Facts:

In 2006, Irving Pulp and Paper (“Irving”) adopted a new policy on alcohol and drug use at its kraft paper mill in Saint John, New Brunswick. The mill is acknowledged to be a dangerous workplace with malfunctions carrying the potential for “catastrophic failures”. As part of the new workplace policy, Irving instituted a random alcohol testing program whereby 10% of the employees in safety sensitive positions were to be randomly selected for unannounced breathalyzer testing over the course of a year. In the 15 years which preceded the introduction of this policy, there were only eight documented incidents of alcohol consumption or impairment at the mill. Moreover, there were no accidents, injuries or near misses connected to alcohol.

On March 13, 2006, mill employee Perley Day, was randomly selected to submit to a breathalyzer test. As Mr. Day does not consume alcohol, his test returned a blood alcohol level of zero. Shortly thereafter, the Union filed a policy grievance alleging that the random alcohol testing component of the new alcohol and drug policy was unreasonable; the Union did not challenge the other aspects of the policy.

The arbitration board found that although random alcohol testing may be reasonable in some circumstances, there was not sufficient evidence in this case of an existing problem with alcohol use in the workplace. On judicial review, the Court of Queen’s Bench of New Brunswick set aside the arbitration decision. The New Brunswick Court of Appeal dismissed the appeal.

The SCC’s Decision:

While there was no debate about the safety-sensitive nature of the workplace, the majority held that the dangerousness of a workplace is only the beginning of the inquiry, “[w]hat has been additionally required is evidence of enhanced safety risks, such as evidence of a general problem with substance abuse in the workplace.” That said, Justice Abella, on behalf of the majority, went on to say that “[t]his is not to say that an employer can never impose random testing in a dangerous workplace. If it represents a proportionate response in light of both legitimate safety concerns and privacy interests, it may well be justified.” Considering the particular facts before them in this case, the Court found that random alcohol testing was not justified in the context of the Irving paper mill in Saint John, New Brunswick.

The three judges in dissent noted that an employer should not be required to wait for a serious incident of loss to take proactive steps to mitigate risk.

Barbara B. Johnston and April Kosten represented the Construction Owners Association of Alberta, Construction Labour Relations – An Alberta Association and Enform at the Supreme Court of Canada. Please feel free to contact Barbara or April directly if you would like to discuss the implications of this decision.…

In February 2013, the Court of Appeal of New Brunswick upheld a lower court finding in the case of Asurion Canada v. Brown and Cormier,  to the effect that dismissal without notice was a disproportionately severe penalty for receiving pornographic emails at work.  At the time of termination, Cormier had been with Asurion for 8 years and was a call centre supervisor.  Brown was employed by Asurion for 9 years and was vendor payables specialist.  Both men had a good employment history with the company.  Both men, unfortunately, also had a mutual friend who liked to send them pornographic emails.

During the period from mid May to mid July 2010, Cormier and Brown were sent over a dozen unsolicited emails from their friend.  The emails were promptly sent to home email accounts and deleted.  They were not shared with anyone at work. When Asurion became aware of the emails in July as a result of its network monitoring system, both men were dismissed immediately due to breach of the company’s policies and breach of trust.

While the company did have a policy which prohibited “accessing, transmitting, receiving or storing discriminatory, profane, harassing or defamatory information”, the court found that the policy was not reasonable given that: (i) ”receiving” information does not involve a positive act; and (ii) the emails in question were unsolicited.  More importantly, the court confirmed that the response of the company was not proportionate to the actions of the employees.  In particular, these longstanding employees had unblemished records, none of the emails were shared with fellow employees, and the images attached to the emails fell within the category of “perfectly legal adult pornography” and were not in violation of the Criminal Code of Canada.

Asurion had an employee handbook with a comprehensive Computer Use and Harassment policy.  The company’s employees were required to read the company’s policies and there was some suggestion that they were reminded of the Computer Use policy each time that they logged onto their work computers.  The company went even further, and used a network monitoring system in order to ensure that the policies were being complied with.  Ultimately it was all for naught, as the policy was found to be unreasonable and the application of it was disproportionately severe when viewed through the lens of the employees’ years of service and specific actions or inactions in the case at hand.

This recent decision serves as a good reminder that any time a termination for cause is being considered, the employer should consider not just the offending actions of the employee, but the other relevant circumstances of the employee’s employment.

