Employment and LabourBreakfast for the Mind

November 6, 2014

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Reform to the Temporary Foreign Workers program: What rules do employers now need to follow to obtain a Labour Market Impact Assessment

Colleen VervillePartner

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LMIA and increased fees

• Labour Market Opinion (LMO) is now known as Labour Market Impact Assessment (LMIA)

• Applications have been updated to reflect new requirements announced on June 20th, 2014. Ensure you are using the current application form.

• The new name for non LMIA work permits is the International Mobility Program (IMP)

• IMP deals with work permit categories such as NAFTA Professionals, Intra-company Transferees and the International Experience Canada Program

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LMIA and increased fees (cont’d)

• LMIA processing fee has increased from $275 to $1000, for every temporary foreign worker position requested by an employer

• Additionally, Employment and Social Development Canada is seeking to impose a $100 privilege fee on employers

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High-wage/low-wage occupations

• TFWP is now administered based on the concept of “High Wage” vs “Low Wage” occupations instead of National Occupational Classification (NOC)

• High-Wage vs Low-Wage calculation is based on the Provincial Median wage, as determined through the annual Labour Force Survey conducted by Statistics Canada

• If the Job Bank prevailing wage is below the Provincial Median wage, then considered low-wage. If prevailing wage meetsor is above Provincial Median wage, then considered high-wage

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High-wage/low-wage occupations (cont’d)

• To determine Job Bank prevailing wage, visit: http://www.jobbank.gc.ca/home-eng.do?lang=eng

• Provincial Median wages can be found here, http://www.esdc.gc.ca/eng/jobs/foreignworkers/reform/tables.shtml

• The Median wage for the province of Alberta is currently $24.23

• If a position meets or is above $24.23 it is a “high wage” and if it is below, it is a “low wage”

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Low-wage cap

• Employers now have a cap on the percentage of their workforce that are “low wage” temporary foreign workers, at each specific work location

• There is a transition period for employers who have received a positive opinion for low-wage positions in the previous three years, the cap will be the lesser of: • 30% (as of June 20th, 2014)

• 20% (as of July 1, 2015)

• 10% (as of July 1, 2016)

• New employers (no positive opinion for low wage position within the previous three years), the cap is automatically set at 10% per site

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Low-wage cap exceptions

• Exceptions

1) Employers with a business size of less than 10 employees nationally, including vacant positions

2) Truly Temporary (i.e. time-limited positions that will no longer exist once the TFW leaves i.e. emergency personnel or warranty work repair technicians or mechanics)

• Employers must detail on their LMIA application how they meet one of the above exceptions

• Work permit durations for “low wage” LMIAs will be limited to a maximum of 12 months (instead of 2 years), but you may re-apply every year

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Low-wage – areas of high unemployment

• ESDC will refuse to process LMIA applications for positions located in areas where the unemployment is 6% or higher

• ESDC will currently also refuse to process LMIA applications of for the Accommodation, Retail Trade and Food Service sectors at the NOC D skill level

• Occupations could include: food counter attendants, kitchen helpers, cashiers, light duty cleaners, etc.

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High-wage occupations – transition plans

• Employers of high wage TFWs must have a plan in place to transition to a Canadian workforce. This is in addition to existing recruiting and advertising requirements.

• Employers must agree to undertake certain activities that should result in the increased hiring of Canadians and/or Permanent Residents and therefore a decreased reliance on the TFWP

• Exceptions to transition plan requirements are: • Truly Temporary (i.e. time-limited positions between 120 days to a maximum of

2 years duration, that will no longer exist once the TFW leaves i.e. non-recurring project based positions)

• Limited Duration: (i.e. time-limited to less than 120 days or less i.e. emergency personnel or warranty work positions)

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High-wage occupations – transition plans (cont’d)

• Employers must detail on the LMIA application how they meet one of the exceptions. ESDC will then consider each application on a case by case basis.

• If employer is not exempted from the Transition Plan, must commit to conducting specific activities:

1) At least 3 distinct activities to recruit, retain and/or train Canadians or Permanent Residents in the occupation specific on the LMIA application; and,

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High-wage occupations – transition plans (cont’d)

2) One additional distinct activity to engage an organization serving underrepresented groups to identify potential candidates for recruitment or training (i.e.. Aboriginals, Youth, immigrants settlement offices or, unemployment centers etc.); or,

3) Employers may also choose to do the following: One activity which facilitates the permanent residency of a temporary foreign worker (i.e. making a permanent job offer or offering language training to the foreign worker to support the individuals permanent resident visa application. However, if the employer chooses to only support the permanent residency or a TFW and does not proceed with it, they will be in breach of the transition plan and non-compliant if inspected.

