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“ Don't work here! ”: Employers' denigration may prove very costly
The Québec Superior Court has ordered a former employee to pay her employer $11,000 in moral and punitive damages because she posted defamatory comments about the company on Ratemyemployer.ca 1. In doing so, the employee contravened her loyalty obligations and the confidentiality and non-disparagement undertakings that she had subscribed to when her employment was terminated. Expressing dissatisfaction on social media has become commonplace. People can now publicly decry situations that upset them, and, in some cases, doing so can attract unexpected media attention. Hence, employers feel vulnerable to comments that their employees or former employees may publish on social media. It is therefore prudent for them to include clear and precise non-disparagement clauses in employment contracts and termination agreements, and to remind employees of these obligations in internal company policies. Background The employee's position was abolished in January 2012, and, as part of her termination conditions, the employer, Digital Shape Technologies Inc. (hereinafter “DST”), offered her severance pay in consideration for signing a termination and release agreement that included a confidentiality clause and a non-disparagement clause with respect to DST. However, between April 15 and 17, 2012, the employee posted three comments on RateMyEmployer.ca. In these comments, she, among other things, described a toxic work environment with a turnover rate of about 80% where social interaction was discouraged, as well as an employer that did not provide the necessary tools to do the work, repeatedly dismissed employees without just cause, hired private investigators to uncover what was said in meetings between employees and former employees, and accessed employees' personal social media accounts. After reviewing these posts and discovering the identity of the author, Digital Shape Technologies Inc. (“DST”) and its CEO filed a lawsuit against the employee claiming $150,000. Loyalty and contractual undertakings In its analysis, the Court reiterated the obligations of loyalty and discretion provided for in the Civil Code of Québec in matters of employment contracts. An employee’s obligation of loyalty to his or her employer persists after the employment relationship ends and includes a prohibition on injuring an employer's reputation, which inevitably leads to a certain limitation of the right to freedom of expression. In this case, this limitation on freedom of expression had to be taken into account to an even greater extent as the employee had contractually undertaken not to make comments that could harm DST’s reputation or to disparage its management, services or products. Although the employee claimed that the non disparagement clause violated her freedom of expression - a fundamental right protected under the Charter of Human Rights and Freedoms – the Court determined that she had validly waived her freedom of expression with respect to her former employer. In this case, the non disparagement clause was unambiguous, using clear and precise terms to define the scope of the undertaking. Considering the legal and contractual obligations that bound the employee to Digital Shape Technologies Inc. (“DST”), the Court found her contractually at fault and liable. Defamation The Court also reviewed the employer's recourse under the defamation 2 rules and concluded, after a thorough analysis of the evidence, that even if the employee had not signed a non disparagement undertaking, she had made factual statements that were false, unfounded, distorted or exaggerated. She thus wrongfully injured the employer's reputation. Damages The Court pointed to the difficulty in quantifying damages in a defamation situation, Digital Shape Technologies Inc. (“DST”) being unable to directly prove financial losses, missed business opportunities or missed candidates that may have been put off by the reading the employee's comments. Based on jurisprudential parameters, which establish a range between $10,000 and $30,000 in the case of a legal person, the Superior Court believed that a sum of $10,000 in moral damages was appropriate given the gravity of the acts and their intentional nature, as well as the amount of time the posts could be read, the fact that they were only minimally viewed and the employee's cooperation after being served with a formal demand. The Court was also of the view that awarding punitive damages was justified as the evidence revealed that the employee had intentionally harmed DST’s reputation. In light of the employee's financial situation, she was ordered to pay $1,000 in punitive damages. What employers should do The publication of defamatory content against an employer or former employer may constitute a civil fault giving rise to the right to compensation for the damages suffered. The decision in Digital Shape Technologies, however, shows that it would be prudent for employers to require that employees agree to be bound by non disparagement covenants, particularly in employment contracts, termination employment/release agreements upon termination of employment, as well as internal policies regarding the use of technology and the internet, and so forth. Doing so may not only discourage the publication of defamatory remarks, but also make it easier for employers to seek compensation in the event of breaches. A few clicks can be expensive and cause all kind of inconvenience. A good reason to think twice before hitting “send”. Digital Shape Technologies inc. c. Walker, 2018 QCCS 4374 Defamation consists in the communication of spoken or written remarks that cause someone to lose in estimation or consideration, or that prompt unfavourable or unpleasant feelings towards him or her. For a court to conclude that defamatory statements constitute a fault for which the person who disseminated them is legally liable, it must find that the person: 1) knew that the unpleasant or unfavourable statements about the other were false, or 2) communicated unpleasant or unfavourable information about the other that he or she ought to have known to be false, or 3) made unfavourable but true comments about the other without any valid reason for doing so.
Recruitment: Why you need to prepare your interview questions?
During a job interview, an employer cannot ask questions that involve grounds for discrimination prohibited under the Charter of Human Rights and Freedoms1 (the “Charter”), including the religion, marital status, or ethnic or national origin of a candidate. Simply asking such questions could result in a violation of the Charter and, for a claim for damages to be disallowed, the employer would be required to prove that the information sought was necessary to determine if the candidate had the aptitudes or qualifications required for the position to be filled.2 Learning from the judgments rendered by the Human Rights Tribunal In 2018, the Human Rights Tribunal (“HRT”) rendered three decisions that set out principles for employers to consider when hiring. The HRT ruled on complaints filed following recruitment processes in which questions were asked about a candidate’s accent or the ethnic origin of a candidate’s name. The latter was not subsequently selected as a candidate. The plaintiff claimed that he was discriminated against based on his ethnic or national origin. The HRT pointed out that section 18.1 of the Charter is aimed at eradicating discrimination in hiring by prohibiting questions about personal characteristics that do not relate to the candidate’s qualifications or abilities. The employers admitted to asking about the plaintiff’s ethnic origin, but stated that the question fell within a specific context: In order to discern if the ethnic origin of the plaintiff corresponded to one of the countries in which the business’s partners were located, so as to justify the question as relating to the employment requirements. During an informal conversation that took place before the interview. Out of curiosity, and to understand why the candidate addressed the employer's representatives in familiar French. The HRT rejected these arguments and emphasized that no matter the reason behind the question or the manner in which it was formulated, it remains that the question, asked during the job interview, was aimed at learning a personal characteristic of the candidate as it related to his origin, which is prohibited by the Charter. In its decisions, the HRT also reiterated the following points: Informal conversations that take place before or after a formal interview are part of the steps in a hiring process, and, therefore, they fall under the protections of the Charter of Human Rights and Freedoms. If a question is asked about a candidate's ethnic origin, the employer must be able to demonstrate that the answers sought relate to the qualifications or abilities required for the job. Approach to be taken by employers 1. Prepare an interview plan and follow it These decisions confirm that it is very important to be well prepared for the hiring process and to pre-establish an interview plan that clearly defines the employment requirements, so as to ensure that you only ask questions that directly relate to such requirements. 2. Avoid improvised questions On the basis of the HRT decisions, questions asked “just out of curiosity,” off the cuff, that are more interpersonal in nature, or are meant to lighten the mood must be excluded, especially if such questions establish a direct or indirect connection to any of the grounds for discrimination prohibited by section 10 of the Charter. 3. Require the same vigilance from external consultants and in written communications This planning must also include and regulate the content of email exchanges, text messages, and pre-interviews based on new methods of communication or pre-selection, by both the employer and its external consultants, given that the HRT emphasized that the guiding principles of the Charter can also be applied with the necessary adaptations in the digital era. CQLR, c. C-12, ss. 10 and 18.1. Section 20 of the Charter.
