivity of the production, reproduction, representation, publication, translation and adaptation of the work, including the right to authorize one or the other of these actions. Moral rights, in contrast, are associated with the author as a person and focus on the protection of his honour and his reputation. They associate the creator to his work and give him the prerogative rights with regards to users. For example, in a case ruled in Ontario,16 an artist who had sculpted a work suspended from the ceiling in the entrance of a shopping mall objected to the modification of his work. The shopping mall wanted to surround the sculpture with red ribbon, which offended the author. The court ruled that by doing so, the shopping mall was violating the author’s moral rights.

Moral rights cannot be assigned. They continue to belong to the author of the work even if the author assigns his rights on the work. However, these rights can be waived. For this reason, it would be prudent to include a clause regarding the waiver of moral rights in any relevant employment or consultation contract.

Trade-marks

For a company in the process of registering its trade-mark, the essential element of trade-marks within an employer-employee relationship is to always ensure that this trade-mark is registered under the company itself. Indeed, it happens that employees file applications to register trade-marks themselves. In these cases, it is essential to ensure that the employee registers the trade-mark under the company’s name and not under his own name. Registration of the trade-mark under the employee’s name can lead to major problems, considering that the trade-mark will belong to him until it is assigned to the company.

This situation is very common for domain names since, quite often, only employees with a technical background understand the steps necessary to their registration. It is therefore essential to ensure that a domain name is registered under the name of the company. Furthermore, the company that deals with

15 Sections 14.1, 14.2, 28.1 and 28.2.

16 Snow v. Eaton Center Ltd., (1982) 70 C.P.R. (2d) 105.


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another company to register the domain name must also ensure the domain name is created under its name. Indeed, several companies developing websites register the corresponding domain name under their own name to then obtain more money from their clients.

Trade Secrets

Article 2088 of the Civil Code of Québec17 imposes an obligation of faithfulness to the employee. This obligation remains for a reasonable delay after the termination of the employment relationship. Its intensity will vary depending on the employee’s position. If the latter was an executive or an officer of the company, the obligation will be very exacting.18

A duty of confidentiality stems from the obligation of faithfulness. Case law has not yet clearly defined the scope of confidential information, as the nature of the obligation varies according to the type of employment and the nature of the information. For example, an employee who disclosed scientific data obtained within the performance of his duties was considered to have breached of his obligation of faithfulness,19 as was the employee who, after having left his employment to create his own company, used confidential information to compete against his former employer.20

Case law has identified three categories of information that an employee can acquire during his employment,21 trade secrets being part of the third category:

1. Information that, due to its ease of access or its trivial nature, could not be considered confidential. This type of information is not protected. All employees could use this information at their own discretion.

2. Information that must be treated as confidential by the employee during employment, either because the confidential nature of this information is obvious or because it was specifically pointed out to the employee. However, this information is considered to be subjective; it belongs to the employee and is part of his general knowledge. These are skills or talents that an employee has acquired during the performance or in the course of his work.

3. Trade secrets are of paramount importance to a company. These specifically include manufacturing secrets, knowledge owned by the employer and transmitted to employees only to produce what the secret allows to realize. For example, the employer has an

17 Q.S., 1991, c. 64 (CCQ)

18 Here we are talking about a fiduciary obligation, see Canadian Aero Service Ltd. v. O’Malley, [1974] S.C.R. 592 (S.C.C.)

19 Armanious v. Datex Bar Code Systems Inc., 2001 CanLII 11301 (C.A.).

20 LXB Communication marketing inc. v Brien, D.T.E. 2003T-328.

21 Positron inc. v. Desroches, [1988] R.J.Q. 1636 (S.C.); Faccenda Chicken Ltd. v. Fowler and others, (1985) 1 All ER 724.


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exclusive ownership right on the following elements: price lists, client lists, maps, forms, plans, diagrams, drawings and graphics.

Former employees cannot use or disclose trade secrets belonging to their former employer. If an employer wants to protect certain information with an injunction, it will bear the onus to demonstrate that the former employees knew that the information was secret and that it has taken all the necessary means to protect the information. The courts will also take into account the fact that a non-disclosure agreement was signed upon employment. If no agreement has been signed, the obligation will vary according to the employee’s position.

Practical Considerations

Here are a few pointers that can help a company prevent disputes with its employees involving intellectual property and trade secrets.

First of all, every company should have contracts that contain clauses covering intellectual property and confidentiality. It is important to specify that the employment contract clauses should vary according to the activities performed by the employee within the company. If, for example, an employee is hired by a pharmaceutical company to develop new medications, it is obvious that this employee’s contract of employment will contain very restrictive clauses regarding intellectual property and trade secrets.

Employment contracts should include clauses that provide, among other things22:

• a statement on the existing rights of the employee at the time of employment, e.g., previous inventions;

• a disclosure commitment in due time, given effect in some cases by the respect of in-house policies, e.g., use of laboratory notes (ideally, innovative companies should have a written disclosure policy);

• an assignment and commitment of assigning all rights, titles and interests in favour of the employer;

• a statement by the employee asserting that none of his former employers prohibits him from signing an employment contract;

• a waiver by the employee of all moral rights on works created during the performance of his work;

• a commitment by the employee to sign, during the term of his employment and thereafter, any document necessary for the protection of the rights and interests of the employer or to defend

22 See RACICOT, Michel, Inventions et innovations par des employés, McCarthy Tétrault, pp. 63 to 66.


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these interests and the commitment to collaborate in all proceedings in the violation of the employer’s rights;

• a commitment to respect the secret of the employer’s confidential information and also information provided to the employer under the promise of confidentiality and the commitment to only use this information for the purpose of the employment;

• a commitment to return to the employer all documents belonging to the company or containing confidential information upon the termination of employment; and

• a statement that the confidentiality and co-operation clauses will survive the employment contract.

Consultants’ contracts should include the following clauses:

• a stipulation committing the consultant to acknowledge any invention, work, trade secret and any other intellectual property as being the exclusive property of the company;

• a commitment that the consultant require all of his employees or sub-contractors to sign an assignment clause similar to the one mentioned above. In addition, this clause should include a waiver of moral rights; and

• a stipulation that the consultant undertakes to co-operate with the company in order to complete its ownership rights.

Finally, here are a few tips that can be useful to prevent the disclosure of trade secrets:

• transfer trade secrets onto any material form;

• store this documentation in a secure place;

• restrict access to this documentation to as few people as possible;

• designate a place under high surveillance to store important information;

• monitor the circulation of third persons in the company;

• train employees on the importance of trade secrets for the company; and

• provide a confidentiality clause in the employment contract, specific to trade secrets.


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Conclusion

A misconception of the rules governing intellectual property can lead to significant conflicts and give rise to enormous costs for a company. It is therefore paramount for any employer to clearly identify the various intellectual property law concepts set out in this presentation and to provide for adequate employment contracts for each of its employees and consultants.

A Practical Guide to Alternate Dispute Resolutions and Hearings André Baril and Pierre Jolin

November 7, 2007

McCarthy Tétrault LLP Suite 2500 1000 De La Gauchetière Street West Montréal, Québec H3B 0A2

www.mccarthy.ca

A Practical Guide to Alternate Dispute Resolutions and Hearings

Page 1

A Practical Guide to Alternate Dispute Resolutions and Hearings

Introduction

The use of alternate dispute resolutions (ADR) has increased over the last few years, as more people are recognizing that these mediation, conciliation or settlement meetings are not only effective, but preferable to lengthy and expensive hearings.

Whether before the Commission des normes du travail (CNT), the Commission des relations du travail (CRT), the Commission de la santé et de la sécurité du travail (CSST), in grievance adjudication, or before a civil court, every ADR primarily requires solid preparation and thorough knowledge of the case.

This workshop will help you take a more in-depth look at alternate dispute resolution techniques used in labour and employment law, and will advise you on how to prepare yourself and your lawyer for and effectively facilitate ADR meetings.

Alternate Dispute Resolutions

Definitions

Mediation (or conciliation, depending on applicable legislation) is a dispute resolution method where a qualified and impartial third person helps both the disputing worker and employer develop a feasible and mutually satisfactory solution.

The mediator (or conciliator) must generally keep all communications during mediation/conciliation confidential. He may, however, be called to testify about the existence (or non-existence) of an agreement.

Mediation/conciliation makes it possible to:

• actively look for a satisfactory solution to the conflict;

• retain control over the decisions to be made;

• save time and money;

• reduce the potential for aggravation; and

• reach an agreement that is freely consented to.

In civil matters, the Superior Court and the Court of Québec offer the possibility of a settlement conference. This is a dispute resolution process that, like mediation/conciliation, enables people involved in a civil matter to meet and settle their dispute under the supervision of a judge rather than through a hearing. Unlike hearings, these meetings are private, informal and time-efficient. The judge will facilitate dialogue among the parties to help them identify their interests, assess their positions, and negotiate and explore mutually satisfactory solutions.

Legal Framework

Commission des normes du travail

• When a complaint against prohibited practices1 or a dismissal not made for good and sufficient cause2 is filed with the CNT, a mediation session3 is offered to the parties.

• Mediation is also offered in cases of psychological harassment.4

• Mediation is a voluntary process.

• The parties are free to terminate the mediation at any time and for any reason.