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10 Business Day Speed of Service

• An LMIA application can qualify based on meeting one of the following criteria: • Highest Paid – Job Bank prevailing wage falls within the top 10% of wages

earned by Canadians or Permanent Residents in a given Province or Territory

• In Alberta the wage is currently set at $48.04

• Short Duration – any occupation equal to or less than 120 calendar days of work and the wage being paid is at or above the Provincial Median wage

• Highest Demand Occupations – Limited to certain skilled trades where the prevailing wage for the occupation is at or above the Provincial Median wage (i.e. iron workers, welders, pipefitters, crane operators, etc.)

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Here today, gone tomorrow: Are unpaid internships legal in Canada?

Alison WalshAssociate

Here today, gone tomorrow: Are unpaid internships legal in Canada?

Huffington Post_________________________________________

May 20, 2014

Unpaid Interns in Canada May Number as Many As 300,000: Report

Toronto Star_________________________________________

March 28, 2014

Unpaid interns are this generation’s slaves: Mallick

Toronto Star_________________________________________

July 22, 2013

Training or work? Unpaid interns want companies to pay up

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Why should employers be concerned?

1. Negative publicity

2. Employment standards ministry crackdowns

3. Political attention

4. Breaking the law

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Negative publicity

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Negative publicity

Jainna Patel v. Bell Mobility:

• Patel worked as an intern in Bell’s Professional Management Program (“PMP”)

• PMP:• Voluntary training program for post-secondary students, recent graduates and those in

career transitions

• Hired 300 interns

• Promoted as an opportunity to learn in a corporate environment with advanced technology and support from management

• In 2012 – Patel filed a federal labour complaints under the Canada Labour Code against Bell Mobility for unpaid wages alleging that Bell broke labour laws by not paying her wages

• The matter is expected to go before independent adjudicator in fall 2014

• In April 2014 Bell cancelled PMP

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Negative publicity

Eric Glatt et al. v. Fox Searchlight Pictures:

• Unpaid interns working on the production of Black Swan sued Fox Searchlight Pictures for unpaid wages

• Tasks performed by the unpaid interns included:

• Picking up pay cheques;

• Tracking and reconciling purchase orders and invoices;

• Drafting cover letters;

• Organizing filing cabinets;

• Assembling office furniture;

• Taking lunch orders;

• Answering phones;

• Making photocopies; and,

• Running errands.

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Negative publicity

Federal Court judge in New York followed a 6-part test outlined by the Labour Department for determining whether an internship can be unpaid:

1. Is training similar to what would be given in an educational environment – would an employee would receive more than on-the-job training;

2. The internship must be for the benefit of the intern;

3. The intern does not displace regular employees but works under close supervision of existing staff;

4. The employer derives no immediate advantage from the activities of the intern and on occasion operations may actually be impeded;

5. The intern is not necessarily entitled to a job at the conclusion of the internship; and,

6. The employer and the intern understand that the intern is not entitled to wages for the time spent in the internship.

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Negative publicity

• Federal judge concluded:

• Benefits received by the interns such as resume listing, job references and how a production company worked were incidental to working in the office like other employees

• Fox Searchlight received the benefits of the interns’ unpaid work, which otherwise would have had to be performed by paid employees

• Performed routine takes that would otherwise been performed by regular, paid employees

• There was no evidence that the interns were entitled to jobs at the end of the internship

• Interns understood they would not be paid; however, were never given a chance to waive their entitlement to wages

• Conclusion: interns were “employees” and should have been paid

• Fox Searchlight was granted the right to appeal on November 26, 2013

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Employment standards ministry crackdowns

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Employment standards ministry crackdowns

Ontario Ministry of Labour inspection blitz:

• December 2013 - ministry inspected two magazines, Toronto Life and The Walrus

• Issued compliance orders for unpaid wages, holiday pay and vacation pay for interns

• Unpaid internship programs were shutdown

• Spring 2014 - ministry inspected 56 business in GTA:

• Targeted advertising, public relations, computer design and consulting business

• 31 business had interns; 13 were breaking the Employment Standards Act

• Issued 37 compliance orders

• Common violations: not paying minimum wage, not providing vacation or public-holiday pay and not keeping proper records of interns hours and remuneration

• Demanded the businesses pay $48,543 in back pay

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Political attention

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Political attention

House of Commons:

