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Which issues would you most highlight to someone new to your state?
Provincial or federal legislation
Canada has a unique constitutional division of powers between the federal and provincial governments. As such, most employers in British Columbia are covered by provincial legislation, but some are covered by federal legislation. The nature of an employer’s business is critical in determining whether federal or provincial legislation applies. For most employers engaged in manufacturing, construction, retail or the service sector, provincial law applies. For those employers engaged in certain activities of an inter-provincial nature (eg, shipping, railways, airlines, radio and television broadcasting, banking and inter-provincial transport (including oil and gas pipelines)), federal law generally applies. Accordingly, where material differences between British Columbia law and federal law exist, British Columbia law is addressed first, followed by federal law.
No employment at will There is no at-will employment in Canada. Rather, the employment relationship is contractual. Unless there is a written contract dealing with termination, common law requires employers to provide employees with reasonable notice of termination or pay in lieu of notice if employment is terminated without cause. The courts are generous when prescribing the length of notice that an employer must give managerial, professional or long-term employees where no contract provision exists. Although the courts approach each case on an individual basis, case law suggests that a rough rule of thumb for reasonable notice may be approximately three to five weeks of pay in lieu of notice for each year of service, up to a maximum of 24 months.
Limitations on ability to terminate employment The general approach is that non-unionised employees may be terminated at any time without cause, as long as the required notice is provided and the terms of any written employment contract are followed. All jurisdictions in Canada have some important qualifiers to this general rule. For example, anti-discrimination or human rights legislation restricts the ability to terminate an employee if the reason for termination is directly or indirectly connected to a protected ground or characteristic. There are also anti-reprisal or whistleblower protection rules under employment standards and occupational health and safety legislation.
Federally regulated employers are subject to special scrutiny when terminating employment. Non-managerial employees with at least one year of service may take their dismissal to adjudication under the Canada Labour Code and seek reinstatement. However, there are exceptions to reinstatement, such as genuine layoffs.
What do you consider unique to those doing business in your state?
The major difference between Canada (including British Columbia) and the United States is that Canada has no at-will employment. Hence, severance packages in British Columbia are often much higher than in the United States.
An executive’s right to receive and exercise stock options on termination of employment is subject to the relevant provisions of the employer’s stock option plan. Typically, these plans provide that an executive’s options cease to exist on termination of employment. However, Canadian courts have interpreted 'termination of employment' in stock option plans to mean lawful termination. Accordingly, in order to be lawful, termination occurs at the end of the reasonable notice period, thus entitling the employee to claim damages for any lost opportunity to exercise options that were vested during the notice period. In many cases, courts have found that where a stock option plan does not contain a clear triggering event, the effective date of termination is the date on which the executive would have ceased to be an executive had he or she been given reasonable notice. Accordingly, to ensure that stock option plans are interpreted correctly, employers must draft their plans and grants carefully.
Privacy legislation British Columbia is one of the few provinces in Canada with privacy legislation which imposes rules on the protection of employee information in relation to the collection, retention, use and disclosure of information.
Is there any general advice you would give in the labour/employment area?
New businesses should hire all employees under written employment contracts that contain provisions dealing with entitlements and obligations when employment is terminated.
Proposals for reform
Are there any noteworthy proposals for reform in your state?
The British Columbia Law Institute is completing a three-yearly review of the British Columbia Employment Standards Act and compiling a list of recommendations which will be available shortly for public input.
What are the emerging trends in employment law in your state, including the interplay with other areas of law, such as firearms legislation, legalisation of marijuana and privacy?
British Columbia has a robust complaints and investigations process and the province’s privacy commissioner has consistently ruled in favour of employees and individuals regarding hiring, background checks and surveillance issues.
Constitutional protection of union activities The Supreme Court of Canada has reversed its earlier jurisprudence and found that many traditional union activities (eg, collective bargaining and legal strikes) have constitutional protection.