Asurion Canada Inc. v. Brown and Cormier, 2013 NBCA 13 (CanLII)…

In a 2012 decision in  Fair v. Hamilton-Wentworth District School Board, adjudicator Joachim found that the respondent school board had discriminated against the employee by failing to accommodate her disability.  In particular, in 2001 she developed an anxiety disorder as a result of the highly stressful nature of her job, and went on long-term disability.  She was subsequently assessed as capable of gainful employment in 2004.  From mid 2003 onwards however, the school board failed to take any steps to offer her available alternative work, even though similar jobs were advertised and the employee underwent job hardening in positions for which the employer was seeking employees.

In March 2013, adjudicator Joachim rendered her decision in relation to the remedy for this case of discrimination.  She found that because: (i) the employee had commenced her initial complaint with the Ontario Human Rights Commission only 4 months after her employment was terminated; (ii) the delay was largely at the hands of the Commission; and (iii) the employee had confirmed that she was seeking reinstatement when her application was subsequently filed with the Tribunal, there was no good reason to not order reinstatement due to the passage of time.

As a result, the employer was ordered to reinstate the employee despite her absence from work for almost a decade.  In addition, the employer was ordered to pay the employee’s lost wages, benefits, expenses and pension contributions over that period of time, which amounted to over $400,000 (subject to any employment insurance and related deductions).  Finally, adjudicator Joachim awarded the Applicant $30,000 as compensation for the injury to her dignity, feelings and self-respect.

Despite the likelihood of an appeal, this is an important decision as it illustrates the potential liability associated with a failure to return an employee to work after his or her disability leave.

Hamilton-Wentworth District School Board, 2013 HRTO 440 (CanLII)

 …

Harvey Aitchison worked as a driving examiner for DriveTest Centre, the agency that tests Ontario drivers, in Oakville. He accepted bribes from Cyril Julius Marques, who was the owner and driver instructor of a driving school, to guarantee that that Marques’ driving students passed their Ministry of Transportation road examination.

Marques would charge $450.00 to his driver students, $300.00 of which he would give to Aitchison.  Marques would keep the remaining $150.00.  The bribing came to light after Marques offered a DriveTest coordinator a pack of cigarettes if she assigned Aitchison to test his student.  The coordinator blew the whistle.  Aitchison resigned from his job.

Both Aitchison and Marques pleaded quilty to accepting a bribe, contrary to section 426(1)(a) of the Criminal Code. That section provides:

426 (1) Every one commits an offence who

(a) directly or indirectly, corruptly gives, offers or agrees to give or offer to an agent or to anyone for the benefit of the agent — or, being an agent, directly or indirectly, corruptly demands, accepts or offers or agrees to accept from any person, for themselves or another person — any reward, advantage or benefit of any kind as consideration for doing or not doing, or for having done or not done, any act relating to the affairs or business of the agent’s principal, or for showing or not showing favour or disfavour to any person with relation to the affairs or business of the agent’s principal

Aitchison claimed the he accepted the bribes out of frustration towards his employer; Marques said that his actions were caused by his financial problems and his wife’s health problems.

The court sentenced Aitchison, a 64-year-old man with no criminal record, to a jail term of 4 months to be followed by 2 years of probation. The court sentenced Marques, a 58-year-old man who also did not have a criminal record, to a jail term of 90 days, which he was permitted to serve intermittently given his employment status and his wife’s medical needs.  The court stated that their corrupt scheme was a breach of trust offence that put the public at real risk of harm: sending unqualified drivers onto the roads.  The court pointed out that, ”Public corruption is of significant concern to the citizens of Canada and general deterrents and denunciation must be the dominant sentencing factors.”

While there is no indication in this decision that the employer was charged or implicated in this case, employers that knowingly permit employees to accept bribes could also be subject to prosecution under the Criminal Code: subsection 426(2) of the Criminal Code provides that, “Every one commits an offence who is knowingly privy to the commission of an offence under subsection (1)”.

R. v. Aitchison, 2013 ONCJ 74 (CanLII)…

The Employment Standards Amendment Act (Leaves to Help Families), 2013, proposes new leaves that build on the existing Family Medical Leave under the ESA.  They are as follows:

Family Caregiver Leave - up to 8 weeks of unpaid leave for employees to provide care and support to a family member with a serious medical condition.

Critically Ill Child Care Leave – up to 37 weeks of upaid leave to provide care to a critically ill child.

