Argentina  How to Hire & Fire: A Global Guide  Canada - British Columbia

Miller Thomson LLP

1

GENERAL PRINCIPLES

Forums For Adjudicating Employment Disputes

Employees working in British Columbia (“BC”) come under either federal (national) jurisdiction, or provincial jurisdiction. The determination as to whether an employee is provincially or federally regulated is a question of constitutional division of powers between the provincial and federal legislatures. Presumptively, jurisdiction over employment taking place in BC is provincial, unless it falls within certain industries that are within the federal domain.

For the most part, the forums for adjudicating employment disputes are different depending upon whether the employer is provincially or federally regulated.

Provincially-Regulated Employers

The majority of employees fall under provincial jurisdiction. In BC, certain types of employment disputes are adjudicated by administrative tribunals established by statute. Of particular note, administrative bodies under the Employment Standards Act and the Human Rights Code adjudicate disputes relating to employment standards and human rights, respectively. For employment disputes that are not required to be adjudicated by administrative tribunals, the courts of BC have jurisdiction to hear such employment disputes. In addition, the courts also have limited jurisdiction to hear appeals from decisions from the above-noted tribunals. For all employment disputes that are not required to be adjudicated by the tribunals established by statute, the courts of BC have jurisdiction to hear such employment disputes (i.e. the Supreme Court of BC, the Provincial Court of BC, and the BC Court of Appeal).

In a unionized workplace, the BC Labour Relations Code governs matters involving collective bargaining rights, negotiation of collective agreements, strikes, and lockouts. The BC Labour Relations Board adjudicates disputes between employers and unions regarding those matters. Disputes between individual unionized employees concerning the violation, application, or interpretation of collective bargaining agreements are adjudicated by private arbitrators, under the rules prescribed in the collective bargaining agreement between the employer and the union representing the employees. The BC courts have limited jurisdiction to hear appeals from the decisions of arbitrators and the BC Labour Relations Board.

Federally-Regulated

Federally-regulated employers are subject to federal legislation that establishes its own administrative tribunals. Employment standards and human rights are adjudicated federally under the Canada Labour Code and the Canadian Human Rights Act. The Canada Labour Code also addresses matters relating to the unionized workplace in the federal context (similar to the BC Labour Relations Code). The Federal Court of Canada has limited jurisdiction to hear appeals from decisions from those forums. As with provincially-regulated employers, disputes not governed by the Canadian Human Rights Act or the Canada Labour Code are adjudicated by the courts of BC.


The Main Sources Of Employment Law

As with above, employment and labour law in BC emerges from a combination of legislation (i.e. statute) and case law (i.e. the common law). Besides the above noted legislation, there are other provincial and federal statutes that regulate matters including privacy, pension plans, or which regulate specific industries and/or professions. There are also a number of statutes dealing with public sector employers. In considering the common law of employment, the law of employment is in essence the law of contract, and accordingly employment agreements (for non-unionized employees) or collective bargaining agreements (for unionized employees) also affect the terms and conditions of the employer/employee relationship.

Finally, the BC Workers Compensation Act sets out requirements for occupational health and safety requirements in the workplace and provides for a mandatory, employer-funded scheme to compensate workers for employment related injuries and diseases. The Workers Compensation Act applies to both provincially and federally regulated employers with respect to its workers compensation scheme. The Workers Compensation Act also has its own adjudication process and tribunals for disputes regarding occupational health and safety for provincially-regulated employees (note the Canada Labour Code addresses occupational health and safety for federally-regulated employees).


National Law And Employees Working For Foreign Companies

If an employee works in BC but is employed by a foreign company, the employee will be governed by BC or federal employment law (depending on the industry), unless that employee is receiving his or her wages outside of BC and is only working in BC temporarily.


National Law And Employees Of National Companies Working In Another Jurisdiction

Typically, BC (provincial or federal) employment law will not apply to employees of British Columbia companies who are working in another jurisdiction. (Note: certain other laws such as Canada’s Income Tax Act may still apply to income earned outside of BC or Canada).


Data privacy

BC businesses are subject to privacy laws, which regulate the type of employee information an employer can collect, use and disclose. The specific privacy statute that a business will be bound by will depend upon whether the business is provincially or federally regulated, and whether the business operates in the private or the public sector.

BC’s Personal Information Protection Act applies to provincially regulated private sector businesses, whereas BC’s Freedom of Information and Protection of Privacy Act applies to provincially regulated public sector businesses. Some business in BC which collect, use and disclose personal information across borders may be subject to privacy laws under the federal Personal Information Protection and Electronic Documents Act if they operate in the private sector, or the federal Privacy Act if they operate in the public sector. A business’s transactions can be subject to both provincial and federal privacy legislation.