Is the duty of loyalty a limit to freedom of expression?
The right to freedom of expression is not absolute. It does not permit employees to comment on political events unrelated to their workplace at all times and an employer can intervene if an employee expresses his opinions at work and on social networks. An employer has the right to request that his employees adopt a neutral position in these matters in the workplace and on the social networks. This principle remains effective even when the employee is a union representative if the positions expressed do not concern a dispute related to working conditions within the organization or when such positions explicitly denigrate or criticize the employer. In July 2018, the Superior Court upheld an arbitration award1 in a case involving Renaud Bray2 and, in doing so, upheld the disciplinary suspension and dismissal of an employee and union representative who asserted that he had the right to wear the red square symbol at work. The employee also made defamatory statements about the employer on the internet. In the opinion of the Court, the importance of freedom of expression must be recognized, but so must the right of the employer to remain neutral in situations in which it is not involved. Context The employee wore a red square, a symbol of support for students in their dispute with the government over tuition fees at the time while he worked at a Renaud Bray bookstore. The employer also accused him of posting, while he was on paternity leave, comments on social networks that supported a boycott movement with regard to the employer, following a controversy that opposed the principal shareholder of the bookstore and an author.He was contesting two disciplinary measures (a three-day suspension and a dismissal), which had been imposed after he published comments that criticized and denigrated the employer on Facebook and on his blog. In particular, the employee encouraged citizens, customers, former employees, and artists to criticize Renaud Bray and file complaints because the company banned its employees from wearing red squares. The employer also filed two management grievances demanding compensation for the damage suffered as a result of these negative posts. Freedom of expression or neutrality? The Court recognized that freedom of expression is an essential component of labour relations, and that it is often as a result of this freedom of expression that vulnerable workers are able to gain public support in their pursuit of better working conditions. The judge noted, however, that the red square movement did not relate to the working conditions at Renaud Bray, and the bookstore could validly maintain neutrality on this issue and require its employees to respect such neutrality. In this context, the right of freedom of expression is not absolute. Immunity that can apply to a union representative does not allow the employee to evade penalties: By posting such texts on his blog and his personal Facebook page, the employee was not acting as a union representative, but rather as an individual; He signed his articles and made requests to the readers in his own name; Moreover, some of the comments were made while he was on paternity leave and not working; His most recent posts were not about subjects that related to working conditions at Renaud Bray, but rather about a dispute between Renaud Bray and an author. Since some of the comments were false, the employee was also at fault with regard to his employer, and the employer was therefore entitled to compensation. According to the arbitrator and the Court, it was abundantly clear that the trust between employer and employee had been broken and that the dismissal was justified: how could the employer trust an employee who encouraged the readers of his Facebook page to demonstrate in front of the store and even boycott it? What employers should aim to do Given that an employer can legitimately maintain its neutrality in current debates and require that its employees respect such neutrality in the workplace, it is important to ensure that management is consistent and fair: for example, the employer could, in the workplace, prohibit the expression of political or other opinions in front of customers in general and refuse to tolerate messages on some matters. Given that the right to freedom of expression is not absolute, the employees’ duty of loyalty means that employees should not denigrate their employer, but instead should show restraint in their comments about the employer. In addition, the immunity from which union officials benefit is not unlimited; it does not protect an employee who clearly breaches said duty of loyalty. An interesting element in this case was that the employer became aware of the employee’s comments through an automated alert system used to find media articles and publications, regardless of the author. The arbitrator concluded that this was not illegal surveillance on the part of the employer, and this conclusion was not challenged before the Superior Court. Syndicat des employées et employés professionnels-les et de bureau, section locale 574 (SEPB-CTC-FTQ) et Librairie Renaud-Bray inc. (Julien Beauregard, griefs patronaux et syndicaux), 2017 QCTA 26. Syndicat des employées et employés professionnels-les et de bureau, section locale 574 (SEPB-CTC-FTQ) c. Sylvestre, 2018 QCCS 2987 (discontinuance filed in September 2018 in regard to the application for leave to appeal).
Employer-sponsored holiday parties: What are you liable for?
Your guests have arrived and it’s time to give the toast! Are you ready to celebrate? December is undoubtedly the most festive month of the year. It’s a great opportunity for employers to thank their employees for the services rendered during the year, but also for employees to interact with their colleagues in a relaxed atmosphere. With the parties just around the corner, it’s a good time to remind employers that maintaining the health, safety and dignity of all participants is crucial when organizing such events. Even in these happy times, the employer’s obligation to ensure the health and safety of employees extends beyond normal work hours and outside the regular work premises. Here are some tips to help you celebrate in a happy, respectful and safe atmosphere for all. Moderation is always in good taste First, preventing undesirable situations begins with controlling the consumption of alcohol and other substances that can cause impairment. As psychoactive products that directly and quickly affect brain function, excessive alcohol or cannabis consumption is certainly the main factor that can lead to misdemeanour during holiday parties. When employees participate in employer-sponsored activities, they attend as part of their job: they thus have the same status that they do when at work within the company1. Consequently, employers retain their management and leadership powers during social events. Thus, they can sanction any misconduct committed during a social event. In order to limit alcohol consumption and reduce the risk of incidents, employers may, in particular: Distribute a limited number of alcohol vouchers; Stop serving alcohol a few hours before the event ends; Limit the open bar formula, if you have one, to a predetermined schedule. As for the use of cannabis and cigarettes, including e-cigarettes, it’s worth remembering that your guests must respect the smoking ban in or near the premises. Harassment prevention Though the movement concerning harassment has prompted employers to increase their efforts to prevent sexual misconduct in the workplace, the Act respecting labour standards already obliged employers, since 2002, to take reasonable action to prevent psychological harassment and, whenever they become aware of such behaviour, to put a stop to it2. Employers are not exempt from this obligation when they invite employees to a social event. A safe trip back home At the party’s end, employers should make sure their employees get home safely by providing ways to travel other than getting behind the wheel, including: Providing taxi vouchers to prevent road accidents caused by impaired driving; Reimbursing employee travel expenses; Encouraging employees to contact organizations offering driver services. Company holiday parties have become a must. Beyond employer obligations and responsibilities, such festivities are a great opportunity for employees to forge ties with their colleagues outside the more rigid work environment and for employers to show their appreciation and thank their employees. Happy festivities to all! Association internationale des machinistes et des travailleuses et travailleurs de l'aérospatiale, district 140, section locale 2309 et Servisair (Avo Minassian), D.T.E. 2009T-448; Nettoyage de drains A. Ducharme (2000) inc. et Syndicat national des travailleuses et travailleurs de l’environnement (F.E.E.S.P.-C.S.N.), D.T.E. 2001T-1030. Sec. 81.19 A.L.S.
