Gowlings employment and labour law seminar, february 2014

WelcomeWelcome

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Legal Implications of Workplace Restructuring

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Laura L. Mensch, Partner

Legal Implications of Workplace Restructuring

• Economic necessity (downsizing)Economic necessity (downsizing)• Significant re-organization due to changes in businessin business • Smaller-scale changes to business ff ti l f laffecting only one or a few employees

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Legal and Other Implications

• Protect legal positionProtect legal position

F i t t t f l• Fair treatment of employees

• Manage business effectively in a changingeconomy or altered business environment y

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Employee Reorganization

• Workforce reductionsWorkforce reductions• Changes to employee roles and

compensationcompensation • Temporary layoff • Business transactions

- Acquiring or eliminating employeesq g g p y- Changes to compensation or benefit

plans

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plans

Workforce Reductions

• Group or mass terminations• Group or mass terminations• Specific statutory requirements• Common law or contractual requirementsCommon law or contractual requirements• Practical considerations

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Statutory Requirements

• Vary across provinces• Vary across provinces

• Minimum statutory notice still applies tothe individual termination but differencesacross provinces when group terminations

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Alberta

• Written notice to Minister of Labour of intention to terminate 50 or moreintention to terminate 50 or more employees within a four-week period(four weeks’ notice)(four weeks notice)

• Number of employees and effective dateIndividual statutory notice period not• Individual statutory notice period not affected

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Ontario

• Written notice to Minister of Labour when terminating 50or more employees within a six-month period

• Statutory notice period is increased when terminating 50or more employees within a four-week period

50 t 200 l 8 k- 50 to 200 employees – 8 weeks- 201 – 500 employees - 12 weeks

500+ employees 16 weeks- 500+ employees – 16 weeks • Statutory severance pay if employee has five or more

years of service and the severance occurs because of permanent discontinuance of all of part of the employer’s business at an “establishment” within a six month period

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British Columbia

• Written notice to Minister of Labour and to each affected employee when terminating 50 or more employees at a single location within a two-month period

- Number of employees, effective date and reasons for termination • Minister has option to establish an “adjustment committee”

- Employer and employee representatives- Purpose to eliminate need for termination or minimize impact of

termination • Statutory notice of group termination must be given

50 t 100 l 8 k- 50 to 100 employees – 8 weeks- 101 to 300 employees – 12 weeks- 300+ employees – 16 weeks

• In addition to and does not include individual statutory notice which stillIn addition to, and does not include, individual statutory notice, which still applies

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Common Law “Reasonable Notice” Requirements

• Still apply to each individual employee affectedby a group termination

• Bardal factors- Ageg- Length of service- Character of employment

A il bilit f i il l t- Availability of similar employment (experience, training, qualifications)N t h ti- Not exhaustive

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Common Law “Reasonable Notice” Requirements – cont.

• Economic circumstances of employer may be• Economic circumstances of employer may be considered when determining the notice period

- Bohemier v Storwal International IncBohemier v. Storwal International Inc. (ONCA, 1983)

- Heinz v. Cana Construction (1987, ABQB)Heinz v. Cana Construction (1987, ABQB)- Sarton v. Fluor Canada Ltd. (1986, ABCA)- Sifton v Wheaton Pontiac Buick GMC- Sifton v. Wheaton Pontiac Buick GMC (2010, BCSC)

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• Employer must lead evidence of economic p yhardship

- Novak v. Fintech Services Ltd. (2001, ABQB)( )- Pauloski v. Nascor Inc. (2002, ABQB)- Russell v. Stewart (Winnifred) Association( )for the Mentally Handicapped (1993, ABQB)

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• Economic conditions are only one factorEconomic conditions are only one factor• Could also be used to increase length of time for employee to find new employmentemployee to find new employment

- Wilks v. Moore Dry Kiln Company of Canada Limited (1981, BCSC) ( , )

- Ducharme v. Cambridge Stamping Inc. (2008,ONSC)

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Structuring Group Termination Packages

• Formulaic, despite individual Bardal factors, p• Employees discuss and look for internal fairness • Formula should incorporate Bardal factorsFormula should incorporate Bardal factors

- mid-range offers • Must still consider individual circumstancesMust still consider individual circumstances

• E.g. Disability or maternity/parental leave

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Manner of Compensation

• Working Notice• Working Notice• Severance

- Lump sum- Salary continuance

• Combination of working notice andseverancese e a ce

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Working Notice

• Effect on morale and productivity - absenteeism- “presenteeism”

• Security of employer information• Security of employer information • Potential increase of sick leave, disability, WCB claims • Employer policies still continue to applyEmployer policies still continue to apply

- but difficult to enforce?• Must give reasonable time off for employment search• Difficult to obtain a release

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Severance Payments – Elements of Compensation

• Put employee in position as if had been given working notice • Salary• Benefits• Benefits

• Note Ontario obligation to continue benefits through statutory notice period

B ?• Bonus?• Actively employed

- Stea v. Kulhawy (1996, ABCA)P l Whi l l C ti (2011 ONSC)- Poole v. Whirlpool Corporation (2011, ONSC)

• Non-discretionary and integral • - Daniels v. Canadian Tire (1991, ONSC) • Commission?• - Farmer v. Foxridge Homes (1994, ABCA)

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Severance Payments – Salary Continuance

• Employee may be actively at work or not working• Subject to mitigation payment

e g 50% of remainder of salary payments when obtains new- e.g. 50% of remainder of salary payments when obtains new employment

• Incentive to look for workP t ti l t d ti t l• Potential cost reduction to employer

• But may require notice at upper end of range (Albach v. VortekIndustries, 2000 BCSC)• Employer must monitor employee mitigation efforts and success• Option of discounted lump sum severance or salary continuance

- may reduce costs • Can obtain release if employee not actively working

- no payments until sign release

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Outplacement Services

• Beneficial to employee• Beneficial to employee

f f• Useful for employer to argue mitigation

• Offer without requirement for settlement and releasea d e ease

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Changing Terms of Employment

• Position and duties• Position and duties • Fixed compensation

(• Variable compensation (bonus, commission)

• Employee may argue constructivedismissal

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Constructive Dismissal

• Employer makes unilateral, substantial change to an essential term of employee contract

- Employer repudiates the contract • Employee does not agree to change

E l• Employer may argue:- Change is not substantial change to essential term

Employee agreed to change; or- Employee agreed to change; or - Employee condoned or acquiesced in the change

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Constructive Dismissal – cont.

