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Disclaimer: This article does not constitute legal advice. Information contained herein is intended to provide knowledge about Canadian employment laws to small business owners and to encourage small business owners, entrepreneurs and independent contractors to seek further education about the laws and statutes that govern their businesses. This article is the property of Okanagan Small Business Services, Inc. © 2019. All Rights Reserved. This document may not be reproduced, distributed or transmitted in any form without the prior written consent of the publisher. INTRODUCTION Occupational health and safety (OH&S), a.k.a. "workplace safety", is a very important consideration for every employer in British Columbia. Not only are there economic and moral reasons for developing an OH&S program, there are also legal requirements to do so. Generally, the task of developing an OH&S program in a small business falls on the shoulders of the owner, but it is often overlooked as an unnecessarily time-consuming task which can lead to trouble down the road. WHAT'S THE WORST THAT CAN HAPPEN? In BC, workplace health and safety measures are taken very seriously. Failure to comply with statutory standards can result in fines of up to $687,358.45 and/or imprisonment for just a first conviction; fines only increase from there for subsequent violations. In addition to fines, small businesses may incur indirect costs such as increased insurance premiums. Aside from financial implications, a preventable workplace accident can lead to bad publicity which can be just as damaging. The OH&S needs of small businesses vary greatly. Certain businesses and industries are inherently more dangerous than others, so they will require more in-depth consideration and specialized knowledge when creating a workplace safety program. It can be daunting for a small business owner to know where to begin. In this article, we will try to simplify the OH&S statutes and legal requirements in BC to help you understand how your business can comply with them. STATUTORY LAW In BC, there are two main statutes that address health and safety in the workplace: the Workers Compensation Act (WCA) and Occupational Health and Safety Regulation (OHSR). It is important to note that small businesses may also be subject to other industry-specific statutes both provincially and federally (such as the Transportation of Dangerous Goods Act or the Waste Management Act). Employers have an obligation to find out which industry-specific statutes apply to them and to comply with their requirements. In addition, every employer should also be aware of potential consequences for workplace safety violations under Canada’s Criminal Code. We understand that this may already seem overwhelming, but rest assured that for most small businesses in BC, complying with WCA and OSHR requirements will suffice. For that reason, we will focus our discussion on these two main legislative bodies. WORKERS COMPENSATION ACT (WCA) The Workers Compensation Act (WCA) is an employer-funded, no-fault insurance program that is administered by WorkSafeBC. Every employer in BC with one or more employee must register with WorkSafeBC and pay into the program. If you are a small business owner with no employees, you may register for optional coverage but are not required to do so. The purpose of the WCA is to compensate employees in the event of a work-related injury or illness. Rates for coverage will vary depending on the nature of the industry, the potential for injuries or illnesses, and the employer’s safety record (if applicable). Naturally, the more dangerous the work is, the higher your rates will be. The WCA also gives all workers three important rights:
An employer’s requirements for complying with these three workers’ rights are outlined in the Occupational Health and Safety Regulation (OHSR). The WCA and OHSR work together in tandem to promote workplace health and safety. OCCUPATIONAL HEALTH AND SAFETY REGULATION (OHSR)
The Occupational Health and Safety Regulation (OHSR) outlines an employer’s responsibilities when it comes to health and safety in the workplace. The focus is on prevention. The OHSR is based on a system of joint responsibility, also called the “internal responsibility system”. This system holds everyone in the workplace accountable for workplace health and safety – including owners, managers, supervisors and employees. However, do not mistake the shared responsibility system as an opportunity to allow workplace safety to fall on someone else’s shoulders! Establishing an effective OH&S program and enforcing it in the workplace is primarily the employer’s responsibility. Under the OHSR, every employer must establish a health and safety program for their workplace. The formality of this program will vary depending on how many employees the employer has and how inherently dangerous the work is. For small "low hazard" workplaces with up to 10 employees, informal monthly discussions regarding health and safety matters in the workplace may suffice. For workplaces that have 20 or more workers, a formal OH&S program must be established that includes a joint health and safety committee (JHSC). The JHSC is an advisory group of both workers and management representatives that meet regularly to discuss health and safety matters. If an employer has between 10-19 workers, a single worker can act as the health and safety representative, effectively taking the place of a JHSC. The process for establishing a JHSC and the responsibilities of the committee are outside the scope of this article however, the OHSR covers these topics in detail. Employer Responsibilities Under OHSR, an employer is responsible for preparing a written Workplace Safety Manual. This manual must comply with the WCA, OHSR and all other relevant industry-specific statutes. The employer must ensure that this manual is prominently displayed in the workplace and is readily available for employees to read. In addition to preparing a written safety manual, employers have many other responsibilities including:
This list is not exhaustive. We encourage every small business owner to familiarize themselves with the OHSR and to contact WorkSafeBC to clarify their workplace-specific obligations. Workplace Safety Manuals Although a complete list of the steps required to develop an effective OH&S program are outside the scope of this article, a good first step for employers is to develop a written Workplace Safety Manual. This manual will be workplace-specific (you cannot just copy and paste a policy you find on the internet into your policy). It must discuss the risks and hazards that are specific to your workplace and how you intend to control them. For offices with low hazard ratings, your workplace safety manual may simply be a section contained in your Company Policy Manual. For businesses with high hazard ratings, it may be an extensive stand-alone document that contains both safety policies and procedures. The workplace safety manual will be used as a reference guide to train employees and potentially as part of your legal defense in the event of a safety-related claim. Writing a workplace safety manual begins with a workplace hazards analysis. This analysis requires employers to identify all obvious and potential hazards in their workplace. The process can look very different for every workplace. For some small businesses, it may be as simple as walking through the workplace and conducting a visual inspection. For others, it may be quite complex and require testing, methodologies and outsourcing of professional help. WorkSafeBC assigns workplace hazard ratings that range from Low to High. The rating depends on how many risks and hazards are present in the workplace and how many employees there are, and is used to determine rates for WorkSafeBC coverage. You can determine your hazard rating here: HOW WE CAN HELP Workplace risks and hazards can vary dramatically from business to business, therefore workplace safety is a specialized body of knowledge. Safety manuals should be developed by people who understand your workplace and the risks involved. At Okanagan Small Business Services, our scope is limited to writing generalized workplace safety policies for small businesses with low hazard ratings. If your business has a Moderate to High hazard rating, we recommend contacting a professional OH&S firm that specializes in developing comprehensive workplace safety programs. References:
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Disclaimer: This article does not constitute legal advice. Information contained herein is intended to provide knowledge about Canadian employment laws to small business owners and to encourage small business owners, entrepreneurs and independent contractors to seek further education about the laws and statutes that govern their businesses. This article is the property of Okanagan Small Business Services, Inc. © 2019. All Rights Reserved. This document may not be reproduced, distributed or transmitted in any form without the prior written consent of the publisher (Okanagan Small Business Services, Inc.). INTRODUCTION Sometimes, despite an employer’s best efforts, an employee just doesn’t work out. Maybe it’s a personality clash, maybe they’re lazy, maybe they tried to date your daughter, or maybe you suspect they are stealing from you. Whatever the case may be, every employer eventually finds themselves in a situation where they are considering letting an employee go. Terminating an employee in British Columbia is not how it’s portrayed on TV. An employer cannot simply say “you’re fired” and carry on with their day. Employee terminations must be handled with thoughtful consideration and care to avoid the possibility of a wrongful dismissal claim. You may be wondering what wrongful dismissal is, and we’ll get to that in a minute. First, we are going to talk about how an employer can dismiss (a.k.a. “fire”) an employee in BC. There are three ways:
DISMISSAL WITH CAUSE Dismissal with cause is when an employer believes they have a good reason to fire an employee, so they do so without giving the employee any notice or pay in lieu of. An example of dismissal for cause would be catching your employee taking money out of the till and saying to them “You’re fired, get out of my shop immediately!” In this example, the employee has been fired on the spot (without notice) and not paid any severance (pay in lieu of notice). While this may seem like a perfectly reasonably response to catching an employee stealing, under Common Law, things are not so cut and dry. Canadian employment laws provide significant protection for employees – even in cases of employee misconduct (such as theft). In Canada, the only legal way an employer can fire an employee without notice (or pay in lieu of) is when they have just cause to do so. However, establishing just cause is not easy. The onus of proof is on the employer to establish that the employee breached the employment contract in a fundamental way and that a working relationship is no longer possible. FYI, this is very hard to establish. In cases of employee misconduct, the courts use a contextual approach to consider the nature and severity of the misconduct to determine if dismissal is a proportionate response given the circumstances. Many factors will be taken into account to make this determination, including the employee’s length of service, previous discipline record, and other relevant considerations. On that note, we will reiterate: establishing just cause is not easy. The courts favor “second chances” and “progressive discipline” over ending an employment relationship altogether. Now let’s discuss what can happen if you dismiss an employee “for cause” but the employee doesn’t believe you have “cause”. If this happens, the employee can bring a wrongful dismissal claim against you. Disputing a wrongful dismissal claim can cost a small business owner thousands of dollars in legal expenses, but more importantly, if the employee is successful in their claim (in other words, if the courts agree with the employee that you did not have “cause” to fire them), the employee may be awarded significant damages (money) that you will be required