BC Labour Board Further Clarifies an Employer’s Right to Communicate with its Employees
In a decision issued on July 8, 2005 - RMH Teleservices International Inc.-a Reconsideration Panel of the BC Labour Relations Board further clarified an employer’s expanded right to communicate with its employees during a unionization campaign. This right was expanded as part of the 2002 amendments to the Labour Relations Code, which we outlined in our Summer 2002 Newsletter.
Background
RMH operates a call center in Surrey that the BC Government and Service Employees’ Union had been attempting to organize. In response to the union’s campaign, RMH undertook several actions including: (1) distributing gifts (Frisbees, message pads, etc.) to the employees that bore anti-union messages; and (2) most contentiously, projecting anti-union messages on a large screen in the middle of the call centre and on the walls of the call centre, throughout the workday for about one week. The union argued that these actions violated the right to communicate provisions in the Code and were an unfair labour practice.
2002 Amendments to Labour Relations Code
Following the amendments to the Code in 2002, an employer can now “express his or her views on any matter, including matters relating to … a trade union or representation of employees by a trade union, provided that the person does not use intimidation or coercion.”
Original Panel’s Decision
In a controversial decision issued in October 2003, the Original Panel ruled that RMH had not violated the right to communicate provisions in the Code by undertaking the above noted actions.
Reconsideration Panel’s Decision
Prior to RMH, the Board had interpreted the amendments to the “right to communicate” provisions in the Code in three primary decisions(1).While in those decisions the Board had focused on the content of the employers’ communication, in RMH the Board considered the context and manner in which the employer communicated with its employees and the cumulative effects of the communication.
In overturning the Original Panel’s decision, the RMH Reconsideration Panel stated that:
-The 2002 amendments have given employers a much broader scope with respect to what they can say to their employees about unionization.
-Employers are not precluded from expressing their views on unionization to their employees during the course of an organizing drive, as long they do not do so in a way which is coercive, intimidating or otherwise an unfair labour practice.
-Although the scope of an employer’s ability to communicate with its employees has been broadened, there was nothing in the 2002 amendments to suggest that the legislature intended
to undermine the principle of employee free choice with respect to unionization.
-An employer cannot, in expressing its views, seek to compel employee choice with respect to unionization.
-In assessing whether an employer’s views are coercive or intimidating, the Board will look not only at the content of the communication but also the context and manner in which an employer may express its views, as well as the cumulative effect of the communication.
-The Board will continue to closely scrutinize “captive audience” meetings where employers use them to express views on unionization.
-Where an employee is “forced to listen” to an employer’s views, it can make an otherwise acceptable “view”, one that is coercive or intimidating. The Code does not guarantee that an employer will have an audience when it expresses its views on unionization.
-In this case, the employer’s slide shows were so prominent, persistent and impossible to miss that an otherwise permissible “view” became one that was coercive or intimidating. If the same “views” had been posted on bulletin boards at the call centre they likely would have been acceptable. Although the gifts were of marginal value, when viewed contextually in light of the overall communication by the employer, they were improperly intrusive and persistent.
(1) Convergys Customer Management Canada Inc, BCLRB No. B62/2003; Excell Agent Services Canada Co., BCLRB No. B172/2003; British Columbia Lottery Corporation, BCLRB No. B289/2003.
BCLRB No. B188/2005
Greg Gowe
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Liability of Employers in Administering Life Insurance Programs
In a May 2005 decision of the Ontario Court of Appeal, an employer, Riverside Health Care Facilities Inc. (“Riverside”), was found liable to the estate of a deceased employee for the amount of life insurance that the employee ought to have been paid under a life insurance policy.
Carole Perlett (“Perlett”) was a Registered Nurse employed by Riverside from 1981 until she was killed in March 1996. After her death, her estate claimed life insurance benefits on her behalf, from Riverside, under a group life insurance policy issued by Mutual Life Assurance Company of Canada (“Mutual Life”) and administered by Riverside (the “Policy”).
The group life insurance plan provided for two types of benefits under the policy:
1. basic life insurance benefits in stipulated amounts; and
2. enhanced benefits equal to double the annual earnings of the insured.
Perlett had become eligible for coverage under the plan in June 1981 and she elected at that time only basic life insurance coverage. Throughout her employment Perlett never changed her election to have enhanced benefit coverage. As a result, on her death Mutual Life paid her estate the sum of $10,000 on account of the basic life insurance benefit under the Policy. The evidence was that had she elected the enhanced benefit, her insurance coverage would have been over $200,000.
While she was employed at Riverside, Perlett was a member of the Ontario Nurses Association (“ONA”), the bargaining agent for the nurses. Throughout her employment, her terms and conditions of employment were governed by various versions of a collective agreement negotiated between the ONA and the Ontario Hospital Association on behalf of Riverside.