Employers: 6 main amendments to the Act respecting labour standards
On June 12, 2018, the Act respecting labour standards (the “Act”) was amended to give employees more flexibility in order to improve their family work balance. Here is an overview of the main changes made to the Act. The reference guide specifies which amendments will be coming into force on January 1, 2019. All other amendments have been in force since June 12, 2018. Prohibition on differences in treatment based on employment status For employees who perform the same tasks in the same establishment, the rate of wage, the length of vacation or the method of calculating the related indemnity cannot be different solely based on their differing employment status. For example, a temporary employee and a regular employee performing the same tasks in the same establishment must be remunerated on the same wage rate. Prohibition on differences in treatment based on hiring date Improvement of the existing protection against differential conditions of employment based on the hiring date of employees who perform the same tasks in the same establishment. Pension plans and other benefits plans have been added to the list of employment conditions that cannot be the object of differential treatment such as wage, hours of work and various leave entitlements provided for in the Act. (Employers who implemented pension or benefits plans with differences in treatment based on the hiring date of the employees before June 12, 2018, will not be required to amend them..) An employee who believes he or she is a victim of differential treatment with respect to pension plans or other benefits plans may file a complaint with the Commission des normes, de l’équité, de la santé et de la sécurité du travail (CNESST) within 12 months of finding out this differential treatment. (This amendment does not prohibit distinctions based on employment status. Two employees with different statuses may still be entitled to different benefits and pension plans, subject to possible recourses under the Charter of human rights and freedoms (e.g., discrimination based on age, social condition, etc.). Overtime An employee may now refuse to work more than two hours (instead of four) after his regular daily working hours. Therefore, an employer cannot force an employee to work more than two hours of overtime, except in special circumstances provided for in the Act which allow the employer to demand that the work be carried out: Danger to the life, health or safety of employees or the population at large Risk of destruction or serious deterioration of movable or immovable property Cases of superior force Contravention of the employee’s professional code of ethics Work schedule Employees may refuse to work if they are not informed at least five days in advance that they will be required to work. Thus, employers cannot force employees to work without prior notice of at least five days, except in special circumstances provided for in the Act: Shift extended by a maximum of two hours (refer to previous section - Overtime) Employees required to remain available given the nature of their duties Agricultural workers (e.g., tasks related to the sowing, harvesting, monitoring and maintenance of agricultural production) Danger to the life, health or safety of employees or the population at large Risk of destruction or serious deterioration of movable or immovable property Cases of superior force Contravention of the employee’s professional code of ethics Important: this amendment gives employees a right of refusal, but places no obligation on employers to provide employees with their work schedule five days in advance. Staggering of working hours An employee (non-unionized) may make an agreement with the employer, on an individual basis, to stagger his working hours over a period of more than one week for the purposes of calculating overtime, without prior authorization of the CNESST. This agreement must meet the following conditions: The agreement is made in writing. The working hours are staggered over a maximum period of four weeks. Each week of the specified staggering period may not exceed the business’ regular work week by more than 10 hours, which is 40 hours a week for most employees. The weekly average of the hours worked during the staggering period may not exceed the number of hours of the regular work week, which is usually 80 hours over a two-week staggering period, for example. The written agreement provides that each party may resiliate the agreement with notice of at least two weeks before the end of said agreement. Despite this amendment to the Act, employers may still ask for the authorization of the CNESST to stagger all of their employees’ working hours. In such cases, the CNESST policy entitled Politique sur l’étalement des heures de travail [Policy on the staggering of working hours], providing for more restrictive terms of eligibility, must be applied. Domestic or sexual violence Employees who have been the victim of domestic or sexual violence may now benefit from a leave of up to 26 weeks within a 12 month period, just like employees who must be absent due to sickness, organ or tissue donation, an accident or a criminal offence. Even if the employee has not accrued three months of uninterrupted service Entry into force January 1, 2019. The employment relationship is maintained during this leave The first two days of absence owing to sickness, an organ or tissue donation for transplant, an accident, domestic violence, sexual violence or a crime will be paid. Maximum of two paid days of leave in a given year in these situations, as for absences for family and parental reasons (refer to following section). Family and parental leave and absences General improvements: certain leave entitlements have been reformulated to ensure that employees caring for a relative or acting as a caregiver for someone may benefit from such entitlements and be provided with employment protection for a longer period. The duration of the leave of absence increases from 12 to 16 weeks over a period of 12 months when an employee must be absent because of the state of health of a relative or a person for whom the employee acts as a caregiver. This leave entitlement is 36 weeks long if the relative or person is a minor child of the employee. Other leave entitlements have also been improved or added, such as leave in the event of the disappearance or death of a minor child. Remuneration for the first two days of a leave of absence to fulfil obligations relating to the care, health or education of theemployee’s child or the child of the employee’s spouse, or because of the state of health of the employee’s spouse or relative An employee may be absent from work for ten days per year to fulfil family and parental responsibilities. The first two annual leave days that are taken will be paid if the employee has three months of uninterrupted service. pour un salarié justifiant trois mois de service continu. Maximum of two paid days of leave of absence in a given year for family or parental reasons, or for sickness, an organ or tissue donation for transplant, an accident, domestic violence, sexual violence or a crime (refer to previous section). Other leave entitlements related to family or parental responsibilities Authorized leave of absence for two paid days (instead of one) in the event of the death or funeral of an employee’s spouse or child, the spouse’s child, the employee’s father, mother, brother or sister. The employee may also be absent from work, without pay, for three more days (instead of four) on such occasion. In the event of a birth, an adoption or the termination of a pregnancy, absence is authorized for the first two days (paid), even if the employee has not accrued 60 days of uninterrupted service. The option of taking three additional unpaid days off is maintained. Statutory general holidays An employee is entitled to an indemnity or a compensatory leave, at the employer’s choice, if a holiday provided for in the Act does not coincide with an employee’s regular work schedule. Annual leave Amended so that employees with three years of service (instead of five) are entitled to an annual leave for a minimum duration of three consecutive weeks. Despite this amendment, employees will have to have completed the reference period in which they will have accrued at least three years of service to be entitled to a third week of annual leave. Harassment prevention and complaint processing policy Obligation to adopt a harassment prevention and complaint processing policy Psychological harassment, including sexual misconduct New time limit to file a compliant for harassment The 90-day time limit to file a complaint has been extended to two years starting from the last incidence of the alleged conduct. This longer time limit does not apply to complaints filed or prescribed before June 12, 2018 (Dinu v. 9227-3754 Québec Inc., 2018 QCTAT 4502) It applies to complaints filed with the CNESST or grievances filed in accordance with the collective agreement. Best managerial practice: document all reported incidents, the decisions made subsequently and the reasons behind them, in order to include the information gathered in the response to the complaint, which may be submitted several months after the events. Complaint filed with the Commission des droits de la personne et des droits de la jeunesse (CDPDJ – the Human Rights Commission) in the event of sexual harassment After obtaining the concerned employee’s consent, the CNESST must send all complaints of harassment involving discriminatory conduct to the CDPDJ. Provisions will come into effect on a date to be determined (subject to the adoption of a regulation) Better protection of workers hired through personnel placement agencies and recruitment agencies for temporary foreign workers Agencies required to obtain a licence Personnel placement agencies Prohibition on giving an employee a rate of wage that is less than that of other employees of the client enterprise doing the same work in the same establishment due to the employee’s hiring date. Personnel placement agencies and client enterprises are solidarily liable for pecuniary obligations pursuant to the Act. Employers of temporary foreign workers Further obligation to provide information to the CNESST such as the term of the contract and the arrival and departure dates. In the event of criminal prosecution for violation of the Act by a legal person or its representatives: A director or officer of the legal person will be presumed to have personally committed the offence, unless proof of due diligence is established.
