The importance of mobility clauses for Quebec employers

In order to meet their organizational needs, employers may need to relocate their employees’ workplace. However, relocating employees can be risky business for employers.

The place of work is an important part of an employee’s working conditions. When employers make substantial changes to their employees’ working conditions, said employees can potentially claim that their original employment contract has been terminated. This is referred to as a “constructive dismissal”.

When it comes to relocating an employee’s workplace, a substantial change is defined by the relocation involving a relatively large distance, and impacting the employee’s daily life. Generally, the courts will evaluate this by calculating the time it will take the employee to travel to and from work each day. They will attempt to determine whether a reasonable person would consider the relocation to be a substantial change. Even though case law does not refer to a scale by which the distance from the workplace can be measured and evaluated as a substantial change, it seems that any workplace relocation within less than 35 kilometers will not be considered problematic. However, it seems that the level of risk for employers does rise when the relocation involves 50 kilometers or more. In such cases, a decision maker could evaluate that the relocation constitutes a substantial change to the employee’s working conditions, and that there is reasonable cause to claim constructive dismissal. Nevertheless, such occurrences need to be analyzed on a case by case basis.

Employees that are subjected to constructive dismissal due to the relocation of their workplace are entitled to reasonable notice, or pay in lieu thereof. The employees could also file a complaint under article 124 of the Act respecting labour standards aiming to cancel the workplace relocation, provided that the conditions of the complaint under article 124 are met.

Employers may, however, overcome the legal consequences mentioned above by negotiating a mobility clause in the employees’ employment contract. In such cases, an employer would be able to make changes to an employee’s workplace location, provided that these changes coincide with the terms established within the employment contract. For an employer to take advantage of this opportunity, mobility clauses must meet certain requirements in order to be valid. Case law has established in particular that the mobility clause needs to have been brought to the attention of the employee, who will have had to voluntarily consent to it, and be sufficiently precise by providing examples of locations where the employee might be required to work.

Fair pay, safe workplaces, and federal contractors telling it like it is

On August 24, 2016, the U.S. Department of Labor (DOL) and the Federal Acquisition Regulatory (FAR) Counsel issued a final rule to implement President Obama’s Executive Order 13673, entitled “Fair Pay and Safe Workplaces,” first announced by the President over two years ago on July 31, 2014.

According to the Federal Acquisition Institute, the purpose of E.O. 13673 is “to help [federal] contractors come into compliance with labor laws – not to exclude contractors.” The final rule implementing the order requires both current and prospective federal contractors and subcontractors to disclose labor law violations and establishes how federal agencies (primarily contracting officers working with agency labor compliance advisors) should take infractions and violations of labor laws into account when awarding or extending federal contracts.

The “Fair Pay and Safe Workplaces” order affects an estimated nearly 30 million employees in the U.S. workforce and tens of thousands of federal government contractors. According to the final rule and accompanying guidance provided by the DOL, current and prospective contractors seeking contracts valued at more than $500,000 will be required to disclose to the contracting agency any violation of one or more enumerated federal and state labor laws of which they have been found guilty or otherwise responsible for the three years preceding the submission of the contract bid.  Once a contract has been awarded, the contractor must renew its disclosures every six months. The federal and state labor laws of which contactors must disclose violations include wage and hour, safety and health, collective bargaining , family and medical leave and civil rights laws.  Contractors must also disclose such information as it pertains to their primary subcontractors.

Since Executive Order 13673 is intended to encourage reporting and accountability among federal contractors and not to eliminate or reduce the number of federal contracts, the DOL contemplates that only the most egregious violators – namely contractors who fail or refuse to come into compliance with labor laws – will be refused new or extended federal contracts. Indeed, the executive order provides that each contracting agency will designate a senior official as a Labor Compliance Advisor who will advise the contractor (or prospective contractor) whether any violations rise to the level of a lack of integrity or business ethics and, if appropriate, will provide guidance on corrective actions the contractor can take to avoid losing a current or prospective contract.