The Policy did not form part of the collective agreement and the collective agreement did not set out the terms on which the group life insurance plan was to be administered. Riverside’s only obligations under the collective agreement, in relation to the group life insurance plan, was to pay a stipulated percentage of the premium on the Policy when due and to provide hospital employees with an information booklet concerning the Policy.
Following Mutual Life’s denial of the payment of enhanced benefits under the Policy, Perlett’s estate and the union commenced a grievance against Riverside. Riverside took the position that the claim was not arbitrable under the collective agreement. Accordingly, the estate then sued Riverside and Mutual Life, asserting that Riverside was negligent in administering the Policy resulting in Perlett’s estate being wrongfully denied the enhanced benefits.
Riverside defended the negligence action on the basis that it did not owe a duty of care to Perlett, and that its only duty to her in relation to the Policy arose under the collective agreement with which it had complied.
In the court action, it was agreed between the parties that neither party would raise the issue of jurisdiction, accordingly there were no arguments made relating to the issue as to whether the matter should more properly be subject to grievance arbitration.
The evidence before the court revealed that:
1. the enhanced benefits to which Perlett was entitled were clearly set out in the collective agreement and available for her to see;
2. after 1981 when Perlett originally opted for the basic coverage, the collective agreement changed on a number of occasions resulting in the enhanced benefits being available to her at no additional cost; and
3. Perlett ought to have been aware of these changes given that for many years she was active in the
ONA, had been a member of the Executive of the Local, had held various positions with the Local and had been a member of the bargaining team.
The trial court, upheld by the Court of Appeal, found that Riverside had an obligation to exercise a duty of care in administering the benefit plans on behalf of its employees. It found that Riverside had been negligent in:
(1) not providing regular information to its employees regarding the benefit coverage that they had and, (2) where an employee made an unusual election they made no effort to confirm that election (i.e. Perlett elected a basic benefit when she qualified for twice her annual salary in insurance at no additional cost.). the court also found that there was no doubt in its mind that had Perlett been adequately advised of her entitlement under the Policy, she would have elected and received fully funded group life insurance worth twice her annual earnings rather than maintaining the $5,000 election.
Perlett Estate v. Riverside Health Care Facilities Inc. 2005 CanlII 18184 (Ontario Court of Appeal)
M.J. (Peggy) O’Brien
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Punitive Damages Awarded For Manner of Administering Disability Benefits
The BC Court of Appeal recently awarded $150,000 in punitive damages against the University of British Columbia (“UBC”) as a result of the action by its long term disability plan administrator.
UBC employees, including the Respondent, Ms. Asselstine, were covered by a disability insurance plan provided by UBC and UBC contracts with Manufacturers Life Insurance Company (“Manulife”) to administer the plan.
Manulife declined Ms. Asselstine’s claim on the basis that she was not totally disabled prior to the end of her employment with UBC. She appealed the rejection of her claim twice and provided further medical evidence which stated that she did not have the ability to work after she was diagnosed with Multiple Sclerosis in March 1997 (prior to her leaving employment at UBC).
At trial, the judge was highly critical of Manulife’s adjudicators reliance on one of the doctor’s opinions over other medical evidence that was available and conflicting. The trial judge, however, did not undertake any particular analysis as to why the other medical evidence was to be preferred over the evidence preferred by the adjudicator.
The trial judge held that both UBC and Manulife were responsible to Ms. Asselstine for punitive damages in the amount of $150,000.
On appeal, the damage award against Manulife was overturned on the basis that Manulife was not a party to any contract with Ms. Asselstine. However, UBC was still held responsible for the $150,000 in punitive damages notwithstanding that it was Manulife which had investigated and made the decisions concerning Ms. Asselstine’s right to claim disability benefits under the plan.
In light of this case, employers who contract with an administrator to administer their disability or other types of benefit plans should be aware that they may be held liable for the actions of their administrators and accordingly should ensure that the administrator is acting in good faith in its plan administration.
Asselstine v. Manufacturers Life Insurance Co. et al, 2005 BCCA 292
M.J. (Peggy) O’Brien
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Privacy Commissioner Rebukes Companies and Law Firms for Disclosing Sensitive Employee Information During a Transaction
The Alberta Information and Privacy Commissioner (the “Commissioner”) recently found two companies and their respective law firms in breach of Alberta’s Personal Information Protection Act (“PIPA”) in their handling of sensitive employee information while acting for their clients during an acquisition.
Background
Builders Energy Services Ltd., (“Builders”) was in the process of acquiring several companies including Remote Wire Line Services Ltd. (“Remote”). Both companies hired law firms to assist with the transaction.