• If no agreement is reached, the CNT will immediately transfer the complaint(s) to the CRT. In the case of psychological harassment, the CRT will initiate an inquiry.

• The complaint will be heard by a commissioner assigned by the CRT.

• A conciliation process is also possible at the CRT.5 If the parties consent, the CRT may designate a member of its staff to meet with them and help them attempt to reach an agreement. The same confidentiality principles apply.

• The parties may choose to have their lawyer present. It is generally more beneficial to be accompanied by a lawyer as he can ensure the settlement proposals, as well as any agreement, are both reasonable and consistent with the applicable legislation. The lawyer can also bring creative ideas to reach a settlement. In addition, if the case goes to hearing, he will be better prepared if he has attended mediation/conciliation, as he will have heard part of the evidence and will have met the worker, and, possibly, his representative.

1 Section 122 of An Act respecting Labour Standards, R.S.Q., N-1.1 (ARLS). 2 Section 124 ARLS. 3 Sections 123.3 and 125 ARLS. 4 Section 123.10 ARLS. 5 Sections 121 and following of the Labour Code, R.S.Q., c. C-27 (LC)

According to the CNT, close to 80% of employees and employers involved in a recourse against a practice prohibited under the ARLS, or against a dismissal not made for good and sufficient cause, have agreed to the mediation service.6 Mediators designated by the CNT are subject to specific rules of ethics that state their role, duties and responsibilities related to skills, impartiality, fairness and confidentiality.7 CRT conciliators are also subject to confidentiality. According to the CRT, 80% of cases subject to conciliation reach a settlement8.

Commission de la santé et de la sécurité du travail and Commission des lésions professionnelles (CLP)

• Any worker who believes he has been the victim of a penalty, disciplinary action or reprisal by his employer because he i) was the victim of an employment injury, ii) exercised a right under An Act respecting Industrial Accidents and Occupational Diseases9, or iii) exercised a right under the An Act respecting Occupational Health and Safety10, can submit a complaint to the CSST11.

• The CSST assigns responsibility for the complaint to a “conciliator-decision-maker” (designated by the CSST).

• Conciliation is voluntary for the parties.

• Conciliation services are offered by the CSST free-of-charge.

• The conciliator-decision-maker, as the title indicates, wears two hats: that of a conciliator during conciliation and that of a decision-maker during the hearing (if conciliation fails). Confidentiality of communications during conciliation cannot therefore apply, which limits in some respects the efficiency of the process. Indeed, the parties generally express concern to put forth or disclose elements that will be used against them in a forthcoming hearing.

• If there is no possible solution after conciliation, the conciliator-decision-maker will convene the parties to a hearing.

• Conciliation is also offered by the CLP in all appropriate cases.12 Contrary to the CSST conciliation process, the conciliator designated by the CLP is bound by the confidentiality of communications.13

6 “Mediation: a free service to help you rapidly settle a dispute,” Commission des normes du travail, http://www.cnt.gouv.qc.ca. 7 “Mediation: Rules of Ethics,” Commission des normes du travail, http://www.cnt.gouv.qc.ca. 8 Ibid, Note 6. 9 R.S.Q., c.A-3.001 (AIAOD). 10 R.S.Q., c. S-2.1 (AROHS). 11 Section 32 AIAOD and Section 227 AROHS. 12 Sections 429.44 and following, AIAOD.

• Experience indicates the CLP conciliation process is efficient and the rate of settlement is high.

• If an agreement is reached, it may be confirmed by a commissioner to the extent that it is in accordance with law.14 Where no agreement has been reached, the parties shall be convened to a hearing.

• The parties may choose to have their lawyer present whether it is before the CSST or the CLP. It is generally more beneficial to be accompanied by a lawyer as he can ensure that the settlement proposals, as well as any agreement, are both reasonable and consistent with the applicable legislation. The lawyer can also bring creative ideas to reach a settlement. In addition, if the case goes to hearing, the lawyer will be better prepared if he has attended conciliation meetings as he will have heard part of the evidence and met the worker, and, possibly, his representative.

Civil Remedies

• Under the Québec Code of Civil Procedure15, the chief justice may, at any stage of a civil proceeding, designate a judge to preside over a settlement conference.16 A judge will generally be designated at the request of the parties. It is recommended that such a settlement conference be held out-of-court prior to the hearing of the case.

• The conference is held in the presence of the parties, and, if the parties so wish, in the presence of their lawyers.17 It is generally more beneficial to be accompanied by a lawyer as he can ensure that the settlement proposals, as well as any agreement, are both reasonable and consistent with the applicable legislation. The lawyer can also bring creative ideas to reach a settlement. In addition, if the case goes to hearing, the lawyer will be better prepared if he has attended the settlement conference as he will have heard part of the evidence and met the worker, and, possibly, his lawyer.

• The settlement conference does not suspend the proceeding, but the judge may modify the timetable.18

• Anything said or written during a settlement conference is confidential.19 All participants sign a confidentiality agreement by which the judge is also bound.

13 Section 429.48, AIAOD. 14 Section 429.46, AIAOD. 15 R.S.Q., c. C-25 (CCP), sections 151.14 and following. 16 Section 151.15, CCP. 17 Section 151.17, CCP. 18 Section 151.19, CCP. 19 Section 151.21, CCP.

• The settlement conference is scheduled as soon as the parties have agreed on a date and transmitted the prescribed form to the Office of the Court.

• When the settlement conference leads to a solution to the dispute, an agreement is then drafted and signed by the parties –- and their lawyers, if applicable. If the agreement is consistent with the law, it is submitted to the relevant court to be confirmed and given force and effect.20

• If no settlement is reached, the conference judge may not preside over the hearing, which will then be heard by another judge.21

Practical Advice from the Legal Aspect

Communications Skills and Techniques

• The best communicator is generally the most successful one.

• The best communicator is generally the person who knows how to keep quiet, listen and keep and open mind: alternate dispute resolutions are in part to collect facts and the worker's version.

• There are four categories of knowledge: 1) what we know; 2) what we don't know we know; 3) what we know we don't know; 4) what we don't know we don't know.

Strategic Considerations

• Know how to separate personality conflict issues.

• Have an initial goal that can be established at the beginning of the process and that will serve to determine if the desired result has been reached. This goal can be modified for valid reasons in support of the interests of a party.

• Always plan thoroughly: get the information you need and use it to reach the target goal.

• Consider your BATNA (best alternative to a negotiated agreement ), meaning the benefits, financial impact, waste of time, distribution of resources and all other considerations.

• Consider your WATNA (worst alternative to a negotiated agreement).

20 Section 151.22, CCP. 21 Section 151.23, CCP.

Hearings and Proceedings

Legal Considerations

Burden of Proof

• The burden of proof is the obligation of a party to demonstrate the validity of its right and of its contentions and alleged facts, as well as to convince the court thereof.

• This factual evidence answers the "burden of persuasion," which is the obligation for a party to persuade the decision-maker that there is or is not a litigious fact according to the "degree of credibility required."

• In essence, the burden of proof rests on the shoulders of the party that contends the fact in dispute or claims the performance of an obligation.

• It is generally up to the party on whom the burden of proof rests to first present evidence.

• Legal presumption22, which exempts the person in whose favour it exists from making any other proof, may lighten the claimant’s burden of proof. Note that presumption is a means of proof and not a preliminary to the receivability of a complaint.

• In grievance adjudication, the union often has the burden of proving the employer has not complied with the collective agreement. However, the collective agreement can reverse the burden of proof in some cases. Therefore, it is of paramount importance to analyze the collective agreement to establish clearly who has the burden of proof.

Rules of Evidence

• The Civil Code of Québec (CCQ) lists five means of proof, namely: 1) by writings, 2) by testimony, 3) by presumption, 4) by admission, and 5) by the production of material things.

22 Such as the presumptions of industrial accidents and occupational diseases provided for under Section 28 and 29 of the AIAOD.

Complaints under Section 122 of the ARLS also benefit from statutory presumption inasmuch as the worker can establish in particular

the employment link, the prohibited measure, the right claimed as well as the concomitance between the penalty and the right

claimed. With respect to complaints under section 124 ARLS, it is up to the worker to prove the conditions to initiate action; then,

the employer has the burden to demonstrate the dismissal was made for good and sufficient cause. If such a demonstration is made

according to the degree of evidence required, the complainant then has the burden to contradict or diminish the employer's evidence.

Sections 32 AIAOD, 227 AROHS and 15 LC are also the object of legal presumptions.

• Therefore, there are three direct means of proof (by writings, by testimony and by the production of material things) and two indirect means (by admission and by presumption) to establish the facts relevant to a dispute.

• The CSSTs, CRT and CLP commissioners and the arbitrators are not technically subject to the same rules of proof as are the courts in civil matters. These rules are generally followed, however, although not as closely.

• Proof by writings is proof from the production of any document. It is a means of universal proof except when the writing is prohibited by hearsay.

• Proof by testimony is a statement whereby a person relates personal knowledge of the facts, or whereby an expert gives his opinion23.

• Proof by hearsay is generally prohibited, but is subject to exceptions. It is evidence given by proxy report, specifically, a verbal or written extrajudicial statement that is made out of court by a witness who is not part of the hearing, and that establishes the existence of facts at issue.