• Test is objective• Would a reasonable person in the same situation as the

employee have felt that the essential terms of the employment contract were substantially changed?employment contract were substantially changed?

• Relevant time is when the change is made, not when it will affect the employee p y

- e.g. employee not obliged to wait around and see whether compensation will really be reduced by the changethe change

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Constructive Dismissal – cont.

• Corporate reorganization typically not a defence• But courts less likely to find constructive termination in context of more wide-sweeping change

• Doran v. Ontario Power Generation Inc. (2007, ONSC)• Kuz v. CIBC Trust Corp. (1998, ABQB)

• Corporation shows changes were designed to preserve overall employment and profitability, especially where change to employment not terribly significantchange to employment not terribly significant

• Meyers v. Chevron Canada Limited (2013, BCSC)• Still very specific to employee circumstances

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Changes to Compensation

• 15 - 20% or more is almost certainly a• 15 - 20% or more is almost certainly a constructive dismissal 5 to 10%?• 5 to 10%?

• Courts consider overall effect on compensation

- Doran 14 to 17%

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Variable Compensation

• Change to fixed or regular compensation likely a constructive dismissal

• Pathak v. Jannock Steel Fabricating Co. (1999, ABCA)- Elimination of a bonus was fundamental and was a

constructive dismissalconstructive dismissal • Prozak v. Bell Telephone of Canada (1984, ONCA) and

Conway v. George’s Farm Centre (1986, ABQB)- Switch from commission to (lower) fixed

compensation is a constructive dismissal

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Variable Compensation – cont.

• But, if the compensation is really intended to vary, and does vary, likely not a constructive dismissal - Chapman v. Bank of Nova Scotia (2008, ONCA)

• Employer entitled to change terms affecting variable• Employer entitled to change terms affecting variable compensation provided fundamental terms of contract are adhered to

- Haglund v. Clean Harbours Canada Inc. (2008, BCSC)• Modest changes to benefit programs will not amount of

constructive dismissalconstructive dismissal - Otto v. Hamilton and Olsen Surveys (1993, ABCA)

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Employee Condonation or Acquiescence

• Acceptance or remaining in employment for p g p ylonger than a “reasonable period”

• Wronko v. Western Inventory Services Ltd. y(2008, ONCA) suggests employee may remain under protest and still claim full damages

- unique facts - has not been followed in Alberta

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Employee Obligation to Mitigate with Same Employer

• Applies to actual termination and constructive termination

• Evans v. Teamsters Local Union No. 31 (2008, SCC) • Exceptions:

- Compensation substantially lowerCompensation substantially lower- Working conditions substantially different- Work demeaning

P l l ti hi i i- Personal relationships acrimonious- Hostile work environment

• Useful in context of corporate reorganization or p gtransaction

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Lay-Off

• Statutory concept• At common law, depriving a person of work and pay

constitutes constructive dismissal • To avoid constructive dismissal claim:

- Layoff notice must be extremely clear and specificLayoff notice must be extremely clear and specific requirements followed

- Vrana v. Procor (2004, ABCA)- Employment contract must contemplate employer

right to lay off - Turner v. Uniglobe Travel (2005, ABQB)g ( , Q )

• Useful tool in industries and work environments where layoff is part of the employment culture

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Employment Agreements

• Limit notice (subject to statutory compliance)( j y p )

• Contract out of constructive dismissalContract out of constructive dismissal- Magyrosi v. Berg Chilling Systems (ONSC, 2001))

• Contemplate layoff (if appropriate) p y ( pp p )

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Thank YouThank You

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Cross-Border Employment Law Issues: An Introduction

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Paul Edwards

Importance of this topic

• Why this topic is important:• Ever-increasing fluidity of workforcee c eas g u d y o o o ce• HR professionals may be expected to manage

employees in multiple jurisdictionsp y p j• Fundamental differences between some legal

regimes• Variations in specific laws and practices

between jurisdictions• Scope for confusion: complexity of “conflicts”

rules

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Some substantive legal issues affected

Some employment law issues that can be complicated by cross-border movementsp y

• Wrongful dismissal• Restrictive covenantsRestrictive covenants• Discrimination• Workers’ compensationWorkers compensation• Employment standards• Taxation• Taxation• Portability of pensions• Stock options

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• Stock options

An Illustrative Cross-Jurisdictional Wrongful Dismissal Case

Young v. Tyco (Ontario Court of Appeal, 2008))

• Employee transferred from Ontario to USA.• Worked in three states over 21 months.Worked in three states over 21 months.• Dismissed for cause by US affiliate.• Would the Ontario courts take jurisdiction?Would the Ontario courts take jurisdiction?• Why that issue had importance for the parties:

• Indiana laws (employment at will) v the laws• Indiana laws (employment at will) v. the laws of Ontario

• Location of parties/witnesses

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Location of parties/witnesses

Will a court take jurisdiction?

Jurisdiction: Will a court take jurisdiction over a case?over a case?• Contexts in which this question may arise:

• Plaintiff makes the initial selection of “forum”• Plaintiff makes the initial selection of forum .• Service outside the jurisdiction: defendant

applies to set aside serviceapplies to set aside service.• Or defendant applies for a “stay” of the action.• Later: Enforcement of “foreign” judgments• Later: Enforcement of foreign judgments

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Jurisdiction: A two-step analysis

• Accepting jurisdiction: Two basic questions• Accepting jurisdiction: Two basic questions1. Can the Court legitimately assume

jurisdiction?jurisdiction?2. If so, is it the most convenient forum to

decide the dispute?decide the dispute?

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Real and Substantial Connection

• Jurisdiction Proper (first issue)• Jurisdiction Proper (first issue)• The basic test is whether the case has a “real and substantial connection” with thereal and substantial connection with the forum.

