Coming Soon: Heightened Accountability and Transparency in Federal Employment Equity

In Canada, most federally regulated employers in the private and public spheres are subject to the Employment Equity Act, or in French, la Loi sur l’équité en matière d’emploi (the “Act”). First enacted in 1986, the Act’s objective is to ensure that federally regulated employers proactively engage in equitable practices that reduce barriers and counter disadvantages in employment with respect to the Act’s four designated groups: women, Aboriginal peoples, persons with disabilities and members of visible minorities. Under this regime, employers are subject to reporting requirements regarding the fair and proportional representation of the four designated groups in their workforce, and the steps taken in the furtherance thereof. The Canadian Human Rights Commission has the mandate to carry out audits and ensure that employers subject to the Act comply with its various requirements.

In its 2018 Budget Plan, Equality and Growth: A Strong Middle Class, or in French, Égalité et croissance : une classe moyenne forte, the Government of Canada, as part of its greater initiative to promote pay transparency, announced that it would be “converting existing pay information filed by federally regulated employers under the Employment Equity Act into more user-friendly online content with specific attention paid to making existing wage gaps more evident.” In so doing, the Government’s objective will be to highlight the work done by employers who engage in equitable practices that further the Act’s overall objective, while holding accountable employers whose wage gap persists in respect to the Act’s four statutorily defined designated groups. The Government has pledged three million dollars over five years to implement pay transparency.

The federal Budget Plan 2018 does not state if the Government’s pay transparency initiative will lead to any legislative amendments or regulatory changes in the employment equity context specifically. That said, federally regulated employers should consider if they are subject to and fully compliant with the Act, and be alive to the Government’s above-noted commitment to ensure greater accountability and transparency in employment equity moving forward.

We will keep you apprised of new developments as further information in this field is released.

Written with the assistance of Lucas Rivet-Crothers, articling student in Ottawa

New York City expansion of sick time law to cover “safe time” goes into effect on May 5, 2018; action required for New York City employers

New York City has recently adopted amendments to the New York City sick time law.  These amendments, which go into effect on May 5, 2018, will require action by New York City employers.

Background on New York City’s sick time law

Since April 1, 2014, all New York City employers have been required to provide sick time to their employees.  Whether such sick time is paid or unpaid depends upon the size of the employer.  New York City employers must provide each employee with a copy of the Notice of Employees Rights at the time of hire, and generally must maintain a compliant written sick time policy that is distributed to all employees.  Please see our prior legal updates for further detail on the requirements of the New York City sick time law, as follows:

New York City sick time law expanded to cover “safe time” under recent amendments

Recently, New York City passed a law, Int. 1313-A, that expands the reasons for which employees can use sick time to include “safe time,” and renames the law the New York City Earned Safe and Sick Time Act.  These amendments become effective on May 5, 2018.

Action required by New York City employers in response to recent amendments to New York City sick time law

In response to these amendments, New York City employers need to do the following:

  1. On or before May 5, 2018, update their written sick time policies to reflect the new “safe time” provisions; and
  2. On or before June 4, 2018, provide all existing New York City employees with a notice of their rights to use their sick time for “safe time” leave reasons. Note that on or after May 5, 2018, the Notice of Employee Rights provided to new hires will also need to include notice to employees of their rights to take “safe time.”

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Artificial intelligence and the workplace

These days especially in view of “Arbeiten 4.0”, the so called fourth industrial revolution in Germany, digitalization pervades the whole working world and is reflected in a vast number of different phenomena. As one of them artificial intelligence can complement – and in some cases even replace – manpower as we can see in the automotive industry. Yet the commitment is no longer limited to pure routine activities: Artificial intelligences can just as well assume employer’s responsibilities for example by giving automated instructions to employees. Therefore, digital changes also affect highly qualified positions, scientists and management – all of which felt secure from risks to their job continuity until now.

Even though the digitalization trend has reached new heights according to different studies a lot of German corporations still dispense with an accurately defined digitalization strategy. The slow progress of legislation for standardized data communication and interaction between machines, sensors and products did not help. Especially the safety of “intelligent” factories and products causes worries in German companies. So far the German legislator has not yet set special legal provisions on the required quality or the launch of artificial intelligence. That means these areas are only regulated by general provisions e.g. the Betriebssicherheitsverordnung (German Ordinance on Industrial Safety and Health) or regulations on product safety.

Assuming autonomous actions only by humans German law is not prepared for autonomous systems and in particular civil liability of artificial intelligence is an issue. Damage claims cannot be asserted against artificial intelligences as they are not defined as legal entities. Lacking deliberately controlling their own actions robots and artificial intelligences can neither act for companies as „Erfüllungsgehilfen“ (vicarious agents) and their “fault” cannot be attributed to companies according to § 278 BGB (German Civil Code). There are different approaches to create a liability system regarding artificial intelligences e.g. by compulsory insurances for owners or by transmitting the principles of the strict liability but as long as there are no special liability concepts it is necessary to revert to the existing German liability law. Unfortunately it is often imprecise to determine the contribution of persons being responsible for robots and artificial intelligence regarding the causation of damages.