• There are generally two types of witnesses, the ordinary witness and the expert witness. The ordinary witness testifies about facts observed or experienced by him. The expert witness provides an opinion on a subject that is beyond the knowledge and experience of the decision-maker.

• The parties must usually summon witnesses. Therefore, witnesses must be identified in advance and subpoenaed to attend the hearing.

• The parties usually ask to proceed with the exclusion of witnesses in order to not adversely affect credibility. However, this rule does not apply to the parties.

• The direct examination is led by the lawyer of the party producing the witness. During this examination, leading questions are generally prohibited.

• When a party has completed its direct examination, any other party may cross-examine on all disputed facts. This witness may then be re-examined by the party that produced the witness about testimony given during the cross-examination.

• A party may raise an objection against the administration of proof it considers contrary to a rule of evidence. It is therefore up to the parties to monitor the application of the rules of evidence and to take issue of any violation thereof.

23 Article 2843 CCQ.

• Pre-trial disclosure and written evidence that is to be presented to courts in civil matters, is subject to a thorough application process. When such evidence, including medical evidence, is to be presented to administrative tribunals such as the CLP, it also may be subject to some form of application process.

• Section 9 of the Charter of Human Rights and Freedoms24 provides for solicitor-client confidentiality or privilege. This protects the client and prevent the disclosure of his confidential information to the professional consulted, thereby upholding the right of freedom of expression.

Practical considerations prior to the hearing

• Initial meeting: the initial meeting with a lawyer is usually to examine the file, to assess strengths and weaknesses and to analyze the settlement expectations. It is important during this initial meeting to:

o provide the lawyer with maximum information and relevant documents;

o tell the lawyer about any previous discussion with the worker(s) or the union (communications history can be very useful);

o have already collected all relevant information from factual witnesses; and

o have, where reasonably practicable, proceeded with an investigation in the case, if applicable.

• Witnesses: Witnesses are an essential part of the file if it proceeds to a hearing. It is therefore important to quickly identify the witnesses necessary for your case and to ensure they are available for the hearing. It is also important for your lawyer to meet with these witnesses prior to the hearing, not only to get their version of the facts but also to prepare their testimony. In cases involving a medical component, the calling of expert witnesses is a common practice. As the availability of these expert witnesses is often limited, it is important to ensure as early on as possible that they will be available.

• Transfer of information: It is important to keep your lawyer informed about the developments of the case and the documentation received from the organizations involved, such as notices to appear. It is generally easier to ask for a continuance at the time you receive a notice of hearing than just a few days prior to the scheduled date. In addition, some requests are subject to certain delays, and failure to answer within the prescribed time limit can lead to undesired consequences, in particular in a CSST matter where failure to contest a ruling (which may look, at first glance, like a simple letter) may have a serious impact.

24 R.S.Q., c. C-12 (The Charter).

• In-house precedent: It is also important to inform the lawyer of any in-house precedents. Are there any in-house decisions on this point of law? Have there been similar situations with other workers? If so, how was the case handled? A decision-maker will give significance to in-house precedents. It is therefore important these are known so they may be explained or differentiated.

• The decision-maker's choice: in grievance adjudication, the parties generally come to a mutual agreement on the choice of arbitrator. This choice must not be made lightly. Arbitrators are not all the same: they have different expertise in varying areas and subjects. A lawyer can help choose an arbitrator who is the best fit for the particular case, taking into account the relevant facts and legislation. A lawyer can also analyze previous rulings rendered by various arbitrators on similar cases. At the CRT and the CLP, as before higher courts, decision-makers are designated by them; the parties do not have the option of choosing the person who will hear their case. However, once the identity of the decision-maker is known, there may be more motivation to settle a case.

Workplace Investigations Nathalie Gagnon and Jacques Rousse

November 7, 2007

McCarthy Tétrault LLP Suite 2500 1000 De La Gauchetière Street West Montréal, QC H3B 0A2 www.mccarthy.ca

Workplace Investigations


Introduction

A wide variety of occurrences may be classified as "workplace incidents" requiring an employer to undertake some kind of investigation. Examples include employment injuries, psychological harassment complaints, theft, fraud and drug and alcohol abuse.

The purpose of this paper is to provide employers with some general guidelines that will allow them to properly and appropriately investigate workplace incidents. This paper aims to give employers specific tips for conducting workplace investigations in three contexts: (i) disciplinary incidents, (ii) psychological harassment complaints, and (iii) health and safety incidents.

Investigating Workplace Incidents: Preliminary Considerations

The purpose of an investigation is to gather information in an organized, complete and fair manner that will result in accurate findings of fact. If an investigation is performed with this purpose in mind, an employer will inevitably find itself in a better situation than if it had either turned a blind eye or proceeded in an unorganized manner.

Investigating workplace incidents is not harassment. Indeed, in many circumstances, an employer has a positive duty to investigate, especially when an employee alleges he has been the victim of psychological harassment.

Deal with Exigencies

The first step after any incident is to respond to its exigencies, not in the sense of punishing the alleged offender, but rather to bring any crisis brought about by the incident under control.1 For example, in a situation where workplace violence has occurred, the medical and personal needs of the victim should take immediate precedence. Further, the integrity of the workplace should be ensured; property should be protected and any affected workplace processes should be attended to.2

1 This being said, depending on the nature of the incident, an employer may be warranted to suspend the alleged offender with pay, pending the outcome of the investigation. The suspension should not be done for punishment purposes, but rather, to protect the integrity and safety of other workers and the workplace. The best way to remove an employee from the workplace pending the outcome of an investigation is to place him on paid “administrative leave.” 2 N. A. Keith, Human Resources Guide to Preventing Workplace Violence, (Aurora: Aurora Professional Press, 1999) at p. 187 [Keith].


Consider the Nature of the Incident

The second step is to consider the nature of the incident: did the incident occur on or off-duty? Is it criminal in nature? Is the incident the subject of a specific employee complaint, and if so, what are the rights of the complainant? Beyond determining the manner in which an investigation is conducted, considering the nature of the incident may lead to the conclusion that the integrity of the incident scene should be preserved. The incident scene may provide the most invaluable source of evidence later on in the investigation.3

Note Legal Requirements that May Apply

The third step is to consider whether the employer is under any legal restrictions regarding the manner in which the investigation is carried out. Any relevant legislation should be consulted. In addition, if a collective agreement is in place, it should be analyzed to determine whether there are provisions that may affect the investigation. For example, a collective agreement may require an investigation prior to suspension or discharge, stipulate that investigations be conducted expeditiously, set out notice requirements, permit an employee to have the assistance of a union steward at the investigation, or require written notification of certain types of allegations.

Choose the Investigator

The final preliminary step is to identify the investigator and/or investigative team.4 Care should be taken to ensure the selected investigator is unbiased and has the necessary expertise and authority to conduct a thorough investigation. As such, an employer may wish to seek external assistance if the investigation cannot be completed in an unbiased manner, or if some special expertise is required (such as forensic auditing experience or experience handling harassment complaints).To best ensure a fair and unbiased investigation, the investigator(s) should also be instructed to focus on fact-finding as opposed to fault-finding.5

Checklist

Prior to commencing an investigation, the employer should consider the following questions:

3 Ibid. Further, if investigating a health and safety incident, Section 62 of the Act Respecting Occupational Health and Safety, R.S.Q. c. S-2.1 [A.R.O.H.S.], stipulates that the scene of the incident must remain unchanged until it has been investigated by the inspector, except to prevent an aggravation of its consequences, or unless the inspector authorizes a change. 4 Keith, Ibid. 5 Keith, Ibid. at p. 186.


• Is there a “safe” mechanism in place for employees to report information regarding the incident to management?

• What is the nature of the incident?

o Did the incident occur on or off-duty?

o Are human rights issues involved?

o Did the incident involve a threat to the health and safety of the employee or other individuals?

o Does the incident involve a complaint by another employee who would like the company to enforce the employee’s workplace rights?

o Is disciplinary action likely? If so, could it involve termination of employment?

o Is the incident criminal in nature or does it involve allegations of a quasi-criminal nature?

• How should an appropriate investigator be chosen?

o Consider whether external assistance is necessary.

o Ensure the investigator is relatively unbiased.

o Ensure the investigator has the requisite authority to conduct the investigation.

o Select an individual with suitable interpersonal skills.

o Ensure the investigator has the necessary training. Ideally, an investigator should be trained in investigative techniques, including fact-finding, questioning, decision-making, assessing credibility and preparing documentation.

o If possible, the investigator should not be the individual who will be making the final decision regarding what to do about the incident.

• Is there is a collective agreement?

o If so, it is imperative to review the agreement and ensure compliance with any relevant provisions.

The General Investigative Process

An investigation usually involves some or all of the following steps:

• interviews of people who were involved in the incident or who witnessed some or all of the incident;


• collection of documentary evidence, such as time cards, work records, e-mails, accounting or inventory records, invoices or sales documentation, and building access records;

• collection of actual evidence, including recovering stolen property, taking photographs of any evidence such as stolen or damaged property, and preserving damaged or vandalized items;

• "creation" of evidence by means such as video surveillance; and

• production of an “incident report,” which, if intended to defend against existing or anticipated litigation, should only be undertaken at the behest of legal advice so as to invoke privilege (further, the confidentiality and intended use of the report should be made clear throughout the investigation).

