Back in 2003, with the objective of giving employers and employees maximum flexibility to agree to working relations, the so-called zero hour contract, also known informally as “job on call,” was formally introduced into the Italian employment law regime. Under these contracts, the employee agrees to be available to work for the employer only at specific times, at the request of the employer. In Italy, the typical employment contract is still the traditional full-time, open ended one, so it comes as no surprise that this arrangement is largely viewed as punitive to employees and is subject to multiple restrictions.
Through the Voluntary Retirement Savings Plans Act, the Québec government aimed at making sure all workers who did not participate in a RSP plan at their workplace had the opportunity to do so. The Act creates different obligations for the employers it covers depending on the number of eligible employees they have on their payroll.
As of 31 December 2016, enterprises covered by the Act must offer a VRSP if, on 30 June 2016, they had 20 or more eligible employees at their service. Employers are not required to financially contribute to the plan but still they have to make it available for their eligible employees. Similar obligations will be imposed on enterprises employing less eligible employees in the near future and we will keep you informed in due course.
In the UK, before June 2000 there was no express protection for part-time workers against less favourable treatment when compared with those who work full time. Their only options for legal redress were by way of an equal pay or sex discrimination claim. In 2000 the Part-time Workers (Prevention of Less Favourable Treatment) Regulations (the Regulations) came into force providing specific protection for part-time employees and workers.
What is a part-time worker?
In the Regulations, a part-time worker is defined as a person who is paid wholly or in part by reference to the time they work, and who is not a full-time worker having regard to the employer’s custom and practice in relation to workers employed under the same type of contract. A “worker” includes a person who works under a contract of employment or under any other contract for the personal performance of work or services with the exception of services which are provided for a client or customer on a professional basis or by a business undertaking carried on by the individual.
Identifying a comparator
In order to bring a claim under the Regulations, a part-time worker must identify a suitable full-time worker as a comparator.
The comparator must be:
- Employed by the same employer.
- Employed under the same type of contract.
- Engaged in the same or broadly similar work having regard, where relevant, to whether they have a similar level of qualification, skills and experience.
- Working or based at the same establishment as the part-time worker or, where there is no such worker who satisfies the three requirements listed above, working or based at a different establishment and satisfying those requirements.
Protection against less favourable treatment
Under the Regulations, a part-time worker has the right not to be treated less favourably than the employer treats a comparable full-time worker with regard to the terms of their contract; or by being subjected to any other detriment by their employer.
This means, for example, that a part-timer worker is entitled to the same hourly rate of a pay as comparable full-time workers.
This applies only where the less favourable treatment is on the ground of the worker’s part-time status and the treatment is not justified on objective grounds. For example, if the part-time worker brought a claim because of not being promoted, the employer may have a valid defence if it can show that the reason for the lack of promotion was not the worker’s part-time status but performance issues.
In deciding whether a worker has been treated less favourably under the Regulations, the pro rata principle must apply unless it is inappropriate. This means, for example, if a full-time comparator working 5 days per week is entitled to 25 days’ paid holiday each year, a part-time worker who works 3 days per week should be entitled to 15 days’ paid holiday each year.
There is no minimum qualifying period of employment or upper age limit for bringing a claim under the Regulations but a claim must be brought within three months of the act or omission complained of.
If the claim is successful, the tribunal can:
- make a declaration as the rights of the parties; and/or
- order the employer to pay compensation; and/or
- recommend that the employer take action to address the matter complained of.
A recent decision of the Western Australian Industrial Magistrates Court has provided a timely reminder that, where employers pay an annualised salary to an award-covered employee, specific wording may be required in the contract of employment to ensure the higher salary can be offset against specific award entitlements that are not separately provided, such as payment for overtime or leave loading.
Employers frequently address the issue of whether a dismissed employee should be paid a bonus that would be paid after an employee’s dismissal but during the period of common law reasonable notice. We now have recent guidance from Ontario’s highest court on this issue
In Paquette v TeraGo Networks Inc., 2016 ONCA 618, the Court of Appeal for Ontario held that a dismissed employee was entitled to a bonus payment that became payable after his dismissal but during the reasonable notice period. This was despite the fact that the employer’s bonus plan required an employee to be “actively employed” on the date of payout to eligible for the bonus.
This was wrongful dismissal case, in which the dismissed employee, Paquette, had brought a motion for summary judgment on the issue of the period of reasonable notice and damages, including his entitlement to a bonus. The motions judge fixed the period of reasonable notice for Paquette at 17 months, and awarded him the salary and benefits he would have received had he been employed for this 17 month period. He rejected Paquette’s claim for lost bonus payments, however, on the basis that the bonus plan required an employee to be “actively employed” at the time the bonus was paid and Paquette, while “notionally” an employee during this reasonable notice period would not be “actively employed”. Therefore, held the motions judge, pursuant to the terms of the bonus plan, Paquette had no entitlement to damages in respect of lost bonus payments.