Apart from liability issues artificial intelligences raise questions in the areas of protection against dismissal and co-determination in companies. According to experts the automation of the working world can affect more than half of the existing workplaces in Germany in the medium and long term. It still requires political organization and constitutional framing to strike a new balance between the affected interests. Even though digital progress and development is necessary to keep a high level of competitiveness and artificial intelligences create new perspectives and possibilities at the workplace they meet their limits (amongst others) at their non-existent autonomously decision making and should be treated with intelligent caution.

Changing the working functions requires both: Technical input as well as the consideration of cultural aspects. A fundamental digital shift affects all hierarchy levels in the working environment and therefore requires a critical review of roles, functions, hierarchies and values in the corporations. If artificial intelligences are able to replace management boards and executive leaderships it will raise an open question: Will the responsible organs come to a decision that may lead to the loss of their own power and status?

Inexécution d’une promesse de porte-fort conclue dans le cadre d’une transaction : pas de résolution du protocole

En l’espèce dans le cadre d’un litige avec l’un de ses salariés, un employeur a été condamné à verser à celui-ci une somme totale de près de 180.000 euros. A la suite de cette décision, les deux parties se sont rapprochées ont conclu un accord transactionnel aux termes duquel l’employeur versait au salarié une somme de 72.000 euros et s’engageait à ce que les entreprises du groupe reprennent des relations contractuelles avec le salarié – qui exercerait dorénavant à titre libéral et indépendant. En contrepartie, l’ancien salarié renonçait à l’exécution du jugement prud’homal.

Le salarié ne s’étant vu proposer aucune mission, il et a de nouveau saisi les juges aux fins d’obtenir la résolution judiciaire du protocole transactionnel ainsi que le versement de dommages-intérêts.

Inexécution d’un élément essentiel de la transaction

La cour d’appel a considéré justement que la transaction comportait une promesse de porte-fort, à savoir l’engagement par l’employeur, de faire en sorte que les sociétés du groupe proposent au salarié la reprise d’une relation contractuelle..

Pour la cour d’appel, l’inexécution de cet justifiait l’annulation de l’accord transactionnel, dans la mesure où la promesse constituait un élément essentiel de la transaction.

La société employeur a formé un pourvoi en cassation contre l’arrêt de la cour d’appel.

Autonomie de la promesse de porte-fort

La Cour de cassation a censuré l’arrêt de la cour d’appel considérant au contraire que l’inexécution d’une promesse de porte-fort ne peut être sanctionnée que par la condamnation de son auteur à des dommages-intérêts (en appliquant à la lettre les dispositions du Code civil à la promesse de porte-fort).

En effet, le droit commun prévoit la possibilité de demander la résolution judiciaire d’une transaction conclue après la rupture du contrat de travail, lorsque l’une des parties ne respecte pas les engagements qu’elle prévoit. La résolution a pour effet de replacer les parties dans la situation juridique où elles se trouvaient avant la conclusion du protocole transactionnel, de sorte que celui-ci n’est plus opposable au salarié.

Pour autant la résolution et selon la Cour de cassation de la transaction ne peut être obtenue lorsque l’engagement inexécuté par l’employeur est une simple promesse de porte-fort.

La solution est dès lors moins favorable à l’ancien salarié car la transaction lui restant opposable, il n’est plus question pour lui d’obtenir l’exécution du jugement prud’homal. Par ailleurs, le montant des dommages-intérêts qu’il pourrait obtenir dépend du préjudice subi, et celui-ci n’est pas nécessairement équivalent au montant des indemnités prud’homales auxquelles il a renoncé. Il lui faudra en effet démontrer qu’il aurait pu percevoir des revenus équivalents si des missions lui avaient été confiées comme prévu initialement. Il appartiendra aux juges du fond, du fait du renvoi de l’affaire, d’évaluer le préjudice réellement subi.

You can’t escape award coverage with a fancy job title and a big salary

In our experience, many employers are under the false impression that, if they put an employee on a ‘common law contract’ and give them a fancy job title, they will be award-free, particularly if they are paid well above the award rates.

The recent case of Karen Muscat v Chase Commercial Pty Limited [2018] FWC 1398 reminds us that this just isn’t always true.