The investigation process will vary depending on the type of incident. For example, an alleged incident of insubordination will likely involve, primarily, the interviewing of witnesses, and, possibly, the collection of documentary evidence such as time cards or other relevant documents. A harassment investigation will involve extensive interviewing of witnesses as well as of the complainant and alleged harasser, both of whom will likely be involved in more than one interview.

Interviews

Conducting post-incident interviews of involved employees is perhaps the most important part of any investigation, for three reasons. First, interviews help the employer gain a clear and comprehensive picture of what occurred, providing valuable information that can help the employer to remedy the incident in an appropriate manner. Second, interviews, if conducted properly, provide an invaluable source of evidence if litigation later becomes involved; interviewees can be committed to a story and/or helpful admissions may be gathered. Finally, if the only evidence of a workplace incident are the two conflicting stories of the complainant and alleged offender, interviews give the employer the opportunity to assess the credibility of both parties involved.

Interviews should be conducted as soon as possible after the incident, when memories are vivid.

Before the Interview

In the preliminary stages of an investigation, a list of potential interviewees should be made, then consideration given to whether there are any possible legal restrictions or ramifications related to interviewing them. If any of the potential interviewees may be involved in a criminal prosecution, legal advice should be sought prior to meeting with them. Employers should ensure that witness meetings or statements do not undermine criminal charges, especially in very serious matters. Finally, if any of the interviewees are unco-operative, the employer should develop a strategy for how to deal with them, assess how crucial their evidence will be, and determine whether the information can be obtained from alternative sources if necessary. For example, in the case of potentially difficult interviewees, consider having two persons attend.


The employer should take care to design an interview that suits both the nature of the incident being investigated and the individual being interviewed (i.e., consider whether the interviewee is the complainant, the alleged offender or a witness). Further, attention to the interviewee’s position in relation to the employer is imperative in designing the interview (i.e., consider whether the interviewee is management, unionized, a contractor or a member of the public). It is helpful to compile a list of points and/or questions to be covered in the interview, and to develop a strategy for when and how various issues will be addressed.

Regarding the order in which interviews should be conducted, it is generally advisable to interview the complainant or injured party first, followed by any witnesses, concluding with an interview of the alleged offender.6 The person conducting the interview will want enough background information so that he can ask focused questions and be able to assess the credibility and probability of the answers provided by the employee. By the time the alleged offender is interviewed, you should have a clear idea of the incident from interviews of witnesses and a review of the collected evidence. As well, you should assess the strength of the evidence in advance to consider whether the timing of the interview is appropriate. For example, with a theft or vandalism problem, if the company has only weak evidence, it should decide whether to engage in video surveillance, surveillance by a private investigator or other means of collecting evidence, before an employee is confronted.

Checklist

• A list of potential interviewees has been made.

• Interviews have been scheduled as soon as possible.

• The time and the place of the interviews ensure confidentiality.

• A general description of the incident has been obtained.

• All relevant documents have been gathered and reviewed.

• An interview strategy has been developed.

• Legal advice has been sought if any interviewees may be involved in criminal prosecution.

• An appropriate interviewer or interview team has been selected.

o Ensure the interviewer is a person with whom the interviewee will feel reasonably comfortable.

6 As an exception to this strategy, when conducting a psychological harassment investigation, the alleged offender should be interviewed after the Complainant.


At the Interview

At the interview, the interviewer should commence by explaining his role, the purpose and structure of the interview, and relevant company policies. The interviewer should stress that confidentiality will be respected, but cannot be guaranteed. If interviewing a complainant, the interviewer should highlight who will be responsible for making decisions about the investigation and explain any available remedies. Further, the complainant should be kept appraised of the status of the investigation as it progresses. If interviewing an alleged offender, the allegations should be explained to the alleged offender.

The interviewee should be allowed to explain the incident in his own words. Open-ended questions should then be used to elicit more information. Employers should avoid using leading questions, that is, questions that suggest the answer. For example, rather than asking whether the interviewee reported the incident immediately after it occurred, it would be better to ask what the interviewee did immediately following the incident. However, at later stages of the interview, once the interviewee has committed to a basic ‘story,’ more pointed questions may be required to obtain the requisite amount of detail to conduct a thorough investigation. Likewise, the use of probing questions at the later stages of the interview may be helpful to test the employee’s response against the evidence already collected. If documentary, photographic or video evidence was obtained, it should be discloses to the employee. If any employee has been filmed on video, it is effective to show the video and then ask the employee to provide an explanation.

The interviewer should elicit a description of the incident; the date, time and place that it occurred; whether there have been similar/related occurrences; who was involved, including witnesses; whether anyone else was informed of the incident, and, if so, the details of their response, and so on. Care should be taken to press behind those statements that involve a conclusion rather than a statement of fact: for example, "He stole the torque wrench," when in fact what the witness saw was someone who looked like the suspect exit the side door of the building with a large rectangular cardboard box. Imprecise, exaggerated or vague witness statements may lead an employer to make a decision based on "evidence" that may later turn out to be less strong than was believed. The interviewer should also repeat the facts back to the interviewee to ensure accuracy, and clarify any discrepancies.

When interviewing the alleged offender, it is very important that he be given a fair opportunity to explain his/her side, to offer an explanation that shows his innocence, and to offer any mitigating explanation. Accordingly, either at the time of the interview or prior to it, the employee should be given adequate information of the allegation(s) against him, in order to permit the employee a full and fair opportunity to make a defence. The allegations should be briefly set out, having regard to who, what, where and when. It is not necessary to tell the employee the names of all the witnesses, or of all the details of the evidence collected.

All answers and comments made by the parties present at the interview should be recorded. Notes should also reflect when the interview was conducted, by whom and who was present. Accurate notes should be


kept of all discussions (e.g., who the witnesses are, exactly what he saw or heard). As it is difficult to conduct an interview and take adequate notes at the same time, consider having someone there to take accurate and thorough notes. Whenever appropriate or possible, use any existing company forms to record the particular type of incident involved. Witness statements should be taken. If a person refuses to sign a statement, read his/her statement to him and ask that he sign an acknowledgment to that effect.

Close the interview by asking the interviewee whether he has any other information that might be important, and whether there is anyone else who may have information about the incident.

Checklist

• The purpose and structure of the interview have been explained.

o At the opening of the interview with the alleged offender, it may be prudent to ask the following two questions:

− “We have asked you to come in today to discuss a situation that has arisen in the workplace. It is extremely important that you answer the questions we will ask you in an honest and forthright manner. Your future employment with the company may depend on the honesty of your answers to the questions we will ask you. Do you understand?”

− “Do you have any questions?”

• Confidentiality has not been guaranteed, or if the investigation is being undertaken with a view to litigation, confidentiality with regard to the report has not been assured.

• All the relevant facts have been obtained.

o Use open-ended questions to elicit an overview of what the witness saw. Avoid asking questions that suggest the answer, doing so may "taint" the statements.

o Elicit adequate detail, having regard to distances, the location of the witness and suspect, as well as what was actually observed. Remember to probe about "who, what, when, where and how.” Have the interviewee describe his/her positioning and/or movements with the aid of maps or pictures of the scene of the incident.

o Press behind statements that are conclusions, particularly those asserting the guilt of a person, to get the facts supporting the witness’s conclusion.

o Ask the witness who else was present or may have any information.

o Where appropriate, obtain a map or diagram.


• The facts have been repeated to the interviewee to ensure accuracy; any discrepancies have been clarified.

• Witness statements have been taken and signed by the witness (or at least acknowledged).

o Prepare a written statement of the witness’s evidence and have the witness sign it. Make sure the written statement is accurate and does not overstate the witness’s evidence.

• All facets of the interview have been well documented.

o Have someone there whose sole task is to take accurate notes of everything said at the interview.

• End the interview with a "scoop" question, such as "Is there anything we haven’t talked about that I should know about?" In addition, at the close of the interview, the following statement may also be prudent:

o “We would like to have the opportunity to review carefully your answers to the questions we have asked you in this meeting. We may have further questions to ask you. If we do, we will call you and ask you come back to see us. If you have any questions for us, or wish to provide us with any further information, please do not hesitate to telephone us. Thank you for meeting with us.”

After the Interview

After the interview, a written report of the incident as outlined by the interviewee should be prepared. It should then be determined whether further investigation is required. If the interviewee has proffered any other potential sources of relevant information, further investigation should be conducted to obtain it. If the situation necessitates further interviews with the particular interviewee, he should be scheduled.7

Checklist

• The interviewees have been kept apprised of the status of the investigation, if necessary.

• A report of the interview has been completed.

• Other sources of potential information have been followed up.

7 When scheduling additional interviews, it should be kept in mind that most investigations should be concluded within thirty days of the incident.


Documents/Records

Documents and records may be crucial evidence that can significantly impact the veracity of evidence collected from witnesses. 8 This evidence may include:

• notes;

• correspondence;

• memoranda;

• e-mail;

• computer recorded data;

• pictures;

• video;

• floor plans;

• time cards; and

• workplace logs.