Cannabis legalization: a reference guide for employers
The use of cannabis for recreational purposes will be legal in Canada as of October 17, 2018. Employers will have to manage cannabis consumption in the workplace to ensure that employees do their work safely while respecting applicable laws. Summary of the law in Quebec Considering the various applicable laws and regulations concerning cannabis in Quebec, Quebec employers need to be aware of these main legal restrictions: Adults may possess up to 30 grams of dried cannabis in a public place, and up to 150 grams in private premises; Minors may not possess or consume cannabis; The sale, production and trafficking of dried cannabis by individuals remains illegal; Smoking or vaping cannabis is prohibited in places where smoking tobacco is already prohibited, including enclosed workplaces and any other enclosed space that admits the public; In certain cities and municipalities, consuming cannabis in all public places is prohibited; Working while impaired by alcohol or drugs, including cannabis and similar substances, is also prohibited; It is an offense under the Criminal Code to have a concentration equal to two nanograms (ng) or more per millilitre (ml) of blood within two hours after ceasing to operate a motor vehicule; and Once effective tools are available to detect the presence of cannabis in saliva, it will be prohibited in Quebec for any person to drive or to have control of a road vehicle if there is a detectable presence of cannabis or other drug in the person’s saliva. What are the responsibilities of employers and employees? In Quebec, an employer’s right to limit or ban any form of cannabis use by members of its personnel at the workplace is recognized, even if the workplace is not enclosed. Quebec legislation now requires employers to ensure that a worker does not perform work when his or her condition represents a risk to his or her health, safety or physical well-being, and also to other persons at or near the work place. Employees have a similar obligation. In order to address these responsibilities, employers should list the applicable rules in the workplace to prevent and limit potential problems stemming from cannabis legalization. Employers should adopt or update a policy that is clear and adapted to the realities of the workplace. What changes should be made to your drug and alcohol policy? Ensure that the policy specifically covers legal cannabis: erase all explicit references to cannabis consumption as an illicit activity; As much as possible, align cannabis restrictions with those for alcohol, specifically in terms of possession, consumption, trafficking, distribution and to the concept of impairment; Define the workplace (consider parking lots, patios, etc.) and set out the rules for consumption in open spaces; Define impairment and establish tolerance thresholds for employee consumption with respect to the risks associated with their positions; Reiterate that employees must show up for work unimpaired, while respecting the tolerance threshold established by the employer, and that they must remain unimpaired for their entire shift; Include all forms of cannabis consumption (smoked, ingested, etc.) in the policy; Specify that consumption is prohibited during work hours and in the workplace as well as before or after the shift when necessary; and Set out rules for cannabis consumption during work-related activities (breaks, meal times, social activities, off-site Christmas parties, meetings with clients, etc.). Can employers have employees take drug tests? The courts have recognized that drug tests may be administered in the following circumstances: If the employer has good reason to believe that an employee is impaired by the effects of alcohol or drugs while at work; Following a serious incident; Following a consumption-related absence; As part of a last chance agreement; With the employee’s express, free and voluntary consent. It is still very important for employers, and particularly managers, to observe and document objective signs of impairment, since a positive drug test does not necessarily prove a violation of the employer’s policy or the employee’s impairment. What obligations exist for accommodating medical cannabis? Despite a policy prohibiting the possession and consumption of cannabis in the workplace, an employee may request accommodation to use cannabis for therapeutic reasons. As with any accommodation request related to a disability, the employer must understand the basis of the request and evaluate the request in order to determine if the policy constitutes undue hardship. Employers should not hesitate to ask questions and demand a detailed medical certificate in order to fully understand the conditions of use prescribed by the doctor, particularly: Length of treatment; Dose; Required frequency of consumption; and Side effects. How does one prepare for the legalization of cannabis? The first step for employers is to evaluate their employees’ positions as well as their needs and expectations in terms of preventing drug consumption. Following this evaluation, employers will be able to adapt the terms of their policies on drugs and addictions. It is also important that the policy’s provisions comply with laws and jurisprudence and that each infringement of an employee’s fundamental rights (e.g., prohibiting consumption outside of the workplace) be justified by considerations that are specific and proportional to the employer’s objectives based on employment requirements and the nature of work activities. Supervisors and managers should also be trained to detect cannabis consumption and intoxication, as well as signs of such consumption, and to administer tests to prove intoxication. Implementing appropriate tools, such as a checklist, may facilitate the analysis and preparation of a properly documented file. Proactive employers equipped with tools and procedures that suit this new reality will be able to effectively carry out their managerial responsibilities.
