Singapore: “Watershed” Amendments to Employment Legislation

Singapore’s employment laws are set to undergo watershed changes come April 2019. In summary, a greater number of employees – in particular, professionals, managers and executives (“PMEs”) – will soon be able to avail themselves of the statutory protections contained in Singapore’s Employment Act, the key employment legislation in Singapore.

The single most significant legislative change is the removal of the monthly salary cap of SGD 4,500 in respect of PMEs. Presently, only PMEs below this salary cap have the benefit of the provisions in the Employment Act relating to minimum periods of notice, paid public holiday and sick leave entitlements, as well as other protections such as timely payment of salary and protection against wrongful dismissal.

With these legislative changes, all PMEs regardless of their monthly salaries will fall within these provisions of the Employment Act.

At the recent second reading of the Employment (Amendment) Bill, the Minister for Manpower explained that the removal of the salary threshold was timely in light of the rising proportion of PMEs, which is expected to make up two-thirds of the Singapore workforce by 2030. The Ministry of Manpower estimates to an additional 430,000 PMEs are likely to benefit from this change.

Another legislative change to the Employment Act concerns the statutory protections found in Part IV of the Employment Act. These statutory protections – which relate to rest days, maximum hours of work, overtime payments – generally apply to vulnerable employees. Presently, these protections found in Part IV of the Employment Act cover workmen earning up to SGD 4,500 a month, and non-workmen earning up to SGD 2,500 a month. The Employment Act will be amended to increase the monthly salary threshold for non-workmen from SGD 2,500 to SGD 2,600, a move that is likely to expand these protections to half of Singapore’s total workforce.

As far as employers are concerned, some of the legislative amendments are aimed at giving businesses greater flexibility. For example, employers will now have an added option when it comes to certain employees (i.e. employees who are covered by the Employment Act but do not fall within Part IV) who are made to work on public holidays: these employees may now be given time off in-lieu instead of a full day off or an extra day’s pay.

The Ministry of Manpower also announced legislative changes to move the adjudication of wrongful dismissal claims from the Ministry of Manpower to the Employment Claims Tribunals (ECT). Presently, salary-related disputes are adjudicated by the ECT, while wrongful dismissal claims are adjudicated by the Ministry of Manpower. It has been observed that this distinction can be artificial as more often than not there are overlaps between both forms of disputes. These changes are therefore intended to provide both employees and employers with a more convenient “one-stop service” for the adjudication of employment disputes.

In addition to the above, there will be other legislative changes made to the Employment Act. For example, the requirement that employers can only recognise medical certificates which are either issued by government doctors or employer-approved doctors will be removed, and employers must now recognise all medical certificates issued by registered doctors (the rationale being that doctors in Singapore are today registered under the Medical Registration Act and are subject to the Singapore Medical Council Ethical Code and Ethical Guidelines).

Finally, it should be stated that notwithstanding these significant legislative changes, the Employment Act will continue to not cover public servants, domestic workers and seafarers, who are covered separately under other laws.

More information on these legislative changes may be found here.

 

Premature termination of fixed term contracts of employment

Fixed term contracts of employment are becoming a common practice in the workplace. A fixed term contract is typically entered into for a specific duration (defined by time) or purpose (for a particular project) and would ordinarily expire either with the effluxion of the agreed time or upon the purpose for which it had been entered into being fulfilled (for example the return of a permanent employee who was on maternity leave).

The question that often arises is whether the fixed term contract of employment can be terminated prior to the agreed termination date or the happening of the agreed-upon circumstance.

The common law position is that fixed term contracts of employment cannot be prematurely terminated, unless there is a material breach or repudiation by either party.

The Courts have consistently upheld the principle that by entering into a fixed term contract of employment for a specific period, the parties intend to be bound by the contract for the stipulated duration unless there is express provision made for earlier termination.

Buthelezi v Municipal Demarcation Board [2005] 2 BLLR 115 (LAC) the Municipality terminated Mr Buthelezi’s fixed-term contract early. Mr Buthelezi then claimed this as an unfair dismissal. The Labour Appeal Court agreed with him. In arriving at its finding the Court held:

“There is no doubt that at common law a party to a fixed–term contract has no right to terminate such contract in the absence of repudiation or a material breach of the contract by the other party. In other words there is no right to terminate such contract even on notice unless its terms provide for such termination.”