Workplace investigations The effectiveness of internal investigations by employers is being increasingly scrutinised in the courts. For example, due to an improper investigation, Walmart was recently ordered to pay punitive and aggravated damages in the amount of C$1.2 million; this was later reduced to C$300,000 on appeal. A proper investigation may substantially reduce or eliminate liability in any case related to an alleged violation of human rights (anti-discrimination) legislation.
What state-specific laws govern the employment relationship?
The main British Columbia employment-related statute is the Employment Standards Act. Other important statutes for private employers include:
- the Apprenticeship Act;
- the Pension Benefits Standards Act;
- the Human Rights Code;
- the Labour Relations Code;
- the Workers Compensation Act; and
- the Personal Information Protection Act.
A number of other laws affect public sector and broader public sector employers in British Columbia.
For federally regulated employers, the main statute is the Canada Labour Code, although other federal legislation also governs the workplace (eg, the Canadian Human Rights Code and the Personal Information and Protection of Electronic Documents Act).
Who do these cover, including categories of worker?
Generally, the laws cover employees. However, because the laws governing the employment relationship are public welfare laws, the courts have held that the term 'employee' must be broadly and liberally interpreted. Therefore, depending on the circumstances, the definition of 'employee' may include independent contractors, consultants, interns, employees of affiliated employers or employees of temporary help agencies. Health and safety law has been interpreted to include self-employed individuals and independent contractors as workers.
Are there state-specific rules regarding employee/contractor misclassification?
Yes – the rules or approaches may differ between a variety of agencies (eg, tax and health and safety) depending on the purpose of the specific legislation. The recognised category of dependent contractors are also owed reasonable notice of contract termination.
Must an employment contract be in writing?
Contracts need not be in writing, but by law all employees must have a contract; in many cases contracts are part oral, part written (eg, offer letters or vacation policies) and part implied by common law (eg, the employee’s duty of loyalty and the employer’s duty to provide reasonable notice of termination, except for just cause). Nevertheless, ensuring that employees have a comprehensive written employment agreement is the most prudent course of action.
Are any terms implied into employment contracts?
Yes – the major implied terms are the employee’s duty of loyalty and the employer’s obligation to provide reasonable notice of termination, except for just cause.
Are mandatory arbitration agreements enforceable?
Yes – although arbitration clauses should be drafted carefully and in accordance with the British Columbia Arbitration Act in order to ensure that the objectives behind agreements are achieved.
How can employers make changes to existing employment agreements?
If a material change to an employment agreement is made without the employee’s consent, he or she may be able to resign and sue for constructive dismissal, or claim damages for breach of contract. Any agreed changes should be supported by an exchange of consideration. Changes can be made unilaterally, provided that notice under the contract or reasonable notice is given. Written agreements may also contain provisions which specifically address amendments.
What are the requirements relating to advertising open positions?
Job advertisements should comply with human rights legislation and generally should not contain statements, qualifications or references that directly or indirectly relate to protected grounds.
What can employers do with regard to background checks and inquiries?
(a) Criminal records and arrests
With consent, employers can perform background checks on employees’ criminal records. However, employers may be vulnerable to challenges if a candidate is denied a job because of a criminal record which is unrelated to the position for which he or she applied.
(b) Medical history
Generally, medical history should not be considered in the hiring process, except where there is a genuine occupational requirement. Pre-employment medical testing or medical history can be requested after a conditional offer of employment has been extended, if it can be shown that this information is relevant to the position.
(c) Drug screening
Drug and alcohol testing is a contentious issue in Canada as addiction is classed as a disability under human rights law and it has been held that drug testing does not determine whether an employee is impaired while at work. This has led to conflicting case law in Canada. The federal and Ontario approach is that, in general terms, testing is inherently discriminatory under human rights law, and is a significant intrusion on an employee’s privacy rights.
In British Columbia, pre-employment drug testing may be justified for safety-sensitive positions if the candidate is made aware of the testing and is subject to a strict testing regime. This is because the British Columbia courts and tribunals have found that health and safety can be paramount to human rights issues. However, if a candidate tests positive and subsequently proves to be a dependency, the employer may have a duty to accommodate him or her.