New Regulation Respecting Immigration to Québec: Economic needs of Quebec and its regions come first
The new Regulation Respecting Immigration to Québec (“RIQ”), the purpose of which includes fostering the participation of immigrants in the development of Quebec and alleviating the labour shortage currently experienced by many employers in the region, came into force on August 2nd, 2018. The Regulation makes major changes to a number of programs of the Ministère de l’Immigration, de la Diversité et de l’Inclusion (“MIDI”) of Quebec. Previously, the Regular Skilled Workers Program (RSWP), known as the regular process for submitting applications for a Certificat de Sélection du Québec (“CSQ”, Quebec selection certificate), allowed eligible applicants in Quebec to submit a CSQ application at any time. Candidates outside Canada could submit their applications during the application intake period until the quota was reached. Henceforth, it will not be possible to submit a CSQ application under the regular process without first being invited by MIDI to do so. The Regulation Respecting Immigration to Québec establishes a “Declaration of Interest” system under which interested applicants must submit a declaration of interest form and wait to receive an invitation from MIDI before submitting a CSQ application. In addition, priority will be given to applicants who want to settle outside the Montreal metropolitan region and applicants who have a job offer validated by MIDI. The Quebec experience program (“PEQ”, Programme de l’expérience québécoise), a “simplified” program that also leads to the CSQ, has been changed substantially as well. A holder of an open work permit obtained as an accompanying spouse or common-law partner may now apply as the principal applicant in a CSQ application submitted under the PEQ. In addition, the PEQ no longer imposes any requirement regarding the position’s level of specialization. Before August 2nd, 2018, the applicant must have held full-time qualified employment in category 0, A or B of the National Occupational Classification (NOC) for 12 months. Under the new regulation, MIDI will now accept applications from candidates who have held positions in NOC categories C and D.1 MIDI’s investor and entrepreneur programs have also undergone significant changes. For example, the amount of the investment required in the investor program has been raised from $1,200,000 to $2,000,000 and the assets needed have risen from $800,000 to $1,200,000. For the entrepreneur program, there are now two components: the creation of innovative businesses and the creation and acquisition of small and medium-sized businesses in Quebec. Please do not hesitate to contact us if you have questions about the new RIQ, the programs referred to above or the programs’ specific requirements. The NOC is a tool that that classifies and categorizes occupations in the Canadian labour market. Category 0 corresponds to managers, category A usually requires university education, and category B generally requires college education or apprenticeship training. The least specialized categories are C and D: category C requires secondary school and/or occupation-specific training and category D usually calls for on-the-job training.
A new step in processing requests for accommodations on religious ground
On July 1st, 2018, the provisions of the Act to foster adherence to state religious neutrality and, in particular, to provide a framework for requests for accommodations on religious grounds in certain bodies, RLRQ, c. R-26.2.01 (“Act”) came into force. This Act applies to the “public bodies” that it defines, but remains of interest to any Quebecois employer called upon to process a request for accommodation since it establishes a general framework for analyzing such requests on the basis of principles generally adopted by the courts. For almost three decades, Canadian and Quebecois courts have heard many disputes over the processing of requests for accommodations on religious grounds made by employees to their employers. The decisions rendered, in particular by the Supreme Court of Canada, have identified the main guidelines that must be observed when analyzing these requests. However, these guidelines are established on fluid concepts like the existence of a sincere religious belief, the discriminatory effect of a measure, or the qualification of the constraint imposed by the accommodation. Debates surrounding the adoption of the Act, in October 2017, mainly focused on the issues of the religious neutrality of the State, such as the issue of openly providing and receiving services from any body associated with the State in any way. There has been much less focus on the utmost important provisions that require a method of analyzing accommodation requests made by staff members of these bodies. The Act implicitly codifies that guidelines adopted by the courts, not only in religious matters, but also regarding other grounds that may constitute an infringement of the right to equality recognized, in particular, by the Charter of Human Rights and Freedoms, RLRQ, c. C-12 (“Charter”). In this respect, the Act does not modify the state of the law, but specifies the terms of its application, although only in the area of the freedom of religion and its exercise. On the other hand, the criteria adopted by it are sufficiently generic enough to be extended, by simple analogy, to different grounds, such as those for people with disabilities. Article 11 of the Act lists four criteria that should be considered when processing a request for accommodation: 1. that the request is serious; 2. that the accommodation is consistent with the right to equality of women and men and the right of every person to be treated without discrimination; 3. that the requested accommodation respects the principle of State religious neutrality; and 4. that the accommodation is reasonable in that it does not impose undue hardship with regard to, among other considerations, the rights of others, public health and safety , the proper operation of the body and the costs involved. By an unusual legislative process, Article 12 of the Act provides that the Minister of Justice must establish guidelines “in order to support bodies in their application of Article 11.” These guidelines were published on May 9, 20181 and provide a guide for the application of Article 11 of the Act as well as Article 13, which specifically addresses requests that involve an absence from work. They propose several definitions of notions and concepts involved. In particular, they illustrate several situations in which the requests may be made, as well as the circumstances that make it possible to assess whether the resulting constraints are excessive and justify not proceeding. They clearly state that any request for accommodation on religious grounds requires a contextual and personal evaluation, confirming that in this respect, it is essential to proceed on a case-by-case basis, despite the criticisms that this approach raises in some areas. It should be noted that the Act and its guidelines are explicit on the obligation of cooperation on the part of the person making the request for accommodation: failing that, this request may be dismissed. The Act does not contain, in a strict sense, penalty measures for non-compliance with its provisions. However, since it is closely linked to the application of the Charter, the mechanisms provided by the Charter are accessible to those who feel dissatisfied by the decisions made by a reporting body, as will remain the arbitration process, as the case may be. The Act applies to public bodies, which it defines in a very broad manner in order to include, for example 2, public transit companies, early childhood centers, government regulated private institutions and intermediary resources in the health sector. One would think, however, that it will provide an informal reference on how to process accommodation requests, regardless of the work place. It would therefore be useful for managers of other entities to draw on the guidelines adopted when they must process accommodation requests and it would also be appropriate to consider the approaches proposed in the guidelines. The goal that fundamental rights be exercised equally is not just a State matter ; it is, above all, a social matter. https://www.justice.gouv.qc.ca/fileadmin/user_upload/contenu/documents/Fr__francais_/centredoc/publications/ministere/dossiers/neutralite/PL62-lignes-FR.pdf (accessed June 21, 2018). A directory of the organizations concerned is available at: https://www.justice.gouv.qc.ca/fileadmin/user_upload/contenu/documents/Fr__francais_/centredoc/publications/ministere/dossiers/neutralite/Liste_organismes_PL62.pdf (accessed June 21, 2018).