Attached to the purchase and sale agreement was a Schedule that was to include a list of Remote’s employees, employment agreements, and details regarding its employee benefit plans.
Inadvertently, Remote provided its lawyers with an employee list in the Schedule that included the employees’ home addresses and SINs. Without removing this information Remote’s lawyers forwarded the Schedule to Builders’ lawyers, who in turn provided it to Builders. After Builders signed off on the Schedule its lawyers attached the Schedule to the purchase and sale agreement and filed it on SEDAR. SEDAR is a website, accessible to the public for free, that allows for the electronic filing of securities information. The parties did not become aware of the disclosure on SEDAR, and the information was not removed, until approximately two weeks later.
In assessing the situation, the Commissioner referred to the disclosure of the Schedule by Remote’s lawyers to Builders’ lawyers as the “First Disclosure” and the disclosure by Builder’s lawyers to SEDAR as the “Second Disclosure”.
Alberta PIPA
The Alberta PIPA allows parties to a “business transaction” (as defined in the Act) to collect, use and disclose personal information without the consent of the employees if: (1) the parties have entered into an agreement under which the collection, use and disclosure is restricted to purposes that relate to the transaction and (2) the information is necessary to determine whether to proceed with or complete the transaction. In respect of the First Disclosure, the Commissioner found that the “business transaction” exception did not apply because the employees’ home addresses and SIN’s were not necessary for the purposes of the transaction. The Commissioner did note, however, that the following employee information could, depending on the circumstances, meet the business transaction exception:
-the names and titles of employees;
-descriptions of the employees positions and functions;
-the description of an employee’s place in the management structure;
-employee salary levels;
-information relating to outstanding employee litigation; and
-information relating to whether the employee belongs to the vendor’s benefit, stock purchase or pension plan or collective bargaining unit.
The Commissioner noted that the disclosure of personal information in this case without consent was also not permitted by two other “exceptions” found in PIPA, being; (1) the personal information was not collected, used and disclosed in a situation where it was reasonably required by the organization for the sole purpose of establishing, managing or terminating the employment relationship(the Commissioner found that it had been used or disclosed, at least in part, for the purposes of completing the transaction) and (2) the personal information was not disclosed pursuant to a legislative requirement.
Which organization was accountable?
PIPA states that: (1) an organization is responsible for the personal information that is in its custody or under its control; (2) an organization is accountable for its contractors and agents’ compliance with PIPA; and (3) a person or agent retained by an organization is not relieved of its own responsibilities or obligations under PIPA because it has been retained by another organization.
In relation to the First Disclosure, the Commissioner found that both Remote and its lawyers were responsible, although the Commissioner directed her harshest criticism at Remote’s lawyers for not exercising adequate diligence in the review of the Schedule. Similarly, the Commissioner found both Builders and its lawyers responsible for the Second Disclosure, although the strongest criticism was directed at Builders’ lawyers.
Recommendations
The Commissioner did not make any recommendations with respect to:(1) Remote, because Remote had been amalgamated with Builders; and (2) Builders, because during the course of the investigation Builders had implemented a privacy policy and had appointed a privacy officer. In contrast, the Commissioner made a series of recommendations to the law firms concerning their approach to privacy issues and privacy legislation.
BC PIPA
The BC PIPA is similar to Alberta’s and also contains a “business transaction” exception (s. 20) pursuant to which a vendor can disclose personal information about its employees without their consent to a purchaser if: (1) the personal information is necessary to determine whether to proceed with or complete the transaction and (2) the vendor and purchaser have entered into an agreement that provides that the purchaser will use or disclose the personal information solely for the purposes related to the transaction.
Notably, BC PIPA has an additional provision not found in the Alberta PIPA. In BC if the transaction completes the vendor must notify its employees (as well as customers, directors, officers and shareholders whose personal information was disclosed) that the transaction has taken place and that their personal information has been disclosed to the purchaser.
Under both PIPAs, if the transaction does not proceed or is not completed, the prospective purchaser must destroy or return the personal information.
Investigation Report P2005– IR-005
Greg Gowe
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Just Cause for Dismissal Not Found Where Employee Working in Family Business While on Disability Leave
Arbitrator Rod Germaine ruled in a May 2005 decision that an employee of Canada Safeway did not give his employer cause to dismiss him from employment when he was found working full time in his family business while he was claiming disability leave.
The grievor, who had 16 years of service with Safeway, was injured in an automobile accident in October 1997. He returned to work in January 2002 on a graduated return to work basis but subsequently left work again in April 2002. He had further surgery in May 2002 and went back on disability benefits. Starting in October 2002, the grievor began working full time on an unpaid basis at a fitness centre that had been opened by his family earlier that year.