Paquette appealed on this narrow issue of entitlement to bonus payments that become payable after his dismissal but during the notice period. The Court of Appeal allowed the appeal.
The Court of Appeal held that the motions judge ought to have engaged in an analysis that commenced with the premise that the appellant’s common law right to damages was based on his complete compensation package, including any bonuses; only then should the motions judge have examined whether the bonus plan unambiguously limits or restricts that right. The Court found that the requirement for active employment in the present case was not sufficient to contract out of the common law right to accrue benefits during the reasonable notice period, explaining in no uncertain terms:
“A term that requires active employment when the bonus is paid, without more, is not sufficient to deprive an employee terminated without reasonable notice of a claim for compensation for the bonus he or she would have received during the notice period, as part of his or her wrongful dismissal damages.”
The Court of Appeal considered a similar issue in Lin v Ontario Teachers’ Pension Plan Board, 2016 ONCA 619. In that case, an employee (Lin) had been dismissed for just cause. The trial judge held that cause had not been established. Lin was accordingly owed wrongful dismissal damages to cover what the trial judge assessed to be a reasonable notice period of 15 months. The trial judge held that any bonuses that would have been payable during this period pursuant to the employer’s short and long term incentive plan were also owed to Lin. As in the Paquette case, this was despite the fact that the plans stated that in the event a participant is dismissed prior to payment of a bonus no bonus shall be paid.
On appeal, the Court of Appeal upheld the trial court’s finding on the basis that the plaintiff’s bonus constituted an integral part of the plaintiff’s compensation and was an amount he would have earned had he not been wrongfully dismissed without reasonable notice.
In these cases, the Court of Appeal has made it clear that unless there is unambiguous contractual language stating otherwise, a dismissed employee will be entitled to be “made whole” during the reasonable notice period. This means that a bonus that would have been payable during that period is presumptively owed. In terms of what language in a bonus plan or contract would suffice in order to displace this common law presumption, the Court of Appeal has held that a requirement to be “actively employed” will not suffice. Employers are therefore well-advised to review their existing bonus plans and seek advice on drafting any provisions that are intended to address disentitlement to bonus following an employee’s dismissal.
Written with the assistance of Melanie Simon, articling student.
A worker who injured herself when she went for a run whilst working from home has had her application for workers compensation dismissed, but only on the basis that the injury did not occur during an ‘ordinary recess’.
In Demasi v Comcare (Compensation)  AATA 644 (26 August 2016), the Administrative Appeals Tribunal (AAT) heard that the applicant took a break from her work at 9.45am (on a day when she was working from home) and went for a run. She tripped on an uneven surface and landed awkwardly, breaking her right hip. The applicant claimed compensation on the basis that the injury she suffered arose out of or in the course of her employment. Comcare denied liability.
In the review application, the AAT heard that the applicant ‘often’ worked from home – estimated at approximately 30 per cent of her total work time.
On the day of the injury, the applicant began work at 7:30am and decided to take an early break in order to go for a run. The injury occurred 30 minutes into the run. There was evidence from the applicant’s manager that she was aware that the applicant would regularly run during her recess breaks.
The B.C. Court of Appeal recently gave employers a much-needed reminder: they’re entitled to reasonable notice too.
While most employees are familiar with the fact that they are entitled to reasonable notice if they’re terminated without cause, employers sometimes forget that the obligation works both ways. An employee cannot simply stop showing up to work without giving their employer time to prepare for the employee’s departure.
In Consbec v Walker, the Court of Appeal considered the case of Peter Walker, a former employee of Consbec Inc., a blasting and drilling company operating throughout Canada. While working as Consbec’s only employee in its Kamloops’ office, Walker abruptly quit one day in June of 2002, leaving the office for good without having given Consbec any prior warning. Walker incorporated a competitor company a month later.
A lower court initially awarded Consbec $56,116.11 in damages for Walker’s failure to give the company notice. Ultimately, the Court of Appeal scaled this amount back. The Court ruled that an employee who quits without giving notice is only responsible for those damages that flow from his or her failure to give notice – they are not on the hook for all the costs associated with their resignation in general. Importantly, in its decision, the Court of Appeal determined that Walker legally owed his employer a reasonable notice of one month before leaving.