• NDP MP Andrew Cash – tabled a private member’s bill in June 2014 to create the Intern Protection Act

• Liberal MP Scott Brison – reported to have taken on the cause to raise awareness of unpaid internships and called on the federal government to legislate changes to protect interns

• Federal Liberal Leader, Justin Trudeau – reported to describe unpaid internship as “worrisome”

Public Interest Groups - Canadian Intern Association:

• “advocates against the exploitation of interns”

• Website includes a “Wall of Shame”

• October 29, 2014 - President, Claire Seaborn, was a witness before the House of Commons Standing Committee on Finance focused on maximizing jobs for Canadians

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The law

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Unpaid intern vs. employee

• Unpaid internship:

•Usually an opportunity to gain experience in an industry

•Most interns are students and recent graduates

• Work free in exchange for valuable experience and connections

• Common law definition of “employee”:

• Person who receives or is entitled to receive wages in exchange for work

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Legislation across Canada

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Alberta

Employment Standards Code:

• “Employee” means an individual employed to do work who received or is entitled to wages

• Regulations exempt the requirement to pay minimum wage for a student engaged:

(i) in a formal course of training approved by the Director,

(ii) in an off-campus education program provided under the School Act, or

(iii) in a work experience program approved by the Minister of Enterprise and Advanced Education or the Minister of Human Services.

• Student interns engaged in exempted programs are not required to be paid

• No interpretation bulletins or decisions regarding internship in Alberta

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British Columbia

Employment Standards Act:

• ““Employee” includes: • A person an employer allows, directly or indirectly, to perform work normally

performed by an employee

• A person being trained by an employer for the employer's business

• B.C. Employment Standards Interpretation Manual:• Distinguishes between a “practicum” and “internship”

• “Practicum” means hands-on training for students required by the curriculum of a public or private post-secondary institution which results in a degree or diploma

• “Internship” means on-the-job training to provide a person with practical experience, often offered for new graduates

• Practicum is not considered “work”, but apprenticeship training or an internship is

• If a intern falls within the definition of “employee” and performs services for an employer, the intern must receive at least minimum wage

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OntarioEmployment Standards Act, 2000:

• “Employee” includes:

• A person who receives training from a person who is an employer

• An individual receiving training from a person who is an employer is an employee...if the skill in which the individual is being trained is a skill used by the person’s employees, unless the following conditions are met:

1. The training is similar to that which is given in a vocational school

2. The training is for the benefit of the individual

3. The person providing the training derives little, if any, benefit from the activity of the individual while he or she is being trained

4. The individual does not displace employees of the person providing training

5. The individual is not accorded a right to become an employee of the person providing the training

6. The individual is advised that he or she will receive no remuneration for the time that he or she spends in training

• Ontario Ministry of Labour Guideline: “generally, if you perform work for another person...and you are not in business for yourself, you would be considered an employee.”

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Ontario

Harpreet Brar v. Computer Window, 2013:

• Brar was a software engineer and wished to work as a computer technician

• Hired as a co-op student and knew he would not be paid; installed software, answered telephones and was instructed on how to build personal computers

• Analysis:

• Received some training as a computer technician; no evidence that training was comparable to a vocational school

• Brar understood he would not be paid – neutral; not determinative

• Company received benefit of Brar’s skills and charged their customers for his expertise

• Conclusion: Brar was an employee and entitled to unpaid wages

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Ontario

Hsieh and Sip v. Girex Bancorp Inc., 2014:

• Girex was an e-commerce business; lacked financial resources to hire employees.

• Girex offered “training” opportunities to students from the Institute of Computer Studies

• Complainants claimed unpaid wages and vacation paid

Analysis:

• No evidence that “training” including any formal instruction, supervision or evaluation

• Primary benefit reaped by the Company, which needed its software program to be viable; Letter of reference was of dubious value

• Claimants were brought in to perform work initially done by paid employees that had been laid off when the Company ran out of money

• No right to become employees

• Claimants advised they would not receive remuneration for 3 months

• Only 2/6 pre-requisites were met; Claimants were employees under the Act

• Hsieh - $10,000; Sip - $7,681.60

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Summary

• Generally, unpaid internships will be illegal unless the person is a “student”

• In Alberta:• Employment Standards Code – interns part of a school program can be unpaid but

otherwise interns must be paid

• Other protections under the Code such of hours of work, rest periods apply to interns

• Worker’s Compensation Act and Occupational Health and Safety Act also apply to interns

• Just because an intern agrees not to be paid does not mean that the employer is complying with employment standards

• Written clauses or oral agreements that contravene employment standards are null and void

• If an intern is not specifically exempt by employment standards, they should be paid at least minimum wage

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Here today, gone tomorrow: Are unpaid internships legal in Canada?