Nkopane and Others v Independent Electoral Commission (2007) 28 ILJ 670 (LC) the Labour Court was required to determine whether an employer can prematurely terminate a fixed term contract due to its operational requirements. In arriving at the decision that the employer is only entitled to premature termination on the basis of operational requirements, if the contract allows for it, the Court said:

“It could easily have worded the form and the related documents to make it clear that the employment would terminate at the latest on the date specified and was subject to earlier termination for operational reasons.”

The finding in the Buthelezi and Nkopane cases, that there is no common law right to premature termination of a fixed term contract unless the fixed term contract provides for such right was upheld in Lottering and Others v Stellenbosch Municipality [2010] 12 BLLR 1306 (LC). At paras 14 and 20, the court held:

”If the contract is for a fixed term, the contract may only be terminated on notice if there is a specific provision permitting termination on notice during the contractual period – it is not an inherent feature of this kind of contract and accordingly requires specific stipulation.”

In the more recent case of Nord v Civicus World Alliance for Citizen Participation Inc (JS363/12) [2016] ZALCJHB 162 (21 April 2016) the Court held:

“……premature termination of a fixed term contract is permissible, where an express provision is made for such an event.”

An appropriate clause making express provision for premature termination of a fixed term contract of employment would read something like this:

“Either party may terminate this fixed term contract of employment on one calendar months’ written notice only for reason of misconduct, incapacity or the operational requirements of the Company.

Should this fixed term contract be lawfully terminated prior to its expiry, the employee will have no claim for compensation or damages against the Company.”

In today’s ever changing work environment, it is extremely important for employers to ensure that their contracts of employment include their specific requirements.  In the present context, employers must ensure that any fixed term agreement includes a clause allowing for premature termination.

This article was written by Danielle Ebrahim-Naseem, Associate, Norton Rose Fulbright South Africa Inc

 

Recent changes to Modern Awards – What employers should know

As part of the Commission’s four-yearly review of modern awards[1], the Full Bench of the Fair Work Commission (FWC) recently handed down a number of decisions[2] which have the effect of inserting a model casual conversion clause (Model Clause) into 84 Modern Awards[3] from 1 October 2018.  This provides “regular casual” employees the right to request to convert their employment to permanent full-time or part-time.

The other 28 Modern Awards that already contain a casual conversion clause prior to 1 October 2018 will remain unchanged.

Who can request for casual conversion?

The Model Clause provides a framework under which employees are entitled to request to convert their employment from casual to either permanent part-time or full-time, in certain circumstances.

The entitlement arises if the employee is a “regular casual employee” within the definition provided in the Model Clause.  This requires the employee to have, in the preceding 12 months, worked a pattern of hours on an ongoing basis which, without significant adjustment, the employee could continue to perform as a full-time employee or part-time employee under the provisions of the Modern Award.

When can an employer refuse the request?

In the event that an employee is a “regular casual” employee for the purpose of the Model Clause, the employee is not provided with an automatic right to be converted to permanent full-time or part-time employment.  The Model Clause allows employers to refuse a request on “reasonable grounds”, including any of the following:

  • It would require a significant adjustment to the employee’s hours of work in order for the employee to be engaged as a full-time or part-time employee in accordance with the provisions of the Award. That is, the employee is not truly a regular casual employee under the Award.
  • It is known or reasonably foreseeable that the regular casual employee’s position will cease to exist within the next 12 months.
  • It is known or reasonably foreseeable that the hours of work which the regular casual employee is required to perform will be significantly reduced in the next 12 months.
  • It is known or reasonably foreseeable that there will be a significant change in the days and/or times at which the employee’s hours of work are required to be performed in the next 12 months which cannot be accommodated within the days and/or hours during which the employee is available to work.

For any ground of refusal to be reasonable, the employer must base the reason on facts which are known or reasonably foreseeable at the time the decision is made.

Continue reading

Claim by track cyclist Jess Varnish to be heard in the employment tribunal next week

Track cyclist Jess Varnish brought a claim of sex discrimination against British Cycling and UK Sport last year, following her removal from the Great Britain Olympic team just months before the 2016 Rio Games.