Common to all of these privacy statutes is the principle of reasonableness. A business should only collect, use or disclose personal information if the purpose is considered reasonable given the circumstances. This principle is intended to balance individual privacy rights with the needs of businesses to collect, use, and disclose personal information.

Privacy legislation applies to the following activities that businesses may wish to engage in with respect to its employees:

  • Pre-employment collection of information;
  • Transfers of employee information to a third party for storage or processing;
  • Monitoring employee computer use;
  • Overt and covert video surveillance;
  • Employee drug and alcohol testing; and
  • Employee medical privacy.

In many instances, employee consent is required before an employer can collect, use, or disclose information about its employees. There are limited circumstances under which employee consent is not required.

Please note that the remainder of this Guide will focus exclusively on BC employment laws (i.e. provincially-regulated) and will not reference any Federal laws unless otherwise expressly so stated. As noted, there are special considerations which may apply to public sector employers.

2

HIRING THE EMPLOYEE

Legal Requirements As To The Form Of Agreement

The BC Employment Standards Act provides for certain minimum standards (wages, hours of work, and the right to pregnancy/parental/family/bereavement/ military service leaves) for employment contracts and collective bargaining agreements. While collective bargaining agreements must be in writing, employment agreements between an employer and its non-union employees may be oral or in writing.

Most of employment contracts between an employer and its non-union employees are oral. The terms of oral employment contracts will be implied based on common law principles that have evolved over time. The terms of written employment agreements must provide the minimum standards set out in the Employment Standards Act; if it does not, those terms will not be enforceable.

Note that the Employment Standards Act does not apply to some employees, such as lawyers, accountants, insurance agents. These exclusions are set out in the Regulations to the Employment Standards Act.


Mandatory Requirements
  • Trial Period

    • At common law there is no implied term to the effect that an employee is subject to a “probationary” period, but the parties may agree to one if they wish.

    The Employment Standards Act imposes minimums for employees who are employed for more than 3 months, so an employee can be terminated without notice or pay in lieu of notice within that period (provided their employment contract does not otherwise provide).

    A probationary period can impose a standard of suitability in order to terminate the employment relationship. If the probationary period is longer than 3 months, employment standards minimums will also be payable.

  • Hours Of Work

    • There are restrictions under the Employment Standards Act on the number of consecutive hours of work in a day and hours of work in a week, as well as when certain employees are entitled to overtime pay:

    • An employer must pay an employee overtime wages if the employer requires or allows the employee to work more than 8 hours a day or 40 hours a week. Note that under strict conditions, an employer can enter into an averaging agreement with an employee under which the employee’s hours of work are averaged over a period of time for the purpose of determining the employee’s entitlement to overtime wages.
    • An employer must ensure that no employee works more than 5 consecutive hours without a meal break, and that employees have at least 8 consecutive hours free from work between each shift worked.
    • Generally speaking, an employer must either ensure that an employee has at least 32 consecutive hours free from work each week or pay the employee overtime wages for hours worked during this period.
    • An employer must not require or allow an employee to work excessive hours or hours detrimental to the employee’s health or safety.
    • Certain types of employees including “managers”, as that term is defined in the Employment Standards Act, are not subject to the usual restrictions relating to hours, breaks, and overtime.
    • There are special provisions in the Employment Standards Act and its regulations relating to employees in particular lines of work or industry. For example employees who earn a large part of their income from sales commissions, who provide personal care services, employees who work and/or live in their employer’s residence, young people or group hires in the entertainment industry, agriculture workers, and employees in the high technology sector or silviculture industry are subject to special provisions.

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  • Special Rules For Part-time Work

    • There are no special rules for part-time employees in BC. The requirements under the Employment Standards Act apply equally to full-time and part-time employees.

  • Earnings

    • Employees must receive at least the minimum wage as set by the Regulations to the Employment Standards Act, and must be paid at least semi-monthly and within 8 days after the end of the pay period. Employers must also ensure that employees who are paid by commission, solely or in part, are paid at least the equivalent of the minimum wage. If an employee’s commission earnings during a pay period fall short of the minimum wage, the employer is required to pay the employee the difference and the amount paid cannot be deducted from an employee’s future earnings.

  • Holidays/Rest Periods

    • As noted in the “Hours of Work” section, an employee is entitled to certain hours free from work, or to be otherwise compensated for same. Additionally, the Employment Standards Act contains minimums in respect to vacation and public holidays, as follows:

    • An employee who has worked for an employer for at least 12 consecutive months must receive an annual vacation of at least two weeks, and after 5 years of consecutive employment, the employee is entitled to three weeks annual vacation.
    • An employee is also entitled to vacation pay, to be paid in advance of or in conjunction with the employee’s annual vacation. An employee is entitled to 4% of total earnings in the previous year, and once an employee has had 5 years of consecutive employment, the employee is entitled to 6% of total earnings in the previous year.
    • Employees are entitled to public or statutory holidays off, or be paid statutory overtime if they are required to work on these days. Certain employees such as “managers” are excluded from entitlement to the overtime statutory holiday pay. The Employment Standards Act sets out the statutory holidays to which it specifically applies.