• When collecting records or documentation kept independently by an employee, including:

• when and why the employee began making notes or collecting documentation;

• whether the notes were made contemporaneous or after the fact; and

• whether all relevant facts and/or additional incidents of a similar nature were recorded.

8 For instance, Section 100.6 of the Québec Labour Code, R.S.Q. c. C-27 [L.C.] gives arbitrators the power, upon application of any of the parties or the party’s own initiative, to compel a witness to file a document. In the federal jurisdiction, Section 16(f.1) of the Canada Labour Code, R.S.C. 1985, c. L-2. [C.L.C.], gives the Canada Industrial Relations Board the power to order production of any relevant document. Section 179 of the A.R.O.H.S. gives inspectors the power to access all the books, registers and records of any employer. Section 9 of the Act Respecting Public Inquiry Commissions, R.S.Q. C-37 [A.R.P.I.C.], which is referenced in Section 112 of the Quebec Charter of Human Rights and Freedoms, R.S.Q. c. C-12 [the “Charter”], gives the Human Rights Tribunal the power to order witnesses to bring before them any documents that appear necessary for arriving at the truth. Section 109 of an Act Respecting Labour Standards, R.S.Q. c. N-1.1 [A.R.L.S.] stipulates that, in proceeding with an inquiry, the Commission des normes du travail may enter at any reasonable time any place of work or establishment of an employer and make an inspection thereof, which may include the examination of registers, books, accounts, vouchers and other documents. In the Federal jurisdiction, Section 141(h) of the C.L.C. gives health and safety officers the power to order production of any document related to health and safety.


Checklist

• Secure all documents (e.g., records, pictures and videos) that may relate to the incident.

• Carefully review all documents to determine their relevancy.

Employee Searches

Tribunals and courts have generally insisted that an employer’s right to search an employee’s person or personal effects must give way to the employee’s right to personal privacy unless there is a real and substantial suspicion, for example, of theft or wrongdoing.9 The employer must therefore be prepared to establish that adequate cause to justify the search existed, that available alternatives were exhausted, that reasonable steps were taken to inform the employee and that the search was conducted in a systematic and non-discriminatory manner. Searches based solely on circumstantial evidence, universal searches in the absence of reasonable suspicion of wrongdoing and purely random searches will, in principle, violate this rule.

When an employer has reasonable grounds to suspect an employee of criminal conduct, it should ask for police assistance if its request to search the employee’s person or personal effects is rejected.

Checklist

• There is adequate cause to justify a search.

• All available alternatives have been exhausted.

• Reasonable steps have been taken to inform employees.

• The search was conducted in a systematic and non-discriminatory manner.

• Police assistance has been sought if a request to search has been denied in a criminal context.

9 Section 5 of the Quebec Charter and Article 35 of the Civil Code of Quebec [C.C.Q.] provide employees with a general right to privacy. However, “a violation of the right to privacy […] cannot be characterized as illicit or wrongful if there is a reasonable justification or a legitimate purpose, or if it can be concluded that the person consented to the invasion of his privacy” [translation], The Gazette (Division Southam inc.) v. Valiquette, [1997] R.J.Q. 30 (C.A.)at 36 [Valiquette].


General Post-Investigation Considerations

Reporting the Investigation

If the incident requires an investigation, it also requires an investigation report. The report should include background information such as the names of those involved, the date of the incident, the names of those interviewed and any materials reviewed. The report should also detail the findings of the investigation, including a description of what happened, an assessment of the seriousness of the incident, a description of any harm or injury, an assessment of whether anyone is culpable, the position of the parties involved, any previous warnings, the effect on the workplace and the type of evidence considered. Finally, the report should outline any recommendations generated from the incident or the investigation.

Checklist

• An investigation report has been completed.

• The report includes all relevant information.

• The report details the findings of the investigation.

• The report outlines any recommendations.

• A copy of the report has been given to all those involved.

Making a Decision

At the conclusion of the investigation, a decision must be made. Generally, the standard of proof required with respect to workplace incidents is proof on a balance of probabilities.10 However, where the allegations are very serious and would constitute criminal conduct, the proof required will have to meet the higher standard of "clear and cogent" evidence.

Checklist

• A final determination of the issue has been made.

• The final determination flows logically from the results of the investigation.

10 i.e. it is more likely than not that X occurred.


The Dangers of a Flawed Investigation

Whether workplace incidents are properly investigated can have serious implications for employers. A flawed investigation can lead to the inability of an employer to accurately determine how and why an incident occurred. Not only does such a result render an employer incapable of properly remedying the particular incident, it also inhibits an employer’s ability to establish effective proactive measures to prevent similar incidents from recurring. For example, an inadequate and/or improper investigation of a health and safety incident may not identify the “root” cause of the incident, possibly exposing an employer to recurrences. Further, if a similar health and safety incident recurs, a due diligence defence may be unsuccessful.

If an employer acts on the results of a flawed investigation and terminates an employee, insurmountable evidentiary problems and/or harsh financial consequences for the employer may follow if litigation is undertaken. For example, an employer may not be able to establish just cause, and may even be penalized with further damages, if an employee’s employment is terminated following a disorganized, incomplete investigation. If the integrity of the investigation is in question, it will become more difficult to uphold a dismissal, whether or not just cause exists.

While sloppiness or an honest mistake does not amount to bad faith, it can lead to the conclusion that an employer is without just cause for termination.

The Investigative Process in Focus

This section seeks to highlight various factors that should be kept in mind when conducting workplace investigations in the following three contexts:

1. disciplinary investigations;

2. investigations of psychological harassment complaints; and

3. health and safety investigations.

It should be noted that a workplace investigation may not fall neatly into any one category. Depending on the nature of the incident at hand, an employer may have to undertake a “blended” investigation. For example, an incident of workplace violence may necessitate that the employer undertake an investigation engaging all three contexts. A health and safety investigation will likely be necessary, as workplace violence usually affects the safety of some or all employees. Likewise, a disciplinary investigation will be necessary to properly deal with the employee who committed the violence. Finally, the violence could be tantamount to psychological harassment.


Disciplinary Investigations

• It is imperative to act quickly. An employer risks appearing to condone the incident if it does not investigate and respond as soon as possible. If the investigation is likely to be lengthy, ensure the alleged offender is notified of the investigation and its timeframe as soon as possible.

• When conducting interviews, the following considerations are important:

o Ask the alleged offender about any mitigating circumstances, such as provocation, personal or health problems, economic circumstances, etc.

o Consider asking an impartial person to act as a witness during interviews.

• In a unionized context, disciplinary investigations and/or imposed discipline is usually addressed in the collective agreement. Make certain the collective agreement is thoroughly canvassed to ensure its provisions are followed during the investigation and/or imposition of discipline.

o For example, care should be taken to determine whether the collective agreement contains any time limits regarding investigations and discipline. Some collective agreements stipulate time limits at the investigation stage, e.g., “No discipline shall be enacted after five days from the date of the incident or the date the Company becomes aware of the incident.” In addition, some collective agreement also stipulate time limits once an investigation is complete, e.g., “No discipline shall be imposed more than five days after the conclusion of the Company’s investigation.”

Investigating Psychological Harassment Complaints

• The relevant sections of the Act respecting Labour Standards should be consulted.

• An internal investigation into psychological harassment complaints is necessary because the A.R.L.S. requires that the employer take reasonable measures to stop harassment.

• When conducting interviews, the following points should be considered:

o Always describe to the interviewee the internal investigation procedure, including the timeframe involved, as well as who will investigate the complaint and who will be responsible for decisions related to the complaint.

o When interviewing the Complainant, it is advisable to undertake the following strategies:

− The Complainant should be asked whether he ever confronted the accused employee concerning his conduct and asked that it stop.

− Probe for reasons or ulterior motives that may have caused the Complainant to file a complaint, e.g., a poor performance review given by the accused employee.


− Ask the Complainant what he hopes will result from the complaint.

o When interviewing the accused employee, it is advisable to undertake the following strategies:

− Provide the accused employee with sufficient information to enable him to understand the specific nature for the complaint.

− Give the accused employee the opportunity to respond to allegations and to provide other relevant information, including the names of other persons who may have information, an ulterior motive the Complainant may have in making a complainant, etc.

o When interviewing witnesses, it is advisable to undertake the following strategies:

− Provide the potential witness with sufficient information to enable him to understand the specific nature of the complaint and to answer questions about it.

− Limit the information provided to potential witnesses to a “need to know” basis. Circumscribe information, where possible, to protect the identities and reputation of the Complainant and the accused employee.

Health and Safety Investigations

Some points to consider:

• The relevant sections of the A.R.O.H.S. and applicable regulations should be consulted.

o The reporting requirements under Section 62 of the A.R.O.H.S. need to be satisfied.

o The regulations give more specific guidance. For example, the Regulation Respecting Occupational Health and Safety in Mines11 (ss. 25.1) outlines specific requirements.

• Notify in-house or external legal counsel about the accident.

o Consider undertaking the investigation at the direction of the Company’s lawyer, in an effort to preserve privilege.

o Consider whether counsel should attend at the accident scene.