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Federal Employers: Get Ready, Proactive Pay Equity is on the Horizon

Earlier this year, we learned that the federal government is going forward with its promise to re-vamp the federal pay equity system. As of yet, the federal government has not introduced any legislation. However, in the 2018 Budget Plan, the federal government has promised a proactive federal pay equity system in line with Ontario and Quebec’s: proactive pay equity. According to the 2018 Budget Plan, the new federal pay equity legislation would:

  • Apply to federal employers with 10 or more employees, with pay equity requirements built as much as possible into existing federal compliance regimes;
  • Establish a streamlined pay equity process for employers with fewer than 100 employees;
  • Set out specific timelines for implementation, and compulsory maintenance reviews;
  • Include job types such as seasonal, temporary, part-time and full-time positions;
  • Provide independent oversight;
  • Ensure that both wages and other benefits are evaluated in a gender neutral way;
  • Apply to the Federal Contractors Program on contracts equal to or greater than $1 million, and ensure a robust application of federal employment equity law; and
  • Repeal previous legislation such as the Public Sector Equitable Compensation Act which is inconsistent with the goal of pay equity.

While the information provided by the federal government is limited, it is probable that the federal government will implement pay equity legislation that would resemble a hybrid between Ontario and Quebec’s pay equity regimes. Most notably, the promise of an “independent oversight” will likely see the creation of a new regulatory body like the Pay Equity Commission in Ontario or the Commission des normes, de l’équité de la santé et de la sécurité du travail in Quebec, which have expansive powers to investigate and enforce their respective acts. Continue reading

New York State’s new sexual harassment prevention laws will require action by all New York employers

On April 12, 2018, New York State  Governor Andrew Cuomo signed into law new measures aimed at preventing sexual harassment. We summarized these provisions in detail in our legal update, New York employers should get ready to comply with New York State’s new sexual harassment prevention laws, published on April 11th, in anticipation of the bill being signed into law.  The new law requires New York State employers to adopt sexual harassment prevention policies and conduct annual training on such policies, restricts the use of non-disclosure and arbitration provisions related to claims of sexual harassment, and extends workplace protections against sexual harassment to non-employees.  The new law requires prompt action on the part of most, if not all, New York State employers.

Mandatory sexual harassment prevention policies and training

Effective October 9, 2018, every New York State employer (regardless of size and including those who employ only domestic and household employees) will be required to adopt a sexual harassment prevention policy that meets specified requirements.  New York State employers who currently have anti-harassment policies in place will likely need to update their policies, as most policies that we have seen do not cover every item that is required by the new law.

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It’s not discriminatory to pay enhanced pay during maternity leave but only statutory pay during shared parental leave

In the UK, only female employees are eligible for statutory maternity leave. They are also eligible for statutory maternity pay at a fixed rate during such leave subject to certain conditions – and it is common for employers to pay enhanced maternity pay during periods of maternity leave.

Whilst many employers do not pay enhanced paternity pay to those on paternity leave, it has long been accepted that paying enhanced maternity pay is defensible under the provisions of the Equality Act which state that, when determining whether a man has been discriminated against on grounds of his gender, no account is to be taken of special treatment afforded to a woman in connection with pregnancy or childbirth. Continue reading

Le projet de loi sur la réforme de la LNT: quelles sont les conséquences pour les agences de placement?

Le projet de loi 176 intitulé « Loi modifiant la Loi sur les normes du travail et d’autres dispositions législatives afin principalement de faciliter la conciliation famille-travail » a été déposé par le gouvernement libéral à l’Assemblée nationale à la fin du mois de mars. Plusieurs de ses dispositions auront un impact significatif sur les agences de placement de personnel. Voici quelques-unes de nos observations sur le sujet.

En résumé

En plus d’établir le principe selon lequel une agence ne peut accorder à un salarié un taux de salaire inférieur à celui consenti aux salariés de l’entreprise cliente, le projet de loi oblige les agences à détenir un permis et prévoit la mise en place d’une réglementation les concernant. Il rend passible d’une sanction pénale une entreprise qui retient les services d’une agence ne détenant pas de permis. Également, les agences et les entreprises clientes qui retiennent leurs services seront dorénavant solidairement responsables envers le salarié des obligations pécuniaires fixées par la LNT. Continue reading

Changes to taxation of termination payments – April 2018

Changes to taxation of termination payments came into force in the United Kingdom on 6 April 2018. The new rules will mean that income tax and national insurance contributions (NICs) will be payable on all payments which relate to an employee’s notice period.

The position prior to 6 April was that a “termination payment” (being any payment that is not already chargeable to income tax) could be paid tax free up to £30,000. However, any payments made pursuant to the contract of employment including a contractual payment in lieu of notice (PILON) would be subject to tax in the usual way.  One particular area of issue was the taxation of discretionary PILONs.  Whilst a discretionary PILON may be outside the contract and therefore could arguably fall within a true termination payment,  where such a payment has become “customary” then the UK tax authority (HMRC) has sought to tax that non-contractual PILON. Continue reading