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  • Minimum/Maximum Age

    • The employment of a child between the ages of 12 and 15 is only permitted under the Employment Standards Act if the child’s parents or guardian provide written consent. If a child is younger than 12 years old, they will only be able to work if the Director of Employment Standards gives permission. The Director may set out conditions of employment for the child which the employer must abide by. There are no mandatory requirements relating to hiring employees above any maximum age limit. Under the Human Rights Code an employer cannot discriminate against its employees by requiring them to retire from their employment at a given age.

  • Illness/Disability

    • The Employment Standards Act provides that employees be entitled to certain job-protected, unpaid leaves of absence, including:

    • COVID-19 Leave: Employees are entitled to take an indefinite unpaid COVID-19 leave for a number of reasons (both health and non-health) affiliated with COVID-19.
    • Personal Illness or Injury Leave: Employees are entitled to up to 3 days unpaid leave per year after being employed for at least 90 days.
    • Domestic/Sexual Violence Leave: Employees are entitled to up to 5 days paid leave if they are impacted by domestic or sexual violence. They are further entitled to 5 more days’ unpaid leave per calendar year and can take up to 15 more weeks of unpaid leave.

    Although there is no obligation to provide employees with paid sick leave, employers may have policies that provide that employees who are away from work on account of illness or injury be paid for a certain number of days. This may also form part of the employee’s employment contract.

    Under the Human Rights Code, an employer must accommodate employees with physical or mental disabilities recognized under the Code.

  • Location Of Work/Mobility

    • Employment standards apply throughout BC, there are no rules regarding where an employee may be required to work within the province. However, the ability of an employer to direct where an employee is required to perform work is dependent on the employment agreement or collective agreement. To the extent that the employment contract does not contemplate the ability of the employer to require the employee to move locations, a change of an employee’s place or work may constitute a breach of the employee’s employment agreement, giving rise to a claim of constructive dismissal. Generally, a change of more than 50 kilometres in the absence of any agreement allowing such will likely constitute a breach.

  • Pension Plans

    • The Canada Pension Plan is a mandatory government pension plan which applies to all employees in Canada including BC. This plan is funded by deductions from employee pay (based on actual income), with matching contributions by the employer.

    An employer is not required to offer any of its own pension plan for its employees. However, if an employer chooses to put a pension plan in place, it is governed by the BC Pension Benefits Standards Act, which contains minimum standards for every employment pension plan relating to eligibility, vesting, and portability.

    If an employer chooses to implement a group registered retirement savings plan for its employees, the Canada Income Tax Act governs the maximum limit of such contributions per year.

  • Parental Rights (Pregnancy/ Maternity/ Paternity/ Adoption)

    • The BC Employment Standards Act requires employers to provide the following unpaid leaves related to family life to employees:

    • Pregnancy/Maternity Leave: Pregnant employees are entitled to 17 weeks of unpaid leave. An employee whose pregnancy ends (i.e. is terminated) can take up to 6 weeks of leave starting on the day a pregnancy ends. This leave can also be extended an additional 6 weeks.
    • Parental Leave: Employees are entitled to up to 62 weeks of unpaid parental leave. This may be extended by up to 5 weeks if the child needs more care due to a physical, psychological or emotional condition. Pregnant employees can take pregnancy leave and parental leave, to a total 78 weeks.
    • Family Responsibility Leave: Employees are entitled to up to 5 days of unpaid leave annually to meet responsibilities regarding the care, health, or education of their immediate family.
    • Critical Illness or Injury Leave: Employees are entitled to take up to 36 weeks of unpaid leave to care for a child and up to 16 weeks to care for a family member above the age of 19.
    • Compassionate Care Leave: Employees are entitled to take up to 27 weeks within a 52-week period of unpaid compassionate care leave to provide care and support to a family member in situations where the family member is gravely ill with a significant risk of death within 26 weeks.
    • Bereavement Leave: Employees are entitled to up to 3 days of unpaid leave on the death of a member of the employee’s immediate family.
    • Leave respecting Disappearance of Child: Employees are entitled to up to 52 weeks unpaid leave if their child disappears as a result of a crime.
    • Leave respecting Death of Child: Employees are entitled to up to 104 weeks unpaid leave if their child dies.