Still, the end result of the case does shed light on why employers don’t usually bother pursuing these types of claims. The Court of Appeal ultimately found that the reasonable costs that Consbec incurred, from sending a last-minute employee to Kamloops to fill in for Walker, were more than offset by the money the company saved not paying Walker’s salary for a month. Thus, the damage award was set aside.
So, employers should beware. If they’ve been left in the lurch by an employee, they do have potential recourse. However, it’s important that they seriously consider whether a former employee’s wrongful quitting actually cost them enough to justify a legal proceeding. Otherwise, an employer can only hope for – at most – a symbolic victory.
Written with the assistance of John Schudlo, articling student.
Last month, the Fair Work Commission upheld a decision to dismiss an employee for breaching its zero tolerance policy on illicit drugs, confirming the importance of having a clear drug and alcohol policy that is effectively communicated and consistently applied.
The employer, Coles Group Supply Chain Pty Ltd (Coles), summarily dismissed Shane Clayton who tested positive to cannabis, in breach of Coles’ drug and alcohol policy, which clearly stipulated cut-off levels of alcohol intake and a zero tolerance to illicit drugs for any person employed “at any Coles Distribution Centre in any position.”
Whilst the fairness of a dismissal for breaching a zero tolerance policy is ultimately for the Commission to determine, taking into account the nature of the workplace, the risks associated with employees working under the influence of alcohol or illicit drugs and the absence of an appropriate objective test for impairment, the case confirms that an important consideration is the language of the policy. In this case, Coles’ policy stated that it was directed to providing “a conclusive (positive/negative) result and not to establish[ing] the extent to which a person may be impaired from performing work tasks.” It also clearly stated that a positive test for illicit drugs could result in dismissal.
An employer generally does not have any right to direct how an employee conducts themselves outside of their employment. For an employee’s “out of hours conduct” to be a valid reason for dismissal, the conduct must have a relevant connection to the employment relationship.
In the recent decision of Kedwell v Coal & Allied Mining Services Pty Limited T/A Mount Thorley Operations / Warkworth Mining  FWC 6018, Commissioner Saunders of the Fair Work Commission (FWC) has considered the factors which go to establishing a relevant connection between an employee’s out of hours conduct and their employment, and whether such conduct was a valid reason for the employee’s dismissal.
On 28 September 2016 the Financial Conduct Authority (FCA) published final rules on regulatory references. The purpose of the rules is to support the FCA objectives of “consumer protection and market integrity by providing firms with effective tools to better assess individuals fitness and propriety and ensure individuals take greater responsibility for their own conduct.”
The obligation is on banks and insurers to request a reference from all previous employers over the last six years for individuals applying for a senior management function or senior insurance management function within the Senior Managers Regime or Senior Insurance Managers Regime, a significant harm function under the certification regime, Notified Non-Executive Directors and Key Function Holders. The rules will come into force in March 2017. The FCA feels that this will give firms sufficient time to ensure that their processes are up to speed particularly as some of the most challenging requirements will arise after the rules have been in force for some time.
The FCA have sought to address some of the concerns raised in the previous consultation issued in October 2015, relating to legal considerations about data protection, the practicalities of updating historic references, how to obtain regulatory references from certain overseas employers, the rationale of applying the references to intra-group moves and concerns regarding proportionality.
The final rules allow firms within a group not to request a reference from each other where the group has centralised records or alternative means of sharing relevant information. The rules also clarify that the obligation is on the firm to take reasonable steps to obtain a reference. Some respondents to the consultation had raised concerns over the difficulty of obtaining a reference from an overseas firm or even a non-financial services firm more generally. The rules also allow for some flexibility in timing, where providing a reference would require the recruiting firm or the existing employer to make a public announcement. If that is the case there is no time limit and references can be obtained at any point during the application process.
The rules include a standard template which regulated firms should use to provide a reference. This template has also been amended so that breaches of individual conduct are only required where the breach is subject to disciplinary action and further additional guidance has been given as to the level of detail required in the standard template. The rules also remove the requirement to provide details of an employee’s responsibilities in addition to their role.
Another important change to the final rules is in relation to the obligation to update a reference for six years since the date of the original reference. Concern was expressed that this could lead to data protection issues about sharing personal information with firms that may not have a legitimate reason for receiving such information. The amendment requires that a firm is only required to update the current employer to revise a reference already provided if new relevant information comes to light.
The FCA has also extended its guidance to assist firms in determining whether to give an employee the “right to reply “ to both the reference and the updating of any reference. Much of this guidance would in any event comply with the common law and employment law duties which apply to an employer in giving a reference
Firms will need to ensure that they are ready to implement the new regulatory reference rules on 7 March 2017.