CBC, November 5, 2014:

• Headline:• “Stephen Poloz comments on unpaid work raise ire of youth groups: Bank of

Canada governor draws fire for suggesting students should work for free to get experience”

• Full story: http://www.cbc.ca/news/business/stephen-poloz-comments-on-unpaid-work-raise-ire-of-youth-groups-1.2824388

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High risk terminations: Strategies for employers

Joe HunderPartner

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Identifying additional risks

You have been instructed to proceed with the termination of employee X. The termination is not for cause. You begin by asking yourself:

• Is there an enforceable written offer letter or employment contract with a termination clause that crystalizes the employer’s notice obligation?

• If there is nothing that crystalizes the employer’s notice obligation, what is the employer’s liability at common law in respect of notice or pay in lieu of notice?

Before proceeding any further, you should ask yourself:

• Is there anything about this termination that makes it different or unique such that it might pose additional risks?

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Examples of higher risk circumstances

Higher risk circumstances include:

• Shorter serving employees who were lured away by the employer from another job where they had been long serving

• Employees who are about to go on or recently returned from pregnancy, paternity or disability leave*

• Employees with known or suspected health issues*

• Employees who have filed discrimination or harassment complaints*

• Employees whom you reasonably believe may be predisposed to violence*

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Why are these higher risk terminations?

Potential for:

• Longer reasonable notice period

• Other damages could be claimed (i.e. general damages for breach of human rights legislation)

• Multiple forums in which to complain (Courts and the Human Rights Commission)

• Jurisdiction of the Human Rights Commission to award additional remedies (i.e. back pay and/or reinstatement)

• Potential safety risk to others

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Terminating the employment of a pregnant employee

Main source of protection for pregnant employees:

Alberta Human Rights Act

• Human rights legislation prohibits discriminatory practices on the part of employers

• For most employers who are provincially regulated the Alberta Human Rights Act applies

• Discrimination is unlawful when it is based on a prohibited ground of discrimination. Alberta’s human rights legislation prohibits discrimination in employment on the basis of pregnancy (sex)

• Termination of the employment of a pregnant employee may be discriminatory

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Terminating the employment of a pregnant employee

Alberta Human Rights Act (continued)

• Employer bears the burden of showing that pregnancy was not a factor in the decision to terminate the pregnant employee

• Remedies include monetary compensation for injury to dignity, feelings, and self-respect and restitution for loss arising out of infringement

• Although remedies can be pursued at the Human Rights Commission, these are regularly added to wrongful dismissal claims before the Courts

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Additional claims: Pregnant employee

A pregnant employee whose employment is terminated may also rely on the following in support of an argument for an increased period of reasonable notice or a greater amount of pay in lieu of notice:

• Visibly pregnant women have greater difficulty securing permanent employment

• The loss of benefits during pregnancy is particularly difficult since the employee will require health benefits during this time

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Terminating the employment of a disabled employee

• Disabled employees who are terminated rely on protections available under the Alberta Human Rights Act

• Discrimination is unlawful when it is based on a prohibited ground of discrimination. Disability is a prohibited ground of discrimination

• Termination of the employment of a disabled employee may be discriminatory

• Same burden of proof, remedies available and forums as for pregnant employees

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Terminating a disabled employee: A cautionary tale

Brito v. Canac Kitchens [2012] Ont. C.A.

• 55 year-old employee; 24 years of service

• Terminated as a result of restructuring

• Paid employment standards obligations only including benefits during employment standards notice period

• Employee re-employed within weeks of termination, but at a lower salary and with no disability coverage

• Approximately 1 ½ years post-termination, employee began treatment for cancer, rendering him totally disabled and unable to work

• Brought an action for wrongful dismissal, including a claim for damages in lieu of disability benefits

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Terminating a disabled employee: A cautionary tale

Brito v. Canac Kitchens [2012] Ont. C.A. (cont.)