Crime-Related Child Death and Disappearance Leave - up to 52 weeks of unpaid leave for parents of a missing child and up to 104 weeks of unpaid leave for parents of a child that has died as a result of a crime.

If passed, the leaves would allow parents and other family caregivers to provide care and support for loved ones without fear of losing their jobs.  These leaves are in addition to the current Family Medical Leave, which is available when a family member has a serious medical condition with a significant risk of death occurring within 26 weeks.  A doctor’s note would be required for the Family Caregiver Leave and the Critically Ill Child Care Leave.

Complementing the new federal Helping Families in Need Act, employees covered by the Critically Ill Child Care Leave and the Crime-Related Child Death and Disappearance Leave would be eligible to apply for federal Employment Insurance benefits.

The Ontario’s government’s news release and “backgrounder” may be accessed here.…

• Reduced administrative requirements – PRPPs will not be administered by B.C. employers, but rather by licensed entities, such as insurance companies
• Low-costs realized through the pooled nature of the investments and central administration
• Employer choices – PRPPs are not mandatory for B.C. employers, and once a PRPP is offered employer contributions are optional
• Tax advantages for employers that are not available for other forms of workplace retirement savings plans
• Employers not exposed to underfunding issues – the PRPP will function on a defined contribution basis, which limits employers’ funding obligations
• Recruitment and retention advantages of providing a new option for retirement savings

The PRPP legislation is aimed to enhance pension coverage in B.C., where according to the Ministry of Finance News Release, approximately two-thirds of the workforce has no access to a registered pension plan.

Information about the federal government’s rules regarding PRPPs can be found here.

FMC will continue to monitor the legislation and provide updates on the implementation of PRPPs in British Columbia and across Canada. For more information please contact Colin Galinski at 604-443-7133 or colin.galinski@fmc-law.com.…

The next day after the mediation, Ms. Amy Lalonde, manager with the Respondent Company, was informed by a colleague that Ms. Tremblay had posted messages on Facebook about the mediation and settlement. In fact, the first message was posted during the mediation session itself:

“Sitting in court now and _______ is feeding them a bunch of bull shit. I don’t care but I’m not leaving here without my money…lol”.

After the Minutes of Settlement were signed, Ms. Tremblay posted the next message as follows:

“Well court is done didn’t get what I wanted but I still walked away with some…”

Shortly thereafter Ms. Tremblay posted the following message:

“Well my mother always said something is better than nothing…thank you so much saphir for coming today…”

While Ms. Tremblay argued that there was no proof that she was talking about the Respondents as she did not mention them by name, the Tribunal held that it was clear from the date of the postings and the comments made that she was referring to the mediation. The Tribunal found that Ms. Tremblay had breached the confidentiality provision of the Minutes of Settlement. However, the Tribunal found that the Respondent Company had also breached the Minutes of Settlement by not paying Ms. Tremblay the settlement amount.

The Tribunal ultimately ordered that the amount owing to Ms. Tremblay under the settlement agreement be reduced by $1,000. In determining the appropriate remedy, the Tribunal took into account that Ms. Tremblay did not disclose the amount of the monetary settlement in her Facebook posts. The Tribunal also considered the relatively public nature of Facebook, especially in the small community in which the applicant and respondent company resided.

When mediating issues of a sensitive nature, employers should consider including confidentiality provisions in settlement agreements that specifically prohibit disclosing terms of settlement on social media sites, including Facebook, Twitter, LinkedIn, etc.

Tremblay v. 1168531 Ontario Inc., 2012 HRTO 1939 (CanLII)…

The Q&A, which can be found at the link listed below, covers issues such as whether or not an employee can be forced to take vacation days in the event of a natural disaster which prohibits him or her from working, or whether an employee must be paid if he or she is told to not come to work during the disaster.

Apart from basic issues covered in the Q&A, there are a number of other things to be aware of in the event of a natural disaster.  The Emergency Management Statute Law Amendment Act, 2006 (Ontario) permits the Premier and Cabinet to introduce legislation intended to govern emergencies such as natural disasters.  In addition, the Employment Standards Act, 2000 (Ontario)  provides for unpaid emergency leave for declared emergencies such as natural disasters, which is different than the standard emergency leave to deal with an ill or injured family member.