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    If an employee takes any of these types of leave, an employer cannot terminate the employee or change a condition of employment without the employee’s written consent. Once the leave has ended, the employer must place the employee back in the same or comparable position the employee held before taking the leave.

    During the leave, employment is deemed continuous for the purposes of calculating vacation entitlement, entitlements under pension, medical or other plans beneficial to the employee, and notice of termination or severance.

  • Compulsory Terms

    • There are no compulsory terms which must be included in an employment agreement, subject to the minimum standards for wages, vacation, hours of work and overtime, and notice of termination as required by the Employment Standards Act.

    Under the Labour Relations Code there are specific requirements regarding collective agreements. For example, a collective agreement must be for a minimum of one year and must contain a dispute resolution process failing which the parties will be subject to statutorily imposed terms and conditions.

  • Non-Compulsory Terms

    • Parties are free to agree on all terms of an agreement, as long as such terms do not contravene the minimum standards of the Employment Standards Act, or are not otherwise unlawful.


Types Of Agreement

BC does not have different rules for different types of agreements. The most common types of agreements include contracts for an indefinite term of employment, fixed term contracts, and contracts for services (for hiring an individual as an independent contractor rather than an employee). In the unionized context, collective agreements must comply with any minimums set out in the Labour Relations Code.


Secrecy/Confidentiality

All employees at common law owe their employers a general duty of good faith and fidelity, which includes the duty not to disclose the employer’s confidential information or trade secrets. The duty of non-disclosure can continue even after employment has ended. Certain senior employees may also be considered fiduciaries and held to a higher standard. Parties may furthermore choose to enhance common law confidentiality obligations through the use of a confidentiality agreement.


Ownership of Inventions/Other Intellectual Property (IP) Rights

Generally, inventions created by employees during work are deemed to become the employer’s property, although the courts have made some incursions on this principle. For example, some decisions have held that in order to be the property of the employer, the invention must be related to the employees’ job, or that the subject matter must be related to the company’s normal business operations. The parties may reach a contractual agreement with respect to ownership of intellectual property.


Pre-Employment Considerations

Obligations under the BC Human Rights Code and BC Personal Information Protection Act may apply to prospective employees.

The Human Rights Code prohibits discrimination in hiring on the basis of race, colour, ancestry, place of origin, political belief, religion, marital status, family status, physical or mental disability, sex, sexual orientation, gender identity or expression, or age, or because that person has been convicted of a criminal or summary conviction offence that is unrelated to the employment or to the intended employment of that person (the “ Protected Characteristics”) unless the limitation, specification or preference is based on a bona fide occupational requirement. Because of these laws, an employer should not publish an advertisement nor ask for information about or express a limitation, specification or preference about the Protected Characteristics unless the limitation, specification or preference is based on a bona fide occupational requirement.

Pre-employment background checks, criminal record checks, and drug and alcohol tests may be permitted in certain situations, but generally obligations under human rights and privacy legislation.

Criminal Record Checks

Under the BC Criminal Records Review Act, every person hired for employment involving work with children or vulnerable adults must undergo a criminal record check/verification. It is the obligation of the employer to ensure that the requirements of the Act are met.

There is no statutory bar prohibiting employers whose work does not involve children or vulnerable adults from requesting or obtaining criminal record checks from current or prospective employees. However, under the BC Human Rights Code, employers may not discriminate against a current or prospective employee on the basis of a criminal record that is unrelated to the employment or to the intended employment of that person.

Drug & Alcohol Testing

Random drug and alcohol testing remain a highly contentious issue in BC and other jurisdictions and involves a delicate balance of employee privacy with workplace safety. While random drug and alcohol tests are not prohibited, the evidentiary burden that the employer must meet to justify such testing is very high (but not well defined by the courts). Employers must be able to clearly demonstrate that there is an enhanced safety risk due to alcohol or drug abuse. The fact that a workplace is inherently dangerous will not, in and of itself, justify a random testing policy.


Hiring Non-Nationals

Federal immigration law (which covers persons working in BC) contains strict rules about hiring non-nationals. Temporary foreign workers are also protected under BC’s Temporary Foreign Worker Protection Act.

 

Hiring Specified Categories Of Individuals

Under the Human Rights Code a potential employer must not refuse to employ or discriminate regarding employment or any term or condition of employment, because of a Protected Characteristic unless the refusal, limitation, specification or preference is based on a bona fide occupational requirement. The Employment Standard Act also contains rules restricting the hiring of employees who are children.


Outsourcing And/Or Sub-Contracting

There are no specific rules about outsourcing and/or sub-contracting. However, some collective agreements in the unionized sector may be restricted by the ability of an employer to contract out services which might otherwise be performed by employees who are covered by a collective agreement. Whether the individual to whom the work is “contracted out” become an employee will depend upon the intention of the parties and the nature of the relationship between the employer and that contracted party.