• Awarded 22 month notice period, over $200,000 damages in lieu of short-term and long-term disability benefits (including present value of the remainder of his long-term disability entitlements until age 65), and $15,000 in punitive damages (punitive damages award overturned on appeal)

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Terminating the employment of a complainant

• Employees who claim or attempt to enforce their rights under human rights or occupational health and safety legislation are protected from reprisals under the Alberta Human Rights Act and/or occupational health and safety legislation

• For human rights, same burden of proof and remedies are available as for pregnant and disabled employees

• For occupational health and safety, employee can file a complaint and practically speaking it is up to the employer to establish the termination was not a reprisal for a complaint

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Assessing the risks

• Two most common employer reasons for without cause termination:• Restructuring• Poor performance / fit

If the termination relates to restructuring, consider the following questions:

• Was he or she the only employee terminated, or part of a group termination?

• Why was this employee chosen for termination over others?

• Are there other employees in the work group at the same or lower seniority and skill level that were not let go?

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Assessing the risks

If the termination relates to restructuring, consider the following questions (cont’d):

• Are you currently hiring for other positions? Was the employee considered for these positions?

• Was there an alternative position that the employee was qualified to perform on an interim basis (i.e. for pregnant employees to bridge her to her maternity leave)?

• Are you planning on hiring a replacement for this employee in the near future?

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Assessing the risks

If the termination relates to performance / fit, consider the following:

• Do you have thorough performance documentation on file?

• What was the timing of the performance issues in relation to the employee’s pregnancy, disability, or complaint?

• Could the performance issues be related to a medical condition, as a result of his or her disability or pregnancy (i.e. morning sickness, mobility constraints, fatigue), which you should be accommodating?

• Are you treating this employee consistently with your other employees with performance issues?

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Reducing the risks

• Document, document, document

• Ensure that there is a complete paper trail and solid evidence supporting the position that a pregnancy, disability or reprisal was not a factor in the termination

• Call your legal counsel for a second opinion on the evidence

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Reducing the risks

If you decide to proceed with the termination:

• Detail the reason for the termination in the termination letter

• Briefly outline the steps taken by the employer in the termination letter to accommodate (if applicable)

• Explain the reasons for the termination orally in a termination meeting and make sure that it is consistent with the termination letter

• Offer an additional payment in exchange for signing a full and final release. In that release expressly reference the release of any human rights claims.

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The potentially violent employee

• Employers have a duty to ensure that they protect the health and safety of employees

• This duty is broad in scope – must take every precaution reasonable in the circumstances

• The occupational health and safety legislation imposes specific obligations on employers to take every precaution reasonable for the protection of employees from workplace violence

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The potentially violent employee: Steps for a safe termination

Pre-termination:

• Review your workplace violence risk assessment, policy, and program

• Consider having security onsite

• Notify police in advance of termination of time and place of termination

• Have termination letter and any other documents ready

• Consider location of meeting from a safety perspective

• Consider whether protective or investigative services are required

• Consider other aspect of security such as the need to change locks, deactivate swipe cards, change passwords and notify building security

• If inexperienced in dealing with these types of situations, or uncomfortable call your counsel to ensure that the steps necessary to ensure everyone's safety is in place and that you are otherwise comfortable to proceed with termination

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The potentially violent employee: Steps for a safe termination

Termination meeting:

• Schedule the termination meeting for early in the week

• Conduct termination meeting in a location as non-threatening as practical

• Make the meeting short

• Have a third party with you at the termination meeting

• Have a physical obstruction between you and the employee

• Sit closer to the door – ensure a safe exit

• Explain why the employee is being let go

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The potentially violent employee: Steps for a safe termination

Termination meeting (cont’d):

• Offer outplacement services

• Collect any company belongings that the employee has on him or her at the time

• Have a plan regarding the employee’s personal effects

• Escort the employee discretely from the premises with the third party

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The potentially violent employee: Steps for a safe termination

Post-Termination:

• Implement security plan - change locks, deactivate swipe card, change passwords and notify building security

• Notify potentially affected employees of risk of violence from terminated employee in the event violence is specifically threatened

• Engagement of protective or investigative services as necessary

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Take aways

• Always examine and consider every termination carefully to make sure there are no special considerations or additional risks

• When in doubt – check with your lawyer. “An ounce of prevention is worth a pound of cure”

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Questions?

Thank you! Adrian Elmslie adrian.elmslie@dentons.com 780 423 7364Fausto Franceschi fausto.franceschi@dentons.com 780 423 7348Joe Hunder joseph.hunder@dentons.com 780 423 7354Cristina Wendel cristina.wendel@dentons.com 780 423 7353Colleen Verville colleen.verville@dentons.com 780 423 7103Alison Walsh alison.walsh@dentons.com 780 423 7147