In the UK, protection from discrimination in the workplace is governed by the Equality Act 2010 (the Act). However, in order to be able to bring a claim, an individual must fall within the categories of protected persons under the Act.

Who is protected?

The first category of those protected under the Act are those in “employment” which has a wider meaning for the purposes of discrimination law than for other areas of employment law. “Employment” means “employment under a contract of employment, a contract of apprenticeship or a contract personally to do work”.

This definition covers employees, workers and also a wider category of individuals who are self-employed, provided that their “employment” contract obliges them to perform the work personally: in other words, if they are not permitted to sub-contract any part of the work or employ their own staff to do it. Case law has also established that, in addition to personal service, a degree of subordination to the “employer” is required.

Tribunal hearing

Jess Varnish’s legal representative has confirmed that the preliminary hearing to determine whether she was an employee, worker or self-employed falling within the definition of those protected under the Act will take place next week.

As with similar cases on employment status over recent months involving drivers, couriers and plumbers, the case will be decided on its particular facts and the nature of the relationship between the parties, and will not turn solely on the terms of any written contract between them.

If the cyclist succeeds in arguing that she was an employee, worker or someone engaged under “a contract personally to do work”, her claim of sex discrimination can go ahead in the tribunal next year. If she was an “employee” she would also have the right to bring a claim of unfair dismissal subject to establishing the necessary length of service required in the particular circumstances of her case.

Decision of the French Supreme Court of 28th November 2018 : Does it spell the doom of the gig economy?

The term « gig economy » has come into use to describe segmented jobs governed by “apps”. Drivers, riders, cleaners rely on a “digital platform” to be put in contact with clients and their jobs do not seem to fall precisely within the parameters of laws designed to deal with the traditional subordination relationship of employee to employer, for example because they are free to accept or decline a request for work and because it is often a side job conducted at the same time as another activity.

In France, the business model of such platform relies on the individual being self-employed (no social security is paid by the platform as the self-employed individual carries the cost of his or her own social protection and does not benefit from the rights traditionally enjoyed by employees). However, some unions and individuals working for such platforms have queried whether the status of self-employed is adapted to such individuals given the constraints placed on them by some platforms.

This distinction between employees and self-employed persons is one of the main problems from a legal perspective and often gives rise to cause for dispute. Under French law, the distinction is important in particular with regard to the application of the strict employment law rules such as working time rules and  the protection given in case of termination of the employment contract as well as the employer’s liability for social security contributions (employers must make these payments only for employees but not for self-employed) and entitlement to unemployment benefits.

There have been some litigation over the recent years before the labour courts  with drivers or riders  who claimed to be employees but it ended with mixed results both before the courts of first instance and at the court of appeal level.

A new law was passed in 2017 granting some very minimal rights for the individuals subscribing to the platform such as the obligation by the platform to pay for a work accident cover, some sparse obligations to cover financial cost of professional training, and right to strike and to constitute a union association. However the parliament decided not to  qualify the status of such individuals as the point made during the debates was that it was up to the labour courts to apply the usual criteria of case law to determine whether such individuals were employees or not.

This is exactly what the supreme court did on 28th November 2018 for a rider for Take Eat Easy, (which had in the meantime gone into liquidation in 2016). The rider asked for the qualification of his relationship as an employment contract before the labour court and the case went up to the supreme court.

The supreme court began by recalling that a subordination link (which is the determining factor under French law in assessing whether the relationship is an employment contract) is characterized by the performance of work under the authority of an employer which has the power to give orders and instructions, to control the performance and to sanction the failure of a subordinate.

Therefore, the supreme court decided that a rider is bound by an employment contract to a company which has recourse to a web platform and an application in order to connect partner restaurants, customers ordering meals through the platform and riders, on the basis that the application used a geo-location system enabling the monitoring in real time of the rider’s position and the recording of the total number of kilometers travelled and that the company had the power to sanction the rider by a system of penalties which could even lead to the exclusion of the rider.

The supreme court outlined the control over the rider’s activity and the capacity for the platform to sanction the individual by refusing to work any longer with him which are the two main aspects which can allow a court to requalify a self-employed relationship into an employment contract.