Further, when employees must work part of the time in the United States (eg, inter-provincial truckers) and drug screening is a requirement under US state law, that requirement may be found to support an employer’s position that drug testing is a genuine occupational requirement that should be permitted, notwithstanding general human rights and privacy concerns.
(d) Credit checks
The British Columbia privacy commissioner has ruled that employers are permitted to collect only personal information that is specific to the requirements of the position from prospective employees. Credit checks for employees as part of a routine background check process are not recommended.
Federally regulated employers are governed by the Personal Information Protection and Electronic Documents Act and are permitted to request credit checks only where it is reasonable to do so.
(e) Immigration status
Employers may require proof of legal ability to work in Canada as a condition of employment, but are prohibited under human rights legislation from inquiring into a prospective employee’s ancestry, citizenship or national or ethnic origin.
(f) Social media
Social media checks during the pre-hiring stage increase the risk of a discrimination complaint, as a candidate’s social media profile may disclose information concerning a protected ground under human rights legislation. Further, social media checks can violate privacy legislation due to a collection of non-work related personal information and the personal information of third parties.
Wage and hour
What are the main sources of wage and hour laws in your state?
The British Columbia Employment Standards Act is the main source of wage and hour law.
For federally regulated businesses, Part III of the Canada Labour Code applies.
What is the minimum hourly wage?
The minimum hourly wage in British Columbia is C$14.
What are the rules applicable to final pay and deductions from wages?
Deductions from wages can be made where authorised by law or where an employee has provided written authorisation. The amount to be deducted must be set out in the authorisation or readily determinable by way of a formula. No amounts may be deducted in respect of an employer’s business costs, such as losses due to faulty work, missing cash or property loss.
Federal rules Employers cannot make deductions from wages or other amounts due to an employee except under the following instances:
- payments authorised by a federal or provincial act or regulation;
- deductions authorised by a court order, a collective agreement or other document signed by a trade union on behalf of an employee;
- deductions authorised by the employee in writing; and
- overpayments of wages by the employer.
Hours and overtime
What are the requirements for meal and rest breaks?
A 30-minute unpaid rest period must be provided after five hours of work.
Federal rules There are no prescribed rest periods for federally regulated employees. However, most employers follow provincial guidelines for safety and employee relations purposes.
What are the maximum hour rules?
Employees cannot work more than 12 hours per day; special rules exist for certain industries (eg, high-tech companies employing high-tech professionals).
Federal rules Employees cannot work more than 48 hours per week; special rules exist for certain industries (eg, trucking, shipping and railways).
How should overtime be calculated?
Overtime is calculated as one-and-a-half times the employee’s regular rate for all hours worked in excess of eight hours per day and 40 hours per week (whichever is greater) and two times the employee’s regular rate for all hours worked in excess of 12 hours per day; special rules exist for certain industries.
Federal rules Overtime is calculated as one-and-a-half times the employee’s regular rate for all hours worked in excess of eight hours per day or 40 hours per week (whichever is greater); special rules exist for certain industries.
What exemptions are there from overtime?
The terms 'exempt' and 'non-exempt' are not used in Canada to differentiate between employees. In British Columbia, employee entitlements to certain provisions under the Employment Standards Act (including hours of work and overtime) are generally determined based on whether the employee is considered to be in a managerial or supervisory role. However, special exemptions exist for some types of commissioned salesperson, professional (eg, lawyers, engineers, dentists and architects) and high-tech professional employed by a high-tech company.
The main managerial and supervisory exemption applies only if the employee performs non-managerial work incidentally. Below are some general factors that are considered in British Columbia when assessing whether an employee’s work is managerial or supervisory (using a retail store environment as an example):
- What percentage of time do managers perform the same work as sales associates?
- How frequently do managers perform non-managerial work (eg, do they perform the work of a sales associate every day or once a week)?