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Young v. Tyco: Real and Substantial Connection

• Young v. Tyco • Facts re Ontario connection were in dispute:p

• Had pre-transfer employment contract with Ontario corporation been terminated?

• Had Young been assured that it had not?• Why did he take a temporary L-1A Visa?• Were the US assignments only temporary positions?• Were the US assignments only temporary positions?

• Court: Plaintiff’s version should be accepted as long as it has a reasonable basis on theas long as it has a reasonable basis on the record.• Held that the Ontario Courts had jurisdictionHeld that the Ontario Courts had jurisdiction.

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Real and Substantial Connection – cont’d

• In Club Resorts v Van Breda (S C C• In Club Resorts v. Van Breda (S.C.C., 2012), a new approach was introduced –that of looking for one or more “presumptivethat of looking for one or more presumptive connecting factors”.

The Supreme Court’s idea was to avoid• The Supreme Court s idea was to avoid “abstract concerns for order, efficiency or fairness”fairness .

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Real and Substantial Connection – cont’d

• Presumptive connecting factors that, prima facie, entitle a court to assume jurisdiction:

(a) defendant is domiciled or resident in the province;(b) defendant carries on business in the province;(c) tort was committed in the province; and(c) tort was committed in the province; and(d) a contract connected with the dispute was made in the

province.

• Other factors may be introduced in the future.• In theory, this approach may make the analysis y y ysimpler, but it does not seem well suited to employment disputes.

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Convenient forum

• Next question: Is there clearly another forum that is more appropriate to hear the action?• Factors used to assess the connections to each forum:1. Location where the contract was signed2. Applicable law of the contract3. Location of witnesses4 Location where the bulk of the evidence will come from4. Location where the bulk of the evidence will come from5. Location in which the factual matters took place6 Residence or place of business of the parties6. Residence or place of business of the parties7. Loss of a legitimate juridical advantage.

This list is not exhaustive.

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Tyco: Application of convenient forum test

Tyco case• Place of residence of harassment complainants pfound to be “probably neutral” as a factor.• Key were two “juridical advantages”:y j g1.Being able to litigate in a jurisdiction in which judges are used to awarding to damages equivalent to reasonable notice.2.“access to justice” (advantage to Young of home jurisdiction)

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Forum Selection Clauses

• The parties may simplify the issue by including a contractual choice of forum (attornment) clause in their contract.• These clauses are generally to be encouraged by the co rts as the create certaint and sec rit in transactioncourts as they create certainty and security in transaction, … order and fairness, which are critical components of private international law: Morguard Investments Ltd. v. De Savoye. (S.C.C., 1990).• The courts will approach the convenient forum issue from a different starting point which is that the parties shoulda different starting point, which is that the parties should normally be held to their bargain. Z.I. Pompey Industrie v. ECU-Line N.V. (S.C.C., 2003)

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Forum Selection Clauses – cont.

• Not all forum selection clauses are equally effective.effective.• Exclusive forum selection clauses may be relied upon to prevent employee frombe relied upon to prevent employee from suing in a different court.

Arbitration clauses are similar in nature• Arbitration clauses are similar in nature to forum selection clauses, and may also be worth consideringworth considering.

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Applicable Law

• Which jurisdiction’s laws should be applied is a different question from choice of forumis a different question from choice of forum (jurisdiction).• Parties may agree on “choice of law”• Parties may agree on choice of law . Contractual choice will normally be respected in common law jurisdictionsrespected in common law jurisdictions.• In civil law jurisdictions, choice of law cannot deprive employees of “mandatorycannot deprive employees of mandatory protections” of defined jurisdiction.

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Applicable Law – cont.

• Where no agreement on “choice of law”: courts will apply laws of the jurisdiction with the closest and most real connection.• What is the “closest and most real connection”?• Typically, the jurisdiction in which most services performed.

• E.g. Dallas Oilfield Contractors v. Petroneuk (Sask, 1980)• Plaintiff a resident of Saskatchewan.a t a es de t o Sas atc e a• Employer an Alberta corporation.• Work done in BC.• BC laws held to apply.BC laws held to apply.

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Applicable Law – cont.

• Not necessarily so where the employee is posted y p y poverseas for a short duration.

• E.g. Petroasia Energy Inc. v. Samek (Alberta g gy (Q.B., 2008)• Alberta company hired employee to set up an

office and obtain O & G concessions in Kazakhstan.

• Alberta law held to apply.

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Proving “foreign” laws

• How does a party expect a court to apply the laws of a different jurisdiction?• It must prove the laws through an expert witness (a lawyer from the other jurisdiction).• E.g. Buchanan v. Geotel (Ont., 2002)

• Stock option agreement provided it was governed by the laws of Delaware.Delaware.

• Both parties called Delaware lawyers as experts.• The experts gave conflicting opinions.

The judge preferred one of the experts and found that the law of• The judge preferred one of the experts, and found that the law of Delaware led to the same result as the law of Ontario would have.

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Proving “foreign” laws – cont’d

• “Foreign” laws may include the laws of another province.another province.• In practice, the courts will take notice of, and apply the statutory and case law ofand apply, the statutory and case law of another province.

H Q b l h t b• However, Quebec law may have to be proved.

A h ld i G C ti A i l d B• As held in Gagnon v. Cooperative Agricole du Bas St.-Laurent (1985, N.B.)

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Situations giving rise to cross-border issues

• Cross-border employment law issues arise in p ymany different kinds of situations – e.g.:

• Hiring from abroadf• Transfers between provinces

• Transfers in or out of Canada• Temporary assignments of foreign workers to Canada• Temporary assignments of Canadians overseas

• This makes any attempt to devise a checklist• This makes any attempt to devise a checklist dangerous and unsatisfactory.

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Some issues to be considered

• However, a few of the legal issues which will typically need to be addressed in cross-border situations include:

• Employment contract• Employment contract• Is the existing one to continue to apply?• If so, what amendments are required?

Diff t l ?• Different employer?

• Choice of law• Which jurisdiction?

• Forum selection• Which jurisdiction?• Make the selection exclusive?Make the selection exclusive?• Consider arbitration?

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Some issues to be considered – cont’d

• Policies and manuals• Are existing policies appropriate for employees being transferred

abroad?