Two other aspects of Executive Order 13673 are worth noting. First, the order mandates that federal contractors not require their employees to enter into pre-dispute arbitration agreements for disputes involving allegations of sexual assault or harassment.  Simply put, the order requires that employees be given their “day in court” for any claims involving sexual harassment or assault.  Importantly, the “no arbitration” restriction does not apply to other types of worker claims, including workplace safety or wage and hour claims.

Second, the Order requires that federal contractors provide employees with accurate information every pay period about the number of basic and overtime hours worked, amount of pay, and any additions to or deductions from the calculate pay, so that employees may see precisely how their pay was calculated.

Federal contractors have always been subject to an added layer of scrutiny because of their interface with the federal government, but Executive Order 13673 takes this scrutiny to a new and unprecedented level. While the DOL has attempted to streamline the disclosure and assessment processes under the new final rule – including by promising to design a single website so that contractors can “report once in one place” in order to meet their disclosure requirements no matter how many separate federal contracts they have or are seeking – the full implementation of the new reporting requirements  are sure to cause some bumps and bruises along the way as both federal agencies and their contractors become accustomed to the more rigorous process.


Terminating an Employee for Voicing His Political Opinion : What Are The Potential Consequences?

Terminating an employee for expressing his political opinions at work can be costly for an employer. This is what  an employer learned after being ordered to pay 91 073,46 $ to an employee following his termination for sharing his political opinions in the workplace.

In this decision (2015 QCCRT 0399), the « Commission des Relations du Travail » (Commission) held that, not only must the corporation reinstate the plaintiff to his previous position, but the plaintiff was also entitled to compensation for loss of salary, moral as well as punitive damages. As stated in Quebec’s Charter of Human Rights and Freedoms (Charter), an individual has the right to freely express his opinion, and any unlawful interference with such freedom entitles the victim to compensation. Although the Commission, an administrative tribunal, has the authority to order the payment of both moral and punitive damages under the Act respecting labour standards, it is relatively uncommon for the Commission to grant such damages.

In this case, while at work, the plaintiff discussed the upcoming 2012 election with his co-workers. He stated that the leader of the “Parti Québécois” (a separatist political party in Québec), Pauline Marois, would be elected, that Quebec would become a country and that this situation would be difficult on Anglophones in Quebec. One of his English-speaking co-workers was offended by this statement and accused the plaintiff of wanting to throw him out of his own country.

The next morning, the employee was called into the Executive Director’s office and saw a termination letter open on the Director’s computer. She then told him that their business did not need politicians, and consequently terminated his employment without further details. Additionally, his record of employment referred to “intimidation” as the reason for his discharge. Unsurprisingly, the employee was shocked to learn of his dismissal, and experienced various problems following his unforeseen termination.

In its ruling, the Commission emphasized its serious disapproval of the corporation’s actions and the corporation’s delay in admitting its fault. The Commission held the corporation’s actions to be a severe violation of the Charter and ordered the payment of damages.

Given the Commission’s authority to grant moral and punitive damages, employers should be cautious when terminating employees to ensure that their actions are not considered a violation of the rights and freedoms protected by the Charter.

Written with the assistance of William Provencher-Campeau, summer student.

NLRB allows student assistants to form union

In the much anticipated Columbia University decision, the National Labor Relations Board reversed its most recent precedent and held that student teaching assistants at private colleges and universities are statutory employees under the National Labor Relations Act and may therefore vote to form a union.  This decision is a return to an earlier decision by the Board which overturned a decade-old standard of viewing student teaching assistants as students rather than a part of the teaching faculty.  This decision is sure to invite a rush of union organizing efforts at private universities and colleges across the country.

The Board’s decision in Columbia University stems from a petition for election filed in December 2014 by the Graduate Workers of Columbia-GWC, UAW, which sought to represent graduate and undergraduate student teaching and research assistants at the university.  After a requested hearing upon the petition, the Regional Director dismissed the petition for election on the basis that it sought an election among students who are not employees within the meaning of Section 2(3) of the Act.  The Union then sought review of the Regional Director’s decision by the Board.  The Board granted review of the decision to resolve the primary issue of whether student teaching assistants are statutory employees, as well as subsidiary issues if the classifications were found to be employees.