- Do managers perform non-managerial work on a scheduled basis (eg, during lunch)?
- Do managers have no alternative but to perform non-managerial work?
- Do managers perform non-managerial work only for unforeseen reasons (eg, if sales associate calls in sick or there is an unexpected rush of customers)?
- Do managers’ performance appraisals include an evaluation of non-managerial work?
- Are managers performing their managerial role at the same time that they perform non-managerial work (eg, the store manager may be on the floor for supervisory purposes, but will also assist customers if necessary)?
Federal rules The Canada Labour Code states that the standard hours of work and overtime do not apply to managers or superintendents, exercise management functions or members of the architectural, dental, engineering, legal or medical professions. The test for the managerial exemption is similar under federal law.
What payroll and payment records must be maintained?
Type of information
British Columbia retention period
Employee’s name, address and the date on which he or she began employment
Two years after employment ends
Employee’s date of birth
Two years after employment ends
Number of hours that the employee worked each day and each week, regardless of how the employee is paid
Two years after employment ends
Information contained in each written statement given to the employee in relation to wages, wages on termination and vacation pay
Two years after employment ends
Every agreement made permitting the employee to work excess hours
Two years after employment ends
Every overtime averaging agreement that the employer has made with the employee
Two years after employment ends
Holiday time and holiday pay records, including the amount of:
Two years after employment ends
There may be different record-keeping considerations for federally regulated businesses.
Discrimination, harassment and family leave
What is the state law in relation to:
The British Columbia Human Rights Code prohibits discrimination based on age (19 years of age or older).
Federal The Canadian Human Rights Code provides no restricted definition of age.
Under both provincial and federal law, racial discrimination is prohibited.
Under both provincial and federal law, discrimination based on disability – which includes actual (or, in British Columbia, perceived), physical or mental disability and addiction – is prohibited.
Under both provincial and federal law, gender discrimination is prohibited.
(e) Sexual orientation?
Under both provincial and federal law, discrimination based on sexual orientation is prohibited.
Under both provincial and federal law, discrimination based on religion is prohibited.
Under both provincial and federal law, medical discrimination based on a disability is prohibited.
British Columbia legislation prohibits discrimination on the basis of:
- religious beliefs;
- gender identity;
- gender expression;
- physical disability;
- mental disability;
- place of origin;
- marital status;
- source of income;
- family status;
- sexual orientation; and
- conviction of criminal or summary conviction offence unrelated to the employment or intended employment.
Federal legislation prohibits discrimination on the basis of:
- national or ethnic origin;
- sexual orientation;
- marital status;
- family status;
- disability; and
- convictions for which a pardon has been granted or a record suspended.
What is the state law in relation to harassment?
Under both federal and provincial human rights laws, harassment is prohibited to the extent that it qualifies as discrimination based on a protected category; employers may be liable for any harassing conduct of their employees. Harassment is also prohibited under British Columbia occupational health and safety legislation.
Under British Columbia law, employers are required to prepare workplace harassment and violence policies which must include complaint and investigation procedures. All employees must be trained with respect to workplace harassment and violence. Further, emergency procedures must be in place to deal with workplace violence.
The Canada Labour Code requires all federally regulated employers to prepare sexual harassment policies and bring these to the attention of their employees. However, it is also best practice to provide training and extend harassment policies to cover all types of harassment and workplace violence.
Family and medical leave
What is the state law in relation to family and medical leave?
The types of unpaid statutory leave outlined below relate to provincially regulated businesses in British Columbia. There are minimum service requirements for some categories of leave. If an employee takes one type of protected leave, that does not reduce his or her entitlements to other types.
Different types of statutory leave apply under federal law.
Pregnancy/parental leave In British Columbia, pregnancy leave for birth mothers is 17 weeks, which can be extended by up to six weeks if a birth mother is unable to return to work for reasons related to the birth or termination of the pregnancy.
