Archive for April, 2010

Some employers getting around minimum wage increases

By Jeffrey R. Smith (jeffrey.r.smith@thomsonreuters.com)

The minimum wage has been increasing in most Canadian jurisdictions lately. This is looked upon favourably by labour groups and those who get by on the basic rate. But there has been some outcry from employers regarding the financial pressures this puts on them and some may be trying to circumnavigate the wage increases.

The Toronto Star recently reported on a trend among some employers in the service industry of asking servers to hand part of their tip money over to the company. According to the Star, this practice was rare until last year when the economic slowdown prompted some restaurants and bars to take a little back from their employees. Sometimes it’s calculated as a percentage of tips and sometimes it’s based on net sales regardless of the tip. The latter calculation could hurt servers more if they don’t receive a good tip.

Now, business is on the uptick for many of them, but they are continuing this practice to offset recent increases in the minimum wage. On March 31, the minimum wage for servers in Ontario who get tips was set at $8.90 per hour and the general minimum wage at $10.25. One server at a Toronto restaurant told the newspaper her employer started asking for a portion of tips when the minimum wage went up and now she takes home less than what she did before the increase.

Some establishments say the money is used to cover breakage or calculation errors on bills. It’s illegal for employers to deduct wages for any reason without employee consent, but tips aren’t generally considered wages, leaving them open to be shared with the employer.

There are both legal and ethical considerations to keep in mind in these circumstances. Asking an employee to give part of her tips back to the employer could be considered a change in the employment contract, though it’s unlikely an employee at the low level of the totem pole would consider pursuing it, considering the small amounts involved. Courts might also not consider such an action worthwhile.

But could employers who take part in this practice be exposing themselves to potential legal trouble? What about the potential problems created by disgruntled employees? And what about the question of basic fairness? The employers are taking money from their lowest-paid employees to address financial concerns, but not from salaried management. Whether legal or not, is it ethical?

Jeffrey R. Smith is the editor of Canadian Employment Law Today, a publication that looks at employment law from a business perspective. For more information, visit www.employmentlawtoday.com.

Private prosecutions could bring public pain for employers

By Jeffrey R. Smith (jeffrey.r.smith@thomsonreuters.com)

Laws are made by governments and it’s government representatives, such as police and prosecutors, who generally bring charges for breaking those laws upon the lawbreakers. However, what happens if a private party believes another has broken the law and should be charged?

Private parties can bring a case before the courts in an attempt to launch a private prosecution, but it’s rare for this to happen and even more rare for it to be successful. If Crown attorneys don’t believe there are sufficient grounds for charges or prosecution, it’s unlikely a private party can convince the courts differently. However, the United Steelworkers Union is kicking up a fuss in British Columbia that, though unlikely to succeed, could open a can of worms for employers.

On Nov. 17, 2004, Lyle Hewer, a sawmill worker for Weyerhaeuser, was killed after falling into debris in a machine that converts wood waste to chips. It came to light that Hewer knew the situation was dangerous, but his supervisor asked him to clear it out anyway. Worksafe BC determined nobody at the mill did anything to make things safer until after the accident.

In March 2007, WorksafeBC fined Weyerhaeuser $297,000 for health and safety violations that contributed to Hewer’s death, the highest fine it had ever imposed against an employer. Police also recommended to Crown prosecutors that the company be charged under the Bill C-45 amendments to the Criminal Code, which impose criminal penalties on corporations that fail to protect the health and safety of their employees and the public. However, after looking at the case, B.C. prosecutors declined to pursue a criminal case.

The steelworkers union didn’t agree and felt Weyerhaeuser was criminally negligent and deserving of charges under the amendments. It launched its own private criminal prosecution proceeding against the company, urging the province to re-open the case.

It’s clear from the fine Weyerhaeuser received that it had a role in Hewer’s death with lax safety procedures. But the company was fined a large amount and the Crown, after looking at the case, felt that was sufficient. Should a private party such as the union be entitled to bring the matter before the courts again?

The B.C. criminal justice branch has a policy of not allowing private prosecutions to proceed — if it feels one has merit, it takes over the prosecution. It’s likely most other jurisdictions have similar policies, because allowing private prosecutions could open floodgates that might be better off closed.

If this private prosecution were to succeed, it would open the door to similar actions. The judgment of Crown prosecutors, rather than being the final word, could become another obstacle to overcome for someone with an agenda. This would be of particular concern for employers in circumstances such as this, where a workplace accident or death would often be motivation for someone to pursue punishment beyond a fine or other sanctions, especially with the Criminal Code amendments hanging like a sword over an employer’s head.

There would also be an issue with clogging up the courts if more cases were brought to court by private parties after the Crown was done with them.

If the courts find merit in the Steelworkers’ push, employers better be prepared for messier fights in the aftermath of workplace health and safety violations.

What do you think about private prosecutions? Join the conversation by posting a comment.