Amendments to the Act respecting labour standards adopted: new changes with immediate effect
On June 12, 2018, Bill 176 was adopted, resulting in the immediate enactment of several amendments to the Act respecting labour standards (ALS) which seeks in particular to facilitate work-family balance. Our article published March 21, 2018 addresses the key aspects of these changes. However, additional amendments have been made to the LNT which certainly bear mentioning: Domestic and sexual violence Employees who have been the victim of domestic or sexual violence may now benefit from a leave of up to 26 weeks within a 12 month period, just like employees who must be absent for organ or tissue donation, accidents, or who have been the victim of domestic violence or criminal offences; Difference in treatment clauses An employee who believes he or she has been the victim of differential treatment with respect to retirement plans or other benefits may file a complaint with the Labour standards, pay equity and occupational health and safety commission within 12 months of becoming aware of the difference; Employers having put in place, prior to June 12, 2018, differential retirement or benefit plans based on the hiring date of its employees will not be required to change those plans. Psychological harassment and sexual misconduct The second paragraph of section 81.19 of the ALS requires employers to adopt a policy to prevent psychological harassment and handle complaints, but going forward this policy will now be required to include a section regarding sexual misconduct. Employers will have until January 1, 2019 to adopt a policy regarding psychological harassment in accordance with the aforementioned amendments to section 81.19 of the ALS. The 90 day time limit for filing a complaint with the Labour standards, pay equity and occupational health and safety commission with respect to conduct constituting psychological harassment will now be extended to two (2) years starting from the last incidence of the alleged conduct. This new time limit will be deemed to be integrated into any collective bargaining agreement; NOTE: Managers and HR advisors must be even more careful to record reported incidents (whether or not they are followed up on) as well as the corresponding decisions made and the reasons underlying such decisions. Such proactive vigilance will make it possible to resolve potential conflicts and, where necessary, have the benefit of the information that was gathered when preparing a response to a complaint submitted several months after the incident. In contrast to the previous version of the bill which would have required the Labour standards, pay equity and occupational health and safety commission to notify the Quebec human rights and youth commission without delay of cases of complaints of sexual misconduct, going forward the Labour standards, pay equity and occupational health and safety commission must now provide the Quebec human rights and youth commission with any complaint of discriminatory conduct after having obtained the consent of the employee concerned. Effective dates and other specifics The majority of the amendments to the ALS came into effect on June 12th of this year. However, certain provisions will not come into effect until January 1, 2019. 1 Vacation time This is the case for the amendment which would entitle employees with 3 years of service (as opposed to 5 years) to an annual vacation of at least 3 continuous weeks. Despite this amendment coming into effect on January 1, 2019, an employee must have completed the reference period during which he or she completed 3 years of service to be entitled to a 3rd week of annual leave. Prohibition on differential treatment on the basis of employment status The amendments to Articles 41.1 and 74.1 will also enter into force on January 1, 2019. These amendments are intended to clarify that the rate of pay, the length of vacation or the method of calculating the related indemnity cannot be different between colleagues who perform the same tasks in the same establishment solely based on their differing employment status. For example, a temporary employee and a regular employee performing the same tasks in the same establishment must receive wages based on the same rate of pay. Differential treatment as it pertains to pension plans or other benefits based on an employee’s date of hire will also be prohibited as of January 1, 2019. It is important to note that this amendment, unlike the wage rate and vacation leave amendments, does not prohibit differential treatment based on employment status. As a result, two employees with different statuses may still be entitled to different benefits and pension plans. For the full version of the approved bill, click here. Amendments to sections 59.0.1 (refusal to work more than two hours beyond typical hours or without being notified five days in advance), 69 (3 weeks of vacation for employees with 3 years of service), 79.7 (compensation for 2 days of leave) and 80 (2 days of paid bereavement leave).
Confinement in an establishment: establishments must exercise caution before making an application
In a decision rendered on March 13, 20181, the Court of Appeal reiterated that caution is in order when making an application for confinement. The Court also took the opportunity to review the topic of confinement orders and the supervision and safety requirements that healthcare establishments have towards their users. The Court of Appeal’s reasoning is based on the following elements: where two doctors conclude on the need for confinement in an establishment, the user cannot be kept without his or her consent or the Court’s authorization for more than 48 hours; the hospital’s decision to make an application for confinement in an establishment does not constitute a simple blind or purely mechanical application of the conclusions presented in the psychiatric examinations conducted by the psychiatrists. It is the responsibility of the healthcare establishment in question to verify whether the legal obligations have been met prior to initiating the legal proceedings. Accordingly, the establishment must act with caution and transparency throughout this type of process, since the basic rights of the user subject to an application for confinement are at stake; the Civil Code of Québec, the Code of Civil Procedure and the Act Respecting the Protection of Persons Whose Mental State Presents a Danger to Themselves or to Others2impose very specific and strict provisions that must be complied with in connection with an application for confinement in an establishment; the establishment may likely be held liable if it neglects to verify and control compliance with the requisite conditions for confinement; failure to verify whether the two psychiatric examinations justifying the application for confinement comply with the legal requirements may also potentially engage the establishment’s civil liability; any incident or accident must be declared in good and due form in accordance with the Act respecting health services and social services3 to determine whether the establishment fulfilled its supervision and safety obligations as regards its confined users. It is therefore important to remember that healthcare establishments are obliged to demonstrate caution, transparency and verification when making an application for confinement and preparing such an application. G.D. v. Sir Mortimer B. Davis Jewish General Hospital, 2018 QCCA 379. CQLR, c. P-38.001. CQLR, c. S-4.2, Sec. 8 par.2 and 233.1.