All employees (both male and female) who have become a parent or have had a child come into their custody for the first time are entitled to parental leave. Parental leave can last for a total of 37 weeks (35 weeks for birth mothers who have taken pregnancy leave).
Compassionate care leave An employee is entitled to compassionate care leave of up to eight weeks in order to provide care or support to a gravely ill family member. A physician’s certificate is required stating that a family member has a serious medical condition with risk of death within 26 weeks and that the family member requires the care or support of one or more family members.
Reservist leave An employee who is a reservist is entitled to reservist leave without pay:
- to take part in deployment to a Canadian forces’ operation outside Canada or inside Canada if related to an emergency;
- to take part in annual training; or
- as the regulations additionally prescribe.
The length of the leave is prescribed by regulations. Where no period is prescribed, the length of leave will be for as long as the operation or training applies to the employee. However, entitlement to leave for annual training is limited to 20 calendar days.
Reinstatement after taking statutory leave Employees returning from statutory leave in British Columbia must be reinstated to the position that they most recently held before taking leave, or a comparable position. Whether a position is comparable will depend on various factors, including:
- hours of work;
- quality of the working environment;
- degree of responsibility;
- job security;
- possibility of advancement; and
- prestige and perquisites.
The importance and weight of each factor will vary from case to case.
No reinstatement obligation will apply where an employee’s employment ended solely for reasons unrelated to leave. If a complaint is brought against an employer, the employer’s conduct and rationale will be subject to careful scrutiny. Under the Employment Standards Act, employment standards adjudicators may order reinstatement for breach of this obligation.
Privacy in the workplace
Privacy and monitoring
What are employees’ rights with regard to privacy and monitoring?
British Columbia is one of the few provinces with privacy legislation, namely the Personal Information Protection Act. The act governs the processes to protect the collection, retention, use and disclosure of personal employee information.
Federal rules Federal privacy law and privacy commissioner decisions require monitoring to be reasonable. Typically, video monitoring is permitted for safety or security reasons in public cases. Video monitoring of work areas is much more controversial and must not be used for productivity or performance issues.
Are there state rules protecting social media passwords in the employment context and/or on employer monitoring of employee social media accounts?
Any employer monitoring of employee social media accounts is subject to provincial privacy legislation and must be reasonable. At the least, employers should develop a social media policy that notifies employees that monitoring is ongoing and explains how the personal information collected will be used (ie, performance management or discipline). However, employers should balance the desire to monitor social media against the risk that they will inadvertently obtain information from social media accounts that concerns a protected ground under the Human Rights Code.
Federal rules The same human rights considerations apply for federally regulated employers. However, the federal privacy commissioner has expressly stated that employers should have social media policies that advise employees as to whether social media will be monitored. Failure to warn employees that their personal information is being collected by way of social media monitoring could violate federal privacy legislation.
Bring your own device
What is the latest position in relation to bring your own device?
To what extent can employers regulate off-duty conduct?
Off-duty conduct is generally not the employer’s concern. British Columbia courts recognise some relationship between certain kinds of misconduct and an employer’s legitimate business interests – for example, criticism of the company or management on an employee’s social media or improper conduct during employee-only drinks.
Are there state rules protecting gun rights in the employment context?
Trade secrets and restrictive covenants
Who owns IP rights created by employees during the course of their employment?
Employers generally own IP rights, subject to exceptions under common law based on the nature of the job. In addition, any moral rights which employees have over their work products can be waived only in writing. As such, it is always best practice to have employees sign ownership of invention and IP agreements at the time of hire to avoid disputes.
What types of restrictive covenant are recognised and enforceable?
Canadian courts generally consider non-compete covenants to be a restraint of trade and therefore illegal and unenforceable, unless an employer can establish that the covenant:
- goes no further than is necessary to protect rights which the employer is entitled to protect;
- does not unduly restrain the employee from making use of his or her skills and talent; and
- is not contrary to public interest.