While an employer may not wish its employees to come to work in the event of a natural disaster, there may also be situations where certain employees are in fact required to work precisely because of the natural disaster, even if the workplace is under quarantine.  The ESA specifically permits certain employees to work in those situations, if their skills are required due to an emergency.  Likewise, although employees may rely on the Occupational Health & Safety Act (Ontario) (“OHSA”) to refuse to work if they are concerned that the condition of their workplace may jeopardize their health or safety, exemptions to OHSA require certain essential employees to work notwithstanding those conditions.

In addition to the above, there are a number of other pieces of provincial and federal legislation which work together to answer some of the key questions about how to deal with a natural disaster in the workplace.  Whether that disaster relates to health issues (eg. SARS, H1N1), loss of the workplace premises or something else, this combined legislation will help employers determine the appropriate response to disasters, and it is recommended that employers be proactive about understanding their obligations so that they are prepared in the event that disaster strikes.

To access the Ministry of Labour’s Q&A, click here.  For more information about all of the workplace issues involved in the event of a natural disaster, a more thorough discussion can be found here.…

1. Priority. The full amount of a deficit in an Ontario pension plan will rank ahead of secured creditors (as a deemed trust), provided that the plan is wound up and the employer is not in bankruptcy. The SCC upheld the Court of Appeal on this issue.
2. DIP Facilities Can Come First. A judge may order that court-approved debtor-in-possession financing in a CCAA proceeding ranks ahead of pension deficit deemed trusts. The SCC upheld the Court of Appeal on this issue.
3. Fiduciary Duties Owed. Employers who administer pension plans owe a “fiduciary duty” to the members of the plans. This means that such employers must manage conflicts of interest. These conflicts will arise when there is a substantial risk that the employer-administrator’s representation of the plan members would be materially and adversely affected by the employer-administrator’s duties to the corporation. In these circumstances, separate representation (among other things) might be appropriate to protect plan members. The SCC narrowed the scope and content of the fiduciary duty that the Court of Appeal had imposed.
4. Remedies. Any remedy for a breach of fiduciary duty must be tailored to the nature of the breach. The remedy of a “constructive trust”, which provides the plan members with a proprietary interest in specific assets of the employer corporation, will only be available if there is a direct link between the breach of fiduciary duty and the specific assets. The breach must have resulted in the assets being in the corporation’s hands. The SCC overturned the Court of Appeal on this issue.

Lawyers will be picking through the lengthy judgments in this decision for months to come. It has significant implications for Canadian corporate lending, insolvencies and restructurings.

Look for FMC Law’s in-depth analysis of this case in the coming days.

This post was co-authored by Jane Dietrich and Timothy Banks.…

On January 23, 2013, the Ontario pension regulator (the Financial Services Commission of Ontario), issued a new policy regarding administrative fees and expenses payable from a pension fund. The new policy, Policy A200-101, replaces four existing policies on the topic and is accessible at http://www.fsco.gov.on.ca/en/pensions/policies/active/Documents/A200-101.pdf.

Although clarification regarding expenses chargeable to pension funds was provided in late 2010 with the addition of a new section 22.1 in the Ontario Pension Benefits Act (“PBA”), Policy A200-101 provides additional guidance that is welcome.

Policy A200-101 reiterates that fees and expenses payable from a pension fund must:

1. be reasonable;
2. relate to the administration of the pension plan or the administration and investment of the pension fund; and
3. not be prohibited or otherwise provided for under the documents that create and support the plan or the fund, or under the PBA or related regulations.

It is the plan administrator’s responsibility to determine whether or not an expense fits the criteria to be properly charged to a pension fund. So it is up to the plan administrator to decide whether amounts are appropriate and reasonable, and to find out whether there are provisions in the pension plan documentation that restrict the charging of expenses.

Since each pension plan is unique, the PBA and regulations do not set out the specific nature or type of administrative expenses that can be paid from a pension fund. However, Policy A200-101 provides examples of the types of expenses that would usually be considered appropriate administrative expenses, such as certain actuarial fees, trustee and custodial fees, and investment management fees. It also provides examples of expenses incurred that would not usually be properly chargeable to a pension fund. These typically include fees incurred by a person acting in the role of plan sponsor, collective bargaining agent or employer.

Many types of fees and expenses incurred by a plan sponsor or administrator can be complex and difficult to categorize. FMC can help you identify proper fees and expenses that can be charged to your pension fund. Please feel free to contact one of our Pension & Benefit experts and we would be pleased to assist.…