• Employment standardsp y• Which jurisdiction’s laws will apply?

• Worker’s compensation• Is coverage available where the employee will be working?• Should employee consider separate insurance for workplace

injuries?

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Some issues to be considered – cont’d

• Tax• Does the employee assume the employer is responsible for tax

planning issues?

• Stock optionsp• Medical coverage• Social security benefits• Pension entitlements

• E.g. transferability of existing plans

Immigration issues• Immigration issues

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Immigration Update and EmployerImmigration Update and Employer Compliance – What You Don’t Know Can

Hurt You

February 6, 2014

Bill MacGregor

Introduction

• Focus of today is on compliance, and what employers need to know to avoid problems

Trends:• Trends:• Greater onus put on employers and their decision-

makers• Increased penalties and consequences for failure to

complyR f t d• Reasons for trends

• Failure to follow rules will detrimentally affect businesses that employ foreign workers, or move personnel across bordersp y g p

• e.g. Entry refusals; red flags on travelers; company reputation at border tarnished etc.

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Penalties and Consequences

Under IRPA:• S124 - violation if you employ a foreign worker without

proper authorizationproper authorization• Deemed knowledge of violation unless you can show due

diligence was used to determine whether TFW was authorized

• S126/127 – violation where anyone directly/indirectly misrepresents or omits to provide a material fact that “could p pinduce an error” applying IRPA

• Penalties include fines up to $100,000 and jail timeEmplo ers fo nd to be non compliant face 2 ear ban from• Employers found to be non-compliant face 2 year ban from being able to use TFWP

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Crossing Borders for Business Purposes

• Key Question – Does the activity require a work permit?• If not, may enter as a business visitor

C f• Common fallacies:• Short visit = no work permit needed• No direct pay in foreign country = no work permit neededNo direct pay in foreign country no work permit needed• Professional services contracts = no work permit needed

• What matters is the purpose of entry / activity• If a work permit is needed, then must identify a category that fits the person and the purpose of entry

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Crossing Borders: Common Issues / Pitfalls

• Regional sales territories across U S/C d b dU.S/Canada border• Managers with North American responsibilities

• “Do you have hiring/firing or disciplinary power” over l?personnel?

• Is there a degree of operational management being done?done?

• How is employee portrayed on the web?• Officers know how to use Google and Linked-in

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Officers know how to use Google and Linked in• Public announcements regarding position may suggest

FW is already working

Crossing Borders: Common Issues / Pitfalls

• What are personnel traveling with?• business card content• tools or equipment• computers / PDAs

• What are personnel traveling without?• Supporting documentation• Best practices – support letters for business travelers

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Crossing Borders: Pitfalls – Criminal Inadmissibility

Canada Entry:• DUI/DWI conviction of any sort = inadmissibley• U.S. pardons may not be recognized• Temporary Resident Permits = possible solution

U.S. Entry:• Crimes of Moral Turpitude / zero tolerance for any drug

conviction• Canadian pardons not recognized

O l l ti i U S i hi h t k th t• Only solution is a U.S. waiver, which takes months to obtain

Lessons: Must find out if there are62

Lessons: Must find out if there are convictions; consider employment contract terms regarding ability to travel if a bona fide

LMOs: New Rules as of July 31, 2013

• Labour Market Opinions (LMOs) - basis for many Canadian work permits

July 31 2013: new LMO rules introduced• July 31, 2013: new LMO rules introduced• Advertising requirements increased – content and

placementp• Outsourcing questions• Employer declarations in application form more

onerous• Consequences

• Timelines have increased• Timelines have increased• Incumbents • Public disclosure of salary / openingsy p g

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New Regulatory Regime as of January 1

• To “detect and deter employer non-li ”compliance”

• New IRPA Regulations introduced January 1, 2014• Significant changes to Regulations g g g

• Many more statutory requirements put on employers (both for LMO and LMO exempt work permit situations)

• Revisions to substantially the same test• Length of compliance period increased from 2 to 6

years (but not retroactive)years (but not retroactive)• Broad powers of inspection granted to CIC and Service

Canada officers 64

New Regulations – New Employer Conditions

For all TFW Situations (LMO based or LMO exempt):• Must comply with laws regulating employment and recruiting• Must provide each TFW with “same occupation”, and wages and working conditions which are “substantially the same – but not less g yfavourable than” the TFW’s offer of employment• Must make “reasonable efforts” to provide a workplace free from abuse• During the “period 6 years beginning on the first day of employment for which the work permit is issued”, must be able to show (1) any information provided to get LMO/WP was accurate AND (2) must retain p g ( )any document that relates to compliance.

• Failure to comply is only justified if employer “made all reasonable efforts” to comply

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New Regulations – New Employer Conditions / LMOs

For LMO based work permits, there are further conditions in addition to the ones onfurther conditions in addition to the ones on the last slide

M t b bl t d t t f t d• Must be able to demonstrate factors used to grant LMO have been met

• E.g. If employer says jobs will be created, need to demonstrate that

• Must maintain documents to show this for the 6 yearMust maintain documents to show this for the 6 year look back period

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New Regulations – Inspections

Very broad inspection powers granted:M ith t t t l• May occur without a warrant at any place

where TFW works or did work• May demand any documents or access to computer systems• Triggered randomly or where there is a concern (so complaint from employee may ( p p y ytrigger)• Can occur anytime up to 6 years from firstCan occur anytime up to 6 years from first date of employment of TFW

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LMOs: Employer Compliance Reviews

• ECRs have been increasing• Random selection or complaint driven• Random selection or complaint driven• Pre-2014 test and post-2014 test• Will review payroll records, time sheets, contracts etc. to verify• Information sharing with provincial authorities = possible further liability if breach occurs• Issue of changes to employment terms of TFWs• Issue of changes to employment terms of TFWs

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New Rules – Effect on LMO Applications

• Further changes as of January 1, 2014, in addition to new rules introduced on July 31addition to new rules introduced on July 31, 2013

N f f LMO li ti• New forms for LMO applications• Declaration section expanded

R i d t i ll t ili• Required to review wage annually to ensure prevailing wage being paid; must adjust it up if necessary

• Some additional supporting documents (proof ofSome additional supporting documents (proof of workers comp)

• Non-compliance risk has increased, p ,therefore must be very careful in preparing forms 69

Best Practices for Compliance

Clients need to adopt best practices and internal policies• Recruiting protocols to ensure consistency• Review of LMO application content and Work Permit Support letters• Document retention relating to TFWs and recruiting – will need to be maintained for 6 years from first date of employment of TFWof TFW• Changing employment terms – need protocol in place• Longer term strategies – e.g. moving TFWs to permanent status as soon as possible

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Future Immigration Developments

• Clarification of recent changes• Service Canada directives for LMOs? Revised TFW

Manual?