3

MAINTAINING THE EMPLOYEE RELATIONSHIP

Changes To The Contract

Employers are permitted to make changes to the employment contract. However, fundamental changes to material terms in the employment contracts must be made by mutual agreement. If the employer unilaterally and fundamentally changes a material condition of employment, the employer may be deemed to have terminate the employment without just cause, and the employer will be liable to provide the employee with damages in lieu of reasonable notice of termination (severance). This is known as “constructive dismissal”.


Change In Ownership Of The Business

Under the Employment Standards Act, if all or part of a business, or a substantial part of the assets of a business is disposed of, if no other changes occur to the employment terms, an employee’s employment is treated as continuous. In the unionized sector, a collective agreement typically follows the business, so that the collective agreement will continue in effect as between the new owner and the employees.

If, because of a change in ownership of a business, the employees are terminated or the purchaser only offers employment on substantially different terms and conditions, employees may be entitled to severance under the Employment Standards Act. If the new employment terms offered by the purchaser are silent on this issue, the employees will be deemed to carry their pre-sale service with them for the purposes of calculating vacation and severance entitlements.


Social Security Contributions

There are compulsory social security enrolment and contributions by the employer and/or the employee under federal law. Employment Insurance and Canada Pension Plan benefits are funded by contributions by both employees and employers. Employers with BC remuneration greater than $500,000 are also required to remit an employer health tax under the Employer Health Tax Act.

The Workers Compensation Act is a mandatory program which insures employees for loss of income due to injuries and disabilities arising out of and in the course of employment. Premiums for Workers Compensation is funded 100% by employers.


Accidents At Work

The Workers Compensation Act and related regulations, including the Occupational Health and Safety Regulation, provide with respect to (1) a no-fault insurance scheme for injuries sustained out of and in the course of employment and (2) standards for occupational health and safety in the workplace. Generally, these rules relate to the reporting of accidents, making claims, and assessing, evaluating and preventing the risk of accidents and injuries. WorkSafeBC, the administrative body responsible for carrying out certain regulatory obligations under the Workers Compensation Act.


Discipline And Grievance

There is no requirement to discipline employees. The ability of an employer to discipline employees in the non-unionized sector depends on the nature of the contract of employment. At common law, the ability to discipline has constraints. To the extent that any imposed discipline is inconsistent with the contract of employment, it may be seen as effecting a dismissal of the employee.

Accordingly, is advisable for an employer to practice “progressive discipline” to warn an employee about his or her shortcomings to justify a termination for just cause, where a single act of misconduct is not egregious enough to constitute sufficient justification.

In unionized workplaces, the ability of the employer to discipline for misconduct is set out in the collective agreement. Collective agreements typically require progressive discipline to be applied before termination of an employee will be justified.

If an employee in the unionized context considers discipline to have been unjustly applied, access to a grievance procedure is mandated. An arbitrator chosen by the parties or by the Labour Relations Board adjudicates a grievance.

Since the grievance process arises from the collective agreement, there is no grievance process for non-unionized employees at common law. An employee who has been unjustly disciplined may treat the contract as having come to an end and seek damages for the failure of the employer to terminate in accordance with the terms of the agreement.


Harassment/Discrimination/Equal pay

Discrimination and Harassment

Under the Human Rights Code, an employer cannot terminate or discriminate against persons regarding employment or any term or condition of employment on the basis of the Protected Characteristics. To the extent that an employee is subjected to any harassment or discrimination rooted in the Protected Characteristics, an employer may be found liable for breach of the Human Rights Code, unless appropriate steps have been taken to prevent such acts or properly deal with such complaints.

Employers are required to prevent bullying and harassment under the Workers Compensation Act as an aspect of overall workplace safety. An employer is required to, among other things, develop a workplace bullying and harassment prevention policy statement, and to develop and implement procedures for reporting and investigating incidents or complaints of workplace bullying and harassment. Workplace bullying and harassment is defined as including any inappropriate conduct or comment by a person towards a worker that the person knew or reasonably ought to have known would cause that worker to be humiliated or intimidated.

Equal Pay

While there is no specific pay equity legislation in BC, an employer must provide equal pay for similar or substantially similar work. Any difference in the rate of pay between employees of different sexes based on a factor other than sex will not violate the Human Rights Code so long as the difference is reasonably justified.


Compulsory Training Obligations

There are no compulsory training obligations on BC employers, unless they form part of collective agreements in the unionized sector. Note however that employers have a legal obligation to ensure a safe workplace which includes the obligation to ensure that its employees are trained in all procedures, and have the skills required to perform the work in a safe manner. Failure to ensure a safe workplace can result in fines under the Workers Compensation Act.