It will be interesting to see how this case law develops and in particular the position of the courts of appeal across France which until now have seemed mostly to consider that self-employment was the applicable relationship. This landmark decision of the supreme court may also prompt the legislator to intervene to try to secure the digital platform business and perhaps grant an intermediary protective status to such individuals.

 

Employees on Long term sickness – when can an employer dismiss?

The Employment Appeal Tribunal (EAT) has recently confirmed that employers should take care when dismissing an employee who is entitled to participate in a permanent health insurance (PHI) scheme and is absent from work by reason of long term ill health. It held that there is an implied term that an employer will not dismiss an employee for incapacity if that would prevent the employee being entitled to long term disability benefits.

Where an employee is absent due to ill health then on termination of employment, the employer may face a claim for unfair dismissal and for disability discrimination.   Capability is a fair reason for dismissal, but the employer would have to show that it adopted a fair procedure in dismissing the employee, for example, by seeking medical advice and reviewing the likelihood of the employee returning to work.  A claim for disability discrimination can be defended by the employer if it can show that the dismissal was a proportionate means of achieving a legitimate aim and that the employer made all reasonable adjustments to ensure that the employee could return.  The situation becomes more complicated where the employer provides a PHI scheme.

In the case, the employee was employed as a security agent at Heathrow Airport by American Airlines. Under the terms of his contract of employment he was entitled to the benefit of an insured long term disability benefit plan.  The terms of the plan stated that the employee would be entitled to those benefits as long as he remained an employee and until he returned to work, death or retirement.    The employee went on long term sick leave and during that period the security department was outsourced and the employer’s obligations under the plan transferred to the new employer under the Transfer of Undertakings (Protection of Employment) Regulations 2006 (TUPE).

The employee was dismissed by reason of lack of capability and he brought a claim for both unfair dismissal and disability discrimination. The Employment Tribunal held that the employer had dismissed the employee fairly and had acted reasonably.  It also held that the dismissal was a proportionate means of a achieving a legitimate aim and so there was no unlawful disability discrimination.

The employee appealed to the EAT and the appeal was upheld. It held that following a line of cases, a term should be implied into the contract that, once the employee has become entitled to payment of disability income under the long term disability plan,  the employer will not dismiss him on the grounds of continuing incapacity to work.  The term effectively limited the right of the employer to terminate on notice by preventing the exercise of that right in circumstances where it would frustrate the contractual entitlement to long term disability benefits.

As a result, the Employment Tribunal’s conclusions could not stand, and the EAT held that the matter should be remitted to a fresh tribunal to determine the fairness of the dismissal and whether it was a proportionate means of achieving a legitimate aim.

The case itself does not represent new law. In most cases it is the intention of the parties that the dismissal power will not be operated so as to remove accruing benefits under the income insurance scheme except cases of summary dismissal, redundancy, or a repudiatory breach by the employee.  For the most part employers will not be concerned by the individual remaining employed as the cost is covered by the insurance company.  However, in this case, the new provider,  following the TUPE transfer refused to cover the two individuals who were already on sick leave, of which the claimant was one.  Therefore, the employer would be responsible for covering the cost of the PHI.  Employers should therefore take care on a TUPE transfer to determine what cover can be sought  for employees on sick leave prior to the transfer.

Another issue for employers, who have employees on PHI schemes, is to remember that employees continue to accrue holiday during sick leave. Employers should therefore ensure effective absence management and include clauses limiting the carryover of the holiday for a certain period into the next holiday year.  For example, a clause should be included which states that any such carried over holiday accrued during a period of sickness absence which is not taken within eighteen months of the end of the relevant holiday year will be lost.  This means that when the employment is terminated, the employee will only be entitled to accrued holiday for a limited period of time.

Can an express term in the contract override the implied term regarding termination? It has generally been thought that an express termination clause allowing the employer the right to terminate for incapacity notwithstanding that the employee is on the PHI scheme would override the implied term.  However, the EAT in this case did cast some doubt explaining that such a clause would be inherently contradictory as either the claimant had a meaningful entitlement to disability benefits or the employer had an unfettered right to terminate his contract on notice even for incapacity.