• Canada-EU Free Trade AgreementWill h bilit i i• Will have mobility provisions

• TFW Program to be further revised this year??year??

• Expect narrowing of some work permit categories• e.g. transferee category limitations on % of foreign

workers; increased minimum experience for specialist transferees?

• “Fast Track” LMOs re-introduced??

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• Further compliance obligations likely to be put on employers

Conclusion

• Companies engaging TFWs need to be aware of trend of increasing complianceaware of trend of increasing compliance requirements and negative consequences of non-compliancenon compliance• Companies and their managers may face exposure for non-complianceexposure for non-compliance• Companies must be able to demonstrate ongoing compliance whether TFWs areongoing compliance, whether TFWs are here under LMO or LMO exempt WPs

P i h i b d72

• Proactive approach to crossing borders, hiring foreign workers and implementing t i t l t d li i i

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Bill MacGregorTel: 519-575-7528 / 403-298-1979Email: [email protected]

73Montréal Ottawa Toronto Hamilton Waterloo Region Calgary Vancouver Beijing Moscow London

Privacy Breach Reporting: y p gResponding to Privacy

Breaches in Alberta

Birch Miller, CalgaryCMartha Monterrosa, Calgary

Overview

• 1) What constitutes a privacy breach?• 2) Key steps in responding to privacy• 2) Key steps in responding to privacy breaches• 3) Best practices for safeguarding against further privacy breaches

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Overview

• Alberta Privacy Framework• Private: Personal Information Protection Act• Private: Personal Information Protection Act

(“PIPA”)• Public: Freedom of Information and Privacy Act• Public: Freedom of Information and Privacy Act

(“FOIP”)• Federally regulated: Personal Information• Federally regulated: Personal Information

Protection and Electronic Documents Act (“PIPEDA”)( PIPEDA )

• Health records: Health Information Act (“HIA”)

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Alberta Privacy Framework

PIPA: Private Sector

• Addresses collection, use and disclosure of personal information and right to request access to personal informationright to request access to personal informationFOIP : Public Sector

• Regulates how public bodies conduct the collection, use and g p ,disclosure of personal information and right to access to access all information held by public bodies

PIPEDA: Federal UndertakingsPIPEDA: Federal Undertakings

• Addresses collection, use and disclosure of personal information and the right to access personal information

SHIA: Health Sector

• Addresses collection, use and disclosure practices of custodians and provides individuals with the right to access health records in p gcustody or under control of custodians

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Privacy Breach Notification

What is a privacy breach?• Privacy Breach occurs when there is:Privacy Breach occurs when there is:

• “a loss, unauthorized access to, or disclosure of personal information”

• Common privacy breaches happen when personal information of customers, patients, clients or employees is lost, stolen or mistakenly disclosed

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Privacy Breach Notification – PIPA

PIPA• First Canadian jurisdiction to require mandatory privacy breach

notification by private sector organizations

• Requirement: Private sector organizations are required to notifythe Privacy Commissioner if personal information under its controlthe Privacy Commissioner if personal information under its controlis without authorization accessed, lost or disclosed (s. 34.1)

• Offences / Penalties:

• Failure to notify Commissioner of a breach is an offence

• Organizations liable of a fine up to $100,000 under s. 59(2)(b)

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When must the Commissioner be notified?• An organization having personal information under its control must, without unreasonable delay, provide notice to the Commissioner of any incident involving the loss of or unauthorized access to or disclosure of the personal information where a reasonable person would consider that there exists a real risk of significant harm to an individual as a result ofthere exists a real risk of significant harm to an individual as a result of the loss or unauthorized access or disclosure

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When must the Commissioner be notified?• Threshold of notification: “real risk of significant harm”

• “Significant harm” means “a material harm”; it has non-trivial consequences or effects.

• “Real risk” means “a reasonable degree of likelihood that the harm• Real risk means a reasonable degree of likelihood that the harm could result”; must be more than “merely speculative” and not simply “hypothetical or theoretical”

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Assessing the Breach • OIPC provides a Mandatory Breach Reporting Tool (http://www.oipc.ab.ca/Content_Files/Files/Publications/Mandatory_Breach_Reporting_Tool_2012.pdf)

1. Has there been a breach involving “personal information”?

2. Does your organization have “control” of the personal information breached?

3. What is the sensitivity of the personal information breached?3. What is the sensitivity of the personal information breached?

4. Would a reasonable person consider that a real risk of significant harm exists to an individual as a result of the breach?

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Assessing the breach• If an organization determines that there is a real risk of significant

harm to an individual as a result of the breach – must report breach to the Commissioner

• If an organization’s internal assessment determines that there is gnot a real risk of significant harm to an individual, do not have to report

• Advised to retain a copy of the mandatory breach reporting tool whichAdvised to retain a copy of the mandatory breach reporting tool which allowed an organization to determine breach was not significant

83


What are the contents of notice to the Commissioner?

• breach report form: htt // i b /C t t Fil /Fil /P bli ti /B h R t F J lhttp://www.oipc.ab.ca/Content_Files/Files/Publications/Breach_Report_Form_July_2012.pdf

• description of circumstances of loss or unauthorized access or disclosuredisclosure

• date on which, or time period during which, loss or unauthorized access or disclosure occurred

• description of personal information involved in loss or unauthorized access or disclosure

t f i k f h t i di id l lt f l• assessment of risk of harm to individuals as a result of loss or unauthorized access or disclosure

• estimate of number of individuals to whom real risk of significant

84

harm as a result of loss or unauthorized access or disclosure


What are the contents of notice to the Commissioner? (cont.)