In a 3-1 decision with Board Member Philip Miscimarra dissenting, the Board held that student teaching assistants are statutory employees under the Act. The Board also held that the petitioned for unit, which included graduate and undergraduate students, was an appropriate unit for bargaining and contained of no temporary employees.  The Board determined that the students performed work, at the direction of the university, for which they are compensated.  The students may therefore be treated as statutory employees despite the fact that they are also students at the university.  The Board held that statutory coverage is permitted by virtue of an employment relationship, and is not foreclosed by the existence of some other, additional relationship the Act does not reach.

With this decision, the Board reversed its 2004 decision in Brown University, which held that a group of graduate student assistants were not employees within the meaning of the Act.  In that case, the Board reasoned that graduate student teaching assistants could not be statutory employees because they are primarily students, and they have a primarily educational, not economic, relationship with their university.  The Brown University decision, however, supplanted the 2000 Board decision of New York University which held graduate student teaching assistants to be employees based on the common law agency doctrine and the absence of any statutory exclusion for graduate student teaching assistants.

The Board majority in Columbia University returns to the reasoning in New York University, and finds that the Board erred as to a matter of statutory interpretation in the Brown University decision.  The Board notes that extending the Act to student teaching assistants would effectuate the purpose of the Act, and that collective bargaining between a university and its student teachers is feasible, though it poses some special issues.  In contrast, Board Member Miscimarra in his dissent views the extension of the Act to student teachers as causing uncertainty and complexity in the student-university relationship, as well as unintended risks associated with collective bargaining, such as resort to the economic weapons allowed under the Act.  According to Board Member Miscimarra, collective bargaining may allow student teachers to exercise control over the student-university relationship in areas such as tuition and graduation that Congress never intended for them to have.  Further, resort to the economic weapons allowed by statute may fundamentally change the relationship between university students and their professors and detract from the far more important goal of completing degree requirements.

Legal challenges to the Board’s return to the New York University decision are expected, and another flip-flop by the Board on this issue would not be surprising.  In the meantime, it is anticipated that students at other private universities and colleges in the Northeast and West Coast will follow suit and seek representation.  Therefore, it is advised that these institutions seek consultation with an experienced labor attorney to discuss the implications of a union organizing campaign on campus, and the procedures for collective bargaining should a union be elected.

Continuous service: Prior casual service counts

A majority of a Full Bench of the Fair Work Commission has recently held that for the purposes of calculating notice of termination and redundancy entitlements for permanent employees under the Fair Work Act 2009 (Cth) (the Act), a prior contiguous period of regular and systematic service as a casual employee will count as service.

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Termination payments – proposed changes to tax and national insurance.

The UK Government has published its response to a consultation on the taxation of termination payments. In 2015, the Government issued a consultation paper containing various different proposals for simplifying the regime. The paper published on 10 August is the Government response and also includes draft legislation for further consultation.

Currently under UK legislation payments and other benefits “received directly or indirectly in consideration or in consequence of, or otherwise in connection with” a termination of employment are taxable under sections 401 to 416 of the Income Tax (Earnings and Pensions) Act 2003 (ITEPA 2003). However, the first £30,000 of any such payment is tax free and the employers National Insurance Contributions (NICs) are not payable on the whole of the payment. The tax treatment of certain payments, for example payments in lieu of notice (PILONs), will depend on the nature of the payment, including whether it is contractual. There are also various specific exemptions, including for injury, disability or death and for employment performed outside the UK for particularly long periods, known as foreign service relief.