Jeffrey R. Smith is the editor of Canadian Employment Law Today, a publication that looks at workplace law from a business perspective. For more information, visit http://www.employmentlawtoday.com.

Injured employees: How long should they get to come back to work?

 By Jeffrey R. Smith

Suffering a serious injury is never a good situation, especially if it affects a person’s ability to do the job. When the injury can be rehabilitated, the employer is obligated to give the employee a chance to get well without losing her job. This can involve a medical leave, perhaps with a gradual return-to-work program with lighter duties that lead up to full duties, or sometimes the employee is accommodated with permanent lighter duties. However, it can become a tough situation if the injury doesn’t seem to be healing and the employer can’t afford to accommodate the employee with a leave or lesser duties forever.

Legally, employers are required to accommodate employees with injuries or disabilities to the point of undue hardship. It’s also usually the decent thing to do — it wouldn’t be fair for someone to lose her livelihood because she got hurt, especially if the injury could heal in the future and the employee would be able to do her job again.

Generally, when an employee has to take time off due to an injury, she’s required to provide regular updates on her medical status from doctors. These allow the employer to get an idea of when the employee will return to work and if any special accommodation is needed, which is important to running the business. But if there’s no timetable for recovery, how long should the employer be expected to wait? This can become a difficult situation that boils down to the employee’s right to preserving her livelihood versus the employer’s right to operate its business to its full capacity.

A small-town Manitoba police officer had shoulder problems a few years ago that impeded his ability to do his job, which required significant physical exertion at times. The condition was identified as degenerative, but he had surgery and said he hoped for improvement. The town gave him time to rehabilitate his shoulder but, after a year, there was little improvement and no estimation of his return. Though the officer wanted to go back to work and said his shoulder might still improve, the town was stuck — it had a small police force and needed someone who could do the job right away. It finally decided it had to hire someone new and terminated the injured officer.

In this case, the town needed someone who could do the job right away and there was no indication the injured officer would ever be able to come back. As a result, the employment contract was frustrated because the officer was unable to fulfill his job requirements. However, the situation may have been different if it was a larger police department — perhaps it would have been able to afford to keep the officer on the payroll a little longer. Frustration of contract and undue hardship is a moving target and never the same. But how much weight should be given to the employee and employer rights?

If an employee has a timetable for recovery, the employer would naturally be expected to hold her job, unless the timetable was ridiculously long. But what if there is no timetable, such as in the Manitoba police officer’s case? If a doctor can’t predict when or if an employee will get better, should the employer be able to terminate right away? Is it unfair to ask it to carry the employee’s salary for a while — more than a year in the above case — when the contract will probably be frustrated anyway?

Jeffrey R. Smith is the editor of Canadian Employment Law Today, a publication that looks at workplace law from a business perspective. For more information, visit www.employmentlawtoday.com.

Reasonable notice or a salary for life?

By Jeffrey R. Smith (jeffrey.r.smith@thomsonreuters.com)

With mandatory retirement gone the way of the passenger pigeon, some employees are choosing to delay their retirement and working to ripe old ages. Employers can benefit from the experience and knowledge of these older employees, but what happens if things aren’t working out?

Obviously, employers have to be careful not to do anything that could be perceived as discrimination, as age is a protected ground under human rights legislation. Trying to force someone to retire would be entering dangerous territory. But what happens if an employer decides to terminate an older employee? What kind of reasonable notice should an employer be expected to give?

The purpose of the reasonable notice period, whether working notice or payment in lieu of, is to give the employee enough time to find comparable employment — a bridge between jobs. The length of notice is determined by factors such as the employee’s age, position, level of pay and the availability of similar jobs nearby.  However, what about an employee who’s pushing 70? With more people working past 65, there are bound to be some who end up in circumstances where the employer wants to or needs to let them go. But what’s the likelihood of someone in their late 60s of being hired in a similar job they’ve already held for many years?

A Quebec employer was faced with this situation when its parent company fired its top executive in 2005 after 39 years with the company. The 69-year-old president of Cerescorp, an equipment management company operating in Montreal, was fired by parent company CTI after he pried into the company’s financial statements after a dispute over his bonus.

The Quebec Superior Court found CTI constructively dismissed him and he was entitled to damages for reasonable notice. The court acknowledged notice was “not intended to be a guarantee of employment for life,” but awarded the terminated employee 24 months’ notice because of his high position and slim chance of being hired somewhere else.

The court noted determining reasonable notice for someone of advanced age was “a balancing act.” He should be compensated for the fact it was unlikely he would find another comparable job, but part of that could be because it’s likely he would retire soon anyway. Would a 69-year-old still be working at all in two years, let alone looking for a new job? Reasonable notice usually goes up the older an employee is, but should there be an age threshold where it starts to go down again?

Jeffrey R. Smith is the editor of Canadian Employment Law Today, a biweekly newsletter that looks at workplace law from a business perspective. For more information, visit www.employmentlawtoday.com.


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