• description of steps organization has taken to reduce risk of harm to indi id alsto individuals

• description of any steps organization has taken to notify individuals of the loss or unauthorized access or disclosure

• name of and contact information for a person who can answer, on behalf of organization, Commissioner’s questions about the loss or unauthorized access or disclosureor unauthorized access or disclosure

85


What happens after notification?• When notified, Commissioner will review information provided and p

determine whether affected individuals need to be notified

• Organization can also proactively notify individuals

• Commissioner can direct organization to notify individuals directly and include description of loss, date occurred, description of personal information, steps organization has taken and contact information who can answer on behalf of organizationinformation who can answer on behalf of organization

• Purpose of notification to individuals is to allow individual to take steps to reduce risk of harm, or extent of the harm, where possible

86

PIPA Decisions – Breach Notifications

P2012-ND-34 (“Conoco Case”)

• On January 7, 2013, ConocoPhillips Canada (North) Limited orderedt tif i di id l di l f l i f tito notify individuals regarding loss of personal information

• Employee’s home broken into

• Employee’s workbag contained information on 11 students that had• Employee s workbag contained information on 11 students that hadapplied to ConocoPhillips

• Following items were stolen and not recovered:

• Resumes with contact information• Unofficial University transcripts• Recruiting questionnairesg q• Interview matrices

87


Conoco Case (cont.)

Findings:

Information stolen was classified as moderately sensitive (i.e., did t contain SIN numbers, credit card information)

However information could be used to cause significant harmHowever, information could be used to cause significant harm

Relevant factor was that documents were stolen and never covered

Real risk of significant harm to students in the form of identity theft, ud, embarrassment and humiliation

Ordered to notify individuals which ConocoPhillips had already doneOrdered to notify individuals, which ConocoPhillips had already done

..


P2013-ND-10 (“Sun Life Financial Case”)

March 26, 2013: Sun Life Financial ordered to notify individualsdi l f l i f tigarding loss of personal information

RRSP income statements were mailed to incorrect addresses for 11embers and not recovered

RRSP income statements contained the following information:

• NameAdd• Address

• Social Insurance Number• Group RRSP contract number• 2012 RRSP withdrawal amount and related income tax deduction


Sun Life Financial Case (cont.)

Findings:

Information classified as highly sensitive

Exposes individuals to risk of identity theft and fraud

Information was lost and not recovered

Due to these factors, Commissioner determined likelihood of gnificant harm, identity theft and fraud, will occur to the individualsgnificant harm, identity theft and fraud, will occur to the individuals

Ordered to notify individuals, which Sun Life Financial had already ne


2013-ND-18 (“Sculpz Case”)

May 9, 2013, Sculpz, Inc. (operating as Enchantress Hosiery of Canada) d d t tif i di id l f th i d t d di las ordered to notify individuals of unauthorized access to and disclosure

personal information

During a scheduled security review, Sculpz discovered its website had en hacked

Website server log showed unauthorized access for 5 days

154 Alberta customers affected

The following customer information was exposed:

• Name• Name• Address• Phone number• Email address• Credit card number and expiry date


Sculpz Case (cont.)

Findings:

Information exposed is highly sensitive

Includes credit card information that was not encrypted

Type of harm that could result is identity theft and/or fraud

Affected individuals can also be at risk of phishing (email addresses, dresses and phone numbers involved)dresses and phone numbers involved)

Incident involved criminal intent

Real risk of significant harm because hackers were specifically after stomer’s credit card information

Ordered to notify all affected individuals which Sculpz had already nene

Privacy Breach Notification – PIPEDA

Federal legislation – PIPEDA• Current framework for privacy breach notification in private sectorCurrent framework for privacy breach notification in private sector

outside of Alberta is PIPEDA

• Voluntary security breach notification

• Guidelines from Federal Privacy Commissioner


Federal legislation – PIPEDACurrently, under PIPEDA data breach requirements, subject to certainCurrently, under PIPEDA data breach requirements, subject to certainuntary guidelines

• Key Steps for Organizations in Responding to Privacy Breaches

htt // i /i f ti / id /2007/ l 070801 h kli t• http://www.priv.gc.ca/information/guide/2007/gl_070801_checklist_e.asp

The Commissioner also developed an associated checklist to assistganizations in ensuring they have dealt with all relevant considerations of the

heach


uidelines state four key steps to consider when sponding to a breach:

Breach containment and preliminary assessment

Evaluation of the risks associated with the breach

Notification

Prevention

Privacy Breach Notification – PIPEDAKey Steps to Consider When Responding to a Breach

Breach ontainment and eliminary

2. Evaluation of the Risks Associated with

3. Notification 4. Prevention

Key Steps to Consider When Responding to a Breach

eliminary ssessment

Associated with Breach

ke immediate What Personal In determining whether Investigate the breach mmon sense steps imit the data breach

termine who should made aware of the

Information was Involved?

What was the Cause and Extent of the

to notify should consider:

(1) Risk of harm to;

with view of developing a prevention plan depending on nature/type of breach (i.e. isolated ormade aware of the

ident internally and entially externally

ppears to involve ft/ i i l ti it

and Extent of the Breach?

What individuals were affected by the breach?

(2) When/How/Who Should Notify; and

(3) Content of N tifi ti

(i.e. isolated or systemic)

ft/criminal activity ify the police What is the foreseeable

harm that could result from the breach?