− If the Company’s lawyer will be attending at the accident scene, depending upon how long it will take the Company’s lawyer to attend, the Commission de la santé et de la sécurité du travail [CSST] may or may not be willing to suspend its investigation. At a minimum, the CSST

11 R.S.Q. c. S-2.1, r.19.1.


inspector should be asked to refrain from interviewing management witnesses until the Company’s lawyer arrives. If the client is located at a distance, in general the CSST will proceed to initiate its investigation, but will co-operate with the employer to the extent that employer witnesses will not be interviewed until the arrival of counsel.

o Consider the issue of representation of the employer and others who may be prosecuted.

o For fatal, critical or other serious accidents, the Company’s lawyer should, if possible, interview and prepare any management witnesses – before the CSST inspector conducts interviews.

• The investigation should include references to anything that will assist in the defence that the incident was not foreseeable. For example, Joint Health and Safety Committee minutes, prior policies, worker training, review of work refusals, and so on, should be canvassed. Ideally, the employer should review documentation generated three to five years prior to the accident.

• CSST inspectors have a great deal of discretion in recommending that charges be laid. Co-operation with the CSST inspector may benefit the employer. Consider whether the Company has information in its possession indicating steps that were taken to prevent the specific occurrence, e.g., minutes of the Joint Health and Safety Committee, completed work orders, etc. If so, the Company should consider compiling the information to highlight its conduct to the CSST. Before voluntarily providing documents or information to the regulator, consult legal counsel.

• Consider the pros and cons of preparing an internal written investigation report.

o It is imperative to keep in mind when preparing the report that, as it may have to be disclosed, an employer should vet it for incriminating statements or admissions before it is finalized.

Conclusion

The goal of a workplace investigation is to obtain accurate facts about a workplace incident. The key to a properly conducted and successful investigation is ensuring that it is –- and is perceived to be –- organized, complete and fair. This means following predetermined policy, collecting adequate information, allowing employees to respond to any allegations against them and making a decision that is supported by the results of the investigation.

McCarthy Tétrault Co-Counsel:

Labour & Employment Quarterly

Volume 1, Issue 3September 2007

Editor-in-ChiefBrian P. Smeenk

EditorsJenifer C. Gentle

Karen M. Sargeant

Co-Counsel

Co-Counsel: Labour & Employment Quarterly Volume 1, Issue 3

Welcome to Volume 1, Issue 3 of McCarthy Tétrault Co-Counsel: Labour and Employment Quarterly. To begin, we’d like to remind you about our upcoming client conferences in Toronto on October 26, 2007; in Montréal on November 7, 2007; in Vancouver in early March 2008; and in Calgary in early June 2008.

We are also delighted to tell you about some new additions to our Labour and Employment Group. We welcome Kate McNeill and David Phillips to our Toronto office.

In this issue of the LEQ, we highlight a recent Supreme Court of Canada decision that reverses 20 years of previous decisions and finds that collective bargaining is constitutionally protected under the Canadian Charter of Rights and Freedoms. We also discuss what this does and does not mean for you.

As a follow-up to the Québec Report in our last edition of the LEQ, we tell you more about the Supreme Court of Canada’s decision on automatic termination clauses and the duty to accommodate disabled employees.

We give you an overview of a recent law passed by the Ontario government that will significantly impact both the scope of government’s workplace investigations and the penalties and sentences for employers who do not comply with applicable legislation.

We also give you an update on changes to Québec’s Labour Code, which allow unionized employers to contract out part of their business in certain circumstances.

In our International Corner, we tell you how NAFTA can help your company conduct business in Canada. Specifically, we look at how it relaxes some immigration requirements for U.S. and Mexican citizens travelling to Canada for business.

Finally, we conclude with some tips to help you get ready for your next round of collective bargaining.

If you would prefer to receive a paper copy of the LEQ in the future or wish to change your subscription information, please contact me at the link below.

McCarthy Tétrault is proud of its position as a leader in all areas of law. With offices across Canada, we are able to manage our clients’ needs across the country through the strength of a single partnership.

http://www.mccarthy.ca/Lawyer_Detail.aspx?id=6472



Our Labour and Employment Group has the experience and expertise to assist you with all the complexities of labour and employment law that affect your business. According to the Canadian Legal Lexpert Directory and Guide to the Leading 500 Lawyers in Canada, our labour and employment lawyers have a reputation for world-class legal experience.

We hope you enjoy our publication.

Jenifer C. Gentle Editor September 2007



Table of Contents

National Report .................................................................................... 1 The Supreme Court Warns Employers to Think Twice before Terminating an Employee on Long-Term Disability — Your Duty to Accommodate May Not Be Over Yet..............................1

Ontario Report ..................................................................................... 3

The Ontario Government Consolidates Sharing of Information ...............................................3

Western Report .................................................................................... 6

Charter Now Protects Collective Bargaining — What Does It Mean for You?................................6

Québec Report ..................................................................................... 8

Just Imagine If You Were Allowed to Subcontract ..............................................................8

International Corner .............................................................................10

What NAFTA Can Do for Your Business.......................................................................... 10

Quarterly Tip......................................................................................12

Getting Ready for Your Next Round of Collective Bargaining ............................................... 12


National Report The Supreme Court Warns Employers to Think Twice before Terminating an Employee on Long-Term Disability — Your Duty to Accommodate May Not Be Over Yet

By Rachel Ravary

Introduction

At one point or another when dealing with cases of long-term disability, you have likely had to ask yourself the question, “How long is long enough?” After how many months or years an employee has been off sick do you have the right to terminate his or her employment? How long can you reasonably be expected to hold an employee’s job, and even maintain benefits, while the employee is unable to work?

To make this decision easier, it is not uncommon for employers to apply a standard period of time — 12, 24 or even 36 months — after which employment will be terminated if the employee is still not able to return to work. In unionized workplaces, this rule may be expressly written into a collective agreement and applied systematically as soon as the magic number is reached. In other cases, it may be set out in an employee policy or handbook. More commonly, employers may terminate employment once the employee no longer has the right to retain his or her job under the provincial labour standards legislation.

Until recently, arbitrators and courts generally upheld these automatic termination provisions,

especially when negotiated into a collective agreement. Maintaining the employment for that length of time was considered, in and of itself, to be sufficient accommodation.

However, this issue came to the forefront when unions across the country began arguing that the automatic termination clauses in their collective agreements were contrary to human rights laws. More specifically, they argued that, in some cases, the employer’s duty to accommodate would require that the sick employee’s job be maintained for a longer period than that set out in the collective agreement, or that additional measures be taken to assist the employee in returning to work.

The Supreme Court Weighs In

The debate ultimately wound its way up to the Supreme Court of Canada in McGill University Health Centre (Montreal General Hospital) v. Syndicat des employés de l’Hôpital général de Montréal (MUHC). In its decision released in January 2007 (and as reported in our last edition), the court unanimously concluded that automatic termination clauses are valid but cannot be applied blindly in every case. Such clauses are a valid way of trying to promote regular attendance by employees, but they cannot operate so as to deprive a sick employee of the full extent of the accommodation to which he or she is entitled under human rights legislation.


An automatic termination clause is a factor to be considered in assessing whether the employer has met its duty to accommodate to the point of undue hardship. It is a significant measure of accommodation in itself, and depending on the length of the period provided, it may serve as useful evidence of the point at which the employer will begin to suffer undue hardship. That said, it does not definitively determine the accommodation to which an employee is entitled, and each situation must still be evaluated on a case-by-case basis. The dominant message in the court’s judgment is a warning to employers who seek to terminate an employee on extended sick leave. The duty to accommodate is always present and may require a longer period or additional measures in light of an employee’s specific circumstances.

You’re Not in it Alone

One important point reinforced by the Supreme Court in the MUHC decision is that accommodation is not a one-way street. Rather, it is a process in which the employer, the employee and, in unionized workplaces, the union, must collaborate to arrive at a reasonable compromise. Confirming the principles originally set out by the Supreme Court of Canada in Central Okanagan School District No. 23 v. Renaud, the court stated that an employee cannot expect a perfect solution and must co-operate with a reasonable proposal put forward by the employer or risk having his or her complaint dismissed.

What Does This Mean for You?

If you currently apply a maximum period of absence rule, whether in a collective agreement or otherwise, you should continue to do so. The rule may serve as an indication of reasonable accommodation, especially if it has been negotiated or has been established by reference to objective considerations.

It is also important that you clearly communicate to your employees that maintaining their employment for a specified period is a measure of accommodation on your part and not a punishment.

Keep in mind, however, that having such a rule in place will not shield you from the scrutiny of arbitrators, courts or tribunals if a terminated employee takes action. If the employee claims that his or her personal circumstances should have given rise to additional accommodation, you will have to prove that you met your obligation, notwithstanding the automatic termination provision.

Therefore, long-term disability files should be closely monitored throughout, and all accommodation measures should be well-documented. Also, before making the final decision to terminate an employee on sick leave, make sure that you have an up-to-date evaluation of the employee’s medical status and that you have made a last attempt to see whether additional accommodation measures could reasonably be extended.


For example, if the employee advises you at the expiry of the specified time period that he or she will be able to return to work on a progressive basis or within a short time, then you may be well-advised to bend the rules and avoid future problems. If, on the other hand, the employee is still completely unfit to work at the end of the specified time period, and there is no indication that the situation will improve in the foreseeable future, you may have reasonable grounds to conclude that your duty to accommodate has been satisfied.