As a result of the case it is clear that the contract should be drafted to ensure that the terms of the PHI in the contract are subject to the rules of the PHI scheme and the agreement of the insurance provider. It should also expressly state that the employer shall only be obliged to make payments to the employee if it has received payment from the insurance provider.  The employer should also retain the right to discontinue, vary or amend the scheme at any time on reasonable notice.   In addition, although the inclusion of an express clause allowing termination while absent on sick leave may be cast into doubt, it is worth including such a clause in case the employer may seek to rely on it.

Minority trade unions make good bedfellows

In UASA, Solidaity and NUM v Lonmin Platinum PLC and AMCU (HO1312-18), the CCMA was tasked with determining the question of whether three minority trade unions, acting jointly, could obtain organisational rights at Lonmin in order to challenge the influence of the majority union (AMCU).

Section 18 of the Labour Relations Act, 1995 (the LRA) allows an employer and a majority trade union to conclude a collective agreement establishing a representivity threshold which effectively excludes minority trade unions from gaining organisational rights at the employer’s workplace.  This is part of the principle of majoritarianism endorsed by the LRA.

Section 21(8C) however allows a minority trade union, or minority trade unions acting jointly, to obtain organisational rights (despite the fact that they do not meet the threshold) if they represent a “significant interest or substantial number” of employees in the workplace.

Typically such attempts to gain organisational rights have met with little success due to the institutional desire to avoid the proliferation of trade unions at a workplace.

In a novel development, three rival trade unions (UASA, Solidarity and NUM) joined forces to create a self-styled ‘Coalition’ in order to gain organisational rights in competition with AMCU. Lonmin and AMCU in turn both opposed the application.

In a well-reasoned award, the CCMA ruled that despite the protestations from Lonmin and AMCU that the granting of organisational rights to the Coalition would lead to a proliferation of trade unions and thus inter-union rivalry and possible violence, it was fair to grant organisational rights to the Coalition, essentially because it represented a substantial number of the employees at Lonmin and could not be proven to be a sham.

The Commissioner thus granted organisational rights to the Coalition, subject to certain safeguards so as to ensure that the unprecedented cooperation between the three minority trade unions was not simply a marriage of convenience. In summary, the Coalition will henceforth be obliged to exercise those organisational rights as a single entity.

Clients who are exposed to multi trade union workplaces will need to take heed of the possibility that rival trade unions may see the sense in increased cooperation.  This will no doubt render more complex, the collective bargaining environments at play.  Clients may also wish to revisit the recognition agreements that they have with the majority trade union in order to ensure that the principle of majoritarianism remains entrenched for practical purposes.

This article was written by Jason Whyte, Director, Norton Rose Fulbright South Africa Inc

Brexit – English Soccer and dispute over foreign players

Another interesting and unforeseen consequence of Brexit is the power struggle that has been triggered between the Premier League and the FA in relation to post Brexit quotas for “home grown” players and the visa requirements for overseas players.

The FA is seeking to use Brexit as an opportunity to boost the longer term health of the national team by reducing the number of overseas players in each squad. This is not proving popular with the Premier League which takes the view that a continued influx of high profile international players adds to the global appeal of the league.

Following the UK’s exit from the EU and the end of any relevant transition period, the freedom of movement of people within the EU will cease and the terms of movement of people within the EU is subject to change depending on the agreed terms of exit. The immigration requirements which would apply for “highly skilled” workers is yet to be determined but the government has indicated that preferential access to the UK for EU citizens and their families will cease after the transition period and so workers from the EU will be treated in the same way as those from other countries seeking the right to work in the UK. Would this apply to those seeking to play football in the UK?

Currently, the FA operates the visa system for non-European players together with the Home Office. Players are considered for work permits with a sliding scale of appearances required or clubs can seek an exemption by arguing the case for a work permit before a panel.  Clubs also have a maximum quota of overseas players of 17 in a 25 man squad.  The FA’s post Brexit proposal would be that the Premier League clubs would be allowed to sign whichever overseas players they want but they would be restricted to 13 overseas players (down from the current quota of 17).

The Premier League has rejected these proposals, arguing that there is no evidence that reducing the number of overseas players would in fact strengthen the national team. Instead the Premier League have argued that the global interest in the Premier League is increased by having overseas players playing in the UK.

This is a continuing battle between the FA and the Premier League and Brexit is simply bringing it to a head. In fact the FA have indicated that they will argue for the change in the quotas even if there were to be a second referendum.