Notification


Penalties & EnforcementNo penalty under PIPEDA for actual failure to follow guidelinesp y g

However, Federal Privacy Commissioner has power to investigate derlying breach

S 14 ll l i t ft i i C i i ’ t t lS.14 allows a complainant, after receiving Commissioner’s report, to apply Federal Court for a hearing of complaint

Available remedies include order to correct practices, publish notice of ti t k / d t t ti d dtion taken/proposed to correct practice and damages


Damages Under PIPEDAUntil the recent case of Nammo v. TransUnion of Canada Inc., 2010 FCUntil the recent case of Nammo v. TransUnion of Canada Inc., 2010 FC84., there was no precedent for an award of damages under PIPEDA

Court awarded damages of $5,000 to complainant

Principles to consider when awarding damages: compensation, vindication,d deterrence

Court stated:b th th ti f h th d h ld b…both the question of whether damages should be

awarded and the question of the quantum of damagesshould be answered with regard to whether awardingdamages would further the general objects of PIPEDA

d h ld th l it b di F thand uphold the values it embodies. Furthermore,deterring future breaches and the seriousness oregregiousness of the breach would be factors toconsider


Federal government proposals to amend PIPEDA to include mandatory each notification

Bill C-29 (May 2010) died on tableBill C 29 (May 2010) died on table

Bill C-12 (September 2011) did not move forward

Bill C-475: An Act to amend the Personal Information Protection and ectronic Documents Act

• mandatory breach reporting to the Commissioner• power to make compliance orders • first reading February 26, 2013

Privacy Breach Notification – FOIP

OIPReporting a breach under FOIP is voluntary

OIPC encourages voluntary privacy breach reporting

Public bodies regulated by FOIP can report a privacy breach to OIPC f ( ) ( ) ( )the following ways: (i) verbally, (ii) by letter, or (iii) by the Breach

Report Form ttp://www.oipc.ab.ca/Content_Files/Files/Publications/Breach_Report_Form_2010.pdf)

Privacy Breach Notification – FOIP

FOIP• Government of Alberta is performing FOIP Act Review in 2013Government of Alberta is performing FOIP Act Review in 2013

• OIPC’s recommendation is to require public bodies to reportprivacy incidents meeting certain criteria and giving OIPC thepower to require public bodies to notify affected individualspower to require public bodies to notify affected individuals.

• Advocating for mandatory breach reporting similar to PIPA

• These measures have not been adopted by the Alberta legislatureThese measures have not been adopted by the Alberta legislatureto date

Privacy Breach Notification – HIA

HIAReporting a breach under HIA is not mandatoryp g y

OIPC encourages voluntary privacy breach reporting

Public bodies regulated by HIA can report a privacy breach to OIPC the i (i) b ll (ii) b l tt (iii) b th B h R t Fowing ways: (i) verbally, (ii) by letter, or (iii) by the Breach Report Form

tp://www.oipc.ab.ca/Content_Files/Files/Publications/Breach_Report_Form_10.pdf)

Privacy Breach Notification – HIA

On January 23, 2014, OIPC Commissioner launched investigation into edicentres privacy breach incident

• laptop containing name date of birth provincial health card numberslaptop containing name, date of birth, provincial health card numbers, billing codes and diagnostic codes stolen September 2013

• affects 620,000 Albertans • laptop belonged to IT consultantlaptop belonged to IT consultant • Health Minister requested Commissioner to investigate breach in January

22, 2014

Investigation to include broad review of privacy breach reporting in theInvestigation to include broad review of privacy breach reporting in the alth sector

OIPC Commissioner advocating for introduction of mandatory breach porting for HIAporting for HIA

Recommendations

developing a set of policies and accompanying procedures, organizationsould take the following steps into account:

develop comprehensive security program to protect confidentiality integrity anddevelop comprehensive security program to protect confidentiality, integrity and availability of information, not just personal information

develop data classification standards that identify personal information

d t i k t f l i f ti t it t lconduct risk assessment of personal information to ensure proper security controls (i.e. Authentication, encryption) are in place to protect these information assets

develop policy for handling security breaches and ensure that it is updated periodically to reflect modern technologies and circumstancesto reflect modern technologies and circumstances

incorporate into the policy a step that requires a report to the Privacy Commissioner ofy serious data breach

ensure third party service contracts expressly require third party to immediately informensure third party service contracts expressly require third party to immediately informorganization of any possible or suspected breach

Ensure employees of the corporation are aware of, and in compliance with,anization’s policies and practices relating to third party personal informationp p g p y p

MENTAL ILLNESS IN THE WORKPLACE

goinnovation

beyondresults

bordersvaluevalue

y: David J. Corry, Q.C.F b 6 2014

MENTAL ILLNESS –IMPACT ON THE WORKPLACE

Mental health problems and illness account for 30% of thedisability claims in Canada.In some sectors it rises to 50% of disability claimsIn some sectors it rises to 50% of disability claims.Organizations with the most effective health and productivityprograms have:• Greater revenue per employee (18% more)• Lower medical claims & costs• Fewer absent days per employee; andy p p y ;• Greater shareholder returns (40% higher)

wers Watson, 2012-12 Staying@Work Report online:wers Watson, 2012 12 Staying@Work Report online: ww.towerswatson.com/assets/pdf/6031/towers-watson-staying-at-work-port.pdf#>

OUTLINE

. Overview of legal issuesHuman Rights and Duty to Accommodate. Human Rights and Duty to Accommodate

. Wrongful DismissalC. WCB

. Occupational Health & Safety

HUMAN RIGHTS

Employers prohibited from discrimination because of mental disabilitybecause of mental disabilityEmployers must accomodate mentally ill employees unless it amounts to undueemployees unless it amounts to undue hardship

UNION CASES (COLLECTIVE AGREEMENT)

Saint John Shipbuilding (1993), 26 L.A.C. (4th) 361 (N.B. – MacLean)• Employee dismissed after threat to supervisor with a

gunG i h d l d ti l bl• Grievor had personal and emotional problems resulting in panic attacks

• Threat to supervisor connected to employee’s ea o supe so co ec ed o e p oyee smental illness

• Conditional reinstatement ordered


Calgary Co-operative Assn. and Calco Club (1992), 24 L.A.C. (4th) 308 (Alta. - McFetridge)• Employee dismissed following inappropriate

treatment of customersC ti b t l ’ b h i d• Connection between employee’s behaviour and frontal lobe brain damage

• Not known until after terminationo o u a e e a o• Employee reinstated with back pay