Finally, don’t forget that the employee and the union (if there is one) must collaborate in the accommodation process.

Contact: Rachel Ravary in Montréal at [email protected]

Ontario Report The Ontario Government Consolidates Sharing of Information

By Andrew Bracht

On May 17, 2007, the Ontario government passed into law Bill 69, the Regulatory Modernization Act, 2007 (the Act). This law will come into force on January 17, 2008, and will significantly affect both the scope of government’s workplace investigations and the penalties and sentences for employers who do not comply with applicable legislation.

Although introduced by the Ministry of Labour, the Act will affect all of Ontario’s enforcement ministries and related agencies (the Designated Ministries), including the Ministry of Labour and the Ministry of the Environment.

Purpose of the Act and Effect on Employers

The Act is intended to improve information sharing among the Designated Ministries and to reduce duplication in information collection and compliance activities by the Designated Ministries. While the purpose of the Act is to increase government efficiency in the enforcement of legislation, there is a potentially significant impact on employers. In particular, the Act will permit the Designated Ministries to:

1. share information collected in the course of their investigations with other Designated Ministries;



2. share observations made in the course of their investigations with other Designated Ministries;

3. consider an employer’s compliance record, including previous convictions and penalties imposed under other legislation, when determining appropriate sentences for legislative violations; and

4. make available to the public the information collected in the course of their workplace investigations, including an employer’s compliance record.

1. Information sharing

The Act permits the Designated Ministries to collect and use information obtained by other Designated Ministries in the course of their investigations and compliance activities. This information (collectively called the Shared Information) includes but is not limited to:

• statistical information about an employer and the sector or industry in which an employer operates;

• information about the issuance or renewal, a refusal to issue or renew, or a suspension, revocation or cancellation of a permit, license or other similar approval that an employer may be required to have under legislation;

• complaints against an employer under any legislation enforced by the Designated Ministries;

• information regarding audits, tests and investigations performed by other Designated Ministries; and

• information regarding an employer’s compliance with legislation, including information about prior convictions and penalties.

Such information may only be collected and used for the purposes stated in the Act, which include but are not limited to:

• compiling information regarding an employer’s compliance with designated legislation;

• assisting with determinations regarding an employer’s entitlement or eligibility for a legislative license, permit, certificate or other approval;

• assisting with sentencing; and

• making public the Shared Information.

2. Observation sharing

In addition to permitting Designated Ministries to share information, the Act also permits Designated Ministries to share observations made during their workplace investigations. For example, if an investigator inquiring into a human rights complaint observes an employment standards violation in the course of the human rights investigation, he or she is permitted to record the violation and disclose it to the Ministry of Labour. Accordingly, the Act significantly broadens the scope of


workplace investigations and an employer’s exposure to charges of legislative violations.

3. Compliance record and sentencing

The Act also permits government prosecutors to rely on an employer’s prior convictions and penalties as an aggravating factor when determining the appropriate sentence for a current conviction. For a prior conviction to be an aggravating factor, the Act requires that the prior conviction be “relevant” to the current conviction. However, since the Act does not provide a definition of “relevant,” it is not clear what constitutes a relevant prior conviction. Accordingly, it may be possible that an employer with a clean record with the Ministry of Labour may receive a substantial fine in relation to an employment-related conviction if the employer has a poor environmental record.

4. Publicizing of Information

The ability of the Designated Ministries to publicize information collected during their workplace investigations may lead to unwanted negative publicity for employers.

What Can Employers Do?

To guard against the government’s expanded investigatory powers, employers should take the following steps:

• Review workplace policies and procedures to ensure compliance with relevant legislation.

• Appoint a company representative who will act as a liaison between the company and all government inspectors who may visit or otherwise investigate the workplace. Such an appointment will ensure consistency with respect to the information and messaging shared with government inspectors.

• Take account of the current government inspections occurring in the workplace and reconsider the strategy for them, knowing that prior convictions may be used by government prosecutors in relation to sentencing for other legislative violations.

Contact: Karen Sargeant in Toronto at [email protected]



Western Report Charter Now Protects Collective Bargaining — What Does It Mean for You?

By Donovan Plomp

Introduction

The Supreme Court of Canada recently released a landmark decision, Health Services and Support-Facilities Subsector Bargaining Assn. v. British Columbia, which concluded that collective bargaining is constitutionally protected under the Canadian Charter of Rights and Freedoms. The decision reverses 20 years of prior jurisprudence by the court, and unions have hailed it as a huge victory. This article will review the background and key points of the decision and conclude with implications for you as an employer.

Facts

In 2002, the British Columbia government passed legislation overriding certain collective agreement provisions in the health care sector regarding contracting out, layoffs and bumping. Thousands of union employees lost jobs and benefits under these collective agreements as their positions were contracted out to private — often non-union — providers.

The unions challenged the legislation in court, claiming that the government had violated the constitutionally protected right to collective bargaining. As the Supreme Court of Canada had already ruled in past decisions that

collective bargaining was not a constitutionally protected right, the unions lost their claims in the lower courts.

Ruling

In the Health Services decision, the Supreme Court of Canada changed the law and ruled that the Charter guarantee of freedom of association does protect the procedural right to collective bargaining.

Nature of the protection

The court limited the constitutional protection of collective bargaining in important ways. Most importantly, the right is to a process; it does not guarantee any certain result. Employers and unions remain free to reject each other’s demands and, failing agreement, to strike or lockout in accordance with applicable legislation.

Also, the court held that only “substantial interference” with the activity of collective bargaining is prohibited, meaning interference that seriously undercuts or undermines the activity of workers joining together to pursue collective bargaining. To determine whether a government measure constitutes “substantial interference,” the court will look at (i) the importance of the matter affected to the process of collective bargaining and (ii) the manner in which the measure impacts the collective right to good faith negotiation and consultation.


In the Health Services case, the government gave only 20-minutes warning to the unions before the legislation was introduced. The decision states that, if proper consultation and negotiation takes place, there may be no violation of the Charter even if the result of a government measure might be seen to be important to collective bargaining concerns. Thus, the duty to consult, negotiate and bargain in good faith was recognized as being fundamental to the process of collective bargaining.

Implications for Employers

What does this decision mean for other employers? In light of the claims of a ‘huge victory’ by unions, it’s important to start with what the decision does not mean.

It does not mean that non-government employers must scrutinize their conduct in light of the Health Services decision. The Charter applies only to state action, and the court in Health Services was reviewing the action of the B.C. government in passing legislation that took away collectively bargained rights. The decision is of key importance to governments, as legislators and employers. Governments will likely be required to negotiate and consult before enacting legislation overriding collective agreements or passing ‘back-to-work’ legislation. Non-government employers will continue to bargain collectively in accordance with the legislation in their jurisdiction.

It does not mean the imposition of a new or unfamiliar process. The court’s decision simply gives constitutional protection to the process of negotiation and bargaining that already occurs between employers and unions across the country.

It does not mean a guaranteed or favourable outcome in bargaining for unions. Only the process is protected, and government employers can still refuse to meet union demands, provided that good faith bargaining and negotiation occurs.

Notwithstanding what it does not mean, the decision is significant. The duty to bargain in good faith now has Charter ‘teeth,’ which could lead to a more stringent review of bargaining tactics and strategy by labour boards. Unions may also use the decision as a foundation to attack existing government processes or legislation that they feel interferes with collective bargaining.

Unions are also more likely to rely on international labour standards and International Labour Organization declarations to support their positions. The court made specific reference to international law in coming to its decision.

Finally, governments may be less willing to step into private-sector labour disputes. The court was most concerned with the government’s failure to consult with the unions before legislating. We can expect a government to ensure alternatives to ‘back-to-work’ legislation are discussed before interceding in a private-sector labour dispute.


Conclusion

While the Health Services decision is significant, it does not confer substantive benefits on unions or impose new requirements on non-government employers. The decision gives constitutional protection to the process of collective bargaining that employers adhere to in normal labour relations on a day-to-day basis.

Contact: Dononvan Plomp in Vancouver at [email protected]

Québec Report Just Imagine If You Were Allowed to Subcontract

By Simon-Pierre Hébert

You think that it would be more efficient for some of your activities to be contracted out, but assume that this would be impossible because you’re unionized? Think again. Recent changes to the Québec Labour Code may be of assistance.

First Step: The Collective Agreement

To determine whether you can subcontract at least some of your activities, the first step is to analyze your collective agreement to see whether it contains any provisions that stand in the way of your plans. There are many different types of clauses that deal with subcontracting, and each must be studied carefully.

If your collective agreement does not contain such a clause, or if the clause in question allows you to subcontract subject to certain restrictions (e.g., on condition that no unionized position is abolished), then you can move on to the second step of the analysis, which is the application of Section 45 of the Labour Code.

Review of the Recent Changes

Section 45 has been the subject of discussion and debate for more than 40 years. It provides that a certification and the collective



agreement transfer to the person who takes over the operation of a business when it is transferred in whole or in part. The certification and collective agreement are also passed on to the new employer if (i) the business is sold, (ii) the business merges with a competitor, (iii) there is a change in ownership or (iv) the activities are split between two parties.

Section 45 can therefore be an obstacle in certain commercial transactions, since a potential buyer may not necessarily want to take over the previous owner’s collective agreement.