In August 2003, the grievor’s manager advised the insurance company that the grievor was working in the family business. In surveillance conducted later that year, the insurance company captured the grievor on videotape greeting customers, working out and answering phones at the fitness centre. In November 2003 the insurance company terminated his disability benefits on the basis he was no longer totally disabled. The employer subsequently dismissed the employee for fraud.
Notably, the grievor readily admitted that he had been helping out at the fitness centre on an unpaid basis.
The arbitrator allowed the grievance finding that Safeway had not proven that the grievor had a dishonest intent, a key element of the offence of fraud. The grievor stated that he believed he was entitled to continue to collect his disability benefits so long as he was not paid for working elsewhere. The arbitrator found that his belief in this regard was at least credible as he had done nothing to conceal the fact that he was working at the fitness centre. In addition, the arbitrator found that the grievor was genuinely convinced that he had told Safeway that he intended to go to work in the fitness centre. Although the arbitrator did not find, one way or the other, whether the grievor had in fact told Safeway of this, this belief went to his state of mind and supported that he did not have a dishonest intent.
As a result, Safeway could not prove that the employee had a dishonest intent and just cause for dismissal was not found.
United Food and Commercial Workers Union Local 1518 v. Canada Safeway [2005] BCCAAA No. 96, (May 4, 2005. )
M.J. (Peggy) O’Brien
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Alberta to Review Employment Standards Code
The Government of Alberta has recently announced that it will undertake a comprehensive review of Alberta’s Employment Standards Code. The six-month review, which is scheduled for completion by the end of 2005, will examine all aspects of the Code, including hours of work, termination, overtime, vacation time and general holidays. While updates and revisions have been made periodically to the Code, this is the first major review since 1988. The Alberta Government is currently consulting with stakeholders in the business and labour communities, and expects to begin broader public consultations later this summer.
Krista L. Hughes / Karl J. Bomhof
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First Bill C-45 Prosecution Resolved
Bill C-45, an amendment to the Criminal Code, took effect in March 2004. The Bill C-45 amendments established a duty of care on all individuals and organizations to take “reasonable steps” to prevent bodily harm to employees, and others, who may be affected by work being performed at a job site.
The amendments were drafted in response to the Westray Mine disaster, in part to enable prosecution of senior corporate executives for serious health and safety breaches. The first application of the Bill C45 amendments, however, targeted a first-line supervisor, Dominico Fantini. In April 2004, under Mr. Fantini’s direction, a worker was killed, in King Township, north of Toronto, when a trench he had excavated collapsed around him. In September 2004, Mr. Fantini was charged with one count under the Criminal Code of criminal negligence causing death, along with eight counts of contravening the Ontario Occupational Health and Safety Act.
In March 2005, the Crown withdrew the Criminal Code charge against Mr. Fantini. In exchange, Mr. Fantini pleaded guilty to three offences under the OHSA: (1) failing to ensure that a worker did not enter an excavation that was not properly shored or sloped; (2) failing to ensure that a worker was wearing protective head gear; and(3) failing to ensure a worker was wearing protective footwear. Mr. Fantini was fined $50,000, plus a 25% victim surcharge.
The withdrawal of the charge under the Criminal Code means that the case will not provide any guidance on how the courts will interpret the new Criminal Code provisions.
We will continue to monitor the case law for new relevant developments. In the meantime, employers should continue to be aware of the Bill C-45 amendments and the potential for increased liability under the Criminal Code for failing to maintain a safe work environment.
Christine Kowbel
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Deductions From An Employee’s Pay Cheque
The BC Court of Appeal recently confirmed that, pursuant to the BC Employment Standards Act, an employer is prohibited from making unilateral withholdings/deductions from an employee’s pay cheque for any purpose, including to recoup a previous overpayment of wages to the employee.
An employer is, however, permitted to make withholdings/deductions from an employee’s pay cheque in certain circumstances, including to recover an overpayment of wages, where: (1) the employee consents to the specific withholding/deduction; or (2) a statute or a collective agreement expressly authorizes the employer’s action.
If the employer does not have consent or authorization by way of a statute or a collective agreement, it must recover overpayments (or other monies owed) by pursuing a grievance (in a unionized workplace) or bringing a claim in court (in a non unionized workplace).
Health Employers Assn. of BC v. BC Nurses Union 2005 BCCA 343
Greg Gowe
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New Member of Labour & Employment Group
The newest member of the Lawson Lundell Labour & Employment group is Nicholas Ellegood. Nick was a summer student with the Labour & Employment group in 2003. After graduating from UBC law school in 2004 he returned to complete his articles with Lawson Lundell. Nick received his license to practice on August 15, 2005. Nick is also assisting Lawson Lundell’s general Litigation group.
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