Offsetting Earnings

Under the Employment Standards Act, an employer must not directly or indirectly withhold, deduct or require payment of all or part of an employee’s wages for any purpose, except where the employee has given written authorization, the withholdings are for statutory deductions required by law such as income tax, Canada Pension Plan and Employment Insurance premiums, or a court order to garnish an employee’s wages.

An employer must not require an employee to cover any of its business costs as this is the responsibility of the employer. Uniforms or other special clothing required by the employer must be provided to its employees at no cost. The employer must also pay the cost of maintenance of special clothing unless the employees agree in writing otherwise.


Payments For Maternity And Disability Leave

Maternity and disability leave are unpaid. However, the employee may be entitled to receive payments under Employment Insurance for such leave.


Compulsory Insurance

Workers Compensation premiums must be paid by the employer and are compulsory.


Absence For Military Or Public Service Duties

Under the Employment Standards Act, employees who are members of the reserve force are entitled to unpaid leave under certain circumstances. Employees are entitled to take time off to vote Under the Canada Elections Act (three consecutive hours) and the BC Election Act (four consecutive hours). An employer is likewise required to provide an employee with unpaid leave for jury duty under the Employment Standards Act. Recently, COVID-19 leave has been introduced under the Employment Standards Act for employees who require leave for a number of reasons related to COVID-19, including to receive a COVID-19 vaccination.

If an employee takes any of these types of leave, an employer cannot dismiss the employee or change a condition of employment without the employee’s written consent. Once the leave has ended, the employer must place the employee back in the position the employee held before taking leave or in a comparable position. During the leave, employment is deemed continuous for the purposes of calculating vacation entitlement, entitlements under pension, medical or other plans beneficial to the employee, and termination.


Works Councils or Trade Unions

here are rules relating to works councils or trade unions, under the BC Labour Relations Code.


Employees’ Right To Strike

The right to strike is governed by the Labour Relations Code. Unionized employees have the right to strike where, after full and good faith collective bargaining, an impasse exists regarding the terms of employment, a positive strike vote has been taken by affected employees, and the union has notified the employer of its intent to strike. Some employees are considered to be essential (for example, certain health care workers), in which case the Labour Relations Board will designate the number of employees who must continue to provide services to the clients of the employer.


Employees On Strike

An employer cannot fire employees who are on strike unless their actions amount to just cause for dismissal. Employees who are in a union may not apply to decertify the union during the currency of the strike.


Employers’ Responsibility For Actions Of Their Employees

Employers can be held indirectly responsible for the harm or damages arising from the negligent actions of its employees under the principle of “vicarious liability”, provided that the employee’s negligent actions occurred in the lawful discharge of his or her employment.

4

FIRING THE EMPLOYEE

Procedures For Terminating the Agreement

The contract of employment must be terminated in accordance with its terms. Where a contract expressly provides for the manner in which termination may be affected, the provisions of the contract must be observed. Where a contract is not specific about the manner by which it may be terminated, the employer will be expected to comply with any terms implied by law, including an implied term to the effect that reasonable notice of termination must be given to an employee.

In addition to any contractual requirements, an employer must ensure compliance with the minimum standards under the Employment Standards Act. If an employee has worked at least three consecutive months, employers must prove “just cause”, or they will be liable to pay an amount which varies according to the employee’s length of service. Liability is discharged if the employee is given written notice, pay in lieu of notice, resigns or retires.

Note that a unionized employer may or may not be subject to the provisions of the Employment Standards Act which deal with termination of employment. If the collective agreement includes a termination provision, the Employment Standards Act does not apply. The Employment Standards Act requires that the collective agreement meet or exceeds the requirements under the Employment Standards Act (when considered in conjunction with certain other requirements). However, if the collective agreement contains no termination provision, the Employment Standards Act provisions are deemed to be incorporated into the collective agreement.

Under the Employment Standards Act, “just cause” is not a defined term. Instead, the test developed in the courts of common law is used. In determining what constitutes just cause, the employer may show that it has taken steps to exercise “progressive discipline” on its employee. However, just cause can also result from a single act.

There are no statutory rules relating to the specific form for terminating the agreement unless the termination constitutes a “group termination” under the Employment Standards Act ((to be discussed further below). Approval from a court or other regulatory body is not required before termination is effective.


Instant Dismissal

Under both the Employment Standards Act, an employer may terminate an employee, without cause, without providing any notice or severance in lieu of notice, if the termination takes place before the employee has completed 3 consecutive months of employment. However, if there is a written employment agreement (or, for unionized employees, a collective agreement) between the employer and employee which provides for notice or severance in lieu of notice prior to the employee completing 3 consecutive months of employment, the employer must abide by the terms of the agreement. Note that if there is no written employment agreement governing termination of the employee, it is still open to the Court to award damages to the employee even if the employer has no obligation to provide the employee with notice or severance in lieu of notice under the applicable statute.