One of the changes to Section 45 is that the certification and the collective agreement will not follow where the transfer of part of a business does not involve transferring to the subsequent employer, in addition to functions or right to operate, most of the elements that characterize the business involved.

Effect of the Recent Changes

When these changes were adopted in February 2004, many union representatives feared that employers would take advantage of them by increasing subcontracts to non-unionized employers. However, the fact that only a handful of decisions have been made on these new provisions shows that these fears of abuse were misplaced. To fully understand the impact of the changes, it’s helpful to review some of the decisions dealing with them.

Practical examples

In the first decision applying the new provisions,1 the employer contracted out some of its shipping routes to independent contractors. Because employees or equipment had not been transferred, the Commission des relations du travail du Québec (the Commission) decided that the mere transfer of functions and the right to operate the business fell within the new exception. Consequently, no certification or collective agreement was transferred to the subcontractor.

Subsequent decisions have been even more enlightening. In a case involving a business in the food market industry,2 the employer transferred the verification of its orders to a subcontractor without transferring any employees, equipment or know-how. Interestingly, the subcontractor occupied a space in the employer’s warehouse that was exclusively reserved for him. The relationship was characterized as a contract for service because the employer had transferred only the verification of the orders. As this was only a small part of the employer’s operations, the Commission did not find any justification for concluding that the certification had been transferred to the subcontractor.

Finally, in a case that involved the subcontracting of cleaning operations on school grounds,3 the Commission again held 1 Syndicat national du lait (CSD) and Laiterie Royala inc. 2 Travailleuses et travailleurs unis de l’alimentation et du commerce, section locale 501 and Inventaires Laparé inc. 3 Union des employés et employés de service, section locale 800 and 9066-7148 Québec inc. (Services CB Star). Request for review rejected (CRT 2007-02-09)


that where none of the elements that characterize a business are transferred, other than the right to operate the business, there will not be sufficient grounds to transfer the rights and obligations of the union to the subcontractor. Furthermore, where no employees are transferred, this seems to be a decisive element, even if equipment has been transferred. This decision was confirmed on judicial review.

Impact on Your Business

The case law on the changes to Section 45 is still being developed. However, it’s already well-established that unionized employers may subcontract a part of their activities without the certification and collective agreement being transferred to the subcontractor, especially where no employees are transferred. This can result in many interesting opportunities for your business, whether you are a unionized employer or a subcontractor searching for new contracts.

Contact: Simon-Pierre Hébert in Montréal at [email protected]

International Corner What NAFTA Can Do for Your Business

By Naseem Malik

Do you have U.S. or Mexican employees who travel to Canada for business? If so, the North American Free Trade Agreement (NAFTA) may help your company conduct business in Canada. While this international agreement does not change the universal requirements for entry into Canada by non-Canadians (i.e., the requirements for valid travel documents or medical/security clearance), it does relax other immigration requirements for U.S. and Mexican citizens travelling to Canada for business.

To Whom Does NAFTA Apply?

NAFTA applies to four main categories of individuals. The key categories for employers are usually (i) business visitors, (ii) professionals and (iii) intra-company transfers.

NAFTA Business Visitors

NAFTA business visitors are allowed to conduct certain types of business activities in Canada without a work permit. The general types of business activities that fall under this section include marketing/promotions, research and design, and sales and after-sales services. Among other permissible activities, NAFTA business visitors can travel to Canada to consult, negotiate, research, participate in business meetings and conventions, and solicit business.



To qualify as a NAFTA business visitor, your employees must be U.S. or Mexican citizens. NAFTA does not apply to permanent residents of the United States (e.g., green card holders) or to non-Americans who are currently employed on work permits in the United States.

In addition, the business activities necessitating the travel to Canada must be international in nature. The employee’s primary source of payment (in goods, services or money) and principal place of business must remain outside of Canada, and the employee must have no intention of entering the Canadian labour market.

In order to be considered a NAFTA business visitor, the employee should apply for such status when he or she arrives in Canada at the port of entry. The employee will require supporting documents, including support letters from your organization and corporate identification such as business cards.

If your employee will travel to Canada on multiple trips over a short period of time, the employee may ask the immigration officer to issue a document called a visitor record that classifies him or her as a NAFTA business visitor. This document may allow for ease of entry on future trips, as the employee has already been adjudicated and granted entry as a business visitor. It reduces the probability of delays and secondary referrals into Immigration Canada from the primary inspection line. But it does not guarantee entry on future trips, and an immigration officer is under no obligation to issue this document.

NAFTA Professionals

Unlike NAFTA business visitors, NAFTA professionals must have work permits. To qualify as a NAFTA professional, your employee must be a U.S. or Mexican citizen who has secured employment with a Canadian employer and meets certain educational and professional standards. More than 60 professional occupations fall into this category, including computer system analysts and management consultants.

An individual who is employed by a U.S. company and enters into a service contract with a Canadian company can be a NAFTA professional. A NAFTA professional can also be an independent worker who has been hired by a Canadian company. In both cases, however, the employment must be pre-arranged and the employee must provide professional-level service in his or her field of qualifications as described in the occupational list.

If your employee seeks to be considered as a NAFTA professional, he or she should apply for such status either upon arrival in Canada at the port of entry or at the Canadian consulate in the United States or Mexico before travelling to Canada. Like NAFTA business visitors, NAFTA professionals will need to present supporting documents from their employers.

NAFTA Intra-Company Transfers

NAFTA intra-company transfers may transfer from their employers in the United States or Mexico to a legally related company (e.g., a subsidiary, sister/affiliate, parent or branch)


in Canada, provided they meet a number of criteria. Like NAFTA professionals, NAFTA intra-company transfers also require work permits.

To qualify, your employee must be a U.S. or Mexican citizen. In the previous three-year period, the employee must have been employed by your organization for at least one year in an executive or managerial capacity, or in a specialized knowledge subcategory. Generally, middle managers do not qualify for the managerial subcategory.

If your employee qualifies as a NAFTA intra-company transfer, the employee may be employed in Canada and possess a work permit for up to seven years if he or she qualifies as an executive or managerial employee. The employee may, however, only be employed in Canada for up to five years as an employee with specialized knowledge. If the employee requires a work permit beyond the prescribed time period, the employer will have to explore other legal avenues to extend the work permit.

Contact: Naseem Malik in Toronto at [email protected]

Quarterly Tip Getting Ready for Your Next Round of Collective Bargaining

By Karen M. Sargeant

We all know that collective bargaining takes up significant time, effort and resources, and it often seems like you’re just settling one collective agreement before you’re back for the next round. What can you do to streamline the bargaining process? This article provides some tips that may help your next round of collective bargaining go as smoothly as possible.

1. Do your homework. Consider:

• collecting and reviewing internal data on grievances/arbitrations;

• collecting data with respect to the bargaining unit and relevant cost issues, such as benefits costs, sick leave costs or overtime costs;

• obtaining a legal review of the existing collective agreement and determining whether anything needs to be revised to reflect changes in legislation;

• gathering and reviewing current information on terms of settlement, including wage increase information, pay and benefit surveys and the terms of other collective agreements in your industry; and



• reviewing the company’s short- and long-term business goals to ensure alignment of bargaining positions and goals.

2. Develop company goals and proposals for bargaining in advance.

3. Develop a strategic plan for the bargaining process. To ensure you are ready for any steps the union may take, consider issues such as:

• whether you (not the union) should give notice to bargain;

• how likely it is that a strike or lockout will occur (if likely, start preparing your plan for shutdown);

• depending on which province you are in, what the complement of replacement workers will look like;

• whether your organization can continue operations during a strike or lockout;

• the best timing of a strike or lockout, which should be factored into your strategic plan and the bargaining dates and processes; and

• what the labour board processes for dispute resolution will be.

4. Develop a communications strategy to deal with all types of communications, including:

• internally among the management team;

• during bargaining between the two negotiating committees;

• between the employer and the bargaining unit employees; and

• by the employer to third parties such as customers, clients, suppliers and the media.

5. Prepare for the bargaining process. Where will the bargaining take place? How many people will be on the negotiating teams? How will employees on the union’s team be released from work? How will they be paid? Who will take minutes?

6. Keep detailed minutes of bargaining, including the time and date of each party’s proposals.

7. Break the proposals into monetary and non-monetary proposals. Consider bargaining the non-monetary issues first and only proceeding to the monetary issues when all of the non-monetary issues have been settled.

8. Negotiate monetary proposals as a package, not piecemeal.


9. Conduct a final ‘housekeeping’ review of the collective agreement to ensure consistency in language.

10. Make sure the Memorandum of Agreement includes:

• the term of the collective agreement;

• what constitutes ratification of the collective agreement;

• the triggering events by which the collective agreement takes effect; and

• the date the collective agreement takes effect and whether any portion is retroactive.

Contact: Karen Sargeant in Toronto at [email protected]


Every effort has been made to ensure the accuracy of this publication, but the comments are necessarily of a general nature, are for information purposes only and do not constitute legal advice in any matter whatsoever. Clients are urged to seek specific advice on matters of concern and not rely solely on the text of this publication.

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2007 Labour and Employment Law Client Conference · 2007-11-14 · 2007 Labour and Employment Law...

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