to pay them as compensation for your failure to provide reasonable notice or pay in lieu of. At this point you may be wondering what is reasonable notice or pay in lieu of?. We will discuss that next. DISMISSAL WITHOUT CAUSE In BC, an employer can fire an employee “without cause” (in other words, for any reason) as long as the employer gives the employee reasonable notice or pay in lieu of. Great, right? Not really... Unfortunately, “reasonable notice” or “pay in lieu of”, can be significant. There are two driving forces at play here: 1) the BC Employment Standards Act (ESA), and 2) Common Law. We’ll discuss an employer’s obligations under each of these forces. EMPLOYMENT STANDARDS ACT (ESA) OBLIGATIONS Under the ESA, employees are entitled to either a) working notice, b) compensation for length of service (CLOS), or c) a combination of these two options. The rule of thumb for how to calculate “working notice” or “CLOS” under the ESA is: an employee is entitled to 1 week of pay per year of service. For example:
The "1 week of pay per year of service" rule caps out at the 8-year mark. An employee with 8 or more years of service is entitled to a maximum of 8 weeks of pay. To a small business owner with an intolerable employee, this may sound pretty reasonable – a small price to pay for your peace of mind! But don’t do your happy dance just yet, because the ESA requirements are separate from, and in addition to, what is considered “reasonable notice” under common law. COMMON LAW OBLIGATIONS Reasonable notice under common law is substantially more generous than ESA requirements. Common law notice is not a payment for past work (as is the ESA’s “compensation for length of service”); it is damages for the employer breaching the employment contract. The general rule of thumb for calculating reasonable notice under common law is: an employee is entitled to 1 month of pay per year of service. For example:
The "1 month of pay per year of service" rule generally caps out at 24-months of pay, however, this “cap” is solely at the discretion of the courts. What this means for small business owners is this: if you have an employee who has worked for you for 2 years and you want to fire them “without cause”, they may be entitled to 2 weeks of pay under ESA in addition to 2 months (or more) of pay under common law. As you can see, firing an employee can become very expensive, very fast. IMPORTANT NOTE: We have a loophole for employers to negate their obligations under common law, which we will reveal at the end of this article. CONSTRUCTIVE DISMISSAL The third way an employer can dismiss an employee is constructive dismissal. Constructive dismissal is a backhanded way to dismiss an employee. The employer does not explicitly “fire” the employer, instead they either a) unilaterally change the terms of the employment contract (such as reducing the employees pay or changing their job duties), or b) create a work environment that is intolerable for the employee to work in. Constructive dismissal is shady and unprofessional – don’t do it! However, if harming your professional integrity isn’t enough of a deterrent, there is this: constructive dismissal can also bring a wrongful dismissal claim! KEY TAKEAWAYS: OK, so now that we have explained the three ways that an employer can fire an employee in BC, we will reveal the loophole that can help you avoid a wrongful dismissal claim in the event you need to dismiss an employee. Are you ready for it? Here it is… Policy Manuals & Employment Agreements. The power of a professionally drafted policy manual (or standalone policies) and a legally enforceable employment agreement can not be understated. These two power tools can effectively reduce or eliminate an employer’s obligation to give common law notice or pay in lieu of when dismissing an employee without cause. If you're interested in protecting yourself from wrongful dismissal claims, contact the friendly HR professionals at Okanagan Small Business Services today to discuss having policies and employment agreements drafted. We’ve got your back! Okanagan Small Business Service Inc. Phone: (778) 738-0338 Email: osbservices@outlook.com References:
Williams-Whitt, K., Begg, M., Harris, T. & Filsinger, K. (2017). Employment law for business and human resources professionals. Alberta and British Columbia. Toronto, ON: Emond Montgomery Publications Limited Disclaimer: This article does not constitute legal advice. Information contained herein is intended to provide knowledge about Canadian employment laws to small business owners and to encourage small business owners, entrepreneurs and independent contractors to seek further education about the laws and statutes that govern their businesses. This article is the property of Okanagan Small Business Services, Inc. © 2019. All Rights Reserved. This document may not be reproduced, distributed or transmitted in any form without the prior written consent of the publisher (Okanagan Small Business Services, Inc.). INTRODUCTION Canadian employment law is a complicated web of laws, statutes and regulations. It can be daunting for a small business owner to know where to begin when it comes to getting educated about employment laws and how to avoid legal issues. Canadian courts expect every employer – regardless of size, industry, or years of experience – to be aware of and comply with employment laws. In the event of a legal issue, the defense of "I didn't know" will not stand up in court. For this reason, it is important for every employer in BC to have a general understanding of the laws and statutes that govern them. In an effort to provide you with this general understanding in a 15-minute read, we will discuss the two main sources of employment law that apply to British Columbia employers: Statute Law & Common Law. STATUTE LAW
Statute law is law created by the government (both federal and provincial). “Statutes” are often called “legislation” or “acts”. Federal statutes only govern about 6% of employees in Canada because they only apply to federally regulated industries (in other words, industries of national importance – such as banking, railways and pipelines). The remaining 94% of Canadian employees are governed by provincial statutes. For small business owners in BC, there are 6 main provincial statutes to be familiar with:
We have provided links to each of these statutes on our website and we strongly encourage all our clients to familiarize themselves with them. However, in the interest of saving you time, here is a brief summary of what each of these statutes are about: BC Employment Standards Act (ESA): the ESA outlines the “minimums” for all employees in BC – including minimum wages, working age, working hours and overtime, statutory holidays, leaves, and terminations. If an employee believes their employer (or former employer) has violated any of the ESA requirements, they can bring a complaint to the Employment Standards Tribunal. BC Human Rights Code: this is the provincial version of the Canadian Human Rights Act. The BC Human Rights Code does not exclusively apply to the employer-employee relationship, it applies to everyone in BC. The objective of the Human Rights Code is to protect everyone in BC from discrimination based on twelve prohibited grounds - including race, religion, family status and sexual orientation. Section 11, 12 and 13 are of particular importance to small business owners, as these sections cover discrimination in employment ads, wages and the duty to accommodate. If an individual feels they have been discriminated against on one or more prohibited ground, they can bring a complaint to the BC Human Rights Tribunal. BC Labour Relations Code: the Labour Relations Code deals with unions and organized labour. Even if you are a small business owner of a non-unionized workplace, it is a good idea to familiarize yourself with the Labour Relations Code. This statute enables employees of any sized workplace (yes, even two employees) to join or form a union to collectively bargain with their employer. It also prohibits employers from interfering with this process. Please note that Okanagan Small Business Services does not provide HR services to unionized work environments. BC Occupational Health and Safety Regulation (OHSR): OHSR is not technically a “statute”, however it outlines the legal requirements for employers to comply with the Workers Compensation Act. The objective of OHSR is to protect workers from work-related risks, injuries and illnesses. OHSR becomes more important when an employer has a workforce of 20+ workers. BC Workers Compensation Act (WorkSafeBC): The Workers Compensation Act is an employer-funded, no-fault insurance program. It is designed to compensate employees in the event of a work-related accident, injury or illness. Every small business owner that employs one or more employees must register with WorkSafeBC and pay into the program. If you are a “solopreneur” without any employees, you can purchase optional coverage but are not required to do so. Lastly, BC Personal Information Protection Act (PIPA): PIPA governs the collection, use and disclosure of personal information in the private sector. This statute is relevant to small business owners when it comes to employee surveillance, computer monitoring, managing personnel files, providing references, collecting information from your customers, and more. COMMON LAW Common law is not as “cut and dry” as statute law. Common law is law made by judges. It is based on past decisions (also known as “precedents”) and is applied in situations when there is no statute in place to address a particular issue. Common law is continuously evolving. Two important branches of common law that BC employers should be familiar with are Contract Law and Tort Law. Contract Law: Contract law deals with employment contracts. Regardless of whether your employment contract is written or verbal, all employer-employee relationships are contractual and are governed by the common law. Over the years, judges have developed what are called “implied terms” which can be thought of as default rules for employment contracts. What this means for employers is that if you do not expressly state your own contractual terms of employment in a contract, your employer-employee relationship will be governed by the implied contractual terms of common law. This can be troublesome throughout the employment relationship for many reasons, but especially when it comes to terminations. For this reason, we strongly advise our clients protect themselves by having professionally drafted employment contracts with their employees. Tort Law: Tort law addresses wrongs and damages that one party causes another, and provides legal remedies (usually in the form of financial compensation) to resolve the issue. A “tort” can be either deliberate (intentional) or negligent (unintentional). In an employment context, an example of a deliberate tort would be providing a false statement about one of your ex-employees during a reference check. This situation may result in either the ex-employee or their new employer bringing a tort action against you. If successful, the courts may award the ex-employee or their new employer significant damages (a.k.a. money) that you would be required to pay them. CONCLUSIONS Although it is not possible for us to cover the infinite implications of common law on employment relationships in this article, there are two key takeaway points here:
Okanagan Small Business Services, Inc. Phone: (778) 738-0338 Email: osbservices@outlook.com References:
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authorDanielle Harshenin, BBA, leads the HR department at Okanagan Small Business Services. She is passionate about sharing her knowledge with small business owners. Archives
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Okanagan Small Business Services Inc. is a small group of professionals who are committed to helping local entrepreneurs grow their businesses. We provide a wide range of support services in the areas of Human Resources, Bookkeeping, and Marketing. Our mission is to provide affordable solutions to everyday problems faced by small business owners in the Okanagan and throughout BC.
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