Non-compete clauses must also be reasonable in duration, geographic scope and all other aspects (eg, scope of activity covered) in light of the interest that the employer seeks to protect. However, courts cannot read down a restrictive covenant in any respect in order to make it enforceable.
The courts will not enforce non-compete clauses unless the employer can demonstrate that a non-solicitation clause is insufficient to protect the employer’s proprietary interest. Non-compete clauses found in agreements for the purchase and sale of a business are more likely to be enforceable because the courts will usually consider that the two parties are more likely to enjoy relatively equal bargaining power, and because the clause may be necessary to ensure that the buyer’s newly acquired business is not subverted by the previous owners, some of whom may be managers and executives.
Non-solicitation clauses Canadian case law suggests that while courts are adverse to non-compete clauses, they are more sympathetic towards and more inclined to enforce non-solicitation clauses. However, before the courts enforce a non-solicitation covenant, the employer must show that it is necessary with regard to the nature of the business and the type of employment. The employee must have not only acquired knowledge of the employer’s customers, but also have influence over them through his or her business dealings. However, the level of reliance on this provision may vary with the sophistication of the client. Non-solicitation clauses should be restricted to customers with which the employee has dealt (ie, clauses should not include customers with which the employee did not deal or of which the employee has no knowledge).
Are there any special rules on non-competes for particular classes of employee?
The less 'important' an employee is to his or her employer, the more difficult it will be for the employer to enforce a non-compete agreement.
Right to work
Is the state a ‘right to work’ state?
No. However, if a union collective agreement requires employees to be members of a union, the employer can employ only union members in the bargaining unit.
Unions and layoffs
Is the state (or a particular area) known to be heavily unionised?
Overall, the unionisation rate in Canada is 30%, a number which is influenced by the public sector.
In British Columbia, there is a higher unionisation rate relative to other Western provinces, such as Alberta.
What rules apply to layoffs? Are there particular rules for plant closures/mass layoffs?
Depending on the express or implied terms of an employment contract, temporary layoffs for non-unionised employees may be considered as constructive dismissal in common law. Under the Employment Standards Act, a temporary layoff is permitted subject to the Employment Standards Act and the regulations, but courts imply a term that the employee must expressly agree as a term of employment to a layoff.
If 50 or more employees at a single location are terminated in a two-month period, notice to the Minister of Labour and the affected employees is required. The length of the notice period differs based on the number of affected employees, as follows:
- eight weeks if 50-100 employees are terminated;
- 12 weeks if 101-300 employees are terminated; and
- 16 weeks if 301 or more employees are terminated.
For unionised employees, layoffs are generally governed by a collective agreement.
Federal rules If 50 or more employees are laid off or terminated in a four-week period, 16 weeks’ notice or more must be provided to the federal Ministry of Labour. This notice period is separate from the individual notice and statutory severance pay to which employees may be entitled. Federally regulated employees with at least 12 months’ service are entitled to statutory severance pay of either two days’ pay for each completed year of service or five days’ pay (whichever is greater).
Discipline and termination
Are there state-specific laws on the procedures employers must follow with regard to discipline and grievance procedures?
No. However, the common law rule regarding 'just cause' termination requires employers to undertake an investigation and present any allegations to the employee so that he or she can provide an explanation.
At-will or notice
At-will status and/or notice period?
Notice period. Canada is not an at-will jurisdiction. Therefore, on termination without cause, employees must be provided with notice of termination or pay in lieu. This entitlement may be included in a contract. If not, in British Columbia, the Employment Standards Act sets a minimum notice entitlement ranging between one to eight weeks depending on length of service. Further, common law provides a greater right to notice.
What restrictions apply to the above?
In an employment contract, the employer and employee can agree to the employee’s entitlements on termination, as long as those entitlements satisfy the minimum requirements under applicable employment standards legislation.
Are there state-specific rules on when final paychecks are due after termination?
Under British Columbia law, final pay must be provided within 48 hours after termination (or six days after resignation). Under federal law, final pay must be provided within 30 days.