Key aspects of the changes made to the Act respecting labour standards
On March 20, 2018, Minister Dominique Vien introduced the much-awaited bill no. 176 to the National Assembly of Quebec, entitled the Loi modifiant la Loi sur les normes du travail et d’autres dispositions législatives afin principalement de faciliter la conciliation « famille-travail » [An Act to amend the Act respecting labour standards and other legislative provisions mainly to facilitate family-work balance], an important and relevant subject for a number of employers in Quebec. A number of employer groups, unions, and community groups were consulted regarding the improvements to be made to the Loi sur les normes du travail [Act respecting labour standards] (the “LNT”). However, this bill will potentially be the subject of revision and amendment before its adoption, if it is indeed adopted. Here are some of the key points from the major legislative amendments proposed by this bill: Liability of the director or officer of a corporation: In the context of a legal proceeding for violation of the LNT by a corporation or its representatives, the director or the officer of the corporation will be presumed to have personally committed the offence, unless proof of due diligence is established. This will furthermore be consistent with the legislative amendments regarding directors’ liability for health and safety at work. New developments regarding psychological harassment: Requirement to adopt a policy for preventing psychological harassment (“PH”) and handling complaints; With the goal of increased prevention, the LNT will explicitly state that words, actions or gestures of a sexual nature constitute psychological harassment, in accordance with the current interpretation of the courts; In cases of complaints of sexual misconduct, the Commission des normes, de l’équité, de la santé et de la sécurité du travail (“CNESST”) [Labour standards, pay equity and occupational health and safety commission] will be required to notify the Commission des droits de la personne et des droits de la jeunesse (“CDPDJ”) [Quebec human rights and youth commission] without delay. Intergenerational equity: Improvements to existing protections against disparity in working conditions based on the hiring date of employees who carry out the same duties at the same institution: in addition to equity in salaries and distribution of annual leave, retirement plans and other social benefits are added to the list of working conditions that may not be the subject of disparity; - Note: employers having already instituted different social benefit and retirement plans according to the hiring date of employees (for example, defined benefit plans for older employees, and defined contribution plans for newer employees) will not be required to change those plans; Certain enhanced leave provisions, including: 3 weeks of annual vacation for employees with 3 years of continuous service instead of the 5 years currently provided for in the LNT; 26 weeks of absence in a twelve-month period protected by the LNT for employees who are victims of domestic violence; Compensation for the first two days of the absence of an employee with three months of continuous service due to organ or tissue donation, accident or being the victim of domestic violence or criminal offences: Possibly inspired by the Ontario law, all employees will be allowed ten days of absence per year to fulfill family obligations. The first two annual leave days that are taken will be paid; The 12-week period of absence already allowed will be expanded to 16 weeks over a period of 12 months, during which an employee’s absence is necessary to attend to a relative with health issues. This leave is increased to 36 weeks when the relative is an underage child; The bill proposes that an employee be allowed two paid days’ absence for a death or funeral (instead of one day), but provides that employees will only be entitled to three additional unpaid days (instead of four). We emphasize that the bill reformulates certain leave entitlements to ensure that an employee acting on behalf of a parent or as a “family caregiver” will be able to benefit from such entitlements and to be provided with employment protection for a longer period, in the event of an absence. Provisions regarding working hours: Employees will be allowed to refuse to work more than two hours beyond their typical daily work hours (instead of four hours); An employee will have the right to refuse to work if not informed five days in advance of the requirement to work, except when the nature of the employee’s duties requires him or her to remain available; Section 53 of the LNT will be amended so as to allow employers and employees to agree to staggered work hours for the purpose of calculating overtime without CNESST authorization being necessary; For placement agencies, specifically: Increased protection for workers hired through personnel placement agencies and foreign temporary workers. From now on, such agencies must hold a license in order to conduct their business activities; In addition, a personnel placement agency may not offer an employee a salary less than that accorded to employees of the client company who carry out the same duties solely because of that person’s employment status; The placement agency and client company will be jointly and severally liable for monetary obligations arising from the LNT. We will closely follow further developments of this bill and measures taken to adopt it, which, we reiterate, could be the subject of a several amendments. We anticipate that the provisions regarding intergenerational equity, as well as those regarding placement agencies will be the subject of lively parliamentary debate, given the major social issues which they are attempting to define. For the full version of the bill, click here.
The Court of Appeal sets the record straight on applications for assignment of costs
On January 24, the Quebec Court of Appeal1 released a very important decision on the application of section 326 of the Act respecting industrial accidents and occupational diseases2 (“A.I.A.O.D.”), thereby setting the record straight on the true effect of this provision. An employer will no longer be permitted to rely on the first paragraph of this provision to seek a partial assignment of costs on the basis that there is no “direct connection” between the benefits paid to a worker and the worker’s industrial accident. The employer will now have to base its application on the fact that it “has been unduly burdened” and meet the requisite burden of proof. However, the Court of Appeal declined to resolve the controversy in the case law regarding that burden. We have every reason to believe that this decision will put an end to the current moratorium placed on these applications3 by the Commission des normes, de l’équité, de la santé et de la sécurité du travail (“Commission”) and that a significant number of cases will be decided in the next few months. In the interim, employers should review their pending applications and take appropriate action or adopt the appropriate positions in light of this development. It should also be noted that the Court of Appeal states, in passing, that the one-year time limit set out in the last paragraph of section 326 A.I.A.O.D. for submitting an application for an assignment of costs begins to run on the date on which the right to apply for the assignment arises, thereby ending a controversy which had previously existed in the case law. The Facts The facts of this case are relatively simple. In August 2011, an employee of Supervac 2000 suffered an industrial accident which rendered him unable to perform the duties of his employment. The Commission subsequently found that the worker was entitled to the benefit from the compensation scheme created by the A.I.A.O.D. A few months later, the employer temporarily assigned the worker to another position and the latter ceased to receive benefits under the Act. A few months after that assignment began, the employer dismissed the worker for disciplinary reasons. The worker subsequently began receiving benefits under the Act once again. It was in this context that the employer filed an application with the Commission pursuant to section 326 A.I.A.O.D. The employer argued that it has been “unduly burdened” by having the benefits paid to a worker that it had dismissed attributed to its file, especially given that it could no longer temporarily assign work in order to reduce its costs. In the alternative, the employer argued that, contrary to the general principle established by the first paragraph of section 326 A.I.A.O.D., in this case the worker entitlement to an income replacement indemnity was not “as a result of an industrial accident”, but was instead due to the termination of the temporary assignment, which was itself caused by the termination of the employment relationship. In this context, the employer took the position that it was entitled to an assignment of costs under the first paragraph of section 326. Section 326 A.I.A.O.D. It is useful for our purposes to reproduce section 326 A.I.A.O.D. in full: 326. The Commission shall impute to the employer the cost of benefits payable by reason of an industrial accident suffered by a worker while in the employ of the employer. It may also, on its own initiative or on the application of an employer, impute the cost of benefits payable by reason of an industrial accident to the employers of one, several or all units if the imputation under the first paragraph would have the effect of causing an employer to support unduly the cost of benefits due by reason of an industrial accident imputable to a third person or unduly burdening an employer. Any application under the second paragraph must be filed in writing by the employer within the year following the date of the accident, and state the reasons for the application. The first paragraph of this provision establishes the general principle that the Commission will attribute the cost of the benefits payable due to an industrial accident involving