Brexit will also make a difference to young players who don’t fall within the other visa requirements. Currently 16 and 17 year old players can be transferred between European countries, but after Brexit, clubs would only be allowed to sign players over the age of 18.

This dispute could have ramifications for current overseas players as clubs may be reluctant to agree long term contract extensions when the permitted quota for overseas players going forwards is so uncertain.

We look with interest to see how the discussions between the two sides, with different interests and priorities concludes

Bill 47 receives royal assent: Changes to the Employment Standards Act, 2000 and the Labour Relations Act, 1995

On November 21, 2018, Bill 47, the Making Ontario Open for Business Act, 2018, received royal assent. Bill 47 amends both the Employment Standards Act, 2000 (ESA) and the Labour Relations Act, 1995 (LRA). The full text of Bill 47 can be found here.

The changes to the ESA come into force on January 1, 2019. The changes to the LRA came into force on November 21, 2018.

A summary of the changes to each of these statutes is provided below.

Legislative history

Bill 47 repeals or amends many of the employer obligations introduced by the previous government under the Fair Workplaces, Better Jobs Act, 2017 (Bill 148).

Bill 47 was first introduced on October 23, 2018. We reported on the proposed changes to the ESA and LRA here and here. The Bill subsequently received a second reading and was referred to the Standing Committee on Finance and Economic Affairs. The Standing Committee made minor amendments to the Bill, which can be seen here. Bill 47 was then ordered for a third reading and received royal assent on November 21, 2018.

 

Summary of Changes – Employment Standards Act, 2000 – In force January 1, 2019

Subject Matter Current Entitlements under the Employment Standards Act, 2000 New Entitlements
(Bill 47, January 1, 2019)
Minimum Wage $14 minimum wage

$15 minimum wage on January 1, 2019

Minimum wage is frozen at $14 until October 1, 2020

Minimum wage will be subject to an annual inflation adjustment starting October 1, 2020

Scheduling Starting January 1, 2019, employees can request changes in their work schedule or location. Employers have to provide reasons for denial

Starting January 1, 2019, employees are entitled to three hours’ pay if their shift is cancelled within 48 hours before it begins

Starting January 1, 2019, employees will have a right to refuse a change in schedule or on-call shift if the request is made fewer than 96 hours before the shift was scheduled to start

Starting January 1, 2019, employees are entitled to three hours’ pay if they are on-call and not required to work, or if they work fewer than three hours

Employers must keep records of dates and times employees were scheduled to work or be on-call and any cancellations

All of the changes in respect of scheduling are repealed, except:

Employees who regularly work more than three hours a day and are required to present themselves for work, but who work fewer than three hours, will be entitled to a minimum of three hours’ pay

 

There is an exception to this three hour minimum if the shift is shortened because of events beyond the employer’s control (e.g. fire, power failure)

Personal Emergency Leave Ten days of leave due to personal illness, injury, or medical emergency for employees and/or certain family members

The first two days are paid

Employers are prohibited from requiring a doctor’s note to substantiate these absences

Personal emergency leave is repealed and is  replaced with sick leave, family responsibility leave, and bereavement leave, each of which apply separately from each other

Employees are entitled to three sick leave days, three family responsibility leave days and two bereavement leave days

Each new category of leave is unpaid

Eligibility for these leaves begins after two consecutive weeks of employment with the employer

These leave days are deemed to be taken as entire days, regardless of whether or not the employee is off work for the entire day

Evidence reasonable in the circumstances can be requested by an employer, including a doctor’s note

Sick leave: three unpaid days for personal illness, injury, or medical emergency

Family responsibility leave: three unpaid days for illness, injury, medical emergency, or urgent matters relating to a parent, grandparent, child, spouse, sibling, or dependent relative of the employee

Bereavement leave: two unpaid days for the death of a parent, grandparent, child, spouse, sibling or dependent relative

Leaves, Generally Two new categories of leave:

  • Domestic and sexual violence leave (up to 10 individual days and up to 15 weeks, with the first five days paid); and
  • Death of a child or crime-related disappearance leave (up to 104 weeks)