Sealy Canada Ltd. And U.S.W.A, Loc. 5885 (2006), 147 L.A.C. (4th) 68 (Alta. – P.A. Smith)• Assault on co-worker and plant manager• Previously undiagnosed bi-polar disorder • Conduct non-culpable; not deliberate nor intentional• Discharge not meeting just cause standard• Employer aware of disorder after termination but• Employer aware of disorder after termination, but

failed to accommodate grievor• Positive prognosis for managing disability –p g g g y

reinstated


York Region Bd. of Education (1999), 84 L.A.C. (4th) 90 (Ont. - Shime)• Teacher with bi-polar disorder stopped taking lithium

against Psychiatrist adviceI i t b h i t d t d t t h• Inappropriate behaviour toward students, teachers, parents and supervisors

• Cause for discipline. Author of own misfortune for Cause o d sc p e u o o o s o u e ogoing off lithium

• However, no cause for discharge• As teacher’s behaviour irreparably undermined

employment – awarded 6 months damages in lieu of reinstatementreinstatement

NON-UNION CASES (HUMAN RIGHTS ACT)

Warren v. West Canadian Industries Group Ltd.2007 AHRC 3• Short service employee (1 year)• Employee diagnosed with chronic depression, PTSD (post

traumatic stress disorder))• Borderline personality disorder and agoraphobia• Interactions with some employee’s resulted in stress & anger• Behavioural issues and absences should have triggered a• Behavioural issues and absences should have triggered a

follow-up with employee/doctor re: mental illnesses• Employer has a duty to inquire


• Panel stated at paragraph 193:

Mental illness is one of the least understood and leastMental illness is one of the least understood and leastaccepted of all illnesses. It creates fear andstereotypical responses in people. Yet who are thementally ill? Potentially they can be people who suffermentally ill? Potentially they can be people who sufferfrom varying degrees of illness, from short termsituations that temporarily incapacitate an individual tolong term illnesses that require continuous support andg q ppattention. Psychiatric disabilities have many possiblecauses, sometimes physical, sometimes psychologicaland sometimes social. For a great many people, suchillnesses are shameful and embarrassing and as aresult they are very reticent to stand up for their rightsor to protest when injustice has been done to them.


Lane v. ADGA Group Consultants Ltd. 2007HRTO 34• Employed 8 days.• Bi-polar disorder reported to supervisor and employee warned

his supervisor that his behaviour in the workplace should bep pmonitored.

• Mental illness not disclosed prior to hiring.• Dismissed due to inability to do the jobDismissed due to inability to do the job.• Hospitalized for 10 days after dismissal. (Manic state

triggered by 2 CF-18 fighters flying over the house.)• Employee discriminated against damages of $80 000• Employee discriminated against – damages of $80,000

awarded.

WRONGFUL DISMISSAL

Yeager v. RJ Hastings, [1985] 1 WWR 218(BCSC)• 30 year employee, 2 I/C, shareholder.• 1980 – misdiagnosis – incurable organic brain disorder.• Last 3 years of employment – progressively worse –Last 3 years of employment progressively worse

occupationally disabled – abandoned employment.• Court held that 2 year period of disability did not frustrate

contract of employmentcontract of employment.• Awarded damages for wrongful dismissal based on 18 months

notice.

SUMMARY

dealing with employees who are potentiallyentally ill:

• Behaviour may trigger duty to inquire with employee/doctor(s)as to whether employee has mental illness.

• If disruptive in workplace – put employee on STD or paid LOAp p p p y puntil you have necessary information.

• Gather evidence to determine:• Any underlying mental disabilityAny underlying mental disability• What accommodation is necessary• Benefits entitlement• Appropriate course of actionAppropriate course of action• Legal obligations, risks, recommendations

• Retain disability management/medical expertise as required.

WORKERS COMPENSATION (WCB)

If mental illness arises from the workplace – may be acompensable claim under WCB.Alberta WCB Policies – Policy: 03-01 Part II Psychiatricor Psychological Injury.

e: www.wcb.ab.ca

If possible claim – file Notice of Claim and encourageemployee to file claimemployee to file claim.Lawsuits against employer are subject to statutory barpursuant to s. 23 of Workers Compensation Act.

OCCUPATIONAL HEALTH & SAFETY

Employers, contractors and workers jointly obligated toensure a safe workplace.Specifically, employers, contractors and workers mustprevent violence and psychological injury to workers.

Occupational Health and Safety Act, s. 2p yPart 27 of Alberta Occupational Health & Safety Code

e: Workplace Health and Safety Bulletin: Preventing Violence andrassment at the Workplace

Employers obligated to develop and implement plan tominimize violence in the workplaceminimize violence in the workplace.Most cases of workplace violence involve a mentally illemployee.


hen dealing with mentally ill employee:Dismissal is a last resort and usually makes mattersworse.

• Increases legal risk and exposure.• Lose touch with employee and may trigger greaterLose touch with employee and may trigger greater

symptoms/behaviours associated with mental illness (eg.violence, depression, suicide).P t ff ti di bilit t d• Prevents effective disability management andaccommodation of employee.

• Prevents employee access to disability and otheremployment benefits (when they need them most).


est course of action:If necessary, place employee on paid LOA pendingi ti ti f ll f tinvestigation of all necessary facts.Retain disability manager or medical expertise as required.Have employee sign medical consent to release informationp y gto management who “need to know”. (Comply with PersonalInformation Protection Act and Health Information Act, asapplicable).applicable).Once all relevant information obtained, including medicalinformation determine:

Wh th d t t d t d if ti il bl• Whether duty to accommodate, and if so, options available• Discuss and enter into written accommodation agreement with

employee


With consent of employee, advise other employees who“need to know” and ensure that they participate inaccommodationaccommodation.Follow-up regularly to ensure accommodation is working forall parties.Before employee returns to work – ensure an adequatefitness to work assessment is done and released tomanagement on a “need to know” basis.Assist employee in applying for employment benefits (whereappropriate).Seek and follow legal advice to minimize legal risk andSeek and follow legal advice to minimize legal risk andliability


If continued employment not viable, then “without prejudice”package should be offered in exchange for general release.Take pro active steps to promote psychological health andTake pro-active steps to promote psychological health andsafety in the workplace. It deserves the same priority asphysical health and safety.

ontact Informationontact Information avid J. Corry, Q.C.el: 403-298-1812mail da id corr @go lings commail: [email protected]

Thank you for attending.y g

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