On 10 August 2016, the Government published a paper confirming that it proposes to:

  • Remove the distinction between contractual and non-contractual PILONs. This will mean that all PILONs will be paid subject to income tax, employer NICs and employee NICs regardless of whether or not a contract of employment permits the employer to pay in lieu of notice. In fact contractual PILONs have become increasingly common as including a PILON in the contract ensures that an employer does not commit a breach of contract by early payment on termination. As a result an employer can rely on the post termination restrictive covenants.
  • Retain the exemption from income tax and employers’ and employees NICs for payments relating to the termination, up to the current threshold of £30,000. However, for termination payments over that amount it will align the rules for income tax and employers’ NICs so that employers’ NICs will become payable on the excess over £30,000. This will result in the cost of termination payments being more for employers and may therefore have an effect on the amount that an employer is prepared to pay to an employee.
  • Abolish foreign service relief, except in relation to seafarers. The Government argues that today there is a global workforce and that this exceptional treatment is no longer justifiable.
  • Clarify that the exemption from tax for payments for injury excludes injury to feelings. The exemption will only apply where there is an injury or disability of a physical or psychological nature that is sufficient to cause the employee to be unable to perform his or her job properly.

The Government has not included many of its original proposals, which included only allowing the tax free payments in certain scenarios such as redundancy and changing the level of the tax free exemption from £30,000. This means that the current rules on redundancy payments are not intended to be affected.

The Government has invited views on whether the published draft legislation achieves the stated objective. The consultation is open until 5 October. The changes are intended to come into force with effect from April 2018.

Alberta on Track to Raise Minimum Wage to $15-per-hour by 2018

Alberta’s New Democratic Party (NDP) government is moving forward on its 2015 campaign promise to raise minimum wage to $15-per-hour by 2018. The raise to $15-per-hour is being applied incrementally. On October 1, 2015, Alberta’s minimum wage rose from $10.20 to $11.20. For those who serve liquor, the minimum wage rose from $9.20 to $10.70. The next wage increase is scheduled for October, 2016 and will increase the minimum wage by $1 to $12.20-per-hour. The following two increases will occur in October 2017 and 2018.

The upcoming minimum wage increase will apply to employees in almost every industry, including the liquor service industry (thus eliminating the minimum wage differential for those who serve liquor). However, certain employees will remain exempt from the minimum wage requirement. Those employees include but are not limited to real estate brokers, farm employees, and insurance sales persons.

The raise to $15-per-hour will make Alberta’s minimum wage the highest in the country. The raise will also reduce the income gap and bring Alberta in line with Ontario and Quebec.

Written with the assistance of Hannah Buckley, summer student.

Does Title VII cover sexual orientation claims? It depends.

In July 2015, the EEOC officially took the position that sexual orientation claims may be brought under the non-discrimination provisions of Title VII of the Civil Rights Act of 1964. However, in the recent case of Hively v. Ivy Tech Community College, the Seventh Circuit refused to accept the EEOC’s position and affirmed the dismissal of a sexual orientation discrimination claim holding that such claims are not cognizable under Title VII.

Following the United States Supreme Court’s 1989 decision in Price Waterhouse v. Hopkins, federal courts have consistently recognized sexual stereotype or gender non-conformity claims as a species of sex discrimination prohibited by Title VII.  There, the Court recognized that the anti-discrimination protections of Title VII protect employees who do not conform to stereotypes regarding their gender.

In the ensuing years, the EEOC seized upon the logic of Price Waterhouse in asserting that sexual orientation discrimination claims similarly fall under the sex discrimination claim rubric.  According to the EEOC, these types of claims are based on sex because a complaint alleging that an employer “took his or her sexual orientation into account in an employment action necessarily alleges that the [employer] took his or her sex into account,” because they are a form of discrimination based on gender stereotypes, and because they are a form of associational discrimination on the basis of sex. Baldwin v. Foxx, EEOC Appeal No. 0120133080, 2015 WL 4397641, at *5-8 (July 16, 2015).

In reviewing the dismissal of Hively’s sexual orientation claim, the Seventh Circuit noted that it was compelled to affirm the dismissal based on its prior precedent dating to 2000 which held that sexual orientation claims are not cognizable under Title VII. However, given the EEOC’s recent announcement regarding it position on the issue, the court felt compelled to analyze its rationale for so holding.