Increased entitlements for parental leave (61 weeks if the employee took a pregnancy leave and 63 weeks if the employee did not take a pregnancy leave); family medical leave (28 weeks in a 52 week period); critical illness care leave (37 weeks in a 52 week period for a child, 17 weeks in a 52 week period for an adult)

New leaves and increased entitlements remain the same, however, if an employee takes a paid or unpaid leave under an employment contract in circumstances for which he or she would also be entitled to take sick leave, family responsibility leave, or bereavement leave, then the employee is deemed to have taken the statutory leave
Employee Classification Employers face a reverse onus to prove that a worker is not an employee if an employee’s status is in question Repeals the reverse onus provision

Employers must still classify employees correctly

Public Holiday Pay and Vacation Time/Pay Public holiday pay is calculated as all regular wages earned by the employee in the pay period immediately preceding the public holiday, divided by the number of days the employee worked in that pay period

Three weeks’ vacation time/pay for employees with five or more years of service

Two weeks’ vacation time/pay for employees with less than five years’ service

Public holiday pay is calculated as the total amount of regular wages earned and vacation pay payable to the employee in the four work weeks before the work week in which the public holiday occurred, divided by 20

The entitlements to vacation time and pay remain the same

Equal Pay for Equal Work Equal pay for equal work, on the basis of sex, for those who perform substantially the same (but not necessarily identical) jobs for the same employer

Equal pay for equal work on the basis of employment status (part-time, full-time, seasonal, casual) and for temporary help agency employees

Equal pay for equal work, on the basis of sex, is maintained for those who perform substantially the same (but not necessarily identical) jobs for the same employer

Equal pay on the basis of employment status and for temporary help agency employees is repealed

Penalties for Contravention $350/$700/$1500 for first/second/third administrative contravention Penalties are reduced to $250/$500/$1000 for first/second/third administrative contravention
Wage Review Employees can request a review of their wages and the employer must respond with a pay adjustment or a written explanation for why the request is denied Repealed
Scope of the Act The ESA currently exempts an individual who performs work in a simulated job or working environment if the primary purpose in placing the individual in the job or environment is his or her rehabilitation Repeals this exemption. Those who perform work in a simulated job or working environment (for the primary purpose of his or her rehabilitation) are covered by the ESA

Note: this change comes into force on a day to be named by proclamation of the Lieutenant Governor

 

Summary of Changes – Labour Relations Act, 1995 – In force November 21, 2018

Subject Matter Current Entitlements under the Labour Relations Act, 1995 New Entitlements
(Bill 47, in force November 21, 2018)
Union Certification Card-based certification for home care and community services industries, building services industry, and temporary help agency industry Card-based certification in each of these industries is repealed – regular certification rules apply
Remedial Certification Where an employer’s contravention of the LRA results in (a) the true wishes of employees in the bargaining unit not being reflected in the representation vote, or (b) the union being unable to obtain membership cards from at least 40% of the proposed bargaining unit, the OLRB must certify the unit This power is repealed. The original pre-conditions for the OLRB to certify a union as a remedy for employer misconduct are reinstated: remedial certification is only available if no other remedy would be sufficient to counter the effects of the employer’s contravention

 

First Collective Agreement Mediation In addition to arbitration, first collective agreement mediation is available. Where mediation is unsuccessful, mediation-arbitration is available First collective agreement mediation and mediation-arbitration are repealed

First collective agreement arbitration in accordance with the pre-Bill 148 legislation is restored

Employee Lists On application, where a union can establish at least 20% support of the employees involved, it will be granted access to a list of employees and certain contact information Trade unions can no longer obtain a list of employees or their contact information from an employer

A trade union must destroy any employee contact list obtained under the previous version of the LRA

Educational Support Parties can request educational support in the practice of labour relations and collective bargaining Repealed
Review of Bargaining Unit Structure An employer or union can apply to the OLRB to review the structure of a bargaining unit after certification (but prior to entering into a collective agreement) Repealed
Strike or Lock-out Timelines Where there is no collective agreement in force, no strike or lock-out is permitted until seven days after the conciliation report has been released, or 14 days after the release of a notice that the Minister will not appoint a conciliation board The timelines are lengthened: no strike or lock-out is permitted until nine days after the release of the conciliation report, or 16 days after the release of a notice not to appoint a conciliation board
Reinstatement of Employees after Strike No time limit on the employer’s obligation to reinstate an employee at the end of a legal strike or lockout The pre-Bill 148 legislation is restored: an employer must reinstate an employee where an application is made within six months following the commencement of a lawful strike
Notices and Communication Notices and communications have to be by mail For any proceeding under the LRA, any notice or communication may be sent by mail, courier, fax, or email
Penalties and Fines The maximum penalties for a conviction for an offence are $5,000 for individuals and $100,000 for organizations The penalties are decreased to $2,000 for individuals and $25,000 for organizations, which restores the pre-Bill 148 amounts