An employer may terminate an employee for just cause resulting from a single act where the act is wilful, deliberate, inconsistent with the continuation of employment, and prejudicial to the employer’s interests. However, only the most egregious single acts may constitute just cause for termination and extreme caution must be exercised before making a decision to terminate an employee for cause for a single act.

Dismissals are subject to the requirements under the Human Rights Code and may not be discriminatory.


Employee's Resignation

Employment can be terminated by the employee’s resignation. For resignation to be effective, the employee must evince a subjective and objective intention to resign which is subsequently accepted by the employer. The subjective element requires a true intention to resign. The objective element requires that the employee act in a way which confirms their intention to resign. At common law, an employee is obliged to provide an employer reasonable notice of the employee’s intention to terminate the employment agreement unless the manner by which the employee may resign is expressly set out in the employment contract. Note that the “reasonable notice” an employee must provide upon resignation is much shorter than the “reasonable notice” that an employer may be required to provide to an employee upon termination.


Termination On Notice

An employer may terminate an employee at any time without cause so long as the employer provides the employee with, at minimum, the notice or severance pay in lieu of notice required by the Employment Standards Act. The Labour Relations Code provides that all collective agreements must contain a provision that the employer have just and reasonable cause for dismissal of an employee (except for employees hired on a probationary basis).

If there is a written employment agreement between the employer and employee which provides for more notice or severance in lieu of notice than is required by the applicable statute, the employer must abide by the terms of the contract.

If there is no written employment agreement governing termination of the employee, the employer’s common law obligation to provide the employee with notice or severance in lieu of notice is not limited to the minimums established by the applicable statutes. Instead, the employer is obliged to provide the employee with “reasonable notice” or severance in lieu of “reasonable notice”. The meaning of “reasonable notice” has received extensive judicial consideration and is determined by reference to a number of different factors, including the employee’s age, length of service, gender and position.


Termination By Reason Of The Employee's Age

The BC Human Rights Code prohibits discrimination based on “age”, which is defined as an age of 19 years or more. However, if an employer can prove that there is a bona fide age-related reason that means that the employee cannot adequately perform his or her work, then an employee may be dismissed for that reason. Mandatory retirement at 65 or above is not permissible, except in statutorily mandated mandatory retirement schemes.


Automatic Termination In Cases Of Force Majeure

An agreement can be terminated automatically in cases of force majeure (i.e. where the performance of the contract is rendered impossible). No notice or severance in lieu of notice is required if work is impossible to perform because of unforeseeable circumstances. In such circumstances, the contract is considered “frustrated,” and the parties are discharged from further performance. Bankruptcy, receivership, insolvency, or other adverse economic conditions do not constitute “frustration” of the contract.


Collective Dismissals

Where an employer intends to terminate the employment of 50 or more employees at a single location within any 2-month period, the Employment Standards Act requires the employer to give advance notice of that intent to the Minister of Labour, the affected employees, and any involved union. Under the Employment Standards Act an employer is required to give this notice in writing, and to specify the number of employees who will be affected, the effective dates of termination, and the reasons for termination. There are also requirements under the Employment Standard Act regarding the timing of this notice (which varies depending on the size of the termination).


Termination By Parties’ Agreement

Employment may be terminated by the parties by mutual agreement at any time.


Directors Or Other Senior Officers

There are no separate rules for terminating directors or other senior officers. Directors and officers may be removed in accordance with the BC Business Corporations Act, however, the removal of an individual as a director does not impact their entitlement to contractual notice further to their employment agreement with the employer.


Special Rules For Categories Of Employee

There are no special rules which apply to different classes of employees within an organization, but there are different remedies available to terminated employees who belong to a union. Unionized employees (through their union) have a right to file a grievance through the collective agreement’s grievance process. The grievance will be dealt with in an arbitration, and one of the remedies available to the arbitrator is to reinstate the employee to his or her former position. (All other employees must bring either an action in the BC courts, or a complaint pursuant to the Employment Standards Act, and reinstatement is not an available remedy in either of those forums).

Furthermore, there are certain categories of employees to which the Employment Standards Act does not apply or to which the application of the Employment Standards Act may differ. These categories are generally based on the industry or profession of the employees.


Whistleblower Laws

There is no specific whistleblower statute. However, a number of statutes have whistleblower provisions including the Employment Standards Act, Workers’ Compensation Act, Labour Relations Code, Personal Information Protection Act, Freedom of Information and Protection of Privacy Act, and Human Rights Code. These protect employees from harassment or discriminatory action because the employee has reported a breach of the statute or has exercised a right under the law.