In doing so, the court noted that Congress has “repeatedly rejected” legislation that would have extended Title VII’s protections to sexual orientation. The court also noted that Congress has failed to amend Title VII in light of the emerging judicial consensus that workplace discrimination based on sexual orientation “can no longer be tolerated.”  The court further noted that the line between a gender stereotype claim and a sexual orientation claim is difficult, if not impossible, to draw and that such efforts often lead to “odd results.”  However, the court ultimately concluded that under Title VII in its current form, it is a line that must continue to be drawn by courts when facing such cases, an approach leads to the “paradoxical legal landscape which a person can be married on Saturday and then fired on Monday for just that act.”

The Hively decision is clearly a rebuke to the EEOC’s efforts to expand the protections of Title VII without Congressional action.  Moreover, given the current composition of the United States Supreme Court, it appears unlikely that employers will receive any definitive guidance in the short term as to the viability of these claims.  However, it also seems clear that the EEOC will continue to assert its position on sexual orientation claims absent Supreme Court or Congressional action.  As a result, employers should be prepared to defend against these types of claims at an administrative level, at a minimum.

Management of psychological health and safety risks

A recent case from the Supreme Court of Queensland (Beven v Brisbane Youth Service Inc [2016] QSC 163) again illustrates the importance of managing risks to psychological health and risks of occupational violence.

The case involves a sexual assault perpetrated by a client of the Brisbane Youth Service Inc. (BYS) on one of its employee case workers.  The client had a history of drug use (which was continuing), sexualised behaviours towards a number of the workers with whom she came into contact (both at BYS and other organisations) and had made two previous staff members of BYS feel unsafe when working with her (to the extent that they ceased working with her or working with her at her home alone).

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A new model of discrimination?

Last December, the French government passed a bill decreeing that models must now obtain a medical certification in order to be able to work in France. Companies found not to be respecting the new law will be liable to a fine of more than 75,000 euros (approximately $CAN 108,000 at the current exchange rate) and their directors could also be forced to serve up to six (6) months in prison. France is not the first country to adopt a law banning unhealthy models. In 2012, the Israeli government passed a similar law. In some other countries like Spain, Italy and Denmark, it is the fashion industry that took steps to regulate itself.

There exists no such law or regulation in Canada yet. In the context of employment law, issues could be raised concerning the legality of such restrictions. Refusing to employ someone because of their physical features could indeed be seen as discriminatory. Discrimination is prohibited by section 10 of the Quebec Charter of Human Rights and Freedoms (Charter). Handicap is one of the various prohibited grounds for discrimination enumerated in this section and Canadian courts have held that the notion of handicap must be interpreted liberally. For example, case law has found that obesity can be considered as a handicap, and distinction based on such a physical characteristic can thus be deemed discriminatory. Following this logic, excessive thinness could also be seen as an handicap, and therefore constitute a prohibited ground for discrimination.

Practising discrimination in hiring a person is prohibited by section 16 of the Charter. However, refusing to hire a person following a distinction, exclusion or preference based on the aptitudes or qualifications required for an employment is deemed non-discriminatory following section 20 of the Charter. Hence, employers could possibly justify their refusal to hire unhealthy skinny models by explaining why it is necessary for models to be in good health in order to perform their job. The same justification could be put forward by the government to defend the enactment of a law similar to the one recently passed in France and rebut any claim accusing it of discriminating against skinny models. It would be interesting to see how the Québec Human Rights Tribunal would decide on such a question and whether or not its analysis would take into account how the images that are put forward by the fashion and publicity industries can affect the physical and psychological health of many persons.

In conclusion, everyone agrees that eating disorders are a serious problem that needs to be addressed. However, there is still no answer as to whether legislation or the fashion industry’s self-regulation regarding the models’ weight and health are viable ways to deal with this sensitive issue.

Written with the assistance of Sarah Hébert-Tremblay, summer student.