Do managers typically think of personal liability when making decisions to dismiss? They perhaps should

Directors and senior managers and their employers should consider the recent Court of Appeal decision in the Osipov whistleblowing case very carefully. Briefly, by way of scene-setting, Osipov had made a series of protected disclosures and he was ultimately dismissed as CEO of the employer company pursuant to a decision of two non-executive directors (NEDS) of the company. He brought a  whistleblowing claim (for approx. £1.7m) against the company.  He also added the two NEDS as respondents on the basis that they had subjected him to a detriment for (amongst other allegations) their part in the decision to dismiss him.

A worker has the right not to be subjected to detriment on the ground that they have made a protected disclosure (e.g. a disclosure of some wrongdoing). This protection applies to detriments caused by the employer as well as a detriment by the worker’s colleagues or an agent of the employer. Since 2013, in the case of detriment by a colleague, it will be treated as also having been done by the employer (vicarious liability).

A worker who is also an employee will have a claim for automatically unfair dismissal (no cap on compensation) if they are dismissed by the employer for the sole or principal reason that they have made a protected disclosure.

An employee cannot bring a claim for detriment where “the detriment in question amounts to dismissal” (within the meaning of the unfair dismissal provisions of the relevant statute).  The employee would need to bring a claim for unfair dismissal instead. However, a worker who is not an employee (and so who is not eligible to claim unfair dismissal) can bring a detriment claim in respect of termination of the engagement.

The question posed in Osipov was whether, although the only claim for Osipov against the employer arising out of the dismissal would be unfair dismissal, the claims against the NEDs could include a detriment claim where the detriment was the dismissal itself?  The answer was yes, it could. This made the NEDS jointly and severally liable with the employer for the full amount of the £1.7m.

Naming individuals as respondents to claims is common in discrimination cases and has been for quite some time. There is a psychological and practical advantage to the claimant in doing this. The individual respondent is made to feel uncomfortable by the personal nature of the accusation and, in some cases, financially vulnerable too.  Naming an individual respondent also offers a practical advantage to the claimant if the employer is subject to solvency issues. Adding individuals in whistleblowing cases will I think increase as a result of cases such as Osipov.

In the majority of cases the employer will indemnify the individual employee or officer (the NEDS had the benefit of D&O insurance in Osipov) for any liabilities in relation to such a claim (which would otherwise be joint and several). However, there may be instances where the culpability of an individual becomes more apparent as the evidence develops through an investigation or trial and the employer’s appetite for indemnifying the individual may change. I doubt whether such a potential liability is in the contemplation of many senior managers when they take decisions to dismiss.

Osipov also highlights why employers should think through carefully who is involved in decisions to dismiss. Each person who has a part to play in the dismissal is likely to be called as a witness and may also be named as an individual respondent. It might be, for example, that a “c-suite” director who only had a cursory input to a decision to dismiss, would nevertheless have to give evidence in determining what the “sole or principal reason” for the dismissal was. Most employers would want to avoid their senior executives having to give evidence in such cases and therefore they should give some thought to how such decisions might be contained. If a decision to dismiss is escalated – as good governance might dictate in some circumstances – it should only be done in the full  knowledge of this possible outcome. For their part managers involved in decisions to dismiss might want to think about their potential personal liability.

Another reason why this decision is significant is that a detriment claim (not available to an employee against the employer when a dismissal has occurred and the claim is about the dismissal itself) may be more attractive to a claimant because of the lower burden of proof. For whistleblowing dismissal claims it must be shown that the sole or principal reason for the dismissal is the protected disclosure, whereas for a detriment claim it need only be established that the protected disclosure was a materially influential cause of the detriment.

 

LexBlog