For instance, it is a violation of the BC Human Rights Code for a person to intimidate, impose a penalty on, deny a benefit to, or otherwise discriminate against another because they filed a human rights complaint or assisted with a complaint.


Specific Rules For Companies in Financial Difficulties

If a business experiences financial difficulty, the legal requirements for termination must still be followed.

If wages are not paid to employees, the Employment Standards Act imposes a statutory lien for the unpaid wages without requiring steps from any party. The lien is imposed on the real and personal property of the employer at the time wages were earned, and automatically attaches to any property the employer may subsequently acquire. Examples of the types of property that can be subject to a lien include land, buildings, vehicles, equipment, stocks, bonds, and bank accounts.

The Employment Standards Act also provides that officers and directors can be personally liable for up to two months unpaid wages for each employee.


Special Rules For Garden Leave

There are no special rules for employees who are provided working notice in relation to the termination of their employment but are asked to remain away from the workplace for the duration of the notice period. However, at common law, garden leave could result in a constructive dismissal claim, as it is a fundamental term of a contract of employment that an employee be provided with work.


Restricting Future Activities

There are no statutory rules that encumber a departing employee’s ability to work. However, the parties are free to enter into contractual non-competition and non-solicitation agreements. Such restrictive covenants may be enforced if they are reasonably required to protect the proprietary interests of the employer. The employer must establish that the covenants are reasonable, both from a temporal and geographical perspective. To the extent that such clauses are considered to be injurious to the public interest, they will not be enforced. In the absence of restrictive covenants, employees are free to work for other employers, even those who may be in competition with the dismissing employer. All employees are restricted from removing confidential information, including customer lists. There are certain employees who, by virtue of their senior positions, are considered to be “fiduciaries” who may be restrained, for a reasonable period, from soliciting customers of a former employer.


Severance Payments

Whether a dismissed employee is entitled to any payment depends upon whether the employee was dismissed with or without “just cause”. As stated above, “just cause” is determined using tests developed in the courts of common law.

If there was just cause for the employee’s dismissal, then no notice or payment is required.

If the employee was dismissed without just cause, then the amount of the notice or equivalent payment depends upon whether the employee is subject to the relevant provisions of the Employment Standards Act or Canada Labour Code, the terms of a contract, and/or the entitlement to “reasonable notice”.


Special Tax Provisions And Severance Payments

Severance payments are taxable. If the severance payment constitutes a “retiring allowance” under the Canada Income Tax Act, , it is subject to a withholding tax rate which varies depending on the amount of the payment.

Damage awards obtained for human rights violations are not taxable.


Allowances Payable To Employees After Termination

Where the employee continues working for a period of time after termination (referred to as “working notice”), the employer should continue to make contributions. However, if the employee is offered a salary continuance or a lump sum payment, the employer must determine which benefits are included in the offer. There is no “COBRA” type legislation as in the United States.


Time Limits For Claims Following Termination

In a union setting, the time limit is set by the collective agreement. The time limit for commencing an action in the BC courts for breach of the employment contract is 2 years for claims arising on or after June 1, 2013 under the BC Limitation Act. There are specific limitation periods under legislation, including the Employment Standards Act (varies depending on nature of claim) and the Human Rights Code (12 months) to bring claims within the applicable tribunals.

5

GENERAL

Specific Matters Which Are Important Or Unique To This Jurisdiction

Restrictions on Use of Cellular Phone While Driving

Many employers provide their employees with communication tools such as cellular phones and personal digital assistants as part of their employment. In BC, employers face the risk of vicarious liability for accidents caused by employees who violate the restrictions regarding handheld devices while driving.

With respect to a hand-held electronic communication device such as a cellular phone, a person who is driving a vehicle must not hold, operate or watch the screen of the device, or send or receive text messages or electronic email. A driver is permitted to use a hands-free telephone provided certain requirements are met, including the requirement that the device is not operated by the hand, the device is voice-activated, or requires only one touch in order to initiate, accept or end a call.



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Contact a Contributing Author:
Sabrina R. Anis
Miller Thomson LLP
Canada


Nicole Byres
Miller Thomson LLP
Canada


Disclaimer:

© 2021, Miller Thomson. All rights reserved by Miller Thomson as author and the owner of the copyright in this chapter. Miller Thomson has granted to Multilaw non-exclusive worldwide license to use and include this chapter in this guide and to sublicense Lexis Nexis, a division of RELX Inc. and its affiliates certain rights to use and distribute this Guide.

The information in the How to Hire and Fire Guide provides a general overview at the time of publication and is not intended to be a comprehensive review of all legal developments nor should it be taken as opinion or legal advice on the matters covered. It is for general information purposes only and readers should take legal advice from a Multilaw member firm.

Publication Date: June 2021