one of its workers to an employer’s file. That attribution will ultimately have an impact on the employer’s contribution to the regime. The second paragraph of section 326 A.I.A.O.D. states that an employer can be exempted from the general principle by requesting the Commission assign the cost of the benefits associated with an industrial accident to all of the employers in its unit or all units of classification where it is able to show (1) that it is “unduly burdened” by a particular situation, or (2) that it is unduly supporting the cost of benefits paid due to an accident which is attributable to a third person. The text of section 326 A.I.A.O.D. states that an application for an assignment of costs must be filed by the employer “within the year following the date of the accident”.4 It should be noted that there are two lines of cases on the question of the employer’s burden of proof must meet in order to show that it has been “unduly burdened”. The first line of cases requires proof of a situation in which there is unfairness for the employer and a significant financial burden caused by that unfairness, while the second requires only that the employer prove unfairness. Decision of the Commission des lésions professionnelles Relying on a number of relatively marginal decisions, the CLP concluded that the second paragraph of section 326 A.I.A.O.D. was drafted in such a way that it covered only applications for an assignment of costs of all of the benefits paid to a worker as a result of an industrial accident, which was plainly not the situation in this case. On that basis, the CLP allowed the employer’s application for partial transfer, applying the general principle of attribution set out in the first paragraph of section 326 A.I.A.O.D., concluding that [TRANSLATION] “any imputed benefit that is not paid as a result of the industrial accident should be removed from the employer’s financial file”.5 Accordingly, having found that the cost of the benefits paid to the worker due to the interruption of his temporary assignment was not directly related to his accident, and was instead due to his dismissal, the CLP concluded that the amounts paid to the worker after his dismissal should not be attributed to the employer. The CLP’s decision had a significant impact on employers and initiated a line of cases that subsequently authorized an employer to apply for an assignment of the cost of benefits paid to a worker where there was no “direct connection” with the accident, but without requiring that unfairness or financial prejudice be shown. Recall that the Superior Court of Quebec did not intervene , holding that the decision of the CLP was “reasonable”.6 Decision of the Quebec Court of Appeal Since all good things must come to an end, the Court of Appeal stepped in on January 24, 2018, to overturn the CLP’s decision. Justice Vézina, writing for the Court, shed an interesting light on the effect of section 326 A.I.A.O.D. The Court held that a worker’s right to the compensation provided by the Act cannot arise from any source other than the accident, whether or not the worker has been dismissed. It therefore rejected the CLP’s reasoning regarding the employer’s right to an assignment of costs under the first paragraph of section 326 A.I.A.O.D. In the opinion of the Court, that first paragraph sets out no more than the general rule that the total cost of compensation for employment injuries must be attributed to the employer. The Court also noted that there is an exception to every rule, and as such, the second paragraph of section 326 A.I.A.O.D. allows the employer to apply for an assignment of costs if it proves that attribution to its file would have the effect of “unduly burdening” the employer. The Court concluded that the CLP had erroneously adopted an overly literal interpretation and it was on this basis that it had held that the exception could not apply in the case of a partial assignment of costs. There is therefore nothing to prevent an employer from applying for a partial assignment of costs under section 326 paragraph 2 A.I.A.O.D. However, that is not all. The Court of Appeal also held that the one-year time limit set out in the third paragraph of section 326 A.I.A.O.D. is not a mandatory limit7 and that it does not begin to run until the date on which the right to apply for an assignment of costs arises. In Supervac 2000, the limitation period therefore started running on the date of the dismissal and not “within the year following the date of the accident” as set out in section 326 A.I.A.O.D. However, that is not the end of the matter: the Court declined to rule on the facts of the case, that is, whether Supervac 2000 was actually unduly burdened, within the meaning of the second paragraph of section 326 A.I.A.O.D., by the attribution of the benefits paid to the worker after he was dismissed to its file. That question will have to be analyzed by the Administrative Labour Tribunal (which has replaced the CLP) from the perspective of determining whether the employer has been “unduly burdened”. Conclusion With this judgment, the Court of Appeal has put an end to the debate by providing a complete picture of what it considers to be the correct interpretation of the three paragraphs of section 326 A.I.A.O.D. The Court has therefore put a damper on employers’ enthusiasm for shared imputation applications under the first paragraph of section 326 A.I.A.O.D. based on the absence of a connection between the accident and the payment of benefits. Commission de la santé et de la sécurité du travail v. 9069-4654 Québec inc., 2018 QCCA 95. This decision follows on the October 2013 decision of the Commission des lésions professionnelles (“CLP”) in Supervac 2000: Supervac 2000, 2013 QCCLP 6341 CQLR A-3.001 http://www.csst.qc.ca/lois_reglements_normes_politiques/orientations-directives/Documents/Moratoire-demandes-transfert-imputation.pdf 326, para. 3 A.I.A.O.D Supervac 2000, 2013 QCCLP 6341, para. 123 Commission de la santé et de la sécurité du travail v. Commission des lésions professionnelles, 2014 QCCS 6379 Section 352 A.I.A.O.D.
Clothes make the man
When an individual chooses to enter into an agreement via a management company, he has to accept all of the consequences of that decision, the good and the bad. This principle applies in particular to working relationships. In the Kucer case,1 the Superior Court recently confirmed that, barring extraordinary circumstances, an employee hired and paid through their own management company is not entitled to termination notice or pay in lieu thereof. For tax purposes, the employee in question decided to proceed this way. Consequently, he was unable to demonstrate that the agreements entered into had been imposed by the employer. An individual seeking to avail himself of the tax benefits connected to a contract for services may as a consequence lose the protections applicable to employment contracts. The context In 2007, Stephen Kucer started a company, which went bankrupt in 2012; its assets were acquired by 8237514 Canada inc. ("Canada Inc."), a wholly-owned subsidiary of 9265-0597 Québec inc. ("Québec Inc."), with Stephen Kucer as one of the shareholders. The shareholders of Québec Inc. wanted Stephen Kucer to become the chairman of Canada Inc., but Kucer insisted that he render his services via his own management company, Harland Tech Group inc. ("Harland"). Canada Inc. therefore entered into a contract for services with Harland, according to which Harland would provide Canada Inc. with Stephen Kucer's services as chairman, with Harland assuming responsibility for Kucer’s remuneration. Stephen Kucer lost his position as chairman of Canada Inc. when the latter terminated Harland's contract for services. Kucer then initiated proceedings seeking pay in lieu of notice of termination. The parties' positions Stephen Kucer argued he was dismissed without cause, and that as an employee of Canada Inc., he was entitled to pay in lieu of notice. In contrast, Canada Inc. argued that Stephen Kucer was not an employee, but rather an independent worker whose services were retained by Harland, and therefore, the agreement with Harland could be terminated for any reason and without providing Stephen Kucer with any notice. The outcome of the dispute The Superior Court reviewed several rulings by the Court of Appeal and endorsed, among others, remark made by Justice Chamberland2 who stated that workers who seek to avail themselves of the benefits associated with a management company when rendering services cannot avoid the disadvantages associated with such an approach, unless the arrangement is the result of a subterfuge or smokescreen imposed by the employer. In this matter, Stephen Kucer made the well-informed decision to sign a contract through his own management company. In the absence of any evidence that the employer imposed this way of operating, one cannot conclude that there were any extraordinary circumstances which would allow the Court to pierce the corporate veil and to provide Mr. Kucer with the status of an employee. In the absence of a direct contractual relationship between Canada Inc. and Stephen Kucer, the Court refused to recognize he had any entitlement to pay in lieu of notice. This dispute is also demonstrative of the principle, underlined by the Court, , whereby economic dependence does not amount to an employer-employee relationship of subordination which would make it possible to conclude an employment contract, rather than a contract for services, existed between the parties. Conclusion A person rendering services to an employer via his management company cannot be considered to be an employee, unless he has demonstrated the existence of extraordinary circumstances. Given that such an individual is not a party to the agreement entered into with the company to whom services are being rendered, he cannot claim that the company is his employer, nor can he claim the legal protections afforded to employees. 8237514 Canada inc. v. Kucer, 2018 QCCS 12 Conseillers en informatique d'affaires CIA inc. v. 4108647 Canada inc., 2012 QCCA 535